Nexus Weekly Update
07/05/26
In the Far East and South East Asia, it has been a quiet week, with many players away from their desks due to holidays in China and Japan. Enquiry has dropped noticeably. That being said, rates have remained relatively firm, supported by a limited tonnage list in the region. There is some caution that the current tightness in tonnage may be holiday-driven, and an influx could be seen once players return. The same applies to cargoes, making the near-term direction uncertain. Overall, a subdued week, with most already looking ahead to next week when activity is expected to pick up.
Tonnage lists lengthened this week in the Indian Ocean as discussions between Iran and the US remained ongoing. Market participants continued to take a wait and see approach, while others have established new routes for transporting their products in and out of the Red Sea, however insurance premiums for calling the area remain high. For the few cargoes that are coming up, competition is fierce amongst owners looking for coverage for their vessels. Further down, the South African market remains stable with a mix of rates being reported, however rates may come under pressure with an influx of vessels opening in the area in the coming weeks.
An oversupply of Handysize tonnage, particularly in the East Mediterranean and Black Sea, continues to limit upward momentum of rates. Emerging grain cargoes from the upcoming Russian harvest are expected to absorb some of this spare tonnage, and Russian callers will be able to command a premium. Many fertiliser stems on both handy/supra sizes are being covered, mainly for the Indian government tenders. Ongoing congestion in the western parts of the basin is tying up some vessels, offering only limited support given the lack of strong cargo demand this week.
In the US Gulf, the market has eased slightly from the previous week. A reduction in grain enquiry contributing to a softer tone overall. Tonnage availability remains broadly stable, though the lack of fresh cargo has led to increased competition among owners. As a result, some vessels are beginning to accept lower rates, with a growing preference to reposition towards South America in search of better opportunities.
In North Coast South America, weather related disruptions have slowed the movement of cargoes into ports, causing rates to soften. These weaker rates being observed have been compounded by a steady inflow of ballasting vessels from the Caribbean, as weaker conditions in the US Gulf encourage repositioning towards NCSA. Higher rates are being commanded by vessels in the ECSA as an increased number of grain cargoes have come to market this week. In West Africa, a slight uptick in cargo activity has been noted, largely driven by older stems which have been pushed back due to the high bunker prices. The persistent gap between owners’ and charterers’ expectations continues to limit fresh deals.
While bunker prices have softened from recent highs, prices continue to be aligned to ongoing geopolitical risks around the Strait of Hormuz, disruption to regional tanker movements, tighter global inventories, and declining US crude and product stockpiles. As a result, physical bunker markets across key hubs remain firm, with volatility expected to persist. Prices are currently holding around 800USD at Gibraltar and Singapore and 900USD in Fujairah.
Morning. Renewed optimism over a US/Iran peace 'deal' and trade flow though Straight of Hormuz (let's see) saw offers come in y'day, prices adjust lower, leaving bids cautious by end of day. Activity focused on Nola Urea – loaded phys traded $585 (down $30 from Tues), Q3 paper down $25, with price discovery on Q4 at $510. Looking to refresh bids//offers – mkts framed:
AG
May $730//$800
Jun $590//$660
Cfr Brazil
May $680//$720
Jun $590//$650
Jul $580//$642 – traded $642
Aug $580//$650
cfr Brazil AS
May $255//$275
Jun $255//$270
Nola
Phys: Loaded traded $585
Paper:
May $590//$615
Jun $550//$570
Jul $485//$530
Q3 $485//$525 – traded $530, $525
Q4 $495//$515 – traded $510
UAN Nola
May $500//$535
DAP Nola
May $735//$760
June $700//$765
MAP Brazil
Jun $875//$920
Q3 $875//$920
invivo to buy 50-70kt urea in june, US market done now (and urea prices are falling/fallen) ameropa EUR 400 CFR for amsul (france)
Oil prices fell sharply to two-week lows on Wednesday as optimism grew about a possible end to the war in the Middle East, with reports the United States and Iran were nearing an initial peace deal.
Brent crude futures settled $8.60, or 7.83%, lower at $101.27 a barrel, having earlier dropped below $100 for the first time since April 22. U.S. West Texas Intermediate crude lost $7.19, or 7.03%, to $95.08
A source from mediator Pakistan said the United States and Iran were closing in on an agreement on a one-page memorandum of understanding.
