Prices in the IPL urea tender marked a drop of prices of $11-$12/mt for offers into both coasts. All told, 20 companies put up about 1.7 million tons in firm offers and another 132,000 mt in optional tons.
Ameropa came in with the lowest offer to the West Coast of $259.97/mt CFR into Mundra. All told, the trading house offered 154,500 in three lots with a top price of $263.97/mt CFR. This price reflects an $11/mt drop from the $271/mt CFR awarded in the February MMTC tender.
Swiss Singapore offered the lowest price into the East Coast with one cargo into Karaikal or Gangavaram at $264.90/mt CFR. The awarded price in the MMTC tender was $277/mt CFR.
Direct offers from Arab producers in the UAE, Saudi Arabia and Qatar came in with 140,000 mt at $252-$255/mt FOB. Sabic offered the lowest price. Sources had expected the Arab producers to put in prices to try to bolster a sagging market. Just as the tender was announced last week, sources put the Arab Gulf price at $245-$250/mt FOB.
About 1.1 million tons in the current tender are priced under $264/mt CFR for the West Coast, which is still $7/mt cheaper than the awarded price in the MMTC tender.
The total offered tonnage compares favorably to the MMTC tender, which saw 1.2 million tons offered. Awards in the MMTC tender totaled 654,000 mt. In the run up to the IPL tender, sources said they expect IPL to take as many tons as their funds will allow, possibly out stripping the MMTC award numbers.
Sources expect talks to commence immediately with traders and producers with IPL holding to the lowest prices for each coast as the base price.
Shipment of the urea must conclude by May 28.