US Gulf:
NOLA urea covered a broad range during the week, but prices for both prompt and forward barges continued to fall. Prompt and loaded barge trades were reported in the $355-$370/st FOB range during the week, down from the prior week’s $383-$392/st FOB range, while full-April business was pegged at $320-$335/st FOB, down from last week’s $340/st FOB low.
Eastern Cornbelt:
Urea slipped to $440-$460/st FOB terminals in the Eastern Cornbelt, down $10/st from last week at the low end of the range, with the bottom confirmed out of several Illinois River terminals and the high at Cincinnati, Ohio. In the Great Lakes region, the latest urea offers in Michigan were pegged at $490-$495/st FOB for April-May tons.
Western Cornbelt:
Urea pricing dropped to a broad $420-$460/st FOB in the Western Cornbelt, down from the prior week’s $450-$465/st range, with the low confirmed at St. Louis, Mo.
Southern Plains:
Urea prices were down slightly in the Southern Plains. The latest offers FOB Catoosa/Inola, Okla., were pegged in the $470-$485/st FOB range, down from $495-$510/st FOB at last report, while the Houston, Texas, market was quoted at the $500/st FOB level in early April.
South Central:
Urea prices edged down to $430-$470/st FOB terminals in the South Central region, with the low confirmed at Convent, La., and the high out of river terminals in Arkansas. Kentucky sources pegged the latest offers at $450-$460/st FOB most Ohio River terminals, with prices at Memphis, Tenn., quoted in the same range.
Southeast:
Urea firmed to $440-$460/st FOB port terminals in the Southeast, with the low confirmed at Wilmington, N.C., and the high at Charleston, S.C. Rail-DEL offers were also pegged at the $450/st level in Virginia and $460/st in Pennsylvania during the week.
India:
It now appears that Rashtriya Chemicals and Fertilizers Ltd. (RCF) will purchase just 724,150 mt through its March urea tender. Of that amount, 474,150 mt will go to ports in West Coast India and the remaining 250,000 mt will ship to East Coast facilities.
Initial reports indicated that RCF would attempt to buy 1 million mt in the tender. However, as the April 2 deadline approached for companies to accept the L1 prices of $339/mt CFR for the West Coast and $347.70/mt CFR for the East Coast, it appeared that no more than 810,000 mt would be offered. That number moved lower after traders reevaluated their positions and as RCF disqualified at least one company from contention.
| West Coast – $339/mt CFR | |
| Offering Company | Quantity (mt) |
| Liven – L1 | 50,000 |
| OQ Trading | 200,000 |
| Total – West Coast | 250,000 |
| East Coast – $347.70/mt CFR | |
| Offering Company | Quantity (mt) |
| Samsung – L1 | 90,000 |
| Aditya Birla | 200,000 |
| Ameropa | 47,150 |
| Agri Commodities | 47,000 |
| Fertiglobe | 45,000 |
| Keytrade | 45,000 |
| Total – Total East Coast | 474,150 |
| Total | 724,150 |
Material for the awards will be sourced from the Arab Gulf and Russia, players said, with no Chinese material expected in the mix. The price gap between the East and West Coast offers makes sending Arab Gulf product to the East Coast a better deal, traders noted.
There is typically a $5/mt premium on shipping Arab Gulf urea to India’s East Coast. The nearly $10/mt difference between the tender’s East Coast and West Coast prices will enable Arab Gulf suppliers to earn a better netback. The same is true for product coming from Russia, both from Baltic and Black Sea ports.
Going into the tender, sources said there was no need for RCF to make a large purchase. February reserves were placed at slightly more than 7 million mt. As this week closed, the government revealed that March reserves had moved up to 8 million mt, largely thanks to increased domestic production.
Sources previously said that India could have gone longer without calling a tender because of the amount of urea it had on hand. However, they also pointed out that India is in the middle of its national elections. It was important to the ruling party that rural voters see the government doing all it can to ensure a plentiful urea supply for the upcoming application season.
RCF’s small purchase may also push prices lower in the next tender. Sources noted that by taking less than 1 million mt, RCF left product in the hands of Arab Gulf and Russian suppliers. While there is some demand from Australia and possibly Brazil, these buyers are not expected to soak up all of the market’s excess product. At the same time, Chinese urea is expected to return to the global marketplace in the second half of May, adding more supply to an already saturated market.
The next tender could be called as early as May 20 – the shipping deadline for the current RCF tender – though sources said the call is unlikely to come before early June.
Black Sea:
Export urea prices from the Black Sea were reported softening to $275-$290/mt FOB, even lower than what some traders expected based on the West Coast India price from the RCF tender. Looking at the freight rate, some had suggested the price would fall in the upper-$290s/mt FOB.
At the same time, Turkish buyers secured a few small granular urea cargoes from Black Sea ports at $315/mt CFR. The product showed a $290/mt FOB netback into the Black Sea. Granular urea is normally sold at a $5-$7/mt premium to prilled. If the estimated netbacks from the Indian tender and deals into Turkey hold, however, the differential will be reversed.
