U.S. Gulf:
Granular urea barges that were ready to move continued to garner a huge premium at $383-$390/st FOB this week, with late Thursday sellers seeking $400/st FOB for the next trade. However, barges still to load in late April into first-half May were called as low as $340/st FOB. Full-month May was called $320-$322/st FOB.
Eastern Cornbelt:
Urea prices were lower in the Eastern Cornbelt, driven by softer pricing in the NOLA barge market. Sources quoted the regional market at $410-$430/st FOB, down $10-$20/st from last report, with the low confirmed at Ottawa, Ill., and the higher end of the range at Cincinnati, Ohio, and other Ohio River terminals.
Western Cornbelt:
The urea market had reportedly slipped to $420-$425/st FOB St. Louis, Mo., down $5-$15/st from last report, with pricing at Caruthersville, Mo., pegged at the $430/st FOB level. The upper end of the regional range was quoted at the $440/st FOB level in Iowa on a spot basis.
Southern Plains:
Urea pricing had reportedly slipped to $420-$425/st FOB in the Southern Plains, down some $10-$20/st from last report, with the low confirmed at Houston, Texas, and the upper end at Catoosa/Inola, Okla.
South Central:
The urea market had reportedly inched up to $415-$435/st FOB in the South Central region, with the lower end of the range reported at Memphis, Tenn., and the high at Shreveport, La. The market FOB Convent, La., was pegged at the $420/st FOB level, while pricing out of most Arkansas River terminals was quoted firmly at the $430/st FOB level at mid-month.
Southeast:
The urea market was pegged at $435-$440/st FOB Wilmington, N.C., Charleston, S.C., and other port terminals in the Southeast, up $5-$10/st from last report. Savannah, Ga., remained out of product in late April.
India:
Sources reported a delay in calling the pending MMTC tender. A meeting that was reportedly scheduled by MMTC and officials of the Department of Fertilizers on April 20 was scrapped as government and private sector offices closed under pressure to stem the growing COVID-19 infection rate. Reports are also circulating that many key officials at MMTC and the department have been infected, leaving the organizations shorthanded.
International traders said if the preventative steps work, the earliest the tender call could happen would be during the first full week of May. Sources said calling the tender at that time will put it in direct competition with growing demand in the Chinese domestic market. Chinese prices are already rebounding from calls for more domestic buying and in anticipation of a large order from India.
China:
Urea prices have moved back into the $340s/mt FOB for both prills and granular. Traders warned that some prilled product may still be available in the upper-$330s/mt FOB, but not for long.
Buyers for domestic distributors have begun making offers to producers at the same time international traders began looking for product to position in an upcoming Indian tender. The confluence of the two forces pushed prices up.
Sources also pointed to the STC Nepal tender that closed earlier this week. The estimated netback from the 25,000 mt tender put a price in China of $350/mt FOB. Some in the industry discarded that information, however, noting that the transportation and bagging package for the Nepal tender is always expensive and difficult to accurately calculate.
For now, producers do not appear to be in a hurry to make accommodations to international traders looking for product to offer into India. The domestic market is looking strong and is backed by a central government anxious to make sure farmers have all the inputs they need.
Exports for the first quarter were up marginally at 2 percent, to 803,000 mt from 786,000 mt in the same period in 2020.
| Chinese Urea Exports | |||
| Partner Country | January-March (mt) | ||
| 2019 | 2020 | 2021 | |
| World | 1,308,586 | 786,264 | 802,775 |
| India | 446,613 | 222,683 | 244,482 |
| South Korea | 160,101 | 181,649 | 146,476 |
| Mexico | 53,330 | 93,811 | 109,824 |
March exports were up 36 percent, to 368,000 mt from 271,000 mt in March 2020. March exports surpassed each of the previous two months, with January exports at 292,000 mt and February at 143,000 mt. Sources said the lower February number resulted from closures due to the Lunar New Year holiday and an upswing in COVID-19 cases.
If the pattern of previous years follows, exports will be higher in the second half of the year.
Middle East:
Urea supplies from the Arab Gulf remain tight. The only product moving out of Arab production facilities consists of tons already contracted.
Reports that Ma’aden 4 is back online or about to be restarted were a relief to some international traders. As with ammonia, sources said it will take a few weeks for the production to ramp up and cover the backlog of orders created when the plant went down.
