U.S. Gulf:
The NOLA granular urea barge market continued to strengthen at $346-$359/st FOB, up from the week-ago $324-$356/st FOB. CF indicated in its recent earnings call that it was in the urea market to assure that it would be well-stocked for the season. Others noted its presence during the week.
Eastern Cornbelt:
Urea was quoted at $385-$410/st FOB in the Eastern Cornbelt in late February, depending on location, with the low confirmed at Cincinnati, Ohio, for early-week offers.
Western Cornbelt:
Urea was pegged at $380-$410/st FOB in the Western Cornbelt, with the low reported at St. Louis, Mo., and reflecting a $5/st increase from the previous week. The Port Neal, Iowa., market was quoted at $390-$410/st FOB, with St. Paul, Minn., pricing reported at $390-$395/st FOB for river-open tons and $400/st FOB or higher for spring shipment.
The Catoosa/Inola, Okla., urea market was reported at $385-$390/st FOB at midweek, up $5/st from last report.
California:
Urea pricing at California port terminals was pegged at $450-$480/st FOB, up from $400/st FOB at the end of January, with the low end confirmed for some immediate pull offers. Rail-DEL pricing was reported at the $480/st level or higher in the state.
Pacific Northwest:
The urea market remained at $450/st FOB Rivergate, Ore., and $455/st FOB Aurora, Ore. Delivered urea was pegged at $455-$485/st in the region, with the low confirmed in Montana and the high in Washington. The delivered market in Idaho remained at the $470/st level in late February.
Western Canada:
Urea pricing in Western Canada had reportedly firmed to C$615-$645/mt DEL, depending on time of shipment, up C$20/mt at the low end of the range. The market FOB Saskatchewan warehouses was reported at C$600-$615/mt for March tons, with spring offers firming to C$610-$640/mt FOB.
“It has been quiet as of late, assuming everyone is just evaluating how much more they need to buy before spring,” said one regional contact. Added another source: “The market had a lot of buying activity all through January and the first half of February. It’s slowed down, but we’re still seeing some activity.”
China:
Sources reported a prilled urea sale of 20,000 mt at $348-$350/mt FOB. Valency was identified as the international trader handling the deal. Reportedly, the order had to be assembled from a number of domestic traders to reach the desired volume.
The difficulty arranging a cargo of this size was not surprising, most sources said. Chinese producers are just coming off the Lunar New Year holiday. Prior to the holiday break that started on Feb. 7, production was down because of COVID-related issues.
Sources said some plants and terminal facilities were affected by orders to reduce staff. In other cases, hot spots that did occur caused issues moving the urea from factory to terminal.
As the country came out of the holiday break this week, sources said the government sent notices to the producers to immediately increase production. One trader said the production rate has now moved up to a nine-month high. Another trader said the increase has taken production levels to 100,000 mt/month.
The concern for the government was that there needs to be enough product in the pipeline for the domestic market. However, sources said with the increase in production, some producers might also be able to participate in the Indian urea tender once it is called without hurting their commitment to fill domestic distribution centers.
Granular urea remains in the $360s/mt FOB, but only because of deals done several weeks ago. No new spot business has occurred to formally shift the price. Traders said current discussions are centering on the upper-$360s/mt FOB without too much pushback from producers.
India:
The urea world is waiting for the next Indian tender. Sources said for now, the government seems to be balancing the needs of the farmers against what is being reported as ever-rising prices from major suppliers.
Indonesia:
PIM offered urea for April shipment at $354.90/mt FOB for prills and $366.90/mt FOB for granular. Sources noted that these are the same prices Kaltim settled on earlier this month.So far, there have been no takers.
Sources said there is a growing reluctance by traders and end-users to keep paying higher prices for urea. Many of the NPK buyers, for example, are abandoning urea in favor of ammonium sulfate to get their nitrogen content. Sources said while buyers have been willing to pay a premium for Indonesian urea in the past, the current high prices make buyers reluctant to commit to deals too far into the future, in the hope that the ceiling has be hit and prices will start coming off.
