U.S. Gulf:
NOLA granular urea barge prices continued to surge after USDA’s Jan. 12 news of lower crop inventories, which spurred higher crop prices. Early week trades were reported in the $275-$285/st FOB range, but they quickly hit and then topped the $300/st FOB mark. The last heard deal for January was $312/st FOB. The week-ago range was $252-$285/st FOB.
Forward
cargoes into February and March were quoted in the $323-$325/st FOB range.
Prills
were pegged at $300/st FOB, up from $290-$300/st FOB.
U.S.
Imports:
November
urea imports were shown at 296,441 st, falling 0.6 percent from the 298,318 st
in November 2019. July-November import volumes moved 10.6 percent lower, to
1.20 million st from 1.33 million st.
U.S.
Exports:
July-November
exports of urea climbed 68.4 percent year-over-year, to 427,401 st from 253,791
st. Volumes were up 204.2 percent in November, to 79,054 st from the prior-year
25,986 st.
Eastern Cornbelt:
Urea prices were firming quickly in the Eastern Cornbelt. “To state the bleeding obvious, this market is on fire,” said one industry source. “It feels like we’re in the middle of the spring season already.”
Several
sources said the Jan. 12 WASDE report from USDA, which pushed crop prices
higher after describing lower corn yields and tighter soybean stocks, added
fuel to the fire. “Seems like everyone wants some of the increased grain market
revenue,” commented one regional source.
Sources
quoted the river terminal market for urea at $335-$350/st FOB for prompt tons
in the Eastern Cornbelt, up from $285-$315/st FOB the previous week, with the
high reported at East Dubuque, Ill., and the low at Cincinnati, Ohio, and most
Illinois River terminals. Several contacts said they were looking for
additional increases before the week was out.
Western Cornbelt:
Sources reported rapidly
firming urea prices in the region at mid-month. “The USDA announcement and the reaction of the grain market has sent
some customers into panic mode to make sure they get covered for spring before
the next price increase,” said one industry contact.
Sources quoted the urea market firmly in
the $340-$360/st FOB range in the Western Cornbelt, with the low end of the
range reported early in the week and up dramatically from the previous week’s
low of $280-$290/st FOB. Iowa sources reported a firm $350/st FOB for prompt
and spring tons on Jan. 14, while the St. Louis, Mo., market was described as
“volatile” at the $360/st FOB level from some suppliers late in the week.
The
St. Paul, Minn., urea market had reportedly firmed to $365-$375/st FOB as the
week progressed, with delivered tons in North Dakota approaching the $380/st level.
Urea pricing FOB Catoosa/Inola, Okla., was said to be in the $355-$360/st FOB
range.
California:
Urea
pricing in California reportedly firmed to $360-$365/st FOB port terminals, up
$10-$20/st from last report, with rail-DEL offers increasing to $400/st or
higher as the week progressed. Sources said they expect additional increases in
the near term.
Pacific Northwest:
Urea
prices were moving up rapidly for urea in the Pacific Northwest. “All nitrogen
has rebounded,” said one contact. “It’s been a battle to stay on top” of the
firming market, added another source. “Seemingly everything is in a state of
flux given the corn/soybean runaway markets.”
The urea market FOB
Rivergate, Ore., reportedly firmed from $375/st earlier in the week to $400/st
FOB on Jan. 14, with the Aurora, Ore., price moving up to $405/st FOB on Jan.
14. Those levels were up dramatically from the $330-$335/st FOB prices reported
in mid-December.
Rail-DEL urea prices
were also higher, with sources quoting a range of $378-$410/st in the region
during the week, depending on location and point of origin, up from
$348-$360/st at last report.
Western Canada:
Urea
pricing in Western Canada had reportedly firmed to C$510-$535/mt DEL for Q1
tons, up from C$485-$510/mt the week before and a low of C$470/mt DEL in
mid-December. Sources also reported prompt offers at C$505/mt FOB on a spot basis
in the region, but some suppliers had pulled pricing temporarily due to the
rapid increase and strong uptake.
India:
The
Indian government continues to monitor domestic needs and the amount of urea
coming in. Sources said the bean counters will soon determine how quickly
another urea tender is needed and how many tons must be bought.
