U.S. Gulf:
NOLA granular urea barges were reported at $350-$372/st FOB, down from the week-ago $363-$390/st FOB. The higher end of the range represented first-half May barges, with the lower end for full-month.
Eastern Cornbelt:
Urea prices edged up to $420-$440/st FOB in the Eastern Cornbelt, roughly $10/st higher than last report, with the low reported out of spot Illinois River terminals. The Cincinnati, Ohio, urea market was quoted firmly in the $435-$440/st FOB range in early May.
Western Cornbelt:
Urea pricing was steady at $420-$440/st FOB in the Western Cornbelt, with the low reported at St. Louis, Mo., and the high at Port Neal, Iowa.
Northern Plains:
The urea market had reportedly firmed to $425-$430/st FOB St. Paul, Minn., with delivered tons pegged at $480-$485/st in North Dakota, up $5-$10/st from last week.
Northeast:
Urea prices were quoted at $435/st FOB Fairless Hills, Pa., for May-June tons, down $10/st from last report.
Eastern Canada:
Sources reported a broad range of urea prices in Eastern Canada in early May, but the regional average was virtually unchanged from last report. The market was pegged at C$580-$640/mt FOB in the region, depending on location, compared with C$602-$620/mt in late March.
India:
After some confusion about the final number, sources confirmed that 2.2 million mt of urea were offered by 13 companies. The lowest prices showed a $21-$23/mt drop from the RCF tender earlier this year.
Ameropa offered the lowest prices for East Coast and West Coast deliveries at $356.99/mt CFR and $358.99/mt CFR, respectively. The Ameropa offers were weighted to the West Coast, with 153,000 mt to be divided among three ports. The price-setting East Coast offer from Ameropa was for one cargo of 61,500 mt to be unloaded at Kakinada.
The offers by two producers were higher than the levels reported by sources. Fertiglobe offered 45,000 mt at $353/mt FOB, and PIC/Kuwait offered 40,000 mt at $348/mt FOB. MMTC countered those prices with $323/mt FOB. Sources said they did not expect the producers to accept that bid.
| Offering Company | Quantity Offered (mt) | US$/mt CFR | Discharge Port |
| Ameropa | 61,500 | 356.99 | Kakinada L1 ECI |
| 51,500 | 358.99 | Mundra L1 WCI | |
| 51,500 | 358.99 | Pipavav | |
| 50,000 | 358.99 | Mundra | |
| Koch | 60,000 | 377.00 | Pipavav |
| 50,000 | 377.00 | Mundra | |
| 60,000 | 369.69 | Gangavaram | |
| 60,000 | 369.69 | Krishnapatnam | |
| 60,000 | 369.69 | Vizag-Karaikal | |
| 50,000 | 369.69 | Kakinada | |
| Swiss Singapore | 46,000 | 363.60 | Kandla |
| 46,000 | 363.45 | Pipavav | |
| 46,000 | 362.05 | Karaikal | |
| 46,000 | 363.50 | Mundra | |
| 46,000 | 362.00 | Gangavaram | |
| 46,000 | 362.10 | Kamrajar | |
| 46,000 | 363.55 | Hazira Adani | |
| Continental | 50,000 | 372.50 | Kandla-Mundra |
| 50,000 | 374.50 | Pipavav-Karaikal-Krishnapatnam-Kakinada-Vizag-Gangavaram-Tuna | |
| Keytrade | 45,000 | 364.81 | Kandla |
| 50,000 | 377.00 | Paradip | |
| 50,000 | 377.00 | Kakinada | |
| Gavilon | 50,000 | 385.05 | Krishnapatnam |
| 50,000 | 387.05 | Mundra | |
| Torbert | 65,000 | 365.75 | Gangavaram-Krishnapatnam-Karaikal-Kakinada-Pipavav-Tuna |
| 65,000 | 372.75 | Mundra-Pipavav-Tuna | |
| Transglobe | 50,000 | 363.50 | Pipavav |
| 50,000 | 360.90 | Krishnapatnam | |
| Samsung | 45,000 | 367.25 | Gangavaram |
| 50,000 | 370.00 | Krishnapatnam | |
| 45,000 | 371.00 | Karaikal | |
| 50,000 | 369.60 | Mundra | |
| 50,000 | 369.70 | Rozy | |
| 45,000 | 369.50 | Pipavav | |
| 50,000 | 373.50 | New Mangalore | |
| Dreymoor | 52,000 | 363.91 | Pipavav |
| 52,000 | 361.87 | Kakinada | |
| Midgulf | 63,000 | 370.10 | Gangavaram-Krishnapatnam-Kakinada |
| 63,000 | 372.10 | Mundra-Tuna | |
| Fertiglobe | 45,000 | 372.00 | Kandla-Mundra |
| 50,000 | 374.00 | Pipavav-Kakinada-Gangavaram-Tuna | |
| 376.00 | Karaikal-Krishnapatnam-Vizag | ||
Of the 2.2 million mt offered, East Coast offers totaled 968,500 mt; the West Coast was offered 1.043 million mt; 100,000 mt to either coast; and 85,000 mt directly from producers. Sources said the emphasis on the West Coast once again showed an inclination to avoid Chinese product.