Exports from Indonesia in 2020 were reported at 2.4 million mt, up about 28 percent from 1.9 million mt in 2019, according to Trade Data Monitor. The top five buyers of Indonesian urea in 2020 were India at 825,000 mt, the Philippines at 533,000 mt, Mexico at 280,000 mt, South Korea at 117,000 mt, and Malaysia at 100,000 mt. Ten other buyers took cargoes ranging from 87,000 mt to 18,000 mt each.
Middle East:
Sources reported no new spot urea deals as producers focused on fulfilling previous orders and their long-term contracts. There are reports that some deals may have been done at $380/mt FOB, but, said one source, those rumors appear to be coming from producers with no details about the buyer or the shipping time.
Arab Gulf urea is expected to play an important role in the upcoming Indian urea tender because of constant reports of limited urea supplies in China. The news that Chinese producers have accelerated production could lead to a challenge to the Arab producers in India.
Egyptian producers keep securing higher prices for small lots. Helwan this week sold 5,000 mt at $395/mt FOB for late April shipment. In the latter part of the week Fertiglobe secured a deal to sell 8,000-10,000 mt for the same price, also for late April shipment.
Producers continue to push for $400/mt FOB. Traders said producers might reach that level, but that might also signal the peak of the market. One trader noted that once India calls its tender and makes its awards, a new price level will be set and the last large buyer will have its needs covered. That combination could mark a decline in prices.
The material being shipped this month and into March is pegged at $380-$390/mt FOB.
Malaysia:
The Petronas Gurun urea plant shut down as technical teams assess the situation and determine how long the closure will be. Sources said the company is estimating the plant will be down about two weeks. The facility has a rated capacity of 700,000 mt/y.
Urea exports were down slightly in 2020, to 2.1 million mt from 2.2 million mt in 2019, according to Trade Data Monitor. Of the 13 countries taking 25,000 mt or more, a bit more than half of the exported tons were bought by three countries. Thailand bought 477,000 mt, Australia took 378,000 mt, and the Philippines imported 353,000 mt.
Nepal:
The country is expected to receive 50,000 mt of urea from Bangladesh soon. The product is being sent under a government-to-government deal to ease a urea shortfall because a contractor failed to fulfil its contract with the government to supply the urea.
Initially, the deal, which was negotiated in September 2020, was to have been a loan from Bangladesh to Nepal. Over time, the two governments decided to make the swap an out-and-out purchase.
Brazil:
Sources said the port price was stable in the upper-$380s/mt CFR. Higher prices are expected, partially because of the rising urea prices in the major pricing areas, but also because of increased freight rates. Sources reported an almost $10/mt jump in freight rates for dry bulk from Baltic ports to Brazil in just one week, to a level approaching $40/mt.
| Brazil Urea Prices | ||
| Terminal/City | US$/mt FOB ex-warehouse | |
| Week ending 02/19 | Week Ending 02/26 | |
| Rondonopolis | 475-490 | 529-550 |
| Sorriso | 540 | 520 |
Rondonopolis is seeing a dramatic increase in price even as limited business is concluded. Sources now put the urea price at $529-$550/mt FOB ex-warehouse, up dramatically from the previous range of $475-$490/mt FOB. Sources said the new price is reflective of the recent rise in the landed port price and in transportation issues bedeviling local traders.
Sources said delays in the soybean harvest have tied up trucks to move their product from farm to port at a time when those same trucks usually move fertilizer from the ports to the local distributors. The delay in the soybean growing regions is having a domino effect on the rest of the Brazilian markets, dramatically reducing available trucks and running up transportation costs.
Barter rates remain steady at 1 mt of urea for 60 bags of corn at Mato Grosso.
Libya:
The Libyan Norwegian Fertiliser Co. (Lifeco) recently loaded its first urea export shipment since it became a majority-owned Libyan company, according to a Libya Herald report, citing a company statement. Lifeco said the Mare 1 vessel loaded 5,000 mt of urea.
Libya’s National Oil Corp. (NOC) in January took over Yara International’s 50 percent share in the company to become the majority shareholder (GM Jan. 8, p. 1). The transaction, effective Dec. 31, 2020, gave NOC 75 percent ownership while the Libyan Investment Authority (LIA) still holds 25 percent.