U.S. Gulf: The barge market is quickly transitioning as many were throwing out forward numbers rather than prompt, except for those in rice country that still may need barges.
Actual prompt sales were called $565-$595/st FOB early in the week, but by week’s end sources said barges could be had at $550/st FOB, with others suggesting $520/st was not too far off the mark.
Eastern Cornbelt: Fueled by weak demand and a rapidly plunging NOLA barge market, granular urea pricing in the region was “dropping like a bomb,” according to one contact. Sources pegged the dealer market in a broad range at $650-$700/st FOB regional terminals, with the lower numbers reported out of spot river locations in Ohio.
Those prices reflect a drop of $40-$60/st from last report.
Western Cornbelt: Granular urea was pegged in a broad range at $680-$720/st FOB in the Western Cornbelt last week. Sources said urea pricing out of Catoosa, Okla., had fallen to the $650/st FOB level.
Northern Plains: Urea pricing had reportedly slipped to $680-$700/st FOB, with the low reported out of the Twin Cities market at midweek. Delivered urea in North Dakota ranged widely from $640-$700/st, “depending on who you talk to and who has tons for sale,” with the low end quoted for some dealer-to-dealer bartering of excess spring tons. Urea supplies were loosening up in the region in late May.
Northeast: With demand winding down, the granular urea market was falling as well. Sources pegged the dealer market at $670-$690/st FOB regional terminals, although reference prices remained at the $700/st FOB mark or higher at some locations. The low end of the range was reported FOB Fairless, Penn.
Eastern Canada: Urea pricing in Eastern Canada was down from last report. Sources tagged the granular urea market at the $690/mt FOB mark in Ontario for any available tons in late May. Inventories were described as tight after strong demand in the region this spring.
Pakistan: The campaign to stop further imports of urea by the domestic producers stepped up a notch last week.
When the producers failed to prevent TCP from awarding Gavilon a contract for 100,000 mt of urea two weeks ago and from issuing a second tender for 200,000 mt to close June 25, they shifted their focus to the weak state of the country’s foreign reserves.
The urea producers first argued that the natural gas allotment taken from them for the consumer market should be restored so they could make up the 300,000 mt shortfall of urea. When that argument failed, the producers told the Ministry of Finance that it would be cheaper for the government to import fuel oil for the power sector rather than importing urea.
The producers laid out their spreadsheets for the finance ministry, saying the cost of importing 300,000 mt of urea at $522.86/mt CFR will cost about Rs14.4 billion (US$154 million). On top of that, they say, will be Rs5 billion (US$53 million) in subsidies.
The producers claim they can supply the whole 300,000 mt for RS9.9 billion (US$106 million). The savings, they say, could be used to help the power sector.
Besides the need for natural gas, the producers say the nearly 7,000 megawatt gap in output could be made up with imported fuel. They claim the support for the power sector would be a better expenditure of the government’s money rather than urea imports.
The government has already shaken loose some natural gas for producers in the north of the country. Production was slated to start last week.
In the meantime, TCP is proceeding with its next tender.
The rules under which the buying house operates state it can only take the lowest offer in any given