US Gulf:
NOLA urea barges were reported at $505-$530/st FOB, down from the week-ago $520-$530/st FOB. Prices had already started to soften before word came on Nov. 16 of the much lower India tender prices. Lower NOLA numbers were heard again after the India news broke.
Eastern Cornbelt:
The urea market was pegged at $590-$610/st FOB in the Eastern Cornbelt, depending on location, down from the previous week’s high of $635/st FOB. Pricing at both Ottawa, Ill., and Cincinnati, Ohio, was reported at the $600/st FOB level at midweek.
Western Cornbelt:
Urea prices dropped to $575-$600/st FOB in the Western Cornbelt, down from the prior week’s $580-$610/st FOB range, with the high reported in Iowa. The St. Louis, Mo., urea market was pegged in the $575-$585/st FOB range at midweek.
Northern Plains:
Urea prices in the Northern Plains dropped to $600-$615/st FOB St. Paul, Minn., and $670-$710/st DEL in North Dakota, down from the previous $615-$630/st FOB and $685-$730/st DEL ranges. The latest offers FOB Carrington, N.D., were pegged at the $675/st level, down from $700-$705/st FOB in late October.
Northeast:
The last urea offers were reported at $665/st FOB Fairless Hills, Pa., but sources at midweek said that location is currently out of urea until a resupply vessel arrives on Nov. 24. Delivered urea was pegged at the $675/st level in central Pennsylvania, down significantly from the $740/st DEL level reported in late October.
In the South Central region, new urea offers FOB Convent, La., were quoted at $620/st, down $20/st from the previous level.
Eastern Canada:
The urea market in Eastern Canada remained at C$1,060-$1,120/mt FOB in mid-November, depending on location and supplier.
India:
The NFL tender closed on Nov. 14 with 16 companies offering 2 million mt for shipment by Dec. 22. Ameropa offered the lowest price for an East Coast delivery with 90,000 mt at $578.77/mt CFR. Fertiglobe was the lowest offer to the West Coast with 45,000 mt at $573/mt CFR.
Almost exactly a year ago, IPL closed a tender that had some of the highest prices seen in an Indian tender. The West Coast price was $981.64/mt CFR and the East Coast price was $998.50/mt CFR. Prices have edged downward in the intervening 12 months, dipping to $517-$520/mt CFR in July 2022.
Aarka was disqualified with an offer of 50,000 mt. The Indian buyer did not explain why. Only one urea producer offered directly in the tender, with PIC offering 45,000 mt at $605/mt FOB.
| Offers to East Coast India | |||
| Offering Company | Quantity (mt) | US$/mt CFR | Discharge Port |
| Ameropa | 90,000 | 578.77 | ECI-L1 |
| Fertiglobe | 45,000 | 580.00 | ECI |
| Dreymoor | 45,000 | 589.42 | Kakinada |
| Aries | 90,000 | 591.97 | Vizag-Kakinada-PDP |
| Samsung | 50,000 | 602.50 | Kakinada |
| Swiss Singapore | 75,000 | 605.00 | ECI |
| Gavilon | 50,000 | 608.00 | Krishnapatnam-Gangavaram-Karaikal |
| Keytrade | 45,000 | 610.00 | Kakinada |
| Midgulf | 94,000 | 610.90 | Gangavaram-Kakinada |
| Fertcom | 45,000 | 615.00 | ECI |
| Koch | 45,000 | 620.00 | Krishnapatnam-Gangavaram |
| OQ Trade | 52,500 | 630.00 | Kakinada |
| Offers to West Coast India | |||
| Offering Company | Quantity (mt) | US$/mt CFR | Discharge Port |
| Fertiglobe | 45,000 | 573.00 | WCI-L1 |
| OCI | 45,000 | 574.00 | WCI |
| OQ Trade | 105,000 | 575.00 | Mundra-Kandla |
| Fertcom | 45,000 | 575.90 | WCI |
| Ameropa | 182,150 | 578.77 | WCI |
| Dreymoor | 93,000 | 584.91 | Pipavav |
| Aries | 45,000 | 591.97 | Kandla-Pipavav-Tuna |
| Swiss Singapore | 200,000 | 597.00 | WCI |
| Indagro | 100,000 | 603.00 | Mundra-Tuna |
| Midgulf | 94,000 | 604.90 | Mundra |
| Keytrade | 45,000 | 605.00 | Kandla |
| Samsung | 135,000 | 610.20 | Mundra |
| Koch | 45,000 | 620.00 | Mundra-Kandla |
As expected, the West Coast offers dominated the tender with 1.18 million mt. Sources said, however, they were surprised at the number of tons offered for the East Coast. Twelve companies offered a total of 726,500 mt for East Coast ports. The large amount offered to the East Coast, said traders, could indicate more Chinese material might be available than had been previously estimated.
