May 2026 Global Fertilizer & Petrochemical Market Report

Author: Saman Memarpour

Geopolitical Risk Assessment

Middle East Geopolitical Landscape

The Middle East remained the most important geopolitical variable influencing fertilizer and petrochemical markets during May 2026.
Market participants closely monitored developments across the Persian Gulf, the Red Sea, and the wider Middle East, as geopolitical uncertainty continued to affect freight markets, insurance premiums, and supply chain planning.
Although no major disruption to commercial shipping occurred in May, elevated tensions continued to support risk-adjusted pricing across fertilizer and petrochemical markets.

Strategic Importance of the Persian Gulf

The Persian Gulf remains one of the world’s most important commodity-export regions.

Strategic Commodities Exported Through the Region

A substantial share of globally traded fertilizers, petrochemicals, and energy products depends, directly or indirectly, on maritime routes originating in the Persian Gulf.

Strait of Hormuz Risk Assessment

The Strait of Hormuz remains the most strategically important maritime chokepoint for fertilizer and petrochemical markets.

Potential Market Impact of Disruption

Strategic Risk Ranking

Geopolitical Risk Matrix

Strategic Outlook

Geopolitical developments are expected to remain a major market driver throughout Q3 2026.

Even without direct supply disruptions, elevated uncertainty is likely to continue supporting:

• Freight premiums
• Marine insurance costs
• Inventory management expenses
• Supply-chain risk mitigation costs

As a result, geopolitical risk remains a structural support factor for fertilizer and petrochemical pricing.

Sources & References

• International Energy Agency (IEA)
• United Nations Conference on Trade and Development (UNCTAD) – Review of Maritime Transport
• International Chamber of Shipping (ICS)
• World Bank – Commodity Markets Outlook
• International Monetary Fund (IMF) – World Economic Outlook (WEO)

Global Nitrogen Market Overview

Nitrogen Market Enters a Softer Phase

The global nitrogen market entered a softer, more balanced phase in May 2026. After the strong price momentum recorded earlier in the year, additional supply from the Middle East, Iran, and other exporting regions reduced upward pressure on urea prices.

Demand remained healthy in major agricultural markets, particularly India and Brazil, but buyers became more selective as prices corrected from Q1 highs. The market, therefore, shifted from a bullish structure toward a more balanced environment.

Nitrogen Market Dashboard

Urea Market Analysis

Global Urea Price Development

Urea prices softened during May as supply availability improved and buyers delayed purchases where possible. Iranian producers increased export availability, while Middle Eastern producers remained active in spot markets.

However, the decline was moderated by continued agricultural demand, limited Chinese exports, elevated freight costs, and expectations of future Indian procurement.

Urea Price Assessment – May 2026

Urea Price Comparison – May 2026

India Market Analysis

India Remains the Main Demand Anchor

India remained the most important demand-side variable in the global urea market during May. Although buying activity was less aggressive than during earlier tender periods, the market continued to expect further Indian import requirements.

Government subsidies and seasonal agricultural needs continued to protect farmers' affordability and support nitrogen consumption.

India Market Drivers

Future Indian tenders remain one of the most important upside risks for global urea prices during Q3 2026.

Brazil Market Analysis

Demand Remains Healthy but Price-Sensitive

Brazil continued to demonstrate resilient fertilizer demand during May, supported by soybean, corn, and sugarcane production.

However, buyers remained selective as international prices softened. Many importers preferred short-term coverage rather than aggressive forward purchases.

Brazil CFR Urea

Brazil Market Risks

China Market Analysis

Export Participation Remains Limited

China remained a key supply-side variable in May. Export participation remained limited relative to historical levels, supporting international markets despite improving supply elsewhere.

If Chinese exports increase later in 2026, the global urea market could face additional downside pressure.

Impact of Chinese Export Policy

Iran Market Analysis

Rising Exports Create Downside Pressure

Iran was one of the most important bearish variables in the May urea market.

Improved gas availability and active port operations supported higher export availability. Iranian material remained the most competitively priced among major suppliers, maintaining a significant discount to other Middle Eastern origins.

Iran FOB Urea

Iranian supply remained attractive for buyers in South Asia, East Africa, Brazil, and Southeast Asia.

