US Gulf:
New NOLA urea business was confirmed during the week at $300-$307/st FOB for January physical tons, with most volume trading at the $305/st FOB level. February trades were reported in the $310-$312/st FOB range. Those levels were up from the last reported range of $292-$308/st FOB for December-January trades.
Eastern Cornbelt:
The urea market was pegged at $355-$375/st FOB in the Eastern Cornbelt, with the low confirmed in Illinois on a spot basis. The Cincinnati, Ohio, market was pegged at the $365-$370/st FOB level in early January.
In the Great Lakes region, Michigan urea prices were quoted at $385-$395/st FOB and $405-$410/st DEL.
Western Cornbelt:
Urea prices were quoted at $360-$390/st FOB in the Western Cornbelt, with the low confirmed at St. Louis, Mo., and the high in Iowa on a spot basis. The Catoosa/Inola, Okla., urea market was pegged at the $365-$370/st FOB level in early January.
In the South Central region, the Convent, La., urea market slipped to $350/st FOB, down from $385/st FOB in mid-December.
Northern Plains:
The urea market dropped to $385/st FOB St. Paul, Minn., below the $400-$410/st FOB range reported in mid-December. Delivered urea offers in the Northern Plains were reported in the $425-$435/st range for fill tons and $445-$465/st DEL for spring.
Northeast:
The latest urea prices fell to $385-$395/st FOB in the Northeast, down from the prior $400-$410/st FOB range, with the low confirmed at Fairless Hills, Pa., for January tons. February-March pricing at Fairless Hills was quoted at the $390/st FOB level.
Eastern Canada:
The urea market slipped to C$680-$725/mt FOB in Eastern Canada, down from prior low of C$710/mt FOB.
India:
The National Fertilizers Ltd. (NFL) urea tender closed on Jan. 4 with 20 companies offering a total of 2.7 million mt. The technical envelopes containing individual tonnage offerings were opened on Jan. 5, while the envelopes with pricing offers are not expected to be opened until Jan. 8.
Trading companies offered 1.6 million mt for West Coast deliveries and 1.1 million mt for East Coast facilities. An additional 45,000 mt was offered directly by PIC on an FOB basis.
| Offering Company | Quantity (mt) | ||
| Total | West Coast | East Coast | |
| Aditya Birla Group | 479,000 | 295,000 | 184,000 |
| Midgulf | 300,000 | 150,000 | 150,000 |
| Samsung | 270,000 | 180,000 | 90,000 |
| Fertistream | 180,000 | 100,000 | 80,000 |
| OQ Trading | 150,000 | 105,000 | 45,000 |
| Continental | 145,000 | 95,000 | 50,000 |
| Dreymoor | 121,500 | 45,000 | 76,500 |
| Agri Commodities | 106,000 | 71,000 | 35,000 |
| Sun International | 100,000 | 100,000 | |
| Aries | 100,000 | 50,000 | 50,000 |
| MacroSource | 100,000 | 50,000 | 50,000 |
| Keytrade | 100,000 | 100,000 | |
| Koch | 95,000 | 47,500 | 47,500 |
| Ameropa | 94,300 | 47,150 | 47,150 |
| Indagro | 94,000 | 47,000 | 47,000 |
| Fertiglobe | 90,000 | 45,000 | 45,000 |
| Fertcom | 50,000 | 50,000 | |
| RE Energy | 50,000 | 50,000 | |
| Medallion | 50,000 | 50,000 | |
| FOB | |||
| PIC | 45,000 |
Pricing ideas shifted as 2023 ended and the deadline for submission to NFL neared. Market watchers initially expected offers at $310-$320/mt CFR, though expectations shifted to $320-$340/mt CFR as the tender deadline approached. As the week ended, however, rumors suggested that West Coast offers may drop back to sub-$320/mt CFR levels, with East Coast offers landing in the low-$320s/mt CFR. Awards at $320/mt CFR would represent a drop of $80/mt from the previous tender.
Even with the lower prices, sources expect NFL to buy just 500,000-800,000 mt in the tender. They point to existing urea reserves of about 7 million mt and steady pressure from the government to limit imports as a cost-saving move. Should offers come in significantly lower than expected, there is some chatter that NFL could take closer to 1-1.5 million mt. Sources estimate that only 2 million mt will be offered, however, and it would be rare to see a commitment for such a high percentage of offered tons.
The dramatic drop in pricing expectations came as the global urea market showed growing reserves and limited demand. India is currently the market’s only major buyer, sources said, and India’s first-quarter demand is insufficient to tighten the market. Demand from the global market’s other two major buyers, the US and Brazil, is not expected to kick in until after the NFL tender’s Feb. 29 shipping deadline.
The Indian media is beginning to report on planned subsidies in the FY2024/25 budget. Government officials claim that India will require fewer imported tons of urea in the upcoming fiscal year and will thus be able to reduce the amount spent on subsidies. According to the reports, the government is counting on stepped-up domestic urea production and increased use of Nano urea to replace imported tons.
Pakistan:
A second lot of 100,000 mt booked from Azerbaijan was delivered to Pakistan this week. The cargo was part of a 200,000 mt deal to fill a shortfall in urea supplies for the current application season.
