Since June 2026, the global fertilizer market has experienced dramatic fluctuations amid geopolitical risks and supply-demand fundamentals, with significant divergence in price trends across different varieties.
On June 15th local time, the US and Iran finalized a draft ceasefire memorandum of understanding, confirming its formal signing on June 19th in Geneva, Switzerland. The agreement stipulates that the Strait of Hormuz will resume full freedom of navigation after signing. This key global commodity shipping route has signaled a phased reopening, leading to the most dramatic price fluctuations in the global fertilizer market since the outbreak of the Middle East conflict at the end of February. Sulfur prices, a core raw material for phosphate fertilizers and sulfuric acid, have experienced a historic precipitous drop, completely reversing the previous three-month-long unilateral upward trend and bringing hope for lower raw material costs in global agriculture and chemicals.
Sulfur prices plummeted by as much as 25% in a single day, with spot prices experiencing an unprecedented sharp correction.
Due to the disruption of shipping through the Strait of Hormuz, nearly half of the world's seaborne sulfur trade relies on this route, resulting in continued restrictions on the flow of goods. Sulfur CFR Brazil prices surged from around $525/ton at the end of February, reaching a peak of $1200/ton on May 28, a cumulative increase of 129%. Following the news of the US and Iran finalizing a draft ceasefire memorandum, market expectations for the resumption of air traffic increased, leading to a rapid weakening of international sulfur spot prices. As of June 16, Middle East FOB sulfur prices fell back to $815-850/ton, with corresponding Brazilian CFR prices dropping to $900-950/ton. Based on the Brazilian CFR peak, the maximum daily drop was $300/ton, representing a maximum decline of 25%, the largest single-day correction in the spot market in nearly a decade.
Urea prices have also seen a significant correction, with risk premiums evaporating rapidly.
Since June, international urea FOB prices have fallen sharply from the conflict's peak, with a cumulative decline exceeding 30%, completely erasing all the geopolitical gains accumulated after the outbreak of the conflict at the end of February. Analysts believe the core reason for this round of urea price decline stems from the rapid clearing of market panic premiums—a combination of factors including the gradual release of goods stranded in the Strait of Hormuz, the closing of the spring fertilization window in the Northern Hemisphere, high prices suppressing Brazilian spot purchases, and a general shift in South American procurement schedules.
Supply Chains in Major Importing Countries Gradually Easing.
According to an official disclosure by the Indian Fertilizers Ministry on June 15, 16 fertilizer vessels bound for India are still stranded in the Strait of Hormuz, including 8 vessels carrying 330,000 tons of urea, 4 vessels carrying 257,000 tons of diammonium phosphate, 1 liquid ammonia tanker, and 3 vessels carrying 110,000 tons of sulfur. With the gradual resumption of navigation in the Strait, these stranded goods are expected to arrive in batches within the next two weeks, greatly alleviating fertilizer supply pressure during India's summer monsoon planting season.
Despite a significant improvement in market sentiment, industry experts warn that it will still take 3-4 months for global fertilizer supply and prices to fully return to normal. On the one hand, Middle Eastern oil and gas refining companies were forced to reduce their operating rates in stages due to saturated storage capacity, and there is a production cycle to restore full-capacity production; on the other hand, hundreds of energy and fertilizer cargo ships that have been stuck in the Strait for a long time need to be cleared in batches, and the efficiency of circulation is difficult to be restored quickly in the short term.