Counterbids were sent to the trading houses on Nov. 17 with the Ameropa and Fertiglobe prices as the basis for East and West Coast deliveries. Sources reported by the close of business on Friday, Nov. 18, NFL had received commitments from sellers for 1.4 million mt.
Initially NFL said it would take 600,000-800,000 mt because of budget constraints. However, once the prices were released, the Department of Fertilizer reportedly reviewed the situation and authorized NFL to take as many tons as possible. Estimates are now that the buying house is looking for 1-1.2 million mt. It is still unclear if NFL will take the full 1.4 million mt offered by sellers. If NFL is able to secure the tonnage newly offered, sources said no more tenders will be needed for the rest of the year.
The bulk of the material is expected to come from the Arab Gulf, with at least one cargo out of the Baltics. Going into the tender, sources said the view was that China would supply four cargoes. Rumors are now circulating that as many as six cargoes might be available.
The earlier estimate was based on reports that the tonnage for those lots had already passed the rigorous tests that allow for exports. The additional tons are suspected of not yet being cleared, but with every possibility of having the paperwork finished in time to meet the shipping deadline of Dec. 22.
January-September imports of urea were reported at 6.8 million mt by Trade Data Monitor, up 13% from the 6 million mt imported during the same period in 2021. Oman, Qatar, and Russia sent a total of 3.2 million mt, compared with 1.1 million mt in 2021. China has been a major supplier so far this year with 855,000 mt, but its sales into India are down from the 2.2 million mt sent last year.
Third-quarter 2022 imports were reported at 2.2 million mt, down 37% from the 3.5 million mt imported during the same period last year.
September 2022 imports were reported at 567,000 mt, down from 1.3 million mt in September 2021. Some 102,000 mt was imported from Finland in September, compared with no Finnish material in 2021. Sources speculated that the tonnage was most likely Russian urea railed through Finland and exported from a Finnish port, so the port of origin was recorded rather than the production source.
Indonesia:
Producers have fallen silent as urea prices drop. The companies are fulfilling their orders for export, but do not seem to be making any moves to hold another selling tender any time soon.
Sources said one reason for the lack of activity could be that the producers have used up their export allocations. Without new permits to export, they have to wait until January for the government to issue new permits for 2023. One trader noted that even when January rolls around, the companies and government offices will spend a lot of time negotiating how many tons each producer will be allowed to export. Much will depend on estimates of domestic urea needs.
Without any new deals, the last tender price of $675/mt FOB remains the official rate, even though the market has come off dramatically since that tender.
Middle East:
The netback to the Arab Gulf from the lowest West Coast India price in the NFL tender was estimated at $550-$555/mt FOB. This is only slightly lower than what traders claimed the price should be as the global urea market softened over the last month.
The only producer in the NFL tender, PIC, tried to draw the line at a massive price drop with its $605/mt FOB offer. Even this price showed that producers saw a softer market. The netback from the last Indian tender was estimated at $624-$626/mt FOB.
Industry watchers said the Arab Gulf producers should have enough material to cover most of the West Coast offers in the Indian tender.
