US Gulf:
NOLA urea remained under pressure, with the market falling to $335-$360/st FOB, depending on time of shipment, down from last week’s $350-$370/st FOB range. The high was confirmed for August tons, with September trades ranging from $335-$350/st FOB during the week. October-November business fell in the $330-$342/st FOB range.
Eastern Cornbelt:
Fueled by softening NOLA barge values, urea pricing in the Eastern Cornbelt fell to $415-$430/st FOB, down from last week’s $430-$460/st FOB, with the low confirmed at Cincinnati, Ohio.
Western Cornbelt:
Urea prices slipped to $410-$430/st FOB in the Western Cornbelt, down from last week’s high of $450/st FOB, with the lower end of the range confirmed at St. Louis, Mo.
Northern Plains:
Urea dropped to $410-$430/st FOB St. Paul, Minn., with delivered tons remaining in a broad range at $485-$525/st in the Northern Plains.
Great Lakes:
Urea in late August was reported at $430-$478/st FOB in the Great Lakes region, down from recent pricing in the low-$500s/st, with the low reported in Wisconsin and the high confirmed out of spot Michigan terminals.
Northeast:
The latest urea offers in the Northeast slipped to $430/st FOB Fairless Hills, Pa., and $440/st FOB Baltimore, Md., down from the prior $460-$470/st FOB level.
Eastern Canada:
Urea was quoted at C$705-$770/mt FOB for the latest offers in Eastern Canada.
Black Sea:
Black Sea prilled urea came off $25/mt to $325-$335/mt FOB, in line with pricing attitudes in the global market.
India:
Urea tender award winners moved quickly to line up vessels to supply product from the Indian Potash Ltd. (IPL) tender. Twelve ships have been booked so far, sources said, accounting for about 600,000 mt.
Eight of the vessels will load about 400,000 mt from China, sources estimated, while another three ships will bring in about 150,000 mt from the Baltic. One Arab Gulf cargo has been booked so far.
India imported 2.9 million mt of urea in January-June, Trade Data Monitor reported, a 38% decrease from the year-ago 4.6 million mt. Oman led suppliers with 1 million mt, and China contributed 438,000 mt. Russia added 403,000 mt.
The tonnage from Oman included material shipped under India’s urea tenders so far this year, as well as the contract with OMIFCO, responsible for at least one urea cargo per month.
June imports were reported at 477,000 mt, a 37% decline from 751,000 mt received in June 2022. Russia sent 161,000 mt, China added 139,000 mt, and Oman shipped 136,000 mt. India received 1.2 million mt in 2Q, down 14% from 1.4 million mt recorded in April-June 2022.
Indonesia:
Pupuk Indonesia Holding Co. closed another selling tender on Aug. 23. Initial bids were reported at $360-$369/mt FOB for granular urea and in the low-$360s/mt FOB for prilled. The company offered 45,000 mt of granular material and 28,000 mt of prilled in the tender.
Following private talks with traders, a deal was reached for 30,000 mt of granular at $392/mt FOB, and at $377/mt FOB for all 28,000 mt of the prilled material. Sources said the granular is most likely bound for Australia, while the prilled cargo will probably be divided into small lots for shipment in the region.
The new price is lower than the $414/mt FOB reported last week from a publicized auction deal. The price declined even more sharply from a side deal done quietly after the previous tender, where 10,000-15,000 mt were reportedly sold at $416/mt FOB.
Sources said it is not unusual for Pupuk to negotiate additional sales based on its most recent tender, and further tonnage is expected to be sold following the latest deal. The price could end up pushing higher, sources said, depending on the intensity of demand.
Middle East:
Producers are focused on fulfilling orders related to the IPL tender. At the same time, buyers are not pushing for any spot business, knowing producers will try to push the price higher based on the large orders they must fill for India.
While the lack of spot deals was expected, sources noted that contract renewal talks are moving more slowly than in previous years. Producers seem to be in no hurry to conclude new contracts.
Offers from Iran softened $20/mt from last week, to $350/mt FOB, equal to the reserve price reported from a recent urea auction. A deal was reportedly cut at $350/mt FOB for 30,000 mt of granular, to be loaded in September. The downward price pressure was said to come from important buyers in Brazil and Turkey.
Egyptian producers remained quiet. The producers are likely happy to fulfil orders placed in July for August and September shipments, international sources said, rather than enter the market at a time when prices are facing downward pressure.
China:
Speculation in the domestic market raised prices so quickly that paper trading was temporarily halted, players said. Based on the domestic market, sources estimated the export price at $385/mt FOB, up $5-$10/mt from the last business, although no deals have been done at that level.
The main export activity is now centered on arranging export inspections for tonnage located at portside warehouses and factories. At the same time, traders are working to time the arrival of vessels to match their material’s anticipated export approval.
Eight vessels, totaling about 400,000 mt, have so far been nominated to pick up material from Chinese ports for the IPL tender, sources said, while about 800,000 mt is currently sitting in portside warehouses. Most of those tons are still awaiting export clearance from customs officials, however.
The Chinese government still appears to be allowing expedited inspections to move the tonnage out quickly, said international traders. Even if more tons become available for export, the threat remains of port congestion slowing the loading process. Recent storms have caused delays in port activities, leaving some vessels to wait almost a week before loading or unloading. There are hopes that fertilizer vessels will be granted priority to meet the Sept. 26 IPL tender loading deadline.
As the week closed, sources noted rumors that the government has reinstituted environmental checks on fertilizer production facilities. The action could force plants to reduce production to meet environmental standards. Similar actions taken a few years ago drastically reduced outputs, especially from older urea plants.
January-July urea exports reached 1.3 million mt, Trade Data Monitor reported,a 52% increase from the 875,000 mt shipped through the same period of 2022. China has diversified its markets, moving away from a reliance on large buyers such as India and a few regional customers. The top three buyers, India, South Korea, and Myanmar, combined to receive 42% of the exports, while the remaining 58% went to 80 different countries.
July exports were reported at 324,000 mt, rising from 151,000 mt shipped in July 2022.
South Korea:
Trade Data Monitor reported South Korea’s January-July imports at 420,000 mt, a 31% decline from the year-ago 610,000 mt. July imports stood at 21,000 mt, down 58% from 49,000 mt logged in July 2022.
Brazil:
Landed urea prices at Brazil softened to $370-$375/mt CFR from last week’s $380-$400/mt CFR, a roughly 4.5% decline. Sources noted a relatively inactive market, causing prices to drift lower. With plenty of offers reported in the market, however, buyers could wait a few weeks before stepping forward to make purchases.
Rondonopolis fell by $20/mt during the week, reflecting recent declines in the international markets. The week’s $500-$520/mt FOB ex-warehouse range could see further softening due to decreased purchasing from farmers. Barter ratios have been impacted by declining corn prices, which have fallen below the Chicago Board of Trade (CBOT) five-year average in recent weeks.