U.S. Gulf: After skyrocketing in late April and early May, the urea barge market continued to weaken last week, and had fallen to as low as $600/st FOB for loadings at New Orleans. Barges already loaded and moving north were running as high as $650/st FOB early last week, but then began to slide as well. Toward the end of the week, the price was much closer to $630/st FOB for a NOLA barge in an attractive location.
The price for prill urea was sitting around $600/st FOB, but that could strengthen during the next couple of weeks as rice farmers make their demands. A decrease in the price for granular urea could help hold down prill as well, however.
Eastern Cornbelt: Urea prices out of regional terminals were reportedly starting to slip as NOLA barge values slide and demand for spot tons wanes. Sources quoted terminal prices for urea in the Eastern Cornbelt in a broad range at $710-$740/st FOB, depending on location.
Western Cornbelt: Sidedress movement continued last week, and rice growers in Missouri were also topdressing with urea. Although dealer reference levels remained as high as $740/st FOB in the region, sources quoted the dealer market for granular urea more commonly in the $710-$720/st FOB range, with reports from Missouri sources of $705/st FOB available on a spot basis.
California: The granular urea market was pegged at $665-$675/st FOB and $685-$705/st DEL in California, though some suppliers were out of product in mid-May.
Pacific Northwest: Granular urea pricing covered a broad range in the Pacific Northwest in mid-May, with sources reporting a lot of sideways trading going on as the spring application season winds down and dealers try to end with minimal inventory. The dealer market was quoted at $675/st FOB in Washington, with delivered tons ranging widely from $695-$765/st in the region, depending on supplier and location.
Western Canada: Granular urea remained at $870-$895/mt DEL in Western Canada, with the lower end of the range reported in Manitoba and Saskatchewan, and the higher numbers in Alberta and British Columbia.
Pakistan: The Trading Corporation of Pakistan (TCP) opened its tender May 21. While TCP got lower prices than originally expected, it did not get the 300,000 mt it wanted.
The buying house awarded Gavilon a contract for 100,000 mt at $522.86/mt CFR. Within 24 hours, TCP issued a new tender to close June 25.
All told, TCP received 14 offers in the tender. The results showed, according to sources, that the urea market is indeed on the wane. One trader put the netbacks on the Gavilon award at $490/mt FOB from an Arab producer and $475-$480/mt FOB Yuzhnyy.
Even with prices about $20 less than STC/India paid just last month, TCP still faced sticker-price shock. When TCP was last in the open market – January 2012 – it paid about $100/mt less.
Domestic producers criticized the calling of the tender, telling government agencies that if they were provided with enough natural gas, they could produce enough urea to satisfy the current application season for less.
In the end, the government decided to proceed with the tender to cover the 300,000 mt shortfall that government experts expect.
The tally of the TCP tender follows.
| Offering Company | Quantity (‘000 mt) | Price (US$/mt CFR) | Origin | ||
| Firm | Option | Firm | Option | ||
| Gavilo | |||||