U.S. Gulf:
The NOLA granular urea range slipped to $422-$435/st FOB from the week-ago $430-$438/st FOB range.
Eastern Cornbelt:
Urea pricing remained in the $475-$485/st FOB range in the Eastern Cornbelt, with little new business reported to test the market.
Western Cornbelt:
The urea market was steady at $460-$480/st FOB in the Western Cornbelt, depending on location, with the St. Louis market pegged in the $470-$475/st FOB range.
California:
Urea pricing was steady at $590-$600/st FOB port terminals in California, with reports of bagged urea at the $660/st level FOB Stockton, Calif.
Pacific Northwest:
Urea continued to be posted at $525/st FOB Rivergate, Ore., and $530/st FOB Aurora, Ore., although sources said they anticipate slightly lower offers for August-September. Rail-DEL pricing was quoted at $525-$528/st in the Pacific Northwest, up slightly from last report.
Western Canada:
Urea prices in Western Canada firmed slightly in mid-July, to C$665-$675/mt DEL, depending on location and time of shipment, up from the last reported range of C$650-$675/mt DEL.
India:
The RCF tender closed on July 22 with 12 companies offering 1.651 million mt. East Coast offers were recorded at 711,500 mt and West Coast offers at 894,500 mt. An additional 45,000 mt was offered directly by producer PIC in Kuwait.
Prices were released on July 23. The lowest offer for the West Coast came from Gavilon at $516.95/mt CFR. Amber came in with the lowest East Coast price at $509.50/mt CFR.
The emphasis on the West Coast indicated to sources that there are limited hopes for large Chinese participation in the tender. Sources said the dampening of expectations of more Chinese product came after a growing chorus of government statements calling on the producers to ensure low-cost and plentiful supplies of urea for the domestic Chinese market before engaging in exports.
| Offering Company | East Coast | West Coast | Quantity Total | |||||
| Quantity (mt) | US$/mt CFR | Quantity (mt) | USD$/mt CFR | |||||
| Amber | 65,000 | 509.50 | 65,000 | 518.50 | 130,000 | |||
| Ameropa | 156,500 | 531.00 | 204,500 | 541.00 | 361,000 | |||
| Continental | 50,000 | 547.00 | 50,000 | 545.00 | 100,000 | |||
| Dreymoor | 50,000 | 540.00 | 52,000 | 529.00 | 102,000 | |||
| Gavilon | 95,000 | 524.50 | 47,000 | 516.95 | 142,000 | |||
| Keytrade | 45,000 | 539.00 | 45,000 | |||||
| Koch | 50,000 | 550.00 | 46,000 | 550.00 | 96,000 | |||
| Midgulf | 60,000 | 533.00 | 60,000 | 543.00 | 120,000 | |||
| Samsung | 90,000 | 518.00 | 190,000 | 526.90 | 280,000 | |||
| Swiss Singapore | 45,000 | 515.00 | 135,000 | 520.40 | 180,000 | |||
| Transglobe | 50,000 | 545.00 | 50,000 | |||||
| Direct Offer from Producers | ||||||||
| Offering Company | Quantity (mt) | US$/mt FOB | ||||||
| PIC | 45,000 | 498.00 | ||||||
Going into the tender, sources said they expected to see $520-$540/mt CFR, which is where the bulk of the offers were. The prices from Amber and Gavilon will now be the basis for counterbids to the other traders.
The total tonnage offered in this tender is the second lowest amount so far this year, besting only the 1.48 million mt offered in May, also to RCF. If the awards match the average take from the previous tenders, RCF will only buy 600,000-650,000 mt, a far cry from what is needed.
Sources said the market has accepted that another tender will most likely be called within three weeks. So far this year, because of urea prices and limited availability, none of the Indian tenders have resulted in the amount of urea the government deems necessary for the season.
Going into this tender, sources said the country was about 2 million mt behind in securing anticipated demand.
Sources said the market has accepted that another tender will most likely be called within three weeks.
So far this year, because of urea prices and limited availability, none of the Indian tenders have resulted in the amount of urea the government deems necessary for the season.
China:
The low price for the East Coast in the RCF/India tender shows a netback to China of $475-$480/mt FOB. Going into the tender, producers had been arguing for $480-$490/mt FOB.
Sources said as the deadline for the tender approached, at least four vessels were being lined up to take Chinese product to India. However, there are now reports that these arrangements have become more fluid.
The Assets Supervision and Administration Commission of the Chinese government called a meeting of all fertilizer producers on July 22. Sources said the main topic was to coordinate efforts to ensure a low-cost and steady supply of fertilizers for the Chinese market.
