Market Outlook

Market Outlook

Historical price trends $/tonne

AMMONIA

• Prices in most markets should register declines through January, though the extent to which benchmarks will ease is yet unclear. Chinese suppliers have seen significant price declines in recent weeks.
• In Egypt, Abu Qir is said to have no availability before February, though loadings at EBIC’s facility on the Red Sea continue.
• Middle Eastern suppliers are seen to be long, and lower prices may tempt Indian DAP producers back into the market. l European gas prices increased throughout much of 2024, and are expected to continue to rise into 2025, although production cuts remain stable.
• More stable prices for downstream nitrogen fertilizers such as AN, alongside a significant fall in the ammonia price, will pressure European ammonia production and swing the pendulum in favour of imports.

UREA

• There is little relief for urea buyers on the immediate horizon. The near-term outlook is bullish with demand in India, the US, Brazil, Europe and elsewhere and no exports are available from China or Iran.
• Demand in Europe is strong, particularly in Turkey and Italy, although Greece and France are also in the market. Baltic and Black Sea export values increased and are expected to gain more ground when Russia returns from the Orthodox Christmas holiday.
• Chinese urea exports have fallen to a two-decade low, and urea stocks were expected to reach 8 million tonnes by the end of the year.
• There is no indication China will return to the market before the second half of 2025, as it is now heading into the spring application season. Chinese domestic prices are at a seven year low, with exports still halted for now.

METHANOL

• Methanol prices are rising, especially in the Atlantic basin, and there is still a positive industry outlook for 2025. US methanol prices are up 30-40% over 2024, and European prices were up to 60% higher in Q4 2024 than Q1 as a knock on, effect of this as Europe imports methanol from the US.
• Most of this is due to systemic lack of supply, including delays in commissioning Methanex’s Geismar 3 plant in the US, Petronas’ new facility in Malaysia, and two plants in Iran. There have also been shutdowns in Germany and lost production in Venezuela and the US.
• Supply is likely to ease towards the end of 1Q 2025, but until then demand continues to keep prices at high levels.
• Chinese spot prices are much lower at around $300/t, with ample domestic supply and prices kept in check by MTO affordability levels.