At present, the international urea market has sufficient supply and weak demand. It is expected that the price of urea pellets will still face downward pressure by January 2023. Due to the full storage of European urea plants, the collapse of natural gas prices and the restart of plants, the demand for imports of urea products in Europe has decreased. According to Egyptian suppliers, the price of urea pellets has dropped from US$900/ton FOB in September to the current US$545/ton FOB. It is estimated that by December, the FOB price of urea granules will average US$500/ton. With the advancement of spring fertilizer preparation in Europe, the FOB price of urea granules may rise steadily to US$660/ton in the first quarter of 2023.
The urea market in the Middle East is facing the same situation. On October 17, the sales volume of India’s IPL bidding was about 700,000 tons, and a total of 1.5 million tons won the bid. Due to sufficient international supply, sellers have lowered their prices to ensure sales, and the price has dropped to US$500/ton FOB or lower.
NOLA has the bargaining power for urea. During November-December 2022, 8-14 shipments are expected to arrive in the US Gulf. This means that when the Mississippi River resumes normal traffic flow, about 300,000 tons of urea will be shipped to NOLA, exceeding the planned tons. The price of urea will plummet to US$530/ton FOB, and is expected to stabilize at US$640/ton FOB by April 2023 when seasonal purchases are made.
In the future, the price of natural gas in Europe may soar again, which may lead to a new round of closures of nitrogen fertilizer plants, thereby stimulating the demand for nitrogen fertilizers in Europe, especially urea. European urea pellets will return to the spot market in the first quarter of 2023. Compared with other nitrogen-containing products, the price of European urea pellets will have higher market competitiveness.
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