US Gulf:
NOLA urea business during the week was reported at $290-$302/st FOB for prompt loaded barges, $290-$295/st FOB for June, and $290-$300/st FOB for July. Those levels were up from last week’s $284-$291/st FOB range, fueled by firming international prices in the wake of production curtailments in Egypt.
Eastern Cornbelt:
Urea inched up to $365-$380/st FOB in the Eastern Cornbelt, up $5/st from last week on slightly stronger NOLA barge pricing. The low was confirmed on the Ohio River, while Illinois River terminals bumped up to a low of $370/st FOB for June-July tons. The Cincinnati, Ohio, market remained at $365-$375/st FOB in early June.
Western Cornbelt:
Urea in the Western Cornbelt fell to $345-$375/st FOB in early June, down slightly from last week, with the high confirmed in Iowa on a spot basis. The St. Louis, Mo., urea market slipped to $345-$350/st FOB, down from $350-$360/st FOB, while the latest offers at Caruthersville, Mo., were reported at the $355/st FOB level.
Southern Plains:
Urea prices fell to $360-$385/st FOB in the Southern Plains, down $10-$15/st from last report, The Catoosa/Inola, Okla., market was pegged at the $360-$365/st FOB level for prompt tons, down from $375-$380/st FOB last week.
South Central:
Urea was quoted at $335-$370/st FOB terminals in the South Central region, with the low reported at Convent, La., and the high out of river terminals in Arkansas. The Memphis, Tenn., urea market was pegged at the $350-$365/st FOB level during the week.
Southeast:
Urea pricing in the Southeast dropped to $375-$380/st FOB port terminals in early June, down from $390-$400/st FOB, with the low confirmed at Wilmington, N.C.
India:
Sources expect a new urea tender to be issued before the end of June. In a departure from previous tenders, however, buyers will most likely take just enough product to maintain India’s already high reserves of urea. Additional tenders will probably be called as well, also with buyers taking less than 1 million mt.
June reserves were reported at a near-record 11 million mt. The high inventories, combined with pressure to increase domestic production, would allow the country to buy fewer foreign tons through the remainder of the year. The continued promotion of India’s domestically-produced Nano Urea could also reduce demand for imported product, sources said.
Black Sea:
Black Sea prilled urea moved up in line with other major urea-producing markets, to $265-$270/mt FOB.
Turkey’s Gübretaş is reportedly in the market for 20,000 mt of granular urea. Turkey’s import numbers, as reported by Trade Data Monitor, have shown a steady dependency on Oman and Egypt for granular product.
Turkey imported approximately 1.3 million mt of urea in January-April, statistically unchanged from January-April 2023. Oman led suppliers with 722,000 mt for 56% of the imports, followed by 396,000 mt from Egypt. April imports stood at 226,000 mt, a 48% decline from the 434,000 mt received in April 2023.
Mediterranean:
Some urea buyers in the Mediterranean region were heard rejecting offers of $350/mt CFR, with French buyers reportedly willing to step in at lower levels of $330-$340/mt CFR. Italian buyers are not looking at offshore tons for restocking, as wet weather has resulted in some delays. Granular urea in the Mediterranean strengthened this week to $330-$350/mt CFR.
It remains unclear whether the market will be swayed by news of further gas curtailments in Egypt, with multiple producers shut down at the start of the week but reports of gas supply resuming later in the week.
Southeast Asia:
No further granular urea business was reported in Southeast Asia this week, but the producer in Brunei was heard offering $320/mt FOB, pushing the regional market up to $312-$320/mt FOB. Petronas in Malaysia resumed operations at its Gurun and Bintulu plants, which had been in turnaround in May.
Indonesia:
Pupuk has reportedly sold another cargo through its $312/mt FOB May granular urea tender, lifting total sales to 280,000 mt.
The company appears to have oversold its product, however. While the initial tender called for loading in June, some of the shipments will take place in July, sources said, with about half of the tonnage sold expected to go to Australia.
Because of the delayed shipping dates, sources now estimate that Pupuk will not call another granular selling tender until late July. Pupuk will most likely also wait to call another granular tender until vessels have been fixed for all of the material awarded in its most recent tender, one source added.
