Sources report that STC has issued an award to Aires for 60,000 mt of urea at $266/mt CFR to be unloaded at Krishnapatnam. An additional 90,000 mt is reportedly ready to be awarded for Iranian tons.
The STC action comes following its counterbids to the June 18 urea tender. The bids were $266-$269/mt CFR for East Coast ports, and $268-$271.75/mt CFR for West Coast ports. STC included Emirate dinar equivalents in its bids. West Coast urea is expected to be all Iranian.
Sources report that companies offering Chinese material have mostly rejected the STC counterbid. Reportedly the Chinese producers have dug in their heels at $260/mt FOB.
In a statement issued June 19, the Chinese Nitrogen Fertilizer Industry Association said matching the Aries price would force Chinese companies to face losses of as much as 80 percent on each ton sold. The statement further denounced the low price as “dumping” and called on its members to take action to boost market confidence.
The rejection of support by the Chinese producers could leave STC with only 150,000 mt out of an expected purchase of 1.5 million. Sources confirmed over the weekend that a new tender will have to be held quickly to meet the urea needs of Indian farmers. Some argue, however, that the small purchase from the STC tender could be enough to hold off panic buying long enough to ensure that no spike in price occurs when the next tender is called.