U.S. Gulf:
NOLA granular urea barges were reported to have traded at $383-$404/st FOB, up from the week-ago $363-$390/st FOB. Prompt and/or loaded barges were put at the higher end of the range, with full June at the lower. Upriver NOLA equivalent barges were reported to have traded at $403-$405/st FOB.
Price ideas continued to be strong at press time, with $410/st FOB being seen as the next possible price point.
While Indian price ideas were way up, most NOLA players cited U.S. demand, particularly for rice season, as the main reason for strong prices.
Eastern Cornbelt:
Urea prices were quoted at $425-$445/st FOB in the Eastern Cornbelt, up $5/st from last report, with the low reported at East Dubuque, Ill., and the high at Burns Harbor, Ind. The market FOB Cincinnati, Ohio, was pegged firmly in the $435-$440/st FOB range in late May, while pricing FOB Ottawa, Ill., was quoted at $430/st.
Western Cornbelt:
Urea pricing reportedly backed off $5/st to $415-$435/st FOB in the Western Cornbelt, with the low reported at St. Louis, Mo., and the high at Port Neal, Iowa. The market FOB Camanche, Iowa, was pegged at the $425/st level for May-June tons.
Northern Plains:
The urea market in late May was quoted at $425-$440/st FOB St. Paul, Minn., and $445-$450/st FOB central North Dakota terminals. Delivered tons ranged broadly at $470-$495/st in North Dakota, with the higher numbers reported in western areas of the state.
Great Lakes:
The urea market ranged broadly from $445-$515/st FOB in the Great Lakes region, with the low at Burns Harbor and the upper end reported at Saginaw, Mich., reflecting an increase of more than $40/st since mid-April. Sources said most other Michigan terminals were out of product in late May.
Northeast:
Urea pricing was quoted at $440/st FOB Fairless Hills, Pa., for May-June tons, up $5/st from offers in early May.
India:
The RCF tender closed on May 25 with 12 companies offering 1.48 million mt. One source said the actual number of tons that might be realistically available was lower because there was a lot of double counting of tons.
Going into the tender, sources speculated on a price range of $380-$400/mt CFR. By the day the tender documents were opened on May 25, industry watchers moved the price range to $400-$415/mt CFR. In the end, the lowest offer for East Coast ports was from Koch at $408.88/mt CFR. For the West Coast, Ameropa was lowest at $418/mt CFR. There were only two offers from producers of 45,000 mt each at $396/mt FOB and $390/mt FOB.
The East Coast dominated the offers at 795,000 mt. West Coast offers totaled 595,000 mt, with 90,000 mt offered directly from two producers. The initial thinking was that if the prices were high enough, more Chinese tons could be drawn into the tender. However, prices for urea kept rising in China and the Arab Gulf, leading some to worry that producers will see little value in meeting netback prices that might be lower than where they think the market is.
In response to the offers, on Friday RCF accepted the Koch and Ameropa prices and issued letters to the other traders to match those levels. The buyer counterbid at $373.88/mt FOB to the two Arab Gulf producers. Sources said the producers are not expected to accept the bid.
| Offering Company | Quantity Offered (mt) | US$/mt CFR | Discharge Port |
| Ameropa | 61,500 | 426.00 | Krishnapatnam |
| 51,500 | 418.00 | Mundra | |
| Swiss Singapore | 47,000 | 422.30 | Gangavaram-Paradip-Kakinada-Tuticorin |
| 47,000 | 422.30 | Vizag-Krishnapatnam-Karaikal-Kamarajar | |
| 47,000 | 422.30 | Gangavaram-Paradip-Vizag | |
| 47,000 | 425.00 | Pipavav-Adani Tuna-Adani Dahej | |
| 47,000 | 425.00 | Mundra-New Mangalore-Adani Hazira | |
| 47,000 | 425.00 | Kandla-Rozy-Jaigarh | |
| Medallion | 60,000 | 433.17 | Gangavaram-Krishnapatnam-Karaikal-Kakinada-Paradip |
| Continental | 50,000 | 445.00 | Krishnapatnam-Kakinada-Gangavaram-Vizag |
| 50,000 | 442.00 | Mundra-Kandla-Adani Tuna | |
| Koch | 60,000 | 408.88 | Gangavaram-Krishnapatnam |
| 60,000 | 408.88 | Gangavaram-Krishnapatnam | |
| 50,000 | 419.88 | Mundra-Adani Tuna-Kandla | |
| Amber | 65,000 | 429.45 | Krishnapatnam-Karaikal-Kakinada-Paradip |
| 65,000 | 433.45 | Mundra-Adani Tuna-Pipavav | |
| Dreymoor | 52,500 | 425.91 | Krishnapatnam |
| 52,500 | 424.10 | Pipavav | |
| Transglobe | 50,000 | 428.50 | Krishnapatnam |
| 50,000 | 435.00 | Mundra | |
| Keytrade | 50,000 | 435.00 | Paradip |
| 55,000 | 435.00 | Kakinada | |
| 45,000 | 432.00 | Kandla-Mundra | |
| Samsung | 45,000 | 424.85 | Kakinada |
| 45,000 | 424.85 | Krishnapatnam | |
| 45,000 | 427.85 | New Mangalore | |
| 45,000 | 427.85 | Mundra |
| Direct Offers from Producers | ||
| Producer | Quantity (mt) | US$/mt FOB |
| Fertiglobe | 45,000 | 396.00 |
| Muntajat | 45,000 | 390.00 |
By Friday morning, seven traders had indicated their acceptance of the counterbid from RCF for a total of about 560,000 mt.
