US Gulf:
Limited NOLA urea transactions were confirmed in the $355-$365/st FOB range for November tons, up from last week’s $345-$355/st FOB range. Sources attributed the slight uptick in part to news of possible Egyptian natural gas curtailments and strengthening gas prices in Europe.
Eastern Cornbelt:
Urea pricing slumped to $410-$425/st FOB in the Eastern Cornbelt, depending on location, with the low confirmed out of spot river terminals in Illinois and Indiana. The Cincinnati, Ohio, market was pegged at $415-$420/st FOB, down from last week’s $420-$430/st FOB range.
Western Cornbelt:
Urea prices in the Western Cornbelt dropped to $405-$410/st FOB St. Louis, Mo., at the low end of the range, with the high reported at the $440-$450/st FOB mark in Iowa and at Caruthersville, Mo.
Southern Plains:
Urea at Catoosa/Inola, Okla., slipped to a low of $420-$425/st FOB, down from last week’s $440-$450/st FOB range, thanks to the reopening of the Arkansas River to barges after a shutdown since mid-October due to low water and dredging activity.
Forward urea offers were reported at $415-$420/st FOB Catoosa/Inola for 1Q shipment, while some prompt prices remained as high as $445/st FOB at the port. Sources also reported recent Houston offers at the $445/st FOB level at the high end of the regional range.
“The numbers are a little sporadic out there right now depending on if you have the product or not,” reported one regional contact. “The river has been giving everyone fits, but it is back open now so people should be getting their product throughout the next few weeks.”
South Central:
Urea was pegged in a broad range at $395-$450/st FOB in the South Central region, with the low confirmed at Convent, La., and the high out of river terminals in Arkansas and Tennessee. Kentucky sources pegged the Ohio River market at $410-$425/st FOB for the latest offers.
Southeast:
Urea slipped to $440-$445/st FOB port terminals in the Southeast, down from $450/st FOB in mid-October. In the Northeast, the latest urea offers at Fairless Hills, Pa., dropped to $450/st for November, down $10/st from last week.
India:
Indian Potash Ltd. (IPL) issued letters of intent (LOIs) to buy early this week. Several traders wasted no time in securing vessels for their awards, and sources reported at least eight vessels nominated for shipments to India by the end of the week.
A minimum of four cargoes will come from Indonesia, sources reported, while rumors suggested China could have up to nine cargoes available for export to India by the tender’s Dec. 20 shipping deadline. Tonnage estimates from China have already risen from last week’s 3-4 cargoes to at least 5-6 cargoes this week.
The total amount of urea awarded increased slightly as the LOIs were issued. Fertiglobe was ultimately awarded 50,000 mt instead of the 45,000 mt reported last week, lifting the total take in the tender to a reported 1,672,900 mt.
The quantity that IPL will receive between now and the end of the year, combined with increased domestic production, is expected to allow India to hold off on calling another tender until late December, said sources.
The Indian government reported September urea production at 2.65 million mt, stronger than expected. Urea production in the April-September fiscal year-to-date was reported at 15.27 million mt, above 13.93 million mt in the same period of 2022.
Even with stepped-up production and a large order in the latest tender, sources said India still needs another 1 million mt to meet year-end demand. Traders pointed to stronger-than-expected domestic sales in India to back up their view that another tender will have to be called before the end of the year.
Black Sea:
Prilled urea from the Black Sea firmed to $345-$370/mt FOB. There are reports that product from the area will be used to cover awards from the IPL/India tender.
Bangladesh:
Bangladesh Chemical Industries Corp. (BCIC) closed its first tender of the year. The tender called for two 50,000 mt deliveries of bagged granular urea to be shipped to Mongla and Chattogram. Even before issuing an award in the tender, BCIC called a second tender to close on Nov. 14. The new tender calls for Mongla and Chittagong to each receive an additional 50,000 mt of granular urea.
Sources reported the lowest prices offered in the first tender at $498-$506/mt CFR bagged, with no awards yet issued. The freight from China was said to run $50/mt, providing a healthy netback of around $450/mt FOB at a time when the China granular price is pegged in the mid-$380s/mt FOB.
In addition to the tenders, the government directed BCIC to purchase 300,000 mt from SABIC under a long-standing government-to-government arrangement between Bangladesh and Saudi Arabia. The government also instructed BCIC to pick up an additional 30,000 mt from the UAE through Fertiglobe.
Thailand:
SABIC continues to dominate the Thai urea market, sources said, offering favorable terms that help the company hold on to a large portion of the market.
Urea imports to Thailand firmed 37% in January-September, Trade Data Monitor reported, to 2.1 million mt from 1.5 million mt in the same period of 2022. Saudi Arabia sent 883,000 mt, followed by Malaysia with 431,000 mt.
July-September imports were 866,000 mt, a 48% increase from the 584,000 mt imported in third-quarter 2022. September imports of 269,000 mt rose significantly from 79,000 mt in the prior September. Saudi Arabia accounted for about one-third of the month’s imports, shipping 99,000 mt.
Indonesia:
Pupuk has arranged for additional sales of prilled urea following the deals cut last week. Aditya Birla picked up 45,000 mt of prilled urea in addition to the two granular cargoes secured last week, sources said. All three lots are expected to be used to cover awards from IPL in India.
