FACT Surges 14%, Coromandel Gains 3% as Fertiliser Shares Rally on Strait of Hormuz Reopening Expected Friday

Fertiliser shares +14% on June 16. FACT Rs 1,036.85 (+14.4% vs Rs 906.05). Coromandel Rs 2,051.80 (+3.3%). Strait of Hormuz likely reopens Friday June 19. Gulf urea supply to resume.

Fertiliser shares surged across the board on June 16, 2026, with FACT (Fertilizers and Chemicals Travancore) leading with a 14.4% gain to Rs 1,036.85 and Coromandel International rising 3.3% to Rs 2,051.80, as investors positioned ahead of an expected reopening of the Strait of Hormuz on Friday June 19 following the US-Iran peace deal signed June 15. The fertiliser shares rally follows nearly 100 days of Strait closure since late February 2026, during which disruption of approximately 30% of global seaborne urea trade and 20% of all seaborne fertiliser exports sent fertiliser prices sharply higher. Other fertiliser shares also gained – Tata Chemicals (+5%), RCF (+3.5%), and National Fertilisers (+2.5%) – as the sector-wide relief rally reflects expectations of supply chain normalisation and lower natural gas and crude oil input costs.

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Fertiliser Shares Rally: Live Data and Context

The Strait of Hormuz and Fertiliser Shares: Understanding the Connection

The Strait of Hormuz is one of the world’s most strategically important waterways, connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea. Through this narrow strait pass approximately 20% of the world’s daily oil production, 30% of global seaborne urea trade, and 27% of global ammonia flows. Key countries that export fertilisers through the Strait include Qatar (the world’s largest LNG and one of the largest ammonia producers), Saudi Arabia, the UAE, Kuwait, and Iran.

When the Strait closed following military escalations from late February 2026, India faced acute fertiliser supply disruption. India sources approximately 75% of its urea from Oman, Qatar, Saudi Arabia, and the UAE – all countries whose exports transit the Strait. The World Bank projected fertiliser prices to rise more than 30% in 2026 due to Strait-related supply disruptions, with urea recording the largest gains of any fertiliser category. For domestic Indian fertiliser shares, this supply crunch was a mixed signal: higher fertiliser prices improved domestic product realizations, but higher natural gas and ammonia input costs compressed margins simultaneously.

Ankit Jaiswal, Senior Research Analyst at Univest, notes that the fertiliser shares rally today reflects a specific logic that is often misunderstood. When the Strait reopens, the initial market reading is positive for Indian fertiliser producers because: (1) crude oil and natural gas prices fall (as seen today with Brent crude down 4.55%), reducing production costs for domestic producers; (2) raw material availability (ammonia, phosphoric acid, sulfur) for complex fertiliser manufacturers improves; and (3) the government’s fertiliser subsidy burden eases as retail fertiliser prices can normalise.

FACT Leads Fertiliser Shares Rally: Why +14%?

FACT (Fertilizers and Chemicals Travancore Limited), headquartered in Cochin, Kerala, surged 14.4% to Rs 1,036.85 today – the largest single-day gain among fertiliser shares on this news. FACT’s outsized reaction reflects its highest sensitivity to natural gas cost movements among listed Indian fertiliser companies. FACT primarily produces ammonia, complex NPK fertilisers, and caprolactam (a nylon precursor), with natural gas being the dominant cost input for its ammonia production process.

When Brent crude falls sharply (as seen today, -4.55% to USD 83.36), LNG and natural gas prices typically follow over weeks and months. For FACT, which imports LNG at the Cochin Port for its ammonia plant, lower LNG prices directly translate to lower production costs and wider margins. The market is pricing in this input cost benefit through a significant re-rating of FACT among fertiliser shares. The stock had been under pressure during the Strait closure period as input costs rose; the reopening expectation is a sharp reversal.

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Coromandel International: Phosphatic Fertilisers and Gulf Supply Restoration

Coromandel International, India’s second-largest phosphatic fertiliser manufacturer, gained 3.3% to Rs 2,051.80 in the fertiliser shares rally. Coromandel produces DAP (diammonium phosphate), NPK, SSP (single super phosphate), and specialty nutrients. For complex fertiliser manufacturers like Coromandel, the Strait of Hormuz reopening has a specific supply chain benefit: phosphoric acid (a key feedstock for DAP manufacturing) is imported from Gulf countries, and ammonia (another key input) is sourced from the Middle East.

