U.S. Gulf:
The NOLA granular urea barge market quickly rose early in the week to as high as $400-$401/st FOB, according to sources, although other trades were reported in the $370-$390/st FOB range. The new range was up from last week’s $357-$370/st FOB.
While there was a flurry of business early in the week, sources said the market became extremely quiet as the week progressed, however. One source offered that this may have been due to a “sloppy” international market, where prices dropped this week in China and the Arab Gulf just as India is expected to call a tender.
U.S. Imports:
July-January urea imports were up 0.7 percent, to 1.78 million st from 1.77 million st one year earlier. January imports were up 71.8 percent, to 441,111 st from 256,783 st.
Qatar continued to top the import lineup in the fertilizer year-to-date with 645,347 st, up 9.8 percent from the year-ago 587,594 st. Saudi Arabia followed with 359,758 st, up 16.5 percent from the prior year’s 308,766 st. Canada’s 275,035 st total for the year-to-date represented a 1.6 percent improvement on the year-ago 270,641 st, and was ahead of Russia’s 210,323 st total.
U.S. Exports:
January urea exports came in at 14,692 st, 75.6 percent below the previous year’s 60,096 st total. Imports for the July-January period firmed 30.4 percent, to 530,764 st from 406,978 st.
Eastern Cornbelt:
Sources reported firming urea prices during the week. The market was quoted at $425-$435/st FOB in the Eastern Cornbelt, up $20-$30/st from the previous week, with the low reported at East Dubuque and the high out of spot Illinois and Ohio River terminals.
Western Cornbelt:
Urea pricing reportedly jumped to $420-$430/st FOB in the Western Cornbelt, up $15-$30/st from the previous week, with the higher numbers confirmed at St. Louis and Caruthersville, Mo., as the week progressed.
Iowa sources quoted spot river terminal pricing firmly in the $425-$430/st FOB range during the week, with the St. Paul, Minn., market reported at $420-$430/st FOB for river-open offers.
Southern Plains:
Sources quoted the urea market at $420/st FOB Houston, Texas, and a firm $425-$435/st FOB Catoosa/Inola, Okla., up some $35-$50/st from the previous week’s low. With higher NOLA barge values reported this week, some contacts said they expect the Catoosa/Inola market to edge up to the $450-$460/st FOB range for the next round of offers.
South Central:
Urea pricing was quoted in a broad range at $410-$440/st FOB terminals in the South Central region, up $30-$35/st from last report, with the low confirmed at Memphis, Tenn., and the high at Shreveport, La. Sources reported the bulk of new offers out of Arkansas River terminals at the $430/st FOB level at midweek, with the Convent, La., market also reported “above $400/st” FOB.
Southeast:
Sources said the week began with urea offers at $410/st FOB Wilmington, N.C., and $420/st FOB Charleston, S.C., but quickly firmed to a solid $430/st FOB level out of port terminals by midweek. Postings FOB Fairless Hills, Pa., also moved up to $430/st FOB for March and $445/st FOB for April-May, up from the previous week’s $400/st FOB for March tons and $405/st FOB for Q2 shipments.
China:
Growing inventories, increased production, and reduced domestic demand have combined to push down export prices. Sources said some small prilled deals were done at $335-$340/mt FOB. Sources said that would place the granular market at $340-$350/mt FOB.
These prices show a marked drop from the $370s/mt FOB of just last week. Traders said the decline came as portside warehouses went from almost empty to reserves of more than 300,000 mt in just a couple of weeks. Sources said the product heading to the ports is coming from regional facilities that would normally serve domestic buyers. With the domestic season winding down and urea plants increasing output, however, traders saw an opportunity to take positions with product for the pending Indian urea tender.
One source said a number of Chinese and international traders are taking long positions on Chinese urea in anticipation of the Indian tender. Some are now saying 500,000-700,000 mt have been booked with the idea of offering the material to India.
