SABIC AN says urea prices impacted by seasonal slowdown in Q4 2024

Logo of SABIC Agri-Nutrients Co. (SABIC AN) 

SABIC Agri-Nutrients Co. (SABIC AN) announced that global urea prices experienced a downturn in early Q4 2024, driven by lower seasonal demand and dependence on tender-based sales.

In its 2024 financial report, the company explained that the surplus dynamic spurred intense sell-side competition, a depressed pricing environment, and the notable crossover of western urea supplies into eastern destinations.

A series of production disruptions did offer price support late in the quarter, the company said. Export availability suffered from overlapping maintenance in North Africa, China’s continued absence from the export market, together with plant outages driven by the onset of winter gas tightness across Europe and Iran.

In 2024, the average sales price declined by 3% year-on-year (YoY), while sales volume grew by 3% YoY, resulting in a 0.3% increase in revenue.

The transition to the new calendar year saw nitrogen trade open on firm footing given widely anticipated first-quarter seasonal demand, multiple large-scale import tenders, buy-side efforts to address earlier purchase deferrals, and the continued impact of depressed export availability, SABIC AN said.

Overall, global urea prices benefit from compressed availably, as exportable urea supply is set to remain comparatively limited through the first quarter as winter gas dynamics remain in place and restrictions prohibit exports out of Asia, the company said.

Spring season nitrogen demand is expected to remain robust following an uptick in grain pricing due to downward revisions on global yield estimates.

SABIC AN’s CEO Fahd Al-Battar said that the company's net income for 2024 was affected by a decrease in sales prices and an increase in the cost of goods sold.

The company demonstrated strong cash flow generation, underscoring its commitment to capital discipline, cost optimization, and effective working capital management, which fortifies its financial stability and supports future investments.

Al-Battar announced that technical and feasibility studies are currently under progress for the proposed low-carbon ammonia plant in Jubail Industrial City. The plant is projected to have an annual productio capacity of 1.2 million metric tons of ammonia and 1.1 million metric tons of urea and specialized agricultural nutrients. According to data compiled by Argaam, SABIC AN reported a net profit of SAR 3.32 billion in 2024, a decline of 9% from SAR 3.65 billion a year earlier. The fourth-quarter net earnings decreased by 3% YoY to SAR 954.3 million.