US Gulf:
NOLA urea trades were reported at $305-$315/st FOB for August barges during the week, with the higher numbers confirmed on Aug. 8. Limited September business was quoted at the $308/st FOB level earlier in the week. This week’s range was down slightly from last week’s $307-$317/st FOB for August barges.
Eastern Cornbelt:
Urea dropped to $360-$370/st FOB in the Eastern Cornbelt, down $5/st from last week, with the low confirmed at Cincinnati, Ohio.
Western Cornbelt:
Urea pricing widened to $345-$370/st FOB in the Western Cornbelt, with the low reported at St. Louis, Mo., and the high at Caruthersville, Mo., and out of spot Iowa terminals.
Southern Plains:
Urea edged up to $360-$370/st FOB Catoosa/Inola, Okla., and $385/st FOB Houston, Texas, up slightly from the prior $355-$365/st FOB range at Catoosa/Inola.
South Central:
The urea market widened to $330-$375/st FOB terminals in the South Central region, with the low confirmed at Convent, La., and the high in Arkansas. Pricing at Memphis, Tenn., was reported at $365-$370/st FOB during the week, reflecting a $10/st increase.
Southeast:
Urea pricing in the Southeast dipped to $365-$370/st FOB port terminals in early August, down $5-$10/st from last report.
India:
Sources said the Indian government planned to issue a new urea tender this week. The Department of Fertilizers (DoF) was engaged in talks with Morocco for DAP imports during the week, however, and will now likely call the tender next week, said traders.
Even though India will need more urea to meet its needs for the current season, the 10 million mt it has in reserves plus the tons coming in from its most recent tender will give buyers some breathing space. There is a greater immediate need for DAP than urea in the country, prompting the DoF to focus on that issue instead.
Only two cargoes awarded in the previous urea tender have yet to receive a vessel nomination, sources said. The ships are expected to be named soon, giving India an earlier window to call its next tender. Sources speculated that National Fertilizers Ltd. (NFL) will be responsible for the new tender and that it will be seeking at least 1 million mt.
Reports that prices are softening in the Arab Gulf as reserves build in producers’ warehouses are an encouraging sign to buyers in India. The Middle East is once again expected to act as the primary supplier for the tender, as there has been little indication that China will release large quantities of urea for export anytime soon.
Pakistan:
The recent Trading Corp. of Pakistan (TCP) tender for 150,000 mt of urea has settled with a $358.99/mt CFR award to West Trade. Sources said the company appears to be ready to supply 100,000 mt, with the first lot to be shipped in mid-August.
On the heels of the award, the government approved an additional tender to be called for 100,000 mt. Sources said the permission came after TCP attempted to secure government-to-government deals with Azerbaijan, Turkmenistan, and China. Talks reportedly remained underway with producers in the latter two countries.
The price awarded to West Trade is reportedly higher than the current domestic price in Pakistan. According to local media reports, the government is planning to add an additional $20 million in subsidies to ease the financial burden on buyers.
Per the agreement between Pakistan’s government and the International Monetary Fund (IMF), however, none of the IMF’s support money may be used to cover that subsidy. Media reports suggested that local governments may be asked to pick up the tab.
Black Sea:
The price of prilled urea softened slightly in the Black Sea, widening the range to $300-$310/mt FOB.
Mediterranean:
Urea offers in the Mediterranean basin slid lower this week, to around $380/mt CFR amid muted demand and improved availability ex-Egypt. Spanish and Italian importers remain on the sidelines, while offers in nearby Romania were heard at $385/mt CFR. As a result, the granular urea market in the Mediterranean slipped to $380-$385/mt CFR, down from $385-$390/mt CFR.
Southeast Asia:
No further spot granular urea business was reported in the region, as Malaysia focuses on contract shipments and Indonesia has no availability. Downward pressure on the market is present, however, with CFR bids and sales in nearby markets reflecting lower levels achieved on an FOB basis. For now, however, the market remains unchanged at $350-$366/mt FOB.
Indonesia:
Bad weather, including unusually high humidity during both the day and night, has caused a delay to shipments of urea purchased in June. One trader reported having a vessel awaiting a berth for at least 15 days due to the delay in loading ships.
The June sales were initially slated to load no later than mid-July. Issues with transportation to the ports and now delays in vessel loadings have pushed back the shipping dates.