Iran said on Wednesday it was reviewing a new U.S. proposal. An Iranian foreign ministry spokesperson, cited by Iran's ISNA news agency, said Iran would convey its response soon via Pakistan.
Iran had said earlier that it would only accept a fair and comprehensive agreement.
U.S. media outlet Axios reported that the U.S. expects Iranian responses on several key points in the next 48 hours, citing sources saying this was the closest the parties had come to an agreement since the war began.
"There's a growing sense that the chance of the Strait of Hormuz reopening is greater, regardless of whether we get a lasting peace deal with Iran or not," said Phil Flynn, senior analyst with Price Futures Group.
Both crude contracts hit their lowest in two weeks, with Brent hitting an intra-session low of $96.75 before paring losses after U.S. President Donald Trump said it was "too soon" to consider face-to-face talks with Tehran, and as a senior Iranian parliament member said the U.S. proposal was more of a wish list than a reality.
The U.S. military said on Monday that it destroyed several Iranian small boats as part of efforts to help stranded ships exit the Strait of Hormuz.
“A deal announcement would move futures further immediately, in fact even the potential of a deal is already triggering a decline in oil prices," said Rystad Energy chief oil analyst Paola Rodriguez-Masiu.
However, the global oil flow would take time to normalize even if the strait is restored. "The six-to-eight-week lag between credible access conditions and real flow normalization is not a conservative estimate, it is a structural feature of how shipping markets work," Rodriguez-Masiu added.
Crude oil supply losses from halted marine traffic through the strait since the war began in February have driven up prices, with Brent trading last week at its highest since March 2022.
The Strait of Hormuz closure has resulted in a drawdown in global oil and fuel inventories as refineries try to offset production shortfalls.
"A partial deal may be enough for Strait of Hormuz shipping to gradually normalize," said Raymond James analyst Pavel Molchanov, adding that if the decline holds, prices at the pump could cool over the next one to two weeks for U.S. consumers.
U.S. crude and fuel inventories continued to draw down last week, the Energy Information Administration said on Wednesday, as countries around the globe scrambled to fill supply gaps caused by disruptions from the conflict in the Middle East.
Crude oil stocks fell by 2.3 million barrels to 457.2 million barrels last week, the EIA said, compared with analysts' expectations in a Reuters poll for a 3.3 million-barrel draw.
China Morning Briefing 2026-5-7
❤ Urea: The domestic urea market remained stable but showed minor fluctuations yesterday. After the May Day holiday, market sentiment weakened, and a few urea companies began to adjust their pricing and acceptance of orders. For some factories with tight inventory of earlier shipments, the time taken to clear their stock has also significantly shortened. The short-term market trend may be weaker and downwardly adjusted.
❤ Melamine: Yesterday marked the first working day of the holiday period, and the domestic melamine market was characterized by cautious observation. Supported by pending orders, most companies offered firm prices. End-users maintained a cautious and observant stance towards the market. The short-term dynamics of supply and demand resulted in a situation where the market might experience moderate fluctuations.
❤Synthesis of Ammonia: During the holiday period, there were varying degrees of increases in storage capacity in regions where exports were predominant. In Hubei Province, there was a significant decline. Yesterday, the domestic market for synthesis ammonia showed mixed trends. Sales from various regions were generally high, but ammonia producers generally did not face inventory pressure. They opted to maintain prices and wait for further developments. After the holiday, transportation resumed, and interregional coordination increased, but demand did not show significant improvement. It is expected that the regional price differences will remain balanced for a short period, with a potential for further declines at high levels.
❤Ammonium chloride: The domestic market for ammonium chloride operated relatively stable yesterday. Some caustic soda production facilities were idled for maintenance, leading to a tightening of supply. Caustic soda producers have temporarily maintained prices while observing the situation, but downstream companies producing compound fertilizers have struggled to secure high-volume orders, and their operating rates continue to decline. There is ongoing demand for ammonium chloride for inventory replenishment, despite both supply and demand being weak. In the short term, the price of ammonium chloride will remain stagnant and subject to consolidation.
❤Ammonium sulfate: The domestic market for ammonium sulfate remained stable and cautious yesterday, influenced by international demand. The trading atmosphere in China was relatively calm, and purchasing sentiment remained cautious. New information is needed to guide the market in the short term. It is expected that the ammonium sulfate market will experience minor adjustments this week.
