Fertiliser traders expect urea prices to stay subdued through the coming weeks after a sharp correction in the wake of Middle East disruption, but analysts say the market could firm again in the autumn as seasonal demand returns.
According to Owen Gooch, a senior analyst with Argus Media, the global urea market has moved back towards balance after Chinese exports resumed in late May and supply that had been held back in the Arabian Peninsula began to move again. He said prices ...
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fell steeply in June, then largely levelled off in July, and are likely to remain close to current levels for the next couple of months.
The latest trade has brought a dramatic reversal from the spikes seen after the outbreak of hostilities between the United States and Iran, when urea briefly traded at about US$900 a tonne. Argus now puts the price nearer US$400 a tonne, with Trading Economics showing a similar stabilisation around US$420 a tonne by July 2026 after the 2022 peak of more than US$1,000 a tonne.
Gooch said the return of product through the Strait of Hormuz, much of it already committed under long-term contracts, helped cool sentiment across the market. Producers in the Arabian Peninsula also kept operating through the crisis, using storage capacity on site and on floating terminals to hold surplus output until shipments could resume.
Argus estimates that about 905,000 tonnes of stored urea have now been shipped through Hormuz and the Red Sea, with a further 440,000 tonnes loaded and waiting to move. The firm also believes demand was delayed or lost to the market in April, May and June, when consumption fell by about 27% from a year earlier.
That weakness may prove temporary. Gooch expects a recovery in buying from September, when India typically steps up purchases ahead of its kharif planting season, while Latin American importers are also likely to return in force. European buyers may follow in October as they look to avoid higher costs linked to the EU’s Carbon Border Adjustment Mechanism, which is due to take effect from 1 January 2027.
Argus has raised its forecast for Chinese urea exports in 2026 to 6.5 million tonnes from 4.6 million tonnes last year, underlining Beijing’s growing influence over the market. By contrast, a return of new production from Nigeria and Russia later in the year could soften prices again in November and December.
The picture is less reassuring for phosphate fertilisers. Claira Lloyd, senior manager of Argus’s fertiliser analytics team, said tighter raw material supplies, particularly sulphur, had forced lower output across China, Africa, the United States, Latin America and India.
Argus has cut its forecast for global phosphate consumption to 48.3 million tonnes, down sharply from its January estimate. Its production outlook for diammonium phosphate, monoammonium phosphate and triple super phosphate in 2026 has also been reduced to just under 60 million tonnes, compared with 69 million tonnes in its earlier forecast.
Lloyd said the conflict disrupted movement through the Strait of Hormuz and constricted access to sulphur, making it harder for producers to maintain operating rates. She added that sulphur prices were already rising before the war, and that China later tightened its own export position by delaying phosphate shipments, with further restrictions possible if sulphur costs continue to climb.
For farmers, the result is a mixed outlook: nitrogen costs have eased for now, but the broader fertiliser market remains exposed to geopolitics, shipping bottlenecks and shifting export controls. In western Canada, where growers rely heavily on urea and phosphate, that volatility remains especially significant.
Source: Noah Wire Services
