PAPER bids:
July usd 350 FOB AG
July usd 390 CFR Brazil
Compare this to Fridays level, the market is certainly looking weak on the forward markets.
*If I were India, and I didn’t secure all my urea, i would be back to market very quickly to try build up inventories before President Trump changes his mind (again)*
News out of India so far has NFL struggling to get all 1.7 mil Mts awarded
So far gossip has it anywhere between 1-1.3 mil Mts.
looks as if the price was a little too sharp for some to short this aggressively
China- June 15 (Monday), the inventory of urea companies stood at 1.1722 million tons. This was an increase of 99,000 tons from the previous Thursday and 140,600 tons from the previous Monday.
CHINA UREA COST WATCH | 15 JUN 2026
Chinese coal prices have risen steadily since January, with anthracite in Shanxi’s Jincheng market now trading at CNY 1,120 to 1,240 per tonne, up around CNY 300 per tonne since the start of the year. A gas explosion in Shanxi on 22 May triggered nationwide coal mine safety inspections, tightening supply further. Anthracite is now back to 2023 price levels.
The pressure this places on urea producers is significant. Fixed-bed coal process plants, which account for around 17% of Chinese urea capacity, are now operating below full cost. Production costs for fixed-bed anthracite units in Shanxi run at CNY 1,700 to 1,820 per tonne against current factory gate prices of CNY 1,660 to 1,780 per tonne. Those plants are losing money.
Modern non-fixed-bed gasification units, which represent the majority of coal-based capacity at around 60%, retain a margin. Their production costs are estimated at CNY 1,450 to 1,600 per tonne, keeping them in profit at current prices.
The near-term read is that overall Chinese urea production is unlikely to fall sharply given the structural dominance of lower-cost capacity. However, if coal prices continue to rise and urea prices remain under pressure, even the modern gasification plants move toward loss, at which point operating rates will weaken and supply will contract.
**AQ OPINION – Urea**
Urea has now corrected to a level the market is comfortable with. The reopening of the Strait of Hormuz is unlikely to move the needle materially on price direction from here.
At current levels, demand side Europe and Brazil return. Affordability vs Corn support buying interest at this range and India will likely want to build up inventories (in case the war restarts)
The upside, however, is firmly capped. China’s estimated 2 million MT of exportable supply acts as a structural ceiling. Any meaningful rally will trigger fresh Chinese export flow, suppressing price recovery before it gains traction.
Expect urea to trade range-bound between USD 400 and USD 500 per MT FOB for the foreseeable period.
+++
HORMUZ CEASEFIRE DEAL STRUCK. US-IRAN MOU TO BE SIGNED IN SWITZERLAND ON 19 JUNE.
Trump declared the opening of the Strait of Hormuz and the lifting of the US naval blockade of Iran early Monday. Pakistani mediators brokered the interim peace deal. Iran’s Supreme National Security Council confirmed the naval blockade lifts immediately. Iran’s Mehr News Agency, citing the 14 points of the agreement, reports both the blockade removal and Strait reopening will be completed within 30 days of signature, under Iranian arrangements. The MOU gives both parties 60 days to negotiate underlying issues including Iran’s nuclear programme, sanctions relief, and economic reconstruction. Clarksons estimates 2% of the global fleet remains trapped in the Gulf, with 8% of VLCCs and 3% of VLGCs affected. FOR FERTILISERS: Hormuz reopening removes the key supply risk premium that has supported sulphur, phosphate, and ammonia freight in recent weeks. Iranian urea and phosphate volumes could return to market once sanctions framework clears.
Watch out for price corrections…
MORE TO FOLLOW.
**FALCON PAPER VALUES/FORWARD CURVE**
Last week Urea mkts contended with a rapidly revised policy on Chinese export prices to start, fresh optimism on a US/Iran deal towards the end of week, and all whilst awaiting confirmations in NFL tender. Now, US/Iran framework deal for peace and opening of Straight of Hormuz seemingly in place – Mkts framed Fri close:
*AG*
Jun $455//$495
Jul $420//$450
_[traded $450 last week]_
*Cfr Brazil*
Jun $450//$500
Jul $445//$485
_[traded $453.50-$488 l/w]_
Aug $430//$475
Sep $425//$480
*Egypt*
Jun $520//$555
Jul $470//$525
*cfr Brazil AS*
Jun $215//$238
Jul $200//$235
Aug $205//$240
*FOB China (Compacted) AS*
Jun-Jul $220//$240
*Nola Urea*
Phys: Loaded traded $405 Fri, June $380, $390.
