Urea futures slightly firmer on Middle East tensions

Spanish Market: Fertilizers
01/10/24

Urea futures rose today on a ratcheting up of tension in the Middle East, but the reaction has been limited with November Arab Gulf derivatives up by $2.50/t on the day.

The November Arab Gulf futures contract has traded multiple times today at $355/t fob, up by around $2.50/t on recent levels, with the deals taking place towards the high end of brokers' ranges for yesterday.

But spot availability of physical cargoes in the region is limited, and there has been no fresh business. Suppliers are holding back from the market until RCF's buy tender in India on 3 October. Argus assessed granular urea spot prices at $350-356/t fob last week.

The Israeli military said earlier today the US has identified an "Iranian network" that is preparing to launch a missile attack on Israel "in the near future", which has stoked a jump in oil prices. Israel began ground operations in southern Lebanon on 1 October, following the ramping up of an aerial strike campaign, while its military struck the Houthi-controlled Red Sea port of Hodeidah in Yemen on 29 September.

Front-month Ice Brent crude futures hit an intraday high of above $74.50/bl earlier, up by nearly $3/bl from yesterday's close.

Iran on 13 April launched more than 300 drones and missiles, marking its first ever direct attack of Israel from Iranian soil. Almost all those weapons were intercepted before they reached Israeli airspace, and no fatalities were reported by Israel.

The Middle East is the largest export region globally of urea and ships around 20mn t/yr, of which Iran accounts for about a quarter.

By Harry Minihan

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

23/06/25

Nola urea climbs 7pc on escalating Mideast conflict

Houston, 23 June (Argus) — Urea barge values at New Orleans (Nola) climbed by 7pc on Monday afternoon in reaction to the US entering the escalating conflict between Israel and Iran. Barges delivering to Nola in July changed hands at $443-450/st fob, about $30/st higher than on 20 June. August barges also transacted at $445-455/st fob. Nola barge values have rallied by $100/st since Israel first launched strikes against Iran on 13 June following a downturn in reaction to spring demand fading at the port. The US bombed nuclear sites in Iran on Sunday. Iran then launched missiles at a US military base in Qatar today in retaliation. Qatar has been the first or second largest source of US urea imports in recent years. The escalation of hostilities between the US and Iran puts supplies in the Middle East at greater risk of disruption. Nitrogen production in Egypt and Iran is already off line. There are also fears in the global market that Iran may try to block the strait of Hormuz, but global supply remains threatened whether that occurs or not. The Middle East exports 21-22mn metric tonnes/yr of urea, about 40pc of global seaborne urea trade. The US received 1.6mn t, or 34pc its urea imports from the region, this fertilizer year, which runs from July through June, according to US Census Bureau data and Argus estimates. The US received roughly 60pc of its phosphate imports from the Middle East through April of this fertilizer year as well. Nola urea prices are taking a lead from international values despite spring demand being essentially over at the port and the Middle East's shrinking share of US imports since April because of US tariff policy. With the fertilizer offseason in the US at hand there is less urgency to attract imports, but the fall application season is closing in. In addition to reduced import availability to the US because of supply disruptions, other destinations could turn to exports from the US, a common but limited occurrence during the summer offseason. If disruptions to global supply continue, producers will have more negotiating leverage through the offseason resulting from having more incentive to export and less imports to compete with. The US is already facing tight supply and demand fundamentals at home. Tariffs restricted imports this spring while the largest corn crop in over a decade drained inventory across the US, likely leaving distributors and producers will little inventory leftover. Urea affordability — measured by a ratio of urea and corn prices — is 32pc below year-ago levels. Higher pricing through the summer season will likely trim fill and prepay buying, especially with interest rates largely holding compared with last year, keeping the cost of storing product historically elevated. By Calder Jett Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

