All posts by hlancey@bloomberg.net

ADNOC Mulls Raising Covestro Bid Again

ADNOC - Abu Dhabi, News, News Briefs

Abu Dhabi National Oil Co. (ADNOC) has indicated it is willing to boost its informal offer for Germany chemicals group Covestro AG to about €11.6 billion (approximately $12.7 billion) on the condition that Covestro agrees to enter formal talks, Bloomberg reported, citing unnamed sources with knowledge of the matter.

The state-backed energy group has verbally signaled to Covestro that it could come back with a new written proposal of €60 per share, according to the report. An offer at that level would represent a premium of about 29% to Covestro’s closing share price on Aug. 11.

Covestro’s management and supervisory board are considering their options. ADNOC last raised its informal offer to €57 per share in July.

According to some analysts, it is unclear why ADNOC is interested in buying Covestro, considering how badly the petrochemical business has been doing. Covestro early this month reported a 21% year-over-year decline in second-quarter revenues, to €3.7 billion.

ADNOC’s CEO Sultan Al Jaber is reportedly hunting for deals to better compete with Saudi Aramco’s SABIC chemicals unit, and to develop the company’s own downstream and renewable energy operations.

Covestro CEO Markus Steilemann recently expressed concern about the trend of more assets being bought or financed by entities backed by autocratic states, according to the report, citing an interview Steilemann did with German business newspaper Handelsblatt  earlier this month.

ADNOC is separately in talks with Austria’s oil and gas group OMV AG regarding a possible merger of the two companies that could form an entity worth $30 billion. OMV is the majority owner (75%) of Austrian company Borealis AG, which last month completed the sale of its nitrogen fertilizer assets to the Czech Republic’s chemicals and fertilizer group Agrofert (GM July 7, p. 1).

ICL’s Sde Brir Mine Plans Face Further Delays

Israel, News, News Briefs, Phosphate

ICL Group Ltd.’s phosphate subsidiary ICL Rotem (formerly Rotem Amfert Negev Ltd.) faces further postponement of its plans to mine phosphate ore at the Sde Brir site in southern Israel’s Negev Desert.

Objections by ultra-Orthodox parties in the nearby city of Arad, home to a large Haredi population, over concerns about air pollution at the potential site and delays in the regulation of Bedouin settlements in the area, have led the Israeli government to postpone debates on the matter indefinitely, Israel’s Haaretz newspaper reported.

Local Bedouins, Arad residents, and environmental groups have fought against the mining plan for years over fears that mining phosphate will pollute the area and damage health.

The Israeli government in late 2021 reversed planning approval for the new mine, officially reporting its decision after an appeal by Environmental Protection Minister Tamar Zandberg (GM Jan. 7, 2022). However, media reports at the time, citing unnamed government sources, said the United Arab List party also played a role in the decision to suspend the project.

The Israeli government earlier this year drew up a draft resolution for the national planning and construction council to set guidelines for an environmental impact survey of Sde Brir. The survey was to be conducted by the Energy Ministry and submitted to planning bodies for approval as soon as possible.

The discussion on the draft resolution, which was to be held a month ago, has now been postponed, however, with no new date set after ministers from Haredi parties, including Construction Minister Yitzhak Goldknopf, opposed the plant, according to the report.

The Office of Israel’s Prime Ministers has indicated that it intends to bring the draft resolution for approval at “a future date” in order “to instruct the planning authorities to continue with the planning process.”

Israeli environmental groups have long cited the toll ICL’s subsidiaries have taken on the local environment, particularly as a result of ICL Rotem’s phosphate activities in the Negev Desert as well as the alleged contribution of ICL Dead Sea Works at Sdom to the rapid decline of the Dead Sea.

ICL Rotem Tops Environmental Offender List

Israel, News, News Briefs

ICL Group Ltd. Subsidiary ICL Rotem, along with two Israeli oil refineries, has topped the country’s list of worst environmental offenders.

Israel’s Environmental Protection Ministry put ICL Rotem, which surface mines phosphate rock at Rotem and Zafir (Oron- Zin) in the country’s southern Negev Desert, in the number one spot for worst performance in its latest index of environmental wrongdoers, published on Aug. 14, according to a Times of Israel report.

