U.S. Gulf: Granular prompt urea prices steadily firmed last week, moving up to $224-$236/st FOB from the prior week’s $215-$220/st FOB.
Sources said the 47 percent drop in fertilizer year-to-date (July-October) urea imports, or 1.2 million st, was catching up with the market, and was being intensified by spot vessels being diverted to other destinations and away from NOLA
Eastern Cornbelt: Granular urea was quoted at $250-$260/st FOB in the Eastern Cornbelt, with the low at Cincinnati, Ohio, and the upper end out of spot river locations in the Indiana market.
Western Cornbelt: The granular urea market remained at $255-$275/st FOB in the Western Cornbelt, with the lower end reported in Missouri and the upper end in Iowa on a spot basis.
Southern Plains: Granular urea pricing had reportedly slipped to $255-$260/st FOB Catoosa and Inola, Okla., for prompt tons, down $10/st from last report, with forward pricing pegged in the $265-$270/st FOB range for first-quarter 2017. “Deals are still available on urea, but it needs to move now as the replacement tons are higher,” said one regional contact.
South Central: Urea prices have been volatile in the South Central region for the past few weeks. After climbing to the mid-$260s/st FOB in mid-November, terminal values reportedly slipped to as low as $245-$250/st FOB in early December. By mid-December, however, sources were nearly unanimous in quoting the regional terminal market at $260-$265/st FOB for new business, although there were few new sales to test the market.
Southeast: Granular urea pricing had reportedly firmed to $270-$280/st FOB port terminals in the Southeast, up another $5/st from last report.
China: National production numbers remain soft because supplies of coal are problematic and demand is off. The upside for those still producing is that prices are strong.
Granular and prilled urea are now pegged at $245-$250/mt FOB. The outlook for January is also bright. Sources report that some traders are going long on Chinese product at $245/mt FOB.
The coal availability issue is a major one for the producers. Coal costs had begun to impact production earlier this year, forcing some plants to shut down because the sales price of urea did not meet the input costs. As urea prices moved up, the price of coal played less of a role, but access to the coal became more critical.
Chinese output remains just under 50 percent of rated capacity.
Sources report that the export duty of RMB80/mt (US$11.50/mt) will be dropped with the New Year. The duty on exports has gradually been dropped over the years to help Chinese producers remain competitive in the global market, especially against Iran, which has started to sell to more markets.
Middle East: Calculating back from sales to Brazil, sources peg the current market at $220-$225/mt FOB. Producers, however, are asking $240-$245/mt FOB.
Traders seem to think the price will be coming up in the New Year. Reports are circulating of at least one major trading house taking a position on January product at $240/mt FOB.
Egypt and Algeria are taking a breather from sales after Helwan sold 30,000 mt of granular product at $242/mt FOB. Ameropa took 20,000 mt of the lot, with Agrium taking the remaining 10,000 mt. The sale was concluded Monday from a Dec. 8 tender. Loading is slated for the second half of this month.
The initial response to the sale was that Europe would be the most likely destination. Sources have said that with the right freight rate, however, at least the Ameropa cargo could end up in the Americas, and most likely in Brazil.
Black Sea: Traders put the Yuzhnyy market at $215-$220/mt FOB for prills. Granular product out of the Black Sea is pegged at $230/mt FOB. The larger-than-usual gap between granular and prilled product is put off to the current demand for granular over prill in some markets.
India: The crisis created by the removal of Rs500 and Rs1,000 notes appears to be easing. Local distributors, with backing from national urea companies, are offering credit to farmers until new currency is put into circulation. While demand is not strong, it is getting better, said one trader.
Sources said this week that the chances for a new urea tender either late this month or early next month have now improved to 50-50. The buyer – most likely IPL – will probably go for purchases totaling 500,000-600,000 mt.
Indonesia: All December product is spoken for. Export licenses for 2017 are expected to be issued in the next week or so. No product will be shipped until Jan. 1, and prices are expected to be a bit higher than the current $230/mt FOB.
Exports for next year are estimated at 1 million mt.