Urea prices

(tradingeconomics.com)

67 points | by burnt-resistor 2 hours ago ago

48 comments

  • WaitWaitWha 2 hours ago

    Yes urea is used in fertilizer. Yes, the price is going up relative to May 13, 2024 (lowest in 5 years).

    look at the chart in the article, then click 5Y on the bottom of the chart.

    Click the + sign between the calendar and wrench icon

    Type in "US Food inflation". It will overlay the "urea" price with the "US food inflation".

    Yes, urea seems to be a leading indicator. It is nothing like in 2022, yet.

    • D_Alex an hour ago

      Yes, it is nothing like 2022 yet. But the concerning thing is that this may be just a beginning of a protracted event, plus the world, and especially Western Europe, is less resilient today to the disruptions in gas supply.

    • pavel_lishin 2 hours ago

      It looks like it's been pretty stable for three years, after what looks like a spike in the end of 2021.

      I can't see past 5Y without paying, so I don't know if the past three years was an abnormal low, or if that's the regular cost.

      • D_Alex an hour ago

        2022 was abnormally high, caused largely by the disruption of gas supplies to Western Europe after sanctions on Russian gas and the destruction of the Nordstream gas pipeline.

    • mkw5053 2 hours ago

      Really interesting. It made me curious to dig in and learn that urea production starts with natural gas. And if you add natural gas to the chart as well urea and natural gas prices generally track together without a lag either way, except natural gas doesn't have the recent uptick seen in urea.

      I guess the recent move in urea likely isn’t coming from energy costs, something fertilizer-specific, exports, shipping, or supply?

      Or it's just noise \_(ツ)_/

    • alephnerd 2 hours ago

      > 2022

      And that was specifically due to the (ongoing) Russian Invasion of Ukraine. After the 2022 spike, most large countries began building alternative supply chains to reduce impacts from these kinds of hits.

      For example, the US and Europe largely doesn't use urea unlike Brazil, India, and China.

      This is also why Asian countries have been investing heavily in Hydrogen energy despite HN's hate boner to the technology.

      Edit: can't reply

      > Is it really hydrogen energy if your plan for the hydrogen gas is turning it into ammonia? Would give you another use for it, I suppose

      The whole point of building a hydrogen energy market is becuase hydrogen electrolyzers are dual use, and the methodology to leverage and produce "green" ammonia is similar to "green" hydrogen.

      A non-LNG method to mass produce ammonia has always been called out in most countries Hydrogen energy roadmaps such as Japan [0], China [1], and India [2].

      [0] - https://grjapan.com/sites/default/files/content/articles/fil...

      [1] - https://rmi.org/wp-content/uploads/dlm_uploads/2022/09/china...

      [2] - https://www.adb.org/sites/default/files/publication/1033081/...

      • extraduder_ire an hour ago

        Is it really hydrogen energy if your plan for the hydrogen gas is turning it into ammonia?

        Would give you another use for it, I suppose.

  • malshe 2 hours ago

    Bloomberg’s Odd Lots podcast did an episode on this today.

    https://podcasts.apple.com/us/podcast/odd-lots/id1056200096?...

  • adrianN 2 hours ago

    Sooner rather than later we need to decarbonize fertilizer production. Maybe this will speed the process up a bit.

    • 3eb7988a1663 5 minutes ago

      I am rather pessimistic. Unless petroleum prices go really bonkers, efuels are in for a rough few years. The synthesized fuels required cheap energy and benefited from subsidies while they are still optimizing the technology.

      Energy use in the country has been basically flat for decades, so the increasing glut of renewables seemed well timed to allow for siphoning off that free mid-day power. Cue massive data center build out, and prices have massively shot up and blown the economics of efuels apart.

      You additionally have an administration which hates anything done by Biden and/or alternative energies, so the bountiful incentives for such programs are/will be neutered.

      There is no stopping the ultimate carbon free transition, but the stars really need to align to see any meaningful amount of synthetic generation to happen soon.

    • Johnny_Bonk 2 hours ago

      Indeed, I did some work on that with regards to renewable ammonia production, interesting field to look into if you're curious

      • toomuchtodo an hour ago

        Resources on the topic you would recommend?

  • jmyeet 2 hours ago

    What's astounding about this entire misadventure is there seemed to be absolutely no plan for what the goals were and what the exit strategy was as well as how to counter the most likely outcomes. I would bet money that military planners had long considered these issues (as they consider many hypotheticals) and those warnings were ignored.

    For context, about 30% of the fertilizer supply chain relies on the Strait of Hormuz, mainly due to natural gas. Additionally, ~15% of crudel oil exports are effectively blocked. All of this was known beforehand. It was also known that breaking the blockade was essentially impossible. Iran's entire military is designed for this scenario: cheap drones and missiles in huge numbers from cheap launchers and in hardened facilities. Commercial vessels can be attacked with drone boats, basically. The navigable part of the Strait at its narrowest point is less than 8 miles wide.

    And we're paying about $1 billion per day for all this. But that's OK because somebody is getting rich from contracts to replenish every munition we're using.

    Invading Iran is geographically impossible.

