Global Fertilizer Market Weekly Update (CW20)
Updated: May 13
Global fertilizer markets remain highly volatile as geopolitical tensions, Middle East shipping disruptions, rising sulfur costs, and shifting seasonal demand continue to reshape trade flows and production economics. This week, international urea prices corrected sharply after India’s IPL tender, sulfur prices surged to multi-year highs, Europe’s fertilizer industry faced mounting energy pressure, and climate agencies warned of a potential strong El Niño return that could impact global energy and fertilizer markets in the coming years.
Urea Market Corrects Sharply After India Tender, Prices Drop by Up to USD 190/t
Following India’s IPL urea tender, the international urea market moved lower under pressure from weak seasonal demand, cautious purchasing activity, and sufficient May shipment availability.
IPL plans to procure around 2.5 million tons of urea, though part of the volume remains unconfirmed as buyers resisted CFR premiums above USD 935/t. Some Indian transactions were reportedly concluded below theoretical benchmark calculations.
The Western Hemisphere saw the largest declines:
Algeria FOB fell to around USD 830-850/t
Egypt transactions peaked near USD 850/t
Baltic FOB dropped to approximately USD 700/t, down significantly from the previous USD 860–890/t range
At the Port of New Orleans, concentrated arrivals during March–April and poor weather conditions pressured prices further, with re-export cargoes trading in the low-to-mid USD 700/t FOB range.
Brazilian prices fell to around USD 770/t, while Central America CFR levels remained above USD 800/t.
In contrast, Eastern markets showed stronger resistance to declines. Supported by Middle East tensions and the continued absence of Chinese exports, suppliers maintained FOB offers near USD 900/t, though trading activity remained limited.
The market is now entering the traditional second-quarter low-demand season. Buyers remain cautious, while future market direction will largely depend on:
Middle East developments
India’s next tender timing
China’s export policy direction
Strait of Hormuz Disruptions Push Sulfur Prices to Multi-Year Highs
Global sulfur prices continued rising sharply this week as Middle East shipping disruptions and tightening supply pushed May official prices to multi-year highs.
The vessel Richsing Lotu, carrying approximately 50,000 tons of sulfur, remained delayed near the Strait of Hormuz for weeks before finally passing through between May 1–6 on its way to Morocco.
Current estimates suggest nearly 1 million tons of sulfur are waiting for shipment in the Gulf region, with most volumes already tied to long-term contracts.
At the same time, major Middle East producers significantly increased May sulfur official prices:
Kuwait Petroleum Corporation raised FOB prices by USD 195/t to USD 765/t
QatarEnergy increased FOB prices to USD 740/t, the highest level since 2013
ADNOC raised FOB prices for the Indian subcontinent to USD 760/t
Higher freight costs, war-risk insurance, and bunker fuel expenses continue pushing global sulfur CFR values upward, adding significant cost pressure to phosphate fertilizer production worldwide.
China’s Fertilizer Exports Continue Growing
China Customs released preliminary April fertilizer export data on May 9, showing continued export growth despite global market volatility.
Key figures include:
April fertilizer exports reached 3.236 million tons, up 27.6% year-on-year
January–April cumulative exports totaled 11.393 million tons, up 17.5% year-on-year
Europe’s Fertilizer Industry Faces Rising Energy and Supply Pressure
Shipping disruptions around the Strait of Hormuz and rising natural gas prices are placing Europe’s fertilizer industry under increasing pressure.
Germany’s largest urea producer, SKW Piesteritz, is reportedly operating at full capacity to offset supply shortages, though surging energy costs continue weighing heavily on profitability.
The company relies on natural gas for around 80% of its production. Since tensions escalated in the Middle East, gas prices have reportedly doubled, further increasing production costs.
German farmers report fertilizer prices rising by roughly 50% since the conflict intensified, while grain prices have remained relatively stable, leaving growers to absorb the additional costs themselves.
Industry associations warned that continued dependence on imported fertilizers could threaten Europe’s long-term food security and industrial competitiveness under current carbon-emission regulations.
Potential El Niño Return Raises Concerns for Energy and Fertilizer Markets
The World Meteorological Organization (WMO) warned that a strong El Niño event could return between May and July, potentially triggering extreme weather, energy volatility, and additional pressure on fertilizer production costs.
Recent ocean temperature data suggest current conditions may develop into one of the stronger El Niño cycles in recent history.
Extreme heat could increase electricity demand, disrupt energy supply systems, and indirectly raise nitrogen fertilizer production costs. Similar conditions during the summer of 2023 previously led to temporary urea production cuts in China.
Key market expectations include:
2027 could potentially become the hottest year on record globally.
Summer energy pressure may become more severe than winter pressure.
Coal markets have already begun pricing in high-temperature expectations.
July–August are expected to become the main pressure period for global energy markets.
Global Fertilizer Market Weekly Update | CW20
Comments