Paper:
Jun $400//$425
Jul $392//$405
_[traded $394–$408 l/w]_
Aug $395//$405
Sep $400//$410
_[traded $380–$394 l/w]_
Oct $400//$410
Q3 $398//$410
_[traded $385–$410 l/w]_
Q4 $400//$410
_[traded $410–$412.5 l/w]_
Q1 $405//$425
_[traded $430 l/w]_
*DAP Nola*
Jun $770//$790
Jul $775//$785
Aug $775//$785
Sep $775//$785
*MAP Brazil*
Aug $900//$925
Sep $890//$910
Malaysia has calculated the palm oil reference price for July 2026 at MYR 4346.79 per T, down from MYR 4372.64 per T in June. The export tax remained at 10% and effective export duty for June 2026 will be MYR 434.679 or $107.46, down in compared to MYR 437.264 or $110.85 per T in June 2026. (USDMYR reference rate of 4.045 is considered for calculations).
** Aquifert China Urea Intelligence**
<div class="telex-card">
<div class="telex-header">
<div class="telex-title-block">
<div class="telex-title">Domestic Market Outlook & Industry Chain Analysis</div>
</div>
<div class="telex-meta">
<div class="telex-date">29 May — 25 Jun 2026</div>
</div>
</div>
<!– WEEKLY OUTLOOK TABLE –>
<div class="section">
<div class="section-label">Weekly Outlook by Period</div>
<table class="week-grid">
<thead>
<tr>
<th style="width: 38%">Metric</th>
<th>29 May–04 Jun</th>
<th>05–11 Jun</th>
<th>12–18 Jun</th>
<th>19–25 Jun</th>
</tr>
</thead>
<tbody>
<tr>
<td class="metric-category" colspan="5">Supply</td>
</tr>
<tr>
<td class="row-label">Avg daily output (10,000 t)</td>
<td class="val-current">21.48</td>
<td class="val-current">21.29</td>
<td class="val-current">21.57</td>
<td class="val-current">21.29</td>
</tr>
<tr>
<td class="metric-category" colspan="5">Demand</td>
</tr>
<tr>
<td class="row-label">Agricultural demand</td>
<td class="val-stable">Steady</td>
<td class="val-stable">Steady</td>
<td class="val-stable">Steady</td>
<td class="val-stable">Steady</td>
</tr>
<tr>
<td class="row-label">Compound fertiliser operating rate</td>
<td class="val-current">33.21%</td>
<td class="val-down">Expected fall</td>
<td class="val-down">Expected fall</td>
<td class="val-down">Expected fall</td>
</tr>
<tr>
<td class="metric-category" colspan="5">Inventory</td>
</tr>
<tr>
<td class="row-label">Enterprise stock (10,000 t)</td>
<td class="val-current">95.94</td>
<td class="val-up">Expected rise</td>
<td class="val-down">Expected fall</td>
<td class="val-down">Expected fall</td>
</tr>
<tr>
<td class="metric-category" colspan="5">Strategy (Futures)</td>
</tr>
<tr>
<td class="row-label">Outright</td>
<td class="val-dim" colspan="4">UR2609</td>
</tr>
<tr>
<td class="row-label">Spread / Arbitrage</td>
<td class="val-dim" colspan="4">UR2609 − UR2701</td>
</tr>
<tr>
<td class="row-label">Options</td>
<td class="val-dim" colspan="4">UR2609</td>
</tr>
</tbody>
</table>
</div>
<!– HENAN COST & PROFIT STRIP –>
<div class="section">
<div class="section-label">Henan Urea — New Coal Gasification Valuation</div>
<div class="val-strip">
<div class="val-cell">
<div class="val-cell-label">Production Cost: 1,530 CNY/t</div>
</div>
<div class="val-cell profit">
<div class="val-cell-label">Estimated Profit: 220 CNY/t</div>
</div>
<div class="val-cell">
<div class="val-cell-label">Implied Ex-Works: ~1,750 CNY/t</div>
</div>
</div>
</div>
<!– NARRATIVE BLOCKS –>
<div class="section">
<div class="section-label">Market Intelligence</div>
<div class="narrative-grid">
<div class="narrative-block">
<div class="nb-label">Supply & Production</div>
<div class="nb-text">Daily output averaged 21.48 ten thousand tonnes for the week ending 4 June, edging back to 21.29 for mid-June. Six plants entered maintenance this week; three resumed. For the coming week, no new maintenance is planned and a further three suspended units are expected back on line.</div>
<div></div>
</div>
<div class="narrative-block">
<div class="nb-label">Agricultural Demand</div>
<div class="nb-text">
Corn and rice top-dressing demand is progressing at a steady pace. Compound fertiliser operating rates slipped to 33.21%, down 0.42 percentage points week-on-week. Northern hubs — Hebei, Henan, Shandong — saw load reductions as summer stocking winds down. Northeast, Southwest, and South China held stable. Jiangsu and Anhui recorded a brief seasonal lift.
