U.S. Gulf:
NOLA granular urea barges continued to surge to meet demand in the Delta. Loaded barges were called as high as $410-$435/st FOB, with the higher numbers as the week advanced. June barges started the week at $386/st FOB.
Eastern Cornbelt:
Prices were firming for urea, fueled by tightening supply. Sources quoted the low end of the regional urea market at $440-$445/st FOB spot Illinois and Ohio River terminals as the week began, but prices firmed from there. The Cincinnati, Ohio, market had reportedly strengthened to $450-$465/st FOB by midweek, with reports of new offers climbing to $475/st FOB Ottawa, Ill., by June 3.
Western Cornbelt:
The urea market was quoted in a broad range at $425-$475/st FOB during the week, up from the previous week’s $415-$435/st FOB, with the high end of the range reported at Caruthersville, Mo., late in the week. Pricing at St. Louis, Mo., began the week at the $425/st FOB level before firming to $435-$445/st FOB, while terminal values in Iowa were pegged solidly in the $440-$450/st FOB range for June tons.
The St. Paul, Minn., urea market was pegged at $440-$460/st FOB during the week, up from last week’s $425-$440/st FOB range.
Southern Plains:
Urea prices moved up quickly in the Southern Plains during the week. Sources reported the Catoosa/Inola, Okla., market at $445-$460/st FOB at midweek, but some suppliers had reportedly firmed to $475/st FOB by June 3. The Houston, Texas, market was pegged at a solid $445/st FOB, with reports that supply has improved since some spot outages during the third week of May.
South Central:
Urea prices were firming rapidly in the South Central region in early June, with levels up some $30-$40/st since mid-May.
Sources reported the Memphis market firmly at the $445-$450/st FOB level at midweek, while pricing at Little Rock, Ark., and Shreveport, La., moved up to as high as $475/st FOB by June 3. The Convent, La., market firmed as well, to $450/st FOB as the week progressed.
Southeast:
Urea prices in the Southeast were moving up in early June. Sources quoted the Wilmington, N.C., market firmly at the $445/st FOB level at midweek, up $10/st from last report, with no tons available at Savannah, Ga.
Urea pricing at Fairless Hills, Pa., also strengthened to $445/st FOB as the week began, but firmed again on June 2 to $455/st FOB. A third increase was announced on June 3, with the Fairless price moving to $465/st FOB for prompt June tons.
India:
RCF issued letters of intent to buy only 565,000 mt from its recent urea tender. Sources said a combination of high prices and limited tonnage led to the lackluster purchase. The final price agreed to by RCF with the traders is $418/mt CFR for the West Coast and $408.88/mt CFR for the East Coast.
Going into the tender, sources said RCF would need to buy at least 1.5 million mt to ensure sufficient tons in the pipeline for the current application season and to make up for smaller purchases in the first two tenders this year. Sources said the small take almost certainly guarantees another tender will be called in a couple of weeks.
The awards are heavily weighted in favor of West Coast deliveries. At the same time, however, only two of five cargoes originating in China will go to the closer East Coast.
| Company | Quantity | Source | Discharge |
| Koch | 60,000 | China | East Coast |
| 60,000 | East Coast | ||
| Ameropa | 51,500 | Oman | West Coast |
| Swiss Singapore | 47,000 | China-Indonesia-Oman | West Coast |
| 47,000 | West Coast | ||
| 47,000 | West Coast | ||
| Samsung | 45,000 | China-UAE | West Coast |
| 45,000 | West Coast | ||
| Keytrade | 45,000 | China | West Coast |
| Dreymoor | 52,500 | Black Sea | West Coast |
| Amber | 65,000 | China | West Coast |
There are reports that only about half of the tons that are slated to come from China have been secured. The remaining tonnage is currently being negotiated with producers, who are looking for a substantial increase in their price.
Traders noted the tender results so far this year are beginning to resemble those of last year, but prices this year are significantly higher. The early May 2020 tender closed at $226-$232/mt CFR. The 2021 early May tender closed at $357-$359/mt CFR. This is in addition to the most recent tender, which has prices not seen for about 13 years.
