China’s record low urea exports support nitrogen fertilizers outlook: Fertiglobe

Record low urea exports by China pose a "favorable" short-term outlook for nitrogen fertilizers, UAE-based fertilizer exporter Fertiglobe said on Nov. 11.

"The longer-term outlook continues to be supported by improving demand from new and existing applications, coupled with limited supply additions," the company said in an earnings statement to the Abu Dhabi Stock Exchange. Abu Dhabi National Oil owns 86% of Fertiglobe.

China's urea exports fell almost 92% year over year to 25,515 mt in August, according to S&P Global Commodity Insights trade data, due to China's stringent export restrictions implemented by the National Development and Reform Commission in late 2023.

Fertiglobe's revenue in the three months ended Sept. 30 dropped to $495.6 million from $525.1 million a year earlier, with its own-produced sales down 7% to 1.36 million mt, ammonia sales off 6% to 305,000 mt and urea falling 8% to 1.056 million mt, it said. The company set aside $87 million, with $28 million attributable in the third quarter, for a possible expense related to potential changes in the Algerian pricing setup. The Algerian gas pricing set-up expired from November 2023 to September 2024, it said.

Fertiglobe also said it's renegotiating the gas supply contract for its Sorfert fertilizer plant in Algeria, with the new price set to be retroactive to the lapse of the 10-year gas stability period, it said.

Gas shortages in Egypt and Trinidad curbed available exports of ammonia in Q3, along with power outages in Algeria, the company said. That caused ammonia prices to rise about 20% in Q3 from Q2, it said.

Ammonia markets are "expected to be firm on continued delays to the start-up of new merchant ammonia supply, reduced exports, the start of the US application season, demand pick-up at major import markets, and elevated" gas prices, it said. Urea prices in Eygpt rose 11% in Q3 vs Q2, reaching about $400/mt in October, it said.

Following ADNOC's completion of its increased interest in Fertiglobe in Ocrober, Fertiglobe said it will consolidate ADNOC's existing and planned low-carbon ammonia projects in the UAE and Texas. Two low-carbon ammonia projects in the UAE include the existing 1 million mt/year project under construction and another 1 million mt/year project in the pre-engineering stage. The 1 million mt/year low-carbon project in Baytown, Texas is in partnership with ExxonMobil, it said. All these projects will add about 2.4 million mt/year of ammonia production capacity, leaving capacity at about 9 million mt/year of net ammonia and urea, the company said.