The market is waiting for reduction in carbamide prices due to Chinese exports
World carbamide prices can stop growing and proceeding to a decrease against the background of expectations of export from China, limited in 2024. From May to September, China can ship about 2 million tons into foreign markets. A shortage of nitrogen fertilizers in the United States can support Russian quotes in such conditions, analysts say.
Market participants expect to reduce world carbamide prices against the backdrop of the prospects for the resumption of exports from China, the review of the Center for Price Index (CCI) said. Global buyers against this background reduce the activity in procurement, analysts indicate. According to the CCC, the price of granular carbamide prices for a week by May 16 at the FOB base of the Baltic has already decreased by 1%. Quotes are in the range of $ 350–360 per ton. The cost of urea is retained at $ 335–345 per ton.
China limited the export of carbamide and phosphates in June 2024 to contain domestic prices for fertilizer and reduction in farmers’ costs, Bloomberg reported. According to the CCI, the parameters of the possible renewal of export of carbamide were discussed in May at a meeting of the Department of Economics and Trade of the State Committee for the Development and Reforms of the PRC. It is assumed that the quotation system will be installed and exports according to the results of 2025 will not exceed the indicators of 2023 (4.3 million tons). Market participants evaluate the possible supply potential of 2 million tons, the review of analysts said. At the same time, the exports of Chinese carbamide to India will be either prohibited or limited.
According to the market participants, which gives the CCC, with a KITARID PORTS, $ 360 per ton, granular – granular – at $ 370 per ton. MMI clarifies that these are the minimum prices that Chinese manufacturers should adhere to export. The return of phosphorus -containing fertilizers from China in the near future does not expect the market, analysts of the CCI add.
According to MMI, in 2024 the Russian Federation increased the export of urea by 4%, to 9.7 million tons, the supply of all mineral fertilizers to foreign markets increased by 13%, to 42 million tons. The volume of world trade in urea, the Fosagro review said in 2023, is about 53 million tons.
MMI clarifies that from May 15 to October 15, the export of Karbamid from China is open for qualified manufacturers and distributors with a total quota of 2 million tons. The first delivery is scheduled for May – July, the second – for August – September. As indicated in MMI, in the world export of carbamide, China was in different years in the second or fourth places. In 2023, about 45% of the supplies were in India, 28%-to Southeast Asia, 15%-to Latin America. Given the limited proposal and demand in Southeast Asia and the upcoming Indian tenders, Chinese volumes will probably be mainly consumed in these regions, and a small part can go to Latin America, MMI believes.
The Kommersant source in the industry notes that while carbamide prices remain stable and influx of offers from traders for the supply of Chinese goods are not observed. Of course, the source of Kommersant notes, in the event of a proposal growth, price correction is possible, but most likely the main volumes of Chinese carbamide will be offered in the markets of Southern and Southeast Asia, which should be more affected by the Middle Eastern manufacturers.
Nina Adamova from the CEP Gazprombank believes that the growth factor of the Chinese offer of urea will negatively affect prices in the second and third quarters of this year. But the expert does not expect a significant decrease in Russian export quotes. “The share of the United States in Russian export of nitrogen fertilizers is more than a quarter, and this market experiences a shortage. And this factor will be a positive counterweight in the formation of Russian export prices for urea in conditions of rising Chinese exports, ”explains Nina Adamova. The Genesis Fertilizer fertilizer manufacturer reported in his review that by the end of April, the prices of carbamide in the United States rose by 53% from January, to about $ 440 per ton, which became a maximum since 2022. This has made the US Carbamide market the most expensive in the world, the review is noted.
