U.S. Gulf: The prompt granular urea barge market continued to have legs last week, with sources reporting trades working their way up as the week progressed.
The range was called $329-$340/st FOB, with most players reporting trades in the $330-$335/st FOB range. Upriver barges were reported in the $340s/st FOB. As with last week, sources said reduced quantities led to higher prices.
Eastern Cornbelt: Granular urea pricing covered a broad range in the Eastern Cornbelt last week. Sources quoted the low end at $390/st FOB Cincinnati, Ohio, and $385/st FOB in the Illinois market on a spot basis, while pricing out of inland locations in Ohio remained as high as $430-$440/st FOB.
Western Cornbelt: Granular urea pricing in the Western Cornbelt continued to be quoted in the $380-$400/st FOB range, with the low out of spot river locations and the upper numbers inland.
Sources pegged the Tulsa, Okla., urea market at $365-$370/st FOB in late May.
California: Urea pricing was down $10-$20/st in California, with sources quoting the dealer market at $460-$470/st FOB in the state. No current delivered numbers were reported last week.
Pacific Northwest: Sources tagged the granular urea market at $470-$490/st FOB in the Pacific Northwest, down $10-$15/st from last report, with rail-delivered tons quoted in the $465-$485/st range. Washington sources pegged the truck-delivered urea market at the $500/st level last week.
Western Canada: Sources quoted the granular urea market at $560-$565/mt FOB and $560-$585/mt DEL in Western Canada, down slightly from last report. Dealer postings for urea remained in the $610-$635/mt DEL range in the region, depending on location.
India: No sooner had most delegates to the annual IFA gathering touched down in their home countries than word filtered out that MMTC called a tender for an unspecified amount of urea. The tender closes Monday, June 3.
The tender rules are all that people expected, with one exception. A few days after the tender was called, MMTC issued an addendum to the call dealing with supplies from Iran. MMTC stated it would be responsible for marine insurance for all orders of material coming from any source except Iran. Suppliers offering Iranian material will have their offers considered only after they show proof they have arranged for all the necessary insurance policies.
Sources say the addendum is a direct result of the economic embargo against Iran imposed by the European Union and the U.S. Insurance companies from those areas are banned from providing coverage to vessels delivering Iranian commodities. A similar insurance issue effectively stopped the flow of ammonia out of Iran last year.
The MMTC tender allows for shipping to take place as late as July 22. The late shipping date makes it likely that Chinese urea will dominate the offers. Sources report that traders are already lining up vessels to get to Chinese ports by the end of June.
Sources say Yuzhnyy tons may also be competitive, but only if the price comes down from current levels in the low $330s/mt FOB.
Asian sources commented that MMTC moved quickly because the off-take of urea from the domestic warehouses is greater than expected. Initially most in the industry expected to see the MMTC tender this week or next, instead of immediately after the IFA meeting. One source noted, however, that in Chicago some of the Indian delegates said they were taking the pulse of the industry and would make a quick decision as to when to call the tender.
Given the generally pessimistic mood about urea during the IFA gathering, sources say it was no surprise to see MMTC move quickly.
Black Sea: Traders are calling the ma