Offers in the STC urea tender that closed today confirmed higher prices across the board, including steeply higher Iranian levels. The lowest offer came in at $535/mt CFR, about $150/mt higher than what IPL paid just two months ago. The average price of all the offers comes in $30/mt higher over the final IPL price.
Industry sources had expected to see the Arab producers come in around $555/mt FOB. And indeed, the three producers companies that did offer set their prices at $555-$556/mt FOB. Traders carrying Middle East tons had offers around $557/mt FOB.
When STC first issued its tender, it would not consider offers containing Iranian tons. At the last minute, however, the company changed the closing date from May 4 to May 8 and allowed Iranian material to be included. The change made a difference. The lowest offer came from Titanium based on Iranian product at $535/mt CFR. Other offers of openly declared Iranian tons range from $563/mt CFR to $579/mt CFR. Offers of Yuzhnyy and Middle East tons started in the upper $550s/mt CFR.
The prices offered in this tender seem to indicate that the days of ultra-cheap Iranian urea are over. The Titanium offer was far outside the norm for this tender, even from other offers based on Iranian material. One observer wondered if Titanium would be able to obtain the necessary product at that price.
Emmsons got stuck between IPL and the Iranian suppliers with its price award from the last tender. Sources report that Emmsons was unable to make good on its award of 500,000 mt.
Last week industry watchers said STC would not only have to make up for the half-a-million tons Emmsons did not deliver but also at least an equal amount to keep supplies at levels designed to prevent panic among local distributors and political figures.
A number of Chinese tons were offered in the tender. It is unclear to sources if the tons are left-over quantities from the last export window that remained in bonded warehouses or if the tons will be shipped after July 1 when the Chinese export duty drops to 7 percent from its current 110 percent. The prices — $527-$563/mt FOB — seem to indicate no one is working with older tons.
Based on the offers, the Yuzhnyy price moved into the $550s/mt FOB, the Middle East – Arab producers – moved into the mid-upper $550s/mt FOB and China into the $540s/mt FOB.
Once STC concludes its talks with the offering companies, new and higher prices around the producing world will be posted.