US Gulf:
NOLA urea barges were quoted in the $600-$635/st FOB range, with $600-$605/st FOB being the most prominent numbers reported. Week-ago prices were $620-$672/st FOB.
Eastern Cornbelt:
Additional softening in the NOLA barge market pushed urea prices lower in the Eastern Cornbelt in late September. The regional market was pegged at $680-$700/st FOB, down from $695-$705/st FOB the week before, with the low confirmed at Cincinnati, Ohio, at midweek.
Western Cornbelt:
Urea pricing continued to drop during the week. Sources pegged the Western Cornbelt market in a broad range at $660-$690/st FOB, depending on location, with the low confirmed at St. Louis, Mo.
In the Northern Plains, new urea offers were reported at $685-$700/st FOB St. Paul, Minn., with delivered pricing pegged in the $740-$765/st range in the Dakotas.
California:
Urea was quoted in a broad range at $760-$840/st FOB in California, depending on location. No current delivered prices were confirmed in the state.
Pacific Northwest:
The urea market slipped to $735-$740/st FOB in the Pacific Northwest, down $15/st from last report, with the low confirmed at Rivergate, Ore. Rail-DEL urea pricing was pegged in the $740-$750/st range in late September.
Western Canada:
Urea prices were reported in a broad range at C$1,085-$1,120/mt FOB in Western Canada, down from C$1,130-$1,150/mt FOB in early September. Delivered pricing was also lower at C$1,110-$1,140/mt, compared with C$1,135-$1,150/mt DEL at last report.
India:
Sources still expect the next tender to be called by mid-October. This timing would allow for all the tonnage awarded in the last tender to be assigned vessels, removing the possibility of a producer backing off from the deal in favor of the expected higher price in the next tender.
RCF is running a small tender for KSCL in Nepal. The tender for 30,000 mt of granular urea closes on Oct. 7, with shipping to take place within 30 days of the issuance of the purchase order. The urea is to be shipped in 50 kg bags for delivery to KSCL warehouses in Nepal.
Black Sea:
Sources pegged the Black Sea prilled urea price at $550-$580/mt FOB. There are reports that some additional sales from the far eastern portion of the Black Sea out of Georgia and neighboring countries are at higher levels. Prices from last week as high as $700/mt FOB do not seem to have been repeated this week.
Indonesia:
Producers have been quiet with pricing ideas as they process the movement of previously purchased tons. Sources report some rumblings that Pusri is preparing the paperwork for a selling urea tender in October. Some have speculated the call could come as early as the next week.
Middle East:
The shutdown of the Nord Stream natural gas pipeline has raised concerns that urea production will be further curtailed in Europe. All eyes quickly turned to Egypt for the necessary product.
Until the damage to the gas pipeline occurred, sources were speculating that prices in Egypt would come off dramatically from the $850/mt FOB level that producers last received in a public deal. Now, sources still expect to see prices lower than that level, but not as much as before the pipeline incident.
Prices out of the Arab Gulf remain steady at $645-$650/mt FOB, based on the most recent Indian tender. Sources said there have been no new spot deals to move the price as producers work to fill the orders placed from the tender and to cover other contracts.
China:
There was a reported sale of up to 30,000 mt of granular urea to two Mexican buyers in the mid-$690s/mt CFR. With freight costs pegged at $70/mt, sources said the netback to China would be in the mid-$620s/mt FOB. The deal was reportedly brokered by a Chinese trader.
This amount bumps up against other reports that Fudao closed a deal for granular at $645-$650/mt FOB. The Fudao price represents a slight drop in the price estimated from the latest Indian urea tender.
The Mexican deal is set for shipment in October or early November, while the Indian-related business needs to ship by Oct. 21. Sources had been talking about softer prices going into the next quarter, despite expectations that India still needs to buy 3 million mt for this application season and Ethiopia appears to be gearing up for a 1 million mt tender.
Prills from China are showing a marked bearish view, with sources pegging the price at $620/mt FOB with further drops to come.
The export price offers Chinese traders potentially excellent margins. Reportedly, granular product is being offered at $349-$350/mt FOB ex-factory, with bids at $339-$341/mt FOB ex-factory.
The wide margin makes some international traders nervous. If a Chinese trader offers tons for export substantially below the existing market levels in an Indian tender, no other firm will be able to match the low price, leaving India with only the few tons offered at the low price. At the same time, the rest of the market will face growing reserves from other producers that could lead to a price collapse.
Reports of port warehouse inventories showed 185,000 mt for September, down 33% from the average. Sources said the current supplies appear to be tonnage arriving to cover sales into the previous Indian tenders. Some of the tonnage may also be export-approved tons for the next tender. Sources said they expect to see an increase in export permit requests as the date of the next Indian tender approaches.
Nepal:
A tender for 30,000 mt of granular urea is being conducted by RCF of India on behalf of KSCL of Nepal. The tender closes Oct. 7. The tender is to be shipped in 50 kg bags within 30 days of the issues of a purchase order.
Delivery of the product is slated for three warehouses in Nepal. Birgunj is to receive 11,500 mt, Biratnagar will get 8,500 mt, and Bhairahawa will receive 10,000 mt.
After several failed tender attempts, the Nepalese government authorized contracting with foreign companies such as RCF to supply material to domestic companies for distribution.
Thailand:
Imports of urea for January-August 2022 were reported at 1.5 million mt by Trade Data Monitor, down about 8% from the 1.6 million mt imported during the same period of 2021. The main suppliers so far this year were Saudi Arabia with 588,000 mt, Qatar with 325,000 mt, and Malaysia with 313,000 mt.
August 2022 imports were reported at 212,000 mt, up 36% from the 156,000 mt imported during August 2021. Saudi Arabia led the way with 94,000 mt, for 44% of the import market. Malaysia sent 54,000 mt for 26% of the market, Qatar shipped 32,000 mt for 15% of the market, and Bahrain sold 25,000 mt for 12% of the market.
Saudi Arabian suppliers have had a long relationship with Thai buyers. Often the landed price in Thailand was equal to or below the publicly posted FOB price from the Saudi ports.
Brazil:
A lack of buying interest has pushed down the landed urea price to $660-$690/mt CFR. Sources said even as the price drifted downward, some buyers were pushing for an even greater drop by bidding at $630/mt CFR. These aggressive buyers were unsuccessful.
Rondonopolis also showed a decline in prices, with sources reporting deals at $815-$855/mt FOB ex-warehouse.
Stepped up soybean planting in the center of the country could soon see demand for urea pick up. Sellers are hoping the demand will be strong enough to stem the steady drop in prices.