U.S. Gulf:
NOLA granular urea barges continued to be volatile, despite a week-ago drop and rebound. The week reportedly began with product still trading as high as $685/st FOB, but $575/st FOB was common by week’s end.
Newly released November import numbers continued to show that significantly more product was imported this fertilizer year than last year, with this extra tonnage reported by some to be a factor in the decline. Sources continued to suggest that some of the imports did not have a home, and this spurred the price drop.
U.S. Imports:
Urea imports firmed 164.5 percent in November, to 784,039 st from the year-ago 296,441 st. Large hauls from Oman (227,617 st), Saudi Arabia (152,086 st), and Russia (91,118 st) contributed to the prodigious monthly total. July-November imports were up 104.1 percent, to 2.43 million st from 1.19 st in the same year-ago period.
Qatar led imports with 428,400 st for July-November, 11.9 percent below the year-ago 485,400 st, followed by 356,000 st from Saudi Arabia, up 41.3 percent on the prior year’s 252,500 st. Russia’s 355,700 st for the period was up 82.2 percent from last year’s 195,200 st. Algeria represented the market’s fourth-largest origin with 316,200, after sending zero tons to the U.S. through the same period of 2020.
U.S. Exports:
Urea exports totaled 25,689 st in November, off 67.8 percent from the year-ago 79,690 st. July-November exports were reported at 86,429 st, down 81.7 percent from the prior-year 471,885 st.
Eastern Cornbelt:
The volatile urea market remained a major topic of conversation in the region, with lower prices reported out of regional terminals. New levels at midweek were confirmed at $725/st FOB in Illinois, while pricing at Cincinnati, Ohio, ranged broadly at $675-$735/st FOB, depending on supplier and time of the week.
Western Cornbelt:
Urea prices continued to fall in the Western Cornbelt, although sources said the terminal markets were not moving in lockstep with NOLA. “The St. Louis market will move somewhat in step with NOLA but will definitely lag,” said one regional contact.
Sources confirmed new offers for as low as $650/st FOB St. Louis and Port Neal, Iowa, as the week progressed. The upper end of the regional market was reported in the low-$700s/st FOB earlier in the week. New delivered urea offers into North Dakota were reported at $690-$730/st, down significantly from the previous week’s $870-$910/st DEL range.
Southern Plains:
Much softer urea prices were reported in the Southern Plains, fueled by a volatile and weakening NOLA barge market. Pricing at Catoosa/Inola, Okla., was quoted at $690-$720/st FOB at midweek, depending on supplier, down dramatically from mid-December levels at the $840/st FOB mark. Some sources speculated that even cheaper tons could be found at the port as the week progressed, with some citing $650/st FOB as the low by the end of the week.
Urea pricing at Houston, Texas, was pegged at the $750/st FOB level, down from a high of $855/st FOB in mid-December.
South Central:
A volatile NOLA urea market contributed to softer urea pricing in the region during the week. New urea prices were confirmed at $710-$715/st FOB in Arkansas, $720/st FOB in Louisiana, and $745-$750/st FOB Memphis, Tenn., down some $40-$60/st from the previous week and a full $80-$100/st below mid-December price levels.
Southeast:
The urea market was quoted at $750/st FOB Savannah, Ga., down from $830/st FOB the week before. Prompt offers at Wilmington, N.C., were confirmed at the $770/st FOB level earlier in the week, but sources speculated that better deals could be had at that location as the week progressed. Carolina sources reported rail-DEL offers at the $755/st level for February tons.
India:
Sources said the next tender may not be called until the middle of February. Traders said the buying houses and the Department of Fertilizers will want to look at the first drafts of the new fiscal year budget before they begin planning the next tender.
India is still about 1.2 million mt short of its estimated needs for the rest of the current season and the start of the next. Even one more tender will not fulfill the demand. Sources said a February tender could provide enough tons to carry the country into the new fiscal year, which begins April 1. Another tender that will be based on funds from the next fiscal year would have to be called quickly to help the supply train get back on track.
Vessels for the awards in the Dec. 23 IPL tender have been nominated. The bookings show how far traders had to go to secure tons for India.
| Vessel Nomination as of Jan 13 | ||||
| Supplier | Origin | Vessel | Quantity (mt) | Discharge Port |
| Dreymoor | Finland | Abu Al Abyad | 50,000 | Pipavav |
| Russia | CL Belle | 50,000 | Pipavav | |
| Georgia | Regal | 40,000 | Pipavav | |
| Midgulf | Saudi Arabia | Christina IV | 49,000 | Mundra |
| Libya | Halit Yildirim | 23,500 | Mundra | |
| Libya | Rek Grace | 22,500 | Mundra | |
| Nigeria | Marvel | 40,000 | Gangavaram | |
| Swiss Singapore | Oman | Am Ocean Star | 40,000 | Kandla |
| Finland | Seacon Shanghai | 50,000 | Kandla | |
| China-Vietnam | Desert Symphony | 48,000 | Krishnapatnam | |
| Nigeria | Ethos | 42,000 | Krishnapatnam | |
| Samsung | Georgia | Amilla | 45,000 | Rozy |
| Georgia | Infinity V | 30,000 | Rozy | |
| Saudi Arabia | Guo Qiang 8 | 50,000 | Mundra | |
| Russia | Equinox Orenda | 50,000 | Mundra | |
| Saudi Arabia | Charisma | 50,000 | Mundra | |
| Qatar | Santos Eagle | 47,000 | Adani Dahej | |
| Qatar | Athena | 45,000 | Adani Tuna | |
| Egypt | Star Cepheus | 45,000 | Adani Tuna | |
| Oman | Dawn | 47,000 | Adani Hazira | |
| Egypt | Common Faith | 47,000 | New Mangalore | |
| Algeria | Ivy Blue | 50,000 | Gangavaram | |
| Vietnam | Anna Meta | 45,000 | Kakinada | |
| Malaysia | Nikolas III | 44,000 | Kakinada | |
| Malaysia | V Star | 45,000 | Dhamra | |
| Vietnam | TanBinh267 | 47,000 | Paradip |
Traders have booked 1.142 million mt, with an additional 45,000 mt purchased directly from Fertiglobe, leaving the vessel selection up to IPL. All told, 1.187 million mt will be shipped to India by the end of January.