Industry
watchers said the strong rains may increase demand for urea into the next
quarter. For now, however, sources said the tender could be called as early as
the last half of January, or as late as early February. Everyone agrees that a
tender has to be called by mid-February.
China:
Sources
are putting the urea market at $290-$300/mt FOB in China, with only rumors to
sustain the higher end of the range. Traders described a cat and mouse game,
with producers offering some tons at a certain price, only to report a day or
two later that either the tons are no longer available, or the price has gone
up.
For
now, said one trader, the producers can play this game, because the domestic
market is still buying tons at a better netback than can be had on offshore
deals. As the global urea market strengthens, however, he said international
buyers will soon be bidding at levels higher than domestic buyers. At that
point, more Chinese tons will start heading to the ports for export.
The
upward push on pricing is coming from limited output in the Chinese urea
industry. Several plants have been shut down since December 2020 for extended
maintenance, and others have had to shut down or limit production because of natural
gas reductions. The gas is being diverted to home heating use during the winter
months, and sources said this diversion has dramatically hit industrial output.
In
the past couple of weeks, new regional shutdowns related to the COVID pandemic
are also impacting urea output. Even if a plant is unaffected, one trader noted
that transportation and port operations are often short-staffed because of the
virus, putting more pressure on the plants to limit material.
Middle
East:
Sources
said talks are taking place at $290-$300/mt FOB. One trader said given the
price in China and the steady increases in Egypt, it makes sense to see Arab
Gulf urea producers asking for this level.While sources said no deals
have been concluded at this level, they note that producers will only engage in
talks within this range.
Egyptian
producers continue to rack up better prices for their product. Sources reported
that MOPCO settled a deal at $323/mt FOB for 5,000 mt to be shipped in March.Closer in, Abu Qir closed a deal for 30,000 mt of granular at $317/mt FOB
to be shipped in mid- to late-February. An additional 25,000 mt of prilled urea
was sold from the same producer to ship out at the same time at $307/mt FOB.
The
Egyptian producers have been experiencing steady and gradual price increases
weekly for a couple of months. They reported that demand from Europe is picking
up at a time when some European production is down because of high energy
costs.
Black
Sea:
Urea
in the area is mostly destined for domestic markets, allowing for very few tons
to shipped abroad. The lack of spot business from Yuzhnyy means older and lower
prices are still being recorded as the public price.
However,
sources said if any tons were made available for export, prices would be in the
$280s/mt FOB. One trader said bids in the $270s/mt FOB are being rejected
without even a counter. At $280/mt FOB, however, talks can continue.
Sources
expected to see price increases from the area. All the other producing zones
are showing stronger prices, from China to the Arab Gulf to the Baltics, where
prices are reported at $290/mt FOB for granular. One deal was also reported at
$280-$282/mt FOB from a Baltic supplier for late February shipment to the U.S.
Indonesia:
No
new tenders appear on the horizon after Kaltim settled with Keytrade at $278/mt
FOB. Sources speculated that the Indonesian companies may hold off until after
the Indian urea tender is called.
Indonesian
exports from January through November 2020 were recorded at 2.2 million mt,
according to Trade Data Monitor, a
healthy jump from the 1.7 million mt exported during the same time period in 2019.
The largest single buyer in 2020 was India at 729,000 mt, followed by the
Philippines at 484,000 mt, Mexico at 280,000 mt, and South Korea at 110,000 mt.
Numerous other buyers, many in the Southeast Asia region, came in with orders
of 100,000 mt or less.
November
2020 exports were at 259,000 mt, well above the 118,000 mt in November 2019.
The
Indonesian government late last year authorized exports of 1.8 million mt in
2021. If that number holds, it could mean the removal of about 700,000 mt from
the regional market. The withdrawal of that many tons could provide a solid
floor on the ever-rising urea prices.
Malaysia:
A
urea sale of 25,000-30,000 mt was reported at $295-$300/mt FOB to a Latin
American buyer for late February shipment.