Iran Risk Matrix

Nitrogen Risk Matrix

Nitrogen Market Outlook – Q3 2026

Supportive Factors

• Future Indian procurement
• Limited Chinese exports
• Healthy Brazilian demand
• Elevated freight costs
• Geopolitical risk premiums
• Stable agricultural demand

Downside Risks

• Rising Iranian exports
• Improving Middle East supply
• Seasonal demand slowdown
• Affordability concerns
• Potential Chinese export recovery

Outlook Scorecard

Strategic Conclusion

The nitrogen market softened during May 2026 as improving supply availability reduced the bullish pressure seen earlier in the year. However, the market remains supported by expectations of Indian demand, resilient Brazilian imports, limited Chinese exports, and elevated logistics costs.

The most important variables for Q3 2026 will be Indian tender activity, Iranian export growth, and any change in Chinese export policy.

Sources & References

• International Fertilizer Association (IFA)
• Food and Agriculture Organization (FAO) – Food Outlook
• World Bank – Commodity Markets Outlook
• International Energy Agency (IEA)

Ammonia Market Analysis

Global Ammonia Market Overview

The global ammonia market remained under pressure throughout May 2026 as improving supply availability continued to outweigh demand growth in several key regions. Following the correction that began during the first quarter, ammonia prices softened further as additional export volumes became available from the Middle East, Southeast Asia, and other producing regions.

Unlike urea, which continued to benefit from agricultural demand and periodic Indian procurement activity, ammonia markets faced a more balanced supply-and-demand environment. Buyers remained cautious, expecting further downward price adjustments, while producers increasingly competed for available spot business.

Despite the softer market tone, ammonia prices remained above long-term historical averages due to elevated energy costs, freight expenses, and geopolitical risk premiums.

Ammonia Market Dashboard

May 2026 Market Assessment

Global Ammonia Supply Chain

Ammonia remains one of the most strategically important intermediates in the fertilizer value chain, making its price direction a leading indicator of broader developments in the nitrogen and phosphate markets.

Regional Price Assessment

Ammonia Price Summary – May 2026

Relative Regional Price Comparison

Middle East Market Analysis

Additional Supply Continues to Pressure Prices

The Middle East remained the primary source of downward pressure on ammonia pricing during May.

Production rates improved across several facilities, resulting in greater availability of spot cargo and reduced market tightness.

Key Middle East Drivers

• Higher operating rates
• Increased export availability
• Improved logistics performance
• Greater competition for spot sales
• Softer demand east of Suez

As a result, FOB values continued trending lower compared with Q1 levels.

East of Suez Market

Supply Growth Exceeds Demand Growth

The East of Suez market remained the weakest ammonia region globally.

Additional cargoes from:

• Middle East producers
• Southeast Asia
• Indonesia
• China

combined with cautious buying behavior to create a lengthening market structure.

East of Suez Market Balance

India Market Analysis

Buyers Remain Selective

Indian buyers maintained a cautious procurement strategy throughout May.

With international prices trending lower, many buyers delayed purchases in anticipation of additional price corrections.

India CFR Assessment

Although ammonia demand remained healthy, purchasing urgency was noticeably lower than earlier in the year.

Europe Market Analysis

Structural Support Remains Intact

Europe remained the strongest ammonia market globally.

Several factors continued to support regional prices:

European importers continued evaluating cargoes from North Africa, the Middle East, and Southeast Asia.

CBAM and European Market Dynamics

The Carbon Border Adjustment Mechanism (CBAM) continues influencing European ammonia economics.

Importers increasingly evaluate:

• Embedded carbon intensity
• Future carbon liabilities
• Supplier emissions profiles
• Long-term compliance costs

As implementation progresses, lower-carbon producers may gain a competitive advantage in European markets.

North Africa Market Analysis

Stable Fundamentals

North African ammonia markets remained relatively balanced throughout May.

FOB values remained supported by:

• Healthy export demand
• European purchasing interest
• Stable production levels
• Limited spot availability

North Africa FOB

North Africa, therefore, remained one of the strongest ammonia-exporting regions globally.

Cost Curve Analysis

Main Ammonia Cost Drivers

Natural gas remains the single largest determinant of the economics of ammonia production globally.



