All posts by mickeybarb@charter.net

Urea

Brazil, China, Cornbelt, India, Indonesia, Market Watch, Middle East, Thailand, U.S. Gulf, Urea

U.S. Gulf:

Most sources saw a quiet market over the holidays. There was speculation that the next trades would see softer prices than those last done in mid-December.

Cornbelt:

Urea prices were mostly unchanged in the Cornbelt in late December, with the last reported offers falling in the $810-$850/st FOB range, depending on location.

India:

Indian Potash Ltd. closed its Dec. 23 tender with 13 companies offering 2.75 million mt. The average offered price was about $940/mt CFR, which was approximately $50/mt lower than the average of the prices in the previous tender. In the end, IPL issued letters of intent Dec. 31 to buy about 1.2 million mt from five suppliers.

Swiss Singapore came in with the lowest offers for both the East and West Coasts, at $899.50/mt CFR and $894/mt CFR, respectively. Only two offers were higher than the winning prices from the Nov. 11 IPL tender. Even the lone offer from a producer at $925/mt FOB was lower than the offers from producers in the November tender.

Offering Company Quantity (mt) US$/mt Discharge Port
CFR FOB
Amber 31,500 979.00   ECI
31,500 999.00   WCI
Ameropa 288,250 909.50   ECI
199,100 929.00   WCI
Continental 230,000 988.50   ECI
  953.50   WCI
Dreymoor 45,000 939.00   ECI
152,000 919.99   WCI
Fertiglobe 45,000   925.00  
155,000 955.00   ECI
  950.00   WCI
Eurochem 50,000 942.27   WCI
Keytrade 145,000 937.96   WCI
Koch 50,000 941.00   ECI
124,000 1,050.00   WCI
Midgulf 40,000 900.00   ECI
95,000 897.00   WCI
OCI 100,000 956.00 ECI
951.00 WCI
Samsung 231,000 512,000 901.00   ECI
894.70   WCI
Swiss Singapore 90,000 899.50 ECI-L1
90,000 894.00 WCI-L1
Transglobe 50,000 928.30 WCI

Reportedly, IPL was initially ready to buy as many tons as could be offered. Sources said the buyer was even willing to accept a range of prices for each coast instead of just the lowest offered price.

In the end, however, IPL settled on using only the lowest price for each coast. Sources also reported that IPL was ordered to cap purchases at no more than 1.2 million mt. One trader said the cap was a response to the offered prices, which, while lower than the previous tender, are still in record-high territory.

Awarded Company Quantity (mt)
Samsung 689,000
Swiss Singapore 180,000
Dreymoor 145,000
Midgulf 135,000
Fertiglobe 45,000
Total 1,189,000

The material from Fertiglobe came from a counterbid to the producer of $867.70/mt FOB. The price fits in with the estimated netback to the Arab Gulf from West Coast India of $864-$869/mt FOB. The estimated netback to Egypt was pegged at $844-$849/mt FOB

Sources said the award-winning traders had been gathering up long positions during the past few months. One trader noted that Samsung will most likely be sourcing its nearly 700,000 mt from areas as diverse as Russia, Egypt, Nigeria, Malaysia, and the Arab Gulf, among others.

The deadline for shipping the material is Jan. 31, 2022. Sources said the tonnage will help ease the urea shortage in the country, but not end it. Once all deliveries from this tender are received, India will still be behind 2020 tender imports by about 200,000 mt.

Indian buyers also have to make up for the loss of about 1 million mt after the OMIFCO contract expired. As a result, traders tend to agree that India is about 1.25 million mt behind its urea needs for the rest of the fiscal year, which ends in March.

The tightness in the global urea market, coupled with indications that prices will not come off much more, has led many in the industry to think India will hold off until February or March before calling another tender. If India waits until March, the bulk of the deliveries would take place in the new fiscal year, and thus make more funds available to pay for the product.

The dramatic rise in prices in 2021 hit the Indian treasury hard. Besides having to pay ever-higher prices, the government also had to cover the difference between the imported price and the approximately $72/mt charged to farmers.

The average price from nine tenders in 2021 was $632/mt CFR for West Coast deliveries and $591/mt CFR for East Coast Deliveries. The 2020 average price was $262/mt CFR for the West Coast and $263/mt CFR for the East Coast.

Indonesia:

Reportedly, the government issued the 2022 export permits for urea. Sources said the government will allow 1.2 million mt to be offered in public auctions throughout the year.

The allotment is about 100,000 mt lower than the 2021 numbers. Sources said the government remains concerned that the priority of the producers needs to remain the Indonesian domestic market. Traders said it is likely that no new major sales of Indonesian urea will occur until the second quarter of 2022.