</div>
</div>
<div class="narrative-block">
<div class="nb-label">Industrial Demand</div>
<div class="nb-text">Cumulative thermal power generation Jan–Apr 2026 reached 2,054.63 billion kWh, up 3.6% year-on-year. Rising summer temperatures are expected to lift urea consumption for power plant denitrification — a partial offset to the seasonal agricultural lull.</div>
</div>
<div class="narrative-block alert">
<div class="nb-label">Inventory Build</div>
<div></div>
<div class="nb-text">Enterprise stocks surged to 959,400 tonnes — a week-on-week increase of 68,000 tonnes (+7.63%). Weak agricultural offtake, minimal industrial support, and slow logistics clearance are all contributing. Producers are holding back stock in anticipation of potential export allocation.</div>
<div></div>
</div>
<div class="narrative-block full">
<div class="nb-label">Policy & Futures Activity</div>
<div class="nb-text">Export policy dominated sentiment this week. An initial move to lift export price caps triggered a sharp rally in urea futures on expectations of higher outbound volumes. The re-announcement of price caps subsequently reversed those gains, cooling optimism and applying immediate downward pressure to contracts. Given the frequency of regulatory adjustments, both spot and futures prices are expected to remain volatile. Market participants are adopting a cautious wait-and-see stance, and this is the primary driver of the inventory build.</div>
</div>
</div>
</div>
<!– RISK WARNINGS –>
<div class="section">
<div class="section-label">Risk Warnings</div>
<ul class="risk-list">
<li>Macroeconomic and financial market volatility</li>
<li>Shifts in domestic urea export policy — price caps, allocation windows, and permit changes</li>
<li>Speculative positioning and sentiment swings in the urea futures market</li>
</ul>
</div>
</div>
China Morning Briefing – June 15, 2026
Urea: Short-term demand support is insufficient, market confidence is lacking, and export relaxation has limited practical impact. As a result, the domestic urea market has been stagnant and weak, with prices temporarily declining to near previous lows. It remains uncertain whether any positive developments will emerge.
Synthetic Ammonia: The synthetic ammonia market in major production regions experienced downward pressure last week. However, in Hubei Province, demand from downstream industries and the existence of maintenance plans for some ammonia producers contributed to a positive atmosphere, leading to price increases. Most regions remained cautiously optimistic. Short-term prospects show no significant improvement in the supply and demand balance; low-priced inventory still needs to be absorbed, and price support remains the primary strategy at present.
Ammonium Chloride: The domestic market for ammonium chloride experienced a subdued performance last week. Companies producing ammonium chloride continued to face difficulties in securing orders. Compound fertilizers were in demand but the production capacity of enterprises continued to decline, and the essential demand for ammonium chloride was constrained. There were no signs of a short-term recovery in domestic demand, and the market for ammonium chloride remained weak. Keep an eye on the impact of export developments on the domestic market.
Ammonium sulphate: The market for ammonium sulphate experienced a narrow range of fluctuations last week, with weakness prevailing among the main players. The decline in international urea prices created a negative outlook, leading to a further weakening of international demand. As a result, market sentiment for domestic purchases remained low. Given the lack of improvement in end-user demand, it is expected that the market for ammonium sulfate will continue to be weak and range-bound in the short term.
Phosphate Fertilizer: The focus of the domestic MAP market last week saw a slight upward trend. The factory price of 55% powder in Hubei reached around 4,380-4,400 yuan/ton, with the lower end difficult to find. Raw material prices continued to rise, increasing pressure on costs. Traders were active in transactions, and downstream buyers purchased based on demand. The market is currently stable for the short term.