| Company | Cargoes | Coast |
| Ameropa | 1 | West |
| Amber | 1 | West |
| Dreymoor | 1 | West |
| Keytrade | 1 | West |
| Swiss Singapore | 2-3 | West |
| Samsung | 2 | West |
| Koch | 2 | East |
The award of two cargoes to Koch is not surprising. The trader offered two cargoes into the East Coast at the same price. One observer noted, however, that it is surprising Koch is not also doing a West Coast shipment. Its price was only $1/mt lower than the winning Ameropa one. The other companies accepting the West Coast price of $418/mt CFR will have to lower their prices $6-$15/mt to meet the Ameropa award.
At least two cargoes from the Black Sea are possible. Sources said Yuzhnyy is pegged in the mid-$360s/mt FOB, with freight rates around $50/mt. The awards to Dreymoor and Keytrade, traditional suppliers of FSU material, could easily come from the Black Sea.
Even as producers are willing to hedge their prices a bit, India will still get slammed by the ever-rising freight rates, When the tender closed, freight between China and the Indian East Coast was around $35/mt. By the time the pricing envelopes were open, that cost had come up into the low-$40s/mt. Likewise, the price from the Arab Gulf to the West Coast of India moved up from the low-$20s/mt to the mid- to upper-$20s/mt.
Sources said a number of factors are causing the higher rates into India, including reports that ship crew unions and employment agents are lobbying ship owners to skip India because of the COVID-19 pandemic. Some owners are also hesitant to send their vessels there because of the quarantine required after making an Indian port call.
Those willing to take cargoes into India are charging a premium to their clients. At the same time, some are also restricting their vessels to only one port of call. In the past, after unloading its fertilizer a vessel might move to another port to pick up an outgoing cargo. By restricting their vessels to only one port, said one trader, the ability to pick up an outgoing commission is reduced.
Sources also said some ship owners are making their vessels available for shipments to other areas, such as Latin America or Europe. This is also done to avoid the Indian ports. The displacement of many vessels from the South Asian market is another contributing factor to higher prices.
The buyer had hoped to secure more tons in this tender. If the 560,000 mt in awards holds, sources said another tender will have to be called quickly to ensure enough urea for the current season. Sources said they would not be surprised to see the next tender called as early as next week.
China:
The netback from the RCF tender to China is $365-$370/mt FOB. However, producers are now asking $380-$385/mt FOB for granular and $375-$380/mt FOB for prills.
Sources said at best 350,000 mt will be shipped from China, if a price agreement can be reached. These tons reportedly are already at portside warehouses waiting for export. Some of the tons have already been booked by traders in anticipation of the Indian tender.
The short time frame to ship – by June 30 – could mean some congestion at key ports, said one trader. Another even noted that there are already some backups for vessels waiting to berth at Chinese ports.
Sources said domestic demand and prices are stable, helping support the higher prices producers are asking. Domestic demand is expected to strengthen as regional domestic distributors look to ensure a plentiful supply of urea for August and September.
Exports from China were up almost 50 percent in the first four months of the year, according to Trade Data Monitor, to 1.3 million mt from 898,000 mt during the same period last year. The main customers so far this year have been India at 493,000 mt and South Korea at 228,000 mt.
April 2021 exports of 539,000 mt were up a whopping 382 percent from the April 2020 total of 112,000 mt. India took 249,000 mt last month, up 110 percent from its April 2020 take. South Korea was a distant second at 82,000 mt. followed by Guatemala, Australia, and Brazil with about 30,000 mt each.
