US Gulf:
The NOLA barge price range stretched as the week progressed, from $300/st FOB for all-June up to $375/st FOB for prompt. By late Thursday, however, those prices were $275/st FOB and $400/st FOB, respectively.
Eastern Cornbelt:
The urea market remained at $490-$500/st FOB in the Eastern Cornbelt, with the low confirmed at Cincinnati, Ohio. In the Great Lakes region, new offers were confirmed at $520-$540/st FOB for May-June tons.
Western Cornbelt:
Urea was pegged at $485-$500/st FOB in the Western Cornbelt, depending on location, with the St. Louis market reported in the $485-$495/st FOB range. In the Southern Plains, pricing at Catoosa/Inola, Okla., was quoted at $475-$500/st FOB during the week.
Northern Plains:
Urea slipped to $480-$500/st FOB in the Northern Plains, down from the prior $500-$540/st FOB range, with the low confirmed at Carrington and Alton, N.D., and the high for “very tight” inventories at St. Paul, Minn. Delivered urea remained strong at $630-$640/st in North Dakota in late May.
Northeast:
Urea pricing in the Northeast dropped to $450-$470/st FOB, down from $470-$520/st FOB earlier in May, with the low confirmed at Fairless Hills, Pa., for June tons. Delivered offers were quoted at the $475/st level in central Pennsylvania.
Eastern Canada:
Eastern Canada urea slipped to a broad C$675-$850/mt FOB in late May, depending on location and supplier, down C$25/mt at the high end of the range.
India:
India has finally called its much-anticipated urea tender. Rashtriya Chemicals and Fertilizers Ltd. (RCF) released the tender documents just after the close of business on May 31. The tender is slated to close June 12, with a shipping deadline of July 17. The buyer advertised that it wishes to purchase 800,000 mt, but may take more depending on recommendations from the Department of Fertilizers.
Just a week ago, as the IFA Annual Conference in Prague was winding down, sources estimated the price in the tender at approximately $300/mt CFR. This week, however, estimates have softened to $275-$280/mt CFR, with a rising bearish attitude. Sources pointed to growing reserves from both China and Russian Baltic ports that could be targeted toward India. China alone was estimated have 500,000 mt available for export through July 15.
Increased urea production in India, along with the introduction of liquid Nano Urea, were designed to reduce dependency on imported urea, thus saving money on subsidy payments. Even with these actions, sources said India would need to call another tender soon after the last of the tons from the about-to-close tender are loaded. One trader said that by keeping purchases limited, India will not empty global reserves, leaving strong global surpluses that will help keep prices down.
Black Sea:
Prilled urea moved down to a single $270/mt FOB price point. With Chinese and Baltic urea reportedly competing for the just-called Indian urea tender, further drops are expected.
Turkey:
Turkish urea imports firmed 79% in January-April, Trade Data Monitor reported, to 1.3 million mt from the year-ago 738,000 mt. Russian material accounted for 204,000 mt during the period, a dramatic rise from 6,000 mt in 2022. Tons from Egypt also firmed considerably, to 388,000 mt from 132,000 mt in the same period of 2022, a 195% increase.
April urea imports were counted at 434,000 mt, up 107% from the prior-year 209,000 mt. Oman led suppliers with 231,000 mt, followed by Egypt with 132,000 mt and 58,000 mt from Russia.
Indonesia:
Sources said the government is still looking at export allotments for the second half of the year. The lack of any new business kept the official price in the $330s/mt FOB. However, once a selling tender is called, sources said, much lower prices will be bid.
Thailand:
Trade Data Monitor reported January-April urea imports at 602,000 mt, up 16% year-over-year from 517,000 mt. April imports fell 22%, however, to 210,000 mt from the year-ago 268,000 mt. Saudi Arabia sent 59,000 mt for the month, while Qatar sent 57,000 mt. Malaysia shipped 51,000 mt, and Oman sent 30,000 mt.
Middle East:
Large reserves of Chinese and Russian urea could push Arab Gulf producers to the sidelines for the just-called RCF/India tender.
Producers wrapped up the last of the shipments to India under the March Indian Potash Ltd. (IPL) tender this week. Sources reported no spot deals coming in to change pricing ideas in the area. The announcement of the next tender also sent a signal to producers to remain publicly quiet as traders try to work out deals for the tender.
If the RCF/India tender comes in at the currently-projected $275-$280/mt CFR level, the estimated netback to the Arab Gulf would be $255-$260/mt FOB at best, a drop of about $70/mt from the area’s current public price.
Iranian producers are now said to be quoting $280/mt FOB to potential buyers, off about $10/mt from offers reported during last week’s IFA conference in Prague. With stockpiles building for June and July, sources expect softer prices to continue.
Egyptian producer MOPCO sold 6,000 mt of granular urea at $320/mt FOB to a trader for delivery to Europe. The price was off about $40/mt from the last public deal, but in the range expected by traders.
Softer prices are already under discussion. As soon as MOPCO closed its deal, traders began bidding at $305-$310/mt FOB for mid-June shipments, while some aggressive buyers were even reported pushing for $300/mt FOB or less. Sources said these prices were being offered for about 50,000 mt of granular product, with an eye toward securing a series of small 6,000-8,000 mt lots for sale into Europe. No one seemed to be looking to take the full 50,000 mt for a long-distance sale.
China:
After price discussions were reported starting the week at $300/mt FOB, sales of prilled urea to Taiwan and the Philippines showed netbacks to China at $275-$280/mt FOB. Sources were not surprised at the drop, having predicted the price would soften to the low-$300s/mt FOB and beyond one week earlier.
The less-available granular urea was priced at $305-$310/mt FOB, sources said. There were reports of a vessel being sought to take 16,000 mt of Fudao granular urea to Vietnam for prompt shipment.
Sources speculated that China will have reserves as high as 500,000 mt through the middle of July. This comes as domestic demand has drawn to a close and production remains at nearly 165,000 mt/d, about 75% of rated capacity.
Chinese urea is expected to be a major player in the soon-to-close RCF/India tender. The tender’s estimated $275-$280/mt CFR price into India would mean the Chinese price will have to come down to the upper-$250s/mt FOB to be viable. Sources did not think this would be a problem.
Brazil:
Prices dipped slightly on the news of the Indian urea tender. Sources now put the price at $290-$300/mt CFR, just $5/mt down from last week. RCF’s request for just 800,000 mt added to the bearish attitude, as traders in Brazil did not think this would be enough to absorb the surplus in the global market.
New bids for urea were said to come in at $280/mt FOB, previously reported as the price level for sanctioned material. Now, buyers are trying to make this the standard price.
The price in Rondonopolis remained stable at $420-$430/mt FOB ex-warehouse. Some sellers are trying to push the market up to $445-$455/mt FOB ex-warehouse, but with no success so far.
Sources reported lingering demand related to the Safrinha season. With the global price sliding, however, buyers are waiting until the last minute to take needed tons. High inventories in Brazil confirm to the buyers that there is no need to be pushed into a deal.