While Turkey’s buyers continue to look for low-cost opportunities such as the recent Black Sea granular purchases, the bulk of the country’s urea is received from Oman and Egypt. Egypt has steadily expanded its share of the Turkish import market over the past four years.
January-February urea imports firmed 24% year-over-year, Trade Data Monitor, to 691,000 mt from 556,000 mt. Oman sent 325,000 mt, followed by Egypt with 267,000 mt. February purchases were put at 410,000 mt, up 59% from the 258,000 mt received in February 2023.
Mediterranean:
Offers for fresh urea tons in Italy have fallen to $360-$365/mt CFR, but demand for new tons is muted due to planting delays. With confirmed sales ex-Egypt down to $328/mt FOB this week, it is expected that Mediterranean urea will continue to experience downward pressure.
Southeast Asia:
Buyers are said to be getting anxious for product. Tons normally sourced from China have not been available for the past several months and are not expected to be seen until late May. At the same time, product from regional producers such as BFI and Petronas is fully committed to contracts. The only spot material available is from Indonesia.
This week saw no granular urea business in the region, with prices at Indonesia holding at the $354-$359/mt FOB level and Malaysia lacking spot availability through April. Theoretical netback calculations from the L1 in India’s RCF tender would indicate about $320-$330/mt FOB at best.
Given a lack of any additional market direction in the region, this week’s Southeast Asia granular urea price was noted at $320-$360/mt FOB.
Indonesia:
Pupuk Holdings appears to be awaiting new export permits before offering more tons for sale. Sources said the permits should be issued soon, allowing for larger cargoes of granular urea to be released once again.
Urea exports from Indonesia stood at 118,000 mt in January-February, Trade Data Monitor reported, a sharp rise from 100 mt shipped through same period of 2023. Australia grabbed 57% of the exports with 67,000 mt, Thailand took 20,000 mt, and the Philippines bought 11,000 mt. Indonesia shipped the entire 118,000 mt in February.
Middle East:
The bulk of the material offered into the RCF tender from the Arab Gulf appears to be destined for India’s East Coast, with netbacks estimated at $330-$335/mt FOB. At the same time, the urea heading for the West Coast shows a netback of $325-$330/mt FOB. Sources said the pricing is valid for both prills and granular.
Soon after the RCF numbers were released, reports of a granular urea sale to Australia from Qatar circulated at $335/mt FOB, while another granular deal to Thailand was noted at $330-$335/mt FOB, confirming the higher price range for Arab Gulf material.
For now, producers claim they are in decent shape for April. However, there are reports that May orders are not where sellers would like them to be. By taking less than 1 million mt, RCF did not absorb the surplus tonnage that was expected for May shipments. Unless other major buyers step up, sources expect prices to soften for late May and June shipments, just as more Chinese urea hits the marketplace.
Helwan closed a 20,000 mt granular urea deal early in the week at $328/mt FOB, while a 5,000 mt deal with Kima quickly followed at the same price. Producers went quiet for the rest of the week.
Egyptian urea has always played an important role in the southern European markets, largely because of the favorable tax rates. In recent years, however, Egyptian urea has also had an impact on the Turkey and Ethiopia markets. In Turkey, Egyptian volumes are surpassed only by imports from Oman, but the margin thins each year. Egypt dominated the Ethiopian market in 2023, supplying 66% of the urea imports.
China:
Sources do not expect to see any Chinese product in the RCF tender awards. The timeline to approve a shipment of urea to India under the tender is too close to the May 20 shipping deadline set by RCF, traders said.
With no exports planned from China until late May, the domestic prilled urea price took another dip. Sources reported the ex-plant price at $275-$278/mt FOB during the week. Once costs are added to cover transporting the urea to port and completing the export-related paperwork, the export-equivalent price was estimated at $300-$305/mt FOB, down from last week’s price.
At the same time, sources working the math for an estimated export price using the RCF tender results showed a netback of $330-$335/mt FOB, based on the tender’s East Coast price. There are reports that China’s limited granular available for export could also be offered at that level.
Industry watchers are expecting lower prices in the second half of the year, due both to the return of Chinese urea in the market and because RCF failed to absorb all the surplus urea already available in the market.
Ethiopia:
Ethiopia imported 247,000 mt of urea in January-March, according to Trade Data Monitor, up 64% from the 150,000 mt received in first-quarter 2023. Egypt supplied 82% of the tonnage with 203,000 mt, followed by Nigeria with 44,000 mt. March imports were 51,000 mt, a slight increase from 50,000 mt in March 2023, with all the material sourced from Egypt.
Brazil:
Brazil urea prices lost ground for a fourth consecutive week. Imports fell to $330-$340/mt CFR, a $5/mt decline, while the paper market was noted trading at $310/mt CFR. Players reported offers from North Africa and the Arab Gulf against bids in the $300-$320/mt CFR range.
Following the import market lower, Rondonópolis urea prices dropped to $475-$490/mt FOB for prompt deliveries, below last week’s $475-$500/mt FOB. Sellers are targeting crops to be planted in the first half of the year, while interest remains slow for the region’s next corn safrinha. Sources expect safrinha demand to begin ramping up in July.