US Gulf:
India’s sudden tender call on Sept. 4 caused urea prices to spike at NOLA. The market jumped to $450/st FOB on Sept. 4 for confirmed September tons, well above last week’s $340-$376/st FOB range. NOLA trades then fell to $390/st FOB on Sept. 5 before rising again to $425-$430/st FOB for limited business on Sept. 6-7.Sources said bids for October business also ranged broadly.
Eastern Cornbelt:
Urea prices ramped up quickly in the Eastern Cornbelt, fueled by surging NOLA barge prices in the wake of an unexpected tender call from India. Some regional suppliers reportedly pulled offers during the week until the market settles.
Sources quoted urea terminal prices in the $465-$490/st FOB range as the week progressed, where offers were available, up from last week’s $415-$450/st FOB, with the high confirmed at Cincinnati, Ohio. Urea prices were also up in the Northeast, with reports of new offers firming to $465/st FOB Fairless Hills, Pa., as of Sept. 5.
Western Cornbelt:
Most urea offers in the Western Cornbelt were pulled during the week due to a volatile and firming NOLA market, but sources said the St. Louis, Mo., market would be at a firm $460-$465/st FOB for new sales based on NOLA pricing.
In the Southern Plains, new offers were quoted at $470/st FOB Enid and $475-$490/st FOB Catoosa/Inola, Okla. In the Northern Plains, sources pegged the St. Paul, Minn., market firmly at the $480/st FOB level, with delivered tons reported in the $525-$550/st range in North Dakota.
California:
Granular urea was steady at $550-$600/st FOB Stockton, with prilled urea priced at the $620/st level FOB San Diego.
Pacific Northwest:
Urea was quoted at $530-$540/st FOB in the Pacific Northwest, up from $465-$470/st at last report, with the low confirmed at Rivergate, Ore. Delivered urea was pegged at $540-$570/st in the region, depending on location, up from the prior $490-$520/st rail-DEL range.
Western Canada:
Urea prices in Western Canada jumped to C$755/mt FOB on a spot basis during the week, up from the prior C$695-$720/mt FOB range, though most suppliers had reportedly pulled offers until the market settles. One source quoted a C$690/mt DEL level for December shipment late the previous week, but he said no new offers were on the table as of Sept. 4.
India:
Rashtriya Chemicals and Fertilizers Ltd. (RCF) surprised the urea market, calling a tender to close on Sept. 15 with a shipping deadline of Nov. 14. One trader said the call came as he was talking to potential suppliers in China, forcing both sides to back away and reevaluate their positions.
A new tender was previously expected closer to Sept. 26, when the last of the urea from the Indian Potash Ltd. (IPL) tender is slated to be shipped. Industry watchers previously calculated that India would be about 2-2.5 million mt short of urea by the end of the year unless a strong tender was conducted before the end of September. New statistics that showed the shortfall could reach 3 million mt appear to have driven RCF to the early call.
At the same time, word of new restrictions on urea exports came out of China. Adding to the concern, reports indicated that while an overall limit on exports would be enforced, there is reportedly pressure from the central government to place an even bigger restriction on urea shipped specifically to India.
The restriction on Indian purchases appears to stem from political disputes between India and China. Sources noted that Chinese Premier Xi Jinping’s choice to skip the 2023 G20 Summit in India was seen as a snub to the Indian government. At the same time, the two countries are embroiled in an ongoing border dispute.
Sources were initially concerned the new restrictions would include the tonnage already booked for shipment to IPL. The issue was quickly settled, however, and vessels previously committed to picking up cargoes for IPL were allowed to berth and begin loading product. There remains some concern that there will not be enough time to secure all the tons promised out of China before the Sept. 26 deadline, however.
China:
A memo from CNAMPGC issued earlier this week required urea producers to ensure they have enough tons to meet China’s mini-application season in October and November. The wording implied that material slated for export under the IPL tender might not be allowed to be shipped before the Sept. 26 tender deadline.
After many phone calls, sources said the situation was clarified. Product already cleared for export to India under the IPL tender could be shipped, while other tons currently undergoing inspection for export approval will also be allowed to be exported.
Late last month, sources expressed concern that the export inspection process could represent a roadblock to meeting the Sept. 26 deadline. Now, traders are apparently more concerned about the logistics of getting the urea from the factories to the ports and onto ships. One trader said the inspection process is taking less time than previously estimated, leaving the urea’s physical movement as the main issue.
