U.S. Gulf:
NOLA granular urea barges continued to move up, starting the week in the $357-$363/st FOB range. However, sources said news on March 4 that CF was raising UAN postings by as much as $90/st quickly impacted urea barge price ideas. As a result, $370/st FOB for granular urea barges was reported by late Thursday, leaving the range for the week at $357-$370/st FOB, up from the week-ago $346-$359/st FOB.
Eastern Cornbelt:
Urea prices in the Eastern Cornbelt were inching up on firming NOLA barge values in early March. Sources pegged the regional market at $395-$415/st FOB terminals, up $5-$10/st from last report, with the low reported at Cincinnati, Ohio, and Ottawa, Ill., at midweek.
Western Cornbelt:
Urea was pegged at $390-$415/st FOB in the Western Cornbelt, up $5-$10/st from last report, with the low confirmed at St. Louis, Mo., and the high out of spot Iowa locations. The market FOB Port Neal, Iowa, remained firmly in the $390-$410/st FOB range in early March, while pricing at Inola/Catoosa, Okla., firmed from a low of $385-$390/st FOB early in the week to a high of $410-$415/st FOB as the week progressed.
Northern Plains:
The urea market was reported at $385-$395/st FOB St. Paul, Minn., for river-open tons and higher for spring offers. Delivered urea in the Dakotas ranged from $430-$460/st in early March, depending on source and time of shipment, with the upper end quoted for some prompt domestic offers to points in northern South Dakota.
Great Lakes:
Urea prices were quoted at $410-$450/st FOB in the Great Lakes region, up another $10/st from last report, with the low reported in Wisconsin. Michigan sources pegged the market at $425-$450/st FOB in early March, with the lower end at Maumee/Toledo, Ohio, and the higher numbers out of terminals in Webberville and Saginaw, Mich.
Northeast:
The urea market in the Northeast was quoted at a firm $400/st FOB Fairless Hills, Pa., for March tons and $405/st FOB for Q2 shipments.
China:
Sources said the domestic urea market softened and quickly rebounded as Chinese traders began taking positions in anticipation of India calling a urea tender.
Sources said prills hovered in the low-$350s/mt FOB, while granular product remained in the $360s/mt FOB. These prices were confirmed by reports that a sale for the end of March was done with an Australian buyer. Likewise, the lowest offer in the Sri Lanka tender showed a netback to China in the low-$360s/mt FOB.
While producers want to see higher prices when the Indian tender comes around, sources said they have been forced to moderate their views because of higher freight prices. Traders argued that the recent jump in freight to about $20/mt to India, combined with ever-higher product prices, could limit how many tons are sold in upcoming tenders.
The domestic season demand is beginning to wind down even as production remains at a robust level. Output is expected to remain high. Green Markets Research Director Alexis Maxwell reported that more natural gas is being made available for industrial use as the weather warms. She said the production rate in urea plants for March is at a five-year high of 75.7 percent.
The resulting increase in output means supplies of product for export are increasing. At the same time, the government seems to have successfully attacked COVID-19 hotspots. As a result, the transportation infrastructure to move urea from the plant to ports is working at better levels than in the past few weeks.
The increased output, along with improvements in transportation, has resulted in reports of higher stockpiles at portside warehouses. According to Maxwell, inventory at the ports for March is expected to reach 300,000 mt, allowing for first-quarter exports to hit 900,000 mt.
Middle East:
Urea prices remain in the low-$370s/mt FOB even as producers clamor for higher prices. Sources said some producers are claiming prices should be in the $380s/mt FOB, but no one can point to any business done at that level.
As Chinese pricing expectations moderate with a possible Indian tender on the horizon, sources said Arab Gulf suppliers also need to practice restraint in their pricing if they want to be competitive in the tender.
The strength in pricing comes from reports that producers are sold out for March and have limited tons for April. Even with those limitations, Arab Gulf urea is expected to play a role in the Indian tender once it is called.
While Arab Gulf producers are being restrained by demands from potential Indian buyers, sources noted that there are few constraints on the Egyptian sellers.
Producers in Egypt watched prices move from $390/mt to $400/mt FOB. By midweek, Abu Qir had settled at $396/mt FOB for 25,000 mt to several buyers. As the week closed, Helwan sold two top-off granular lots of 3,000 mt each at $400/mt FOB. Each of the deals were for mid- to late-April loadings.
Sources said the material in each case was heading for European buyers looking to ensure plentiful supplies for the spring season. One trader said buyers are looking to secure their tons before the Indian tender soaks up the excess urea in the market and pushes prices higher.
