U.S. Gulf:
Increases in the Arab Gulf and Brazil markets set the stage for continued firming in the NOLA granular urea market, sources said.
Coupled with sweeping upward moves across the nitrogen spectrum, urea barges releasing in September were quoted trading up to $650/st FOB for a loaded barge, while players reported tons loading in the September-October window kicking off the week at a $599/st FOB low. Most of the week’s 30-day volume was noted settling in the $600-$625/st FOB range by the end of the week.
Material loading in November and December was reported changing hands in the $590-$640/st FOB range, with prices increasing as the week wore on.
Eastern Cornbelt:
The urea market was pegged at $640-$660/st FOB in the Eastern Cornbelt, up from the prior week’s $585-$630/st FOB range, with the lower end of the range reported at Cincinnati, Ohio, early in the week.
Western Cornbelt:
Urea prices jumped to $640-$650/st FOB in the Western Cornbelt, with the low reported at St. Louis, Mo., earlier in the week, and the high for new spot sales in Iowa. The $650/st FOB offer was pulled as the week progressed, however, with higher numbers expected.
Northern Plains:
The urea market reportedly jumped to $640-$690/st FOB St. Paul, Minn., as the week progressed, up from $610-$650/st FOB during the prior week. Delivered pricing in the Northern Plains was reported at $680-$725/st, depending on location, up from $650-$695/st DEL the week before.
Northeast:
The urea market FOB Fairless Hills moved to $650/st FOB on Sept. 29, up from $620/st on Sept. 27 and $550/st on Sept. 20. No current prices were confirmed at East Liverpool, Ohio, in late September. The Savannah, Ga., market was pegged at $640-$680/st FOB, with the low reported earlier in the week and the high on Sept. 30.
Eastern Canada:
Urea prices in late September ranged broadly at C$745-$835/mt FOB in Eastern Canada, depending on location. Those levels were up from C$715-$765/mt FOB in mid-August.
Pacific Northwest:
Urea pricing at Rivergate, Ore., firmed to $720/st FOB during the week, up from the previous week’s range of $600-$650/st FOB.
India:
The RCF urea tender closed on Oct. 1 with 12 companies offering a total of 1.944 million mt. East Coast offers totaled 1.024 million mt, indicating a strong presence of Chinese material. West Coast offers were at 830,000 mt. Two producers offered a total of 90,000 mt on an FOB basis. This is the most urea offered in an Indian tender since the May 4 MMTC tender, when 2.2 million mt were offered.
In a surprise move, RCF also quickly released the prices offered in the tender. Amber came in with the lowest offer to the East Coast at $665.50/mt CFR and Dreymoor into the West Coast at $714/mt CFR. The last tender in July was priced at $510-$517/mt CFR.
| Offering Company | US$/mt CFR | Quantity (mt) | Discharge Port | Notes |
| Amber | 665.50 | 65,000 | Krishnapatnam-Paradip-Kakinada | L1 East Coast |
| 730.50 | 65,000 | Mundra-Pipavav | ||
| Ameropa | 790.00 | 60,000 | Krishnapatnam | |
| 790.00 | 50,000 | Krishnapatnam | ||
| 790.00 | 50,000 | Gangavaram | ||
| 790.00 | 51,500 | Kandla | ||
| 790.00 | 52,500 | Mundra | ||
| 790.00 | 50,000 | Pipavav | ||
| Continental | 758.00 | 45,000 | Krishnapatnam-Kakinada-Vizag-Gangavaram | |
| 755.00 | 47,500 | Mundra-Kandla-Adani Tuna | ||
| 755.00 | 47,500 | Mundra-Kandla-Adani Tuna | ||
| Midgulf | 695.00 | 50,000 | Krishnapatnam | |
| 695.00 | 50,000 | Gangavaram | ||
| 725.00 | 50,000 | Mundra | ||
| 725.00 | 50,000 | Adani Dahej | ||
| Dreymoor | 665.95 | 62,000 | Kakinada | |
| 714.00 | 52,000 | Pipavav | L1 West Coast | |
| Medallion | 704.79 | 50,000 | Gangavaram-Krishnapatnam-Kakinada-Karaikal-Dharma-Vizag-Paradip | |
| 727.79 | 45,000 | Kandla-Pipavav-Mundra-Adani Tuna | ||
| Koch | 725.00 | 65,000 | Krishnapatnam-Gangavaram | |
| Samsung | 759.30 | 50,000 | Kakinada | |
| 759.30 | 48,000 | Krishnapatnam | ||
| 759.30 | 45,000 | Karaikal | ||
| 754.50 | 48,000 | New Mangalore | ||
| 754.50 | 90,000 | Kandla | 2 lots of 45,000 mt | |
| 754.50 | 135,000 | Mundra | 3 lots of 45,000 mt | |
| 754.50 | 100,000 | Pipavav | 2 lots of 50,000 mt | |
| Swiss Singapore | 759.00 | 90,000 | ECI | 2 lots of 45,000 mt |
| 759.00 | 90,000 | WCI | 2 lots of 45,000 mt | |
| Transglobe | 750.00 | 50,000 | Paradip | |
| 795.00 | 50,000 | Pipavav |
Offers of 45,000 mt each came from producers PIC at $690/mt FOB and Fertiglobe at $710/mt FOB. Most likely, the tons would be sent to a West Coast port.