Last week, the domestic diammonium phosphate market was characterized by cautiousness. Raw material prices rose strongly, putting continuous pressure on the production costs of enterprises. The operational load of enterprises remained to be improved. Demand from downstream industries was weak, and there was a strong atmosphere of waiting and watching in the market. New orders were limited, and the market is expected to remain stable in the short term.
MOP: The domestic phosphate fertilizer market experienced a period of weakness and decline last week. The market price of potassium chloride showed slight downward fluctuations. In the absence of any clear demand from downstream factories, potassium chloride traders exhibited a strong desire to sell. The operating rate of domestic sulfuric acid potassium fertilizer plants has significantly decreased, and manufacturers continue to incur losses and face considerable pressure.
The Asia-Pacific Phosphorus-Sulphur Fertilizer and New Energy Development Conference will be held in Nanning, Guangxi Province, from July 8 to 10.
Iranian producers announced USD 375 FOB as official price
WEEK 24 Market report in *VANTAGE* section
Today SOCAR had announced the tender per sales of Azerbaijan origin Granular Urea Grade-B with the delivery period during SH June, 2026-FH July, 2026.
In the tender were mentioned 30,000 (thirty thousand) metric tons +/- 10% in Seller’s option (In one or multiple lots. Subject to the further confirmation by the Seller) in bulk on FOB Batumi, Georgia basis and 20,000 (twenty thousand) metric tons +/- 10% in Seller’s option (In one or multiple lots. Subject to the further confirmation by the Seller) in big bags on FOB Trabzon, Türkiye basis. CIF/CFR basis per actual freight costs.
Tender will be closed on 16 June, 2026.
**FREIGHT DATA UPDATED** – Please go to *VOYAGE* Tab
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<p class="font-claude-response-body break-words whitespace-normal">Fixture activity this week totalled 3.37mt across 113 fixtures, down 12% on the 3.83mt recorded in the same period last year. Strip out the two 200,000t Aqaba-Gresik rock phosphate enquiries for Indonesia and the adjusted figure falls to around 2.97mt, widening the year-on-year deficit to roughly 23%.</p>
<p class="font-claude-response-body break-words whitespace-normal">India held its position as the dominant discharge destination at 1.10mt but the composition has shifted. Last year India took a balanced mix across sulphur, phosphates, DAP and AN. This week the data is overwhelmingly BHF, suggesting either a change in reporting granularity or a genuine shift in the product mix moving to the subcontinent. Either way, the volume signal is clear.</p>
<p class="font-claude-response-body break-words whitespace-normal">Aqaba dominated load origins last year at 445,000t from a single port. Jordan as a country sits at 495,000t this week but as noted that is almost entirely the two rock enquiries. Port-level concentration is similar, the product is not. Rock has replaced the mixed phosphate and sulphur picture of a year ago.</p>
<p class="font-claude-response-body break-words whitespace-normal">Ukraine was a major discharge destination last year at 377,000t, a striking number for an import market. That likely reflects product moving into storage or transhipment via Black Sea ports rather than domestic consumption. This week Ukraine flips to a load origin at 244,000t, consistent with ongoing export activity out of the region.</p>
<p class="font-claude-response-body break-words whitespace-normal">China was the top load origin last year at over 900,000t. This week Chinese loads sit at 509,000t, a 44% reduction that aligns squarely with the narrative of export restraint from Chinese producers.</p>
<p class="font-claude-response-body break-words whitespace-normal">What this data shows is which cargoes are actively being priced in the open market before they are confirmed. That is a leading demand indicator, not a lagging one. Subscribers who see Bangladesh taking 290,000t of urea from Yanbu and Adabiya across eight fixtures this week know that South Asian demand is live and building. They also know that if producers are actively supplying at these volumes, they are unlikely to be under pressure to cut prices to secure sales.</p>
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NFL has extended its acceptance deadline for the 8 June tender, which sought 1.7 million tonnes of urea for shipment by 20 July. Counteroffers are being invited at USD 444.90/t CFR East Coast India and USD 449.30/t CFR West Coast India. Suppliers must submit acceptances by 15:00hrs IST (10:30hrs BST) on Monday 15 June, with offers remaining valid until 18:00hrs IST on 18 June.