US Gulf:
NOLA granular urea barges topped out and were in retreat as the week progressed. The market was called $630-$680/st FOB, down from the week-ago $680-$710/st FOB.
Eastern Cornbelt:
Urea prices in the Eastern Cornbelt were pegged at $715-$745/st FOB for new offers, with both the high and low confirmed at Cincinnati, Ohio, as the week progressed.
Western Cornbelt:
Urea prices were slipping in the Western Cornbelt, fueled by falling NOLA barge values. The regional market was pegged $690-$720/st FOB, depending on location and timing, with St. Louis, Mo., pricing reported at $690-$705/st FOB, down from the prior week’s $710-$725/st FOB range.
The Catoosa/Inola, Okla., urea market was reported at $702-$715/st FOB during the week, with St. Paul, Minn., pricing quoted at $705-$730/st FOB.
California:
Urea prices were moving up in California, with reports of new bulk offers firming to $840/st FOB Stockton, up from the previous $710-$760/st range FOB port terminals. Reference prices for bagged urea were reported at $900/st FOB Stockton.
Pacific Northwest:
The urea market was pegged at $750-$755/st FOB in the Pacific Northwest, with the low confirmed at Rivergate, Ore. Rail-DEL pricing ranged from $730-$780/st FOB in the region, up from $650-$670/st DEL in mid-August.
Western Canada:
Urea prices continued to climb in Western Canada, fueled by the recent surge in NOLA barge pricing and Europe’s gas-related nitrogen outages.
Sources pegged the market at C$1,100-$1,135/mt FOB for September tons and up to C$1,130-$1,150/mt FOB for October-November, with new delivered postings also confirmed in the C$1,130-$1,150/mt range.
India:
The urea industry spent the past week looking for indications of how prices will go in the Indian tender that closed on Sept. 9. They were also speculating where the tonnage will come from to cover the 1 million mt desired by RCF.
The first set of offers were opened in the so-called technical round, showing 16 companies offering a total of 2.25 million mt. Offers to deliver to West Coast ports dominated the offers at 1.2 million mt. East Coast deliveries came in at 930,000 mt. In addition to the 2,155,900 mt offered by traders, Fertiglobe offered 90,000 mt on an FOB basis.
| Offering Company | Quantity Offered (mt) | Delivery Port |
| Ameropa | 47,150 | Mundra |
| 47,150 | Mundra | |
| 47,150 | Pipavav | |
| 42,000 | Pipavav | |
| 47,150 | Kakinada | |
| 47,150 | Paradip | |
| 47,150 | Krishnapatnam | |
| 42,000 | Krishnapatnam | |
| Swiss Singapore | 90,000 | ECI |
| 200,000 | WCI | |
| OQ Trading | 90,000 | ECI |
| 135,000 | WCI | |
| Samsung | 45,000 | ECI |
| 180,000 | WCI | |
| Midgulf | 100,000 | ECI |
| 100,000 | WCI | |
| Sabic | 100,000 | WCI |
| Aries | 95,000 | ECI |
| Fertcom | 45,000 | ECI |
| 45,000 | WCI | |
| Fertiglobe | 90,000 | WCI |
| Koch | 45,000 | ECI |
| 45,000 | WCI | |
| Gavilon | 45,000 | ECI |
| 45,000 | WCI | |
| Keytrade | 38,000 | ECI |
| 42,000 | WCI | |
| Dreymoor | 60,000 | WCI |
| Sun International | 54,000 | ECI |
| AgriCommodities | 50,000 | ECI |
| Wilson | 50,000 | ECI |
Throughout the week, traders focused on the dangers to the market if prices come in too high or too low. Rumors circulated earlier in the week that at least one trader was holding a cargo that had to be liquidated at $580/mt FOB from the Arab Gulf. If that trader dumped that load on the Indian tender, the price into India would have been around $600/mt CFR. The buyer would have been required to accept that offer as the lowest one presented and ask other traders to match the price. Sources said no one would be able to meet that price, leaving RCF with only that one cargo. This would force India to call another tender quickly.
If prices were too high, RCF would be reluctant to take the full 1 million mt it wanted. Sources said only by having prices in the $650-$720/mt CFR range would there be enough tons to cover the 1 million mt demand at a price the Indian treasury could accept.
Another quick tender because of a limited take due to high prices or because of an outlier disrupting the market would have pushed the market to much higher levels, said sources. The week opened with traders speculating that offers would be around $700-$720/mt CFR. As the week progressed, however, softer prices began to filter into the discussions. By the end of the week most were convinced the price would settle at $650-$680/mt CFR.
Sources said reports out of India indicate prices appear to be at $670-$680/mt CFR for East Coast arrival and $685/mt CFR for West Coast deliveries, with no word on the price connected to the direct offer of 90,000 mt by Fertiglobe. Sources said RCF will most likely not release the prices until Monday. One trader said RCF is notorious for being methodical and bureaucratic in its handling of tenders.
If the rumors are true, sources said the urea market will see a slight bullish shift, but no major jolts to pricing or availability.
Sources said it may be difficult, but not impossible, for RCF to secure all the tons it wants. Estimates are that the buyer should be able to secure 800,000 mt for sure and possibly the full 1 million mt. The bulk of the tonnage is expected to come from the Arab Gulf. Chinese product could be limited to only 100,000 mt or two cargoes.
There are expectations that some sizable offers backed by Russian tons will also play a role in the tender. At least a cargo or two is expected from Indonesia and Nigeria. Product from Vietnam is seen as too expensive to be offered into India.
For traders looking to snag an award, the wild card remains China. While sources said 100,000 mt would likely be the total authorized for export, they have a series of concerns. Reportedly so far not even the expected 100,000 mt has cleared the customs process in China, and there is concern the paperwork might not be completed in time for the Oct. 21 shipping deadline.
