U.S. Gulf:
The story was the same as last week, with upriver barges and those ready to move garnering a significant premium. Barges ready to move were generally put in the $400-$405/st FOB range, with an unconfirmed report of a barge at NOLA going as high as $410/st FOB.
In the meantime, barges with a little time on them saw a lower price. April was reported to be trading in the $370s/st FOB, first-half May at $362/st FOB, and all-May at $355-$360/st FOB.
U.S. Imports:
February urea imports were noted at 316,780 st, softening 19.1 percent from the year-ago 391,764 st. July-February totals stood at 2.10 million st, down 2.9 percent from the year-ago 2.16 million st.
U.S. Exports:
February exports of urea dropped 63.5 percent, to 20,664 st from the year-ago 56,564 st. Exports totaled 551,428 st for July-February, up 19.0 percent from the year-ago 463,542 st.
Eastern Cornbelt:
Urea pricing was unchanged at $420-$440/st FOB in the Eastern Cornbelt, with the low reported out of spot Illinois River terminals and the high out of inland Ohio locations. The Cincinnati, Ohio, market was pegged at $431-$435/st FOB in early April.
Western Cornbelt:
Urea remained in a broad range at $425-$455/st FOB in the Western Cornbelt, with the low reported at St. Louis, Mo., and the high at Sergeant Bluff, Iowa. Other terminal pricing in early April included $430/st FOB Caruthersville, Mo., $430-$440/st FOB St. Paul, Minn., and $435-$445/st FOB Catoosa/Inola, Okla.
California:
Urea pricing in California was quoted at $515-$520/st FOB port terminals for April shipment, with May offers reportedly falling to sub-$500/st FOB levels. No rail-DEL prices were confirmed for urea in early April.
Pacific Northwest:
The urea market remained at $475/st FOB Rivergate, Ore., and $480/st FOB Aurora, Ore., with delivered tons ranging from $490-$510/st in the Pacific Northwest, depending on location.
Western Canada:
The urea market remained at C$650-$690/mt DEL in Western Canada, with the low reported for spotty import offers. Sources also confirmed some C$670/mt DEL offers in Saskatchewan for domestic tons, while FOB warehouse pricing ranged from a high of C$690/mt for prompt shipment to a low of C$620/mt FOB for limited May offers.
India:
So far 12 vessels have been booked to bring in just over 600,000 mt of the 802,000 mt booked by RCF in its March 22 urea tender.The bulk of the material – 509,000 mt – booked so far is from Chinese ports. An additional 96,500 mt is booked on vessels from the Arab Gulf. The remaining 197,000 mt is still to have vessels assigned.
| Supplier | Quantity (‘mt) | Vessel | Origin | Discharge Port |
| Koch | 50,000 | Frosso K | China | Gangavaram |
| 50,000 | Qingdao | China | Pipavav | |
| Transglobe | 50,000 | Anna Meta | China | Karaikal |
| Amber | 65,000 | Agia Valentini | China | Kakinada |
| Liven | 50,000 | Adhiraj | China | Mundra |
| Ameropa | 51,500 | Ince Beylerbeyi | Oman | Kandla |
| 51,500 | Federal Illinois | China | Mundra | |
| 51,500 | New Spirit | China | Tuna | |
| Gavilon | 45,000 | Tomini Ability | China | Rozy |
| Swiss Singapore | 46,000 | Prabhu Gopal | China | Jaigarh |
| Samsung | 50,000 | Melpomeni | China | Kandla |
| Samsung | 45,000 | New Victory | UAE | Dahej |
| Orders Not Assigned | ||
| Supplier | Quantity (‘mt) | Discharge Port |
| Koch | 50,000 | Krishnapatnam |
| Transglobe | 50,000 | Vizag |
| Dreymoor | 52,000 | Pipavav |
| Continental | 45,000 | Hazira |
The two orders bound for Krishnapatnam and Vizag, because they are East Coast ports, are expected to be filled with Chinese material. If that happens, that means just a bit more than 600,000 mt will come from Chinese suppliers. This would fit with previous estimates of 10 panamax vessels in place to handle shipments from China to India.
There are reports that a deal struck by a South Korean trader could provide up to 35,000 mt of product from Indonesia.
Sources said the orders from this tender should be enough to hold over Indian demand into May. Sources said another tender could be called shortly after April 28, the deadline for shipping the last of the RCF tender material. The most likely time to call the tender will be the first week of May to avoid the Labor Day holiday period.
China:
The impact of the limited take by RCF is being felt in the pricing of Chinese urea. Because India is not taking as much product as previously expected, there are more tons available in the market, pushing prices down.
Sources put the current prilled price in the high-$320s/mt FOB, with producers hoping for the low-$330s/mt FOB. Granular urea is pegged in the low-$340s/mt FOB. These prices are as much as $20/mt off the netbacks initially estimated from the awards issued in the RCF tender.
As the urea plants came out of the Lunar New Year and COVID-related shutdowns in February, they cranked up production to about 70 percent of rated levels. Sources said some plants are still operating at that level while others have cut back to 60 percent. The initial production level was based on estimates that about 1 million mt would be taken from Chinese producers for the first Indian tender. When RCF cut back its order from 1.2 million to 802,000 mt, Chinese producers were hit the hardest.
The drop in demand from India coincided with the end of the domestic season. Even though the central government ordered a buildup of urea reserves for the next season, once that fill program ended, the only place for the urea to go was offshore. Sources said the fill program ended in March, leaving a lot of tons for international traders.
The next major round of domestic buying is not expected until June. Sources said the April-May period could see continued softening of urea prices in China.
