HK Stock Market Move | Fertilizer stocks lead gains, the Middle East is an important supplier of international urea, rising gas prices will also increase production costs for urea in the Middle East.

Fertilizer stocks lead the gains, as of the time of publication, CHINA BLUECHEM (03983) rose 6.37% to 3.34 Hong Kong dollars; SINOFERT (00297) rose 3.35% to 1.85 Hong Kong dollars; CHINA XLX FERT (01866) rose 2.14% to 11.93 Hong Kong dollars. On the news front, on March 2, Qatar Energy announced the suspension of liquefied natural gas production after its energy facilities were attacked. On March 3, Qatar Energy further announced an expansion of the production suspension, halting the production of downstream products such as urea, methanol, polymers, and aluminum within Qatar, on the basis of previously suspending liquefied natural gas and related product production. A research report released by Founder stated that the Middle East is an important supplier of international urea. The combined impact of Iran and Qatar on global urea trade volume is 9-10 million tons, accounting for nearly 20% of the total global trade volume. Therefore, the Middle East plays a crucial role in international urea supply, and the escalation of tensions between the U.S. and Iran is expected to reduce this capacity, thereby raising international urea prices. Furthermore, the soaring natural gas prices will further increase the production costs of urea in the Middle East, affecting international urea prices. The closure of the Strait of Hormuz leading to an increase in international shipping costs will also raise international potassium fertilizer prices.