U.S. Gulf:
NOLA granular urea prices continued to skyrocket this week, with October trades quoted in the $665-$700/st FOB range, up from the week-ago $599-$650/st FOB. November trades were reported at $655-$720/st.
While there were reports of $690-$710/st FOB for December-January, other trades were reported to be stair-stepping up at $700/st FOB January, $720/st FOB February, and $730/st FOB March.
U.S. Imports:
Urea imports for July-August were up 120.7 percent, to 722,177 st from 327,260 st during the same period last year. August urea imports firmed 75.3 percent, to 253,651 st from the year-ago 144,698 st.
Imports from Qatar totaled 163,869 st for the fertilizer year-to-date, up 56.9 percent from last year’s 104,443 st, followed by 144,136 st from Russia, a 93.4 percent improvement on last year’s 74,515 st total. Saudi Arabia’s 92,815 st topped Canada’s 90,362 st for third place.
U.S. Exports:
Urea exports softened 87.5 percent in July-August, to 31,774 st from the year-ago 255,049 st. Urea exports totaled 22,668 st for August, down 81.6 percent from 123,234 st in August 2020.
Eastern Cornbelt:
Urea prices jumped to $720-$750/st FOB in the Eastern Cornbelt, depending on location, up $80-$90/st from the previous week. The market FOB Cincinnati, Ohio, was quoted at $720-$730/st FOB earlier in the week, with reports of new offers there climbing to $740/st FOB or higher as the week progressed.
Western Cornbelt:
Urea prices were “changing by the hour” during the week, according to one industry contact. Prices ranged from $720-$750/st FOB in the Western Cornbelt, up a full $80-$100/st from the prior week, with the low reported at St. Louis, Mo., and the high at Port Neal, Iowa. The market FOB St. Paul, Minn., firmed to $750-$770/st FOB, up from $640-$690/st FOB the previous week.
Southern Plains:
Urea prices in the Southern Plains moved up dramatically during the week. Sources quoted the Houston, Texas, market at $715/st FOB at midweek, up from the $660/st level late the previous week. New urea offers FOB Catoosa/Inola, Okla., reportedly climbed to $745-$760/st FOB as the week progressed.
South Central:
The urea market jumped to $700-$745/st FOB terminals in the South Central region, with the lower end confirmed at Memphis, Tenn., early in the week, and the high out of Arkansas terminals at midweek. Sources speculated that some locations could firm to $775/st FOB by the end of the week.
Southeast:
Urea pricing FOB Wilmington, N.C., jumped from $650/st early in the week up to $700/st FOB by midweek, with the market FOB Savannah, Ga., pegged at a solid $680/st FOB at midweek. In the Northeast, the Fairless Hills, Pa., urea price was reported early in the week at $730/st FOB for October-November.
India:
The awards issued in the RCF tender that closed on Oct. 1 will leave India still about 2.2 million mt behind imports of 2020 during the same period. Awards were issued to nine companies for a total of 732,000 mt to be delivered to only East Coast ports.
Within hours of the closing of the tender, RCF released the offered prices. The company quickly counterbid to companies offering tons to the East Coast, ignoring the $714/mt CFR low price for the West Coast submitted by Dreymoor. The counterbid to the Arab Gulf producers was reported at $618.50/mt FOB against the $690-$710/mt FOB offers submitted.
The Arab producers quickly rejected the counterbid. By close of business on Oct. Oct. 4, RCF had acceptances from the nine trading houses.
| All East Coast at $665.50/mt CFR | |
| Awarded Company | Quantity (mt) |
| Ameropa | 160,000 |
| Midgulf | 100,000 |
| Samsung | 95,000 |
| Swiss Singapore | 90,000 |
| Amber | 65,000 |
| Koch | 65,000 |
| Dreymoor | 62,000 |
| Transglobe | 50,000 |
| Medallion | 45,000 |
| Total | 732,000 |
At this point last year, India had secured 6.8 million mt in tender purchases. So far this year, tenders have only yielded 4.6 million mt. The shortage in product is being felt in areas around the country, according to local media reports. International traders have noted that with the exception of the July 22 tender that pulled in 1.2 million mt, tender purchases have been behind anticipated needs.
International traders generally agree that another tender will have to be called soon. They also agree that prices will be even higher.
The West Coast low price of $714/mt CFR translated to $690-$695/mt FOB to the Arab Gulf. Since the closing of the tender, new sales to Brazil and the U.S. indicate prices from the Arab Gulf are now at $700-$710/mt FOB.
China is expected to place limitations on exports of urea beginning Nov. 1, if not banning exports outright. Any reduction in the global market of available Chinese tons will move the price up from the other producers. Sources are now speculating the Arab Gulf could hit $800/mt FOB. Egyptian prices are already done at $820/mt FOB for December shipment, with rumors circulating of $830-$850/mt FOB for the next round.
