China’s domestic urea price edged lower on June 1. Upstream offers held broadly steady but with a softening bias, and offtake was sluggish. Plywood producers (tech urea) continued drawing down existing raw material stocks rather than restocking. Agricultural enquiries remained thin and geographically dispersed, lacking the critical mass needed to provide any price support. Market activity was subdued overall.
Daily urea output reached 216,400 MT on June 1, 2026 with plant operating rates at 86.27%. The market undertone is weak but broadly stable.
**DIRECT HEDGE PAPER MARKET | 1 June 2026**
<a href="https://www.staging.aquifert.com/wp-content/uploads/2026/06/Direct-Hedge-1-Jun-2026.pdf">**Direct Hedge 1 – Jun – 2026 – Link**</a>
Direct Hedge paper values out this morning show June NOLA urea bid at USD 450/t against a monthly average of USD 558.98/t. The curve is in backwardation through Q3, with September bids dropping to USD 435/t.
For buyers not yet covered, the paper market is signalling prices have further to fall. Arab Gulf swaps sit at USD 500-530/t for June, easing toward USD 450-530/t by Q3.
Unless you have an urgent agronomic window, the forward curve suggests patience is being rewarded right now.
**Aquifert Sulphur Market Brief**
Week 22, 2026 | 1 June 2026
FOB Middle East: USD 740-765/t
CFR China Granular: USD 950-1,000/t
China Domestic Spot: CNY 7,360-7,420/t ex-works
The global sulphur market remains caught between severe physical tightness and growing demand destruction. Prices have stabilised at historically elevated levels but buyer resistance is hardening. End-of-week activity was subdued across major markets. That reflects affordability stress, not any improvement in supply.
The structural problem has not changed. Strait of Hormuz disruption continues throttling global supply chains. The Middle East accounts for roughly half of all traded sulphur, and vessel congestion, elevated insurance costs, and restricted transit are all limiting outflows. Large volumes remain stranded inside the Gulf. Producers are running into storage constraints and losing operational flexibility.
Middle Eastern FOB held at USD 740-765/t despite ongoing disruption. That price stability is not a sign of improving fundamentals. It signals buyer resistance. Chinese import prices were equally flat at USD 950-1,000/t CFR, with very few transactions reported.
China tells the clearest story. Domestic prices held around CNY 7,360-7,420/t ex-works while inventories continued falling, slipping back below 1 million tonnes to approximately 988,000 tonnes. That is one of the lowest inventory levels in years and points to serious future availability risk, even with near-term demand looking weak.
The most significant development of the week came from India. IPL cancelled its 593,500 tonne sulphur procurement tender after negotiations broke down on price. Offers came in at USD 1,065-1,295/t CFR for large east coast parcels, with smaller west coast volumes offered near USD 1,400/t CFR. The cancellation is the clearest signal yet that parts of the market cannot absorb current pricing.
Supply risks are widening beyond the Gulf. Fires were reported at Russia's Volgograd refinery this week. Kazakhstan's Tengiz field also saw operational disruptions. Potential maintenance delays at Kashagan add further uncertainty around FSU supply at a time when alternative sources remain thin.
Downstream industries are showing increasing strain. Fertiliser producers across multiple regions are cutting operating rates as margins erode. North African producers are running well below normal capacity. Battery materials and mining sectors remain among the few buyers still competing actively for tonnes, but utilisation adjustments are ongoing there too.
The sulphur market remains structurally undersupplied. The question is no longer how high prices can go. It is how much demand survives at these levels.
**<a href="https://www.staging.aquifert.com/wp-content/uploads/2026/06/Hormuz-1st-June.xlsx">Hormuz 1st June</a>**
Spreadsheet with a list of vessels in the Straits of Hormuz
**Platform Update | Week of 2 June**
We are running stress tests on the platform this week, so expect occasional performance variation. Alongside this, we are rolling out the FOB Netback and On-Farm Price Calculator, a new tool to help importers, distributors, and traders quickly compare origins on landed cost.
More detail to follow on launch.
Iranian producers announced **USD 490 FOB** as official price on 30th May which is a significant drop on last week (USD 60/Mt)
Pardis and Shiraz are offering 30-60 Kt for June shipment.
