StoneX: Urea begins downward trend after price increase.

After two months of strong appreciation, the global urea market is beginning to show clear signs of losing momentum, as prices have reached increasingly unsustainable levels from a demand perspective. According to StoneX, a global financial services company, although logistical constraints in the Middle East remain a structural limiting factor for supply, weakening consumption has begun to exert a greater influence on price dynamics. 

In Brazil, this trend is already being reflected in concrete terms. According to the weekly fertilizer report, urea prices have fallen for the second consecutive week, with deals being closed slightly below US$770 per ton, about 4% lower than the benchmarks from two weeks ago.  

In this scenario, declines were also observed in the United States, China, the Middle East, and Egypt, indicating a broader weakening of prices, aligned with weaker global demand. 

As shared by Market Intelligence analyst Tomás Pernías (pictured), the current context highlights a significant shift in the price formation vector. "Even with a still tense supply-side environment, weaker demand has begun to have a greater impact on market dynamics, pushing prices down after a period of intense increases," he emphasizes. 

Nevertheless, the expectation is that any further declines will be limited in the short term. This is because logistical bottlenecks in the Middle East, a region responsible for a significant portion of global urea and ammonia exports, continue to restrict international supply. 

In this environment, prices tend to remain relatively stable, even in the face of weaker demand. According to Pernías, this scenario is influenced by factors such as periods of lower consumption in key countries, less attractive terms of trade for producers, and a more cautious stance from buyers, who have avoided making new purchases given market uncertainties.