The ministry cited repeated violations of laws and regulations by ICL Rotem from 2019 through 2021. In 2021, the ICL subsidiary was issued with an administrative order for violations connected with wastewater discharge, infrastructure, and excessive emissions into the air. The company came in second place for worst performance in 2020 and 2019.

ICL Rotem in 2017 was responsible for arguably Israel’s worst environmental disaster involving a massive leak and partial collapse of a dyke in a phosphate evaporation pond at the subsidiary’s fertilizer plant in Mishor Rotem in southern Israel (GM July 7, 2017). The collapse caused extensive damage and contamination to the Ashalim Creek Bed and surrounding areas, killing wildlife and reportedly causing long-term damage.

ICL Rotem and other defendants late last year settled all claims relating to the accident (GM Dec. 16, 2022). Rotem agreed to pay the public and the class groups NIS115 million (approximately $30.6 million) as part of the settlement. The Ashalim accident was not part of the Environmental Protection Ministry’s calculations for its latest ranking.

Another ICL Group subsidiary, Rotem Zin, however, topped the ministry’s list for improving environmental performance since 2020.

Azerbaijan Fertilizer Exports Fall, Imports Increase

News, News Briefs, Urea

Azerbaijan exported 113,034 mt of mineral fertilizers in the first half of the year, a 26% year-over-year decline, according to an Interfax report, citing the country’s State Statistics Committee. The value of mineral fertilizers in the six-month period also fell to $32 million, a 68% decline from last year.

The State Oil Co. of the Azerbaijan Republic’s (SOCAR) ammonia and urea complex at Sumgayit, some 30 km from the capital of Baku and commissioned in January 2019 (GM Jan. 18, 2019), potentially is a major contributor to the country’s fertilizer export volumes.

The plant has nameplate production capacity of 650,000-660,000 mt/y of granular urea. However, according to Trade Data Monitor, global imports of urea from Azerbaijan totaled only 289,859 mt in 2021. Azerbaijan imports of minerals fertilizers increased 45% in the first half of 2023, totaling 54,842 mt.

Fertilizer Cited as Possible Cause of Blast in Russia

News, News Briefs, Russia

The illegal storage of agrochemicals is being investigated as the possible cause of a deadly explosion and fire on Aug. 14 at a gasoline station in Russia’s southern republic of Dagestan, about 990 miles south of Moscow. The blast killed 35 people, including three children, and injured 115 others.

The Russian Investigative Committee said the explosion on the outskirts of Dagestan’s capital, Makhachkala, took place after an initial fire broke out in an auto service building and spread to another room where fertilizer might have been stored, according to a Radio Free Europe report.

The fire engulfed nearby structures, including a gasoline station, and took firefighters four hours to extinguish. Media reports cited local emergency officials as saying that blazing fuel covered people who had come to watch the fire. Aug. 15 was declared a day of mourning in Dagestan.

The Investigative Committee, as cited by the report, announced that it had launched a probe into “providing services that do not correspond to the safety regulations, which led to the death of the people.” Russia’s Criminal Code provides for a penalty of up to 10 years in prison for the crime.

In a separate incident, a large fire broke out on Aug. 13 at a fertilizer warehouse in the town of Ramenskoye in the Moscow region. No injuries were reported. The Moscow region prosecutor’s office said the preliminary cause of the fire was a violation of fire safety requirements during welding work, according to a TASS report.

KazAkot Halts Production Amid Power Shortages

Ammonia, Ammonium Nitrate, Asia, News, News Briefs, Nitric Acid

Kazakhstan’s KazAzot JSC halted production of ammonia, nitric acid, and complex fertilizers on Aug. 14 in order to supply more power to individual consumers amid regional electricity shortages, Bloomberg reported, citing the company’s website.

It is unclear from the report if KazAkot is continuing to produce ammonium nitrate given that it has stopped producing ammonia. The company’s production capacities at Aktau include 0.2 million mt/y mt of ammonia and 0.4 million mt/y of ammonium nitrate, according to the Green Markets database.

