U.S. Gulf: Granular prompt business was a little weaker last week, with the market quoted in the $318-$325/st FOB range. Chinese was called around $310/st FOB.
Forward granular trades for November-December were reported at $310-$315/st FOB.
Prills continued to be called $330-$335/st FOB.
Eastern Cornbelt: Granular urea remained at $385-$410/st FOB in the Eastern Cornbelt, with the Cincinnati, Ohio, market quoted at $390-$395/st FOB.
Western Cornbelt: Granular urea was pegged at $385-$400/st FOB in the Western Cornbelt, with the low reported in southern Missouri and the upper end in Iowa.
California: The granular urea market was unchanged at $410-$430/st FOB in California, depending on location, with delivered tons pegged in the $475-$485/st range.
Pacific Northwest: Granular urea pricing remained at $420-$430/st FOB and $435-$445/st DEL in the Pacific Northwest.
Western Canada: Granular urea was steady at $510-$535/mt DEL in Western Canada. Sources reported higher postings as the week progressed, with new reference levels in the $535-$560/mt FOB range, depending on location.
India: Even after the validity deadline passed on the MMTC tender, the buyer was picking extra tons here and there from companies that already had awards.
Sources report the total tonnage now committed to MMTC is 1.8 million mt, with some in the industry calling it 1.9 million. Once all the material is delivered, sources say this will be one of the largest purchases from a tender in a long time.
Now that the awards are made, the real work begins getting the tons from China or Iran to India. Vessel nominations reported so far cover about 760,000 mt from China. Sources say those ships should handle all the September material that built up in the portside warehouses.
The rest of the tons will have until Nov. 10 to be loaded. Few see any problems with meeting that deadline. The real issue, said one trader, could be port congestion on the Indian side.
The east side of the country reportedly has plenty of material on hand in the distribution center. This means, said one source, that the imported urea entering west coast ports might have to wait a while until space opens up inland.
The west side of the country, however, seems anxious to get its urea as quickly as possible, as local media report regional shortages of product. Sources speculate that the material arriving in the first few ships to western ports will go directly inland, without even a glance at the portside storage facilities.
Domestic output is falling, adding to the need for the urea just purchased. The latest issue comes with the closure of Mangalore Chemicals and Fertilizers Ltd. (MCFL) plants in southwest India. The facilities were using naphtha as a feedstock. Earlier this year, the government gave MCFL and two other companies an extension of the requirement to shift from naphtha to natural gas. That extension expired Sept. 30.
The estimated break-even price from the naphtha plants is pegged at Rs43,000 (US$698)/mt. The cost from the natural gas plants is Rs10,000-18,000(US$162-$292)/mt. The guaranteed retail price to farmers is fixed at Rs5,360(US$82)/mt.
The Fertilizer Ministry is reportedly trying to get the government to reverse its position and keep the plants open to ensure a plentiful supply of urea for the current application season. The Finance Ministry, however, remains opposed to allowing the plants to continue to operate, claiming the naphtha-based plants are more expensive. As a result, the government needs to pay more in subsidies to cover the cost of the urea.
The Modi government has been focusing on reducing the subsidies it pays for fe