The State Trading Company (STC) of India called a urea tender over the weekend. The tender closes Oct. 30, with validity through Nov. 5 and shipping by Dec. 15. Industry sources expected a tender to be called before the end of October after the earlier MMTC tender failed to secure as many tons as hoped for.
The buying house will face higher Chinese prices than what were offered in the previous tender. The prime motivation for higher prices is the beginning of the Chinese winter fill program. Producers will be able to play exporters and domestic buyers against each other. The product competition also comes as the producers’ association is strongly advising its members against accepting any offers below $250/mt FOB.
Sources estimate that India needed 1.5-2 million tons to close off the calendar year. Initial hopes that the MMTC tender would get to within closing distance of that amount fizzled after the buying house only picked up about 620,000 mt.