Thailand:
Urea imports for January-April this year were down 34 percent, according to Trade Data Monitor, to 421,000 mt from 639,000 mt during the same period last year. April 2020 imports were reported at 239,000 mt. April 2021 imports were down 68 percent, to 76,000 mt from 239,000 mt in April 2020.
The April year-over-year decline was also matched in February and March.
Middle East:
Arab Gulf and Egyptian producers moved urea prices up just as the RCF tender numbers were being released.
Sources reported sales out of the Arab Gulf at $385/mt FOB as the tender envelopes were opened at the beginning of the week. On the heels of the pricing envelopes opened later in the week. MOPCO reported a sale of 30,000 mt for August at $408/mt FOB.
The two Arab Gulf producers who directly offered into the RCF tender submitted prices of $390/mt and $396/mt FOB. With reports of freight rates in the mid-$20s/mt, sources said the low West Coast price of $418/mt CFR equates to the low-$390s/mt FOB. If freights keep going up, traders with Arab Gulf product will have to do some fast talking to secure tons for India, as the higher transportation costs eat into the netback.
Sources had earlier speculated that the Arab Gulf might supply two or three cargoes for the RCF tender. However, after the Koch West Coast offer of $419/mt CFR, the next lowest is Swiss Singapore at $425/mt CFR. Some traders were not sure the company would be able to ensure a netback price from an Arab Gulf producer that would allow it to participate.
The paper market for the Arab Gulf is already reflecting a price lower than where the industry currently sees prices. The paper price is pegged at $387.50/mt FOB for June and $392.50/mt FOB for July. Sources said the supply of urea out of the region is expected to remain tight well into August.
Going into the week, the Egyptian price held steady at $400/mt FOB into July. Just as the week closed, however, MOPCO confirmed a sale at $408/mt FOB for 30,000 mt to be shipped in early August.
The paper market for Egypt is also a bit behind the times. June prices are pegged at $400/mt FOB, a number long ago achieved for June and July. The July price was put at $404/mt FOB. In this case, buyers broke the $400/mt FOB barrier for an August cargo. Sources said Egyptian producers are sold out for June and most of July.
Black Sea:
Sources reported at least two cargoes from Yuzhnyy might be available for the RCF tender. With freight rates put at $50/mt from Yuzhnyy to West Coast India, sources said the current talk of prices in the low-$360s/mt FOB fit in well.
Toros in Turkey will close a tender on May 28 for 25,000-30,000 mt of granular urea and 5,000-6,000 mt of prilled urea. The material is slated for multiple buyers in Turkey.
Croatia:
Nitrogen and NPK producer Petrokemija reported on May 27 that it will shut its ammonia and urea plants from May 28 to June 11 for planned technical maintenance.
The shutdown will enable the optimization of production according to market demand, and will allow for the necessary repair and maintenance of equipment in order to minimize the risk of unplanned shutdowns during the autumn season, according to a SeeNews report, citing a company filing.
The Croatian producer said sufficient volumes have been secured to maintain supplies to the domestic and regional markets.
Indonesia:
Just before RCF released the figures from its tender, PIH called a selling tender for its subsidiary urea plants. The tender closed May 28 for 45,000 mt of granular urea and 10,000 mt of prilled with a reserve price of $375/mt FOB.
Koch won an award for 40,000 mt of granular urea at $385.20/mt FOB. Golden Barley took 10,000 mt of prilled at $376.10/mt FOB. Both awards are for July shipment.
The July loading time eliminates the use of these awards in the RCF tender, which has a June 30 shipping deadline. The granular price, however, would just work with the current Indian price.
The new price represents a significant leap upward. The last business done for both prills and granular from Indonesia was in the mid-$320s/mt FOB.
Brazil:
Urea prices in Brazil are edging up. Sources are calling the Paranagua market $413-$440/mt CFR. Some traders outside the country have a tighter view of the market, saying business is mostly restricted to the $420-$430/mt CFR range. However, producers claim the real price is closer to $445/mt CFR, but without any evidence to back up that assertion.
Some of the upward movement comes from expectations related to the Indian tender and its higher prices. At the same time, however, there appears to be a real shortage of material inland. Buyers are looking to top off their requirements in preparation for the August and September application season.
Rondonopolis is pegged at $525-$580/mt FOB ex-warehouse. The barter rate changed this week to 62.77 bags of corn for 1 mt of urea at Rondonopolis.