U.S. Gulf:
NOLA granular urea rebounded to $420-$430/st FOB, up from the week-ago $400-$417/st FOB. Reasons given for the uptick included expectations for another Indian tender and that there would be no Chinese exports in the near term.
Eastern Cornbelt:
Urea prices continued to fall in the $453-$470/st FOB range in the Eastern Cornbelt, with the low reported at East Dubuque, Ill., for August-September tons. The Cincinnati, Ohio, market was pegged in the $460-$470/st FOB range at midweek.
Western Cornbelt:
The urea market was quoted at $453-$470/st FOB in the Western Cornbelt, with the low reported at Camanche, Iowa. The urea market was quoted at $453-$470/st FOB in the Western Cornbelt, with the low reported at Camanche, Iowa. Sources pegged the St. Louis, Mo., market in the $460-$465/st FOB range, with the same level reported at St. Paul, Minn., and Catoosa/Inola, Okla.
California:
Sources quoted the urea market in a broad range at $545-$600/st FOB in California in early August, with the low reported at Stockton and the high reflecting smaller one-off sales to retailers. There were also reports of rail-DEL offers in the $530-$550/st range, although no actual business was confirmed at that level.
Pacific Northwest:
Urea continued to be posted at $525/st FOB Rivergate, Ore., and $530/st FOB Aurora, Ore. Rail-DEL pricing remained at $525-$528/st in the Pacific Northwest.
Western Canada:
Urea prices were down slightly in Western Canada, to C$630-$655/mt FOB and C$650-$665/mt DEL, depending on location and time of shipment.
India:
Reports out of India indicate RCF has been given the green light to prepare for another urea tender. Supposedly, the Department of Fertilizers has authorized the next tender for September shipments of urea.
Sources said RCF may hold off calling the tender until vessels are named for all the urea awarded in the previous tender. So far, vessels for 575,000 mt of Chinese urea have been nominated, but sources said no ships have been named for the cargoes slated to come out of the Arab Gulf. Traders said they expect to see nominations early next week.
The next tender will have some interesting dynamics to deal with. Sources said the ban on exports from Chinese state-run companies could have an impact on the amount of urea coming from that country. At the same time, the Ma’aden facility in Saudi Arabia, while rumored to be restarting this week, is not expected to be at full capacity in time to provide strong support for offers into the upcoming tender.
Another issue facing shipments to India is that the lineup for vessels into Chinese ports remains problematic. The Chinese government is limiting the number of foreign vessels allowed into its ports. Especially hurt, said traders, are the northern ports, where much of the exported urea originates.
There is hope that the situation will smooth out by the end of the month in time to handle any sales from China to India. However, how the port situations are handled will largely depend on how well China deals with the COVID-19 variants.
China:
There is lots of discussion about much lower urea prices in China, but few examples of done deals.
Sources reported some small sales to Asian regional buyers that reflected a netback for prilled urea at $452-$455/mt FOB. There were also unconfirmed reports that deals might have been done in the upper-$440s/mt FOB, with one trader saying a bid of $445/mt FOB will get a closed deal. On top of these rumors, sources said the export price should be $435/mt FOB based on what domestic buyers are paying.
No sales of granular product were reported this week, but that did not stop industry players from speculating on what the price should be. Many are arguing that the price to export granular needs to be at parity with prilled in the upper-$440s/mt FOB.
Nailing down the price of Chinese urea is not easy. The government reminded state-owned producers they are banned from making any new offshore sales. At the same time, there was talk that some domestic traders might try to get their hands on product from these producers on the pretext of offering it to domestic distributors, but then turn around and offer the material to international traders for India.
International traders said such a move could happen, but most likely not on a scale that would affect the price into India.
Producers with existing export contracts are having issues getting their tons out. Sources said there are still delays of non-Chinese vessels being allowed to dock and load their cargo. COVID-19 related restrictions on the number of foreign vessels allowed into Chinese ports is slowing much of the export business currently in hand.
Sources said new nominations for vessels into China will take the potential delays into account. Traders speculated that it could take another 10-14 days for the situation to smooth out and for the sense of uncertainty to fade.
Middle East:
Urea offers have reportedly dropped to the low-$460s/mt FOB, but with no deals confirmed. If any arrangement is made in this area, that would drop the price about $20/mt from what was paid in the previous Indian tender.
The paper market for the Arab Gulf shows prices lower than what was achieved in July. August pricing is pegged at $460-$470/mt FOB, with some arguing for the low-$470s/mt FOB. September prices are in the $460s, with October dropping to near $450/mt FOB. All in all, sources said the anticipation of the return of Ma’aden to production is influencing predictions of softer prices.
Rumors are circulating that the Ma’aden plant has restarted, but sources said they have not seen any confirmation from the Saudi company. Speculation is that the plant is in its initial test stage to see if it can sustain full production.
The re-emergence of the Ma’aden plant will ease upward pressure on urea prices going into the next Indian tender. Sources said if the plant does begin serious production by the end of the month, some of its output could easily be in play in the tender.
There are unconfirmed reports of small lots being sold out of Egypt in the $470s/mt FOB. The sales just confirm the stability of pricing from that country. Sources in Egypt said they have seen nothing to justify shifting the published price of $465-$472/mt FOB.
Black Sea:
Sources reported small urea deals out of Yuzhnyy in the $440s/mt FOB. The pricing matches with the softening of urea markets elsewhere in the world.
Reportedly, Toros in Turkey scrapped its tender from last week because the offering prices were too high. The company has now sent out inquiries looking for 30,000 mt of granular urea for September delivery.
Indonesia:
Sources said the next big urea sale will not happen until the end of the month. Kaltim will be busy shipping the 84,000 mt it awarded to three traders last week, and other producers will be looking to the domestic market.
If the price in the late August sale is low enough, sources said Indonesian urea could play a major role in the expected Indian tender. The expected reduction of available Chinese tons, plus a tight Arab Gulf market, leaves only Indonesia as a possible large-scale supplier to India.
Brazil:
Urea pricing ideas in Brazil are all over the place. International traders outside of Brazil are calling the Paranagua market in the upper-$460s/mt CFR. At the same time, however, traders in Brazil said the price range is $475-$490/mt CFR.
Sources said the higher estimates from the Brazilians are in reaction to reports of delays that vessels are facing getting into ports and getting their cargoes unloaded. The demurrage costs are affecting the landed price and giving the Brazilian urea market players large headaches.Sources also said much of the discussion of sub-$470/mt CFR pricing is just talk.
What is clear is that all eyes are on the next Indian tender. Brazilian buyers watched how the price dropped following the last tender when so many Chinese tons were supplied. The uncertainty of how many Chinese tons will be available the next time are making some buyers anxious that there could be a rebound in prices next month.
In Rondonopolis, the price range tightened as buyers looked to the future. Sources pegged the market at $600-$652/mt FOB ex-warehouse, reflecting a slight dip at the upper end and an increase at the lower end of the range.
The barter rate in Sorriso was put at 75 bags of corn for 1 mt of urea. Sources said no one was quoting barter rates in Rondonopolis.