Nitrogen fertilizer companies (XLB) CF Industries (CF), Nutrien (NTR), and CVR Partners (UAN) fell last week[1. Last week ended October 12, 2018.] due to the broader market sell-off. But their fundamentals remained strong. Urea prices, for example, continued to make new highs last week, which is a continuation of the ascending trend we’ve seen since April.
In the above chart, you can see the prices of granular urea in Brazil and NOLA (New Orleans). Urea prices are strong in both areas.
Prices in Brazil rose 2.1% to $346 per metric ton last week, from $339 per metric ton in the week ended October 5. Two months ago, prices were below $300.
In the NOLA region, granular urea prices gained 32 basis points to $288 per metric ton, from $287 per metric ton the previous week.
Year-over-year, urea prices at both locations have increased significantly. In Brazil, prices rose 11% year-over-year, and in NOLA, they rose 30%.
In the next part, we’ll look at the price for natural gas, which has an impact on urea prices.