Ostchem Group reduced urea prices by 17%

Urea prices in Ukraine rose at the beginning of September and remained at a high level during the month, but from Tuesday they immediately decreased by 17% or 4 thousand UAH/t to 20 thousand UAH/t SRT, and in general in 2023 the price fell by 47%, the company Barva Invest reports in its weekly report.

Demand for urea has been low in recent weeks, so the price drop did not surprise the market, especially since trading companies sold Ukrainian products at lower than recommended prices. Importers also sold urea at a low price.

The magnitude of the price drop was unexpected, as global quotes have not shown significant jumps and have even risen slightly recently, as gas prices in Europe have also risen significantly after last week's decline.

At the same time, Ostchem did not change the prices of other nitrogen fertilizers, so the price of nitrate remained at the level of UAH 20,000/t SRT, for KAS-32 at the level of UAH 17,500/t SRT. Among the nitrogen fertilizers produced by Ostchem, urea was the cheapest in terms of active substance, and now the price difference with saltpeter and KAS has grown even more. Now the market has an unusual situation where the prices of saltpeter and urea in physical terms are the same, although usually urea is more expensive because it has a higher nitrogen content.

The Ukrtranslit company, which is the exclusive representative of Dniproazot, left the prices for Ukrainian and imported urea unchanged - at the level of 17,000 UAH/t in deep for water-soluble needs and 19,000 UAH/t for small. The imported product is offered at 24-24.5 thousand UAH/t FCA/EXW.

Other sellers and importers offer imported urea at a price of UAH 21-22.2 thousand/t FCA/EXW, which is still higher than Ostchem's prices. After the price reduction for Ukrainian urea, imported became uncompetitive, so importers plan to stop deliveries.

Urea prices are expected to remain stable in the near term. Lower prices for Ukrainian urea will stimulate its purchase, but mass farmers will not buy fertilizers due to low prices for agricultural products and problems with their sales. Reduction of supplies by importers against the background of only one working plant in Ukraine will reduce the free volumes of fertilizer on the market.