KazAzot’s gas power plant will increase electricity supplies to 29-30MWh from the current 24MWh after full fertilizer production is halted, the company reported.

Kazakhstan is enforcing daily power restrictions for industrial companies until restoration work is completed at block 3 of the Mangistau power plant, where the unit had an emergency shutdown on Aug. 11, according to a statement on Kazakhstan’s electricity grid operator website on Aug. 12.

Unigel to Resume Urea Output in Sergipe

Ammonia, Brazil, Natural Gas, News, News Briefs, Nitrogen, Urea

Brazil’s Unigel plans to restart its urea plant at Sergipe in September. Unigel CEO Roberto Noronha Santos said the decision follows a slight improvement in the petrochemical cycle as a whole.

“The chemical industry scenario is still challenging, but we understand that it is time to resume activities gradually and responsibly,” he said. “We anticipate an increase in demand for urea by the end of the year due to the next winter harvest.”

In full operation, the Sergipe factory has the capacity to produce 450,000 mt/y of ammonia and 650,000 mt/y of urea. Noronha noted that the resumption is a national priority. Additionally, this week Unigel resumed production at the styrene unit located in Cubatão (SP).

“We live with a wide dependence on nitrogenous fertilizers coming from other countries,” he said. “Today 85% of demand is met by imports. Consequently, having production in Brazil is essential to ensure the reduction of the country’s vulnerability and the safety of our customers.”

Unigel’s nitrogen plant at Bahai is expected to remain offline. The company idled production in Bahai earlier this summer and delayed a restart at Sergipe as it tried to renegotiate contracts for the supply of natural gas and struggled to avoid worsening financial problems, which resulted in the company delaying payments to suppliers (GM June 30, p. 26).

Unigel said this week it is still in negotiations with Petrobras and is focused on the company’s projects on renewable energy and fertilizers. Unigel leases the Sergipe and Bahai plants from Petrobras, which is also its natural gas supplier.

In the meantime, Unigel and holders of more than 10% of the company’s outstanding local debt securities called a general meeting for Sept. 5, according to Bloomberg, which reported that the goal is to create conditions for renegotiation of local bonds, with the stipulation of new terms and deadlines “upon the receipt of real guarantees that make the renegotiation feasible, concomitantly with other creditors in the course of the financial restructuring of the issuer.”

Last month bondholders had sought a cash injection into Unigel from the company’s controlling shareholders, the billionaire Slezynger family, which owns Unigel through a holding company. Unigel was founded by Henri Slezynger, whose family fortune is valued at around $2 billion, according to calculations by the Bloomberg Billionaires Index.

Other demands presented to the company were a review of investment plans, delaying dividend payments, and selling non-core assets, sources told Bloomberg, though they said it was not clear if Unigel would meet the demands.

Unigel is poised to breach a covenant on its local bonds as high interest rates at home and lower fertilizer prices globally eroded earnings and sent its leverage ratio skyrocketing. Lending agreements for the company’s local notes require it to keep the ratio of net debt to adjusted EBITDA below or at 3.5 times, and S&P Global Ratings said it could peak at near 10 times by year’s end. 

Sources expected that Unigel would likely breach the covenant with second-quarter results, which have yet to be released. They were reportedly due out Aug. 14 but were delayed.

Ammonia

Ammonia, Black Sea, California, Eastern Cornbelt, India, Market Watch, Middle East, Nitrogen, Northwestern Europe, Pacific N.W., Southeast Asia, Tampa, U.S. Gulf, Western Canada, Western Cornbelt

US Gulf/Tampa:

Tampa ammonia remained at the $295/mt CFR level for August. Sources said the direction for September appears higher, however, amid curtailed production at Trinidad and Tobago due to gas supply issues and a new round of stronger inland postings for fall ammonia.

Eastern Cornbelt:

Ammonia prices strengthened in the Eastern Cornbelt at mid-month, moving to $485-$525/st FOB for prompt or fall prepay offers, up from the previous $465-$485/st FOB. The low was quoted at Lima, Ohio, with most new offers in Illinois and Indiana reported in the $500-$525/st FOB range.