Some small sales of 5,000 mt or less were authorized to Australian buyers. Sources reported two prilled urea shipments were booked for January shipment, with the price pegged at around $1,000/mt FOB. The government allowed the sale after the Australian government intervened, looking for urea for its emissions control formulation rather than agricultural use.

Middle East:

The netback to the Arab Gulf, based on the West Coast India price in the IPL tender, is reported at $864-$869/mt FOB. This represents about a $90/mt drop from the netback achieved in the previous tender. Some sources said an even more favorable freight rate could move the netback into the low-$870s/mt FOB.

The Arab Gulf is expected to be the main supplier of urea in the Indian tender, but not the sole source. Sources said supplies are not high enough to accommodate the needs of India, or even the 1.15 million mt booked in the latest tender.

Prices out of Egypt vary widely. Sources reported a MOPCO sale for January loading at $960/mt FOB. This would be the highest price achieved by an Egyptian producer. It would also confirm reports of a tight market and steady growth in the Egyptian price.

At the same time, however, there are reports of at least two cargoes from Egypt to cover awards in the IPL/India tender. Sources put the netback in the low-$840s/mt FOB for a Mediterranean port loading. One trader said the cargoes could be part of positions taken by a trading house, as prices were beginning a rapid rise in the third quarter of 2021.

Exports of Iranian urea for January-November 2021 were reported at 3.5 million mt by Trade Data Monitor. This reflects a 5 percent decrease from the same period in 2020, or 3.7 million mt. The main buyers in 2021 were Turkey with 1.3 million mt, South Africa with 361,000 mt, and Brazil with 349,000 mt.

November exports were reported at 267,000 mt, down 26 percent from November 2020 exports of 360,000 mt. Turkey took 70,000 mt, followed by Nigeria at 63,000 mt, with South Africa and Brazil rounding out the top takers.

China:

There is no movement on easing the urea export ban from China. Even information about the status of supplies for the domestic market is becoming difficult to obtain.

Sources said they expect little activity through January and into February. The Lunar New Year is Feb. 1. Even with COVID-related travel restrictions, sources expect little business to be transacted during the first week of February.

January-November 2021 exports were reported at 5.3 million mt by Trade Data Monitor, up 8 percent from 4.9 million mt during the same period in 2020. The main buyers in 2021 were India at 2.8 million mt, South Korea at 626,000 mt, and Mexico at 414,000 mt.

November 2021 was the first full month following the decision by the Chinese government to restrict urea exports, and the numbers assembled by Trade Data Monitor show the impact of that decision. November 2021 exports were reported at 500,000 mt, down from 846,000 mt in November 2020 and 740,000 mt in October 2021.

Thailand:

January-November 2021 urea imports in Thailand were down 4.4 percent, according to Trade Data Monitor, to 2.2 million mt from 2.3 million mt during the same period in 2020. November 2021 imports were reported at 116,000 mt, down 29.7 percent from the 166,000 mt imported in November 2020.

The second and third quarters of each year comprise the main buying season for Thailand. Limited imports are expected through March 2022.

Brazil:

Inland urea buyers in Brazil have been pushing back against the rising global prices, leaving sellers little option but to lower their prices. The softer prices in the IPL/India tender appear to have boosted the feeling that prices might continue to come down in 2022.

Ammonium Sulfate

Ammonium Sulfate, China, Cornbelt, Market Watch, Thailand

Cornbelt:

Sources reported indications of ammonium sulfate pricing in the $570-$610/st FOB range out of Cornbelt terminals in late December, depending on location.

Thailand:

Ammonium sulfate imports in Thailand for January-November 2021 were reported at 425,000 mt by Trade Data Monitor, up dramatically from the 286,000 mt imported during the same period in 2020. November 2021 imports were reported at 45,000 mt, up from 11,000 mt in November 2020.

China:

January-November 2021 ammonium sulfate exports were reported at 9.19 million mt by Trade Data Monitor, up 20 percent from the 7.66 million mt exported during the same period in 2020. The main buyers in 2021 were Brazil at 2.8 million mt, Vietnam at 1 million mt, and Indonesia at 938,000 mt.

November 2021 exports of 1.02 million mt represented an increase of 19.6 percent from November 2020 exports of 853,000 mt. October 2021 exports were at 1.06 million mt, marginally more than the November number.

DAP/MAP

Brazil, Central Florida, China, Cornbelt, DAP/MAP, India, Market Watch, Pakistan, Saudi Arabia, U.S. Exports, U.S. Gulf

Central Florida:

Central Florida DAP truck postings were noted at $785/st FOB, steady from mid-December. Truck-loaded MAP was posted even with DAP at $785/st FOB. Sources described the North Florida MAP truck market unmoved at $780/st FOB.

U.S. Gulf:

Players noted drifting price sentiment on the NOLA barge phosphate markets, despite minimal confirmed sales during the holiday period.

