U.S. Gulf:
Prompt granular barges were generally put in the $172-$182/st FOB range last week. All August was called $183-$185/st FOB. Sources continued to say product was in tight supply due to export, re-exports, and buyers finding the bottom. In the meantime, some suggested prices may not get too much higher, else they attract imports and drive it lower again.
Yara, lamenting the weak urea market, told analysts it intentionally shipped less urea to the U.S. during the quarter in favor of sending more premium products to the East and West Coasts.
The last done prills continued to be called $185-$188/st FOB.
Eastern Cornbelt:
The granular urea market was steady at $195-$220/st FOB in the Eastern Cornbelt, with the low reported at spot river locations and the upper end out of inland terminals.
Western Cornbelt:
Urea pricing out of river terminals was moving up in tandem with the recent NOLA rally, sources said. Granular urea had reportedly inched up to $195-$200/st FOB St Louis, Mo., with Iowa sources reporting a firm $200/st FOB level out of most river locations. Inland terminals were pegged in the $210-$215/st FOB range in the Western Cornbelt.
The Minneapolis, Minn., urea market was reported at $197-$205/st FOB, also up from last report, with some sources reporting even higher numbers at that location as the week progressed.
Southern Plains:
Urea pricing was firming in the Catoosa/Inola market in Oklahoma. Some suppliers were still quoting a $195-$200/st FOB range during the Southwestern Fertilizer Conference, while others called the market a firm $205-$210/st FOB as the week advanced.
“Urea is limited, and it has moved up. Few traders are bringing urea into Tulsa these days,” said one contact, citing earlier aggressive offers out of Enid, Okla., and Borger, Texas.
South Central:
Urea movement on rice was “down to a snail’s pace” in the South Central region, according to several contacts.
Urea pricing was quoted at $195-$205/st FOB in the region, up $5/st from last report, with the low confirmed at Caruthersville, Mo., and the upper end at Memphis. The urea market out of Arkansas terminals was generally pegged in the $200-$205/st FOB range at mid-month.
Southeast:
Granular urea was pegged at $215-$225/st FOB in the Southeast at mid-month, with the low quoted in the Savannah, Ga., market and the upper end at Wilmington, N.C. Sources also reported rail-DEL tons coming into the North Carolina market at $234/st from the river system.
India:
The MMTC tender closed Thursday with prices low, but not as low as traders were expecting.
In the run-up to the tender industry sources were predicting offers around $200/mt CFR, with a few outliers in the $190s/mt CFR. However, when the final tally was revealed, the lowest price was $230.06/mt CFR from Comvest. All told, just over 1.4 million tons were offered by 17 companies.
In the end, about 600,000 mt were offered at $204.50/mt CFR or less. This amount is at the low end of what industry watchers were saying MMTC would buy.
The week started with concern that fewer tons would be offered when Iranian producers started telling traders the country would only have 250,000-300,000 mt available for the tender. Just last week, traders were counting on closer to 400,000 mt to be available.
Sources discounted any support from China in this tender. That left cargoes from Arab producers to fill in the gap between what Iran could offer and the expected 600,000-700,000 mt that MMTC would buy. Traders looked at potentially available cargoes from the Arab Gulf and saw that about 200,000 mt of spot material could be purchased – if the price was right. An additional 200,000 mt could be cobbled together if the producers were willing to delay a contracted cargo.
Because the offers are from Arab and Persian producers, the number of offers to East Coast ports are limited. Only five companies offered tonnage to East Coast ports. The difference in pricing made for some interesting reading.
Usually there is a $5-$9/mt price difference between the two coasts. This time the difference ranged from a few cents to $15. The higher priced material – $219/mt CFR from Aries – will not be accepted by the buyer, and the offering company will most likely not be able to lower its price to secure an award.
The tally from the tender follows.
