Urea Prices Fall: Which Companies Could Be Affected?
Fertilizer Update: Weekly Prices for the Week Ended May 20
Urea prices
Previously, we discussed ammonia prices in the week ended May 20. As most global ammonia production is upgraded to urea, ammonia prices may affect urea prices. Overall, urea prices for the week ended May 20 were in the negative territory.
Granular urea prices
Granular urea prices in the Corn Belt declined to $254 per metric ton FOB (free on board), or $290 per short ton, from $258 per metric ton ($285 per short ton), a decline of 1.8% from one week earlier. YoY (year-over-year), Corn Belt prices are down by 32%.
Granular urea prices in China have also declined, to $225 per metric ton, a 2.2% decline from the $230 per metric ton in the previous week. Urea in China fell by 26% YoY from $305 per metric ton in the same week last year.
Things were no different in the Middle East, where granular urea prices fell to $218 per metric ton from $220 per metric ton during the previous week. Urea prices dropped by 27% YoY in the Middle East.
Prilled urea prices
At $198 per metric ton, prilled urea prices from the Black Sea region were down by 3.4% week-over-week. Prilled urea prices from this region declined by 27% YoY.
Urea prices affect companies such as CF Industries (CF), CVR Partners (UAN), and PotashCorp (POT). Declining prices also affect the iShares US Basic Materials ETF (IYM). IYM invests ~48% in chemical companies, with a 9% investment in Monsanto (MON). In the next part of this series, we’ll look at key input costs for nitrogen fertilizers.
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