Price ideas on DAP were quoted up to $745/st FOB, softening from the market’s prior $750/st FOB top, while import trades and offers were reported drifting from the prior $740/st FOB to as low as $730/st FOB. Sources described bidding concentrated around the $715-$720/st FOB mark, hinting at the potential for softening in the next round of trading.

Domestic MAP indications were steady at the top of the prior range at $765/st FOB. Sources described import pricing in the $750-$755/st FOB range, softer than the prior $755/st FOB floor. Players primarily attributed the lower sentiment to end-user demand uncertainty.

U.S. Exports:

Nothing new was heard on the Gulf export market, leaving last-reported pricing steady at $810/mt FOB.

Cornbelt:

DAP and MAP price indications appeared to be unchanged in the Cornbelt in late December, sources reported.

Saudi Arabia:

Phosphate sales out of Saudi Arabia were heard pressing higher over the holidays, firming to the $865-$900/mt FOB range. Sources confirmed a $917/mt CFR trade into Pakistan during the period. The Saudi market was last noted at $850-$900/mt FOB.

Pakistan:

Sources reported a DAP sale by Ma’aden to Pakistan at $917/mt CFR. The price fits in with the $915/mt CFR deal done by OCP to Pakistan in late November. The deal, said sources, indicates prices are holding strong even as major buyers push back.

India:

National Fertilizers Ltd. called a tender for long-term supplies of DAP, NPK, and NPS. The tender calls for a supplier to ship 600,000 mt over 12 months, with an option for an additional 150,000 mt. The tender closes Jan. 23, 2022.

The tender documents said shipment will be for the 12-month period beginning when the award is made. Pricing is on a delivered basis, with the price to be set 25 days before shipping. Orders will be divided between East and West Coast ports. The final destination will be set three weeks before shipment.

China:

Sources reported an inventory of about 460,000 mt of DAP in bonded portside warehouses available for export. The tonnage is apparently material that was booked before the Oct. 15 deadline restricting exports and is only now clearing customs.

Under the terms of the export restrictions, the Chinese government will not allow certain fertilizers – including DAP and MAP – from being exported unless local governments attest that supplies are sufficient in their area and the tons are not needed for the domestic market.

Sources said the material identified in the warehouses might find its way to the original buyers in the first quarter of 2022. Reportedly, the material is already booked by end-users, meaning access to the tons will not affect the spot market.

January-November 2021 DAP exports were reported at 6.2 million mt by Trade Data Monitor, up 18.9 percent up from the 5.2 million mt exported during the same period in 2020. The main buyers were India at 1.7 million mt, Pakistan at 868,000 mt, and Bangladesh at 630,000 mt.

November 2021 DAP exports reflected the first full month of the export restrictions imposed by the Chinese government. Exports for November 2021 were reported at 129,000 mt, down about three-quarters from the 478,000 mt exported during November 2020. The November exports were also significantly lower than the October 2021 number of 790,000 mt.

MAP exports for January-November 2021 were reported at 3.76 million mt, up 57.8 percent from the 2.4 million mt exported during the same period in 2020, according to Trade Data Monitor. The main buyer of MAP during the period was Brazil at 1.8 million mt.

Exports of MAP were also affected by the Chinese export restrictions. November 2021 exports were reported at 76,000 mt, down from the 254,000 mt in November 2020 and 233,000 mt in October 2021.

Brazil:

Low seasonal demand for MAP and the holiday season kept things quiet in Brazil. Sources said prices remained stable, largely because buyers were actively pushing back against higher prices. The absence of willing buyers has left the price at a plateau.

There remains concern, however, that the MAP price will eventually be forced up. Morocco, the main MAP supplier to Brazil, has been cutting back on its MAP production in favor of DAP for India, Pakistan, and Bangladesh. The reduced availability of North African MAP could push the price up in Brazil in the first quarter of 2022.

Phosphoric Acid

Cornbelt, India, Market Watch, Phosphoric Acid

Cornbelt:

December phos acid pricing remained at $16.05-$16.30/unit rail-DEL in the Cornbelt, depending on location. Sources said they anticipate an increase in January, but updated pricing levels were not yet announced.

India:

Phosphoric acid contracts for tons sold to buyers in India were quoted at $1,330/mt CFR for the fourth quarter, up $170/mt from $1,160/mt CFR in the previous period.

Potash

Brazil, China, Cornbelt, Market Watch, Potash, Thailand, U.S. Gulf

U.S. Gulf:

The potash barge market was reported as quiet, though sources indicated that price ideas for the next trade may have drifted lower from the previous $675-$685/st FOB.

Cornbelt:

Warehouse prices for potash continued to fall in the $710-$730/st FOB range for December and Q1 offers in the Cornbelt.

