Urea Price Trend and Forecast

North America

The price of Urea in the US market continued to decrease during the fourth quarter because of the sharp decline in the cost of raw materials. In the wake of unfavorable trading fundamentals and muted demand, the Urea price continued to decline. According to the statistics, feedstock natural gas prices fell by around 15% in November 2022, and this trend continued into December. Manufacturers were able to offer discounts to entice offtakes from downstream niche consumers as a result of the fall in feedstock costs, which had an impact on pricing patterns in major importing countries like India and the USA. Inflation in the country and drought conditions declined the production of Nitrogen in the domestic market. The labor shortage in the US market persisted, but the operational rate remained positive. Urea FOB Illinois prices were assessed at USD 742/MT, averaged in Dec.

APAC

Asia pacific region’s pricing trend for Urea in Q4 remained plunged due to a lack of demand from downstream fertilizer markets. There were great expectations for the requirement for Urea fertilizer during the rabi season in October in India; however, this demand remained low. Spot materials moved from the Middle East, Southeast Asia, and North Africa to Europe and Africa as a result of the lack of downstream Melamine industries’ demand in major importing countries like South Korea and Taiwan. Q4 2022 has historically been one of the weakest seasons for Urea pricing due to the decline in demand from industrial and agricultural clients in the APAC region.

Europe

Urea prices have shown mixed pricing sentiments throughout the Q4 in the year 2022 as the feedstock Ammonia has remained volatile due to fluctuations in Natural gas prices. Some nitrogen-based fertilizer manufacturing facilities in Europe have shut down as a result of rising prices for upstream natural gas. Additionally, the supply chain was in chaos due to conflicting opinions regarding freight prices and the limited number of available containers. In November, Russia raised the import quotas for all nitrogen fertilizers, which contributed to an increase in domestic supply. The downstream fertilizer market responded in a way that was consistent with the changing demand seen in the fourth quarter.

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