U.S. Gulf:
NOLA granular urea barges were reported at $355-$375/st FOB, up from the week-ago $350-$372/st FOB. The higher end of the range represent barges to ship within the next two weeks, with the lower end for first-half June.
Upriver barge trades were put at $380-$395/st FOB, with some saying they were seeing higher price ideas due to the Memphis bridge situation. By late in the week, $450/st FOB was reportedly being offered with no takers.
U.S. Imports:
March urea imports were up 63.4 percent, to 961,973 st from the prior-year 588,557 st. July-March volumes totaled 3.06 million st, 11.3 percent above the year-ago 2.75 million st.
Qatar topped July-March imports with 916,578 st, a 7.6 percent increase from the year-ago 851,742 st. Saudi Arabia boasted 530,682 st for the period, slipping 0.2 percent compared to the year-ago 531,945 st, while Russia’s 492,374 st represented a 23.5 percent improvement on last year’s 398,602 st. Imports from Canada totaled 381,549 st for the period.
U.S. Exports:
March urea exports rose 85.7 percent, to 47,284 st from the prior-year 25,461 st. Exports for the July-March period firmed 30.7 percent, to 652,958 st from 499,559 st.
Eastern Cornbelt:
Urea prices were reported in a wide range at $415-$440/st FOB in the Eastern Cornbelt, with the Cincinnati market pegged at $420-$435/st FOB at mid-month, depending on supplier.
Western Cornbelt:
Urea pricing was steady at $420-$440/st FOB in the Western Cornbelt, with the low reported at St. Louis and Caruthersville, Mo., and the high at Port Neal, Iowa.
Southern Plains:
Urea pricing was pegged at a solid $420/st FOB Catoosa/Inola, Okla., and Houston, Texas, in mid-May.
South Central:
Urea pricing was quoted at $410-$430/st FOB in the South Central region, down $5/st from last report, with the lower end of the range confirmed at Memphis and the high at Shreveport, La., and Little Rock, Ark. Sources pegged the Convent, La., market at $420/st FOB in early May.
Southeast:
The urea market was quoted at $435/st FOB Wilmington, N.C., with no tons reportedly available at Charleston, S.C., or Savannah, Ga.
India:
MMTC sent out letters of intent to buy 549,000 mt of urea from its May 4 tender. The low amount awarded indicates that India will most likely call another tender within the next two weeks.
The dominance of West Coast orders in the awards allowed for only one cargo from China. Sources said the refusal of the Chinese producers to lower their prices led to the public snubbing of their product by MMTC.
| Final Awards in MMTC Urea Tender | |||
| West Coast (487,500 mt) | |||
| Offering Company | Quantity (mt) | Discharge Port | Source |
| Ameropa | 51,500 | Mundra | Oman |
| 50,000 | Mundra | Black Sea | |
| 51,500 | Pipavav | Oman | |
| Dreymoor | 52,000 | Pipavav | Black Sea |
| Samsung | 50,000 | Rozi | Abu Qir/Egypt |
| Continental | 50,000 | Mundra | Egypt |
| Midgulf | 47,500 | Adani Hazira | Oman |
| Swiss Singapore | 45,000 | Mundra | Bahrain |
| Fertiglobe | 45,000 | Kandla | UAE |
| Keytrade | 45,000 | Kandla | Oman |
| East Coast (61,500 mt) | |||
| Offering Company | Quantity (mt) | Discharge Port | Source |
| Ameropa | 61,500 | Kakinada | China |
Going into the tender, sources were expecting to see awards exceeding 1.2 million mt if Chinese product was accepted by the Indians. In the end, when Chinese producers refused to accept netbacks in the low-$330s/mt to upper-$320s/mt FOB, no large quantities were available for sale to India.
Sources said another urea tender could be called as early as next week. Indian buyers were in a similar situation last year when buyers could not get the large quantities they wanted in the tenders.