While each week shows a steady increase in the price out of Egypt, the paper market continues to be bearish in its predictions. The projected price into April, according to sources, is being quoted at $375/mt FOB, with May prices dropping to $357/mt FOB. The price for material being shipped in March is pegged at $380-$390/mt FOB.
A sale from Algeria at $387/mt FOB for the end of April confirmed the stronger prices for the Mediterranean market.
India:
Pessimists said India will not call a tender until the beginning of the new fiscal year on April 1. Optimists said the call could come soon. Most sources, however, speculate that the tender will be called near the end of the month so the awards can be made after April 1, thus initiating the tender before the end of the fiscal year, but pushing costs to the next.
When the Indian buyer comes in, it will face higher prices than last year. Freight rates have jumped at least $5/mt from traditional supply locations such as the Arab Gulf and China. Even if producers are willing to ease off on their pricing ideas, the final landed price will be just under $400/mt CFR. Last year, the higher prices paid were $289-$290/mt CFR, and in 2019 the highest price was $292-$295/mt CFR.
Sources said the Indian tender will have an impact on the general market. Buyers in Australia and Southeast Asia are now looking for urea. Some are hesitant to buy now in the hope that the longer India waits, the more pressure there will be to lower prices. However, once the tender is called, traders are expecting to see prices rebound with a vengeance.
Southeast Asia:
Sources said predictions of good rains for the spring season indicate demand for urea will be stronger than usual. The increased demand is hitting just as India is preparing to call its first tender of the year. Sources said the Indian buyer will quickly absorb the extra tons being produced in China, leaving smaller buyers to face ever-higher prices.
Reportedly, the Thai government has put a cap on what local distributors can charge farmers for urea. While the cap does not affect the few tons already on hand in the country, sources said the current price levels from the Arab Gulf and China would put the landed price well above the limits set by the government.
According to one trader, the reserves on hand in Thailand are only good for about one month. With better-than-expected rains coming, sources said more urea will be needed – and soon.
Sri Lanka closed a tender for 17,500 of prilled urea on March 3. Sources said the award will most likely go to Aries because of its low offer with 180 days credit.
| Offering Company | US$/mt CFR Bagged Sight | US$/mt CFR Bagged with 180 Days | Source |
| Aries | 410.00 | 410.00 | China-Indonesia-Qatar-Vietnam |
| Valency | 405.19 | 418.74 | China-Indonesia-Egypt-Arab Gulf |
| Ameropa | 400.19 | 431.04 | Vietnam-China |
| Agrifert Liven | 438.00 | 440.00 | China-Indonesia-Vietnam |
The last Sri Lanka tender in February came in at $397/mt CFR, also awarded to Aries. Sources said the current Aries offer shows am estimated netback to China of about $360/mt FOB.
Australia:
Urea imports for 2020 were reported at 2.4 million mt, up from 1.9 million mt in 2019.
The main suppliers to the country in 2020 were the Saudis at 607,000 mt, the UAE at 556,000 mt, Malaysia at 442,000 mt, and Qatar at 438,000 mt. The bulk of the orders came in the first half of the year at 1.6 million mt, compared with 775,000 mt during the July-December period.
Brazil:
The lower end of the price range in Brazil tightened as demand for urea steps up. Sources said the price at the ports is now at $395-$400/mt CFR. The demand is also being seen inland. Rondonopolis has edged upward to $545-$550/mt FOB ex-warehouse.
| Brazil Urea Prices | ||
| Terminal/City | US$/mt FOB ex-warehouse | |
| Week ending 02/26 | Week Ending 03/05 | |
| Rondonopolis | 540-545 | 545-550 |
| Sorriso | 520 | NA |
Even though the price of urea is going up, higher returns for crops are keeping the barter rate steady. Sources said 60 bags of corn still gets 1 mt of urea.
Nigeria:
The first shipment of urea will begin this month from Dangote Industries’ ammonia and granular urea complex in the Lekki Free Trade Zone, about 50 km east of Central Lagos, according to Nigeria’s Political Economist Ng, citing Central Bank of Nigeria Governor Godwin Emefiele.
The shipment is presumed to be going to the domestic market, with Emefiele saying it would help boost agriculture in the country. After meeting local demand, urea from the plant is expected to be targeted for export to Latin America.
Dangote Industries did not respond to requests for comment. Reports have been circulating in recent weeks of a first-quarter start-up at the new complex (GM Feb. 5, p. 34).