During the Strait closure, Coromandel’s supply chains for these inputs were disrupted, forcing procurement from alternative routes at higher cost. With the Strait expected to reopen on Friday, phosphoric acid supply from Saudi Arabia and Qatar can resume normal flows to Coromandel’s plants in Andhra Pradesh and Telangana. Additionally, Coromandel benefits from lower crude oil reducing freight costs on fertiliser imports. The kharif sowing season (June-July is peak demand) creates additional tailwind for fertiliser shares including Coromandel, as farmers begin purchasing inputs for the upcoming crop cycle.

Kunal Singal, Associate Director at Univest, observes that today’s fertiliser shares rally is a classic “buy the peace” trade: investors are positioning ahead of a supply chain normalisation event that will directly reduce input costs and improve operational certainty for Indian fertiliser manufacturers across the board. The kharif season demand peak adds seasonal support to the sector-wide fertiliser shares re-rating.

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Conclusion

Fertiliser shares are among the day’s best performers on June 16, 2026, with FACT leading (+14.4% to Rs 1,036.85) and Coromandel International gaining 3.3% to Rs 2,051.80, as the US-Iran peace deal makes a Strait of Hormuz reopening on Friday highly likely. The Strait’s ~100-day closure had disrupted approximately 30% of global seaborne urea trade and 20% of all seaborne fertiliser exports, pushing input costs higher for Indian producers. The expected reopening – combined with Brent crude falling 4.55% today – will reduce natural gas production costs for FACT and similar nitrogen producers, restore phosphoric acid and ammonia supply chains for Coromandel, and ease the government’s fertiliser subsidy burden during peak kharif demand season. Ankit Jaiswal and Kunal Singal at Univest view the fertiliser shares rally as fundamentally justified and expect the momentum to continue through the formal Strait reopening on Friday.

Frequently Asked Questions

Why are fertiliser shares rising today on June 16, 2026?

Ans. Fertiliser shares including FACT (+14.4%), Coromandel International (+3.3%), Tata Chemicals (+5%), and RCF (+3.5%) are rising sharply on June 16, 2026, because the US-Iran peace deal signed June 15 makes a likely reopening of the Strait of Hormuz on Friday June 19 imminent. The Strait had been closed since approximately February 28, 2026, disrupting approximately 30% of global seaborne urea trade and 20% of seaborne fertiliser exports. Reopening the Strait has two direct benefits for Indian fertiliser companies: (1) natural gas and crude oil prices fall, reducing production costs for nitrogen fertiliser manufacturers like FACT, and (2) phosphoric acid, ammonia, and sulfur imports for complex fertiliser manufacturers like Coromandel can resume at normal volumes and prices.

What is the Strait of Hormuz and why does it matter for fertiliser shares?

Ans. The Strait of Hormuz is a narrow waterway between the Persian Gulf and the Gulf of Oman, through which approximately 20% of the world’s oil and 20-30% of global fertiliser trade passes. Key fertiliser-producing countries whose exports transit the Strait include Saudi Arabia, Qatar (QatarEnergy – world’s largest LNG and ammonia producer), UAE, Iran, and Kuwait. When the Strait was closed from late February 2026 following military escalations, fertiliser exports from these countries – which include urea, ammonia, DAP (diammonium phosphate), and MAP (monoammonium phosphate) – were severely disrupted. India, which sources approximately 75% of its urea from West Asian countries, was particularly affected. With the Strait now expected to reopen on June 19, fertiliser supply chains to India will normalise.

How does the Strait of Hormuz reopening benefit FACT specifically?

Ans. FACT (Fertilizers and Chemicals Travancore Limited), based in Cochin, Kerala, is primarily a nitrogen fertiliser manufacturer producing complex fertilisers, ammonia, and fertiliser-grade sulphuric acid. FACT benefits from the Strait reopening through lower natural gas costs. Natural gas is the primary feedstock for ammonia production (the base for all nitrogen fertilisers). When crude oil falls (Brent crude down 4.55% today to USD 83.36), LNG and natural gas prices typically follow, reducing FACT’s production cost. Additionally, FACT imports certain raw materials that transit the Gulf – with the Strait reopening, procurement security improves. FACT surged 14.4% today, the most among fertiliser shares, reflecting its highest sensitivity to natural gas cost movements.