China sulacid exports reach record in Jan-May

23/06/25

China sulacid exports reach record in Jan-May

London, 23 June (Argus) — China's sulphuric acid exports hit a record high for the period in January-May, driven by greater acid availability following the expansion of smelting capacity and strong fob prices. China exported 1.8mn t of sulphuric acid in January-May, more than double the 870,000t exported a year earlier, customs data show. The previous high for January-May was in 2022, at 1.7mn t. China's smelting capacity has risen this year, notably with the launch of Tongling Nonferrous' 500,000 t/yr Jinxin copper smelter in Tongling city in east China's Anhui province on 26 March. Exports are expected to remain buoyant, with smelting capacity rising by over 1mn t/yr in 2025, according to industry estimates. Additional support came from firmer Chinese fob prices in January-May, driven by tight spot availability from Asian suppliers — mainly South Korean and Japanese — as a lack of metal concentrates and maintenance outages limited production. Global copper concentrate supply is expected to remain tight this year, weighing on copper concentrate treatment and refining charges. Chile was the main recipient of Chinese acid in January-May, taking 715,000t, up by 56pc on the year. Exports to Indonesia and Saudi Arabia rose sharply — to 216,000t and 195,000t, respectively, up from 50,000t each a year earlier. Morocco received 176,000t, more than doubling its 81,000t take a year earlier. By Lili Minton China exports vs fob price Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Potential Hormuz closure threatens ferts, sulphur trade

23/06/25

Potential Hormuz closure threatens ferts, sulphur trade

London, 23 June (Argus) — Iran's threat to "close" the strait of Hormuz in response to the US military attack on its nuclear sites over the weekend risks disrupting 20-50pc of international trade in urea, sulphur, phosphate and ammonia. The risk is primarily to buyers of fertilizer and associated raw materials outside the Mideast Gulf as, with the exception of sulphuric acid, potash and some niche products, the flow of trade is dominated by exports. Fully half of global seaborne sulphur trade originates from the Mideast Gulf — 20mn t this year, according to Argus Analytics — which goes primarily to China, Morocco and Tunisia, and for mining users in southern and central Africa. Sulphur is a key raw material for making phosphate fertilizers. Some substitution for sulphur by merchant sulphuric acid is possible but the sulphuric acid markets are already tight. Urea markets also have a substantial degree of exposure to potential disruption to shipments from the Mideast Gulf, with around a third of seaborne trade supplied from the region. Exports from the Mideast Gulf are forecast at around 18mn t this year by Argus Analytics , from a global total of 56mn t. The major destinations for Middle East urea during the third quarter each year are typically Brazil, India, Thailand and Australia. Ammonia exports from the Mideast Gulf account for around a fifth of global trade. Shipments this year from Mideast Gulf producers averaged around 365,000 t/month, according to Argus ' tracking of loaded vessels, with the main buyers being fertilizer producers in India and Morocco, which have taken 830,000t and 315,000t, respectively, and mostly industrial buyers in South Korea, which have taken 335,000t. For phosphates, the main risk is to the supply of MAP and DAP from Saudi Arabia. Saudi Arabia's Ma'aden produces around 20pc of the 17mn t/yr of seaborne trade in MAP and 14pc of the 12mn t/yr of DAP trade, with India typically the largest recipient of the latter, in terms of quantity, during the third quarter. All DAP and MAP shipments, plus some NPS, are loaded from Ras al-Khair. On the import side, the greatest impact from any disruption to shipments in the region would be on sulphuric acid. Ma'aden is expected to import around 700,000t of sulphuric acid through Ras al-Khair in 2025, and line-up data show nearly 500,000t of acid will be shipped in the first seven months of the year, mainly from Asia-Pacific origins such as west coast India and China. Few alternative loading mechanisms are available to bypass any disruption to the strait of Hormuz. The UAE port of Fujairah in the Gulf of Oman can load bulk cargoes, but in the event of significant regional disruption the port might not be able to prioritise fertilizer exports over other commodities. It is also on the far side of the country from the urea and sulphur production facilities. Saudi Arabia has several Red Sea ports, but distances overland from production sites close to the Mideast Gulf make this route operationally and commercially challenging. The threat of disruption has so far not prevented trade in and stevedoring of cargoes within the region — including shipments from Iran's ports of Bandar Imam Khomeini and Asaluyeh — which continued over the weekend. By Bede Heren Mideast Gulf fertilizer and related raw material exports Product Exports (t/yr) % of seaborne trade Sulphur 20,058 50 Urea 17,978 32 Ammonia 3,635 21 MAP 3,480 20 includes exports from Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia, UAE — Argus Analytics Mideast Gulf ports Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Urea prices surge in Australia, prompt supply limited

