US Gulf:
Urea prices fell sharply at NOLA after India issued letters of intent (LOIs) for just 340,000 mt in its latest tender, well below expectations. After starting the week with loaded barge business at the $330/st FOB level, prompt prices reportedly dropped to $290-$305/st FOB after India’s announcement, with full April and early May trades slipping to $280-$294/st FOB.
Those levels were down significantly from the prior week’s $320-$370/st FOB range for prompt and full April trades.
US Imports:
Urea imports for July-February rose 6.4% year-over-year, to 2.78 million st from 2.61 million st. February imports were 642,138 st, however, down 2.6% from 659,508 st in the year-ago period.
July-February imports from Russia were 865,752 st, while Qatar sent 585,573 st. Saudi Arabia took third place with 380,301 st, ahead of 350,804 st from Algeria and Canada’s 260,030 st.
US Exports:
Urea exports for February stood at 56,310 st, falling 38.6% from the year-ago 91,752 st. July-February exports totaled 575,285 st, a 48.1% tumble from the 1.11 million st posted one year earlier.
Exports to Canada totaled 376,239 st in July-February, followed by 83,851 st to Mexico and 77,077 st to Chile.
Eastern Cornbelt:
The sharp drop in NOLA barge prices pressured regional urea prices during the week. Sources quoted the market at $405-$430/st FOB in the Eastern Cornbelt, down from last week’s $440-$460/st FOB range, with the low confirmed out of Illinois River terminals on a spot basis. The Cincinnati, Ohio, market was pegged at $425/st FOB, down from $455-$460/st FOB, with reports of May-June offers dropping to the $400/st FOB level.
In the Great Lakes region, the latest urea offers were reported at $455-$460/st FOB Michigan terminals for April tons, down from last week’s $490-$495/st FOB range.
“I think we will continue to see a major inversion from NOLA pricing to terminal pricing this season until the tail end, with the added value put on product in place at the terminal,” said one Eastern Cornbelt source.
Western Cornbelt:
Plunging NOLA barge values pushed urea terminal prices lower in the Western Cornbelt during the week. The regional market was quoted at $400-$440/st FOB, down $20/st from last week, with the high reported in Iowa. The St. Louis, Mo., market was pegged at $400-$415/st FOB, down from $420-$430/st FOB.
Urea prices also dropped in the Northern and Southern Plains, with the latest St. Paul, Minn., offers quoted at $450-$460/st FOB and the Catoosa/Inola, Okla., market reported at $445-$460/st FOB.
California:
Granular urea pricing in California was steady at $545/st FOB Stockton, with prilled urea remaining at the $580/st level FOB San Diego. Rail-DEL urea prices were confirmed at the $560-$570/st level in the state during the week.
Pacific Northwest:
Urea prices remained at $525/st FOB Rivergate, Ore., and $530/st FOB Aurora, Ore., with rail-DEL offers ranging widely at $540-$590/st in the Pacific Northwest, depending on location.
Western Canada:
Delivered urea in Western Canada edged up to a firm C$780/mt in early April, up from a low of C$770/mt DEL in mid-March.
India:
Rashtriya Chemicals and Fertilizers Ltd. (RCF) shook the market this week when it issued LOIs to purchase just 340,000 mt of urea from its March 25 tender, after initially receiving confirmed commitments for 724,150 mt. Traders said the decision to more than halve the tender’s expected purchase amount came within an hour of the deadline to issue the LOIs.
In the days following the decision, sources sought reasons for the unexpected reduction. At the time of the tender’s closing, many had speculated that RCF would not take many tons because of the record urea reserves reported in India.
March reserves were reported at 8.5 million mt, while domestic production was simultaneously said to be on the rise. Still, the market expected RCF to take the 724,150 mt offered by suppliers matching the lowest East Coast and West Coast prices.
With RCF seemingly ready to take less than 1 million mt at the tender’s outset, sources were already predicting lower prices in the next tender. Some speculated that a whispering campaign centered on the potential for RCF to take fewer tons could pressure the market further, giving the Indian government even more influence in the next tender.