❤Phosphate Fertilizer: The domestic market for monoammonium phosphate saw an upward trend yesterday. In Hubei, the factory price of 55% powder was reported at 4,300 yuan/ton, with actual negotiations taking place. Although transactions were generally modest, the raw material sulfur continued to break new historical highs, and the price of sulfuric acid remained high and rising. Pressure on costs increased continuously, supply continued to dwindle, and the availability of marketable stock remained limited. There is still a possibility of further upward movement in the short term.
The domestic diammonium phosphate market maintained a stable trend yesterday. Raw material prices rose sharply, exacerbating pressure on costs. The market was characterized by a strong atmosphere of waiting and watching. Demand was generally weak, with new orders being limited. Overall trading activity was sluggish, and the market is likely to continue in a state of consolidation and waiting in the short term.
❤Phosphate Fertilizer: The domestic phosphate fertilizer market saw relatively active inquiries yesterday. Traders raised their premium prices slightly, but high-end transactions were limited. Most inquiries remained cautious, with imports of 62% white potassium sulfate priced mostly between 3150 to 3550 yuan/ton, with negotiated terms for transactions. The potassium sulfate market remained stable, with manufacturers’ production costs at a high level.
❤Compound fertilizers: The domestic compound fertilizer market operated relatively stagnantly yesterday. There were fluctuations in the costs of upstream raw materials, but overall adjustments were limited. As a result, companies reported relatively stable prices. However, downstream demand was limited, distributors were cautious about replenishing stocks at high levels, and new orders for compound fertilizers were scarce. The market continued to experience a narrow range of consolidation in the short term.
China Paper Market:
Causes of market fluctuations.
Regarding the spot market, the national price of urea has shown a slight downward trend. The quoted prices by urea factories have remained at the guidance level. The pressure on taking delivery has eased, and the enthusiasm of downstream buyers has further decreased. The premium space for traders has been compressed, primarily due to a decline in industrial and agricultural demand. Regarding urea futures, the market has exhibited a unidirectional downward trend, with both the long and short sides of the market showing signs of increased positions. The weakness of the spot market prices is a significant factor contributing to the decline of urea futures. The relatively strong coal prices have provided some support to urea futures.
Views on the future.
The futures market can focus on the moderate correction in the price trend, which may also remain elevated due to upward pressure from costs and strengthened export expectations. Given the significant decline in crude oil prices during the night session, which has put pressure on chemical commodity futures, urea futures are expected to perform weakly.
In China, Export updates remain unofficial as market rumours persist. Indicative FOB prices are hovering between $840–$860 for prills and $860–$870 for granulars. Rumoured post-holiday shifts in customs policy have yet to materialise. The prevailing sentiment among traders is that export quotas will likely be issued between late May and June.
China Paper Market:
Causes of market fluctuations.
Regarding the spot market, the national price of urea has shown a slight downward trend. The quoted prices by urea factories have remained at the guidance level. The pressure on taking delivery has eased, and the enthusiasm of downstream buyers has further decreased. The premium space for traders has been compressed, primarily due to a decline in industrial and agricultural demand. Regarding urea futures, the market has exhibited a unidirectional downward trend, with both the long and short sides of the market showing signs of increased positions. The weakness of the spot market prices is a significant factor contributing to the decline of urea futures. The relatively strong coal prices have provided some support to urea futures.
Views on the future.
The futures market can focus on the moderate correction in the price trend, which may also remain elevated due to upward pressure from costs and strengthened export expectations. Given the significant decline in crude oil prices during the night session, which has put pressure on chemical commodity futures, urea futures are expected to perform weakly.
China Morning Briefing 2026-5-7
Urea: The domestic urea market remained stable but showed minor fluctuations yesterday. After the May Day holiday, market sentiment weakened, and a few urea companies began to adjust their pricing and acceptance of orders. For some factories with tight inventory of earlier shipments, the time taken to clear their stock has also significantly shortened. The short-term market trend may be weaker and downwardly adjusted.
Ammonia: During the holiday period, there were varying degrees of increases in storage capacity in regions where exports were predominant. In Hubei Province, there was a significant decline. Yesterday, the domestic market for synthesis ammonia showed mixed trends. Sales from various regions were generally high, but ammonia producers generally did not face inventory pressure. They opted to maintain prices and wait for further developments. After the holiday, transportation resumed, and interregional coordination increased, but demand did not show significant improvement. It is expected that the regional price differences will remain balanced for a short period, with a potential for further declines at high levels.
