U.S. Gulf:
NOLA granular urea barge trades for January were quoted in the $311-$320/st FOB range, up from the week-ago $275-$312/st FOB. February was reported to have traded at $328/st FOB. Sources said a retreat in crop prices caused the urea market to trade sideways for a while during the week, but pricing had returned to an upward trajectory by the end of the week.
Eastern Cornbelt:
Urea prices reportedly firmed to $355-$370/st FOB in the Eastern Cornbelt, up another $20/st from the prior week, with the low confirmed out of spot Illinois, Mississippi, and Ohio River terminals and the upper end FOB East Dubuque, Ill., for January-February tons.
Western Cornbelt:
Urea prices continued to edge up in the Western Cornbelt, fueled by a steadily firming NOLA barge market. The market was quoted at $355-$365/st FOB St. Louis, Mo., and Catoosa/Inola, Okla., while Iowa sources pegged urea pricing at $370/st FOB Camanche and $370-$375/st FOB Port Neal at midweek.
Northern Plains:
Urea pricing FOB St. Paul, Minn., was quoted firmly at the $370-$380/st FOB level at midweek, with some speculating that the market could edge closer to the $400/st FOB level before the week was out. Delivered urea was pegged at $380-$390/st for prompt tons in North Dakota, up $60/st or more from late December, with Q2 offers quoted at $395-$405/st DEL.
Great Lakes:
Urea prices were quoted at $370-$375/st FOB in Wisconsin and out of terminals in Burns Harbor, Ind., Toledo, Ohio, and Maumee, Ohio. The market FOB Michigan terminals had reportedly firmed to the $390-$395/st FOB range, up roughly $90/st from early December pricing levels.
Northeast:
The urea market was reported at $365/st FOB Fairless Hills, Pa., for January/February tons, up $10-$20/st from last report and a full $70-$80/st higher than late December pricing. Fairless pricing for March-April and Q2 tons was pegged at the $375/st FOB level.
China: Sources said the country is slowing down in anticipation of the Golden Week associated with the Lunar New Year that begins on Feb. 12. Sources said people are clearing out any holdings they have of product now instead of waiting until after the celebrations.
The domestic demand for urea is beginning to slow down. Sources said following the Lunar New Year holiday, local demand will be sporadic and limited, leaving only the export market. Some sources are nervous about holding onto tons that might be too expensive for export, and are now reportedly selling off their tons.
Traders said even though no export deals were done recently, the export-equivalent price is pegged just a bit above $310/mt FOB. That translates back to a domestic price of around $300/mt FOB ex-factory. Producers had been pushing higher prices to local buyers through last week. Some local demand has eased off as local warehouses fill up.
Producers are facing a number of issues that are pushing higher prices. Many have had to shut down because operating costs are rising more rapidly than urea prices. Natural gas in many areas is also being diverted to home-heating use away from industrial plants. This move is affecting all companies, not just the fertilizer plants.
Regional shutdowns related to new COVID outbreaks are also affecting the shipping of product. Sources said in some areas the lockdowns are preventing workers from getting to work at the terminals and ports. For others, it means truck drivers are not being allowed to transit areas, thus limiting what material can be shipped.
Sources said many of these difficulties will ease in March, however. Warmer weather will release more natural gas to industries, and some COVID-related restrictions are expected to be lifted. If plants can return to operation and if the transportation infrastructure is not impaired too much, Chinese urea could become a factor in an Indian tender looking for March shipments.
Chinese urea exports for 2020 jumped about a half-million tons compared to 2019. Exports in 2020 were pegged at 5.6 million mt against 2019 exports of 4.9 million mt, according to Trade Data Monitor. The single largest buyer in 2020 was India, taking almost 3 million mt. The next closest buyer was South Korea at 554,000 mt.
Exports in the first half of 2020 were reported at 1.7 million mt and jumped to 3.7 million mt in the second half, replicating a ratio also seen in the previous two year. The first half usually shows dramatically fewer exports than the second half due to domestic demand that usually occurs in the first several months of the year, leaving fewer tons for export.
