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Urea Prices Made a Strong Positive Move Last Week

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Urea prices

The fertilizer industry is cyclical, and earnings are sensitive to and positively correlated with fertilizer price movements. Lately, fertilizer prices have been moving higher, and urea prices saw a similar move last week.

Weekly performance

Last week, urea prices continued their positive momentum from a week ago in the NOLA (New Orleans) region of the United States as well as in the Brazil region. Granular urea prices in NOLA rose ~4.5% week-over-week to $212 per metric ton (or $234 per short ton) from $203 per metric ton a week ago. Similarly, granular prices in the Brazil region rose ~5.2% week-over-week to $262 per metric ton from $249 per metric ton a week ago.

The strength in urea prices continues to be good news for nitrogen fertilizer producers (XLB) such as CF Industries (CF), Nutrien (NTR), and CVR Partners (UAN).

Yearly performance

Urea prices remain strong compared to a year ago and have continued to rise this year. In NOLA, urea prices are now 44% higher from $148 per metric ton a year ago. In Brazil, urea prices were almost 24% higher from $211 per metric ton a year ago.

Next, we’ll look at natural gas prices, which are a key input for nitrogen fertilizers and add to the volatility in cost structure for producers.

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