The second urea tender for 50,000 mt sponsored by the Trading Corporation of Pakistan (TCP) closed June 1. Samsung came in with the lowest price at $318.53/mt CFR. Its nearest rival – Dreymoor – came in a penny higher.
These prices are just a few cents lower than those by the same companies in the May 29 tender. All other offers in the June 1 tender were significantly higher, with prices ranging from $325-$335/mt CFR. The Samsung offer has an estimated netback to China of $299/mt FOB. The higher offers were all closer to the price expectations of the Chinese producers, with estimated netbacks ranging from $305-$315/mt FOB.
Higher prices in this tender were expected. Chinese producers began demanding higher prices on the heels of the Indian tender in May. At the IFA conference in Istanbul last week, Chinese prices were quoted at $310/mt FOB for prills. Sources speculate that the Samsung and Dreymoor tons are cargoes picked up before the price increases took effect.
The Pakistan government recently authorized TCP to import an additional 150,000 mt of urea for the upcoming application season. Tenders for this amount are expected to be announced soon.