Brazil:

There are growing concerns that sanctions against Belarus could cause a shortage of MOP in Brazil. The U.S. sanctions against Belarus Potash Co. take effect in April 2022. Traders have until then to divest themselves of their product and cancel any contracts for deals beyond April 1.

Even before the U.S. sanctions kick in, there was concern that Belarusian potash may cost more because of increased freight rates. The Lithuanian government announced they will no longer allow potash from Belarus to be shipped through its country to the export facilities. This move could force Belarus to seek out a more expensive route for its product. In the meantime, the Belarus government is contesting the action.

China:

January-November MOP imports were reported at 7.4 million mt, down 10.7 percent from the 8.3 million mt imported during the same period in 2020, according to Trade Data Monitor. The main suppliers for 2021 were Russia at 2.2 million mt, Canada at 2 million mt, and Belarus at 1.7 million mt.

November 2021 imports were down 10 percent, to 694,000 mt from 774,000 mt in November 2020. The November total was higher than October 2021 imports of 619,000 mt, however.

Thailand:

January-November 2021 imports of MOP were reported at 898,000 mt, up 30 percent from the 690,000 mt imported during the same period in 2020, according to Trade Data Monitor.

November 2021 MOP imports were reported at 79,000 mt, up from 23,000 mt in November 2020. The bulk of MOP purchases in Thailand take place in the second and third quarters of the year.

Sulfur

ADNOC - Abu Dhabi, Alberta, Brazil, China, Market Watch, Sulfur, Tampa, U.S. Gulf, Vancouver, West Coast

Tampa:

Steady fourth-quarter firming observed from international sulfur markets was roundly expected to drag Tampa molten contracts “significantly” higher in first-quarter 2022. Fourth-quarter deals were pegged at $183/mt CFR.

Nationwide refining capacity ticked higher for the week ending Dec. 24, according to the U.S. Energy Information Administration (EIA). Refineries utilized a combined 89.7 percent of capacity through the period, firming 0.1 percentage points from the prior week’s 89.6 percent. The rate led the year-ago 79.4 percent, but trailed the 91.3 percent five-year average.

Crude inputs were noted lower, however, moving to an average 15.703 million barrels/d for the period, down 115,000 barrels/d from 15.818 million barrels/d logged one week earlier.

U.S. Gulf:

A Dec. 23 explosion and fire at the ExxonMobil Corp. Baytown, Texas, refinery near Houston injured four before being extinguished several hours later, local news outlets reported.

The unit involved in the incident remained shut down on Dec. 27, according to Reuters, resulting in reduced operating rates at the 560,000 barrel/d facility. A notice filed with the Texas Commission on Environmental Quality said the incident occurred in the plant’s Hydro Desulfurization Unit 1.

Genscape reported multiple unit restarts at the Shell Norco, La., refinery on Dec. 27, including a 250,000 barrel/d crude distillation unit (CDU); a 78,000 barrel/d vacuum distillation unit (VDU); a 110,000 barrel/d fluidic catalytic cracking unit (FCC); and a 40,000 barrel/d catalytic reformer. The units were taken offline on Aug. 28 ahead of Hurricane Ida. A previous restart was attempted over the Dec. 7-9 period.

Valero suffered the shutdown of a 96,000 barrel/d FCC and a 22,000 barrel/d alkylation unit at the company’s Corpus Christi (West), Texas, refinery on the morning of Dec. 29.

Recent Gulf export business was noted in the $240-$250/mt FOB range, steady from the prior report. December increases noted from key international markets could push pricing in the $260s/mt FOB in the next round of business, some players argued.

Brazil:

Pre-holiday spot trading into Brazil was noted in the $299-$304/mt CFR range. Contract volumes for delivery in the fourth quarter were quoted at $234/mt CFR, increasing from $221-$223/mt CFR in Q3.

Vancouver:

Players continued to quote the recent Vancouver market in the $245-$252/mt FOB range.

Alberta:

Molten and prilled sulfur selling from Alberta was indicated netting back to a wide $68-$182/mt FOB range, unchanged from the prior reporting period.

West Coast:

Genscape reported the shutdown of all monitored units at the HollyFrontier Puget Sound, Wash., refinery on the evening of Dec. 26. Among the units going offline were a 149,000 barrel/d crude section, a 58,000 barrel/d FCC, and a sulfur recovery unit.

Prills loading from the West Coast were indicated on par with Vancouver at $245-$252/mt FOB, unchanged from the prior report. Fourth-quarter molten sulfur contracts were noted at $160-$170/lt FOB. Values were projected to increase in Q1 2022.

China:

Solid sulfur spot imports at China were quoted in the $300-$305/mt CFR range in recent business.

ADNOC:

The Abu Dhabi National Oil Co. was reported offering December sulfur cargoes at $265/mt FOB Ruwais. Most sources expected a moderate price increase in January 2022.