Ammonia Risk Matrix

Ammonia Outlook – Q3 2026

Supportive Factors

• Elevated energy costs
• European import dependence
• Freight inflation
• Geopolitical risk premiums
• Carbon compliance costs

Bearish Factors

• Improving Middle East supply
• Additional export availability
• Lengthening the East of Suez market
• Cautious Asian demand
• Increased spot competition

Outlook Scorecard

Strategic Conclusion

The ammonia market remained in a corrective phase throughout May 2026 as improving supply availability exceeded demand growth across much of Asia.

While Europe and North Africa continued benefiting from tighter fundamentals and structural import requirements, East of Suez markets remained under pressure from growing cargo availability and cautious buyer behavior.

The current market environment suggests continued stabilization rather than a return to the extreme volatility observed earlier in the year. Nevertheless, energy costs, freight inflation, and geopolitical uncertainty remain important support factors that should prevent a severe market downturn.

Sources & References

• International Energy Agency (IEA)
• World Bank – Commodity Markets Outlook
• International Monetary Fund (IMF) – World Economic Outlook (WEO)
• United Nations Conference on Trade and Development (UNCTAD) – Review of Maritime Transport

Sulfur Market Analysis

Global Sulfur Market Overview

The global sulfur market remained broadly stable in May 2026, following the correction seen earlier in the year. Prices were no longer rising aggressively, but the market also avoided a deep decline because key demand centers continued to require replacement volumes.

China remained the most important reference point for global sulfur pricing. Buyers were still cautious, but port inventories remained relatively low compared with historical levels, limiting downside risk. Morocco also continued to support the market as phosphate production requirements remained firm. Indonesia’s nickel-processing sector remained a structural demand driver, with sulfur consumption increasingly linked to battery material and industrial acid production.

Overall, May represented a stabilization phase rather than a bearish reversal.

Sulfur Market Dashboard

Sulfur Price Assessment – May 2026

China Market Analysis

Low Inventories Continue Supporting Sentiment

China remained the most important sulfur market globally during May.

Although buyers avoided aggressive purchasing, port inventories remained below historical comfort levels. This created a market structure in which buyers had some negotiating power, but sellers were not forced into large discounts.

Chinese phosphate producers remained cautious as high raw material costs continued to weigh on margins. However, the need to maintain domestic fertilizer production provided a baseline level of sulfur demand.

China Sulfur Inventory Assessment

Low inventories remain one of the strongest supportive indicators for the sulfur market heading into Q3 2026.

India Market Analysis

Selective Buying Continues

Indian sulfur buyers remained selective during May. Purchasing activity improved compared with the early correction phase, but buyers continued to monitor price direction closely.

Demand remained supported by:

• Phosphate fertilizer production
• Seasonal nutrient requirements
• Import replacement needs
• Stable agricultural demand

India CFR Sulfur

India remains one of the most important demand centers for Middle Eastern sulfur exports.

Indonesia Market Analysis

Structural Demand Remains Strong

Indonesia continued to provide one of the strongest long-term demand stories in the sulfur market.

The nickel processing and battery materials industries continued to support demand for sulphuric acid. This demand is less seasonal than fertilizer demand and gives the market an important industrial support base

Indonesia Sulfur Demand Driver

Indonesia remained one of the firmest destinations for sulfur during May.

Morocco Market Analysis

Phosphate Demand Supports Sulfur Consumption

Morocco remained a major supportive factor for sulfur markets.

As one of the world’s largest phosphate producers, Morocco’s sulfur demand is closely tied to DAP, MAP, phosphoric acid, and phosphate rock production. With phosphate markets remaining firm, sulfur consumption from Moroccan producers continued to support global fundamentals.

Any increase in Moroccan phosphate operating rates in Q3 would further strengthen sulfur demand.

Iran Market Analysis

Competitive Export Position Remains Important

Iran remained one of the most competitively priced suppliers of sulfur in May.

Iran FOB Sulfur

Iranian sulfur remained attractive for price-sensitive buyers in South Asia, East Africa, and Southeast Asia. However, market participants continued monitoring Persian Gulf logistics, insurance costs, and regional geopolitical developments.

