Ammonia spot deals accelerate on improved supply, but Algerian issues persist
Over the last few weeks the urea market has entered a bullish phase with notable price increases globally. This will provide a refreshing break to producers that have been on the wrong end of a falling market for most of the year.
Reflecting this, the Profercy World Nitrogen Index has witnessed an increase in the last month. With supply in the East unable to satisfy demand in India, Pakistan and Bangladesh, prices in the West are likely to be dragged up by increased prices elsewhere. One important factor to consider is that prices in Eastern markets currently have greater appeal to producers, such as those in the Middle East, who would otherwise serve markets in the West. For example, on the basis of the last major Eastern tender, US prices would need to rise to over $325ps ton fob in order to match netbacks for Middle East producers available there.
Our latest supply and demand analysis confirms that there is a solid base to support bullish market into Q1, notwithstanding the likelihood of the market overheating and correcting at certain points. For a more detailed analysis considering other key factors, please contact us for our latest Nitrogen Forecast and a trial of the Profercy Nitrogen Service.
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