US Gulf:
NOLA urea barge prices were up from last week, with prompt, loaded barges remaining at a premium. June barge trades were quoted in a wide range at $297-$330/st FOB during the week, with July reported at $275-$295/st FOB NOLA. Those levels were up from last week’s broad $245-$320/st FOB range.
Eastern Cornbelt:
Urea remained at $460-$480/st FOB in the Eastern Cornbelt, with the upper end of the range reported at Cincinnati, Ohio.
Western Cornbelt:
Urea prices slipped to $440-$470/st FOB in the region, down from last week’s $460-$480/st FOB range, with the St. Louis, Mo., market quoted at $440-$445/st FOB at midweek. In the Southern Plains, the Catoosa/Inola, Okla., urea market remained at $475-$490/st FOB during the week.
Northern Plains:
Urea slipped to $480-$490/st FOB St. Paul, Minn., with the low also confirmed for the last offers out of at Carrington and Alton, N.D. Delivered urea pricing was quoted at $500-$520/st in the Northern Plains in mid-June, well below the $630-$640/st DEL high reported in May.
Northeast:
Urea slipped to $430-$440/st FOB in the Northeast, depending on location, down from the last confirmed $440-$470/st FOB range.
Eastern Canada:
Eastern Canada urea slipped to a broad C$635-$850/mt FOB in mid-June, depending on location and supplier, down C$40/mt at the low end of the range.
Black Sea:
Prilled urea prices tightened to $244-$249/mt FOB from $240-$265/mt FOB reported last week.
India:
Rashtriya Chemicals and Fertilizers Ltd. (RCF) awarded only 560,000 mt in its tender. The company had hoped receive a minimum of 800,000 mt. Sources said the limited tonnage was mostly a result of Chinese producers unwilling to accept the netbacks from the tender’s $280-$285/CFR price, as well as a short shipping window that required vessels to be loaded by July 17.
The lack of Chinese urea in the tender was evident in the final numbers. Only 95,000 mt will be delivered to India’s East Coast. The remaining 465,000 mt will be sent to ports on the West Coast. The bulk of the awards will be covered by Arab Gulf producers.
| RCF Urea Tender Awards (Total – 560,000 mt) | ||
| East Coast (95,000 mt at $284.90/mt CFR) | ||
| Awarded Company | Quantity (mt) | Discharge Port |
| Sun International | 50,000 | Paradip |
| Fertiglobe | 45,000 | Gangavaram |
| West Coast (465,000 mt at $279.70/mt CFR) | ||
| Awarded Company | Quantity (mt) | Discharge Port |
| Samsung | 45,000 | Kandla |
| Agricom | 40,000 | Mundra |
| Swiss Singapore | 60,000 | Pipavav |
| 60,000 | Tuna Adani | |
| OQ Trading | 50,000 | Jaigarh |
| 50,000 | Mundra | |
| 40,000 | Mundra | |
| 40,000 | Rozi | |
| 40,000 | Dahej | |
| 40,000 | Hazira |
There are now expectations that a new tender will be called as early as July 10-15. Sources said this timeframe will allow for all of the awarded tons to have vessels nominated and be in the last steps of loading for shipment, thus preventing suppliers the opportunity to withdraw their tons in the hopes of gaining a better netback in the next tender.
Chinese urea is expected to play a bigger role in the next tender, as the Chinese domestic season will end on June 30, leaving producers looking for markets for their product. As long as pricing remained strong in China’s current domestic market, producers had no reason to accept lower levels from the export market. After July 1, the domestic market’s prices are expected to come off.
China’s export permission routine remains a possible fly in the ointment, however. If the next tender has a similarly tight export window, traders may find it difficult to ensure the export paperwork will be completed in time.
Some traders criticized RCF for going ahead with the tender. They noted that had the buyer scrapped the tender and immediately called a new one, RCF might have been able to get the 800,000 mt it wanted, and possibly more. The change in the shipping deadline would have allowed for more tons to build up in China without buyers lined up. At the same time, supplies in the Arab Gulf would have similarly built up, putting downward pressure on prices.
One trader noted, however, that urea is a sensitive political issue as much as it is an agricultural necessity. Few in the state-owned companies would be willing to risk the wrath of farmers complaining to their local legislators and the national government.
Indonesia:
The Indonesian government continues to investigate Pupuk’s policies, sources reported. Details are thin, but some traders have said the government is looking into prices achieved by Pupuk and its subsidiary producers in relation to subsidy payments made by the government for the domestic market.