While
Malaysian sales are rarely seen as harbingers of the urea market, they can be viewed
as an indicator of where Indonesian prices might move. If the recent sale price
holds, the Indonesian sellers might feel more comfortable aggressively going
for prices in the mid-$280s/mt FOB when they return to the market.
Australia:
Urea
imports in Australia for January-November 2020 were reported at 2.3 million mt,
compared with 1.9 million mt during the same period in 2019.
According
to Trade Data Monitor, Saudi Arabia was
a major supplier at 575,000 mt, with the United Arab Emirates (UAE) a close
second at 518,000 mt. Malaysia followed at 438,000 mt, with Qatar close behind
at 409,000 mt.
The
seasonal nature of Australian buying was evident in the numbers. In November
2020, the country brought in only 21,000 mt, compared with 136,000 mt in
October and 102,000 mt in August. June and July 2020 showed imports of 546,000 mt
and 343,000 mt, respectively. During these month, Saudi Arabia dominated the imports.
China was a distant second, with an average monthly shipment of less than
10,000 mt.
Turkey:
January-November
2020 urea imports in Turkey varied little from the same period in 2019. The
2020 imports were put at 2,399,172 mt, just 6,000 mt less that the 2019 figure
of 2,405,304 mt. The main suppliers to Turkey in 2020 were Egypt at 720,000 mt,
Oman at 716,000 mt, and Iran at 443,000 mt.
November
2020 imports totaled 139,000 mt, Trade
Data Monitor reported, compared with 148,000 mt in November 2019.
Ethiopia:
Urea
imports in Ethiopia continued to climb year-over-year, according to numbers
assembled by Trade Data Monitor.
Imports for 2020 were put at 579,000 mt, compared with 543,000 mt in 2019. The
amount has slowly grown since 2017, when Ethiopia imported 253,000 mt.
Egypt
and the UAE were the two largest suppliers to Ethiopia in 2020, with 299,000 mt
and 270,000 mt, respectively.
If
past numbers are any indication, Ethiopia will be stepping up its imports
during the first half of this year. The first semester of 2019 showed imports
of 529,000 mt against only 50,000 mt for all of the last six months of the
year. A similar pattern was evident in 2018.
Sri
Lanka:
A
tender for 40,500 mt of granular urea for two companies closed on Jan. 12. The
tender called for 23,300 mt for CFCL to be shipped to Colombo Port, with the
remaining tonnage for CCFCL. The material for the second company could be sent
either in bulk to Colombo or divided into 12,000 mt in bulk to Colombo and
5,300 mt in bags or bulk to Hambantota. The cargo is to arrive in Sri Lanka in
early April.
|
Offering Company
|
Quantity (mt)
|
US$/mt CFR sight
|
US$/mt CFR 180 days
|
Source
|
|
Swiss
Singapore
|
40,500
|
335.00
|
340.77
|
China-Oman
|
|
Ameropa
|
40,500
|
341.00
|
347.00
|
Arab
Gulf-Vietnam-China
|
|
Valency
|
40,500
|
348.75
|
358.74
|
Indonesia-Egypt-Qatar-CIS
|
|
40,500
|
382.75
|
393.96
|
|
Golden
Barley
|
40,500
|
352.00
|
360.70
|
UAE
|
|
Aries
|
40,500
|
356.00
|
366.27
|
China-Indonesia-Qatar-Vietnam
|
|
Agrifert
Liven
|
40,500
|
380.00
|
–
|
China-Indonesia-Vietnam
|
Swiss
Singapore came in with the lowest offer at $340.77/mt CFR bagged with 180 days.
This is a boost in price following a Dec. 14 tender for the same amount, which
Swiss Singapore also won at $294.06/mt with the same criteria. Shipment for the
December tender is slated for late February.
A
second tender closed on Jan. 14 for 8,500 mt of prilled urea, also for early
April delivery. In this case, CFCL would take 3,500 mt and CCFCL 5,000 mt. Only
two companies – Valency and Aries – offered tons in this tender. Valency
provided the lowest offer at $364.74/mt CFR bagged with 180 days. The winning
offer represents an almost $60/mt jump in price from the last tender of this
type.