    Every single thing I mentioned here has been known for years. Yet here we are. IN a just world, people would hang for all the crimes we've consistently and repeatedly committed against Iran since at least 1953.

  • avalys 2 hours ago

    Up 30% is not “nearly doubles”.

    • throwaway27448 2 hours ago

      Where are you pulling this number from? I see a clear change from 350 to 585

      • flaminHotSpeedo 2 hours ago

        350 was late last year. The text at the top of the linked page says prices are up about 30% over the past month. Directly prior to the war starting the price was about 470

  • SigmundA 2 hours ago

    Saw posters on /r/Truckers complaining that truck stops were taking advantage of situation to gouge for DEF too on top of diesel before someone pointed out that Iran is the second largest producer of urea, the primary component of DEF. They are not happy right now with $5.00 / gal fuel and higher DEF as well.

    Worried the administration will use it as an excuse to rollback NOx emissions regulations that mandated DEF usage in diesel engines. They are already not enforcing "deletes" of the emissions systems which is a federal crime.

    • throwaway85825 2 hours ago

      The deletes are for recirculation systems not DEF. Recirculation was always a bad idea and anyone who wants diesel for some reason should use DEF.

      • SigmundA 2 hours ago

        There are three main emissions control systems in diesels, the Exhaust Gas Recirculation (EGR), Diesel Particulate Filter (DPF) and Selective Catalytic Reduction (SCR) which uses Diesel Exhaust Fluid (DEF).

        Any or all can be "deleted" and is a crime to do so. All 3 systems add complexity and potentially reduce performance which is why those who don't care about emissions like to get rid of them.

        Before DEF NOx regulations steadily went up engine manufacturers relied on increasing amounts of EGR to control NOx until it was not tenable, once DEF systems where implemented they could back off EGR increasing performance but not as much as ripping it all out and tuning for no care of emissions.

        There are EGR free engines that rely entirely on DEF to control NOx but they are not for on-road use in the US thus far.

        • throwaway85825 an hour ago

          Of course, but mostly it's just recirculation that causes costly engine rebuilds. If it wasn't so expensive no one would delete.

          Most regulations target emissions at point of sale but don't give a toss if such systems are practical or maintainable. It's sometimes better for the environment to have more emissions but not so much waste from having to buy a new thing more frequently.

          • rconti 12 minutes ago

            I've got a 2011 BMW X5 diesel with 189k miles on it. The DPF went out at around 150k, which is roughly the expected lifetime from my understanding. The part alone is ~$4000. Regardless of living in CA, I'd have replaced it anyway because I think it's the right thing to do. (I didn't want a non-DPF diesel that was emitting lots of PM2.5s when I made my purchase).

            That said, many people would prefer the money in their bank account. And if I had decided to sell it rather than fix, no doubt it would have gone to someone looking to delete the DPF.

          • SigmundA an hour ago

            No the DEF systems tend to break down and its mandated the engine go into limp mode when they do, this is hated by those that do not care for emissions and one of the biggest reason to delete by truckers. Also costly to fix the systems out of warranty.

            You can find instructions on how to make DEF simulators using raspi's to fool the ECU into think the DEF system is working, people who do care about emissions will still carry these for emergency so they continue on their trip and get to a shop later. The derate was over zealous for sure and was a bad policy.

            Also DPF is a performance issue since it blocks the exhaust to some degree, same with catalytic converter with def nozzle so no its not just EGR at all. DPF also consumes more fuel for regens.

            2027 diesel regulations was to mandate even more NOx control but also specified manufacturers were required to have 100,000 mile 10 year warranty on emissions systems, its 5 year, 50k now. I believe thats dead in the water now.

            A diesel engine with a deleted SCR system puts out 40 times the NOx of a working one. Thats 40 trucks going down the road to 1 equivalent. NOx causes asthma and acid rain, its not for the environment as much as for you directly.

            • throwaway85825 an hour ago

              And what percent of diesel emissions are from diesel passenger vehicles?

              Emissions reduction efforts would be better spent ensuring repairability. The sunk cost emissions of landfills filled with junk created by planned obsolescence is much worse.

              Diesel pick ups are not practical vehicles. Let's be honest, it's a hobby. It's always going to be niche and cutting down the last 10% is always the hardest. General aviation still uses lead.

              • SigmundA an hour ago

                Not sure what your point is, I was talking primarily about Class 8 heavy duty commercial trucks (semi) and other medium duty commercial use.

                All the stuff that makes up emissions gear is highly recyclable and in fact some of it very desirable which is why people are getting catalytic converters stolen. So I do not worry about it filling up a land fill.

                I also don't worry about EV batteries filling landfills because again they are very high grade ore for new batteries, once we have enough in circulation we no longer need to mine much lithium or rare earth.

                I agree it should be reliable and repairable and forcing the manufacturers to have very long warranties on it seems like a good way to do that, having followed the various generations of DEF systems for the last decade the manufacturers have been making big strides because it costs them otherwise and has.

                I also think airplanes using lead is stupid, but that is a fraction of even private diesel pickup usage let alone commercial trucking. Diesel pickups are at least 10% of all pickup sales now days.