No new export sales opportunities are expected out of Indonesia until late July at the earliest, said sources. Some international traders have even begun excluding Indonesian urea from their July and August purchase plans.
South Korea:
South Korea urea imports totaled 368,000 mt in January-May, Trade Data Monitor reported, off 30% from the year-ago 525,000 mt. May imports stood at 70,000 mt, down from 90,000 mt recorded in May 2022. The month’s largest suppliers were China with 33,000 mt, Qatar with 26,000 mt, and Indonesia with 10,000 mt.
Middle East:
Sources reported a wide range of activity from the area. Just as prices were settled at $265-$270/mt FOB, based on netbacks from the RCF/India tender, sources noted OQ Trading closing a deal to Myanmar with a $253/mt FOB netback, shifting the market range to $253-$270/mt FOB.
Traders looked at the deal into Myanmar as an effort by OQ to average out the price of the tons it has to supply to India. Many of the tons the company is slated to send to India will be purchased from the OQ’s producing side on a formula basis. By averaging the Myanmar and Indian prices, the trading house seemingly hopes to get a better return on its sales into India, sources said.
Due both to existing contracts and the RCF business, Arab Gulf producers were said to be fully booked. Discussions for new orders will begin with shipments in late July.
Egyptian producers continue to push for – and get – higher prices. The week opened with sales at $312/mt FOB and ended at $340/mt FOB. Many of the sales were for multiple cargoes of about 5,000 mt. However, MOPCO and Abu Qir were able to secure deals involving 10,000 mt each as the price edged upward. As the week closed, Abu Qir sold 15,000 mt of granular at $340/mt FOB. In another deal, the same company sold 20,000 mt of prilled urea at $322/mt FOB.
The most likely destination for each of the lots is Europe. Sources pointed out Egyptian urea – along with that from Algeria – is exempt from the re-instated EU 6.5% tariff on urea.
Egyptian producers continued to push for – and get – higher prices. The week opened with sales at $312/mt FOB and ended at $330/mt FOB. Many of the sales were for multiple cargoes of about 5,000 mt. MOPCO and Abu Qir were able to secure deals of 10,000 mt each as the price edged upward, however.
Europe is the most likely destination for all of the cargoes. Sources pointed out that Egyptian urea, along with product from Algeria, is exempt from the EU’s reinstated 6.5% tariff on urea.
China:
Sources reported prilled urea prices as all over the map. The estimated export price was put at $300/mt FOB, based on the ex-plant price. At the same time, deals with Southeast Asian buyers showed netbacks at $275/mt FOB.
Granular urea was more stable, with prices reported at $300-$310/mt FOB. Granular showed less volatility due to limited spot availability.
Sources noted that most of the granular suppliers only had licenses to export large cargoes, while the main demand from regional buyers was focused on smaller lots closer to 6,000 mt. Deals for these small quantities could be done, but only for mid-July shipment at the earliest. The delay was attributed to the export control regime imposed by Beijing. Local customs officials need to first ensure the exported material will not cause a shortage in the domestic market, before permission will be granted for a producer to sell a specific amount to a specific buyer.
Export prices are expected to begin coming off on July 1, when the domestic season closes. So far, Chinese producers have been able to get better prices from the local market than from exporting tons. The strong demand for the domestic top-off season allowed producers to reject the lower prices available from the RCF/India tender. The absence of that safety net means that producers will have to either accept the price from India, or risk building up large reserves in their warehouses with limited selling opportunities.
Urea exports totaled 785,000 mt in January-May, Trade Data Monitor reported, up 46% year-over-year from 538,000 mt. May exports were noted at 183,000 mt, more than doubling the 86,000 mt sent in May 2022. May’s main buyers were India with 46,000 mt, Australia with 36,000 mt, and South Korea with 34,000 mt.
Brazil:
The Brazil market reacted to the inability of RCF/India to achieve its 800,000 mt purchase goal, jumping to $300-$320/mt CFR, a roughly 12% increase from the previous week. Even Iranian material was offered at levels higher than non-sanctioned product from last week. Sources said a trader offered Iranian product at $290/mt CFR into a market with limited buying interest.
The price bump was seen by many as a clear indication that a urea price floor has been found.
The Rondonopolis market showed a slight increase, with sources putting the range at $410-$440/mt FOB ex-warehouse. Some inland areas have withdrawn their pricing lists, however, leaving possible future price trends up in the air.