One trader speculated that the meeting could be a prelude to the imposition of export duties on nitrogen and phosphate fertilizers if the full cooperation of producers is not achieved.
The possibility that some tons might get pulled back from the portside warehouses or that an export tax might be imposed caused some international traders to be hesitant about committing to loading a vessel. Sources estimated there are 250,000-300,000 mt of urea stored in the warehouses for export. Most of those tons, said traders, were expected to be used in the RCF tender.
Exports in the first half of the year were reported at 2.4 million mt, representing a 41 percent jump from the same period last year, according to Trade Data Monitor. The main buyers so far this year have been India at 915,000 mt, South Korea at 376,000 mt, and Mexico at 208,000 mt.
June exports this year were up 117 percent, to 482,000 mt from 223,000 mt in June 2020. Again, India led the way at 233,000 mt, compared with 20,000 mt in June 2020. Second-quarter exports were up 74 percent, to 1.6 million mt from 934,000 mt during the same period last year.
Middle East:
Sources said the celebration of the Hajj and Eid al-Adha limited the amount of regular business being conducted in the area. No new spot deals were settled because all eyes in the market were turned to India.
The estimated netback to the Arab Gulf from the Indian West Coast, based on the Gavilon offer in the RCF tender, is in the upper-$480s/mt FOB, which is about $10/mt lower than the PIC offer in the tender.
Sources estimated that four or five cargoes from the Arab Gulf will be awarded in the RCF tender for a total of about 225,000 mt. At the same time, traders said they are keeping a close eye on demand in Brazil. If urea demand begins to wane, a cargo or two from the Arab Gulf originally booked for Brazil could be diverted to India.
No new deals were concluded in Egypt to move the price off the $465/mt FOB level for prills and $475/mt FOB for granular. Producers are arguing that the new granular price should be $480/mt FOB. The paper market leans toward the producers’ position. Sources said the market is quoting August and September prices at $477/mt FOB.
Iranian urea exports for the first half of the year nearly doubled, to 1.67 million mt from 878,000 mt during the same period last year, according to Trade Data Monitor. The major buyers so far this year were Turkey at 532,000 mt, Brazil at 189,000 mt, and South Africa at 118,000 mt.
June exports were up 81 percent, to 416,000 mt from 230,000 mt in June 2020. Turkey was the main buyer this year at 145,000 mt, followed by Tanzania at 69,000 mt and Brazil at 66,000 mt. Second-quarter exports were about even, at 878,000 mt compared with 886,000 mt in last year’s second quarter.
Ethiopia:
A tender for 150,000 mt of urea was called by the Ethiopian Agricultural Business Corp. (EABC) to close on July 26. Reportedly, the tender was called to make up for at least three cargoes from a September 2020 tender that were not delivered.
Sources said there are often problems in shipping material under the EABC tenders because of delays in issuing letters of credit or in clarifying logistics issues. One trader said the paperwork delayed the tons from the September tender so long that the price of the product exceeded the awarded price, and both sides ended up walking away from the deal.
Another tender is expected from EABC in late August.
Thailand:
Local media are reporting a shortage of urea in Thailand. Sources said government officials have ordered new purchases, but have not authorized higher prices.
One trader said the government wants the urea imported at levels that match the current domestic price, which is below the global market level. Sources said they expect to hear complaints from Thailand about pricing, but no tenders.
South Korea:
Urea imports in South Korea for the first half of this year were down 5.7 percent, to 489,000 mt from 518,000 mt last year, according to Trade Data Monitor. The main source of urea this year was China at 389,000 mt.
June imports this year were up marginally, to 58,000 mt from 55,000 mt in June 2020. China supplied 57,000 mt of the June 2021 urea. Second-quarter imports were also down marginally, to 226,000 mt from 230,000 mt last year. China once again dominated the second-quarter sales at 224,000 mt.
Brazil:
While Brazilian buyers are looking to the RCF/India tender for guidance on pricing, international traders are looking at Brazilian urea demand for clues as to product availability.
Sources said cargoes currently slated for shipment to Brazil in the near future could be diverted to cover an award from RCF if the price begins to soften in the South American country. Prices have come off slightly at Paranagua. Sources reported deals at $490-$520/mt CFR, down from last week’s levels in the $520s/mt CFR.
Even as the landed price softens, sources inland reported higher prices. Dealers in Rondonopolis said prices are now at $600-$665/mt FOB ex-warehouse, a jump of about $50/mt.
Inland prices could start going up and supplies could be limited. A union of independent truck drivers is considering a strike beginning on July 25. The drivers are saying they need higher prices for their services to cover a recent spike in fuel costs, while contractors have been pushing back against higher fees.