Samsung last week secured a prilled cargo of 42,000 mt that was also expected to go to India. The Japanese trading house was able to buy one more 40,000-45,000 mt cargo this week that will reportedly be used for sales into Southeast Asia, sources said.
The granular urea price remained at $381/mt FOB, while prilled urea was pegged at $379.50/mt FOB.
Middle East:
Seemingly focused on fulfilling orders related to the IPL tender during the week, Middle East suppliers are telling potential buyers the price is now $400/mt FOB. Buyers are not yet willing to rise to that level, however, leaving prices unchanged from the mid-$380s/mt FOB set through the IPL/Indian tender.
Some traders expressed concerns about possible complications in their orders arising from the Israel-Hamas conflict. One trader described the concerns as mild, however, citing a lack of concrete statements or actions to escalate the worries so far.
Iranian producers have been hard-pressed to raise prices, and a tender last week was scrapped after the price failed to reach the $350/mt FOB target set by producers. Producers held to their $350/mt FOB price this week, while buyers refused to go above $340/mt FOB.
The week opened with producers receiving a notice from the Egyptian government alerting them to a 30% reduction in their natural gas supplies. By the end of the week, however, producers had not heard anything further on the matter.
Producers and traders said no notice had been issued as to when the cutback will occur, nor how long it may be in effect. International traders who have depended on Egyptian material described the lack of clarity as disconcerting.
At least one producer will reportedly not have a problem handling the cutback when – and if – it comes. MOPCO was planning to shut a plant for a routine turnaround in November, sources said. The closure should allow MOPCO to continue operating as scheduled, even if the gas supply is reduced.
The cutback notice prompted concerns that Egyptian material might become scarce in November and December, and prices quickly jumped to $410/mt FOB in a series of sales. MOPCO and Alexfert each sold lots of 5,000 mt for November shipment to Europe, while a larger deal was reportedly done into Turkey at a slight discount. Players reported a 40,000-50,000 mt sale into Turkey priced just under $400/mt FOB.
The successful conclusion of deals at $410/mt FOB prompted producers to begin asking for $420/mt FOB.
China:
Sources reported prilled urea sales of 8,000-10,000 mt priced in the upper-$360s/mt FOB. At the same time, sources said the domestic price for prilled product is now showing an export-equivalent in the low-$360s/mt FOB.
These levels represent a significant drop from the price earned under the IPL/India tender. Producers, clearly hoping to reclaim the higher price, were said to offer product at $380/mt FOB, but without success.
The hope by traders that China’s export inspection process might be eased or streamlined appears to be dashed. There is no evidence of any special treatment being given to urea producers or traders who want to move product offshore to India, sources said.
Expectations are growing that more urea from China will be available than previously expected. Sources are now speculating that up to six cargoes could be available soon, with the expectation that up to nine cargoes could ultimately be cleared for export by the tender’s Dec. 20 shipping deadline.
Even as some buyers look for large cargoes to export to India and other major buyers, traders handling smaller lots have continued to secure 5,000-10,000 mt lots for regional buyers, sources said.
The export of granular urea is less common than prilled product. A sale into the Philippines reportedly showed a netback in the mid-$380s/mt FOB, keeping granular pricing unmoved from the level earned in the IPL tender.
Ethiopia:
A new tender announced by Ethiopian Agricultural Business Corp. (EABC) will close on Nov. 14. EABC is asking for 562,000 mt to be delivered evenly through mid-2024, while calling for offers in 50,000 mt lots. In the past, EABC has received 2-3 shipments per month.
Turkey:
Trade Data Monitor put January-September urea imports in Turkey at 2.6 million mt, a 59% increase from the 1.6 million mt received in January-September 2022. Oman led suppliers with 1.2 million mt, while Egypt added 662,000 mt.
Third-quarter 2023 imports were pegged at 638,000 mt, up slightly from the 628,000 mt recorded one year earlier. September imports were 200,000 mt, lifting from 154,000 mt in September 2022. Oman sent 81,000 mt for the month, followed by 70,000 mt from Venezuela.
Brazil:
Brazil urea prices pulled back to $385-$400/mt CFR from last week’s $395-$410/mt CFR, while bids at $375-$380/mt CFR reportedly failed to attract sellers. November import lineups show 1.3 million mt en route to Brazil, an estimated 30-40% of which is currently unsold.
With no activity reported in the market, Rondonópolis urea prices were stable at last week’s $540-$550/mt FOB ex-warehouse. Drought is compromising soybean planting in the region, potentially delaying the harvest and threatening to delay planting for the corn safrinha.
Farmers are delaying purchases as they evaluate the planting risks of corn, especially considering urea’s current unfavorable barter ratios. Amid costly inputs and risky yields, it remains possible that farmers will plant fewer acres, reduce nutrient application, or switch crops.
Argentina:
January-September urea imports fell 29% year-over-year, according to Trader Data Monitor, to 516,000 mt from 723,000 mt. Imports slipped to 344,000 mt in the third quarter, down from the year-ago 406,000 mt, while September imports of 62,000 mt were off from the 184,000 mt delivered in September 2022. Egypt supplied 90% of the month’s imports, sending 56,000 mt.