US Gulf:
New NOLA urea business for February-March was reported at $353-$360/st FOB, up from last week’s $345-$350/st FOB range. Loaded physical barge trades were quoted at $357-$360/st FOB during the week, with March trades pegged in the $353-$358/st FOB range.
April business was pegged at $350-$355/st FOB, with May transaction reported in a broad $335-$350/st FOB range, but both were outside the week’s reporting window.
US Imports:
December urea imports totaled 370,085 st, up 24.3% from the year-ago 297,812 st. July-December volumes totaled 1.65 million st, a 1.0% increase on the prior year’s 1.63 million st. July-December imports from Russia were 508,100 st, while Qatar sent 376,603 st. Saudi Arabia shipped 261,727 st, ahead of 185,553 st from Algeria and 183,676 st from Canada.
US Exports:
Urea exports for December softened 18.9% year-over-year, to 78,516 st from 96,800 st. July-December exports were 48.7% lower, at 444,597 st compared to 866,033 st last year. Exports to Canada totaled 253,511 st in July-December, followed by 77,606 st to Mexico and 77,039 st to Chile.
Eastern Cornbelt:
Urea prices remained at $400-$410/st FOB in the Eastern Cornbelt, with the low confirmed at Cincinnati, Ohio. The market out of Illinois River terminals remained at the $405/st FOB level for February-March and $410/st FOB for April-May tons.
Western Cornbelt:
Urea was unchanged at $390-$410/st FOB in the Western Cornbelt, with both the high and low once again confirmed in St. Louis, Mo. In the Southern Plains, the latest Catoosa/Inola, Okla., offers were quoted as high as $420/st FOB, up from the prior $410-$415/st FOB range.
Northern Plains:
Urea prices jumped to $400-$420/st FOB and $500-$540/st DEL in the Northern Plains, depending on location and time of shipment, up sharply from the $385-$390/st FOB and $430-$490/st DEL ranges reported in late January. Sources reported limited availability, with no Q1 or April tons being offered from some regional suppliers.
Northeast:
Sources reported firming urea prices in the Northeast in mid-February as vessel delays contributed to tight supplies. The latest offers jumped to $410-$420/st FOB in the region, up sharply from the $385-$395/st FOB range reported in late January, with the high reported at Baltimore, Md., and the low at Fairless Hills, Pa.
The East Liverpool, Ohio, urea market was pegged at $415/st FOB during the week, with delivered tons quoted at the $430/st level in Pennsylvania.
Eastern Canada:
The urea market tightened to C$680-$725/mt FOB in Eastern Canada, depending on location, up from the prior low of C$645/mt FOB.
India:
The last vessel carrying product for the National Fertilizers Ltd. (NFL) tender has been nominated, sources said, and will pick up its cargo from Ruwais. Under the terms of the tender, the deadline for shipping material is Feb. 29.
With the last cargo of urea ready to be loaded, plans for the next tender would normally be underway. Uncertainty is growing as to when a new tender might be called, however. Market sources initially expected the call to come just as the last vessel from the previous tender began loading. Players are now saying the tender call may not come until early March.
Traders are not expecting large purchases in the next Indian tender. Sources pointed to a tighter supply situation for April and May shipments, noting that Australia, Brazil, and the US are all expected to be looking for tons at that time.
There is a growing view that China will only be willing to supply one or two cargoes for the tender. At the same time, transportation issues may exclude large-scale participation from Russia, despite reports that Russian urea supplies are growing.
Russian material from the Black Sea would normally transit the Suez Canal to reach India. With the ongoing attacks against vessels in the Red Sea and Gulf of Aden, however, shipowners are reluctant to allow their vessels to enter these waters. In lieu of the Suez route, shipments to India from Russia will have to go around the tip of Africa, a more expensive journey. As a result, either the delivered price might be too high for the Indian buyer or suppliers will have to accept a significantly lower netback in order to make the delivered price more competitive.