Western Cornbelt:

Ammonia prices firmed to $500-$525/st FOB in the Western Cornbelt, up from last week’s $440-$475/st FOB, with the low confirmed in Nebraska and the high at Palmyra, Mo. New prompt and prepay offers in the Northern Plains were also reported firmly at the $500/st FOB level, up from the previous $475/st FOB.

California:

Ammonia remained at $580/st DEL in California, with aqua ammonia referenced at $159/st FOB Stockton and $169/st FOB Sycamore.

Pacific Northwest:

Anhydrous ammonia was quoted at the $460/st FOB mark out of regional terminals in the Pacific Northwest, with aqua ammonia referenced at the $120/st FOB level in mid-August. Sources said they expect an increase in the near-term.

Western Canada:

The last confirmed ammonia prices remained at C$810-$1,025/mt DEL in Western Canada for fall tons, but there were few offers on the table in mid-August.

Black Sea:     

Turkish buyers continue to look for bargains. Sources said buyers are looking at Russian tons from the Baltic at prices below what North African suppliers have been offering.

A reported shortage of ammonia supply from Iran seems to have prompted the dispatch of an Iranian vessel to Venezuela to pick up some ammonia for Turkey. While there has been no record of Venezuelan ammonia reaching Turkey, sources noted reports that 2-3 cargoes have already been delivered to Turkish buyers from Venezuela. One trader said the product was most likely re-exported from a third country.

According to Trade Data Monitor, Turkey’s primary ammonia suppliers so far in 2023 have been Egypt, Libya, and Oman.

India: 

Small buyers have been stepping up purchases, sources said, noting loads of 8,000 mt or less selling into India at $380-$385/mt CFR. Sellers are reportedly pushing for $390/mt CFR, but with little success.

The price paid for these smaller spot ammonia cargoes is significantly higher than what larger buyers pay under long-term contracts. Nailing down the contract price is difficult, however, as neither side is willing to reveal it.

Middle East: 

The latest ammonia sales into India showed a netback of $320/mt FOB to the Arab Gulf, according to reports, matching the price achieved last week from a one-off deal involving shipments to Jordan and Morocco.

The spot price is too high for most buyers seeking large quantities, said one trader. Only buyers looking for small lots are accepting these higher prices. At the same time, producers say they are sold out well into September. Boasting full order books, said one source, the producers can demand any spot price they want.

The asking price of $320/mt FOB makes any spot deal into Southeast Asia impossible, said another trader. The current estimated contract price to buyers in Taiwan and South Korea is closer to $330/mt CFR, netting back well below $300/mt FOB to the Arab Gulf.

Supply is expected to pick up as Ma’aden and Muntajat plants slowly return to production, sources said. The extra tonnage is likely to pressure prices lower as demand remains lackluster, according to one trader.

Sources noted limited offers from Iran due to reported work stoppages. The lack of available export material has left some Iranian-owned ships with nothing to do. One vessel, said to be loading this week, was reportedly booked to pick up a cargo in Venezuela.

January-July ammonia exports totaled 352,000 mt, Trade Data Monitor reported, a roughly 25% increase from the year-ago 281,000 mt. India accounted for 88% of the exports with 311,000 mt, followed by Turkey with 25,000 mt. July exports of 2,800 mt, all to Turkey, were down from 39,000 mt in July 2022.

Sources said the gas shortage imposed on nitrogen producers by the government seems to have impacted some exports. Fertiglobe reportedly had an issue fulfilling a sale to Jordan and OCP earlier in the month. The company’s maneuvering to cover the deal led to a higher price out of the Arab Gulf, said sources.

While the price was thought to be a one-off at the time, new deals into India have since locked in the same $320/mt FOB price.

Northwest Europe:  

Citing limited demand, sources described ammonia production as low and slow, but steady. Larger buyers are getting cheaper ammonia from imports, while smaller buyers are taking what they need on a hand-to-mouth basis.

Sources said the larger imports come in at $350/mt CFR, while some of the smaller buyers are paying $370/mt CFR. European producers are reportedly selling at $380/mt CFR.

Industry watchers are beginning to calculate what winter might look like for them. The erratic weather patterns that have plagued the year so far have suggested a handful of possible scenarios.