On the other hand, some have raised concerns that the clearance process could be sped and more than the 100,000 mt might be made available for export. Either way, said one trader, all calculations will have to be redone.
As of the calling of the tender, India had an expected annual deficit of 4 million mt of urea. If RCF achieves its goal of 1 million mt, the country will need to bring in another 3 million mt by the first quarter of 2023. Sources expect to see even higher prices as India would have to compete with buyers around the world at a time when winter will require governments to emphasize natural gas supplies for home heating instead of industrial output.
Local media reported calls for more intensive inspections at warehouses to ensure subsidized urea purchased for agricultural purposes is not diverted to industrial use. To prevent the possibility of diversion, the government mandated all subsidized urea be coated with neem. The coating helps slow the distribution of urea into the soil and makes it unusable in industry.
The call for stepped-up investigations came as more reports surfaced of local distributors removing the neem and selling the urea to local factories.
Black Sea:
Sources reported public deals coming out of the Black Sea are not from Russia, but from its eastern neighbors. Shipments are heaping out of Poti in Georgia on the eastern shore of the Black Sea. Other deals from Uzbekistan and Turkmenistan are also being shipped out.
Sources put the price of the granular shipments around $690-$730/mt FOB, with prilled sales pegged at $550-$600/mt FOB. Reportedly, the upper end of the range was where deals were discussed at the beginning of the week. As the week ended, however, the discussion slipped to the lower end of the range.
Some Russian material is expected to be offered in the Indian tender. Sources said the tonnage is most likely part of the offers submitted by companies that have traditionally handled Russia urea. The most likely players are Dreymoor and Trammo.
Indonesia:
Sources reported a urea sale to Swiss Singapore at $600-$623/mt FOB. The deal showed a continued mild strengthening in Indonesian prices. The tonnage is expected to be included in the RCF/India tender offers. Reportedly producers settled after pushing hard for $700/mt FOB.
Middle East:
Sources said Arab Gulf producers are expected to supply at least 250,000 mt for trader offers into the Indian tender. Only one direct offer of 90,000 mt was made by Fertiglobe in the tender.
Sources reported the paper market for the Arab Gulf at $700-$750/mt FOB for September and $680-$695/mt FOB for October.
Reports circulated of a new cargo sold from an Iranian source to Brazil at $530/mt FOB. Once freight and costs are added in, sources said the landed price would be about $690/mt FOB. This would be about $100/mt below the current landed price in Brazil, but not an unusual gap in pricing. Rumors circulated in Brazil this week that a cargo selling for less than $700/mt CFR was coming from Iran.
A late-week deal out of Egypt softened prices out of the North African country. Sources said a deal closed at $850/mt FOB. The final destination was unclear, but sources said it could be combined with other smaller Egyptian deals into an offer to India under its tender.
The product could also be headed to Europe. Sources reported the high price of natural gas in Europe makes importing urea – even at high prices – more favorable than producing the product. Several sales in July and August showed a growing interest in Egyptian urea by European buyers, pushing the price higher each day. After a few weeks rest, the price seems to have come off the $885-$900/mt FOB deals.
Egyptian producers have indicated they expect to see demand for their urea step up into the fourth quarter. At that time, they also expect to see prices hit $1,000/mt FOB.
The paper market for Egypt is not as bullish on pricing, however. Sources reported the paper market for Egyptian urea through the end of the year is steady at $810-$840/mt FOB.
China:
Sources said at least 100,000 mt of Chinese urea is expected to be offered in the RCF/India tender. Traders said the number makes sense and fits with the general view that China will slowly release limited quantities of urea for export. However, one trader said he was unsure if the paperwork to release the tonnage has even started.
Traders said offers of Chinese material in the RCF tender will be made only if there are assurances the tons will be released to allow the trader to meet the tender’s Oct. 21 shipping deadline.
Sources estimated the current export price to be about $580/mt FOB for either prilled or granular urea. However, one trader noted he has only seen prilled urea in the portside lineups.
Brazil:
Business is slow, as buyers and sellers spent the week speculating about the Indian tender. Prices this week came out to $780-$800/mt CFR on limited business.
International traders said Brazil will soon have to step up its urea purchases, and the competition for product could see higher prices. Likewise, sources said buyers in Brazil had the benefit of several floaters being unloaded at once. An international trader noted the floaters are now gone and Brazil will still need more product.
Lower-priced urea from Iran and Venezuela is not expected to mitigate any upcoming price increases. Sources said once the discounted material arrives, it is worked into the local distribution network where the price savings vanish.
Reports in Brazil of a cargo coming from Iran for less than $700/mt CFR were confirmed from international traders. The cargo reportedly sold for $530/mt FOB out of Iran. Once freight and costs are tacked on, the landed price is estimated at $690/mt CFR.
Deals in Rondonopolis closed higher at $910-$955/mt FOB ex-warehouse. Some of the buying is expected to slow down. Blenders have begun to talk about buying the cheaper ammonium sulfate to supply the nitrogen requirements for their products.
January-August 2022 urea imports were reported at 4.5 million mt by Trade Data Monitor, down about 4.5% from the 4.7 million mt imported during the first eight months of 2021. The top three suppliers were Oman with 885,000 mt, Nigeria with 820,000 mt, and Qatar with 807,000 mt.
August 2022 imports were reported at 698,000 mt, up 27% from the 551,000 mt imported in August 2021. The main suppliers this year were Russia with 158,000 mt, accounting for 23% of urea imports; Qatar with 130,000 mt for 19% of the import market; and Iran with 99,000 mt for 14% of the imported urea.