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Fertilizer prices fall sharply – price drop lasts until May

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Fertilizer prices fall sharply – price drop lasts until May

Urea producers and sellers will have to grant further significant discounts in order to sell any goods at all, analysts report. Even if there are occasional peaks in demand, the market development is strongly geared towards the large supply. The next Indian tender will probably not appear before the middle of the second quarter and will give prices new impetus.

From Europe, retailers are already reporting signs of an incipient seasonal decline in demand. Until May and June, urea producers will have to work very hard to find sufficient sales for their product, analysts say. You can see that in the international prices. In the US Gulf, these fell by a further USD 15 to USD 20 per ton for shipment in April to USD 312 per ton and by June to just USD 303 per ton.

In the Middle East, prices fell below the USD 300/t mark this week – to around USD 290 for April and May. Traders report that Middle East producers appear to have significant unsold volumes. May is usually even quieter than April for fertilizer sales and it looks like urea prices will continue to be under tremendous pressure until then and may then bottom out somewhat, analysts believe.

Ammonium nitrate (AN) prices are also adjusted further downwards as AN manufacturers and traders strive to keep AN’s distance from urea and not promote urea sales. AN sales remain extremely subdued across Europe as wet and cold weather has noticeably slowed output. AN demand is expected to spike after Easter when spring ordering is in full swing, some market watchers believe. However, whether this increase will be enough to reverse price direction is questionable, especially as urea is plentifully available as a substitute for AN.

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