China:
A strong domestic market is providing support to demands from producers for export prices nearing $400/mt FOB.
Sources said the price of prills and granular for export are pegged at $395/mt FOB, based on prices to local distributors for the domestic market, against prices in the upper-$370s/mt FOB based on the RCF tender numbers.
Besides demand from the domestic market, sources said about half of the tons awarded in the RCF tender slated to come from China were not secured by the time the letters of intent were issued. Now, traders are negotiating with producers, who want to see an increase of about $20/mt in their netback.
There are reports that some producers are holding out for $400/mt FOB, but no one could point to any deals done at that level. One trader noted that it will only be a matter of time, however, adding that the deal will most likely occur in the domestic market rather than for an offshore sale.
Domestic sale prices of granular puts the export price at $390-$395/mt FOB and prills at $385-$390/mt FOB.
Indonesia:
The most recent sale of 40,000 mt of granular urea to Koch at $385/mt FOB will most likely go to Australia. The shipment time of July and the high price makes the cargo unlikely for a sale into India from the most recent tender. Prills settled at $376/mt FOB when Golden Barley took 10,000 mt in the most recent offering.
A new offering tender is expected soon, with a reserve price closer to $400/mt FOB.
Middle East:
The Arab Gulf remains tight on urea. The price from the RCF tender showed a netback in the upper-$380s/mt FOB. Now, sources said prices are in the $390s/mt FOB.
By midweek, Bahrain reportedly sold a cargo at $395/mt FOB for July shipment. Producers are now also demanding $400-$405/mt FOB for any sales of August tons. Reportedly, there are no tons available for June, and July is almost sold out, leading to the producers thinking they can keep pushing up on prices.
Egyptian producers have been able to move their prices up in what sources are calling a sustained and steady manner. Initially, August sales were reported at $405-$412/mt FOB. By the end of the week, however, those same prices were being used to settle July shipments. Prills were being sold at $400/mt FOB and granular deals at $412/mt FOB for July loadings.
Sources said demand from Europe and Latin America appears to be the main driving forces in the Egyptian prices. To back up that view, sources also reported that Algeria sold a cargo, possibly for Europe, at $408/mt FOB for early August loading.
A declaration by the Egyptian government to limit exports for June through August could affect product availability and strengthen prices. The announcement by the Egyptian Minister of Trade and Industry extended an existing policy designed to ensure that the domestic market is covered before any exports are booked. One trader said the move could tighten supply for a urea-hungry global market.
Sources said the urea producers will be required to supply at least 323,000 mt each month through the summer to domestic outlets. The estimated output of the operating plants is about 535,000 mt/month, which leaves around 212,000 mt/month for exports.
A tax of $38-$40/mt will be imposed on any exported material if a company does not supply its quota to the domestic market. It was unclear from the government statement how these numbers will be divided among the various producers. Sources in Egypt and Asia were also unsure how the policy will be enforced.
Black Sea:
Urea remains tight out of Yuzhnyy. One cargo from the Black Sea is slated to cover an award in the RCF India tender. Sources said at current freight rates, the netback remains in the upper-$360s/mt FOB.
Turkey:
January-April 2021 urea imports were down about 19 percent, to 1.05 million mt from 1.3 million mt during the same period last year. The top three suppliers so far this year are Oman at 452,000 mt, Egypt at 314,000 mt, and Iran at 114,000 mt.
April imports this year were also down, to 290,000 mt from 319,000 mt in April 2020. While April imports were up from Oman and Iran, the monthly total from Egypt slipped to 50,000 mt, well below its April 2020 total of 217,000 mt.
Brazil:
Urea prices edged up at Paranagua to $420-$440/mt CFR, even as steady shipments of imported product arrive. Sources in Europe and Asia are keeping an eye on the Brazilian market as an indicator of further movement in the global market. Sources noted that the paper market for Paranagua has now moved to $465/mt CFR for July.
Rondonopolis softened to $505-$560/mt FOB ex-warehouse. The roughly $20/mt drop from last week was largely attributed to the market taking a pause as buyers and sellers reassess their situation following the India urea tender and shifting grain prices.