Profercy World Nitrogen Index

Week 17 – Nitrogen Index corrects as urea values slide post-IPL tender

The Profercy Nitrogen Index dropped for a second consecutive week to 369.90, with the weekly decline of 17.58 marking the sharpest fall since November 2022. Still, the index remains at levels not seen since April 2022.

The decline was largely owing to a drop in fob values in the west as any remaining May cargoes struggled to find liquidity anywhere close to returns previously possible in India.

Other markets have not been willing to pay up, with Europe and the USA nearing the end of their seasons and affordability challenges playing a role in Latin American.

In the USA, a combination of poor weather and sizeable March into April arrivals has weighed on demand in Nola. As such re-export business has been possible in the low to mid-$700s pt fob with sales concluded for Africa and Central America. With those values possible from the USA, suppliers elsewhere in the west have had to lower offers to entice buyers.

In the Baltic, granular urea business for Central America was concluded down to the low to mid-$700s pt fob.  Some participants have also covered Indian business from Russia in the last week at close to $800pt fob Baltic, a significant discount on the high-$800s pt netback implied from the IPL tender last week.

In North Africa, small volume May sales of Egyptian granular urea took place at $850pt fob and below with values down as much as $35-55pt week-on-week. Offers of Algerian product were also noted in that range for large lots.

Eastern spot values have been more resilient, with producers not chasing business. But with bid interest lacking, suppliers may be forced to reconsider their price targets. Supply remains tight due to the conflict impacting flows from the Middle East, while contractual commitments and government-to-government deals have reduced spot availability from SE Asia. Chinese exports remain absent, but the market is watching closely for any developments.