Escalating hostilities in the Middle East and an associated surge in energy prices have prompted sellers to pull their offers for urea in the paper markets.
The Middle East April urea contract is bid at a minimum of $675/t, in line with a derivative trade for the contract on 6 March, according to a broker. But sell-side interest has disappeared.
Urea paper prices are set to push above $700/t, in light of southeast Asian granular urea trading at that price earlier today, another broker said. One of the brokers expects trade for Middle East derivatives to slow and largely be confined to holders closing out positions, as concerns build over how the index will settle as physical trade in the region slows.
Prices across the nitrogen complex are rising further today, driven upwards by the surge in energy markets, with European front-month gas futures and Brent crude contracts up by more than 15pc and 10pc, respectively. International urea prices have risen by around $200/t — or 40pc — from pre-war levels on 27 February.