Besides the potential India business, sources said demand is picking up in Australia, Thailand, the Philippines, and South Korea. While demand is strong, sources said buyers are pushing back against prices that have been rising in recent weeks. Freight rates have also been going up, causing sellers to scale back their pricing ideas to ensure a deal.
India:
The consensus in the market seems to be that India will call its urea tender at the end of the month so the awards can be made under the new budget that takes effect on April 1.
Traders are already lining up tons from China at prices in the $330s/mt FOB. Reportedly some have secured tons from the Arab Gulf at levels that also indicate a softening in that market. Price ideas in the tender show a wide range of $350-$380/mt CFR, with the mid-price of $365/mt CFR apparently being a point of general agreement.
Any price in the $360s/mt FOB will be higher than anything paid in the past seven years, according to Green Markets data. November 2018 showed tender awards at $353-$356/mt CFR. The next highest rate was November 2013 at $339-$343/mt CFR. By comparison, the price paid in March 2020 was $255-$258/mt CFR.
Indian buyers will face not only higher urea prices, but also higher freight rates. The increased cost in petroleum is only part of the reason for higher shipping costs, said traders. Many vessels are out of position to take advantage of favorable rates to move product to India from either China or the Arab Gulf. The rate from China to the East Coast of India is pegged around $20/mt against a normal level of $15-$18/mt, Sources said prices are even more unfavorable from the Arab Gulf to the West Coast of India.
Middle East:
Sources said urea prices from the Arab Gulf have dropped into the mid-$360s/mt FOB even as producers reported no material available for March sales. April tonnage is reported as limited and only available at “the right price.”
With more Chinese tons now moving to export ports for possible use in the upcoming India tender, sources said the Arab Gulf producers will have less sway over what happens in that tender.
Even as Chinese and Arab Gulf prices soften, Egyptian producers continue to enjoy strong returns. Sources said MOPCO settled a deal for a May shipment at $400/mt FOB. The company is also reportedly loading a vessel for the U.S., which is also seeing a rise in urea prices.
One trader noted that the only upside to the situation in Egypt is that prices seems to have stabilized. Producers sold product for April shipments at $400/mt FOB. The May deal at the same price could indicate a plateauing of prices.
Indonesia:
Producers are moving out previously booked tons and contracted orders. No new urea tenders were reported this week.
Black Sea:
Sources said some small urea deals out of Yuzhnyy have indicated a netback of $380/mt FOB. Details of the exact quantities sold and to whom were sketchy, but solid enough for sources to feel comfortable with the new posted price.
Brazil:
Demand remains strong in Brazil as prices added a few bucks on the upper end of the range from last week. Sources now put the Paranagua urea price at $395-$405/mt CFR, with sellers pushing for $410/mt CFR.
Traders are saying the market may have topped out and point to strong pushback against the $410/mt CFR offers. One source added that by the end of the month the pushback will be at the $400/mt CFR level. He added that buyers are beginning to slip into an “off season” mood.
Even as portside prices appear to be reaching their peak, upward pressure continues on inland prices. Rondonopolis reported prices at $480-$600/mt FOB ex-warehouse, showing a wider range from last week. The market in Sorriso was also up, with sources reporting prices at $503-$508/mt FOB ex-warehouse.
| Brazil Urea Prices | ||
| Terminal/City | US$/mt FOB ex-warehouse | |
| Week ending 03/05 | Week Ending 03/11 | |
| Rondonopolis | 545-550 | 480-600 |
| Sorriso | NA | 503-508 |
Farmers are said to be hesitating to make large-scale purchases. Sources said excess rain in Mato Grosso is delaying fieldwork that would normally be taking place at this time.
Despite concerns about a weakening Real against the U.S. dollar, sources said the barter rate for 1 mt of urea remains at 60 bags of corn.
Imports of urea so far this year were dominated by Qatar at 393,000 mt, Russia at 353,000 mt, and Algeria at 175,000 mt. All told, in the first two months of the year, Brazil imported 1.3 million mt of urea, up about 23 percent from the same period last year. February imports were pegged at 718,000 mt, according to Trade Data Monitor, against 590,000 mt in February 2020.