Egyptian producers went quiet following the release of the NFL tender prices. Sources estimated that the netback to Egypt from India would be in the low-$530s/mt FOB. This would be a significant drop from the $630/mt FOB achieved just a few weeks ago during a European buying frenzy.
As the week closed, reports surfaced of a small cargo being sold at $565/mt FOB. Shortly after that, traders and producers confirmed that Alexfert sold 6,000 mt of granular urea to a trader for December shipment at $570/mt FOB without designating the destination. Sources reported the hopes of producers to hold the line at $600/mt FOB now seems to have faded.
Demand from European buyers has slackened, said sources. This lack of interest is having an impact on North African producers looking for buyers. Reportedly, the urea warehouses are full, with little demand on hand to clear them out. Sources said farmers appear to be holding off on making any commitments for first-quarter 2023 purchases. Traders are unsure if the lack of sales is related to late demand by farmers, or due to demand destruction. One trader said he fears it is more the latter than the former.
Black Sea:
Sources estimated the netback from the West Coast Indian tender price to Poti in the eastern Black Sea at about $505/mt FOB. Reportedly, at least one inquiry has been made for a vessel to that port but not for product to go to India.
The estimated price matched the low end of where sources called the estimated Black Sea market in the past week. However, because of the distance from the entrance of the Black Sea, the Poti estimated price is lower than that of material coming from other facilities in the area.
South Korea:
Sources reported at least one small deal into South Korea that showed a netback to China of $560/mt FOB. This deal was reportedly done before the numbers in the NFL tender were revealed, and proved prescient
January-October 2022 urea imports were reported at 776,000 mt by Trade Data Monitor, up slightly from the 751,000 mt imported during the same period in 2021. The main suppliers were China with 314,000 mt, Qatar with 183,000 mt, and Indonesia with 89,000 mt. Only China showed a reduction in year-over-year sales to South Korea.
October 2022 imports were reported at 22,000 mt, down from the 48,000 mt imported in October 2021. China supplied 19,000 mt of the 2022 tonnage.
China:
Going into the NFL tender, sources expected Chinese urea to cover only four cargoes. After the tonnage and price offerings were revealed, however, sources now estimate that up to six shipments might come from China.
Sources said the initial four cargoes will reportedly be covered by urea already approved for export by Chinese authorities. There is some suspicion that the other tonnage may not yet have cleared the process to allow for the exports.
The netback to China from the NFL tender is pegged at $555-$560/mt FOB. Just as the tender closed, however, sources said sales to South Korea and the Philippines showed netbacks at $550-$560/mt FOB.
Bangladesh:
The government authorized the purchase of 60,000 mt of granular urea at the beginning of November. According to local media reports, permission was granted for an additional 90,000 mt. The first lot is with SABIC for 60,000 mt. The second lot is with Fertiglobe backed by UAE material.
There are also media reports that BCIC is facing credit issues with Saudi banks to complete existing and future urea purchases. The issue revolves around payment procedures, and BCIC and the Saudi banks are reportedly working to solve the problem.
Ethiopia:
After failing to secure 690,000 mt and nailing down a 200,000 mt government-to-government deal with China, EABC has called a tender to purchase 500,000 mt of urea. The deal is for a series of 10 shipments in 50,000 mt lots to be shipped between December 2022 and June 2023.
The tender calls for two lots for December 2022, three lots during the first quarter of 2023, and the remaining five for the second quarter.
Brazil:
A stagnant market and a midweek holiday led to limited business in Brazil. Sources said the few deals that took place moved the market to $560-$600/mt FOB, with little hope of a price revival. Rondonopolis also saw a drop in pricing, to $705-$760/mt FOB ex-warehouse.
Sources said the large stockpiles of urea, coupled with little demand from farmers, are affecting prices at the ports and at interior distribution centers. There is also uncertainty in the market while buyers and sellers wait to see what actions the new national government will take on agricultural issues.