For the Quarter Ending June 2023

North America

In the second quarter of 2023, the North American Urea market witnessed prevailing pessimistic sentiments. The decline in Urea prices was primarily attributed to the diminishing prices of its feedstock, Ammonia, and upstream Natural Gas. According to data from the US Bureau of Labor and Statistics, the Natural Gas Index registered a 2.6% decrease in the month, marking the fourth consecutive decline. Low water levels in the Mississippi River, caused by high temperatures, disrupted exports from the USA to other countries, resulting in surplus availability of Urea in the market. Consumers also displayed hesitancy in making bulk purchases due to rising inflationary pressures and a global economic slowdown. The collapse of two major banks in the USA further impacted demand and contributed to the market's contraction. However, demand saw a slight revival in May due to the summer season but declined again in June. Notably, the Consumer Price Index of the USA, as indicated by the Federal Reserve of Economic Data, showed a marginal rise from 302.91 in April 2023 to 303.29 in May 2023 and is expected to continue increasing.

APAC

Throughout the second quarter of 2023, Urea prices experienced a downward trend in the APAC region. The declining trend was primarily influenced by reduced demand in the end-user fertilizer segment and decreasing prices of feedstock Ammonia and upstream Coal. Additionally, the lack of procurement orders from international markets, particularly India and South Korea, had a significant impact on the prevailing trend. India's Kharif sowing witnessed an 8.4% YoY decline due to below-normal rainfall, further weakening the fertilizer market. Amidst global inflation, China reduced its exports by 12.4% in June 2023, compounding the decline in end-user market demand and contributing to a narrow demand-supply gap. Consequently, traders were compelled to maintain lower prices. Moreover, as reported by the National Bureau of Statistics China, the Purchasing Manager Index declined to 48.8 in May 2023, with a 0.8% drop from the previous month, along with a decrease in the industrial growth rate from 5.6 in April 2023 to 3.5 in May 2023.

Get Real Time Prices of Urea: https://www.chemanalyst.com/Pricing-data/urea-1190

Europe

In the European market, Urea and other fertilizer prices have been grappling with challenges, primarily stemming from the ongoing conflict between Russia and Ukraine. Additionally, mounting inflationary pressures and economic slowdown have further impacted demand. In an effort to combat inflation in the region, the European Central Bank raised interest rates significantly, causing buyers to hesitate in making bulk purchases. Urea prices experienced a 4.4% decline in Russia and a 3.5% decline in Germany from April to June. Furthermore, an Ammonia pipeline blast in Russia resulted in surplus availability of feedstock Ammonia in the country, coupled with healthy production rates, creating an oversupply situation amidst declining demand from the end-user fertilizer segment. Eurostat data indicated a decline in the Producers' Price Index of the region, dropping from 143.4 in March to 138.3 in May, with expectations of further declines. Overall, the Urea market in Europe remained bearish during this quarter, marked by reduced enthusiasm for bulk purchases in the face of growing regional inflation.


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