20/06/25

Urea prices surge in Australia, prompt supply limited

Sydney, 20 June (Argus) — Domestic urea prices in Australia have surged on the back of rising international fob prices because of ongoing hostilities in the Middle East, and prompt supply has tightened on increased demand. Israel's attack on Iran in the early hours of 13 June and the further escalation of tensions has caused international urea prices to surge on tightened supply as Egyptian output was halted on 13 June and Iranian urea production went off line on 18 June because Israeli gas flows have stopped. Saudi Arabian fertilizer producer Sabic sold 45,000t of granular urea at $450/t fob on 17 June, a sharp rise from $402/t fob in a deal four days earlier. Domestic urea prices in Australia rose throughout the week to 20 June almost as fast as international prices as suppliers raised their offers on a day-by-day basis. Retailers that previously hesitated to buy from importers because of weak domestic demand rushed into the market to procure supplies on fears of further price rises. Offers started the week at around A$775/t ($503/t) fca Geelong on 16 June, increasing to A$790-800/t on 17 June. Cargoes were reportedly sold as high as A$865/t as buyers rushed into the market. Two suppliers reportedly offered urea out of Geelong at A$900/t late on 18 June, but buyers retreated at that level. Weekly average domestic granular urea prices were assessed much higher on the week at a midpoint of A$865/t fca Geelong in the week to 20 June, up from A$745-750/t a week earlier ( see graph ). Urea stocks high, prompt supply limited Healthy stocks and underwhelming domestic consumption from growers owing to unfavourable weather conditions had limited demand for urea so far in 2025, which in turn buoyed stocks and prompted suppliers to lower prices from mid-April until hostilities broke out in the Middle East. Australia imported 1.26mn t of urea in the first four months of the year, the latest data from the Australian Bureau of Statistics show. Urea imports reached an estimated 601,000t in May and are expected to decrease to 508,000t in June, according to vessel-tracking data from trade analytics platform Kpler. This suggests Australia's urea imports could reach 2.37mn t in January-June, down from 2.49mn t in the first half of 2024. But Australian urea stocks are still likely to be higher at the end of June 2025 compared with the same month a year earlier, according to Argus estimates. Favourable weather conditions for urea utilisation early in 2024 reduced urea stocks in the country last year. Urea stocks in Australia are healthy and suppliers started selling cargoes in May for delivery in 1-3 months' time because of sluggish local demand. This has led to at least one supplier running out of supply for prompt sale and delivery after buyers entered the market this week. The tight supply for prompt delivery of urea likely supported the surge in domestic urea prices over the past week. By Tom Woodlock Price of granular urea fca Geelong (A$/t) Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Brazil central bank raises target rate to 15pc

18/06/25

Brazil central bank raises target rate to 15pc

Sao Paulo, 18 June (Argus) — Brazil's central bank today raised its target interest rate by 0.25 of a percentage point to 15pc, the highest level since July 2006, citing a still "adverse and uncertain" global economic scenario. That is the seventh consecutive hike from a cyclical low of 10.5pc at the end of September last year. The bank had last increased the rate by 0.5 of a percentage point in May . "The [economic] scenario continues to require caution on the part of emerging countries in an environment of heightened geopolitical tension," the bank said, citing the US' "uncertain economic policies." The bank also said it increased the interest rate because Brazil's inflation remains above the ceiling of 3pc with a tolerance of 1.5 percentage points above or below. Annual inflation eased to 5.32pc in May . Central bank forecasts for 2025 and 2026 inflation remain at 5.2pc and 4.5pc, respectively, it said. "Inflation risks, both upside and downside, remain higher than usual," the bank said By Lucas Parolin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more