If winter starts early and with a severe cold snap, many in the industry might panic out of fear the record-level gas reserves could be affected, one source said, and may agree to future purchases at high price levels. On the other hand, if the season starts with mild weather, producers could get complacent about supplies and be caught flat-footed should harsh conditions arrive near the end of the season.

Southeast Asia:        

The current contract ammonia price in the area is estimated at $330/mt CFR, netting back well below $300/mt FOB to the Arab Gulf. At these prices, the current $320/mt FOB spot price from the Arab Gulf of is not playing well with potential buyers.

Indonesian ammonia exports were 836,000 mt in January-June, according to Trade Data Monitor, a16% decline from 996,000 mt shipped in first-half 2022. China received 246,000 mt, South Korea took 214,000 mt, and Taiwan bought 96,000 mt. Second-quarter sales were reported at 459,000 mt, down 11% from 518,000 mt in the prior year.

Indonesia sent 137,000 mt offshore in June, off 18% from 168,000 mt in June 2022. South Korea and India each took about one-third of the June tonnage, while Australia, a new buyer of Indonesian ammonia, took 25,000 mt.

Urea

Black Sea, Brazil, California, China, Eastern Cornbelt, India, Indonesia, Market Watch, Middle East, Nitrogen, Pacific N.W., U.S. Gulf, Urea, Western Canada, Western Cornbelt

US Gulf:

NOLA urea for August-September fell to $350-$370/st FOB during the trading week, down from last week’s $355-$395/st FOB. Limited prompt August trades were reported in the $365-$370/st FOB range, with September business at $350-$365/st FOB.

Eastern Cornbelt:

Urea prices slipped to $430-$460/st FOB in the Eastern Cornbelt, down $20/st from the previous week, with the low confirmed at Cincinnati, Ohio.

Western Cornbelt:

Fueled by softening NOLA barge values, the urea market fell to $410-$450/st FOB in the Western Cornbelt, down from last week’s $430-$480/st FOB range. The high was confirmed in Iowa and the low at St. Louis, Mo.

California:

Granular urea pricing in California was steady at $550-$600/st FOB Stockton, with prilled urea available at the $620/st level FOB San Diego. Rail-DEL urea was reported in the low- to mid-$500s/st in mid-August.

Pacific Northwest:

Urea was quoted at $465-$470/st FOB in the Pacific Northwest, down from the previous $485-$490/st range, with the low confirmed at Rivergate, Ore. Delivered urea was pegged at $490-$520/st in the region, depending on location.

Western Canada:

Urea prices in Western Canada were reported at C$695-$720/mt FOB and C$680-$760/mt DEL in mid-August, up from the previous C$635/mt FOB and C$665-$680/mt DEL levels.

India: 

All eyes remain on the Indian Potash Ltd. (IPL) tender. After the tender closed, word came from China over the weekend that more tons would be made available. The total amount of urea IPL is looking to take shot past the initial 1.5 million mt target, to as high as 1.9 million mt. At the end of the week, the quantity appeared to settle around 1.7 million mt as traders adjusted their orders to fit prices and freight costs.

All discussions reportedly ended on Aug. 17. India’s East Coast ports will receive 632,000 mt, according to sources, while West Coast ports will get 1.08 million mt, for a total of 1.7 million mt.

Of that amount, China will supply an estimated 1.1 million mt. Arab Gulf producers are expected to provide 250,000-300,000 mt, with another 200,000-250,000 mt anticipated from either the Baltic or Black Sea. Any remainder might come from Southeast Asian suppliers.