A prilled urea tender closed this week, with Samsung winning the 8,000 mt award at $323/mt FOB. The award translates to an estimate granular price of $328-$333/mt FOB, though granular prices are expected to push even higher once a new tender is called.
Middle East:
Sources reported a granular sale out of Saudi Arabia at $330/mt FOB. The transaction represents a $15/mt increase from the most recent spot deal, and tracks about $10/mt above where traders had previously called the market. The price increase reportedly came on the heels of Egypt’s curtailed production due to natural gas cutbacks.
Following the transaction, July offers firmed to $335/mt FOB for granular urea and into the mid-$320s/mt FOB for prilled.
Prices in Egypt moved up dramatically on the heels of the government-imposed cutback in natural gas supplies. The week kicked off with small-lot sales in the upper-$330s/mt FOB, and sales were reported up to $350/mt FOB by June 7.
Prices moved up $10/mt at the week’s outset, to $335-$340/mt FOB, on small-lot sales from Kima and NCIC, after which offers immediately firmed to $340-$345/mt FOB. Kima then closed a 5,000 mt sale at $350/mt FOB on June 7, followed by a 10,000 mt deal from NCIC at the same price.
The government-imposed cut to natural gas supplied to urea producers, announced late last month, led to price increases from Egypt to the Arab Gulf. The government announced that plants would begin receiving their normal allotment of natural gas beginning on June 6. Some producers late in the week acknowledged receiving notices that the gas restrictions had been lifted, but had not yet received confirmation that the gas was on its way to them.
The restriction on gas supplies initially triggered production cutbacks that failed to impact either prices or exports, and producers have experienced similar reductions in gas supplies in the past. While the urea sales made in late May could have easily been covered by producers’ existing inventories, sources reported a subsequent uptick in demand. At the same time, some producers did more than simply reduce production.
MOPCO initially closed one granular line for a weeklong maintenance shutdown. By early this week, however, the company’s other granular line and a prilled urea line were halted as well. Alexfert, Kima, NCIC, and Abu Qir also shut their production operations rather than reduce output. The unexpected loss of supply has helped push prices higher, players said.
China:
Permission to export urea from China continues to be denied. Sources now expect the first cargoes to be released sometime in late July.
The government remains concerned that prices are too high. Based on the current domestic price, export values have risen to an estimated $340-$345/mt FOB for prilled urea and $348-$350/mt FOB for granular, representing a $5-$10/mt increase. Conversely, the government wants to see prices fall by at least $20/mt, sources said.
In recent years, prices in the Arab Gulf and China have typically maintained a $0-$5/mt spread. Chinese product is currently valued significantly above the most recent Arab Gulf price of $330/mt FOB, however. Prices from China are also considerably higher than those reported out of Indonesia.
The government’s export restrictions were designed to build large reserves in the domestic market, forcing prices down and placating growers. After the government gave up subsidy plans for Chinese farmers, these export controls are the only remaining mechanism the central government has at its disposal to impact prices, one trader argued.
Producers have been required to reduce production to 60% of rated capacity, one trader said. If factories were to increase output to even 80% of nameplate value, said the trader, local reserves would build and the price would move in a direction more to the government’s liking.
Ethiopia:
January-May urea imports firmed 49% year-over-year, Trade Data Monitor reported, to 298,000 mt from 200,000 mt, with 203,000 mt from Egypt accounting for 68% of the import market. May imports of 22,000 mt were off 57% from the 50,000 mt received in May 2023, with all of the tonnage loading from Oman.
Brazil:
The Brazil granular urea market firmed to $340-$350/mt CFR during the week, a $15-$20/mt increase from the prior $325-$330/mt CFR and up 14% in the last four weeks, with the latest offers reported as high as $365/mt CFR. The firmer values followed news of reduced urea production in Egypt and higher nitrogen prices out of Europe.
Rondonópolis pricing held steady at $465-$485/mt FOB. With several players describing a volatile market, new offers were quoted up to $490/mt FOB.
Correction:
In the May 10 edition of Green Markets, US urea imports for March 2024 and July 2023-March 2024 were incorrectly reported at 64,837 st and 640,122 st, respectively. The correct totals are 689,429 st for March and 3.47 million st for July-March, up 11% and 7.4%, respectively, from 618,880 st in March 2023 and 3.23 million st in July 2022-March 2023.