Once the last of the vessels begin loading, sources said Pupuk will once again begin issuing selling tenders. Traders expect to see significant quantities of material coming out of not only Indonesia by mid-September, but also neighboring Bahrain and Malaysia as well.
January-June urea exports firmed 29% year-over-year, according to Trade Data Monitor, to 826,000 mt from 642,000 mt. Australia led buyers with 410,000 mt, followed by the Philippines with 119,000 mt. June exports stood at 210,000 mt, up 37% from 153,000 mt in June 2023. Shipments were down 9% in the second quarter, however, to 485,000 mt from 535,000 mt.
Middle East:
The Middle East urea price remained steady in the low-$340s/mt FOB due to a lack of new spot business. Producers were busy covering both the last of the Indian tender awards and their long-term contracts. Two vessels were reported to begin loading this week, though two more ship nominations are still needed to close out the tender awards from the Arab Gulf.
Producers were reportedly more willing to talk with traders this week about potential upcoming deals, including the next Indian tender, though differences in price ideas remain a stumbling block. Some bids are reportedly coming in the $320s/mt FOB, while producers are looking to hold on to the current price in the $340s/mt FOB, at a minimum.
“So far,” said one trader, “talks are friendly and without acrimony.”
For West Trade to cover its award into Pakistan, sources said the company will be forced to rely on Iranian material. A recent tender for 100,000 mt of Iranian granular urea showed prices in the $290s/mt FOB. Some bids heard in the $280s/mt FOB were reportedly slated for sale to buyers in Latin America.
No awards have yet been issued in the tender, leaving the last price of $296/mt FOB as the benchmark for Iranian product.
Sources continue to wonder what will happen with the reported 100,000 mt being shipped to Chinese warehouses. In the past, such tons were stored in bonded warehouses – never officially entering the Chinese market – and then parceled out in smaller lots to regional buyers.
Egyptian production is nearly back to normal, reports indicated. Only MOPCO, which is running two of its three plants, continues to operate below normal capacity.
China:
Following talks with traders and producers in China, international traders put the odds of large-scale exports being allowed anytime soon at just 30%.
The Chinese application season begins in September, sources noted. The goal of China’s export restrictions was to ensure a plentiful supply of urea at a cheap price. So far, while reserves are slowly building, prices have not come off enough to satisfy the government officials responsible for lifting the export restrictions.
The application season is expected to run through November, with some possible interest lingering into mid-December. This schedule, said one trader, leaves the impression there will be no major exports from China for the rest of the year. Other traders are a bit more optimistic, however, speculating that while the large export quantities seen in the past may not be repeated, the government will allow for a gradual increase in urea shipments in the last quarter of the year.
Domestic prices have been dropping. The latest export estimate, based on domestic prices from the factory, showed an equivalent of $310/mt FOB from some plants. At the same time, however, the bulk of estimates suggests a price in the mid-$320s/mt FOB.
TCP in Pakistan is reportedly in serious talks to secure 100,000 mt as part of a government-to-government deal. If the basis for the deal centers on the last TCP tender price of about $359/mt CFR, sources said producers could see a netback of around $330/mt FOB. There are no reports indicating the progress of the talks, only that TCP is looking at all options to secure the tons needed by Pakistan.
Ethiopia:
Ethiopia imported 502,000 mt of urea in January-July, Trade Data Monitor reported, up 26% from the 398,000 mt received in January-July 2023. Egypt supplied 304,000 mt and Oman shipped 155,000 mt. July imports totaled just 28 mt, compared to the 148,000 mt reported one year earlier. Ethiopia typically imports less urea in the third quarter than other periods of the year.
Brazil:
Granular urea imports dropped 5.5% during the week, to $340-$345/mt CFR, with sanctioned urea reportedly available at a $15-$20/mt discount. Offers continued in the $350-$365/mt CFR range, however, with sellers anticipating a new India tender soon.
Despite lower prices at ports, domestic market negotiations remained stable at $480-$500/mt FOB Rondonópolis for September and October deliveries, with quotes for immediate delivery tracking slightly lower.
July urea imports fell 8% year-over-year, Trade Data Monitor reported, to 600,000 mt, reflecting reduced imports from Qatar and Oman. Imports rose to 3.6 million mt in January-July, however, a 5% increase from the same period of 2023. Nigeria supplied 782,000 mt, Qatar shipped 635,000 mt, Oman sent 627,000 mt, and Russia added 480,000 mt.