Supplier Quantity (mt) Source
East Coast West Coast Totals
Midgulf 100,000 200,000 300,000 China-Arab Gulf
OQ Trading 45,000 150,000 195,000 China-Arab Gulf-Baltic
Ameropa 192,400 192,400 China-Arab Gulf
Aries 50,000 110,000 160,000 China
Koch 60,000 95,000 155,000 China-Arab Gulf
Aditya Birla 100,000 100,000 China-Baltic
EuroChem Singapore 50,000 50,000 100,000 China
Sun International 100,000 100,000 China
Dreymoor 97,000 97,000 China-Baltic
Samsung 80,000 80,000 China
Prima Resources 50,000 50,000 China
Liven Nutrients 50,000 50,000 China
EuroChem Middle East 45,000 45,000 Baltic
MacroSource 45,000 45,000 China
Rayson Global 45,000 45,000 China
  ECI WCI Total
Total 632,000 1,082,400 1,714,400

Even with the larger-than-expected purchase, sources said India will still need another 2.2 million mt by the end of the year. The purchases will allow India to take a breather before issuing a new tender, however. Sources now speculate the next tender call may not come until mid-October at the earliest, depending on the level of demand. If demand exceeds current estimates, the call could come sooner.

Some traders continued to express concern that all of the Chinese urea may not clear the export inspection process in time to meet the tender’s Sept. 26 shipping deadline. One trader noted, however, that the government seems to have relaxed the rules surrounding when and where the inspections can take place. There are now a reported 800,000 mt at portside warehouses awaiting inspection and shipment. The inspectors have also reportedly been told to expedite the process.

When the next tender comes, sources said India will face competition from Australia and Brazil. The presence of Chinese urea in the export markets would act as a major price stabilizer, as the three large buyers compete for the same tons.

Indonesia:     

Pupuk Indonesia has confirmed the sale of 30,000 mt of granular urea to Liven Nutrients at $414/mt FOB, sources said. The cargo will reportedly go to Australia.

Trade Data Monitor reported January-June urea exports at 642,000 mt, off 22% year-over-year from 822,000 mt. The top three buyers were all located in the Pacific region. The Philippines took 145,000 mt, Australia bought 116,000 mt, and Vietnam received 85,000 mt. Second-quarter exports of 535,000 mt were down 13% from the 619,000 mt logged in April-June 2022.

Exports totaled 153,000 mt in June, a 25% decline from the year-ago 204,000 mt. The Philippines, Vietnam, and Myanmar combined to take 103,000 mt., while Uruguay purchased 39,000 mt.

Middle East: 

Following confirmation that some Arab Gulf producers will supply tons to India under the IPL tender, sources estimated netbacks in the $380-$385/mt FOB range. Sources estimate Arab Gulf producers will supply up to 300,000 mt in the Indian tender.

A previous sale out of the UAE at $414/mt FOB to an Australian buyer was closed just as the IPL tender numbers were released. The initial reaction to this sale prompted some to believe prices were moving up. Once the Indian numbers came out, however, sources saw prices shifting to a lower, more stable level.

With Arab Gulf urea now in the $380s/mt FOB, market watchers were not surprised to see Iran drop its price offering to $370/mt FOB. Even at that level, sources said there were no takers. Egypt remained quiet, with no new activity reported.

January-July urea exports from Iran were 2.6 million mt, Trade Data Monitor reported, a marginal increase from the year-ago 2.5 million mt. July exports were counted at 491,000 mt, rising from 314,000 mt shipped in July 2022. Turkey received 53% of the July market with 262,000 mt, followed by Mozambique with 80,000 mt.

China:

Sources reported up to 800,000 mt of urea awaiting export clearance at portside warehouses in China. The granting of permission for the tons to be deposited at the warehouses prior to inspection was a concession to producers looking to meet the IPL tender’s Sept. 26 shipping deadline. Sources estimated China will supply about 1.1 million mt into the Indian tender.

Under normal circumstances, export inspections will take place at the producer’s factory or warehouse. Once approved, the urea is then allowed to be sent to export warehouses. Of the 800,000 mt at the ports, sources estimate only 200,000 mt have already been cleared for export. The remaining 600,000 mt will be inspected at the ports. The inspectors have reportedly been told to expedite the process.

Having the tons already at the ports makes it easier for traders to schedule vessels. Under the normal procedure, the urea would be sent to the ports after a 2-3 week inspection, adding an additional 2-3 weeks to the process. Now, said sources, once the inspection is done, the urea can be loaded immediately if a ship is on hand.

There are still some concerns about delays unrelated to the inspection process. This is typhoon season, sources noted, and some ports are already backed up due to foul weather. There were also reports of worker shortages leaving the ports shorthanded and stretching loading times.