Sulfur Risk Matrix

Sulfur Outlook – Q3 2026

Supportive Factors

• Low Chinese inventories
• Firm Moroccan phosphate demand
• Strong Indonesian industrial consumption
• Elevated freight costs
• Persian Gulf risk premiums
• Stable agricultural demand

Downside Risks

• Buyer resistance to higher prices
• Weak phosphate margins in some regions
• Additional export availability
• Slower industrial activity

Outlook Scorecard

Strategic Conclusion

The sulfur market stabilized in May 2026 following the earlier-year correction. While buyers remained cautious, downside risk was limited by low Chinese inventories, firm Moroccan phosphate demand, and structural growth from Indonesia’s nickel-processing sector.

The market enters Q3 2026 in a more balanced position. Prices may not return to the extreme highs seen earlier in the year, but the medium-term outlook remains constructive due to strong industrial and fertilizer-linked demand.

Sources & References

• World Bank – Commodity Markets Outlook
• Food and Agriculture Organization (FAO) – Food Outlook
• International Fertilizer Association (IFA)
• United Nations Conference on Trade and Development (UNCTAD) – Review of Maritime Transport

Phosphate Market Analysis

Global Phosphate Market Overview

Phosphate markets remained the strongest-performing segment of the fertilizer complex during May 2026. Unlike nitrogen markets, which continued adjusting to improving supply availability, phosphate markets remained supported by structural supply constraints, firm raw material costs, and healthy import demand across key consuming regions.

Limited Chinese export participation remained the most important bullish factor in the global phosphate market. At the same time, demand from India, Pakistan, Brazil, and several African markets continued to support international prices.

Higher sulfur costs, elevated freight rates, and relatively tight export availability from major suppliers further reinforced market strength throughout the month.

As a result, phosphates entered June with one of the healthiest supply-demand balances across all fertilizer segments.

Phosphate Market Dashboard

May 2026 Market Assessment

Global Phosphate Value Chain

This production chain explains why developments in the sulfur and ammonia markets continue to influence phosphate economics globally.

Phosphate Price Assessment

May 2026 International Price Summary

Relative Phosphate Price Comparison

China, therefore, remained the most important bullish factor in the phosphate market during May.

India & South Asia Market Analysis

Demand Remains Strong

India continued to demonstrate healthy phosphate demand during May.

Government subsidies, agricultural activity, and fertilizer replenishment requirements continued to drive imports despite elevated international prices.

Other South Asian markets also remained active.

South Asia Market Assessment

DAP India CFR

South Asia remains one of the most important demand centers for globally traded phosphates.

Morocco Market Analysis

Global Supply Leadership Remains Critical

Morocco remained one of the most strategically important phosphate suppliers globally.

Strong export activity from:

• Jorf Lasfar
• Safi

continued supporting international markets, while occasional logistics constraints prevented any significant oversupply from developing.

Morocco's Strategic Importance

Because Morocco plays such a dominant role in phosphate trade, operational changes there continue to influence global market sentiment.

Saudi Arabia Market Analysis

Export Activity Remains Strong

Saudi Arabia continued demonstrating a strong export performance throughout May.

Sales into:

• India
• Pakistan
• Southeast Asia
• Africa

confirmed the strength of underlying demand.

Saudi Arabia remains one of the key balancing suppliers within the global phosphate market.

Brazil Market Analysis

Strong MAP Demand Continues

Brazil remained one of the strongest phosphate import markets globally.

Although farmers continued monitoring affordability and crop economics, import demand remained healthy because phosphate application rates remain essential for soybean and corn production.

MAP Brazil CFR

Brazil Market Drivers

• Soybean production
• Corn acreage
• Import dependency
• Seasonal procurement
• Limited global availability

Brazil, therefore, continued to support phosphate prices throughout May.

Phosphate Risk Matrix

Phosphate Outlook – Q3 2026

Supportive Factors

• Limited Chinese exports
• Strong South Asian demand
• Healthy Brazilian imports
• Elevated sulfur costs
• Tight export availability
• High freight rates

Downside Risks

• Affordability concerns
• Potential Chinese export recovery
• Seasonal demand slowdown
• Economic uncertainty

Outlook Scorecard

Strategic Conclusion

Phosphates remained the strongest fertilizer segment during May 2026.

