US Gulf:
NOLA urea rebounded slightly during the week. New trades were confirmed at $295-$310/st FOB for prompt or December business, up from last week’s $292-$305/st FOB range.
Eastern Cornbelt:
Urea was quoted at $365-$400/st FOB in the Eastern Cornbelt, depending on location, with the low reported at Cincinnati, Ohio.
Western Cornbelt:
Urea slipped to $365-$400/st FOB in the Western Cornbelt, down $15-$20/st from the previous week, with the low reported at St. Louis, Mo.
California:
Granular urea pricing in California reportedly dropped to $510/st FOB Stockton, down from the prior $530-$535/st FOB range, with rail-DEL urea falling to $420-$450/st from the previous $500-$510/st DEL level. Prilled urea remained at $600/st FOB San Diego.
Pacific Northwest:
Urea dropped to $425-$430/st FOB in the Pacific Northwest, down from the prior $475-$480/st FOB level, with the low confirmed at Rivergate, Ore. Delivered pricing slipped to $450-$474/st in the region, below the previous $470-$494/st DEL range.
Western Canada:
Urea prices were down in Western Canada, falling to C$660-$685/mt DEL for the latest December-January offers, well below the C$750-$760/mt DEL range reported in early November. No current FOB offers were confirmed in the region in late November.
Black Sea:
The price for prilled urea out of the Black Sea followed the global trend downward. Sources now put the price at $280-$290/mt FOB.
India:
Sources are becoming more convinced that the next urea tender will not take place until early January 2024. While some continue to speculate that a tender call could still occur in December, the sense from India is that nothing more will happen this year. India still needs 1-1.5 million mt of urea to close out the fiscal year, which ends March 31, 2024.
Even as vessels begin to arrive with material from the last tender, sources said distribution of urea in the country is uneven. Some local distributors reportedly have plentiful supplies but few buyers, while long lines for limited tonnage were reported in other areas.
Pakistan:
After a week of speculation, Trading Corporation of Pakistan (TCP) finally pulled the plug on its tender for 200,000 mt of urea. Sources put the tender’s best offer price at $370/mt CFR, a level that TCP estimated was too high for the current market.
At the same time TCP was holding its tender, the company was also talking with other countries to secure the necessary urea at more favorable government-to-government rates. In the end, TCP scrapped the tender and accepted a deal with Azerbaijan for the full 200,000 mt.
Indonesia:
Pupuk’s last tender price of $340/mt FOB for granular urea now seems high for the market, said sources. End users continue to push for lower prices, leaving Samsung, the winner of the last auction, holding material that many now think is overpriced.
By all appearances, Samsung was planning on using the material from the tender to cover a sale to Ethiopia through the Ethiopian Agricultural Businesses Corp. (EABC) tender. EABC has still not issued awards in the tender, however, and sources said the buyer may be trying for lower prices.
The continued delay in issuing an award could leave Samsung with a December cargo of granular urea with no home.
Thailand:
Thailand imported 2.2 million mt of urea in January-October 2023, according to Trade Data Monitor, up 34% from the 1.7 million mt received through the first ten months of 2022. October imports were steady year-over-year, at 132,000 mt.
Middle East:
Producers this week focused on fully covering contracts and handling the approximately 460,000 mt of urea awarded in the last Indian tender.
The market’s softness was reflected in bids nearing $300/mt FOB, sources reported. No deals were cut at this level, but one trader said the bids were unsurprising given the general decline in international prices.
Late last week, reports circulated that Egyptian producers had beat out their counterparts from Russia and Uzbekistan to close deals at $360-$363/mt FOB. Shortly after the transactions closed, Helwan confirmed a sale of granular urea at $355-$360/mt FOB.
The rapid price drop had buyers bidding at $340/mt FOB during the week, while producers were reported holding firm at $350/mt FOB.
Turkey:
Buyers were reported playing producers from Russia, Uzbekistan, and Egypt against each other in a search for ever-lower prices. Sources said some Nigerian urea may have also been part of the discussions. In the end, the Egyptian producers won out, sources said.
Trade Data Monitor put January-October urea imports at 2.8 million mt, up 39% from the 2 million mt received one year earlier. October imports of 145,000 mt were off 57% from 343,000 mt in October 2022, with about half of the tonnage coming from Oman.
Ethiopia:
EABC has yet to confirm potential awards in its urea tender for 562,000 mt. Sources tied the delay to the significant decline in urea prices since the tender closed in early November. The buyer may try to negotiate lower prices, one trader speculated.
Shipments under the tender are slated to begin in December and continue through May 2024.
China:
The week closed with Chinese authorities halting urea export inspections at several ports. Sources said all ports could be affected by Nov. 30. The move effectively stops the export of any urea that has not already received permission to be loaded to a vessel. The ban on inspections and exports is expected to last through March 2024.
The action came on the heels of reports that a new quota system, designed to limit exports of fertilizers to 3-4 million mt, would be established through the first quarter of 2025.
The ending of inspections is not expected to affect the tons already cleared for shipment to India under the Indian Potash Ltd. (IPL) tender. Those who will be most impacted are the regional buyers, who typically buy smaller 5,000-8,000 mt lots.
No one expected any large shipments of urea until the next Indian tender call. Even then, sources did not anticipate Chinese urea to play a major role in satisfying India’s demand. The new export policy, and now the announcement to end inspections into April 2024, effectively takes Chinese urea out of consideration.
The high price of domestic urea caused concern for Beijing, prompting the export quota plan and now the outright ban on exports. The market’s current export price, estimated in the upper-$350s/mt FOB, is based on the domestic market and is too high for international buyers. Prices are now expected to come down as domestic reserves build.
One trader noted a possible upside under the new policy. As domestic prices will be forced down and exports will be limited, Chinese traders with urea available for export after inspections resume might be able to offer the product at lower prices than other sources.
However, Chinese producers and traders decided a few years back to no longer be a low-cost supplier. If and when urea is once again exported from China, sources said the price will fit in with the prevailing international price.
Brazil:
Brazil urea prices were noted at $310-$320/mt CFR, tightening from last week’s $300-$330/mt CFR. Last week’s low prices were no longer available, players said, as improved weather conditions and positive barter ratios appeared to stimulate demand. Market players are now estimating a 25% reduction in demand for safrinha.
More aggressive urea offers have begun to appear in the Rondonópolis market, accelerating the pace of sales. Though some material continued to be offered at $480-$490/mt FOB ex-warehouse, low liquidity at these levels, along with pressure to increase demand, drove new business to $450-$465/mt FOB by the end of the week.
The slight increase in demand was a positive for corn safrinha planting. Drought conditions in the region have delayed the soybean season, pressuring the safrinha and reducing corn production potential by as much as 15 million mt, according to MB Agro Consultancy partner Alexandre Mendonça, as reported by Reuters.
Argentina:
January-October urea imports softened 30% year-over-year, Trade Data Monitor reported, to 561,000 mt from 800,000 mt. October imports were 45,000 mt, a 42% decline from the 77,000 mt imported last October. Egypt sent 26,000 mt for the month.