MMTC and RCF called a total of five tenders between April and July last year, compared to only three in 2019. Like last year, if a new tender is called as soon as expected, it will be within the shipping period of the previous tender. Sources said generally the Indian buyers try to avoid this situation, at least until all the awarded tons have vessels nominated. In the past, some producers and traders have used the changing market to their advantage against the buyer.
The next tender will most likely show higher prices. Egyptian prices were moving up all week, from $355/mt to $370/mt FOB. At the same time, a deal in the Arab Gulf moved the market into the mid-$340s/mt FOB. Chinese producers were also stepping up their demand for higher prices, putting granular around $355/mt FOB and prills in the upper-$340s/mt FOB.
Along with the higher urea prices, freight rates continue to be higher than normal. Sources said this is a formula for dramatically higher prices in any quickly called tender.
The less-than-expected awards in RCF’s March tender and MMTC’s May tender leaves Indian farmers concerned that there will be a urea shortage in the country. To ease these concerns, according to local media, the central and state governments have instituted fill programs to ensure a steady supply of urea to local distribution centers.
Imports from tenders for this year are recorded at 1.35 million mt, nearly on par with the 1.38 million mt from the first two tenders of 2020. Sources noted that while India does need to import more urea, it does not seem to be as desperate for tons as it was last year.
China:
Producers see India’s continued need for urea and the upcoming domestic season as the basis for raising prices. Sources said producers are now looking at $370/mt FOB for granular and $350/mt FOB for prills.
Sources reported deals closing in the upper-$350s/mt FOB for granular and upper-$340s/mt FOB for prills as the week opened. By the end of the week, sources reported a sale of bagged prills by container to South Korea in the low-$360s/mt FOB. This price fits with reports of deals closed in the upper-$350s/mt FOB for bulk prills.
Offers for granular at $360/mt FOB have been rejected, with producers starting in the low-$360s/mt at the beginning of the week and closing out the week at $370/mt FOB. The new prices reflect a major step up. When the Indian tender closed, the estimated netback was in the upper-$330s/mt FOB for prilled urea and the low-$340s/mt FOB for granular.
Sources said the next Indian tender will include shipping in June. This is the same period when the central government wants to make sure that local distribution sites have plenty of urea for the beginning of the next application season. Producers can argue for higher price for exports by pointing to pending strong domestic demand.
Middle East:
Egyptian material rose from the low-$350s/mt to $370/mt FOB in just one week. MOPCO started the week out with a 25,000 mt deal at $355/mt FOB to two traders for June shipping. Within hours, additional deals of 60,000-70,000 mt divided among different producers began moving into the upper-$350s/mt FOB.
As the week progressed, MOPCO closed additional deals at $359/mt FOB for May-June shipments. At the end of the week, MOPCO and Alexfert each did deals to multiple traders at $370/mt FOB, with only a slight stop for a small cargo at $365/mt FOB. Sources said the rise in price is a result of tighter material for Western buyers, notably Latin America.
Supporting the move in Egypt, Algerian producers are also claiming sales in the $370s/mt FOB. The Algerian tons are reportedly for a Latin American buyer. According to Trade Data Monitor, Algeria is the third highest supplier of urea to Brazil. So far this year, Brazil has purchased 304,000 mt of urea, with only Russia and Qatar surpassing it. Sources said it would not be a stretch to assume the most recent Algerian sales will be heading to the South American country.
Arab Gulf producers are moving up their prices. Following the Indian tender, the netback was pegged at $330-$340/mt FOB. A sale out of Oman this week moved that price higher. Sources reported that Sohar International Urea and Chemical Industries sold a July cargo of granular at $345/mt FOB. Other producers in the area are expected to follow suit, especially with the possibility of another India tender coming up quickly.
As the week ended, sources reported a deal by Fertiglobe for 40,000 mt at $361/mt FOB for early July shipment. The jump in price far surpasses the SIUCI deal of $345/mt FOB. More price increases are expected as the industry prepares for the next Indian urea tender.