Unlike nitrogen markets, which continued adjusting to improving supply conditions, phosphates remained supported by structural supply constraints, strong import demand, and limited Chinese export participation.

The market enters Q3 2026 with one of the most constructive outlooks across the fertilizer complex. While affordability concerns may occasionally slow purchasing activity, the overall balance of risks continues to favor producers and exporters.

Sources & References

• International Fertilizer Association (IFA)
• Food and Agriculture Organization (FAO) – Food Outlook
• World Bank – Commodity Markets Outlook
• International Monetary Fund (IMF) – World Economic Outlook (WEO)
• International Energy Agency (IEA)

NPK Market Analysis

Global NPK Market Overview

The global NPK market remained firm throughout May 2026 despite softer trends in certain nitrogen markets. Elevated raw material costs, healthy agricultural demand, and limited availability of competitively priced compound fertilizers continued supporting market fundamentals.

Unlike ammonia and urea, which experienced rising supply pressure, NPK producers continued to face relatively high production costs due to firm phosphate prices, stable potash values, and elevated logistics expenses.

Demand remained particularly strong across South Asia, West Africa, and selected Latin American markets, while Southeast Asia and Europe maintained stable purchasing activity.

Overall, the NPK sector remained among the most resilient fertilizer segments in May.

NPK Market Dashboard

May 2026 Market Assessment

NPK Production Cost Structure

Primary Inputs for Compound Fertilizers

This cost structure explains why NPK prices remained relatively firm despite corrections in certain standalone nutrient markets.

NPK Price Assessment

International NPK Prices – May 2026

Relative NPK Price Comparison

India Market Analysis

Strong Demand for Phosphate-Rich Grades

India remained one of the strongest NPK markets globally during May.

Demand remained particularly healthy for grades with higher phosphate content, supported by:

• Government fertilizer programs
• Seasonal planting requirements
• Stable agricultural economics

India Demand Drivers

West Africa Market Analysis

Structural Demand Growth Continues

West Africa remained one of the most important growth regions for NPK consumption.

Key importing countries included:

• Ghana
• Côte d’Ivoire
• Togo
• Benin
• Nigeria

Demand continued to be supported by cocoa, maize, rice, cotton, and cash-crop production.

West Africa CFR Assessment

The region continues benefiting from rising fertilizer adoption and long-term agricultural development programs.

Southeast Asia Market Analysis

Stable Market Conditions

Southeast Asian markets remained relatively balanced throughout May.

Key demand sectors included:

Demand remained sufficient to support prices despite affordability concerns.

NPK Risk Matrix

NPK Outlook – Q3 2026

Supportive Factors

• Elevated phosphate prices
• Strong agricultural demand
• Government fertilizer programs
• Healthy West African imports
• Elevated freight costs

Downside Risks

• Affordability concerns
• Seasonal demand normalization
• Slower economic growth

Outlook Scorecard

Strategic Conclusion

The NPK market remained one of the most resilient fertilizer sectors during May 2026. Elevated production costs, healthy agricultural demand, and firm phosphate fundamentals continued to support prices.

Among fertilizer products, NPK grades are expected to remain among the strongest-performing segments heading into Q3 2026.

Potash Market Analysis

Global Potash Market Overview

The global potash market remained broadly stable during May 2026, although sentiment remained firmer outside North America.

Unlike phosphate markets, which continued to strengthen, potash markets displayed limited volatility. However, healthy demand from Brazil, expectations surrounding Indian contract negotiations, and stable agricultural fundamentals continued to support market sentiment.

The market remained balanced rather than tight, but no major downside pressures emerged during the month.

Potash Market Dashboard

May 2026 Market Assessment

Potash Price Assessment

International MOP Prices – May 2026

Potash Price Comparison

Brazil Market Analysis

Strongest Potash Market Globally

Brazil remained the strongest potash market during May.

Key support factors included:

• Soybean production
• Corn planting activity
• Healthy agricultural economics
• Relatively low inventories

Brazil Market Drivers

Brazil, therefore, continued to provide a strong support base for global potash demand.