The lack of any new spot business means the price remains in the upper-$340s/mt FOB. Sources reported some talks taking place that put the price in the upper-$330s/mt FOB, matching the price in China. During this week, however, the Chinese price moved back into the $340s/mt FOB. Sources said at that point, Arab producers rejected anything in the $330s/mt FOB.
Despite the rebound in pricing ideas, sources said the paper market for the Arab Gulf remains soft. The May price is pegged at $325/mt FOB and June at $322.50/mt FOB.
Egyptian producers have concluded deals that confirm softer prices. As the week opened, the talk was all about prices in the $330s/mt FOB. However, the first confirmed deal came in at $340/mt FOB. Soon after that, another agreement was reached at $345/mt FOB. Both sales were less than 10,000 mt each, and are reportedly bound for Turkish buyers.
Alexfert reported that it was taking down a plant for two weeks due to technical difficulties. Sources said the absence of any urea from the plant for such a short period will not have an impact on the market.
Fertiglobe also got in on the act, selling 10,000-20,000 mt of granular urea in the low- to mid-$340s/mt FOB. Reportedly, the material is bound for Italy with shipment for the end of April.
As the week closed, Abu Qir added to the efforts to move prices back up with a sale of 15,000 mt of granular urea at $348/mt FOB for May shipment.
Iranian exports for the first quarter were reported at 784,000 mt by Trade Data Monitor. There is no data for the first quarter of 2020, but 2019 first-quarter exports were reported at 592,000 mt. The main buyer this year was Turkey, taking 332,000 mt.
March exports were pegged at 315,000 mt, with Turkey taking 212,000 mt. March 2019 exports were reported at 99,000 mt.
Indonesia:
Granular prices firmed to $340-$341/mt FOB on the basis of sales to traders for Australian buyers. Prilled urea remained at around $335/mt FOB. Sources said about 60,000 mt of granular urea will be shipped from Indonesia to Australia in May. An additional 48,000 mt of prilled urea will also be loaded for export next month.
Nepal:
The STC tender for 25,000 mt of bagged granular urea closed this week. The low price of $457/mt CIP bagged was submitted by IPL. The next lowest price came from Swiss Singapore at $460/mt CIP bagged.
The material is slated for delivery to various warehouses in Nepal within 60 days of the opening of the letter of credit. As Green Markets went to press, no award had been announced.
The freight and bagging package on sales into Nepal is usually pegged above $100/mt. If the offered tonnage come from China – the most likely option – sources said the netback would be well into the $350s/mt FOB, a level much higher than the current market.
However, sources noted that shipment may not take place until late May or early June, when demand from the domestic market and India will be in full swing. At that point, sources said, the price could easily move back into the $350s/mt FOB.
Thailand:
The government just recently released import numbers through February 2021. Imports of urea for the first two months of the year totaled 245,000 mt, according to Trade Data Monitor, down 14 percent from the 285,000 mt imported during the same period in 2020.
February 2021 imports were reported at 187,000 mt, down 15 percent from 221,000 mt in February 2020.
Ethiopia:
Urea imports for the first quarter of 2021 were down 14 percent, according to Trade Data Monitor, to 189,000 mt from 219,000 mt during the same period in 2020. Egypt, Saudi Arabia, and the UAE were the main suppliers to Ethiopia so far this year, totaling 186,000 mt among the three producing countries.
March imports were up 16 percent, to 47,000 mt from 41,000 mt in March 2020. The full amount of the March 2021 imports was supplied by Saudi Arabia.
Brazil:
The upper end of the price range softened a few bucks, leaving the range at Paranagua at $345-$350/mt CFR.
Sources said pricing continues to soften as buyers wait to see when India calls its next urea tender. At the same time, sources said urea warehouses at the ports and inland have more material for sale than buyers willing to take it.
The pricing problem continues inland as well. Rondonopolis is pegged at $474-$520/mt FOB ex-warehouse, dropping after a brief bump up last week.
| Brazil Urea Prices | ||
| Terminal/City | US$/mt FOB ex-warehouse | |
| Week ending 4/16 | Week Ending 04/16 | |
| Rondonopolis | 505-530 | 474-520 |
| Sorriso | 480-533 | 480-533 |
Sources said the lack of interest in buying is largely because most of the demand for the current season is covered. Buyers will only step up now if there is a particularly good deal for a limited amount of product to top off the buyer’s current holdings. No big movement is expected until August or September.
The barter rate remains stable at 71 bags of corn for 1 mt of urea.