US Gulf:
The NOLA urea market tightened to $285-$315/st FOB for June-July tons, compared with last week’s broad $275-$330/st range. Most July trades were quoted around the $290/st FOB level, with prompt June business reported at both the high and low end of the range “on very limited trade.”
Sources said demand for prompt, loaded barges is eroding, as is the price premium that contributed to a very wide range in recent weeks.
Eastern Cornbelt:
Urea slipped to $440-$480/st FOB in the Eastern Cornbelt, down $20/st at the low end of the range, with the high reported at Cincinnati, Ohio, for very limited tons.
Western Cornbelt:
Urea prices dropped to $430-$460/st FOB in the region, down another $10/st from last week, with the low confirmed at St. Louis, Mo.
Southern Plains:
Urea pricing covered a broad range at $400-$470/st FOB in the region, down from the prior $475-$490/st FOB range, with the low confirmed at Houston and Borger, Texas. The Catoosa/Inola, Okla., market was quoted at $430-$470/st FOB, depending on supplier, with inventories described as very tight in late June.
South Central:
Urea prices continued to drop in the South Central region, with new levels reported at $350/st FOB Convent, La., $415-$420/st FOB Memphis, Tenn., and $450/st FOB Little Rock, Ark., down from the previous $385-$500/st FOB regional range.
Southeast:
Urea prices dropped to $400-$425/st FOB in the Southeast, down from the prior $425-$435/st FOB, with the low confirmed at Wilmington, N.C., and Charleston, S.C., and the high at Chesapeake, Va.
India:
Sources reported that the last of the tons booked under the RCF tender have been secured and the vessels nominated. As the week progressed, sources said at least one trader was still looking for product to fulfill its award. The traders were facing a rapidly approaching shipping deadline of July 17.
Sources had speculated that once the last of the awarded tons from the RCF tender have vessels nominated, the clock will start ticking for another tender call. The late-week report that all 560,000 mt now have vessels nominated could push up the tender call speculation. However, sources said the most likely time is still around July 15.
The Indian government announced a new three-year plan for urea subsidies, one that is separate from the Nutrition Based Subsidy system that governs other fertilizers. The plan calls for the government to set aside a total of $45 billion for urea subsidies and incentives. The primary goals, the government said in a June 28 statement, are to ensure that farmers do not pay more than the current Rs242/45 kg bag ($65/mt) and to reduce demand for imported urea.
In addition, a plan to put new or refurbished production facilities into operation by the 2025-2026 fiscal year is already paying off, the government said. Domestic production has increased from 22.5 million mt during Fiscal Year 2014-2015 to 28.4 million mt in 2022-2023.
The government also hopes to increase the use of Nano Urea, a water-soluble fertilizer designed to be more efficient than granular urea. The government wants to have eight plants producing 440 million bottles per year of the product by 2025-2026. According to the government statement, this will replace 19.5 million mt of conventional urea.
An innovation of coating urea with sulfur will also begin soon. This so-called Golden Urea will allow for the addition of sulfur to the fertilizer mix, and will be cheaper than the current neem-coated urea.
January-April urea imports fell 45% year-over-year, Trade Data Monitor reported, to 2 million mt from 3.6 million mt. India imported 279,000 mt in April, off 21% from 353,000 mt in the prior April. Oman supplied 113,000 mt for the month, followed by Qatar with 76,000 mt and the UAE with 58,000 mt.
Black Sea:
Turkish urea imports totaled 1.7 million mt in January-May, according to Trade Data Monitor, more than double the year-ago 825,000 mt. May imports were counted at 368,000 mt, up significantly from 87,000 mt received in May 2022. Oman led May suppliers with 212,000 mt, followed by Egypt with 91,000 mt. Russia sent 35,000 mt.
Sources reported offers from Turkmenistan out of the Black Sea were so high that potential deals had to be scrapped. One trader said granular urea offered was as high as $320/mt FOB against “normal” pricing of $250-$280/mt FOB, depending on the source of the product.
Despite a general mood of higher prices in the urea market, the prilled price out of the Black Sea remained at $244-$249/mt FOB.
Indonesia:
Sources still do not expect any new exports from Indonesia for a few weeks. A reported investigation of Pupuk Holdings, the parent company of Indonesia’s urea producers, remains the primary delay in selling tons offshore, sources said. The government is rumored to be investigating the prices Pupuk charged for international sales, and how those sales impacted the domestic market.
Middle East:
Just as sources were anticipating a quiet end to both the week and month due to the Hajj holiday, MOPCO made a 5,000 mt sale for July shipment at $355/mt FOB, lifting the Egyptian price from $312/mt FOB to the new $355/mt FOB level in just two weeks. The transactions represented traders covering short sales into Europe, sources said.
International traders said Arab Gulf suppliers were taking longer to return calls – if they did at all – to discuss July and August shipments. Sources said part of the delay in getting calls returned was the Hajj holiday, which allowed many offices to be vacant or short staffed. Another reason, said one trader, is that the Arab Gulf producers are comfortable for the first half of July, with some fully booked through the whole month. In the end, however, one deal did go through that moved the market.
Sources reported that Fertiglobe closed a deal for 40,000 mt to be shipped in two lots at $295-$312/mt FOB. The two cargoes are slated for July shipment, most likely to an Asian-Pacific buyer.
China:
Sources put the current export price at $305-$310/mt FOB for both prilled and granular urea. While some August offers were said to come in below $300/mt FOB, anyone looking for early-July shipments was either rebuffed or offered much higher prices that are unworkable in the current market, said one trader.
Circulating reports of a sale to a Southeast Asian buyer showed a netback in the $290s/mt FOB. At that level, sources were quick to point out, the deal must have been done some time ago and is only now being openly discussed.
Southeast Asia:
The domestic season in Vietnam is still going strong, said sources, providing a good market for sellers. Sources reported domestic urea offers at $380-$400/mt FOB ex-warehouse, while some cheaper Chinese urea was offered at a reported $370/mt FOB ex-warehouse. Low freight costs between Vietnam and China are providing Chinese producers with a healthy netback for the limited tons being sent.
Thailand imported 931,000 mt of urea in the January-May period, a 41% year-over-year increase from 647,000 mt.
May imports firmed to 329,000 mt, from 130,000 mt received in May 2022. Saudi Arabia sent 199,000 mt in May, Qatar added 83,000 mt, and Malaysia provided 33,000 mt. Saudi Arabia’s large share of the market is not surprising. Saudi producers have previously provided Thai buyers with deep discounts, sources said.
Brazil:
Prices moved up to $315-$330/mt CFR. Trade discussions at the beginning of the week indicated values moving as high as $350/mt FOB, but after some back and forth, deals were settled at $330/mt CFR. Prices are expected to move up, however. Demand appears to be strong, while limited tonnage is being offered.
The Rondonopolis price moved up to $465-$480/mt FOB ex-warehouse, a significant $40-$55/mt rise from the previous week. The market’s volatility has caused some suppliers to withdraw from formula-based deals and settle for day-to-day pricing.
Sources said there is still time for farmers to finish up their urea purchases for the Safrinha season. More are expected to step up now that a price floor appears to have been reached and prices are moving upward.