The netback from the Indian tender was put at $375-$380/mt FOB. Sources said the shipments will consist only of prilled urea, as no granular is available for export. Producers were initially disheartened by this price, and had been hoping for a netback closer to $400/mt FOB, especially after a deal or two were reported at $390/mt FOB just before the tender figures were released.

While the producers have apparently agreed to lower their prices for the large sales into India, sources said they are not giving the traders much wiggle room. One trader noted that if a port becomes so backlogged that loading the product slips past the Sept. 26 deadline, the tons could be shifted to another port. That will cost more money, however, and could eat up what limited profits the traders once had.

At the same time, traders with IPL awards and tons waiting at port will want a vessel to arrive as soon as possible. That also means completing the inspection process as soon as possible. Sources estimated port storage costs at $2-$3/mt per day. Each day the urea is not being loaded represents an extra cost to the trader.

Sources noted that in the six weeks between the awards being issued and the shipping deadline, China is slated to ship more tonnage than it exported during the first six months of this year. Trade Data Monitor reported January-June exports totaling 1 million mt. For this tender alone, China is expected to ship 1.1 million mt.

It is not unusual for China to show more exports in the second semester of the year than in the first. First-half 2022 exports were reported at 724,000 mt against second-half 2022 shipments of 2.1 million mt. While this was not the norm, a typical spread is for the second semester to show an increase of 45-50% over first-semester shipments.

Black Sea:

The price for prilled urea out of the Black Sea tightened to $350-$360/mt FOB. The lower end of the range came up $10/mt, with no change to the upper level from last week.

Brazil:

Import urea prices in Brazil softened to $380-$400/mt CFR from the prior week’s $410-$430/mt CFR, a roughly 7% decline, while the paper market was reported in the $370-$375/mt CFR range. Sources noted international price confusion following the Indian tender, with decreases at Brazil contrasting against increased pricing reported out of China.

Rondonopolis trailed the international urea market lower, softening $20/mt week-over-week to $520-$540/mt FOB ex-warehouse. Despite the drop, sources believe farmers will continue to press for lower prices ahead of the safrinha, while barter ratios remain compromised due to the low price of corn.

UAN

California, Eastern Cornbelt, Market Watch, Pacific N.W., U.S. Gulf, UAN, Western Canada, Western Cornbelt

US Gulf:

NOLA UAN barge prices edged up to $230-$235/st ($7.19-$7.34/unit) FOB based on current upriver terminal pricing. While offers continue to be reported at a high of $240/st ($7.50/unit) FOB for November-December shipment, no new business was confirmed at that level.

Eastern Cornbelt:

The UAN-32 market in the Eastern Cornbelt remained at $275-$285/st ($8.59-$8.91/unit) FOB regional terminals for 4Q tons, with the latest UAN-28 offers reported at the $245/st ($8.75/unit) level FOB Cincinnati.

Rail-DEL UAN-32 pricing in the region was pegged in the $295-$305/st ($9.22-$9.53/unit) range.

Western Cornbelt:

UAN-32 was quoted at $275-$290/st ($8.59-$9.06/unit) FOB in the Western Cornbelt, depending on location, with the low reported at St. Louis for December-January tons and the high in Iowa.

Rail-DEL offers to Nebraska and Kansas were pegged in the $285-$300/st ($8.91-$9.38/unit) range at mid-month.

California:

The UAN-32 market in California was quoted at $315-$320/st ($9.84-$10.00/unit) FOB Stockton, up from the previous $300-$310/st ($9.38-$9.69/unit) FOB range. Rail-DEL offers in Northern California were reported at the $310-$320/st ($9.69-$10.00/unit) level on a spot basis.

Pacific Northwest:

The latest UAN-32 offers remained at $300/st ($9.38/unit) FOB Kennewick, Wash., with rail-DEL pricing pegged in the $294-$318/st ($9.19-$9.94/unit) range in the Pacific Northwest, depending on location.

Western Canada:

The UAN-28 market firmed to C$440-$450/mt (C$15.71-$16.07/unit) DEL in Western Canada, up from C$365-$425/mt (C$13.06-$15.18/unit) DEL in late July.