The call to limit exports appeared to be directed at shipments that would occur in October and November, the same shipping window covered under the new RCF tender. Rumors surrounding the new limitations suggested an unwritten understanding that producers would be permitted to export to as many regional buyers as they like, but that no exports were to be directed to India.
Sources said they were unclear as to why India was reportedly blocked from receiving urea, though traders suggested both a long-standing border dispute between India and China, as well as reports that Chinese leader Xi Jinping will not attend the G20 Summit hosted by India this month as possible triggers.
The RCF tender call and the potential limiting of exports combined to shut down all discussions of pricing out of China, leaving prills in the low-$350s/mt FOB for export. Granular has been noted at a much higher price, but with availability limited to the domestic market. The domestic paper market moved from $300/mt to $354/mt ex-plant due to the recent events.
Black Sea:
Black Sea prilled urea prices reacted to the news from India and China, moving up to $357-$394/mt FOB from last week’s $320/mt FOB.
Indonesia:
New sales of granular urea were reported at the last tender price of $367/mt FOB. So far, Pupuk has closed deals totaling about 130,000 mt for September shipping, sources said. Many of the tons are expected to go to Australia, though sources reported a vessel inquiry indicating that one cargo could be heading to India to cover an IPL award.
Export licenses for 2023 are nearly used up, players said. Indonesia is now expected to hold one more selling tender for October and November shipments, after which exports will likely dry up until second-quarter 2024.
Petronas reportedly closed a deal for 30,000-40,000 mt at $405-$410/mt FOB. This could be the level that Pupuk shoots for in its next selling tender. The price fits with discussions reported following the urea tender call by RCF.
Middle East:
Producers remain focused on fulfilling their orders from regular contract holders and awards from the IPL tender. Sources said that when a price is mentioned, it is usually closer to $420/mt FOB than the low-$380s/mt FOB achieved under the IPL tender.
No one was surprised by the higher price indications from the region. Even without the RCF tender call and indications that China will be limiting urea exports to India, producers were looking to move the price up for the last quarter of the year, sources said.
A reported granular urea auction from Iran featured a price floor of $330/mt FOB. The bids in the tender all seemed to come in at $310/mt FOB. Following the RCF tender call, however, sources noted prices firming to $340-$345/mt FOB.
Prices out of Egypt opened the week with small sales in the $430s/mt FOB, while larger quantities were reported going for $455/mt FOB by the end of the week. Producers are expected to keep pushing for more next week. Sources estimated that prices could reach $470/mt without much effort.
Turkey:
January-July urea imports firmed to 2.2 million mt, according to Trade Data Monitor,up dramatically from the 1.3 million mt on record through the same period of 2022. July imports of 261,000 mt were down slightly from 287,000 mt in July 2022. Oman captured 48% of the market with 124,000 mt, followed by Egypt with 82,000 mt.
Ethiopia:
Ethiopia imported 557,000 mt of urea in January-August under deals for steady shipments received throughout the year, Trade Data Monitor reported,up 22% year-over-year from 456,000 mt. Egypt dominated suppliers with 350,000 mt, for 63% of the market.
August imports stood at 159,000 mt, rising from 50,000 mt in August 2022. Oman sent 108,000 mt – the country’s first shipments to Ethiopia since 2016 – followed by 50,000 mt from China.
Brazil:
Landed urea prices leapt by roughly 30% on Sept. 4, to $450-$455/mt CFR from last week’s $340-$355/mt, following a surprise Indian tender announcement and news that the Chinese government had temporarily halted vessel loading.
Sources cited rumors of difficulties in obtaining the necessary export permits for 400,000 mt of Chinese urea committed to the IPL tender by the shipping deadline. The market subsequently came to a standstill, players said, with most buyers planning to delay purchases for a few more weeks in an undersupplied market.
Rondonopolis followed the import market higher, jumping to $540-$590/mt FOB ex-warehouse from last week’s $480-$490/mt FOB. The price surge triggered inactivity in the region, with buyers awaiting the outcome of the Indian tender before making any moves. Earlier offers reported above $600/mt FOB ex-warehouse saw no deals closed at that level.
Trade Data Monitor put January-August urea imports at 3.9 million mt, an 11% decline from the year-ago 4.4 million mt. August imports of 478,000 mt were off 27% from the 657,000 mt logged in August 2022.