Since early November 2025, urea prices have remained elevated in both China and Europe, supported by tightening inventories and firmer market sentiment. Declining stocks, active winter stockpiling, and shifting global trade flows鈥攑articularly after India鈥檚 latest urea tender and China鈥檚 suspension of fertiliser exports including urea鈥攈ave collectively strengthened the bullish trend.
In China, urea prices continued to rise as aggressive winter stockpiling bolstered market enthusiasm. Strong purchasing activity from compound fertiliser producers and industrial users, particularly melamine and plywood manufacturers, reinforced domestic demand. The surge in winter procurement came ahead of the spring wheat regreening period, prompting distributors to secure volumes early.
On the supply side, daily urea production continued to increase, averaging around 202,000 tons, up 2,100 tons week-on-week and 14,600 tons year-on-year, with operating rates reaching 85.3%. Despite strong production, inventory levels continued to fall due to active export activity and growing foreign inquiries. National inventories fell to approximately 1.444 million tons, down 3.86% week-on-week and 1.16% year-on-year.
Industrial demand remained supportive and northeast China鈥檚 compound fertiliser plants, which continued procuring large-grain urea for winter reserves. The national compound fertiliser operating rate rose to 33.98%, up 2.86% week-on-week and 1.38% year-on-year, reinforcing downstream consumption. Overall, steady agricultural demand combined with strong industrial participation helped sustain upward pressure on domestic prices.
India also played a pivotal role in the global market. On 20 November, Indian Potash Limited (IPL) received bids from 24 suppliers for Urea import, with the lowest East Coast offer at USD 418.4 CIF for 2.26 million tons and the lowest West Coast offer at USD 419.9 CIF for 2.46 million tons. These prices were slightly below expectations but still equivalent to roughly USD 394鈥�396 FOB for Chinese exports. Strong domestic demand in India has led market participants to anticipate another tender by late December.
In Europe, urea prices have remained high since early November, driven by tightening inventories and heightened procurement activity. Although agricultural demand is seasonally limited following the planting window, sentiment has firmed due to uncertainty over future supply availability. China鈥檚 suspension of exports鈥攊ncluding urea, DAP, TMAP and AdBlue鈥攈as significantly reduced international supply flexibility, amplifying upward pressure.
Europe鈥檚 winter crop establishment has progressed well overall, but regional delays in Italy, Hungary, Romania and parts of the Maghreb have raised concerns over frost vulnerability. These agronomic uncertainties, combined with tightening stocks, have encouraged precautionary buying and further supported prices. India鈥檚 tender also reshaped trade flows, pulling cargoes away from Europe and intensifying urea supply tightness across the region.
Urea prices in Europe may face downward pressure in the coming month as weak melamine demand鈥攍inked to a slowing construction sector鈥攕oftens industrial consumption. Additionally, China鈥檚 significant capacity expansion, with 2.51 million tons added in H1 2025 and another 3.41 million tons scheduled in H2, could ease supply tightness and temper global prices as 2025 closes.
