US Gulf:
NOLA urea barge prices continued to move down. New business was reported in the $450-$455/st FOB range, compared to the week-ago $445-$475/st FOB.
US Imports:
October urea imports were noted at 197,829 st, down 70.0% from 659,310 st in the prior-year period. July-October totals stood at 770,545 st, falling 53.1% from the year-ago 1.64 million st.
July-October imports from Qatar were pegged at 270,564 st, followed by 144,524 st from Saudi Arabia. Canada sent 122,945 st, ahead of 121,075 st imported from Oman.
US Exports:
Urea exports were up 562.3% in October, to 86,084 st from the year-ago 12,997 st. July-October exports firmed 1,041.3%, to 701,483 st from the year-ago 61,465 st.
Eastern Cornbelt:
Urea prices were steady at $530-$550/st FOB in the region, with the Cincinnati, Ohio, market unchanged at $530-$540/st FOB during the week.
Western Cornbelt:
The urea market was steady $525-$550/st FOB in the Western Cornbelt, with the low confirmed at St. Louis, Mo., and the high in Iowa on a spot basis. In the Northern Plains, 1Q offers were confirmed at the $640/st DEL level in North Dakota, below the last $670-$690/st DEL prompt business.
California:
The Stockton urea market was pegged at the $700-$710/st FOB level during the week, down $15-$35/st from last report, while rail-DEL offers in Northern California were reported as low as $610/st, below the previous $615-$635/st DEL range.
Pacific Northwest:
Rail-DEL urea offers in the Pacific Northwest were pegged at $625-$635/st, down sharply from the previous $675-$725/st DEL range. The terminal market for urea remained at $640/st FOB Rivergate, Ore., and $645/st FOB Aurora, Ore.
Western Canada:
Western Canada urea pricing fell to C$935-$945/mt FOB and C$940-$970/mt DEL for January-February tons, down from the prior C$965-$1,005/mt DEL range, though spring prepay offers were confirmed as high as C$1,025-$1,045/mt DEL in Saskatchewan.
India:
Sources said there is a growing sense that the next urea tender may not be called until January. Despite reports of spot shortages in the country, the government has assured the agricultural community that there is plenty of urea in the pipeline to handle the rest of the current season.
Traders noted that if the government decided it needed urea for this season, the call would have to come early next week. Any tender called after that, said one trader, would mean the government wants to focus on building buffer stocks for the next application season.
With prices softening around the world, some traders said it would be to India’s advantage to wait until early- or mid-January to make the call. The lack of any other major buyers at that time – and a steady decline in global urea prices – could benefit Indian buyers.
Europe:
The cancellation of import duties on urea and ammonia by the European Union led to immediate speculation that more suppliers will be looking to move tons into the continent.
Jacob Hansen, Director General of Fertilizers Europe, issued a statement claiming that the move jeopardizes the European industry’s ability to return to normal activity, as the rising cost of natural gas has already forced production to cut back to 30% of rated capacity. Hansen said that making it easier to import cheaper urea could force more plants to cut back further, or close.
Samsung and Ameropa have already been connected to potential sales to European buyers from Southeast Asia, with prices for the deals pegged at $540-$550/mt CFR. There are also reports of vessel inquiries from Nigeria to Spain. Traders said they expect to see more material offered into Europe from Southeast Asia and other nontraditional sources.
The removal of duties will also increase competition against Egypt, which has had a growing influence on the European market. In the latest numbers available, Egypt exported 1.5 million mt of urea to the EU in January-September, compared to 1.6 million mt sent in all of 2021. The EU imported 9 million mt in 2021.
Egypt and other nontraditional sources are replacing Russian material absent from the market due to actions related to the war in Ukraine.
Without the import duty, sources said more tonnage may be offered from Southeast Asia and Africa, where excess supplies are reportedly growing.
Middle East:
Sources reported at least one cargo sold for January loading at $480/mt FOB, in line with price ideas discussed by traders earlier in December. The new price target for buyers now appears to be in the low-$460s/mt FOB.
Even as buyers are trying to push down prices, sources said few seem willing to commit to a deal. Many appear to be waiting for the Indian tender to be called before committing to a price that might end up being on the high end of the range.
