We maintain our forecast for an average Middle East urea price of USD350/tonne (+4% YoY) in 2025F (page 3). The average Middle East urea price came in at USD338/tonne in 2024, slightly higher than our forecast. We project urea prices to grow 4% YoY in 2025F, driven by: (1) IEA-forecasted international gas price increases of 34%/14% YoY for the Henry Hub and Dutch TTF natural gases; (2) a 3% YoY decline in global exports, as reduced volumes from other countries offset China’s export recovery (from a low 2024 base, with weaker growth due to extended restrictions through April 2025) and a revised 5% YoY increase from Russia (up from -1%); and (3) modest demand recovery from strong global crop yields per RaboResearch. These factors outweigh lower fertilizer affordability due to projected falling crop prices (Bloomberg Intelligence) and a projected 12% YoY lower Brent oil price.

For 2026-2029F, we maintain our price projection of USD330/tonne, which is 6% lower than our 2025F projection of USD350/tonne, mainly driven by our expectation for prices normalizing toward the 2012-2021 average of USD321/tonne, as we expect the impacts of the Russia-Ukraine conflict to wane. 

We lower our ASP for DPM and DCM during 2025-2029F by 0.8%/4.6%, respectively, driven by our lower projected premium of their selling prices to the Middle East to 10%/12% from 11%/15% previously. Our assumption cuts follow lower 2024 ASP (domestic and export – in our estimate) by 0.8%/1.6% vs our previous forecasts for DPM/DCM, mainly due to weaker-than-expected export prices.

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