The wide range in pricing ideas can be seen in the levels offered by Gavilon at $385.05/mt CFR East Coast and $387.05/mt CFR West Coast. The gap between the average price and the lowest prices of the offers in this tender was also greater than in the last tender.
In the MMTC tender that just closed, the average East Coast price was $369.19/mt CFR and $367.87/mt CFR for the West Coast. The gap between these prices and the winning prices is $8-$12/mt. In the earlier RCF tender, that gap was $6-$9/mt even though the settled price was much higher.
Traders said unlike last year at this time, India is not as desperate for tons. Going into the tender, expectations by traders for the final take were for less than 1 million mt to be awarded. Many put the final take at 600,000 mt to 700,000 mt, with a couple of estimates of 900,000 mt. This came up against reports that MMTC was hoping to buy about 1.5 million mt.
It now appears as if the final take will be even lower than expected. Sources reported that by the early Friday morning deadline in India, eight companies accepted the MMTC counterbids based on the Ameropa numbers. MMTC still has to agree to each of the offers. Some additional tons may still be added to the final number, but it looks as if MMTC will take only 550,000 mt from this tender.
| Offering Company | Quantity (mt) | Estimated Source |
| Ameropa | 214,500 | Oman-Ukraine-China |
| Dreymoor | 52,000 | Ukraine |
| Samsung | 50,000 | Egypt |
| Continental | 50,000 | Egypt |
| Midgulf | 47,500 | Oman |
| Swiss Singapore | 46,000 | Indonesia |
| Keytrade | 45,000 | Oman |
| Fertiglobe | 45,000 | UAE |
If this is the final number, MMTC will purchase 25 percent of what was offered. This will represent the second-lowest percentage take in the past two-and-a-half years of urea tenders. The lowest mark was last year, when MMTC took only 6 percent of the offered tons in the July 7 tender. The average take in the previous two years has been 47 percent.
As the industry waited for the tender results to be announced, sources said Chinese and Arab producers were digging in their heels against selling too many tons at prices they considered too low. The netback to China from India’s East Coast price is put at $332-$338/mt FOB. Producers have said they will not accept anything under $340/mt FOB. Likewise, the netback to the Arab Gulf is put at $337-$340/mt FOB at a time when producers are pushing for $350/mt FOB.
However, for the Chinese producers, the freight market has been much more volatile, leading to more uncertainty and a desire by traders to push the netback price even lower. And Arab producers have appeared willing to talk with traders about deals in the upper-$330s/mt FOB.
| 2020 – India Urea Tenders | ||||||
| Closing Date | Agency | Quantity Awarded (‘000mt) | Quantity Offered (‘000mt) | WC Price US$/mt CFR | EC Price US$/mt CFR | Awards as percentage of Offers |
| 3-Apr-20 | RCF | 747.00 | 1,654 | 251.90 | 257.65 | 45% |
| 7-May-20 | MMTC | 632.00 | 2,400 | 226.81 | 231.90 | 26% |
| 24-Jun-20 | RCF | 628.00 | 2,090 | 238.45 | 237.35 | 30% |
| 17-Jul-20 | MMTC | 117.50 | 2,060 | 242.50 | 240.75 | 6% |
| 30-Jul-20 | MMTC | 697.55 | 1,630 | 257.70 | 259.50 | 43% |
| 10-Aug-20 | RCF | 952.00 | 1,285 | 289.00 | 290.50 | 74% |
| 26-Aug-20 | MMTC | 1,795.50 | 2,340 | 288.89 | 283.52 | 77% |
| 9-Oct-20 | RCF | 2,184.25 | 3,627 | 279.94 | 279.25 | 60% |
| 1-Dec-20 | MMTC | 1,273 | 2,285 | 284.70 | 286.50 | 56% |
| Average | 1,003.0 | 2,152.2 | 262.21 | 262.99 | 47% | |
| Total | 9,026.8 | 19,370 | ||||
| 2021 – India Urea Tenders | ||||||
| Closing Date | Agency | Quantity Awarded (‘000mt) | Quantity Offered (‘000mt) | WC Price US$/mt CFR | EC Price US$/mt CFR | Awards as percentage of Offers |
| 22-Mar-21 | RCF | 802.5 | 1,926.0 | 380.18 | 379.87 | 42% |
| 4-May-21 | MMTC | 550* | 2,196.5 | 358.99 | 356.99 | 25% |
| * Estimated |
China:
Sources said stockpiles at the Chinese ports are building, and the estimated results from the MMTC tender will not help that situation. The amount varies from 600,000-800,000 mt ready for export, depending on who is talking. Sources said some of that tonnage may include Iranian product shipped into Chinese warehouses and processed for re-export.
