Yara expects the global nitrogen market to remain tight despite new capacity additions, supported by steady demand growth, aging plant closures, and supply uncertainty in key exporting regions. The company shared this outlook during its Capital Markets Day 2026 presentation.
According to Yara, nitrogen demand continues to rise globally due to food security needs, while effective supply growth remains limited. This imbalance is likely to keep nitrogen prices supported over the medium term.
New Nitrogen Capacity Fails to Ease Market Tightness
Several new nitrogen and urea plants have come onstream in recent years. However, Yara noted that these additions are not sufficient to offset demand growth and capacity retirements elsewhere.
Older and less efficient nitrogen plants are shutting down or operating at lower utilization rates, particularly in regions with high energy or carbon costs. As a result, net supply growth remains constrained.
Global Nitrogen Demand Remains Resilient
Yara highlighted that global nitrogen demand continues to grow steadily, driven by rising food consumption and the need to improve crop yields. Around half of global food production depends on mineral fertilizers, reinforcing the importance of nitrogen.
Even in periods of lower crop prices, fertilizer demand remains relatively inelastic, especially in major agricultural economies.
China Export Policy Adds to Supply Uncertainty
China remains the world’s largest nitrogen and urea producer. Yara pointed out that uncertainty around Chinese urea and nitrogen exports continues to affect global supply availability.
Export volumes from China can change quickly due to domestic policy decisions, energy costs, and food security priorities. This unpredictability adds volatility and keeps the global nitrogen market tight.
Energy and Carbon Costs Shape Supply Outlook
Energy prices and carbon regulations are playing a growing role in shaping nitrogen supply. In Europe, lower gas prices have improved production economics, but carbon costs still limit aggressive capacity expansion.
At the same time, new large-scale nitrogen projects face high capital costs and long development timelines, delaying meaningful supply additions.
Implications for India and Import-Dependent Markets
For import-dependent countries like India, a tight global nitrogen market means continued exposure to price volatility. Any supply disruption, whether from China or other exporters, can quickly impact international prices and import tenders.
This environment increases the importance of long-term supply planning and diversified sourcing strategies.
Outlook: Nitrogen Market to Stay Firm
Yara expects the global nitrogen market to remain structurally tight over the coming years unless significant new capacity is added or demand growth slows sharply. Until then, prices are likely to stay supported despite short-term fluctuations.
