U.S. Gulf:
The NOLA granular urea barge market showed some strength at mid-month after a few weeks of decline. New barge trades were reported in the $324-$356/st FOB range, up from the week-ago $320-$342/st FOB.
Eastern Cornbelt:
Urea was quoted at $380-$410/st FOB in the Eastern Cornbelt, with the lower end reported at Cincinnati, Ohio, and other river terminals in the region.
Western Cornbelt:
Urea pricing was unchanged at $375-$410/st FOB in the Western Cornbelt, with the low reported at St. Louis and Caruthersville, Mo., and the upper end at Port Neal, Iowa. The St. Paul, Minn., market was pegged firmly at the $405-$410/st FOB level during the week.
Southern Plains:
Sources quoted the urea market at $380-$385/st FOB Catoosa/Inola, Okla., up $5/st from the previous week, with some sources speculating that higher levels are likely when production fully resumes. The Houston, Texas, market was also reported at $380-$385/st FOB, with truck-DEL urea in central Texas pegged at the $400/st level, give or take.
South Central:
Urea prices were inching up in the South Central region, fueled by NOLA barge values that saw a mid-month rebound after a week or two of decline. Terminal values were generally up $10/st from the previous week, to $380/st FOB Convent, La., and most Arkansas River terminals, $380-$385/st FOB Memphis, Tenn., $380-$390/st FOB river terminals in Kentucky, and $400-$405/st FOB Shreveport, La.
Southeast:
The urea market was quoted at $400-$405/st FOB port terminals in the Southeast, up from $375/st FOB at last report.
China:
The country was essentially closed for the past two weeks. Offices are expected to re-open on Feb. 22. In the absence of anyone to talk to, international traders said the market held even in the low-$360s/mt FOB.
Sources said even after people return from the Lunar New Year holiday, urea for export will still not be readily available. Some in the industry are now saying that when the offices open, the starting price will be closer to $370/mt FOB, which would put Chinese urea back on par with the Arab Gulf price.
Just before the beginning of the holiday, the government issued a reminder to all fertilizer producers and traders that the first priority is to ensure a plentiful supply for the upcoming spring application season. Sources said the local distribution centers seem to have good reserves built up. The issue will be determining the demand strength.
Reportedly, the few tons that are being shipped to regional buyers are coming from product already placed in warehouses at the ports. Those tons have not been replaced in the past few months, leaving international traders to speculate that soon there may not be anything for export.
Refilling the export warehouses and satisfying the domestic demand may face difficulties. The sporadic outbreaks of COVID-19 have been affecting the transportation system that moves the urea from plants to local distributors and ports. Some plants have also been hit with reduced staff because of the virus.
India:
Sources are now talking about a tender call in the first week of March instead of the end of February. Reportedly, the government is looking at the ever-rising prices of urea in the global market, and seems to hope that by holding off the price might come down in time for a tender. Most traders said this is a false hope.
International traders have been looking at the demand for urea by farmers. According to some, demand remains strong, meaning local and portside warehouses are being quickly emptied. One trader estimated that at the current rate, the reserves will be quickly eaten up and the country will be in a negative supply situation by the end of March.
One trader said if that situation holds true, a tender will need to be called in late February so that the first cargoes of awarded urea can start being trucked inland by the end of March.
Middle East:
Urea prices have stabilized in the $370s/mt FOB, even as the whole market seemed to pause and take a deep breath. Reports of limited tons coming from China have encouraged producers into thinking that they do not have to lower their prices any time soon.
However, the paper market seems to differ. March estimates in the paper market put the price at $355-$363/mt FOB, representing a $15/mt drop. The following months show a continued slide to $351-$360/mt FOB for April and $340-$350/mt FOB for May.
Traders expressed skepticism that the prices would drop so precipitously in the next three months, despite expectations by buyers that the second quarter would show a price drop.
Egyptian producers were also puzzled by the paper market predictions. The current price in the $370s/mt FOB was set more than a month ago for the February and early March shipments. Early April sales have already been concluded at $380/mt FOB, with producers arguing for late-April prices of $400/mt FOB. In fact, as the week closed, MOPCO concluded a deal for 6,000 mt of granular to be shipped in the second half of April at $390/mt FOB.
The paper market is showing a steady decline for the next three months. March is pegged at $365-$380/mt FOB, which does track with many of the deals already signed. However, the April range of $360-$370/mt FOB is in direct contrast to deals already done for that month at $380/mt FOB. A further decline is seen in May to $350-$365/mt FOB.
Nepal:
A tender for 30,000 mt of bagged urea to be delivered to a Nepalese warehouse closed on Feb. 14 with only two offers at $473.70/mt CFR and $487/mt CFR. The lower offer came from Joshi, which has won previous tenders. One source noted that the company has had a hard time in the past securing the tons awarded in those previous tenders.
The issue Joshi will face this time is the scarcity of urea to fill the award, especially from China, as well as finding any supplier ready to offer tons at prices that are currently below market level. Sources estimate that the cost of bagging and transporting the urea is more than $100/mt, meaning the trader is looking at a China-equivalent price close to the last-done price from China.
Pakistan:
Local media reported that domestic urea producers are asking permission to export urea. The support the government gave the producers last year with subsidized natural gas has led to a surplus of about 1 million mt, according to the industry figures. At the same time, demand from local farmers appears to be waning as subsidies are slowly changed to allow for increases in what the farmers pay for their 50 kg bags.
The latest price quote for urea is Rs1,760/50 kg (US$220/mt) to Rs1,780/50 kg (US$224/mt).
Brazil:
The country took most of this week off for Carnival and other pre-Lent celebrations. International traders said there was no shift in the market. However, as the country came back to work at the end of the week, sources in Brazil noticed prices had slipped.
Traders in Brazil are now calling the market $380-$390/mt CFR at the ports. This represents about a $10/mt decline in prices from the previous week.
The drop coincided with a general lethargy in the market. Sources noted limited interest in new fertilizer purchases because the winter corn market is about done, and farmers are now focusing on fieldwork for the next soy and corn harvests. In addition, sources said mixers either have most of the nitrogen they need or are looking to cheaper urea alternatives, such as ammonium sulfate.
Sources reported some delays in unloading cargoes at the ports because of the seasonal rains. These delays are raising concerns that when more product is needed inland, it might not be there for the farmers.
Rondonopolis is reporting a steady price of $475-$490/mt FOB ex-warehouse, for now, as traders come back to work at the end of the week. Likewise, Sorriso is even at $540/mt FOB. The barter rate for 1 mt of urea remains at 60 bags of corn at Mato Grosso.
| Brazil Urea Prices | ||
| Terminal/City | US$/mt FOB ex-warehouse | |
| Week ending 02/12 | Week Ending 02/19 | |
| Rondonopolis | 475-490 | 475-490 |
| Sorriso | 540 | 540 |