China:
The price for prilled and granular urea in China is now pegged at $620-$625/mt FOB, based on the awarded price in the RCF/India tender. The Indian buyer issued awards for 732,000 mt. However, sources could only identify 500,000 mt available between now and the shipping deadline of Nov. 11 in China.
Actually, sources said 500,000 mt was available at the ports now. Additional tons could be sent from producers to the ports in time to meet the shipping deadline if they are allowed to do so.
Rumors were circulating this week that China was going to announce a ban on urea exports effective Nov. 1. All indications were that the 500,000 mt already committed to offshore buyers would not be affected. However, any new tons not yet at the ports by Nov. 1 might be covered by the rumored edict.
Sources reminded each other that nothing is set until the announcement is made, however. Some argued that the Chinese government may issue restrictions rather than an outright ban on exports. Under the more lenient plan, tons purchased from a producer but still enroute to the ports may be exempted.
Production of urea has been scaled back because of a lack of available energy to run the plants, and in response to citations for environmental violations.
A shortage of coal to run power plants and factories has caused widespread rolling blackouts and brownouts throughout the country. At the same time, the national government has ordered some power plants and factories to close because of excessive air pollution violations.
The government is especially concerned about air quality, because it will be hosting the Winter Olympics in February 2022. In the past, the effort to heat homes and keep factories running has led to some of the most polluted skies in Chinese cities during the winter. The government is said to be concerned that the skies should look pristine for the Olympics.
Middle East:
The estimated netback from the RCF tender’s lowest offer for the West Coast was $690-$695/mt FOB. This price would have reflected a $70/mt jump in pricing from the last spot deal from the area.
The only counterbid RCF made that affected the Arab Gulf came against the $690-$710/mt FOB offers from two producers. The bid of $618.50/mt FOB was quickly rejected.
By the middle of the week, the price offered in the tender began to look low. Sources said deals into Brazil and the U.S. moved the netback to the Arab Gulf to $700-$710/mt FOB. Industry watchers said they expect to see higher prices going forward. They point to the ever-rising price in Egypt, which hit $820/mt FOB for December loading, along with rumors that $830/mt FOB will be done by the end of the week.
At the same time, sources are sure India will have to come out with another tender soon. Unfortunately for Indian buyers, by Nov. 1 Chinese exports of urea are expected to be either restricted or banned well through the first half of 2022.
Throughout the week, prices moved up for December loadings. By the end of the week, sources reported a confirmed deal of $820/mt FOB, with rumors of $830/mt FOB on the table as Green Markets goes to press.
The price of November material is pegged at $735-$752/mt FOB. The rapid rise between November and December came as rumors spread concerning China’s pending restrictions on urea exports. At the same time, demand in Europe stepped up as more factories there and in Ukraine closed due to the high cost of natural gas.
Indonesia:
Sources reported no change in pricing since the selling tender last month at $502/mt FOB. Liven took at least 45,000 mt in that deal. There are reports that Liven and possibly a few other traders picked up some more cargoes at the tender price.
A new auction is expected later this month or early November for December shipments. Sources said they expect to see a healthy increase in pricing from the producers.
Black Sea:
Sources said urea from Yuzhnyy is nonexistent because of the plant closures due to high natural gas prices.
Ethiopia:
The annual EABC granular urea tender will close on Oct. 25. Sources said the tender will call for 804,000 mt to be delivered over five to six months. Delivery is usually in three cargoes of 50,000 mt each month until the tender is fulfilled.
From December 2020 through July 2021, Ethiopia imported 481,000 mt, according to Trade Data Monitor.
Brazil:
Sources put the urea price at Paranagua at $745-$780/mt CFR for completed business. However, sources were reporting new offers at $800/mt CFR as the week closed, with full confidence that a buyer will agree.
Rondonopolis showed a massive leap in pricing. Sources put the market at $850-$952/mt FOB e-warehouse, up dramatically from last week’s price of $660/mt FOB.
The strengthening market inland and at the ports was attributed to the rumors of China limiting or banning urea exports soon, higher natural gas prices cutting off production in Ukraine and Western Europe, and runaway prices in Egypt and India.
Inland distributors are now managing sales on a case-by-case basis, rather than working off pricing sheets. At the same time, buyers are said to be getting nervous that product they want may not be available in the near future.
Imports for January-September 2021 were reported at 5.4 million mt by Trade Data Monitor, representing a 10 percent increase from the 4.9 million mt imported during the same period last year.
Third-quarter imports were pegged at 1.9 million mt this year, down 8.4 percent from the 2.1 million mt bought in 2020. September 2021 imports of 706,000 mt were down 21.4 percent from the 898,000 mt imported in September 2020.