The Department of Fertilizer reportedly reviewed stockpiles of urea in areas served by the ports. In the end, it suggested a much smaller amount for delivery to the East Coast. Ultimately, RCF took only the 90,000 mt offered by Samsung – its lowest East Coast offer – along with the 50,000 mt offered by Liven as part of its low West Coast offer, and another 200,000 mt from OQ Trading for West Coast deliveries.
| West Coast – $339/mt CFR | ||
| Offering Company | Quantity (mt) | Discharge Port |
| Liven – L1 | 50,000 | Kandla |
| OQ Trading | 50,000 | Mundra |
| 50,000 | Pipavav | |
| 50,000 | Rozi | |
| 50,000 | Jaigarh | |
| Total – West Coast | 250,000 |
| East Coast – $347.70/mt CFR | ||
| Offering Company | Quantity (mt) | Discharge Port |
| Samsung – L1 | 45,000 | Kakinada |
| 45,000 | Krishnapatnam | |
| Total – East Coast | 90,000 | |
| Total | 340,000 |
The companies holding the nearly 400,000 mt of additional urea originally planned for inclusion in a larger award are now looking for buyers, sources said. Some of the cargoes slated for April loading need to find a new destination quickly, said one trader, and substantial discounts are already being offered to liquidate the material.
If India’s seasonal rains are as healthy as predictions indicate, sources said a new tender will be needed. The new tender call is most likely to come around the May 20 shipping deadline for the RCF tender, players said. By then, the bulk of the unawarded tons will either be sold to other buyers or offered at deep discounts. At the same time, Chinese urea will be available for export, adding more supply to a market already flush with product.
Mediterranean:
Offers for fresh tons in Italy fell to $350/mt CFR amid little-to-no buyer interest at the start of the week. Later in the week, however, Italian buyer bids were heard at $335-$340/mt CFR.
A sale of Egyptian product at $350/mt CFR late last week into nearby Romania set the high end of the range, but expectations are that prices will continue to slump following India’s surprise purchase of just 340,000 mt. Egyptian granular urea indications slipped to $310/mt FOB by midweek, which was not enough to trigger buyers against ample April availability.
The Mediterranean granular urea range was pegged at $335-$350/mt CFR as a result, with more clarity expected next week when the Eid holiday in North Africa concludes. Prills in the region were quoted at $340-$360/mt CFR, in line with the granular slump.
Southeast Asia:
No new granular urea business was confirmed this week in Southeast Asia. Malaysia’s Petronas remains firmly off the spot market, busy fulfilling contract commitments after Gurun and Bintulu returned from long turnarounds. Indonesia continues to lack export permits for granular urea, with any business limited to small lots of prills.
Despite the lack of product availability, the outcome of the recent India tender is expected to weigh on buyers’ price ideas in the region. For now, the Southeast Asia granular urea range remains unchanged at $320-$360/mt FOB, with expectations of downward pressure ahead.
Indonesia:
Sources expect a selling tender for granular urea to be announced by the end of April. The late-April timing would withhold Indonesian product from direct competition with most of the urea that was expected to be part of a larger Indian order.
Prior to India’s surprise purchase reduction, the estimated granular price was noted in the upper-$350s/mt FOB, with prill prices from a selling tender expected in the low-$330s/mt FOB.
Pupuk Holdings was said to be ready to call a granular tender. At the time, players expected a possible price dip into the $340s/mt FOB. Now, with more material in the marketplace than expected, all bets are off, said one trader. Indonesian players are now said to be recalculating their positions, and sources said the Indian move pushed pricing expectations near the breakeven point for Indonesian producers.
Middle East:
Most of the 340,000 mt ordered in the RCF tender will be sourced from the Arab Gulf, players said, though there are hints that about 100,000 mt may come from Baltic sources.
Despite Arab Gulf producers supplying the bulk of the order, excess material will continue to build up, and prices are now expected to come off in the region. Sources have already reported an unconfirmed offer of Iranian material at $270/mt FOB.