Ammonium chloride: The domestic market for ammonium chloride operated relatively stable yesterday. Some caustic soda production facilities were idled for maintenance, leading to a tightening of supply. Caustic soda producers have temporarily maintained prices while observing the situation, but downstream companies producing compound fertilizers have struggled to secure high-volume orders, and their operating rates continue to decline. There is ongoing demand for ammonium chloride for inventory replenishment, despite both supply and demand being weak. In the short term, the price of ammonium chloride will remain stagnant and subject to consolidation.
Ammonium sulphate: The domestic market for ammonium sulfate remained stable and cautious yesterday, influenced by international demand. The trading atmosphere in China was relatively calm, and purchasing sentiment remained cautious. New information is needed to guide the market in the short term. It is expected that the ammonium sulfate market will experience minor adjustments this week.
Phosphate Fertilizer: The domestic market for monoammonium phosphate saw an upward trend yesterday. In Hubei, the factory price of 55% powder was reported at 4,300 yuan/ton, with actual negotiations taking place. Although transactions were generally modest, the raw material sulfur continued to break new historical highs, and the price of sulfuric acid remained high and rising. Pressure on costs increased continuously, supply continued to dwindle, and the availability of marketable stock remained limited. There is still a possibility of further upward movement in the short term.
The domestic diammonium phosphate market maintained a stable trend yesterday. Raw material prices rose sharply, exacerbating pressure on costs. The market was characterized by a strong atmosphere of waiting and watching. Demand was generally weak, with new orders being limited. Overall trading activity was sluggish, and the market is likely to continue in a state of consolidation and waiting in the short term.
Phosphate Fertilizer: The domestic phosphate fertilizer market saw relatively active inquiries yesterday. Traders raised their premium prices slightly, but high-end transactions were limited. Most inquiries remained cautious, with imports of 62% white potassium sulfate priced mostly between 3150 to 3550 yuan/ton, with negotiated terms for transactions. The potassium sulfate market remained stable, with manufacturers’ production costs at a high level.
❤Compound fertilizers: The domestic compound fertilizer market operated relatively stagnantly yesterday. There were fluctuations in the costs of upstream raw materials, but overall adjustments were limited. As a result, companies reported relatively stable prices. However, downstream demand was limited, distributors were cautious about replenishing stocks at high levels, and new orders for compound fertilizers were scarce. The market continued to experience a narrow range of consolidation in the short term.
The dollar slipped across the board on Wednesday as investors grew optimistic about a possible end to the Iran war, while a sudden jump in the Japanese yen to a more than two-month high put traders on alert for another round of official buying from Tokyo.
A source from mediator Pakistan who is familiar with the negotiations said Washington and Tehran were closing in on an agreement on a one-page memorandum to end the conflict.
The Pakistani source said a report earlier by U.S. outlet Axios on the proposed memorandum was accurate. The Axios report had cited two U.S. officials and two other sources familiar with the discussions.
"The more positive risk tone is really pressuring the dollar as folk buy into the optimism surrounding a potential U.S.-Iran deal," said Michael Brown, senior research strategist at Pepperstone in London.
"Obviously there could still be a long way to go on that front, but today’s headlines support the idea that the direction of travel remains towards de-escalation," he said.
"In any case, participants are desperate to latch on to good news, so it’s a bit of a ‘buy risk first, ask questions later’ mindset creeping in," said Brown.
The dollar index , which measures the U.S. currency against six peers, was 0.3% lower at 97.993, after slipping to 97.623, its lowest since before the late February U.S. strikes on Iran that started the conflict.
The euro was 0.5% higher at $1.17535, while sterling was 0.4% higher at $1.35955.
U.S. private payrolls increased more than expected in April, the ADP's national employment report showed on Wednesday.
The markets are now gearing up for the U.S. non-farm payrolls release later this week, which will serve as a test of whether the economy remains resilient enough to keep the Federal Reserve's monetary policy on hold, or whether a softening labour market could revive the case for interest rate cuts.
