Unlike ammonia prices which declined last week, urea prices were broadly flat to positive for the week ending August 26. Urea is one of the most widely used nitrogen fertilizers in the world. It requires ammonia as a feedstock.
Let’s see how urea prices moved last week.
China is the largest urea producer and exporter. The average weekly urea prices in China for the week ending August 26 were $195 per metric ton—unchanged from the previous week. Average weekly urea prices in China are down 30% YoY (year-over-year). However, they’re still up from the five-year low of $188 per metric ton.
Similarly, average weekly granular urea prices in the Middle East were flat at $196 per metric ton—compared to a week ago. Prices are down 31% YoY in the Middle East.
In contrast, average weekly granular urea prices in the Corn Belt region of the US (MOO) rose 4.4% to $231 per metric ton from $204 per metric ton a week ago. However, prices in this region are down 34% YoY.
Last week, prilled urea’s average weekly prices also traded sideways at $190 per metric ton—compared to the previous week. Similar to the above three points, average weekly urea prices were down 32% YoY.
This remains a concern for companies such as CF Industries (CF), CVR Partners (UAN), Terra Nitrogen (TNH), and PotashCorp (POT). Recently CF Industries commented that Chinese producers have shut down some of their capacities. This shows the extent to which low fertilizer prices can negatively impact the companies.
A decline in nitrogen prices was primarily driven by a decline in input costs such as that of natural gas and coal. In the next part, we’ll discuss how their prices traded last week.