Fertiliser market report: Nitrogen prices surge pre-Christmas

Fertiliser prices have jumped by up to £10/t this month as buyers have rushed to snap up remaining stocks.

Nitrogen prices increased £6/t, while compound prices leapt £6-10/t depending on grade. November compound sales were extremely buoyant and a high percentage of forward orders will keep manufacturers and merchants busy over Christmas.

With price lists effectively now withdrawn until the New Year, current prices should be taken with a degree of caution.

Last month it appeared we were entering a period of stability: Forward prices were available through to spring, P and K prices were steady, and some there was some predictability in the nitrogen market.

Although price hikes to the degree of last year are not anticipated, the nitrogen market is extremely bullish for at least the next three months.

Global urea prices have risen by $40-50/t since 1 December. The cause is unclear but India is once more short of urea which is causing parliamentary debate there. The country needs to secure one million tonnes by early January, in a market unsure of availability.

China is expected to levy another export tax on urea on 1 January following domestic price increases. Chinese authorities always ensure supplies of affordable urea for home production. The level of anticipated tax varies, but either way it will support urea prices at the new higher level.

Market demand in the USA is also very strong and import demand to Europe is higher following the shutdown of Yara’s Ferrara plant in Italy.

Urea trends are mirrored by AN, and prices from the Baltics are also rising. This is being exacerbated as Russia and the Ukraine withhold exports to service home markets.

On top of that, markets for phosphate in the form of MAP and DAP have resurged and prices are also on the increase, by at least $20/t and maybe more to follow.

All this may sound like an invitation to panic, but that is not the case. Buyers who normally commit around now have done so in large numbers, as soon as trends were flagged up by merchants. A price rise of $50/t for urea was widely forecast for 2010 and many argue that we are simply seeing this hike earlier than anticipated.

December 2009 (£/t delivered)*

UK 34.5% N

PK seedbed grades

Imported urea

Imported AN

£198 (Dec) £205 (Jan)




Complex 25.5.5

Complex 20.10.10

Phosphate (TSP)

Potash (Muriate)





*All illustrated prices are based upon 24 tonne loads for cash payment month following. Prices for smaller loads and 50kg bags will vary considerably.

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