In the week ending September 22, urea prices gained significant upward momentum. The gain was favorable news for nitrogen fertilizer producers (MOO) like CF Industries (CF), Terra Nitrogen (TNH), PotashCorp (POT), and CVR Partners (UAN).
In the week ending September 22, granular urea prices at the three location discussed below rose by an average of 11% week-over-week. Prices in the Middle East rose as much as 12.2% week-over-week to $258 per metric ton from $230 per metric ton a week ago. At this location, the prices were almost 38% higher YoY (year-over-year) as of September 22, 2017.
Urea prices in the US Cornbelt region rose as much as 11% week-over-week to $249 per metric ton from $225 per metric ton. Similarly, prices in NOLA (New Orleans) rose as much as 9.8% to $223 per metric ton from $203 per metric ton a week ago. Granular urea prices in the Cornbelt region rose 32% YoY last week. In NOLA, granular urea prices rose 34% during the past year.
The above momentum was also observed in prilled urea prices in Yuzhny, Ukraine. Last week, prilled urea prices rose much as 8.3% week-over-week to $248 per metric ton from $229 per metric ton. Prilled urea prices rose 31% YoY last week.
Why urea prices rose?
According to Mosaic, last week’s urea prices rose due to limited supply coming out of China and stronger demand expectations from India. China is the largest urea producer globally.
In the next part, we’ll discuss natural gas prices. Natural gas is the key input material for nitrogen fertilizers.