Views: 4 Author: Site Editor Publish Time: 2024-07-04 Origin: Site
Urea price in last week drop suddenly came to a halt over the weekend, as Egypt reduced its natural gas supply to urea factories again. Despite India having a large inventory, a tender was still issued on Monday. With the possibility that China will hardly export urea until at least August, the market should return to a strong track.
But the price response is quite slow, and most people tend to observe the price level of the Indian tender on July 8th before taking the next step.
Due to the introduction of the Egyptian quotation, a small amount of Algerian urea was sold at FOB370 USD/ton, while the price in Brazil is close to CFR370 USD/ton.
The tight supply in July is expected to ease in the coming days, but this also largely depends on the outcome of India's bidding. If the price is not satisfactory, high inventory also gives the Indian government the flexibility to reduce procurement volume.
The market factors
Egyptian natural gas: Due to a decrease in natural gas supply in Egypt, all nine urea production enterprises have ceased production, making it difficult to predict the export situation in July.
India: The quantity purchased by IPL in the bidding on July 8th will determine the spot supply situation in Russia and the Middle East from July to August.
China: The efforts to suppress urea prices in China have ended in failure until now. According to the current trend, export restrictions seem to continue until August.
The outlook for 30-60 day outlook
The insufficient supply of urea in China has led to supply shortages in the Asian market,the producers in Southeast Asianselling out urea in July. Buyers in Egypt speculate that they are pushing up prices for alternative land. Prices will rise in July and should remain strong in August.
