Potential gas cuts in Egypt raise concerns for urea market

The Egyptian urea market faced potential government-mandated gas supply cuts to urea production, raising concerns about contract fulfillment during a quiet trading day in the country following several spot sales of granular urea the days before.

"Think people are saying Egypt will cancel contracts," a trader said on March 4, attributing the concern to "gas issues."

Sources close to Egyptian urea producers, however, said the situation remains stable for now. "Till now stable (gas supply), but we can't guarantee that till tomorrow," a source close to one urea producer said March 4.

Another source close to an Egyptian urea producer confirmed they had not been informed of any updates regarding gas supply, while a third source stated it was not an issue "at the time being."

Despite these assurances, the possibility of gas cuts remains a concern for the market. A second trader familiar with the Egyptian urea market said, "there is always the chance," reflecting the underlying uncertainty following Israel's stop on natural gas exports since the beginning of the US-Israel war with Iran.

"The Leviathan gas field is shut as well," a third trader familiar with the Egyptian urea market said and added that it was, "Egypt's main gas supplier."

The latest sale of granular urea was achieved by Helwan at $625/mt FOB Egypt, for 5,000 mt of product and April shipment.

Platts, part of S&P Global Energy assessed the granular urea price at $625/mt FOB Egypt on March 4, unchanged day-on-day, but up from $485/mt on Feb 28.