Urea prices fell sharply, dropping 3.5% in one trading session to $386 per tonne, as two key supply concerns eased simultaneously. Chinese authorities have released additional export quotas, adding supply back into the international market, while diplomatic progress around the Strait of Hormuz has reduced fears of shipping disruptions through the critical Gulf chokepoint.
The move marks a significant reversal from April, when urea prices spiked above $500 per tonne amid concerns over potential supply disruptions tied to Hormuz-related tensions and tighter Chinese export controls. The combination of restored Chinese volumes and reduced geopolitical risk premium has now pulled prices back down substantially.
For fertiliser buyers, this represents a notable easing of input costs after a volatile few months, potentially improving margins for downstream compound fertiliser producers and reducing procurement costs ahead of upcoming application seasons. Trading desks will be watching whether China's quota releases continue at pace and whether Hormuz-related risk stays subdued, as either factor reversing could quickly re-tighten the market.
Original note by GIDEX Group based on reporting by Fertilizer Daily. Not investment advice.