Yara, the global fertiliser giant, has warned that further increases in the price of nitrogen is coming down the tracks. The Norwegian fertiliser company said that reduced urea exports from China was driving “higher price volatility” in fertiliser markets.
Yara, the global fertiliser giant, has warned that further increases in the price of nitrogen is coming down the tracks.
The Norwegian fertiliser company said that reduced urea exports from China was driving “higher price volatility” in fertiliser markets.
The price warning from Yara is in contrast to recent forecasts made by the company.
In July, Yara said that nitrogen prices would remain low into 2018 as there was significant oversupply in the market.
This oversupply related to additional capacity for urea production that was coming online in the US. However, Yara now says there has been a “significant curtailment” in Chinese urea exports due to high coal prices pushing up the cost of production.
Global markets
As the world’s biggest producer and exporter of urea, China is traditionally seen as the benchmark for nitrogen pricing.
The fall-off in Chinese urea exports has left a shortfall in global markets according to Yara, which is driving up prices.
Yara made the announcement as the company revealed third quarter sales of €2.5bn. However, due to rising gas costs in Europe the fertiliser giant saw operating profits plunge almost 50% to €74m, as profit margins were squeezed to 2.9%.
Average prices
Yara said its average price for Urea (fob) during the third quarter period was $235/t (€200/t), which was 22% higher than the same period last year.
Similarly, the price of CAN (fob) was 23% higher than last year at $205/t (€173/t).
Phosphate was the only fertiliser component to see a fall with prices back almost 20% compared to last year at $87/t (€73/t).
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