Belarus:
Grodno Azot will halt its Ammonia-4 and Urea-4 units in mid-June for repairs and maintenance, according to an Interfax report, citing the company’s in-house journal. The repairs and maintenance work will start on June 18 and will last 25 days.
The two units have suffered a number of unscheduled stoppages in recent weeks and months, according to the report. Most recently, the Ammonia-4 unit had a shutdown on April 19, which also led to the shutdown of the Urea-4 unit. Prior to that, production at both units was suspended on March 6, reportedly due to the incorrect operation of the air compressor, and also in early November.
Indonesia:
Urea prices remain steady at $325/mt FOB, based on a sale earlier in the month to Swiss Singapore. At the time, sources speculated the tons would be offered into India. However, Swiss is fulfilling its tender award from Bahrain.
Persero, the holding company for the urea producers, has moved at least 350,000 mt to local distributors to ensure that plenty of material is on hand once the EID (May 13) holiday ends and demand for inputs begins.
Turkey:
The tender called by Toros to close on May 7 was scrapped. The company wanted 15,000 mt of granular and 12,000 mt of prilled urea. Reportedly, the netbacks on the offers came to $350/mt FOB Egypt. At the time, that level was at the upper end of the price range.
Nepal:
Sources reported that KSCL scrapped it May 7 tender for 25,000 mt of prilled or granular urea. Reportedly, the prices were much higher than the Nepalese buyer expected.
Sources said offers were around $453/mt CIP. The estimated package on product sold to Nepal is put at $100/mt FOB, for a netback to China in the low-$350s/mt FOB. At the time, this price was higher than the existing market, but is now at the low end of pricing ideas.
Ethiopia:
Urea imports in Ethiopia for the first four months of the year were down almost 40 percent, to 187,000 mt from 309,000 mt in 2020, according to Trade Data Monitor. April 2021 imports were almost nil at 312 mt, against April 2020 imports of 90,000 mt.
Brazil:
Urea prices are strengthening at the ports and inland. Sources said the upward movement is a result of the MMTC/India tender and subsequent strength in pricing from North Africa and the Arab Gulf.
The landed price at Paranagua is pegged at $385-$400/mt CFR, representing a $10-$15/mt jump in pricing. In addition to the rising prices from exporting countries, sources said reports of better weather for corn inland are driving local buyers to step up their purchases to top off their supplies in preparation for the next application season.
Rondonopolis prices have tightened to $485-$500/mt FOB ex-warehouse. Likewise, prices at Sorriso are now at $500-$535/mt FOB ex-warehouse. The barter rate for 1 mt of urea remains at 65 bags of corn in Rondonopolis.
| Brazil Urea Prices | ||
| Terminal/City | US$/mt FOB ex-warehouse | |
| Week ending 05/07 | Week Ending 05/14 | |
| Rondonopolis | 450-535 | 485-500 |
| Sorriso | 500-510 | 500-535 |
Year-to-date imports of urea moved up 18 percent, to 2.4 million mt from last year’s 2 million mt total, according to Trade Data Monitor. April imports this year were down 1.5 percent, to 406,000 mt from 412,000 mt in April 2020. The main suppliers in April this year were Oman at 150,000 mt, Russia at 99,000 mt, and Qatar at 95,000 mt.
| Brazil Urea Imports | |||
| Partner Country | January-April | ||
| 2020 | 2021 | %Δ 2021/20 | |
| World | 2,016,109 | 2,376,443 | 17.87 |
| Qatar | 538,784 | 677,179 | 25.69 |
| Russia | 288,805 | 626,872 | 117.06 |
| Algeria | 429,031 | 304,385 | (29.05) |
| Oman | – | 265,141 | |
| Nigeria | 295,790 | 164,139 | (44.51) |
| * Source: Trade Data Monitor |