| Offering Company | Quantity Offered (mt) | Price US$/mt | Discharge Port | ||
| Firm | Optional | FOB | CFR | ||
| Muntajat | 40,000 | 190.00 | |||
| Fertil | 35,000 | 200.00 | |||
| Comzest | 280,000 | 120,000 | 203.06 | Pipavav | |
| 203.15 | Rozi | ||||
| 203.60 | Mundra | ||||
| 204.50 | Gangavaram-Karaikal | ||||
| 204.23 | New Mangalore | ||||
| 204.50 | Kandla | ||||
| 204.96 | Hazira Adani | ||||
| Helm | 110,000 | 204.25 | Mundra | ||
| 205.34 | Kandla | ||||
| Swiss Singapore | 40,000 | 204.50 | Mundra | ||
| MTPL | 40,000 | 204.50 | Rozi | ||
| Transagri | 135,000 | 204.50 | Rozi | ||
| 206.50 | Pipavav | ||||
| 207.50 | Mundra | ||||
| Transglobe | 60,000 | 206.00 | Rozi | ||
| Amber | 60,000 | 207.75 | West Coast | ||
| 208.75 | East Coast | ||||
| Koch | 47,500 | 208.82 | Mundra | ||
| Dreymoor | 120,000 | 212.50 | Gangavaram | ||
| 209.90 | Pipavav | ||||
| Keytrade | 50,000 | 211.90 | West Coast | ||
| CHS Europa | 84,000 | 212.37 | Mundra-Kandla | ||
| 218.73 | Vizag | ||||
| Ameropa | 50,000 | 212.50 | Mundra | ||
| Continental | 50,000 | 212.75 | Adani Tuna-Mundra | ||
| 213.75 | Pipavav | ||||
| Midgulf | 120,000 | 213.00 | East Coast or West Coast | ||
| Aries | 100,000 | 219.99 | Gangavaram | ||
| 218.99 | Adani Tuna | ||||
The direct offers from Oman and the UAE were not a surprise to industry watchers. Sources reported Fertil indicated it would not support traders offering its material into this tender. For one observer, this was a strong indication that Fertil did not want to compete against its own product.
MMTC will now review the offers and bid with prices based on East Coast or West Coast deliveries. Muddying up the waters this time, however, is that Comvest holds the pole position for both. It has the lowest West Coast price of $203.06/mt CFR, with the East Coast at $204.50/mt CFR. Traders with West Coast offers at $208/mt CFR to $219/mt CFR will be hard-pressed to match the Comvest price.
The ship-by date is September 1.
Middle East:
Rumors this week that Iran would only have 250,000-300,000 mt available for the Indian tender sent a nervous shudder through the industry. Until the Iranian producers started down-talking their output, most in the industry were expecting Iran to cover a bit more than 400,000 mt in a tender that would take no more than 700,000 mt.
Sources began counting the potential tonnage available from Arab producers to get a better sense of how tight the market might be. One trader calculated about 12 cargoes available in both spot and contract tons. Another, who looked at only potential spot cargoes, said there could be as many as six cargoes available. In the end, two producers offered tons directly to MMTC for a total of 75,000 mt.
Traders reported that calls to Arab producers looking for tonnage were met with cold shoulders. In the end, one trader said the producers were unwilling to quote a price until the MMTC/India tender closed on Thursday.
Buyers were looking at the $188/mt FOB price Ameropa secured from PIC last week. The unwillingness of the producers to quote prices before the MMTC tender closed became clear when the producers who offered directly to MMTC came in at $190/mt FOB and $200/mt FOB.
The $203/mt CFR low price in the Indian tender has an estimated netback to Iran of about $190/mt FOB. Sources said that price would be welcomed by the Iranians, especially after Helm reportedly picked up a couple of cargoes at $185/mt FOB last week.
Sources reported that Fertil has warned off traders, saying it would not support any offers into the MMTC tender. Some in the industry took that as an indication Fertil wanted to offer its own tons at a price of its choosing, rather than be forced to a lower price by MMTC and a trader.
Sources said traders were looking at the Ameropa/PIC cargo to be offered in the MMTC tender. Now, there are reports the cargo is going to Brazil.
Besides India, Brazil and the rest of Latin America remains a strong market for Arab Gulf product. One trader noted sales to Brazil have been strong enough that Arab Gulf producers do not feel a need to lower their prices.
Indonesia:
Despite arguments from buyers that the floor price of $210/mt FOB is too high, urea producers are sticking their guns and holding firm. Sources said bids in the low-$190s/mt FOB were dismissed out of hand. A trader said even at that price it would be difficult to find a buyer.
Black Sea:
The few tons that are available out of Yuzhnyy are being offered at $185/mt FOB, with no wiggle room for bargaining.
Tonnage out of the area is limited, because all the Ukrainian material is being used to cover needs in the domestic market. The only product getting to the port, said one trader, is Russian prills.
Sales out of Yuzhnyy are reportedly heading mostly to Turkey. Sources said the $185/mt FOB price puts the price too high to be considered anywhere outside of the Black Sea.
China:
Prices remain stable, but too high to be considered in the MMTC/India tender. Domestic demand, along with dwindling production, are working together to keep prices stable.
Nepal:
A tender for 30,000 mt closes Monday, July 24. The tender includes 20,000 mt of DAP. The cargo is to be bagged, unloaded in India, and shipped to warehouses in Nepal.