U.S. Gulf:
NOLA granular urea barge prices continued to climb, with most sources quoting prices in the $405-$450/st FOB range, up from the week-ago $386-$435/st FOB. The higher end of the range represented loaded barges that were ready to move. There was a report late in the week of a $455/st deal for a barge that was already moving upriver.
Eastern Cornbelt:
Urea prices surged to $465-$485/st FOB in the Eastern Cornbelt, up from the previous week’s $440-$475/st FOB range. The Cincinnati, Ohio, market was pegged firmly in the $465-$475/st FOB range at midweek amid reports of very tight supply.
Western Cornbelt:
Urea prices were steadily firming in the region, driven by tight supply. While the low end of the range was reported earlier in the week at $430-$435/st FOB Port Neal, Iowa, sources said the facility stopped loading and pulled offers on June 10 due to low inventory.
As the week progressed, urea prices surged to $467/st FOB Camanche, Iowa, $475/st FOB St. Paul, Minn., $480/st FOB St. Louis, Mo., $475-$485/st FOB Memphis, Tenn., and up to $495/st FOB Catoosa/Inola, Okla. Delivered tons in the Northern Plains strengthened to $505-$515/st, up from $475-$480/st earlier in the week.
California:
Urea prices were up at Stockton, Calif., to $545/st FOB from the previous $520/st level. There were also reports of bagged urea available at the $580/st level FOB Stockton in early June. Sources reported no current rail-DEL quotes, with the last business booked at the $495/st level in mid-May. “No one wants to quote rail now,” said one contact.
Pacific Northwest:
Effective June 9, urea prices in the Pacific Northwest firmed to $525/st FOB Rivergate, Ore., and $530/st FOB Aurora, Ore., up $20/st from the last official postings and a full $50/st higher than reference levels in mid-May. The only delivered offer in the region was reported at the $520/st level in Montana for limited tons.
Western Canada:
Limited June volumes of urea fill were reportedly being offered in Western Canada at C$575/mt FOB Medicine Hat, Alta., earlier in the month, with delivered offers in Saskatchewan reported at C$610/mt for June and C$615/mt for July. Sources said the Medicine Hat program was already over, however, with reports of post-fill pricing now in the C$645-$655/mt FOB or DEL range.
India:
Sources said the paperwork is just about all ready to call another tender. The only question seemingly not yet settled is if the shipping deadline will be July 25 or July 31. If it is the former, sources said the tender could be called as early as June 11. Otherwise, the call could come as early as June 14, or by the end of next week.
Sources said one issue facing the Department of Fertilizer (DOF) before allowing MMTC to call the next tender is ensuring that tons booked under the most recent two tenders are not affected by a new one.
The MMTC tender that closed on May 4 has a shipping deadline of June 21. The RCF tender of May 27 has a deadline of June 30. Sources said the DOF might want to wait until all the tons for these two tenders have vessels nominated and shipping dates set.
In the past, when new tenders overlapped with older deals, depending on the price trend in the tenders, either the buyer or producers might back out of the earlier arrangement to take advantage of the new pricing. In the current situation, the Indian government wants to ensure it gets the tons secured in the previous two tenders before calling a new one, because people are already talking about the price going up at least $30/mt.
When the week opened, prices in China and the Arab Gulf would have justified a price into India of about $430/mt CFR. As the week progressed, however, the potential price moved to $465-$480/mt CFR.
Industry sources said there is no doubt India needs the urea. However, at the current rate, few are expecting MMTC will be authorized to buy anywhere close to the 1.2 million mt needed in this round, even if the tonnage was actually available.
The awarded tons from the previous two tenders, plus the 2.08 million mt produced by domestic companies, is not enough to cover the 2.7 million mt the government estimates is needed for June demand. The relatively low purchases in the previous two tenders are putting India further behind in its urea supplies, causing the need for more tenders to be called in quick succession.
China:
The price of prilled and granular urea moved up throughout the week. When the week opened, sources put the prilled market in the mid-$430s/mt FOB and granular at about $440/mt FOB. Even these prices reflected a significant jump from the previous week, when prices were all sub-$400/mt FOB.
