We lower our assumptions for global urea prices but expect high gas, oil & coal prices to support high urea prices in 2022. As of mid-February 2022, global spot urea prices dropped 30%-40% from their peak in December 2021 (Figure 5), which we believe is due to easing supply disruptions and the unwinding of speculative positions; however, these prices have recently rebounded as the Russia-Ukraine conflict has pushed prices of oil, gas, coal and agri-commodities higher. In its Q1 2022 report, the International Energy Agency (IEA) raised its average 2022 gas price forecast 60% from its Q4 2021 report to USD19/MMBTU (Figure 8). As the near-term outlook for commodity prices remains highly uncertain, we cut our average 2022F global urea price by 12% from USD625/tonne to USD550/tonne and reduce our price assumptions for 2023-2026F by 7%.

Powered by Froala Editor