All Posts from May 31, 2024

Urea

US Gulf:

The NOLA urea market was quoted at $284-$291/st FOB for loaded and full-May barges, down from last week’s $285-$295/st FOB as demand slows and the price premium for nearby tons begins to fade. While no June business was actually confirmed during the week, sources reported the market flat at $285-$290/st FOB for that shipping window.

Barge sales of upriver tons were reported at a high of $298/st FOB NOLA based on netbacks.

Eastern Cornbelt:

Urea dropped to $360-$375/st FOB in the Eastern Cornbelt, down from last week’s $370-$390/st FOB, with the low confirmed out of spot Illinois River terminals as the week progressed. The Cincinnati, Ohio, market was pegged at $365-$375/st FOB, below the last confirmed $375-$380/st FOB range.

Western Cornbelt:

Urea in the Western Cornbelt fell to $350-$375/st FOB during the week, down slightly from last week, with the high confirmed in Iowa on a spot basis. The St. Louis, Mo., urea market remained at $350-$360/st FOB, while the latest offers in the Southern Plains region included $375-$380/st FOB Catoosa/Inola, Okla.

Northern Plains:

The urea market remained under pressure in the Northern Plains, with the latest prompt prices reported at $355-$375/st FOB St. Paul, Minn., and $410-$460/st DEL, down from $370-$390/st FOB and $440-$460/st DEL last week. Sources quoted the lower end of the delivered range for unit train shipments in eastern North Dakota.

Great Lakes:

Urea was quoted at $395-$425/st FOB in the Great Lakes region, with the higher numbers reported out of Michigan terminals. Michigan sources also quoted delivered urea offers at the $408/st level in central areas of the state.

Northeast:

Urea pricing in the Northeast slipped to $380/st FOB Fairless Hills, Pa., and $380-$390/st FOB Baltimore, Md., and East Liverpool, Ohio, down from the prior $390-$430/st FOB range in the region.

Though the official opening of the shipping channel at the Port of Baltimore was reportedly pushed back to early June, sources said vessels were able to navigate a temporary channel after the Dali was towed back to port after being trapped under wreckage of the Francis Scott Key Bridge for 55 days.

Eastern Canada:

Urea was quoted in a broad range at C$595-$700/mt FOB in Eastern Canada, down C$25/mt at the low end of the range.

India: 

Traders continue to expect a new urea tender to be called around mid-June, after the end of voting in the national election and when the formation of the new government becomes clearer.

Few expect to see India buy a large amount of urea in the tender. The country’s domestic reserves are reported at near-record levels – around 11 million mt expected by June 1 – while domestic urea production likewise remains strong. This combination leaves little incentive for large tender purchases. The only major unknown is the weather. So far, sources said the government is expecting a slightly better-than-average monsoon season.

With polls showing Narendra Modi in the lead to return as prime minister, the current provisional budget, which reduced the funds available for urea subsidies, will most likely be made permanent.

It has long been a goal of Modi to reduce the subsidies paid for fertilizers. The government is now promoting the use of domestically produced urea and liquid Nano Urea to reduce payments for imported product.

Pakistan:       

Members of Pakistan’s parliament last week called for an end to natural gas subsidies for urea producers. The government this week agreed to the request, ending subsidized natural gas for the producers.

The move came after a government report showed that the savings from reduced natural gas prices were not passed on to farmers. Domestic producers told local media outlets that high prices for other inputs in the production process left price reductions impossible.

In an additional action, the government authorized the import of 200,000 mt of urea, to be handled by Trading Corp. of Pakistan (TCP). TCP will most likely purchase the tons via a government-to-government deal instead of a public tender.

If TCP were to call a tender, one trader said, few major trading houses would participate. Traders have long objected to the payment procedures TCP attaches to its tenders. Without the major houses involved, said one source, it would be difficult for TCP to secure the full tonnage at a reasonable price. The government-to-government deals TCP has secured in the past have quickly and quietly provided the needed urea at prices deemed acceptable to Pakistan’s treasury.