The material received under the new tender will be financed through the 2024/25 budget taking effect on April 1. Fertilizer subsidies have been reduced under that budget, however. According to figures released to local media, the amount set aside to subsidize nitrogen fertilizers – mostly consisting of urea – will total about Rs1.2 trillion ($14.3 billion), a drop of approximately 8% from the Rs1.3 trillion ($15.5 billion) allocated in the 2023/24 budget.
The biggest cut will come from subsidies set aside for imported urea. The new level was reported at Rs187 billion, down 30% from Rs265 billion in the current budget.
The Indian government has pushed for both lower subsidies and stepped-up domestic production, and sources said they have seen reports of increased output achieved by Indian urea plants. This increased production could also impact how many tons will be sought in the next tender.
Black Sea:
Russian urea reserves are reportedly building and will soon need to be exported, sources said. For some of the product, the most logical place to go is India, though sellers will have to consider that offers into India are priced on a delivered basis and their cargos will most likely be forced to take the longer and more expensive route around Africa. This would mean that producers will have to absorb a cut in their estimated netbacks.
The price for prilled urea has already begun to slip. Sources reported the week’s market at $300-$310/mt FOB.
Mediterranean:
Granular urea in the Mediterranean continued to inch higher, albeit at a slower pace. Sources said $435/mt CFR was achieved into Spain for small lots, despite concerns about drought conditions in the country. Offers of $420-$425/mt CFR were heard at the lower end of the range in Italy for the last sales, but no fresh business was confirmed.
Elsewhere, Turkey is still reportedly looking for cargos, with Iranian offers reflecting more than $400/mt CFR. Iranian availability is questionable, however, following reports of explosions affecting the gas pipeline supplying a prilled urea plant in the North Khorasan region of Iran.
In the Black Sea, an uptick in demand from Ukraine, Romania, and Bulgaria has also pushed granular prices closer to the $400/mt FOB mark, with more than 20,000 mt reportedly committed this week between the three destinations.
Indonesia:
Indonesia’s Feb. 14 general elections resulted in the same party maintaining power, though different leaders were elected. Sources said the transition is expected to be swift and easy.
Had the opposition won, traders said the resulting change in leadership to both the government and publicly owned companies would have resulted in delayed calls for urea selling tenders. The current situation left some Asian traders expecting Pupuk to call a tender next week, though others said a new tender may not come until early March.
Should Pupuk release too many tons for purchase, traders are concerned that a dramatic price drop could follow. Pupuk will typically offer up to 45,000 mt of granular urea and 20,000 mt of prilled in its tenders. Following a settlement in the tender, additional tons might be purchased in private deals.
2023 urea exports fell 22% year-over-year, according to Trade Data Monitor, to 1.4 million mt from 1.8 million mt in 2022. The Philippines led buyers with 276,000 mt, while India took 267,000 mt and Australia received 174,000 mt. An additional 23 countries took the remaining exports.
December shipments were reported at 263,000 mt, up sharply from 40,000 mt in December 2022, with India taking 87,000 mt.
Southeast Asia:
The region was quiet during the week due to the Lunar New Year holiday. Urea availability is tight with Indonesia and Malaysia out of the spot export market, the latter due to contract commitments and a turnaround of the Gurun plant and the former due to reduced export licenses. Current cargoes are possible only ex-Vietnam and Brunei.
Regional producer Petronas, in Malaysia, reported that its Bintulu plant is back up and running. Sources said the facility will first focus on covering contracts before switching to building reserves for potential spot sales. Facilities in Brunei have also returned to operation, sources said, citing circulating reports of small sales to regional buyers.
Given the uptick in demand in Thailand and Australia, spot prices for Southeast Asian material are expected to continue to move up. With no fresh deals reported, however, the price in Southeast Asia remains unchanged at $380-$400/mt FOB.
Middle East:
An Australian buyer has reportedly nailed down a 30,000 mt granular urea order at $385/mt FOB, edging the market above the previous $380-$385/mt FOB level. Producers to now asking $390/mt FOB for granular product, while the area’s limited amount of prilled urea is reportedly being offered in the $325-$335/mt FOB range, a deep discount to granular.