Producers in Egypt are reportedly anxious about the EU decision to remove import duties on urea. Sources said the producers still have plenty of product they need to move in January and February, and had apparently delayed making a commitment to sell until the Indian tender was called and a better assessment of urea supplies could be seen. Now, with the delay in the tender and Europe opening its markets to more suppliers, the Egyptians may face the need to lower their pricing ideas to make a deal.
Sales concluding earlier in December moved the Egyptian price to $565/mt FOB for cargoes shipping to Europe. Now deals into Europe with Southeast Asian urea are being reported at $540-$550/mt CFR, with more to come. The new competition could force the Egyptians to reduce their prices so they can hold on to their customers.
Southeast Asia:
Exports from Indonesia are not expected to start until January. Sources reported the government and producers are still meeting to determine the export quotas for 2023.
Material from Malaysia and Brunei was reportedly offered into Europe at an estimated $460/mt FOB. The Indonesian equivalent would be about $450/mt FOB.
China:
Sources reported some small deals to Southeast Asian buyers showing a netback of $470/mt FOB. Even with this news, producers continue to argue for $480-$490/mt FOB.
Even with these few small sales, sources said the market’s main activity is lining up the tons awarded under the previous Indian tender. Traders estimated that 4-5 vessels will be loaded for Indian ports.
Producers are said to be facing some manpower issues following the removal of the zero-COVID-19 policy by Beijing. More workers are reportedly contracting the disease and calling in sick, reducing the available staff needed to operate the plants.
At the same time, COVID-related shortages are also impacting operations at loading docks. Sources said bad weather is combining with COVID to delay loadings.
January-November urea exports were reported at 2.3 million mt by Trade Data Monitor,down 56% from 5.3 million mt exported through the same period of 2021. The market’s primary buyers were India with 944,000 mt, South Korea with 354,000 mt, and Pakistan with 307,000 mt.
Shipments to India and South Korea were down significantly compared to January-November 2021. Shipments to Pakistan, however, were up dramatically from the year-ago 17 mt.
November exports were reported at 373,000 mt, off 25% from 500,000 mt logged in November 2021. India received 198,000 mt, representing 53% of exports.
Nepal:
A tender for 20,000 mt of bagged urea was called by KSCL to close Feb. 3. The product is to be delivered to the company’s warehouses in Biratnagar, Birgunj, and Bhairahawa.
Russia:
The government is preparing new export quotas for nitrogen products. Media reports indicated that urea exports for January-May 2023 will be limited to 4.6 million mt. This quota will not be difficult to meet. Trade Data Monitor put the average tonnage exported for the January-May period in 2019-2021 at 2.8 million mt.
Black Sea:
Russian prilled urea out of the Black Sea is pegged at $470-$480/mt FOB. Higher priced material – closer to $500/mt FOB – was last reported out of the far-Eastern ports of the Black Sea.
Brazil:
Prices continue to follow the global markets lower. Sources pegged the landed price at $480-$490/mt CFR, although there continued to be reports of Iranian material being shopped around at $470/mt CFR.
Rondonopolis was reported at $620-$650/mt FOB ex-warehouse. Sources said that the softness in both port and inland prices stemmed from uncertainties as to when India will call its next tender.
South Korea:
Imports of urea for January-November were reported at 812,000 mt by Trade Data Monitor, a marginal increase from the prior-year 790,000 mt. China was the largest supplier with 340,000 mt, followed by Qatar with 183,000 mt and 93,000 mt from Indonesia.
November imports were tagged at 35,000 mt, down slightly from 39,000 mt recorded in November 2021. China was responsible for 74% of the material, sending 26,000 mt.
Argentina:
Trade Data Monitor reported January-November urea imports at 871,000 mt, off 41% from the year-ago 1.5 million mt. Nigeria shipped 160,000 mt, followed by Bolivia with 138,000 mt. Indonesia and Turkmenistan sent 137,000 mt and 125,000 mt, respectively, compared to zero tons shipped by either country to Argentina in 2021.
November imports were noted at 71,000 mt, down dramatically from 177,000 mt received in November 2021. Indonesia sent 37,000 mt for 52% of the market, while Nigeria’s 15,000 mt accounted for 22% of imports.