Urea prices keep dropping. The Trading Corp. of Pakistan closed its second tender in as many weeks with still lower prices showing up. The lowest price in the latest tender came in at $309.90/mt CFR for 75,000 mt from Blue Deebaj. The price represents a $7/mt drop in just one week.
Earlier this month the Pakistan government authorized TCP to import 300,000 mt of urea for the current application season. The governing body went further and allowed TCP to bypass the usual one-month notification process.
The first tender call brought offers totaling 685,000 mt from 11 companies for an average price of $327.23/mt CFR. This time, 15 companies offered about 1.5 million mt with an average price of $319.75/mt CFR.
Besides the 75,000 mt Blue Deebaj also proffered 50,000 mt at $312.90/mt CFR in optional tons. If TCP were to take the optional tons, it would still be 100,000 mt short of its goal of 300,000 mt.
Within minutes of the earlier tender closing, TCP announced the current tender. Sources say this action will most likely be repeated. If so, the next tender should close on or near Aug. 6.
The drop in price is not unexpected.
The results of the IPL tender late last week showed an ever-weakening market despite bullish talk from producers in the Arab Gulf and China. The fact that offered tons in this latest TCP tender are nearly double from the last one adds to the reports that producers have more tons available for sale than there are buyers.