U.S. Gulf:
NOLA granular urea barges reportedly moved up, firming to $363-$390/st FOB from the week-ago $355-$375/st FOB range. Loaded barges that were ready to go were put in the $385-$390/st FOB range.
While India’s quick retender for more urea was credited with boosting NOLA price ideas early in the week, sources also cited domestic demand and prospects for a good rice season.
Eastern Cornbelt:
Urea prices were quoted at $420-$440/st FOB in the Eastern Cornbelt, depending on location, with the Cincinnati, Ohio, market pegged at $425-$435/st FOB at mid-month. Pricing at East Dubuque, Ill., was reported at the $420/st FOB level for May-June tons.
Western Cornbelt:
Urea remained at $420-$440/st FOB in the Western Cornbelt, with the low reported at St. Louis, Mo., and Caruthersville, Mo., and the high at Port Neal, Iowa. The market FOB Camanche, Iowa, was pegged at the $420/st level for May-June tons, while offers at St. Paul, Minn., were reported at $425-$430/st FOB at mid-month.
California:
Urea pricing was pegged in a broad range at $500-$520/st FOB port terminals for bulk tons, with unconfirmed reports of bagged product being offered at the $580/st FOB level. Sources in Northern California reported limited rail-DEL offers in the $490-$500/st range. “There’s not much available,” said one contact.
Pacific Northwest:
The urea market was steady at $475/st FOB Rivergate, Ore., and $480/st FOB Aurora, Ore., with delivered tons ranging from $490-$510/st in the Pacific Northwest, depending on location.
Western Canada:
The urea market remained at C$655-$680/mt FOB in Western Canada, depending on location, with most of the delivered price quotes falling in a narrower C$655-$660/mt range at mid-month.
India:
RCF began the week by announcing a tender to close on May 25 with a shipping deadline of June 30. The announcement kicked off a firestorm of price increases throughout the urea industry.
By the end of the week, prices had risen in the main producing markets so that levels at $382-$400/mt CFR were being cited as possibilities. Arguments were leaning heavily toward the $400/mt FOB number.
The early call broke a general rule that new tenders are not issued until the tons from the last tender are loaded and heading for India. However, the two tenders held so far this year did not draw the amount of urea that the buyers wanted.
The March 22 tender by RCF looked as if it would bring in at least 1.2 million mt. However, orders came down that the buyer should not consider tonnage from China. In the end, RCF took 802,500 mt.
The second tender brought in only 549,000 mt against expectations of awards of 1.5 million mt. In the May 4 MMTC tender, the limited tonnage came because producers would not lower their prices to meet the winning price.
After hoping to get more than 2 million mt in the first two tenders, India has only booked 1.35 million mt. The demand for urea in the country is strong enough that a new tender needed to be called before the product from the previous tender is shipped. This happened last year as well, when MMTC and RCF alternated calls for a total of six tenders between May and August.
Sources said supplies could be limited from the Arab Gulf because most of the MMTC tender was covered from that area. At the same time, Chinese producers are finding several other buyers for its product, from Southeast Asia to the Americas. In the end, they may not be as desperate to sell to India as they have been in the past.
In addition to the possibility of limited tonnage being offered, sources said more ship owners are hesitant to allow their vessels to go to India. The owners are worried that onward ports of call would require lengthy and expensive quarantines of the crew. Sources also said unions and agencies handling crew assignments seem to be pressuring the owners to skip runs into Indian ports.
The results of the RCF tender are scheduled to be released at 11:30 a.m. IST at the RCF headquarters.
China:
Urea prices in China moved up all week. Sources said the week started with prilled urea in the upper-$350s/mt FOB and granular in the upper-$360s/mt FOB, not much different from where prices were the previous week.
By the end of this week, however, sources were reporting granular in the mid-$380s/mt FOB and prills in the mid-$370s/mt FOB. These levels, so far, appear to be the asking price by producers. There are rumors that some small deals were done at these levels, but no one could name buyers or sellers.
What has been confirmed, however, is that traders are only talking about granular at $380/mt FOB, but with possible deals at $375/mt FOB, and prills in the mid-$370s/mt FOB but really in the lower-$360s/mt FOB. Sources said firm bids are coming in at $380/mt FOB for granular, with prills about $10/lower. They added that producers are rejecting these prices in favor of higher levels.
Demand for limited tons into the domestic market is also adding some extra heat to the market. Sources said the industry will have to wait until RCF issues awards for Chinese product to see how hot the market really is.
At the current level under discussion, sources said the price to India would be about $400/mt CFR. That price, said one trader, could cause RCF to limit how many tons it buys.
Middle East:
Egyptian urea moved up $30/mt in less than a week. By the end of the week, sales from two different producers were confirmed at $400/mt for July shipment.
Steady sales for June shipments moved to $375-$380/mt FOB by midweek. The movement to $400/mt FOB kept going with the July sales.
Arab Gulf prices have also moved up, but not with the same speed as Egypt. The paper market puts the Arab Gulf at $375/mt FOB for June and July. So far this week, sales have been reported at $365/mt FOB for late-May and early June shipments.
The current price could lead to offers into India in the mid-$380s/mt CFR at current freight rates. If the urea price or the freight rates increase, sources said it is possible to see Arab Gulf product offered in the $390s/mt CFR.
Black Sea:
Reports of the shutting of the AZOT plant led to speculation of reduced availability of prilled urea from Yuzhnyy. The lack of new product for the spot market means prices held steady at around $320/mt FOB.
Sources said the upcoming RCF tender might not have many tons offered because of limited resources from the major supplying areas. There is speculation that no more than two cargoes could be offered from Yuzhnyy. If true, that would match what was awarded in the MMTC tender earlier this month.
Indonesia:
Sources said producers are holding back on issuing any new auctions until the RCF/India tender closes. One trader said the producers will most likely use the results of that tender to determine what their reserve price should be.
For now, the producers seem to be content with arranging for the loading of tonnage they sold during the past few weeks.
South Korea:
Year-to-date urea imports in South Korea are down 9.4 percent, to 353,000 mt from 390,000 mt last year, according to Trade Data Monitor. April imports were down 11 percent, to 90,000 mt from 101,000 mt in April 2020. The tonnage brought in last month fits within the average take of 89,000 mt/month so far this year.
Brazil:
Imported urea prices in Brazil moved up on the heels of the RCF tender announcement.
By the end of the week, prices had moved up $15/mt to $415/mt CFR in confirmed sales. Sources reported additional deals that took the range for Paranagua to $410-$420/mt CFR. Talks are now reportedly focusing on the upper end of the range, leaving anything under $415/mt CFR to history.
Rondonopolis also moved up, with sources reporting a $20/mt jump to $518-$520/mt FOB ex-warehouse. Sources reported some interest inland for more urea, but not in large quantities. The barter rate moved to 58 bags of corn for 1 mt of urea, compared with 65 bags last week.