The government of Pakistan was initially ready to call a standard tender for the 200,000 mt, but later settled on securing a government-to-government deal instead. Talks were initiated with several urea-producing countries, and the deal was struck with Azerbaijan. The first lot of the order was delivered during the last week of December.
By itself, Azerbaijan could not deliver the 200,000 mt in the brief period set by Pakistan. Azerbaijan’s State Oil Company of Azerbaijan Republic (SOCAR) arranged for its own material, as well as urea from the UAE, Qatar, and Russia to be shipped to Pakistan.
The Azerbaijan government also offered Pakistan favorable financing on the deal. In addition to a generous payment schedule, Azerbaijan will not charge Pakistan interest on the extended payment plan, according to local media reports.
Black Sea:
Urea prices in the Black Sea held steady in the first week of 2024. Prilled urea remained at $270-$280/mt FOB.
Indonesia:
Pupuk wasted no time offering tonnage for sale under its 2024 export permits. A tender for 10,000-45,000 mt each of granular and prilled urea closed on Jan. 5, with initial reports indicating that pricing for the granular material will not shift much.
Ameropa was reported to bid slightly above $320/mt FOB for the full 45,000 mt of granular urea. Other bids came in around $315/mt CFR, with some bidding for less than the full tonnage offered.
The last Indonesian tender was settled at $321.50/mt FOB. The Ameropa bid represents a flatness to the market that others see as softening.
There are expectations that Pupuk will release more than the 45,000 mt if Ameropa and other buyers are willing. In the past, Pupuk has sold more tons than it has advertised, using the tender results to set prices for the private deals.
Sources previously said that an award price in the $320s/mt FOB could eliminate Indonesian tons from consideration in the NFL/India tender. However, there are still regional buyers willing to pay a slight premium for product from Indonesia, one trader noted, especially at a time when Chinese exports are unavailable or severely restricted.
Middle East:
Traders are calling the market $315-$320/mt FOB. However, if the NFL/India tender shows prices in the $320s/mt CFR, the netback to the Arab Gulf would run about $10/mt lower.
The Iranian government set its new official urea price at $290/mt FOB. Sources quickly reported discussions in the low-$280s/mt FOB, however.
Exports of urea from Iran softened 5% in 2023, Trade Data Monitor reported, to 4.8 million mt from 5.1 million mt. Turkey led buyers with 2.3 million mt, followed by South Africa with 445,000 mt. Exports totaled 1.1 million mt in the fourth quarter and 309,000 mt in December, off from last year’s 1.4 million mt and 440,000 mt, respectively.
Buyers of Egyptian material remained quiet following the short price run-up reported in the last half of December. The latest deal out of Egypt was valued at $340/mt FOB in late December. While producers are now looking for $345/mt FOB, they face a weaker global urea market and more aggressive buyers looking for bargains.
China:
Sources continue to expect urea exports from China to be limited to small and infrequent cargoes. The export constraints are anticipated to remain in force throughout the first quarter of the year.
Thailand:
Thailand imported 2.4 million mt of urea in January-November, Trade Data Monitor reported, up 40% from the 1.7 million mt received in January-November 2022. November imports were 108,000 mt, a sharp increase from 57,000 mt in November 2022.
Turkey:
Urea imports in Turkey totaled 2.9 million mt in January-November, according to Trade Data Monitor, a 28% increase from the year-ago 2.3 million mt. November imports were down 45%, however, to 154,000 mt from the 282,000 mt received in November 2022.
Brazil:
Brazil urea prices increased 2.4%, to $320-$335/mt CFR from $310-$330/mt CFR at last report. The market remains slow as players await the results of the Indian tender, though sources reported multiple offers of warehouse product during the week.
The Rondonópolis market has remained stagnant after a slight demand increase boosted prices by 4.4% in the second week of December. Offers were noted at $475-$480/mt FOB ex-warehouse, narrowing from $460-$490/mt FOB.
Recent rains brought favorable prospects for soybean sowing, sources said. Soybean acres in Mato Grosso state are now 100% planted, according to data from Brazil’s National Supply Co. (CONAB), and suppliers have shifted the focus to deliveries for the start of corn planting in February. The northern region of the state is reportedly facing supply difficulties due to discharge delays in the port of Santarém.
Argentina:
Trade Data Monitor pegged January-November urea imports at 732,000 mt in Argentina, a 16% decline from the 871,000 mt received during the same period of 2022. November imports jumped 68%, however, to 172,000 mt from 71,000 mt in November 2022. Egypt supplied 77,000 mt for the month, followed by 53,000 mt from Nigeria.
Ethiopia:
Urea imports in Ethiopia rose 68% in 2023, according to Trade Data Monitor, to 765,000 mt from 457,000 mt in 2022. Egypt led suppliers with 506,000 mt, and Oman added 161,000 mt. Ethiopia registered zero imports in December, down from 24 mt in December 2022.
The fourth quarter is generally a slow period for imports to Ethiopia, with the bulk of the year’s shipments instead coming during the first half of the year. Fourth-quarter 2022 imports exemplified this norm with only 301 mt received. The 2023 urea market’s volatile nature upended the normal pattern, however, with Ethiopia importing 208,000 mt in October-December 2023.