Going into the latest RCF urea tender, the range of estimated total offers ranged from 700,000 mt to 1.3 million mt. Sources speculated that China could supply as much as 700,000 mt, with most saying the number is closer to 250,000-300,000 mt.
Inquiries for vessels to move urea from Egypt and the Arab Gulf in late October and early November indicate that some traders are looking to offer tons from those regions as well. Any urea from the Black Sea is out of the running, however. The closure of the Ukrainian plants in that area due to high gas prices eliminated 100,000-200,000 mt of urea that normally would have been offered into India.
With freight from China pegged at $40/mt, the Amber offer of $665.50/mt CFR puts the netback to China at $625/mt FOB before trader costs. Sources said freight from the Arab Gulf is now about $30/mt, leading to a netback in the low-$690s/mt FOB based on the Dreymoor low offer for the West Coast at $714/mt CFR. At that rate, the PIC offer will most likely be accepted along with the trader tons.
Pakistan:
In a rare move, Pakistan will be re-entering the urea buying market. The Economic Coordination Committee granted permission to 100,000 mt of urea to be imported. Sources said TCP will most likely handle the deal.
China:
The statement by the National Development Reform Commission (NDRC) blocking phosphate exports through June 2022 made many in the urea industry nervous that nitrogen exports will be next. So far, however, the NDRC has not applied its rules to the urea industry.
Sources said there is 250,000-300,000 mt of urea already in the hands of international traders at portside warehouses. Reportedly, these tons should be allowed to be exported to India, if awarded, without any hindrance from the Chinese government.
However, in the phosphate edict, the NDRC told producers that product already under contract should be decreased in tonnage or delayed. The NDRC also suggested canceling the contract as a last resort. Similar actions could be taken against the urea at the warehouses, said sources, if the NDRC decides more urea is needed for the domestic market.
East Coast offers in the RCF/India urea tender totaled just above 1 million mt, indicating a strong Chinese presence in the tender. Sources said some of those offers may be double counted – that is, some producers may have backed different traders to better ensure a sale in the tender. The low offer in the East Coast of India by Amber at $665.50/mt CFR indicates a netback to China in the low-$620s/mt FOB.
Before the RCF tender close, there were reports late in the week that a broker was offering 50,000 mt at $565/mt FOB for October loading. Sources could not confirm if anyone made a bid on the product. Given the current unclear situation about urea exports, however, one trader said most traders are probably nervous about committing to take the product.
At the same time, there are also reports of small deals at $500/mt FOB to Southeast Asian buyers. Sources said the sales were only for a few thousand tons, and any larger quantities, such as those needed by India, would not see such a favorable price.
The NDRC wants to limit urea exports to ensure a plentiful supply of urea for the domestic market at a stable price. All international deals being quoted are at $500/mt FOB and up. Sources reported quotes for domestic sales out of the factory at a mid-$450s/mt FOB export equivalent rate. If this holds, then the actions of the NDRC paid off.
Middle East:
The week opened with reports of Fertiglobe selling a cargo out of the Arab Gulf at $620/mt FOB. This price represents a jump of $135/mt from the last spot deal. The week closed with an estimated price in the $690s/mt FOB based on the offers in the RCF/India urea tender.