India:
Sources said a urea tender in India will need to be called soon. Traders cited government figures that showed current urea reserves at 480,000 mt, with an estimated deficit of 130,000 mt by the end of March. A tender, they said, needs to be called in early February at the latest to ensure arrival in late March to rebuild stocks.
One trader noted that the uprising of farmers against changes in payments for their crops may have delayed the calling of the tender. This issue, coupled with the organization of a national-wide vaccination program, has stretched the Indian government’s resources thin.
Sources said before a tender can be called, the government needs to assess where the tons will be most needed. If surveys show that more tons are needed in areas better served by East Coast ports, there will be an emphasis on securing Chinese product. That could mean holding off on a tender call until it is clear the urea will be available and can be shipped without difficulty.
If, however, areas better served by West Coast ports show the most need, the buyers will be dependent on Arab Gulf and some CIS material. Arab producers have been moving up their prices steadily and do not appear to be in any mood to lower them.Whatever way India goes, sources are unanimous that prices will be significantly higher than the previous tender.
Middle East: Urea deals out of the Arab Gulf have moved to $322-$325/mt FOB, with limited material available for spot deals.Sources reported a Fertiglobe sale of $322/mt FOB bound for Ethiopia this week. Another deal at $325/mt FOB was reported, but with an unnamed destination.
The paper market for February Arab Gulf material is solidly at $325/mt FOB, a level sources said has already been achieved. Offering further support to producers were reports of higher prices coming out of Egypt.
Helwan sold 10,000 mt at $350/mt FOB for March shipment, and Abu Qir sold another 15,000 mt for the same month at $345/mt FOB. All this occurred while the paper market was calling March prices in the low-$340s/mt FOB. Earlier deals had moved the February price into the low-$340s/mt FOB following a steady rise in prices.
Indonesia:
Kaltim and Gresik called tenders to close on Jan. 22. Both are looking at a reserve price of $315/mt FOB.Kaltim is offering 6,000-45,000 mt of granular urea for shipment in March and April. Gresik is offering 6,000-25,000 mt of prilled urea for shipment at the same time.
Because of the strength of the global urea market, sources said both companies might be able to achieve their reserve price for at least some of the material being offered.
Black Sea:
Sources reported a urea deal at $295/mt FOB, but with few details of the buyer or end user. The price, however, coincides with what sources have been saying the Yuzhnyy market needs to match up with the rest of the world.
The tonnage moving out of Yuzhnyy is limited, because the main demand is to build stockpiles within the CIS before offering for export. The domestic fill programs are expected to conclude by the end of February, meaning some tons might be available for March shipment to cover an award in the pending Indian tender.
The $295/mt FOB price is backed up by a sale of 10,000 mt at $325/mt FOB out of the Baltics. The Baltic sale was said to be done to fill out a contract. Sources said the price was too high and the quantity too low to be used to take a position for a future sale.
South Korea:
Urea imports for 2020 in South Korea were reported at 836,000 mt by Trade Data Monitor, against 2019 imports of 458,000 mt. The single largest supplier to South Korea was China, which shipped 552,000 mt in 2020. Imports totaled 518,000 mt during the first half of 2020 and 317,000 mt during the second half.
Brazil:
Urea prices at Paranagua moved up as traders appear to be taking positions against a further increase once India comes into the market with a tender. Prices are now quoted at $340-$350/mt CFR.Some of the demand for the tons purchased this week will not surface for a few months. Sources said the buying appears to be for the winter corn crop in June.
Even as prices go up at the ports, sources said urea prices are softening in Rondonopolis, with the latest deals quoted at $360-$380/mt FOB ex-warehouse. On the other hand, Sorriso is showing an increase, with sources quoting the market there at $445-$492/mt FOB ex-warehouse.
A better price for corn has shifted the barter ratio. Sources said the ratio is now 50 bags of corn for 1 mt of urea, down from 60 bags earlier this month.
| Brazil Urea Prices | ||
| Terminal/City | US$/mt FOB ex-warehouse | |
| Week ending 01/15 | Week Ending 01/22 | |
| Rondonopolis | 380-400 | 360-380 |
| Sorriso | 390-434 | 445-492 |