Middle East:
Sources reported limited tonnage available out of the Arab Gulf after contracts and the IPL awards are covered. Even with the shortage of product, price discussions are now in the low-$840s/mt FOB after coming down to the $860s/mt FOB because of the IPL tender.
No new deals have been closed to move the price down yet, but sources said it is only a matter of time. Already the paper market for the Arab Gulf is predicting softer prices. The January price is reported at $817/mt FOB, with February predictions at $745/mt FOB.
The wild ride urea prices are taking in the U.S. has sources looking at a serious drop in Arab Gulf pricing. One trader said the netback on a deal into NOLA showed a price of $600-$650/mt FOB. Sources are careful to point out that the bulk of the deals into the U.S. from the Arab Gulf are contract tons and are priced significantly lower than spot deals. Traders dismissed the estimated netback from NOLA as currently unattainable for other markets.
Egyptian producers still claim they can do business into Europe that will reflect a netback of $960/mt FOB. However, the lack of any business at that level in the past several weeks, combined with reports that buyers are now looking at $810-$830/mt FOB for their next orders, puts the producer expectations in doubt.
Reportedly, some small sales into Europe have shown an Egyptian-equivalent price of around $820/mt FOB, but not with tons from Egypt. The Egyptian paper market mirrors that of the Arab Gulf, with January pegged at $817/mt FOB and February at $645/mt FOB.
Algeria reportedly has a few cargoes of granular urea available for January and February shipping. Sources said the asking price is about $820/mt FOB. This level would match up with the reported $810-$830/mt FOB prices suggested for Egypt.
Black Sea:
Georgia will be sending 115,000 mt to India under the IPL tender. Prices are estimated into the region at $844-$854/mt FOB based on that tender.
Russia:
TogliattiAzot reported a near 9 percent increase in urea output last year, with production reaching 913,000 mt, up from 839,000 mt in 2020.
China:
As earlier reported, Pakistan and China concluded a deal that would allow some shipments of urea to Pakistan. Sources reported the first couple of cargoes were being loaded this week. All told, Pakistan is reportedly going to get as much as 125,000 mt from China.
With the exception of the Pakistan deal and a few smaller tons for South Korea and Japan, the restrictions on urea exports are still in effect. Sources said despite pressure by producers to ease up, the government plans to keep the limits in place until May. February will be a quiet month for the industry in China. Most plants will be shut down as part of the week-long Lunar New Year celebrations beginning on Feb. 1. On the heels of that holiday, China will host the Winter Olympics.
Sources have been saying for weeks that many plants will either be shut down or ordered to cut back to reduce pollution. The central government is anxious to have nothing but blue skies for the Olympics. Bloomberg is already reporting that three factories in Shanxi province were “asked” to operate at 50 percent of capacity to reduce visible emissions. Sources said more are expected to receive similar requests in the coming weeks.
Even with the New Year holiday and Winter Olympics affecting output, sources said the rise in Omicron cases will also affect output. Reportedly, several plants are cutting back on production because of wide-spread infections among their workforces.
Brazil:
The softer price reported in the IPL tender and rumors of further pricing drops in the Arab Gulf and North Africa have Brazilian buyers looking at lower prices. And they are slowly achieving their goals.
Sources reported the portside price dropped to $770-$810/mt CFR. This reflects a $45/mt drop at the low end of the price range in just one week. One of the arguments for the dramatic shift is that traders are moving quickly to liquidate their positions. Some of the tonnage was reportedly bought as the price was moving up. Now, with a reversal in pricing ideas, traders are unloading their product while they can still make a profit.
Inland prices, however, have not yet softened. Sources said some deals now show a price of $920-$945/mt FOB ex-warehouse. The move shows a slight increase at the upper end of the price range this month.
Sources said some buyers appear to be willing to move on purchases following reports that grain prices might be improving. The ratio between grain and urea prices now seems to be sliding more to the farmers’ favor.
Urea imports for 2021 were up about 9 percent from 2020, according to Trade Data Monitor. Brazilian importers took in 7.8 million mt in 2021 against 7.1 million mt in 2020. The top five supplying countries accounted for more than 80 percent of the Brazilian market.
December 2021 imports of 698,000 mt were down 8.8 percent from December 2020 imports of 765,000 mt.
| Source Country | Quantity (‘000 mt) | % Of Brazilian Market |
| Qatar | 1,800 | 23 |
| Russia | 1,400 | 18 |
| Oman | 1,250 | 16 |
| Algeria | 1,100 | 14 |
| Nigeria | 845 | 11 |