Indonesia’s Pusri closed its auction for granular and prilled urea June 22. Bids in both auctions indicated buyers are still looking for bargains. And while buyers appeared only interested in the granular product, they do not seem willing to buy at any price.
In the end Universal Harvester was awarded 10,000 mt of the 30,000 mt offered at the Owner Expected price of $431/mt FOB.
The bidding stalled at $403/mt FOB until the last minute when Universal boosted its bid. The last 10 minutes of the bidding – until Universal moved to take an award – showed prices moving lethargically from $390/mt FOB to $403/mt FOB.
The last time Pusri made an award, the winning granular price was $535/mt FOB.
No one wanted to pay the OE Price for the prilled product. At $465/mt FOB, the Pusri expectation was too high for the bidders. Sources say that amount was also too high for the market.
The highest bid for the prilled material came from Feitra Limited at $396/mt FOB.
The winning bid in April for prills was $527/mt FOB.
The bids in both auctions confirmed, for many, the continued softness of the urea market. The winning price in the granular tender indicated, to some that Universal was desperate to pick up a cargo. The refusal to move into the $400s/mt FOB for the prilled also indicated buyers still don’t think the floor has been reached for the urea market.
TCP tender falls short of fulfilling demand.
The Trading Corporation of Pakistan closed its June 25 tender still short of the tonnage it was looking for, but at least it will pay $100/mt less than it did a month ago.
TCP closed its previous tender with an award to Gavilon at $522.86/mt CFR for 100,000 mt.
Sources say the latest award to Transammonia is based on its offer of $411.77/mt CFR for 100,000 mt. Trammo offered an additional 100,000 mt as an option. It is unclear to source if TCP can accept the optional tons and that Trammo would accept the bid if made.
If the additional tons are not awarded, sources expect to see TCP issue another tender soon for 100,000 mt.
In April TCP received orders from the government to import 300,000 mt to ensure enough urea for the current application season and enough to jump start the next season. The rules under which TCP must operate mean the closing date of the tender will be one month from the day it is announced.
Local media report the domestic urea producers will continue to argue that if the national government were to provide the producers with the natural gas supplies they were initially promised, they would be able to supply the country’s urea needs at a lower price.