Initial reports out of India indicate MMTC will take only one cargo – most likely 61,5000 mt via Ameropa – in its tender. This is the second tender where the Indians have stepped away from Chinese product. In the earlier tender this year, RCF did not take as many tons from China as expected. That move in March left more urea in reserve in China than the producers wanted.
The netback to China from India, based on the MMTC tender price, is $332-$338/mt FOB at a time when producers are arguing for $340/mt FOB. Some are even suggesting that the freight situation could take the netbacks even lower into the upper-$320s/mt FOB.
Sources said the dynamics of the market are against the producers, however. The Chinese domestic season is just about over, with only a few small orders still needed to be placed. That means production for the rest of May and all of June and July will be for export.
Some small lots will be sold to regional buyers at higher netbacks, but the only place to move large quantities of urea during the summer is India. The markets in Europe and the Americas are done, again leaving only India as a major buyer for the next few months.
Until the agreements are signed for delivery to India, the price continues to hover in the upper-$330s/mt FOB for prills and low-$340s/mt FOB for granular.
Middle East:
Arab Gulf producers made their pricing intention noticeably clear in the two offers made in the Indian tender. Producers are looking for $350/mt FOB for their product. Unfortunately for them, deals made this week undercut that position.
Sources reported a sale at $340/mt FOB from Oman for shipment in the second half of June. Almost at the same time, traders were reporting small deals at $332/mt FOB from the area, which fits in with the estimated netbacks from the Indian tender. Producers pointed to the paper market, which is now showing prices for May and June at $347.50/mt FOB.
Offers into India’s West Coast dominated the MMTC tender at 1.04 million mt. At least three cargoes for the West Coast are expected to come from Yuzhnyy and possibly one or two from Indonesia, but the bulk of any awards will come from the Arab Gulf.
Sales out of Egypt at $350/mt FOB were reported this week. Sources said the most likely source for the Fertiglobe offer of $353/mt CFR to MMTC was Egypt. Freight costs, however, put the netback to Egypt in the low-$330s/mt FOB, at best. Some have even argued that the price needs to be in the $320s/mt FOB to be competitive in India.
The paper market is reporting a May price of $345/mt FOB and June at $347.50/mt FOB.
Indonesia:
After a dramatic sale of tons to Gavilon at $350/mt FOB last week, Kaltim reportedly settled on a deal to Swiss Singapore at $325/mt FOB. Sources said the freight rates could allow the tonnage to be part of an award that Swiss Singapore might get from India.
The Indonesian producers have called a number of selling tenders, only to scrap them when prices did not go their way. The producers would then go into private talks with traders. The results of these talks led to the dramatically high $350/mt FOB sale and a more recent deal at $325/mt FOB. Now the talks are focused on selling at $335/mt FOB.
Sources said the most recent deal indicated that Kaltim and the other producers are “motivated” sellers, looking to push their product offshore. One source also noted the possibility that there is some political interference taking place in the selling process that makes it look disorganized.
Black Sea:
Sources said the netback for any product heading to India under the MMTC tender would be just under $320/mt FOB. Freight from Yuzhnyy to the Indian West Coast is pegged in the low-$40s/mt.
Sources said they could see two or possibly three cargos coming from Yuzhnyy to India if the right freight rate is found. Sources said Dreymoor for sure has at least one cargo from the Black Sea in its offer to MMTC. Other traders speculated that Ameropa also has at least one in its winning offer.
Turkey:
First-quarter imports of urea in Turkey were down about 21 percent, according to Trade Data Monitor, at 763,000 mt from 964,000 mt during the same period in 2020.
The bulk of this year’s imports came from Oman at 299,000 mt and Egypt at 269,000 mt. Iran sent only 79,000 mt of urea to Turkey this year, compared with 273,000 mt during the same period last year. March imports were up 7.7 percent, to 246,000 mt from 228,000 mt in March 2020, with most of the March 2021 tons coming from Egypt at 142,00 mt.
Brazil:
Urea prices tightened at the low end of the scale, to $375-$385/mt CFR at Paranagua. New business at the port was for small quantities of roughly 5,000 mt in the mid-$370s/mt CFR. This price comes on the heels of a deal last week that moved prices into the mid-$380s/mt CFR.
Buyers inland have been hesitant to purchase until they can assess the impact of the MMTC/India urea tender. Sources reported little activity by farmers or blenders.
The Rondonopolis price showed a wider spread at $450-$535/mt FOB ex-warehouse, illustrating the mixed emotions buyers seem to have about the market. The mild enthusiasm for urea was also seen in Sorriso, where prices moved to $500-$510/mt FOB ex-warehouse. The barter rate for 1 mt of urea in Rondonopolis remains at 65 bags of corn.
| Brazil Urea Prices | ||
| Terminal/City | US$/mt FOB ex-warehouse | |
| Week ending 04/30 | Week Ending 05/07 | |
| Rondonopolis | 485-510 | 450-535 |
| Sorriso | 444-505 | 500-510 |