MIS is offering 30-90Kt for June shipment.
Kermanshah announced a sales tender on 31st May for 30-45 Kt granular urea for first half of June shipment. The tender will close on 2nd June 2026
*Urea Production:*
*Pardis:* One line resumed the production and two lines are down
*Shiraz (Prilled):* Down
*Shiraz (Granular):* Active
*KPIC:* Active
*Lordegan:* Down
*MIS:* Active
*Khorasan:* Active
*Razi:* Down
*Hengam:* Ammonia unit is producing but urea units is down due to technical problems.
China's domestic urea market has been largely stable since the start of the weekend, though the tone is soft and getting softer. A handful of factories have trimmed prices modestly, order flow is thin, and pre-paid volumes are sitting in the queue waiting to ship. The export-driven premium that supported prices in recent weeks has now been fully absorbed. Futures are drifting without conviction, adding little to market confidence.
The fundamental pressure is seasonal. Wheat harvesting across China's major producing regions is now underway in earnest, and the knock-on effect is being felt across the supply chain. Industrial manufacturers are pulling back on run rates, and agricultural input dealers have little appetite for restocking. Both trends look set to persist in the near term.
Shandong: Medium granule spot is trading CNY 1,760-1,820/t, with large granule holding around CNY 1,880-1,900/t. Factory order flow is thin. The board mill sector is running at reduced rates as workers turn to the wheat harvest. Lu'nan is offline for maintenance until 4 June. All other facilities are running normally.
Hebei: Ex-works prices are steady at around CNY 1,810/t. Buyer interest is limited to small agricultural top-ups and essential industrial volumes. Some factories have pre-paid orders pending shipment. Zhengyuan Pingshan remains on extended idle. The new Zhengyuan Huanghe plant is expected to commission in H2.
Anhui: Factory wholesale prices are holding at the provincial ceiling of CNY 1,800/t. Demand is being driven by essential industrial purchases and modest agricultural restocking. Hefei Sifang is under maintenance. Jinmei Zhongneng has shut older units while new capacity runs normally.
Henan: The weakest provincial market. Small and medium granule output prices range CNY 1,780-1,810/t and are increasingly negotiable. Compound fertiliser production has eased and harvest activity is suppressing demand. Xinlianxin's new 800,000t facility is due online in July.
Xinjiang: Stable, with northern plants holding to the local guidance price of CNY 1,490/t and southern plants ranging CNY 1,580-1,690/t. Most output is being absorbed domestically with only a small volume moving to outside markets. Xinji has a planned maintenance shutdown in June.
Guangdong and Guangxi: Prices are holding but showing early signs of softening. Guangxi small and medium granule is trading CNY 1,890-1,920/t. Guangdong is around CNY 1,970/t.
The outlook is range-bound. With harvest demand fading, export stimulus absorbed, and no strong restocking catalyst in sight, significant price movement in either direction looks unlikely near-term.
The USD declined against major currencies on Friday, marking its second consecutive week of losses. This downturn followed reports that the US and Iran agreed to extend their ceasefire and lift shipping restrictions in the strategic Strait of Hormuz.
US President Donald Trump noted that a final decision regarding the 60-day truce extension would be made on Friday. Sources indicated the extension aims to maintain shipping traffic while negotiators address complex issues, including Iran's nuclear programme.
While the USD initially surged as a safe-haven asset at the start of the conflict, it has since surrendered those gains due to ongoing uncertainty.
## Currency Movements
* The EUR rose 0.26 per cent to 1.1678 USD, heading for a weekly gain.
* The GBP increased 0.23 per cent against the USD to 1.3473 USD.
* The USD index dropped 2 per cent to 98.81, confirming the weekly loss.
* The AUD climbed 0.41 per cent to 0.71915 USD.
* The NZD gained nearly 1 per cent to 0.59920 USD, hitting a three-month high after hints of interest rate hikes from the Reserve Bank of New Zealand.
Market analysts noted that a lack of clarity surrounding the geopolitical situation has left central banks without a cohesive narrative, directly stalling USD momentum. This comes despite Thursday's economic data, which showed US inflation rising at its fastest pace in three years this past April. Higher energy costs driven by the conflict have led economists to project that the Federal Reserve will maintain current interest rates well into next year.