Why is Coromandel International’s gain lower than FACT’s in today’s fertiliser shares rally?

Ans. Coromandel International’s gain of 3.3% is lower than FACT’s 14.4% because their business models have different sensitivities to the Strait of Hormuz reopening. FACT is primarily a nitrogen fertiliser producer whose margins are directly tied to natural gas (ammonia production costs) – a direct beneficiary of lower crude/gas prices. Coromandel International makes complex phosphatic fertilisers (DAP, NPK) using imported phosphoric acid from Morocco, Saudi Arabia, and Senegal, and ammonia from the Middle East. While Coromandel benefits from supply chain normalisation and potentially lower phosphoric acid costs, its margins are also affected by DAP pricing and domestic subsidy dynamics – factors that make the impact less linear than for FACT.

How long was the Strait of Hormuz closed and what was the fertiliser impact?

Ans. The Strait of Hormuz has been closed since approximately February 28, 2026, for approximately 100 days following military escalations involving the US, Iran, and Israel (Operation Epic Fury). During this period, the World Bank’s fertiliser price index rose more than 30% in 2026 on projected basis, with urea recording the largest gains. India, which imports approximately 75% of its urea from Oman, Qatar, Saudi Arabia, and UAE, faced severe supply disruption. The fertiliser ministry had to make emergency arrangements for land-corridor imports and alternative sourcing. For Indian fertiliser manufacturers who depend on Gulf ammonia and phosphoric acid for raw materials, input costs rose sharply during the closure period. The expected reopening on June 19 is expected to normalise these dynamics.

What happens to fertiliser prices and shares after the Strait reopens?

Ans. When the Strait of Hormuz reopens, multiple things happen for fertiliser shares. First, global urea and ammonia supply from the Gulf (Saudi Arabia, Qatar, UAE, Iran) can again reach world markets via the standard shipping lanes, putting downward pressure on fertiliser prices. Second, lower crude oil prices (as seen today) reduce natural gas feedstock costs for ammonia and urea producers, improving domestic manufacturer margins. Third, India’s fertiliser ministry can resume normal import tendering from Gulf countries, easing the domestic supply situation and potentially reducing the government’s subsidy burden. Fourth, sentiment across the fertiliser shares sector broadly improves as geopolitical risk premium unwinds. Recovery in fertiliser shares may continue for 1-3 sessions as the market prices in the supply normalisation.

Which fertiliser shares benefit most from the Strait of Hormuz reopening?

Ans. Among Indian fertiliser shares, the degree of benefit from the Strait reopening depends on how much of each company’s cost structure is linked to natural gas and Gulf imports. FACT (Fertilizers and Chemicals Travancore) is the most sensitive because it is heavily dependent on natural gas for ammonia production – hence the 14.4% single-day gain. Chambal Fertilisers, another nitrogen manufacturer, is similarly sensitive. For phosphatic fertiliser manufacturers like Coromandel International, the benefit comes from phosphoric acid and ammonia import costs normalising. RCF and National Fertilisers, as PSU nitrogen producers, benefit from lower natural gas/LNG import costs. Tata Chemicals, with a diversified chemicals business, has partial exposure to fertiliser economics.

What is India’s fertiliser import dependence from West Asia?

Ans. India is heavily dependent on West Asia for fertiliser imports. According to data cited by market analysts, approximately 75% of India’s urea imports in 2024-25 came from Oman, Qatar, Saudi Arabia, and the UAE. The Strait of Hormuz handles roughly 27% of global ammonia trade and 35% of global urea flows, according to Morgan Stanley estimates. When the Strait closed in February 2026, India had to significantly diversify its sourcing to Eastern European, Russian, and other suppliers at higher prices and longer lead times. The reopening of the Strait is therefore not just a supply-side event for global fertiliser markets but a strategic relief for India’s import-dependent agriculture sector and the government’s fertiliser subsidy programme.