Credit Suisse downgraded Saudi Arabian Fertilizers Company (Safco), a leading Middle Eastern nitrogenous fertilizer producer, to “”neutral”" from “”outperform,”" anticipating weak urea prices in the short term.
A fall in fertilizer demand in the second quarter after the spring planting in the United States and a weak corn market would keep urea prices below $360/ton levels, Credit Suisse said.
In the medium-to-longer term, the brokerage also sees risk that marginal producers urea floor price will likely be pushed $40/tonne lower owing to domestic industry consolidation.
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