However, if the next Indian tender is not called until the first week of May, as expected, then the tonnage purchased in that tender will be needed at about the same time as the Chinese domestic market begins a new round of purchases. The resulting competition between the two markets could bounce prices back up., said traders.
Indonesia:
There were reports of a couple of new urea sales that helped set pricing levels in Indonesia.
Sources reported one sale early in the week at $345/mt FOB of granular material. The product reportedly will be mixed with an earlier purchased cargo, which was sold at a higher price. Sources said the combined loads could be offered to cover an award in the RCF/India tender. However, so far, no vessels have been booked from Indonesia to India. The more likely alternative, said one trader, is for the cargoes to go to Australia.
A second sale of about 70,000 mt was reportedly picked up by a South Korean trader, with half of that tonnage expected to cover a sale to Thailand. Sources said the original deal with Thailand was for Saudi product. However, the closer of the SABIC-4 plant caused a shortage of available urea. The Indonesian material is expected to cover that lost product.
The other half of the deal is rumored for either India or Australia. As noted, no vessels have been booked so far to make the Indonesia-India run. Sources reported, however, that some trading houses have feelers out looking for a well-placed and well-priced vessel for that journey.
Nepal:
Three tenders will close beginning on April 21 for a total of 80,000 mt. The first by STC is for 25,000 mt and will close on April 21. The granular urea is to be bagged and delivered to Nepalese warehouses on a CIP basis.
Two more tenders, each called by KSCL, will bring in the remaining 55,000 mt in May. The first tender closes on May 7 for 25,000 mt, and the second for 30,000 mt closes on May 17. All three tenders are for bagged material to be delivered to the Biratnagar, Birgunj, and Bhairahawa warehouses on a CIP basis.
The Nepal tenders are rarely seen as price-setting events. However, the tender results can be seen as price-confirming deals, especially in determining the price of material out of China.
Middle East:
The market is beginning to show some signs of possible weakness. Sources said the limited tons available for export from the Arab Gulf because of limited output suggest firm prices. However, the ever-rising freight rates are putting pressure on producers to absorb some of those costs in their netbacks to conform to deals already in the works.
There are reports of some deals done in the upper-$340s/mt FOB for sales into smaller markets. This range represents about a $10/mt drop from the previous week. The paper market for Arab Gulf granular urea shows an even steeper decline. Prices are put at $336/mt FOB for May, and $330/mt FOB for June.
Egyptian producers are trying to hold onto their premium prices but are facing ever-stronger pushback from buyers. Abu Qir reportedly scrapped its tender that was to close on April 2 for 25,000 mt of prilled urea and 10,000 mt of granular, all to ship in late April.
Sources said the producer scrapped the tender because bids did not meet even their lowered expectations. Sources reported that Abu Qir was hoping for bids in the $370s/mt FOB. However, even that level was about $20/mt too expensive for buyers.
The paper market for May and June prices out of Egypt splits the difference between producers and buyers by putting the price in the $360s/mt FOB. Without any new spot business to report, the price remains at $400/mt FOB.
Turkey:
Toros closed a tender for 20,000 mt of granular and 15,000 mt of prilled urea on April 9 for shipment during the first half of May. The cargoes are to be divided to various unloading ports.
According to Trade Data Monitor, urea imports in January-February 2021 dropped 20 percent from the same period in 2020, to 517,000 mt from 736,000 mt. February imports this year were down nearly a half, to 270,000 mt from 508,000 mt in February 2020.
Brazil:
Traders around the world noted softness in the Brazil landed price. Brazilian sources pegged the market at $370-$390/mt CFR, while international traders took a narrower view and called the market $380-$385/mt CFR in Paranagua.
Sources in Brazil said buyers at the ports and inland are taking a wait and see approach to their buying. Farmers are keeping an eye on weather patterns to see if the rains will cooperate with their planting schedule. Likewise, traders from the ports to the local distribution centers are noting the limited tonnage taken by RCF/India in their latest tender, as well as lower prices in China and reports of softer prices from the Arab Gulf.
The Arab Gulf price is seen as a benchmark for local buyers. Last year, Qatar was the largest provider of urea to Brazil at 1.8 million mt. However, Algeria and Russia were also major suppliers with 1.5 million mt and 1.3 million mt, respectively. Other major non-Arab Gulf suppliers included Iran at 505,000 mt and Nigeria at 431,000 mt. This year, sources are expecting more tons to come from Nigeria once the new Dangote plant comes fully online.
Rondonopolis showed a tightening of the market at the upper end of the range, to $475-$540/mt FOB ex-warehouse. Sorriso remained steady at $480-$530/mt FOB. The barter rate at Rondonopolis for 1 mt of urea remains at 71 bags of corn.
| Brazil Urea Prices | ||
| Terminal/City | US$/mt FOB ex-warehouse | |
| Week ending 4/02 | Week Ending 04/09 | |
| Rondonopolis | 475-555 | 475-540 |
| Sorriso | 480-530 | 480-533 |
Imports of urea for March 2021 were up 22 percent, to 707,000 mt from 579,000 mt in March 2020, according to Trade Data Monitor. Qatar was the single largest supplier at 189,000 mt, but the biggest year-over-year increase came from Russia, which supplied 175,000 mt in March 2021, compared with 44,000 mt in March 2020.
First-quarter imports were up 23 percent to 1.97 million mt, compared to the same period in 2020 at 1.6 million mt. Qatar and Russia were the top two suppliers in 2021 at 582,000 mt and 528,000 mt, respectively.