US Gulf:
NOLA urea was reported in a tight range at $303-$308/st FOB for loaded barges during the week, with the same range reported for limited full-June and July business. This week’s market fell within last week’s $290-$309/st FOB level.
Eastern Cornbelt:
Urea was quoted at $355-$375/st FOB in the Eastern Cornbelt, with the low confirmed out of spot Illinois and Ohio River terminals. The Cincinnati, Ohio, market was steady at $365-$375/st FOB during the week. Michigan pricing included $390/st FOB and $425-$430/st DEL in late June.
Western Cornbelt:
Urea in the Western Cornbelt remained at $335-$365/st FOB, with the low reported at Port Neal, Iowa. The St. Louis, Mo., market was unchanged at $345-$350/st FOB in late June.
Southern Plains:
Urea slipped to $355-$370/st FOB in the Southern Plains, with the low reported at Catoosa/Inola, Okla., and the high in Texas.
South Central:
Urea was unchanged at $340-$370/st FOB terminals in the South Central region, with the low confirmed at Convent, La., and the high in Arkansas. Pricing at Memphis, Tenn., and out of Kentucky river terminals was reported at $355-$365/st FOB during the week.
Southeast:
Urea pricing in the Southeast remained at $375-$380/st FOB port terminals in late June, with the low confirmed at Wilmington, N.C., and the high at Chesapeake, Va.
India:
Indian Potash Ltd. (IPL) called a urea tender this week to close July 8 with a shipping deadline of Aug. 27.
While many sources were expecting a tender to be called in late June or early July, several players expressed surprise that the call came this week.
India started the month with urea reserves at an unprecedented 11 million mt. At the same time, prices were already fluctuating due to China’s export restrictions and production shutdowns in Egypt. The added pressure from an Indian tender could keep the market unsettled, said one trader.
In stipulating a late-August shipping deadline, sources speculated that IPL might have been counting on the availability of Chinese product, thereby adding downward pressure to prices. However, even if the Chinese government allows exports to begin in August, it now looks as though orders will be limited to small lots of 10,000 mt or less, one trader noted.
At the same time, urea reserves from the Arab Gulf have been greatly reduced following a series of plant closures for routine maintenance. The tons that remain available are being used to cover existing contracts or to engage in swap deals to help other producers cover their contracts, sources reported. The steady sale of urea to existing buyers could leave limited tonnage for the Indian tender, said one trader.
Traders initially speculated that IPL will set a top buying target of 1 million mt. As the week progressed, however, more sources voiced expectations of a purchase below 1 million mt, with one trader predicting a take of only 500,000 mt.
Black Sea:
Prilled urea edged up to $305-$310/mt FOB in the Black Sea following reports of a production shutdown in Egypt and a tender call from India.
Mediterranean:
Despite the prolonged Egyptian outages, European buyers in the Mediterranean continue to resist urea values above $380/mt CFR. The latest reports of FCA business done in France and Spain reflected approximately $375-$380/mt CFR, resulting in an unchanged range for the week. Prices are likely to remain sticky as much of the region heads into the offseason.
Southeast Asia:
Southeast Asia granular urea prices edged up to $312-$350/mt FOB, with the high reflecting indications and theoretical netbacks from nearby CFR markets and the low matching the last Indonesian tender award.
Though no FOB granular urea sales were reported this week, some regional players expect Indonesia to tender some tons in the context of the fresh IPL India tender announced on June 24.
Indonesia:
Pupuk continues to struggle with shipping the 280,000 mt of granular urea it sold earlier this month, sources said. The parent company of Indonesia’s urea producers has faced grim weather conditions at ports, preventing ships from loading. At the same time, there are reports that securing vessels for transport has become increasingly difficult.
The attacks on vessels exiting the Suez Canal for Asia have left the Asian shipping market in a state of uncertainty, sources reported There are now rumors that some cargoes may not be fully loaded until late July.
Traders said Pupuk will most likely abstain from calling another selling tender until the last of the cargoes has been nominated to a vessel, potentially pushing the next tender call into late July or early August.
Despite the lack of new business, industry players are talking about potential prices. Indications were noted in the $340s/mt FOB during the week, a significant jump from the last confirmed sale at $312/mt FOB.
Middle East:
Offers for Middle East tons remained in the $350s/mt FOB against firm bids in the $340s/mt FOB. The distance between the two sides prevented players from nailing down new sales during the week.
Industry sources speculated that Arab Gulf urea will dominate the Indian tender set to close on July 8. However, urea reserves in the region are not very high, some traders noted.
When producers took routine maintenance turnarounds in June, they used their reserves to cover contracts or engaged in swap deals with other producers. Now that production is ramping back to normal, contracts still have to be fulfilled and swaps have to be repaid, sources said, leaving fewer tons available to offer into the tender than the buyer may have anticipated.
Urea production in Egypt has essentially shut down once again, sources reported. Earlier this week the government reinstated its limits on natural gas supplied for industrial use. The government said the gas was needed to power residential air conditioning during the current heat wave.
The gas restrictions and subsequent shutdowns in the urea industry lit a fire under export prices. Despite a lack of concluded business, pricing discussions jumped dramatically, players said.
The week opened with sources quoting the paper market at $365/mt FOB for July shipment, up from the last confirmed sale at $340/mt FOB. By midweek, following the Indian tender announcement and the news that most Egyptian urea production would cease, the July paper price jumped to $375/mt FOB.
Egyptian sources were unsure when the natural gas restrictions would be lifted and production could resume.
China:
Restrictions on urea exports remained in place in China, leaving sources to describe price discussions for potential exports as an ongoing academic exercise. The discussions showed prilled and granular urea at parity in the $340-$350/mt FOB range during the week.
Some regional buyers continue to maintain hope that exports could be allowed by mid-July. Once exports are allowed to resume, sources expect the lots to ship in containers and measure less that 10,000 mt, a size and mode of transport favorable to Southeast Asian buyers.
If the export restrictions are lifted in time, some speculated that Chinese product might play a part in the Indian tender. A number of traders dismissed that idea, however.
Even if the restrictions are lifted in early July, sources said preference will most likely be given to the smaller lots preferred by regional buyers over the large quantities needed to compete in India. One trader noted that export approval relies on the ability to maintain large and cheap reserves for the domestic market. It is easier, he said, to regulate the impact of small shipments on the domestic market than the larger, bulk lots.
Brazil:
Brazil granular urea prices softened $5/mt, to $355-$365/mt CFR from $360-$370/mt CFR at last report. Interest was muted as buyers await the results of the Indian tender, while the weakening Brazilian Real and falling corn prices also impacted the market.
The return of gas supply cuts in Egypt and the continued lack of Chinese exports also contributed to high volatility during the week
Rondonópolis trading softened to $480-$500/mt FOB, off from $500-$530/mt FOB in the prior report. While sources noted a handful of negotiations at $510/mt FOB, most product was offered toward the lower end of the range.
Domestic negotiations were affected by lower international market prices this week, while the prospect of reduced import volumes at India – a product of high existing inventories in the country – contributed to the price decline. Additionally, demand was slow as buyers focused on grain sales and the harvest.
Argentina:
January-May urea imports to Argentina totaled 280,000 mt, Trade Data Monitor reported, a significant increase from the year-ago 95,000 mt. Nigeria sent 86,000 mt, Algeria shipped 71,000 mt, and Bolivia added 38,000 mt. May imports were 41,000 mt, down about one-third from the 61,000 mt received in May 2023.