Sources said discussions have taken place that reflect ever higher prices from the old $480-$485/mt FOB. However, the Fertiglobe deal is the first confirmed sale on the spot market.
If that earlier price had held, offers of Arab Gulf material into India would have been at a near-record high of $640/mt CFR. In the end, the Dreymoor offer of $714/mt CFR for a West Coast delivery pushed the netback into the low-$690s/mt FOB. A direct offer of $690/mt FOB by PIC also helped set the tone for new pricing.
Egyptian prices keep rising with strong demand from Europe. Last week, Egyptian producers knocked on $600/mt FOB for November shipment and kept pushing for more. Fertiglobe closed a deal at $610/mt FOB for November. This represents the highest price achieved by an Egyptian producer since October 2008, according to one trader. The previous high price, according to Green Markets, was $425/mt FOB in March 2014.
Producers continue to push on their pricing ideas. Reportedly bids from European buyers at $615-$620/mt FOB were rebuffed. Sources also said traders holding some earlier Egyptian tons are being approached with bids of $620/mt FOB.
To back up their position, producers point to reports from the Baltics that sales there took place at $610-$615/mt FOB. The traditional gap between the Baltic and Egyptian markets would put the Egyptian price at $650/mt FOB.
Sources reported that by the end of the week, producers were rejecting $650/mt FOB. Initial reports had producers stepping away from discussing any more November or December business. However, right after the RCF prices were announced, Helwan announced that it settled a 10,000 mt sale of granular at $700/mt FOB.
Even as the price haggling takes place, a number of companies have sent in enquiries for vessels to move Egyptian material to India in November. The speculation is that some deals may be cut to include Egyptian material in the RCF tender.
Indonesia:
After Liven won the Kaltim auction at $502/mt FOB for 35,000 mt, sources reported that the producer has been shopping around extra tons at the same price. All told, sources said Indonesian producers could have about 250,000 mt to move in this quarter.
One trader said the $502/mt FOB price could make Indonesian material an attractive possibility in the RCF/Indian tender. With Chinese and Arab Gulf prices up, an offer of Indonesian urea at the current price could provide a good profit margin for the trader.Sources said another Indonesian auction will most likely not happen until December.
Brazil:
The jump in the urea price to $640/mt CFR last week prompted more discussion this week about where prices are going. Sources said most of the talk focused on $680-$700/mt CFR. In the end, however, this week ended similar to last week, with even a slight dip to $620-$645/mt CFR.
Once the RCF tender details are released, sources said the market is expected to move in accordance with the price set in India. Many traders in the area have been nervous about the rapid price rises in Egypt, the Arab Gulf, and China, while still waiting to see how many tons India will take.
Adding to the nervous nature of the market, sources looked at the actions taken by China’s NDRC on phosphates, and worried that it would declare a ban on urea exports as well.
During the week, sources were discussing higher prices in reaction to the Indian tender and Chinese government actions. Reports of material traders at $710-$725/mt CFR circulated. There were also reports from outside Brazil that a deal was done at $385/mt CFR. None of these deals could be independently verified by Green Markets.
Prices in the upper $370s/mt CFR are not unlikely, said sources. The jump to $640/mt CFR at the end of last week led a number of industry watchers to expect prices around $700/mt CFR this week. However, buyers and sellers are reportedly treading softly until more details are available from the Indian tender.
Rondonopolis held even at $660/mt FOB ex-warehouse, despite a lot of talk of higher levels needed by producers. The talk indicated prices should be in the $840s/mt FOB, but buyers remained reluctant to let the price run away that fast.
Thailand:
January to August 2021 urea imports in Thailand were reported at 1.58 million mt by Trade Data Monitor, up marginally from the 1.57 million mt imported during the same period in 2020.
August 2021 imports were up 46 percent, to 156,000 mt from 107,000 mt in August 2020. Saudi Arabia, Malaysia, and Qatar were the primary suppliers in August.
| Thailand Urea Imports January-August 2021 | |
| Supplying Country | Quantity (mt) |
| Saudi Arabia | 506,000 |
| Malaysia | 337,000 |
| Oman | 317,000 |
| Qatar | 208,000 |
| Indonesia | 138,000 |
| Total | 1.5 million |