Profercy World Nitrogen Index

Week 34 – Urea firms further amid continuing supply disruption in the Middle East

Continued supply disruption in the Middle East ahead of Brazil’s peak import period has boosted market sentiment of late, with the regional conflict also contributing to firm gas prices in Europe which increasingly point to a challenging operating environment for continental nitrogen producers.

Liquidity has not been significant in recent days, with buyers in Brazil more cautious, particularly given weather uncertainty. Still, firming grain values are making prevailing input values more palatable, subject to region.

Recent business for granular urea in Brazil is some $35pt above values last week, with many conceding that imports are behind. Buyers elsewhere in Latin America have also been engaged, with granular product placed from China.

Concerns are building over the availability of Middle East material for early-Q4 not just in Brazil but also in the USA where efforts are being made to secure alternatives. The Nola granular urea barge market supported over $415ps ton fob this week, rising some $30ps ton in 10 days.

With Iranian supply also locked in since mid-August, concerns over availability have bolstered Turkish import inquiry. Granular urea has been booked from China as well as product from the FSU, including Baltic prills.

The Nitrogen Index rose by 9.67 points on the week to 207.31, the largest weekly increase in five weeks.