By the end of the week, however, sources were reporting deals at $450/mt FOB for granular and $440-$445/mt FOB for prills. Sources said even these prices are low compared to what the price could be based on the domestic market. Reportedly, the domestic price could support an export price closer to $465/mt FOB for either version.
Sources said low inventories in some sectors of the country, along with stepped up demand in some other areas, are providing a solid floor on prices. The strong domestic demand is also keeping urea away from the export warehouses, leaving fewer tons available for offshore sales.
One observer noted that the awards of Chinese product in the last Indian tender were covered mostly by tons already in portside warehouses. Very few tons have been sent to refill those warehouses because of strong local demand and pressure from the national government to ensure a plentiful supply of product for the domestic market.
Sources reported rumors that the Chinese central government may take steps to further protect a plentiful supply of urea for farmers. Reportedly, an edict is being prepared to limit the amount of urea available for export. The document could be released within the next couple of weeks.
Middle East:
The paper market jumped $450/mt in just one week, to $465/mt FOB for July product. At the same time, actual offers and bids also took a leap up.Sources reported the latest offers were at $450-$455/mt FOB with bids at $440-$445/mt FOB. Reportedly, Fertiglobe settled on a cargo for $445/mt FOB, but some sources questioned if the deal was consummated.
Even without the confirmation of the Fertiglobe deal, traders said they were comfortable calling the market in the low-$440s/mt FOB, with room to spare for more growth. They all pointed to continued strong demand for urea, especially from India, and the limited tonnage available from the Arab Gulf. Shutdowns in Saudi Arabia have tightened supplies that make higher prices inevitable, said one source.
Some producers are reportedly opening talks with traders at $520/mt FOB. However, while that price might be attractive to the producers, sources said there are no buyers for urea at that level.
Egyptian producers seem to be taking a break from offering tons for export until they figure out what the government decision to support the domestic market means for them.
Last week, the government said exports needed to be limited to ensure at least 323,000 mt each month through August for the domestic market. The details of how each producer will be impacted by this statement has left the producers hesitant to offer anything for export.
Even with that hesitancy, sources reported that MOPCO and Fertiglobe closed deals at $412/mt FOB for August shipments. Shortly after those deals hit the rumor mill, sources said Abu Qir closed a deal of 30,000 mt for late August shipment at $435/mt FOB.
Sources said the higher prices out of Egypt seem to be backed by positive grain prices in Europe. Also supporting the move upward, sources reported a late-week sale from Algeria to Europe at $465/mt FOB.
Nigeria:
The Dangote urea/ammonia plant is reportedly now running in its first phase to provide urea to the domestic market for July and August deliveries.
Brazil:
The rising prices from producers around the world are being reflected in the landed Brazilian prices. Sources said Paranagua urea is now pegged at $460-$475/mt CFR.
The increase in pricing comes even as supplies seem to be steady and plentiful. The issue, said traders, is the uncertainty in the global urea market. As long as prices keep going up in China and the Arab Gulf, suppliers are not going to back off on increasing their prices.
The inland price at Rondonopolis is also up. Sources reported $520-$598/mt FOB ex-warehouse, with most of the business at the upper end of the range.The market has become so unstable lately, sources said suppliers have dropped their weekly price lists and now seem to prefer to deal with prices on a day-by-day basis.
Even as prices fluctuate, sources said there is enough strength in the grain market during this normally quiet period that barter rates have not really moved off levels of the past couple of weeks.
January-May imports of urea this year were up almost 22 percent, according to Trade Data Monitor, to 2.9 million mt from 2.4 million mt during the same period last year.
The main suppliers of urea so far this year have been Qatar at 783,000 mt, Russia at 682,000 mt, and Oman at 419,000 mt. While Qatar and Russia have been traditional suppliers to Brazil, this year marks a major entrance for Oman. During the same five-month period last year, Brazil did not receive any tons from Oman. Sources speculated the 2021 material is from the OMIFCO plant, which has only recently begun shipping its product to the global market.
May imports this year were also up, to 488,000 mt from 339,000 mt in May 2020.