Some traders have reportedly begun talking about new prices from the Arab Gulf at $300-$320/mt FOB, through no deals were done at this level. Once the surprise Indian action was announced, producers pulled back from any talks for material loading in April-May. In addition, many offices either closed or reduced operations at midweek for the Eid holiday. Normal business hours are expected to resume next week.
For now, Arab Gulf price estimates remained at $325-$335/mt FOB, based on the West Coast India delivered price.
Egyptian producers also retreated following the Indian tender action. Sources estimated price ideas at $310/mt FOB, down about $18/mt from the last-done business, fitting with reports of Algeria pricing reported at $320/mt FOB.
However, Egyptian sources – while acknowledging the impact of the Indian action – reported that no new business was done to justify a price shift. New discussions are not expected to get serious until next week, when post-holiday business hours return to normal.
Iran shipped 1.3 million mt of urea in January-March, Trade Data Monitor reported, a 110% increase from the 633,000 mt sent during the first three months of 2023. Turkey took 693,000 mt, and Brazil bought 190,000 mt. March exports were noted at 393,000 mt, more than double the 192,000 mt shipped in March 2023.
China:
Offtake for China’s domestic application season appears to be at its peak. Local inventories have been on the decline as farmers get more serious about urea application, sources reported.
Ex-plant prices remained steady, offering no new guidelines for theoretical export prices. However, RCF’s action to take fewer tons than predicted has reduced global pricing expectations, which also closed the gap between China’s anticipated export price and the domestic price.
Urea production in the country has eased to about 180,000 mt/d after churning out 185,000 mt/d in late March. The production cutback is reportedly due to some key plants taking maintenance turnarounds.
Exports from China may begin as soon as early May instead of the previously predicted second half of the month. Factories have reportedly been informed they can begin the CIQ inspection process on April 15. The process is expected to take 10 working days, which would allow for tons to be moved to export facilities as soon as May 1. Earlier this week, sources said customs officials were still refusing to accept any paperwork related to urea exports until May 1.
The request for export clearance must originate at the factory. This requirement makes it unclear how the tonnage already at the ports might be affected. Previously, sources said tons that had been cleared before the export restrictions were imposed might still be allowed to ship once the restrictions were lifted.
Regional buyers in Asia who require small tons on a rapid basis are likely the most immediate beneficiaries of the move, while buyers in Latin America could be the first to receive larger shipments. Chinese producers had already been locked out of the RCF/India tender because of limited expectations that a cargo could be cleared in time to meet the tender’s May 20 shipping deadline. A subsequent Indian tender would include June shipping, giving Chinese producers a chance to participate.
Factories were also reportedly told the CIQ inspection will only be permitted through the end of August, which could technically allow for September shipments. While a limited window of export opportunities was expected, an Aug. 31 cutoff date would come sooner than sources had anticipated.
Ethiopia:
Ethiopian Agricultural Businesses Corp. (EABC) has called a purchase tender for 261,444 mt of granular urea to close on April 25. EABC appears to be seeking five lots of 52,000 mt each to be delivered by late June or early July. Offers will be considered on a lot-by-lot basis.
The last Ethiopian tender showed prices at $358-$380/mt CFR. Due both to India’s lower purchase total in the RCF tender and the anticipated return of Chinese urea to the market by late May, offers are expected to soften in the new tender.
Brazil:
The Brazil granular urea market dropped to $300-$305/mt CFR on news of reduced volumes taken in the India tender, off 9.7% week-over-week and down 23.4% from the $395/mt CFR reported on March 8. Bids were noted at $290-$295/mt FOB during the week, with offers for product from sanctioned origins falling below that range.
Rondonópolis prices softened to $460-$480/mt FOB, down $10-$15/mt from last week’s $475-$490/mt FOB. With most buyers reportedly unwilling to compromise on price in the current market, sources predicted further drops ahead.
Brazil urea imports firmed 16% year-over-year, Trade Data Monitor reported, to 1.6 million mt from 1.4 million mt. Nigeria supplied 388,000 mt, ahead of both 258,000 mt from Qatar and Oman’s 229,000 mt, while Venezuela added 181,000 mt. March 2023 imports were 379,000 mt, up 11% from 341,000 mt in the prior March.