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Global Urea Production Cost Curve Breaks In Front of Our Eyes

KEENE, N.H., Aug. 3, 2016 /PRNewswire/ -- Green Markets- China is being displaced as the world's swing manufacturer of the most ubiquitous fertilizer product, urea.

During the first half of 2016, China exported approximately 5.1 million metric tons ("mmt") of urea vs. 6.75 mmt during the same time in 2015. In the same period, there were significant pricing dynamics at play: the primary input cost in the manufacture of Chinese urea, anthracite coal, was relatively stable; while benchmark US Gulf (NOLA) urea prices retreated an additional 17%.

So as China slowed its pace of exports by 25% this year, presumably tightening global supplies, benchmark prices still fell because of increased global product availability. China is running at a reported 65% of production capability, but global additions are removing the need for higher cost Chinese urea across regional markets.

Said Neil...


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