A
tender on Dec. 14, 2020 for 17,000 mt closed with a price of $303.78/mt CFR with
180 days, awarded to Agrifert Liven. Delivery of the cargo in this tender is
slated for late February.
Nepal:
A
tender for 30,000 mt of bagged urea that was set to close on Jan. 7 was
scrapped and reset. The new closing date is Feb. 1 for the same amount. The
material is to be delivered to the KSCL warehouses in Nepal.
Sources
said KSCL scrapped the tender because the prices were too high. Reportedly,
only two offers came in, one from Joshi Biz House at $391/mt CFR bagged and the
other from Swiss Singapore at $395/mt CFR bagged. Both offers included delivery
to the KSCL warehouse inland.
Brazil:
Urea
prices in Brazil have strengthened at the ports and softened inland. Traders at
the ports confirmed a deal at $292/mt CFR at Paranagua, which showed a marked increase.
The sale prompted industry watchers to claim the floor in the market has been
reached, leaving no more room for a downside.
New
pressure on pricing might occur when India calls its urea tender, but that is
not expected until early February.
Besides
looking at upward pressure from the Indian tender, some are looking at a
softening influence as the Nigerian Dangote plant ramps up to full capacity.
Sources said with annual production rated at 3 million mt, there should be
enough tons to offer into Brazil at a better rate than what is coming from
existing sources.
Some
buyers questioned that assumption, however, claiming $290/mt CFR is still doable.
Sources, in fact, are calling the market at $290-$305/mt CFR. Part of the
enthusiasm comes from reports of continued good grain prices in the country.
Nigeria already supplied about 432,000 mt of urea to Brazil in 2020. Once the
plant is fully operational, more is expected.
Inland,
however, prices appear to have softened. A deal for 10,000 mt in Rondonopolis
came in at $381/mt FOB ex-warehouse. On the low end of a range, this represents
a drop of almost $10/mt from last week. Sources put the market at Rondonopolis
at $380-$400/mt FOB ex-warehouse.
Some
of the softness in the inland market could be put off to the general feeling
that most customers are done for the season and no large purchases are
expected. Those buying anything are thought to be picking up top-off tons to fill
out their holdings at a good price.
Business
in Rio Grande do Sul was small and limited. Reportedly farmers were worried
about the weather and are now willing to venture into the market for urea. The
barter rate remained steady for 1 mt of urea at 60 bags of corn.
|
Brazil Urea Prices
|
|
Terminal/City
|
US$/mt FOB ex-warehouse
|
|
Week ending 01/08
|
Week Ending 01/15
|
|
Rondonopolis
|
390-434
|
380-400
|
|
Sorriso
|
390-434
|
390-434
|
|
Rio
Grande Port
|
333
|
NA
|
Brazilian
urea imports for 2020 came in significantly higher than 2019. Trade Data Monitor reported 2020 imports
at 7.1 million mt, against 5.6 million mt in 2019. Imports have shown steady
growth since 2015.
|
Partner Country
|
Annual Series (mt)
|
|
2015
|
2016
|
2017
|
2018
|
2019
|
2020
|
|
World
|
2,849,773
|
3,958,011
|
5,425,178
|
5,561,444
|
5,586,683
|
7,128,276
|
|
Qatar
|
1,459,137
|
1,369,770
|
1,701,295
|
729,431
|
1,164,279
|
1,868,270
|
|
Algeria
|
–
|
117,298
|
307,550
|
1,056,986
|
982,844
|
1,593,705
|
|
Russia
|
468,283
|
534,796
|
768,974
|
961,117
|
1,034,714
|
1,317,055
|
|
Iran
|
–
|
111,910
|
112,535
|
11
|
510,053
|
505,434
|
|
Nigeria
|
23,484
|
66,521
|
419,367
|
490,604
|
458,342
|
432,220
|
|
Saudi
Arabia
|
108,250
|
296,779
|
361,171
|
137,262
|
89,930
|
324,990
|
|
Oman
|
174,024
|
302,690
|
363,155
|
339,212
|
140,516
|
276,259
|
The
Iranian material has been coming in under a provision of the U.S. sanctions
against Iran that allows for a barter arrangement to exchange agricultural
commodities without penalties.