India Market Analysis

Contract Negotiations Remain Critical

India’s annual potash contract negotiations remained unresolved during May.

Market participants generally expected settlement levels to remain supportive for international pricing.

India Contract Scenarios

The outcome of these negotiations remains one of the most important variables for Q3 2026.

Southeast Asia Market Analysis

Demand remained stable across:

• Indonesia
• Malaysia
• Thailand
• Vietnam

Palm oil and rice production continued to support consumption.

Potash Risk Matrix

Potash Outlook – Q3 2026

Supportive Factors

• Strong Brazilian demand
• Stable agricultural fundamentals
• Expected a supportive India contract
• Healthy import requirements

Downside Risks

• Adequate global supply
• Affordability concerns
• Seasonal demand slowdown

Outlook Scorecard

Strategic Conclusion

The potash market remained among the most stable fertilizer segments in May 2026.

Although price movements were less dramatic than in phosphates or nitrogen products, healthy agricultural demand and stable market fundamentals continued to support sentiment.

The market enters Q3 2026 with a balanced but constructive outlook.

Sources & References

• International Fertilizer Association (IFA)
• Food and Agriculture Organization (FAO) – Food Outlook
• World Bank – Commodity Markets Outlook
• International Monetary Fund (IMF) – World Economic Outlook (WEO)

Petrochemical Market Analysis

Global Petrochemical Market Overview

The global petrochemical market remained mixed during May 2026. Unlike fertilizer markets, which continued benefiting from agricultural demand, petrochemical markets were more exposed to weaker industrial activity, volatile feedstock costs, and uncertain manufacturing demand in Asia.

Methanol remained relatively balanced, supported by energy-sector demand and Persian Gulf export flows. Polymer markets, including polyethylene and polypropylene, remained under pressure from weak downstream demand, margin compression, and cautious buying activity. PVC performed slightly better due to demand for construction and infrastructure in selected emerging markets.

Feedstock volatility, elevated freight costs, and geopolitical risk in the Persian Gulf continued to influence petrochemical pricing and trade flows.

Petrochemical Market Dashboard

2. Feedstock Volatility

Petrochemical producers continued to monitor movements in the crude oil, natural gas, LNG, naphtha, and condensate markets. Changes in these inputs directly affected production economics and operating margins.

3. Asian Industrial Demand

Manufacturing demand remained uneven across Asia. China, South Korea, Taiwan, and parts of Southeast Asia continued to show weaker-than-expected downstream consumption of polymers and industrial chemicals.

Methanol Market Analysis

Methanol remained among the more stable petrochemical products in May. Energy-sector demand, Middle Eastern export flows, and elevated freight costs supported the market.

However, weaker industrial activity in China limited stronger price momentum.

Polymer Market Analysis

Polyethylene (PE)

Polyethylene markets remained mixed. Packaging demand was relatively stable, but broader industrial consumption remained soft.

Polypropylene (PP)

Polypropylene remained under pressure due to weaker demand from manufacturing, automotive, and consumer goods sectors.

PVC

PVC showed better resilience than PE and PP. Infrastructure spending and construction demand in selected emerging markets continued to support consumption.

Aromatics Market Analysis

Aromatics remained highly sensitive to movements in crude oil and naphtha. Benzene, toluene, and xylene markets showed mixed performance as buyers remained cautious and refiners adjusted operating rates.

Strategic Conclusion

The petrochemical market remained balanced but cautious during May 2026. Weak industrial demand in parts of Asia limited price momentum, while elevated freight costs, feedstock volatility, and geopolitical uncertainty prevented deeper downside pressure.

For Green Gubre Group and international traders, the Persian Gulf remains the most important strategic variable. Any disruption affecting the Strait of Hormuz would have consequences beyond fertilizers, influencing methanol, polymers, aromatics, LNG, and broader petrochemical trade flows.

Sources & References

• International Energy Agency (IEA)
• U.S. Energy Information Administration (EIA)
• World Bank – Commodity Markets Outlook
• International Monetary Fund (IMF) – World Economic Outlook (WEO)
• United Nations Conference on Trade and Development (UNCTAD) – Review of Maritime Transport

Freight & Logistics Outlook

Global Freight Market Outlook

Freight remained one of the most important supporting factors for fertilizer and petrochemical prices throughout May 2026. Although commodity fundamentals varied across markets, elevated logistics costs continued to raise delivered prices and limit downside pressure in most importing regions.

