U.S. Gulf: Granular prompt granular barge prices narrowed last week, trading in the $243-$245/st FOB range compared with the prior week’s $240-$250/st FOB.
Prills continued to be called $245-$250/st FOB.
Urea imports were up 21 percent in December, to 772,921 st from the year-ago 637,136 st. July-December imports still lagged 31 percent, or some 1.1 million st, at 2.5 million st, down from the year-ago 3.6 million st.
Despite all the talk of less urea coming out of China, DOC statistics show that July-December urea imports were up slightly at 197,567 st from the year-ago 195,257 st. December imports were 95,591 st, up from 69,586 st. The largest laggers YTD appeared to be Qatar, down at 377,659 st from 701,777 st; UAE at 289,603 st versus 435,098 st; and Indonesia at 48,033 st versus 145,989 st.
Urea exports were off 67 percent for December at only 9,011 st from the year-ago 27,068 st. They remained up for the July-December period, however, at 116,427 st from 106,980 st.
Eastern Cornbelt: Granular urea pricing remained at $280-$300/st FOB in the Eastern Cornbelt, with the lower numbers reported at Cincinnati, Ohio, and other spot river locations for prompt tons.
Western Cornbelt: The granular urea market remained at $280-$290/st FOB St. Louis, Mo., and up to $295-$300/st FOB at spot terminals in the Iowa market. There were reports of urea business in the Minneapolis, Minn., market concluded at the $285-$290/st FOB level for river open, while the Catoosa, Okla., urea market was pegged in the $275-$280/st FOB range for February tons.
California: Granular urea pricing was quoted at $330-$340/st FOB California terminals, with the low end of the range reflecting a $10/st increase from last report. Rail-delivered urea was pegged in the $350-$360/st range in the state, also up $10/st from mid-January.
Pacific Northwest: The urea market was quoted at $315-$320/st FOB Rivergate, Ore., with the upper end of the range reflecting the updated reference price as of Feb. 10. Delivered tons were quoted at $350-$360/st in the Pacific Northwest, up $5/st from last report, and were reportedly trending to the upper end of that range as the week progressed.
Some sources expressed concerns about urea availability in the region for the spring season, but another vessel has reportedly been secured for Rivergate. One source said urea and UAN volumes should be up this spring due to healthy stands of wheat following the winter’s plentiful precipitation.
Western Canada: Granular urea pricing had reportedly firmed to $500-$520/mt DEL for spring tons in Western Canada, up $10/mt from last report, although some sources said brokered prompt tons could still be had for sub-$500/mt DEL levels on a spot basis.
Middle East: Prices have begun to come off. Sources said nailing $275/mt FOB is no longer the battle it was just a few weeks ago. Likewise, the paper market is now showing $266-$268/mt FOB for March tonnage.
Demand for product has eased following the end of the U.S. buying season in January. Sources said tonnage is still available for shipment this month. Just a week ago, producers were arguing that supplies would be tight until March to justify holding on to their higher pricing idea.
The slide in pricing reflects a similar shift in pricing in China. Sources noted that prices for Arab Gulf product have been matching those from China for some time.
China: Prill and granular prices have started to come off as the domestic season winds down and no major international buyer has stepped up.
Sources put prills at $250-$255/mt FOB, with most of the discussion focused on the lower end of the scale. Sources added that it would not be surprising to see prices dip below $250/mt FOB before the end of the month. Granular product is now pegged in the low-$260s/mt FOB, with a few claiming that some last-minute deals might reflect prices in the upper-$260s/mt FOB.
With the domestic season winding down, producers are now looking for large sales to offshore buyers. The largest single buyer – India – is not expected to come back in with a major urea tender until March. The build-up of product could be a major downward force on prices.
The national production rate remains just at 50 percent. Producers continue to face higher prices for inputs, including electricity to run the plants, as well as stiff fines for excess pollution. The national government has stepped up its anti-pollution campaign. Some plants have been forced to close because they could not meet the new emissions standards.
India: Sources said the reserves on hand are sufficient to hold over the country until the next fiscal year starts on April 1. Industry watchers speculate that a tender will not be called until the second half of March.
The final details for the 2017/18 budget are coming out, and fertilizer subsidies did not get a boost. Urea subsidies for the next fiscal year will remain about Rs50,000 crore (US$7.5 billion).
Indian urea producers remain skeptical of how well that number will work. The government had to go to the treasury for a special fund of Rs10,000 crore (US$1.5 billion) to cover the arrears from the current subsidy payment plan. The government said it should have all arrears covered by November.
At the same time, the government is looking to experiment with direct payments of urea subsidies to farmers rather than giving the subsidies to the companies selling the fertilizer. The fertilizer minister told local media that the government plans to institute a direct payment plan to farmers in 16 districts around the country.
Pakistan: The first two cargoes of 300,000 mt of urea marked for export were sold to East African buyers through Keytrade. Sources said the price was in the high-$240s/mt FOB. The price achieved is about $20/mt higher than the official price of $229/mt FOB in the country.
The government agreed to sell the 300,000 mt only if the deals incurred no losses to the national treasury or private companies handling the sales. The full amount is supposed to be sold by the end of April.