Fertilizer and coal prices are rising together as supply chains in the Middle East are shaken in the aftermath of the war between the United States and Iran.
According to the global raw material media "Argus" on the 5th (local time), the price of granular urea fertilizers in the Middle East has recently risen by $130 (about 190,000 won) to $575-650 (about 850,000 to 960,000 won) per ton.
An official from the fertilizer industry said, "There is no big problem with the supply and demand of factors at the moment, but if the blockade of the Hormuz waters is prolonged, there is a possibility that fertilizer prices will rise during the July-August farming season, leading to a shortage of supply."
Citing data from raw material market analysis company CRU, the UK's Financial Times (FT) reported that about 35% of global factor exports pass through the Strait of Hormuz.
Urea is the most widely used representative high concentration chemical nitrogen fertilizer, which supports about half of global food production. The Strait of Hormuz is also where 45% of global exports of sulfur, a key raw material used in the production of phosphate fertilizers, and a significant amount of ammonia, a key raw material for nitrogen fertilizers, are moved. Middle Eastern countries such as Qatar, Saudi Arabia, the United Arab Emirates (UAE), Iran, and Oman are major fertilizer producers.
There is also an upward trend in prices in the energy market. International coal prices have recently risen to the highest level in about two years, as European and Asian power generation companies have increased their acquisition of coal as a replacement.
According to energy price information company Argus Media, the price of coal for power generation in Europe rose 26% from before the war to $133 per ton. Similar upward trends are seen in Australian and Asian markets. Tom Price, an analyst at the investment bank Panmuiriburum, said, "It is the biggest shock to the coal market in recent years."
