Urea Outlook
The recent RCF urea tender due to close today, may be the last tender that influences the UK 2020/21 season, so where does that leave urea markets as we look forward to next season. With steep price increases seen during this season, will these levels sustain, or is a correction due? India and China as always will remain the key, India for demand China for production. Favourable rains boosted demand in India with record tenders in 2019 and 2020, even if weather is not so helpful next year, India could still reach over 7M tonnes. In 2019/20 India imported 9M tonnes, the 2020/21 season which is judged to the end of March 10M is possible. Away from India demand will be strong from Brazil, with no significant urea production Brazil is set to import over 6M tonnes. Energy and cost of production is the final part of the jigsaw. Energy markets have been disrupted during 2020 due to Covid-19 from the lows at the start of the pandemic in April, oil prices have risen from $20 to $67 a barrel recently. China with its higher proportion of older coal and anthracite factories is considered a high cost of production, this increase has enabled them to compete and supply this extra demand. While the global exit from Covid is far from certain we cannot be sure when or if energy prices will settle down. If energy prices remain at the levels seen over the last few months, this will put pressure on European and North African producers to keep Urea levels where they currently are, as we head towards the summer.
ABP Ipswich
Associated British Ports (ABP) owners of the port of Ipswich reached a milestone in March of handling 2 million tonnes of all cargo since the start of the first lockdown in 2020. The port has remained open and handles both imports and exports with cargoes as diverse as aggregates and timber to agri-bulks such as grain for exports and of course fertilisers. Andrew Harston, ABP Short Sea Ports Director commented ‘I am proud of our ABP colleagues in Ipswich but also across all of ABP’s ports who have kept goods moving and trade flowing despite the global pandemic’. Below is a cargo of MOP for COFCO Intl about to be discharged at Ipswich, earlier in the year.
Due to annual leave, the next issue of Fertiliser Focus will be Tuesday 6th
Economic Data as at close on Friday 19th February v (12th February 2021) £ = $ 1.3876 ($1.3921) £ = € 1.1656 (€ 1.1646) Crude Oil = $ 64.04 ($ 69.17) Natural Gas =$ 2.52 ($2.66) Please treat pricing on graphs as a guide, please use quote request form for an up-to-date price.