## Japanese Yen Interventions
The JPY traded at 159.22 per USD, hovering just below the critical 160.00 threshold. On Friday, Japan's Ministry of Finance confirmed that authorities spent 11.7 trillion JPY (approximately 73.5 billion USD) over the past month in direct market interventions to support the struggling currency.
After speaking with our China sources, it is looking highly unlikely that Phosphates will be exported this year. There was hope that maybe some would be allowed out in August be this seems remote now.
News headlines from around the world this week:
### Australia and Asia
* **Australia increases monthly urea imports:** Despite the March surge, the quarter still closed with a 3.4% contraction.
* **Russia and Bangladesh renew potash agreement:** Historic contract exceeds 500,000 tonnes of KCl.
* **Yuntianhua to invest USD 1.13 billion in phosphate mine:** Project forecasts annual production of 10 million tonnes of phosphate rock in China.
* **India's fertilizer subsidies could reach USD 31.4 billion:** Rising international prices pressure the Indian agricultural budget.
### Central Asia and the Middle East
* **EuroChem inaugurates sulfuric acid plant in Kazakhstan:** Unit integrates a USD 1 billion complex aimed at regional fertilizer production.
* **Jordan expands phosphate rock exports:** Shipments grew 5.2% in the first two months and reinforced the strategic position of the country.
### Europe and Africa
* **Russian fertilizer production falls 0.4%:** Supply remained relatively stable in the first four months of 2026, totalling 22.2 million tonnes.
* **Turkish ammonium sulfate imports decline 17%:** Logistical adjustments reduced the volume internalized in the first four months.
* **Egyptian urea exports drop 40%:** Reduction in the external flow impacted volumes directed to the European Union and Turkey.
* **United Kingdom assesses suspending fertilizer import tariffs:** Measure aims to reduce agricultural costs in the face of the global logistical crisis.
### The Americas
* **USA announce package for domestic fertilizer production:** Measures include regulatory flexibility and support for the expansion of nitrogen products.
* **Chamber approves creation of Profert in Brazil:** Programme seeks to stimulate national fertilizer production with tax incentives and financing.
* **Argentine DAP/MAP imports grow 16%:** Flow was driven by cargoes originating from Lithuania, Morocco, and Saudi Arabia.
* **Chilean sulfuric acid imports fall 39%:** Mining remains the main demand driver for this strategic input.
<a href="https://www.staging.aquifert.com/wp-content/uploads/2026/05/Fertilizer-28-05-26-DH.pdf" title="Direct Hedge weekly settlement values – May 2026">
<img src="https://www.staging.aquifert.com/wp-content/uploads/2026/05/IMG_8563.jpeg" alt="Direct Hedge Weekly May 2026 Settlement Values" />
</a>
Weekly settlement prices for the Month of May 2026 – Direct Hedge
VIETNAM | TRADE FLOWS | MAY 2026
Vietnam’s fertilizer import volumes are shrinking while export values explode. In the first four months of 2026, imports fell 25% year-on-year to 1.37 million tonnes, yet average import prices crept up 3.7% to USD 331/t. China still dominates the import side at 51% of volume but its pricing to Vietnam has surged 18% year-on-year – a signal worth watching for anyone tracking Chinese export behaviour.
On the export side, the numbers are striking. Vietnam shipped 379,000 tonnes in April alone, up 137% year-on-year in volume and 235% in value, averaging USD 606/t. Four-month export revenues hit USD 590 million at an average of USD 496/t – up 100% on the same period last year. Cambodia remains the dominant outlet at 202,000 tonnes, but the Philippines surge stands out: volume up 164%, value up 238%. Thailand is the outlier of the quarter – exports there grew 333% in volume and 470% in value year-on-year, though off a low base.
