Urea Monthly Brief — June 2026

The Month in Brief

• Spot prices have softened steadily: urea last printed at $400/t (Apr 2026), down from $390/t in Jan 2026 and $385/t in Oct 2025 — a modest but consistent upward revision from the trough, yet the 4-quarter price trend is running at –$4/t, signalling ongoing directional pressure lower.
• Supply marginally outpaces demand: the most recent S&D balance on record (Q4 2021) shows supply at 181 Mt vs. demand at 179.5 Mt — a modest surplus of ~1.5 Mt. More current granular data is not available in this cycle; treat the balance as indicative, not definitive.
• Risk environment is unusually quiet: the model scores current market risk at 0/100 and no alerts are flagged — a rare low-noise reading that reinforces a patient buyer posture.

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Signal

⏸ WAIT — Confidence: 76%

Do not rush to cover. The price trend is negative, supply is in modest surplus, and forward scenarios point materially lower before recovering. Our central case for Q3 2026 is $330/t — roughly $70/t below current spot — with a downside scenario at $280/t. There is no structural urgency to lock in at current levels. Buyers with coverage running into Q4 or beyond should hold and reassess in July.

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Supply & Risks

• Surplus confirmed, magnitude uncertain: the 1.5 Mt surplus on record dates to Q4 2021; no fresher IFA/FAO balance data was available for this issue. The signal direction is clear; the scale requires caution.
• Gas cost exposure: Middle East and Russian gas-linked production costs remain the primary swing variable. Any geopolitical disruption to Russian export flows or a European gas spike could compress the surplus quickly — this is the main upside risk to monitor.
• Chinese export policy: China's periodic export restrictions have historically tightened global availability. No new restrictions are flagged in current data, but this remains a standing tail risk.
• Demand seasonality: Northern Hemisphere spring application demand is largely passed. The next demand catalyst is pre-winter procurement (Oct–Nov), which limits near-term price support.

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Watchlist

Item	Why It Matters
Chinese export quota announcements	Can shift global balance by 4–6 Mt
Q3 2026 Indian tender pricing	Key price benchmark; watch vs. $330 central case
European gas (TTF) spot	Upstream cost signal for European producers
Updated IFA supply/demand balance	Current data is stale (Q4 2021)

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Strata assessments — not investment advice.