Geopolitical uncertainty in the Persian Gulf, vessel availability constraints, seasonal trade flows, and relatively firm bunker costs continued to support freight markets. While rates were below the extreme levels observed during major supply disruptions in previous years, freight remained significantly above long-term historical averages.

In fertilizer markets, freight is no longer merely a transportation expense; it has become a strategic pricing component that directly influences trade flows, procurement timing, inventory management, and import affordability.

Freight Market Dashboard

Key Fertilizer Freight Assessments – May 2026

Comparative Freight Levels

Key Freight Market Drivers

Persian Gulf Risk Premium

The Persian Gulf remained the most important freight risk factor during May.

Although vessel movements through the Strait of Hormuz continued without interruption, shipowners and insurers maintained elevated risk assessments.

This affected:

• Marine insurance costs
• Charter rates
• Voyage risk calculations
• Inventory planning
• Delivered fertilizer replacement values

Vessel Availability

Availability of prompt dry bulk tonnage remained relatively tight on several fertilizer routes.

Market participants reported:

• Longer positioning times
• Higher replacement freight costs
• Reduced scheduling flexibility
• Increased competition for prompt vessels

These factors were particularly visible on Middle East–Brazil and Middle East–Asia routes.

Seasonal Trade Activity

Healthy fertilizer trade flows continued supporting freight demand.

Major cargo flows included:

Strong agricultural demand continued to generate vessel requirements across fertilizer supply chains.

Insurance Costs

Insurance remained elevated due to geopolitical uncertainty.

Although no major disruptions occurred during May, insurers maintained conservative pricing assumptions for voyages involving the Persian Gulf and nearby regions.

Freight Risk Matrix

Freight Outlook – Q3 2026

Supportive Factor

• Elevated geopolitical uncertainty
• Strong fertilizer trade flows
• Higher insurance costs
• Tight vessel availability
• Seasonal agricultural demand

Downside Risk

• Additional vessel supply
• Lower bunker fuel prices
• Slower global trade growth
• Reduced commodity trading activity

Freight Outlook Scorecar

Strategic Freight Assessment

Freight markets are expected to remain elevated throughout Q3 2026. Even without direct geopolitical disruptions, persistent uncertainty over the Persian Gulf and the Strait of Hormuz is likely to sustain meaningful risk premiums along fertilizer and petrochemical shipping routes.

Q3 2026 Market Outlook

Global Fertilizer & Petrochemical Outlook

The most probable scenario for Q3 2026 is not a broad market correction but rather selective adjustments across individual commodity groups.

Markets supported by structural supply constraints and healthy demand are expected to remain firm, while markets experiencing improving supply availability may face moderate downward pressure.

Overall, fertilizer markets continue to exhibit stronger fundamentals than most industrial commodity sectors.

Q3 2026 Outlook Dashboard

Market Strength Ranking

Strongest Outlook

Regional Outlook Assessment

India

Outlook: Strong

Key Drivers:

• Fertilizer subsidy programs
• Strong agricultural demand
• Continued import requirements
• Strategic inventory management

Brazil

Outlook: Firm

Key Drivers:

• Soybean and corn demand
• Potash imports
• Urea procurement
• Stable agricultural economics

China

Outlook: Critical Variable

Key Drivers:

• Export policy decisions
• Sulfur inventory levels
• Industrial activity
• Domestic fertilizer demand

Middle East

Outlook: Strategic

Key Drivers:

• Geopolitical developments
• Energy exports
• Freight risk premiums
• Export availability

Q3 2026 Bullish Factors

• Strong Indian fertilizer demand
• Limited Chinese phosphate exports
• Tight phosphate supply
• Low sulfur inventories in China
• Elevated freight rates
• Strong agricultural fundamentals
• Persistent geopolitical risk premiums

Q3 2026 Bearish Factors

• Iranian production recovery
• Improving ammonia availability
• Affordability concerns
• Potential increase in Chinese exports
• Slower industrial activity in Asia

Strategic Risk Matrix