Black Sea:     

Black Sea prilled urea followed the marginal increases seen in other major markets. Source now put the price at $255-$265/mt FOB.

Mediterranean:

Spanish importers saw $350/mt CFR offers following the recent Egyptian rally, but it is unclear whether any transactions occurred at this level. Prices in nearby Romania moved higher as well, with confirmed sales at $335/mt CFR.

Indications of $320/mt CFR were still reported by some Italian and French importers early in the week, however. As a result, the granular urea market in the Mediterranean was quoted at $320-$350/mt CFR for the week.

Southeast Asia:

Urea sales of more than 100,000 mt were reported by Pupuk Kaltim at $312/mt FOB, the same price attained in its latest tender. With no other confirmed transactions in other regional export markets, the Southeast Asia granular urea price firmed to a solid $312/mt FOB, up from last week’s $290-$312/mt range.

Indonesia:     

After Pupuk closed its 45,000 mt granular tender to the Philippines’ Universal Harvester at $312.26/mt FOB, the company entered into talks with other traders for additional sales. Sources ultimately reported sales totaling 250,000 mt to Universal and three other traders, all for June shipment.

Liven, Koch, and Samsung were all reportedly able to buy cargoes of 30,000-45,000 mt at Universal’s price. The tons sold to Universal are expected to go to Philippine buyers, with the other tonnage reportedly destined for Australia and Latin America.

Sources reported the latest offer from Pupuk in the low-$320s/mt FOB at week’s end.

Thailand:      

Urea imports stood at 947,000 mt in January-April, Trade Data Monitor reported, a significant increase from the 602,000 mt received through the first four months of 2023. Saudi Arabia led suppliers with 392,000 mt, Qatar shipped 120,000 mt, and Malaysia added 118,000 mt. April imports were noted at 225,000 mt, above the 210,000 mt received in April 2023.

Middle East: 

Sources reported a sale of granular urea from PIC for shipment to Australia at $315/mt FOB. Producers last week pushed for $310/mt FOB following a prilled sale at $295/mt FOB and price increases in Egypt and Indonesia.

In addition to the PIC spot sale, sources said a number of contract cargoes are being loaded for delivery to Australia. The contract business has been profitable enough that producers have found little reason to chase after spot deals, said one trader.

The modest price increase showed a continued firming of the market, though several traders have raised concerns that the increases are not sustainable. Traders shared the view that the market was stable but not firm, noting that Australian demand is expected to slow in the short term. While interest from India and Brazil may increase in the coming months, the global supply of urea is expected to exceed demand, leaving producers with little support for further price increases.

Helwan, in Egypt, sold 3,000 mt of granular urea at $325/mt FOB at the end of last week. The deal came to light following a government order directing producers to reduce output by 20% as part of a plan to divert natural gas away from the urea industry.

The previous two weeks showed a significant shift in both prices and tonnage sold. By the end of last week, however, most producers were reportedly satisfied with completing the accounting for the newly closed deals and were ready to reassess their situations given the mandate to reduce output.

As this week opened, some producers had reportedly gotten word that their natural gas allotments would be restored, though others continue to wait for a similar communication. Even with the cutback, sources said the producers who made sales during the mid-month selling frenzy have enough product on hand to cover the deals.

China:

Urea prices remain too high for the government’s liking, players said. The estimated export price, based on the domestic ex-factory price, remained at $335-$338/mt for prills and $342-$345/mt FOB for granular.

Exports have been mostly limited to container-sized shipments to regional buyers, sources said. No major exports are expected until July.

Brazil:

Brazil granular urea prices firmed to $325-$330/mt CFR, up from the week-ago $320-$325/mt CFR, cementing a 4.8% increase from late April. While some sellers were noted offering as high as $340-$350/mt CFR during the week, buyers did not commit at those levels.

Rondonópolis prices moved up to $465-$485 FOB, a $5-$25/mt increase from the previous week. Forward pricing remains uncertain, with demand expected to peak in the late third quarter or early fourth quarter. That timeframe will also be important for India, adding additional demand to the 4Q global market.