Did Urea Prices Have a Eureka Moment Last Week?

Unlike ammonia prices, which declined steeply as we saw in the previous part, urea prices were broadly unchanged at four key locations for the week ended September 2. Urea is one of the most widely used nitrogen fertilizers in the world, and it requires ammonia as a feedstock.

Overall, average granular urea prices moved sideways for the week ended September 2. Granular urea prices in China remained unchanged at $195 per metric ton compared to the previous week. China is the world’s largest urea producer and exporter.

Similarly, granular urea prices in the Middle East were unchanged at $196 per metric ton compared to prices during the previous week. Granular urea prices in the US (IYM) Corn Belt also traded sideways at $213 per metric ton.[1. converted from $235 per short ton] Companies such as CF Industries (CF), PotashCorp (POT), Agrium (AGU), and Terra Nitrogen (TNH) have a heavy presence in the Corn Belt.

Year-over-year, average prices at these three locations have declined by 30% compared to the corresponding week in September 2015. Let’s see how prilled urea prices have performed.

Prilled urea prices at the Black Sea, similar to the prices at the above three locations, also moved sideways for the week ended September 2 to $190 per metric ton. Prilled urea prices at the Black Sea are down significantly year-over-year, falling by 32%.

Prices for nitrogen fertilizers are down primarily as a result of declining input costs, such as natural gas and coal. Let’s look at these factors in more detail in the next article.