US Gulf:
Most saw a fairly quiet NOLA barge market during the short week, however, prices were reported to have dropped to $490-$520/st FOB compared to the week-ago $505-$530/st FOB.
Eastern Cornbelt:
The urea market slipped slightly to $585-$610/st FOB in the Eastern Cornbelt, with the low confirmed out of spot Ohio River terminals and reflecting a $5/st drop from last week. The Cincinnati, Ohio, urea market was pegged at $590-$600/st FOB at midweek.
Western Cornbelt:
Urea continued to be reported in the $575-$600/st FOB range in the Western Cornbelt, with the low confirmed at St. Louis, Mo., and the high in Iowa.
Southern Plains:
Urea pricing covered a wide range at $575-$600/st FOB Catoosa/Inola, Okla., during the week, depending on supplier, down from the previous $590-$605/st FOB range. The Houston, Texas, urea market was pegged at the $605/st FOB level at midweek, down from $615/st FOB earlier in November.
South Central:
The urea market slipped to a broad $585-$625/st FOB range in the South Central region, with the low confirmed by Kentucky sources out of spot Ohio River terminals and the high reported at Memphis, Tenn. Most Arkansas River terminals were quoted at the $610-$615/st FOB level.
Southeast:
Urea pricing in the Southeast was quoted at $620-$640/st FOB port terminals, down $30-$40/st from earlier in November.
India:
National Fertilizers Ltd. issued letters of intent to buy 1.47 million mt of urea from its recently closed tender. The company booked 873,000 mt for West Coast deliveries at $573/mt CFR and 597,150 at $578.77/mt CFR for East Coast arrivals.
When the tender was first called, the buyer had indicated it was ready to take 800,000-1 million mt if the price was right. At the time, the industry was expected only a slight dip from the $649-$655/mt CFR set in the IPL October tender. Once the new prices were seen, the Department of Fertilizers ensured that NFL had the funds necessary to buy as many tons as possible of the 2 million mt offered.
| Awards for East Coast India – $578.77/mt CFR | ||
| Offering Company | Quantity (mt) | Discharge Port |
| Ameropa | 182,150 | ECI – L1 |
| Fertiglobe | 45,000 | ECI |
| Dreymoor | 45,000 | Kakinada |
| Aries | 90,000 | Vizag-Kakinada |
| Samsung | 50,000 | Kakinada |
| Swiss Singapore | 50,000 | ECI |
| Midgulf | 90,000 | Gangavaram-Kakinada |
| Koch | 45,000 | Krishnapatnam-Gangavaram |
| Total ECI | 597,150 | |
| Awards for West Coast India – $573/mt CFR | ||
| Offering Company | Quantity (mt) | Discharge Port |
| Fertiglobe | 45,000 | WCI – L1 |
| OQ Trade | 105,000 | Mundra-Kandla |
| Ameropa | 90,000 | WCI |
| Dreymoor | 93,000 | Pipavav |
| Swiss Singapore | 170,000 | WCI |
| Indagro | 100,000 | Mundra-Tuna |
| Midgulf | 45,000 | Mundra |
| Keytrade | 45,000 | Kandla |
| Samsung | 90,000 | Mundra |
| Koch | 45,000 | Mundra-Kandla |
| Fertcom | 45,000 | WCI |
| Total WCI | 873,000 | |
| Total Awards | 1,470,150 |
Sourcing for the awards is widespread. Arab Gulf producers are expected to provide the single largest amount, about 390,000 mt. China is expected to show up with a surprising 250,000–300,000 mt. Sources had estimated Chinese product would be about half the current number.
Other sources estimated by industry watchers include Helwan and MOPCO of Egypt each supplying 50,000 mt; a cargo from Nigeria; about four cargoes from the Baltic; Indonesia or Malaysian with two cargoes; Algeria providing four cargoes; and Georgia sending one cargo.
Even as the industry was absorbing the size of the order and getting ready to settle down, rumors began circling the globe that another tender will be called soon. Sources in India said RCF is getting the paperwork ready for a tender to be called sometime in the first half of December.
While some traders dismissed the rumors as just talk, others looked more seriously at the situation. One trader said the country most likely needs the tender because domestic production was not hitting the levels earlier estimated by government planners. The reduced tonnage available from local producers will have to be made up with imports to avert complaints of inadequate supplies.