Vietnam Fertilizer Exports by Destination | Jan–Apr 2026
|Market |Volume (t)|Value (USD)|Volume YoY (%)|Value YoY (%)|
|————–|———-|———–|————–|————-|
|Cambodia |202,322 |85,499,859 |-1.48 |+25.79 |
|South Korea |88,518 |58,687,892 |-11.00 |+45.70 |
|Philippines |94,977 |50,076,064 |+163.93 |+237.91 |
|Malaysia |68,504 |37,784,040 |+5.07 |+43.12 |
|Myanmar |30,442 |17,605,367 |+178.19 |+204.54 |
|Thailand |21,244 |13,069,086 |+332.84 |+470.17 |
|Laos |42,313 |10,826,439 |+57.97 |+9.54 |
|Taiwan (China)|7,080 |3,934,279 |-75.45 |-67.85 |
|Japan |5,715 |3,308,731 |-71.91 |-65.73 |
|Mozambique |1,595 |1,263,955 |-30.95 |-27.61 |
|Angola |44 |70,416 |-15.38 |-4.57 |
Source: Vietnam Customs, data released 10 May 2026.
Vietnam is quietly becoming a meaningful fertilizer exporter, not just a consumption market. Watch the South and Southeast Asian trade lanes.
## China Nitrogen Fertilizer Industry Association Document
**China Nitrogen Fertilizer Association [2026] No. 027**
### Notice on Convening a Symposium for Key Nitrogen Fertilizer Production Enterprises Ensuring Supply
**To all relevant units:**
To ensure the stable supply and pricing of domestic nitrogen fertilizer for the upcoming period, the China Nitrogen Fertilizer Industry Association has decided to hold a symposium for key nitrogen fertilizer production enterprises in Beijing on 3 June. The meeting will research the next steps and priorities for our work. The relevant details of the meeting are notified as follows:
### I. Meeting Content
1. Invite relevant enterprises to analyse domestic and international nitrogen fertilizer market trends.
2. Exchange information on current nitrogen fertilizer production and sales for each enterprise.
3. **Training on data submission for nitrogen fertilizer production, sales, and export.** (Highlighted in image)
4. Research further measures and recommendations to ensure stable supply and pricing of nitrogen fertilizer.
### II. Participants
One person in charge of sales (Deputy General Manager level or above) from key nitrogen fertilizer production enterprises ensuring supply, and one staff member responsible for data submission.
### III. Meeting Time
3 June, 14:00 to 18:00 (Sign-in from 10:00 to 13:00)
### IV. Meeting Location
10th Floor Multi-function Hall, Tower B, Tibet Hotel, Beijing
Address: No. 118 North Fourth Ring East Road, Chaoyang District, Beijing (220 metres walk northwest from Exit A of Huixinxijie Beikou Subway Station, Line 5)
### V. Meeting Fees
The meeting is free of charge. Accommodation is at your own expense.
Room reservation contact: Manager Jin (18910810565)
In China, to reward the phosphate factories for keeping the price extremely low, they will be rewarded with urea export quotas (in order for them to be able to show profits for the year)
State Trading Quotas
(Estimated at 2.97 million tonnes, accounting for 90%)
Yuntianhua (云天化): 700,000 tonnes
Hubei Yihua (湖北宜化): 700,000 tonnes
Sinochem Fertilizer (中化化肥): 550,000 tonnes
Sinofert / China Agricultural Means Group (中农集团): 450,000 tonnes
Hualu Hengsheng (华鲁恒升): 250,000 tonnes
Xingfa Group (兴发集团): 200,000 tonnes
Luxi Chemical (鲁西化工): 150,000 tonnes
Other state-owned enterprises (such as Lanhua, Huatian, etc.): around 170,000 tonnes
Non-State Trading Quotas
(Estimated at 330,000 tonnes, accounting for 10%)
Companies such as Huachang Chemical, Xinlianxin, Jinkong Coal, etc.
are reportedly allocated around 20,000–50,000 tonnes each
We have access to the full non-state list.
Urea markets still feeling extremely weak, latest gossip is that India L1 urea tender will be around USD 675 CFR. Which does not help China at all.
Common thinking so far is that Russia can do a USD 600 FOB, Egypt has 0 outlets and will therefore want to target it, as well as Algeria (same as IPL tender)
As there are no physical sales ex-AG (yes we know Saudi/Yanbu) but the journals are going to report a very wide spread, even so – have a look at midpoint + actuals – it will be sub USD 700 CFR, no doubt.
Then you have the likes of Indonesia waiting in the wings…