Urea prices continued to strengthen last week, which added to the optimism surrounding nitrogen companies (XLB) such as CF Industries (CF), CVR Partners (UAN), and Nutrien (NTR). Let’s look at the weekly gains in urea prices for the two locations discussed below.
Last week, urea prices in Brazil rose the most with a 4.3% week-over-week gain to $329 per metric ton from $325 per metric ton a week ago. Similarly, urea prices in the NOLA (New Orleans) region rose ~3.3% week-over-week to $287 per metric ton from $278 per metric ton a week ago. The rally in urea prices was fueled by supply curtailment in China as well as higher energy prices in non-US markets. The net impact is clearly positive in global urea prices.
Year-over-year, urea prices in both the above locations were significantly higher last week. Urea prices in Brazil were up by 16% year-over-year from $281 per metric ton. In the NOLA region of the US, urea prices were up by as much as 35% year-over-year from $287 per metric ton.
Next, we will look at natural gas prices, which are a key driver for urea prices.