Some areas have reported less urea than requested, leading local politicians to complain loudly to the national government to rectify the situation. One source said urea stockpiles remain a sensitive political issue, as well as one of importance to crop output.
If a December tender is called, sources speculated prices will be marginally lower than the NFL results, largely because there will be no other major buyer in the market at that time. The US and Brazil, two major urea players, are not expected to get serious about 2023 imports until the first quarter of the new year.
Sourcing for the December tender may end up not including a strong showing from the Arab Gulf. Many of the producers have long-term contracts that will need to be filled during the January shipping period expected from the tender. Sources suggested the main suppliers will be Nigeria, North Africa, FSU states, and possibly Iran.
Pakistan:
The government authorized TCP to secure a government-to-government deal with China for 125,000 mt of granular urea. The deal was favorable to Pakistan, with a netback of about $480/mt FOB to China.
Another similar deal with Azerbaijan was closed for 35,000 mt. Sources said shipment on this cargo is slated for early December.
Pakistan moved on trying to secure government-to-government deals after a couple of attempts to secure 300,000 mt through the normal tender process. In the first effort, the only participant was disqualified. In the second attempt, the price was so low that if an award was made, sources said there was no way the winning firm could fulfill the contract.
Indonesia:
Pupuk called a selling tender to close on Tuesday for 6,000-15,000 mt of prilled urea for end-November/early December shipment.
The last bit of prilled business from Indonesia was 25,000 mt for Sri Lanka at $620/mt FOB. No new deals for granular urea have been done in a while, leaving the posted price at $675/mt FOB. However, estimates based on the last prilled urea levels put the granular price around $630/mt FOB.
Middle East:
Arab Gulf material is expected to be used to cover about 390,000 mt of the 1.47 million mt awarded in the NFL tender. Sources said these orders, combined with the contract tons already booked with producers, will leave the producers in good shape for the rest of the year.
Exports under contacts for first quarter 2023 could mean Arab Gulf producers might play a lesser role in the rumored December RCF tender.
Helwan and MOPCO will each supply 50,000 mt to India under the awards issued in the NFL tender. The MOPCO cargo was earlier reported at $570/mt FOB. The Helwan tonnage was revealed after the tender closed. Sources said the price for this lot was about $550/mt FOB.
The two deals now leave a wider range than normal for the Egyptian market at $550-$570/mt FOB.
China:
Sources estimated 250,000-300,000 mt of Chinese urea will be sent to India under the NFL tender. Earlier estimates of how many Chinese tons would be involved were about half that amount.
Exports of urea from China for January through October were reported at 1.9 million mt by Trade Data Monitor. This is a 60% drop from the 4.8 million mt exported during the same period in 2021. The main buyers so far this year were India, taking 746,000 mt, South Korea buying 326,000 mt, and Pakistan receiving 255,000 mt.
October 2022 exports were reported at 351,000 mt, a bit more than half of the 740,000 mt exported during October 2021. India took 62% of the urea shipped in October with 217,000 mt.
Bangladesh:
Local media report a fire at Chittagong Urea Fertilizer Ltd. forced suspension of production Tuesday, Nov. 22. The fire reportedly broke out at the ammonia plant in a reformer pipe. The fire was put out in about half an hour, according to the company.
The plant was built in 1987 with a rated urea production capacity of 1,200 mt/day and 1,000 mt/day of ammonia. There is no word when the plant will be back in operation.
Brazil:
Buyers and sellers in Brazil kept a wary eye on the Indian tender. The initial reaction after reports India would take 1.4 million mt, and then later 1.47 million mt, was of concern, because India was seen as taking up the excess tons in the market and possibly forcing prices up.
Almost immediately after the awards in the Indian tender were announced, rumors swept through Brazilian traders that another Indian tender might be called soon. This rumor raised concerns that India will be taking large quantities of urea in January 2023, just as Brazilian buyers will be entering the market.
Despite concerns about a potentially tighter market, prices slumped to $548-$580/mt CFR.
Demonstrations by truck drivers related to the results of the October presidential election are raising concerns in the interior of the country that the blockages may raise insecurities about urea supplies for the 2023 second crop. For now, however, the demand is low enough that higher prices are not expected.
Sources put the Rondonopolis price at $720-$750/mt FOB ex-warehouse. This level represents a tightening of the market in the area and not a major price shift.