US Gulf:
The NOLA urea market was quoted at $303-$313/st FOB for August-September trades during the week, down from last week’s $305-$317/st FOB range.
Eastern Cornbelt:
Urea was steady at $360-$370/st FOB in the Eastern Cornbelt, with the low confirmed at Cincinnati, Ohio. Delivered urea in central Michigan was pegged at the $395/st level for August-September shipments.
Western Cornbelt:
Urea fell to $340-$365/st FOB in the Western Cornbelt, down $5/st from last week, with the low reported at Port Neal, Iowa. The St. Louis, Mo., market was steady at $345-$350/st FOB.
Northern Plains:
The urea market dropped to $350-$360/st FOB St. Paul, Minn., down $5/st from last report. Delivered urea was down $10-$15/st, to $385-$420/st in the Northern Plains, depending on location.
Northeast:
Urea slipped to $365-$380/st FOB in the Northeast, with the low confirmed at Baltimore, Md. The Fairless Hills, Pa., market remained at the $370/st FOB level at mid-month.
India:
The National Fertilizers Ltd. (NFL) urea tender is set to close on Aug. 29. Offers are expected to run below the $350-$365/mt CFR awarded in the last tender, with traders reportedly focused on pricing in the $340s/mt CFR. Additionally, players noted a building consensus that NFL will take 700,000-1 million mt in the tender.
Traders pointed to the long shipping period – through Oct. 31 – as one factor that could allow for up to 1 million mt to be awarded without pushing prices higher. Even with China out of the global market, urea reserves are building in the Arab Gulf, sources noted. These reserves, along with additional production in September and October, could easily allow for the 1 million mt target to be achieved without disrupting the market.
Local media reported a new study showing that India will become less dependent on imported urea in the current fiscal year than in previous years. Imports will represent only 10-15% of total fertilizer use this fiscal year, the report indicated, down from 30% just three years earlier.
The drop in demand for imported product will result from stepped-up urea production and the use of nontraditional fertilizer products. For some time, the government has promoted the use of liquid nano urea in lieu of traditional dry urea. The nano urea, according to the government, more efficiently targets the needs of crops, thereby reducing the amount of product required for each farm. Nano urea is also a domestic product, further reducing the need for imported urea.
Black Sea:
Prilled urea prices remained steady at $295-$305/mt FOB in the Black Sea. The flat pricing in the region was in line with most major urea markets, which have gone quiet in anticipation of the India tender set to close next week.
Mediterranean:
Urea offers in the Mediterranean region were reported lower at $370-$375/mt CFR, with unconfirmed sales suggested as low as $365/mt CFR. The wide shipment window for the Aug. 29 India tender, as well as seasonally slow business in August, have reportedly turned the regional mood bearish.
Southeast Asia:
In the absence of fresh granular urea business, regional indications slipped to $340-$366/mt FOB. Sources remain skeptical that any business can be concluded ahead of the Aug. 29 India tender deadline, as most regional markets are out of season.
Middle East:
Despite last week’s $357/mt FOB sale by MOPCO, the company reported a 10,000 mt granular urea deal late this week at $345/mt FOB. Just prior to the sale’s closing, sources said producers were attempting to hold to a $350/mt FOB price floor.
The drop in prices came quickly. Most bids are now reportedly in the $340s/mt FOB, while the paper market is indicating a decline into the $330s/mt FOB by November. Sources attributed the price slump to a lack of buying interest from Europe combined with a general decline in the global urea market.
There are rumors that aggressive buyers are trying to push the Arab Gulf price into the $320s/mt FOB. However, traders reported a general view that the Arab Gulf will show a netback in the $330s/mt FOB once the India tender numbers are released.
Sources described Arab Gulf producers as having a certainty that they will act as the main suppliers in the upcoming NFL/India tender. Traders point to China being out of the export business and freight costs forcing Russian Baltic material to levels deemed unagreeable to producers. Even with that advantage, sources described the growing urea reserves in producer warehouses and the tender’s extended shipping period as allowing buyers to be aggressive in their pricing ideas.
The last of the 100,000 mt of Iranian granular urea has arrived in China. The tons are reportedly being stored in bonded warehouses for re-export. Some of the tonnage could end up going to regional buyers in search of product they once procured from China. There is also a possibility that at least one 40,000 mt lot could be offered in the India tender.
Bids for Iranian granular continue to be indicated in the low-$290s/mt FOB, against a government desire to hold the line at $296/mt FOB.
China:
Recent price drops reported from domestic factories now put the estimated export price for prilled urea at just under $300/mt FOB. Traders have previously stressed that these pricing estimates are only useful for comparing price trends and should not be taken as viable export prices.
So far, the market’s only talk has centered on prilled urea, and no granular price shifts have been reported. A greater focus on prilled product over granular would not be surprising, one trader noted, due to the limited volumes of granular produced in China relative to prilled urea. At the same time, domestic demand for granular product usually takes most available supply once the product arrives at local distributors.
The lower price, stepped-up production, and growing local reserves have prompted urea producers to once again approach the government to request that export restrictions be lifted or modified. So far, sources said, the government appears unwilling to alter its position on severely limiting the amount of urea for export. Earlier predictions, claiming there will be no new exports for the rest of the year, now appear increasingly likely.
Trade Data Monitor put January-July urea exports at 219,000 mt, down 84% year-over year from the 1.3 million mt recorded in 2023, reflecting the country’s aggressive export restrictions. South Korea led buyers with 77,000 mt, while Japan followed with 27,000 mt. Both countries were said to buy product for industrial use. July imports were 79,000 mt, down 75% from the 323,000 mt shipped in July 2023.
South Korea:
Due to China’s reduced urea exports during the past year, South Korea experienced a near-crisis in its anti-pollution sector as companies have traditionally depended on Chinese urea as a vital component of their pollution-control devices. In response, the government has called on companies to diversify their supply chains. The results of those efforts were apparent in the country’s latest urea import numbers.
South Korea imported 492,000 mt of urea in January-July, Trade Data Monitor reported, a 17% increase from the 420,000 mt received through the same period of 2023. Qatar topped the supplier list with 115,000 mt, while Vietnam sent 111,000 mt. Chinese imports totaled 85,000 mt, down nearly 60% from the year-ago 203,000 mt.
July imports were 66,000 mt, up significantly from 21,000 mt in July 2023.
Brazil:
Brazil granular urea edged higher in a quiet trading week, to $355-$360/mt CFR from last week’s $350-$360/mt CFR, as players await the results of the India tender. Reports of firming demand have begun to circulate as market players anticipate a surge in seasonal purchasing. Players noted an unconfirmed transaction at $350/mt CFR, while bids were noted in the $345-$350/mt CFR range.
Prices moved up $5-$15/mt at Rondonópolis, to $480-$490/mt FOB. While the corn market remains a significant driver of demand, buyers for other crops such as sugarcane, coffee, cotton, HFF, and reforestation are more active in the market, though many buyers secured supply during the recent price dip.
Urea imports met expectations in August, while the vessel lineup shows a relatively modest 350,000 mt in the September import forecast. The numbers suggest balanced supply/demand fundamentals, though inventories are expected to strengthen in the coming months as the peak of seasonal demand approaches.