So far, producers are said to be happy with their lineups for February and early March, though they are expected to start building reserves heading deeper into March. Sellers will be looking to cover deals into Australia, Brazil, India, and the US. The seasonal interest from these major buying locations could prevent any sliding in prices, even if producers assemble large reserves.
Egyptian producers have built solid order books through mid-March, sources said. Prices remained at $410/mt FOB for the week, though discrete inquiries reportedly showed that producers are now talking about $415/mt FOB deals.
China:
All talk of export pricing out of China is currently derived from either factory prices or calculating an equivalent price from some other deal. The government’s export restrictions remain in place, and sources expect no changes to that policy until mid-March at the earliest.
Speculation surrounding granular prices was steady in the $370s/mt FOB, with some claiming that prices had tightened to $375-$380/mt FOB. Estimates for prilled urea were calculated from domestic price reports attached to factories and regional warehouses. Sources put the theoretical export price at $350-$360/mt FOB.
Sources previously expected the Chinese government to resume urea exports in late March. Now, however, there is talk that export permission might be announced in mid-March, but with no actual exports allowed until April. One source said the time gap was to allow for customs officials to process and issue the proper paperwork. The so-called CIQ process can take two weeks.
If the government allows shipments in April, some of the tons could end up being offered in the next Indian tender, sources said. While some players said they would like to see several Chinese cargoes offered into India, most expected only one or two cargoes to be part of the Indian tender.
Initially, the exports will focus on small-lot demands from regional buyers, sources said. Orders of 5,000-10,000 mt are more likely to be approved for quick shipment ahead of the larger volumes that would be needed for India. The slower release of material could help to avoid cratering the market. If China were to reintroduce large quantities all at once, said one trader, prices could drop significantly.
Ethiopia:
After scrapping its Jan. 29 tender, Ethiopian Agricultural Businesses Corp. (EABC) called another tender to close on Feb. 26. The company is looking for 365,000 mt spread over seven lots to be shipped through mid-May. The first six lots should total 52,000 mt each, while the final lot would come in just above 53,000 mt.
| Shipping Date | Lot Number |
| March 15 | 1 |
| 2 | |
| March 20 | 3 |
| April 5 | 4 |
| April 15 | 5 |
| May 5 | 6 |
| May 15 | 7 |
EABC has also reportedly changed the terms of the tender. While the company normally asks for cargoes priced on an FOB Djibouti basis, EABC is asking for prices on a CFR/CIF basis in the new tender. Sources said the most likely reason for the change is to put the responsibility for shipping on the offering company.
Vessels with material destined for Ethiopia have to pass through parts of the Red Sea and Gulf of Aden. With more vessel owners reluctant to allow their ships to enter that area, and with insurance rates rising higher because of the risks posed to ships, delivery costs have skyrocketed.
Brazil:
Imported urea prices dipped slightly during the week, to $390-$400/mt CFR from last week’s $390-$405/mt CFR, with sources citing the Carnival festivities and Brazil’s waning nitrogen season. While demand has been focused at the low side of the range, traders have been largely unwilling to budge from their higher offer levels. Product from sanctioned origins was offered around $380/mt CFR, sources said.
As farmers move forward with the soybean harvest, more space is available to seed the second corn crop. According to Brazil’s National Supply Co. (Conab), corn planting reached 48.3% in Mato Grosso state last week, above 35.9% through the same period of 2023. In order to take advantage of the rains, sources said there is a Feb. 25 deadline for corn planting in southern Mato Grosso. Farmers who delayed sowing soybeans – and subsequently have yet to begin their harvest – will face higher levels of risk in planting after Feb. 25.
Urea demand is falling as the corn season begins, sources said, though Rondonópolis prices firmed to $495-$535/mt FOB ex-warehouse. Given the pressure on CFR prices reported this week, sources expect inland urea prices to begin softening in the near-term.