"In our view, USD downside is limited because recent U.S. economic data are likely to keep odds of Fed funds rate hikes in play," Elias Haddad, global head of markets strategy in the forex team at Brown Brothers Harriman, said in a note.
The rebound in risk appetite helped the Australian dollar extend gains to hit its strongest level in four years, rising 0.8% on the day to $0.72405 . The move follows the Reserve Bank of Australia's decision the previous day to raise rates for the third time this year.
Leading cryptocurrency bitcoin slipped 0.5% to $81,240, after scaling a more than three month high of $82,793 earlier in the session.
YEN WATCH
Against the yen, the dollar was 1% lower at 156.385 yen, after slipping as low as 155, around its weakest since February 24. The move triggered speculation of another round of intervention.
Japanese Finance Minister Satsuki Katayama earlier in the week warned against speculative moves in foreign exchange, after a brief jolt higher in the yen sparked speculation Tokyo had again intervened to support the currency.
"As I have said repeatedly, we will take decisive measures against speculative moves, in accordance with the statement signed between Japan and the United States last year," Katayama told reporters after the Asian Development Bank's annual meeting in Uzbekistan.
The Ministry of Finance of Japan could not be reached immediately for comment during a local holiday.
"Although they’ve not commented officially I think we have to assume that the MoF stepped in again," Pepperstone's Brown said.
"You don’t get a huge move like that, with no obvious catalyst, unless there’s a ‘silent hand’ involved," he said.
Chicago Board of Trade soybean futures tumbled on Wednesday, giving up recent gains, as a decline in crude oil prices caused a flurry of long liquidation by managed commodity funds that had recently taken massive long positions on grains.
Oil prices fell sharply to two-week lows on Wednesday as optimism grew about a possible end to the war in the Middle East, with reports the United States and Iran were nearing an initial peace deal.
A source from mediator Pakistan said the United States and Iran were closing in on an agreement on a one-page memorandum of understanding.
The American Soybean Association said it was worried China, the world's largest soy importer, could reimpose higher tariffs on American soybeans in response to a U.S. trade investigation into excess industrial capacity in major trading partners.
Traders were waiting for a meeting between U.S. President Donald Trump and Chinese leader Xi Jinping next week, though many expect the world's largest soybean importer to purchase only minimal quantities of U.S. soybeans, if any at all.
Brazil's soybean area is expected to post only marginal growth in the 2026/27 season due to higher production costs and risks linked to the El Nino climate phenomenon, Argus analyst Nathalia Giannetti said on Wednesday.
CBOT July soybeans fell 16-3/4 cents to end at $11.94-3/4 per bushel.
CBOT May soyoil fell 1.89 cents to end at 75.02 cents per pound.
CBOT May soymeal fell $3.10 to $317.30 per short ton.
ICE canola futures settled sharply lower on Wednesday, as plunging crude oil hit energy-related commodities.
July fell $13.80 to $743.50 per metric ton. November fell $16.50 to $745.60.
Reaction to the Statistics Canada quarterly crop stocks report was muted, with few surprises and underlying skepticism causing traders to do little.
Statistics Canada found that there were almost 10 million tons of canola seed in stock as of March 31, which is far above the situation in 2025, but almost the same as in 2024 in the same period.
Tony Tryhuk of RBC Dominion Securities said the report was "in line with expectations, which confirmed that (canola stocks) are burdensome and carry-out numbers will easily reach 3.5 million tons."
Brent crude oil had a much bigger impact on Wednesday canola prices, with the selloff in crude torpedoing vegoil prices and pulling down crops in general. Brent fell on hopes for peace in the Gulf, which could allow trapped crude to get out to world markets.
Chicago soyoil fell 2.46%. Soybeans fell 1.38%.
Euronext rapeseed futures fell 1.67%.
Malaysian palm futures fell 2.78%.
May 6 (Reuters) – The White House believes it is getting close to an agreement with Iran on a one-page memorandum of understanding to end the war and set a framework for more detailed nuclear negotiations, Axios reported on Wednesday, citing two U.S. officials and two other sources briefed on the issue.
The U.S. expects Iranian responses on several key points in the next 48 hours, according to the report which cautioned that nothing has been agreed yet but said this was the closest the parties had been to an agreement since the war began.
Liven sells 33kt Gran Urea from Brunei to Australia
Malaysia, 6kt of gran urea has been sold at USD 790 FOB, May loading for regional markets