Urea market cautious after US-Iran ceasefire
Published by Oliver Kleinschmidt,
Deputy Editor
World Fertilizer,
The reaction in the physical urea markets to the two-week US-Iran ceasefire has been muted so far, but downwards pressure is building, with US urea futures trading down by more than 6% on the 8 April according to Argus Media’s research.
Some traders have portrayed the last-minute deal as ‘fragile’ but also acknowledge that buyers will be looking to pressure prices down after five weeks of soaring levels.
Traders appear to be taking a cautious approach while the market determines exactly how much urea has been lost since the hostilities began on 28 February, and how quickly affected plants and Middle East exports can resume in earnest. The global markets are still short despite demand destruction in almost all markets apart from India, according to one veteran trader, and only the resumption of Chinese exports can bring the market back to a ‘comfort zone’.
The urea market has seen more than 2 million t of production cut, Argus Media estimated, while there are vessels carrying around 1 million t of urea in the Middle East Gulf, Kpler data showed. The final figure floating in the Gulf could be higher should vessels have disabled their automatic identification systems. None of those vessels have traversed the strait of Hormuz so far on 8 April, according to Kpler.
Argus Media estimated, conservatively, that at least 2.3 million t of urea production has been cut since the war began, with major outages in India, Iran, Bangladesh, Qatar, and Russia.
Find the original article by Harry Minihan on Argus Media here.
Read the article online at: https://www.worldfertilizer.com/nitrogen/10042026/urea-market-cautious-after-us-iran-ceasefire/