    • tdeck 2 hours ago

      Wars open a lot of opportunities, especially for the worst people.

  • burnt-resistor 2 hours ago

    LNG -> urea (fertilizer) -> food

    About half of all fertilizer is artificially created using fossil fuels.

    There is no undoing of this price shock because the planting and growing season has already arrived in the Northern Hemisphere.

    Expect grains to become more expensive and downstream food products like milk and cheese to increase a lot.

    • belorn 2 hours ago

      Most of the worlds bio fuel that we use to reduce emission in transportation comes from crops farmed to be turned into bio fuel. How will the increase in LNG then do to the price of bio fuels?

      • adrianN 2 hours ago

        It's debatable whether biofuels reduce CO2. I think it's better to understand them as subsidies for agriculture.

      • alephnerd 2 hours ago

        That will depend country to country. The US doesn't use urea to the same degree that Brazil, India, and China do. And Brazil (just like the US) doesn't rely on NatGas from the Gulf.

        It's mostly China and India that are impacted, but both have the Russian option.

        This isn't our first rodeo with elevated urea and NatGas prices - the same thing happened during the Russian Invasion of Ukraine in 2022 (and is reflected in the same dataset OP linked).

        This is also why Asian countries have been investing heavily in Hydrogen energy despite HN's hate boner to the technology.

    • gravypod 2 hours ago

      I thought the US primarily got it's LNG supply from fracking. Is this incorrect?

    • alephnerd 2 hours ago

      American Urea production is orthogonal to LNG production in the Gulf - most American NatGas is sourced domestically, from Canada, or the Carribean [0].

      This will be a shock, but mostly in Asia where LNG is dependent on Gulf sourcing, but most of the larger Asian countries began investing in building alternative supply chains and the financial buffer to ride out these kinds of shocks.

      This isn't the first system shock to have happened in the past 5 years - the Russian Invasion of Ukraine in 2022 led to a similar shock, and larger countries began building redundancies as a result.

      You will see this in the graph linked above as well - urea prices are well below their 2022-23 peaks.

      Additionally, the North American farming uses significantly less urea than other countries [1]

      [0] - https://www.eia.gov/dnav/ng/ng_move_impc_s1_a.htm

      [1] - https://ammoniaenergy.org/articles/decarbonizing-urea-produc...

    • carbocation 2 hours ago

      Haber-Bosch process, for the curious.

  • Trasmatta 2 hours ago

    Incredible how Trump ran on a "no wars" and "lower prices" platform. And that people actually believed it.

    • throwaway85825 2 hours ago

      The Israeli lobby paid more than the voters.

    • hsuduebc2 2 hours ago

      To be honest, the Fell for it again award goes to a lot of voters across the world. It has become a routine part of politics. What is fascinating is how confidently repeating almost any claim, over and over, is often enough to make people eventually believe it. "He wouldn’t have lied to us"

    • Octoth0rpe 2 hours ago

      The value of the Trump presidency for his voters was never really about those issues, so much as who he was promising to hurt.

      • Trasmatta 2 hours ago

        For the core of his base certainly, but he can't win with just them, it's not enough. He won because of the median voter that was mad at the incumbent party for inflation.

    • actionfromafar 2 hours ago

      But at least we have the second coming of Christ soon, so none of that will matter.

      https://en.wikipedia.org/wiki/Eschatology

      xkcd://2345

    • tstrimple 2 hours ago

      It's really not about them "believing" it. They tend to "believe" any new reality they are presented with if given by the "right" person. And they will just as quickly discard those "beliefs" if they are told something different by the "right" person. Trump is that person for them right now. Ultimately there is no value that "conservatives" aren't willing to abandon other than maintaining the hierarchy. Everything else seems to be in service to that end. They fight hardest when new groups are receiving rights they didn't previously enjoy. It's never been about "fiscal responsibility". It's never been about "small government" or "states rights". They are quite happy to abandon all of those if a trans person might be be able to use a bathroom in peace.

      "When someone shows you who they are, believe them the first time." ~ Maya Angelou

    • bediger4000 2 hours ago

      You know what else will blow your mind? Mass media excusing Trump from blame, followed by a good Republican showing in the midterms. Trump will be the only president to escape punishment for inflation. Mark my words.

      • tdeck 2 hours ago

        The administration didn't even bother manufacturing consent this time and yet the media is acting like they did during the Iraq war. Democratic leaders are weakly pretending like they opposed the war but they really stalled the war powers resolution so it would happen before they forced the vote. Now they get to spend the first half of their statements condemning Iran and the second half weakly protesting about procedural issues and lack of an "exit strategy".

      • Trasmatta 2 hours ago

        I expect a very bad showing for Republicans in the midterms. They will almost certainly lose the House, and it's actually becoming possible that they will lose the Senate (which seemed laughable to even consider a year ago).

  • mikelitoris 2 hours ago

    What if we collectively pee in buckets (to not dilute it with water and other human by-products) and give them to refineries for purification? /s

    • bluGill an hour ago

      Possible but there is a lot of water to remove. And even after that a lot of other impurities. You could do it, but it isn't worth it at scale