U.S. Gulf:
NOLA granular urea prices were reported to have topped out in the $680-$700/st FOB range this week, versus the week-ago $685-$710/st FOB.
Eastern Cornbelt:
Urea prices remained at a solid $740-$750/st FOB in the Eastern Cornbelt, unchanged from last report, with the low reported at Cincinnati, Ohio. Out of Michigan terminals, urea pricing had reportedly inched up to $800/st FOB at some locations.
Western Cornbelt:
Urea was quoted at $730-$750/st FOB range in the Western Cornbelt, with the low reported at St. Louis, Mo. The Catoosa/Inola, Okla., urea market was pegged in the $735-$745/st FOB range at midweek, with Enid, Okla., pricing reported at the $735-$740/st FOB level for prompt shipment.
Northern Plains:
The last urea offers were reported at $770-$775/st FOB St. Paul, Minn., up $15-$20/st from the prior week, with delivered tons pegged in the $810-$840/st range in North Dakota, depending on location.
Northeast:
The urea market was quoted at $750-$760/st FOB in the Northeast, up another $10-$20/st from the previous week and a full $100/st higher than late September levels, with the low end of the range confirmed at Fairless Hills, Pa., and the high at Baltimore, Md. In the Southeast, new pricing FOB Savannah, Ga., was reported at the $730/st level at midweek.
Eastern Canada:
Urea pricing in Eastern Canada had reportedly firmed to a wide C$960-$1,200/mt FOB range, depending on location, up from C$745-$835/mt FOB in late September.
China:
A virtual ban on urea exports is in place. Urea not cleared by customs on Oct. 15 was not allowed to be shipped. Sources said there have been as many interpretations of the rules as there are ports. The main issue seemed to be properly processing the paperwork necessary to export the product.
Rather than holding up tons at the ports, sources said factories were denied access to the rail transportation normally used to take the urea to ports. Local and regional authorities, who also had to sign off on the shipments, were reportedly responsible for blocking the tons leaving the factories.
The end result of the government’s action is to kill the once-active urea market. Sources said buyers have talked about what they think prices could be or should be, but the absence of any urea for offshore sales makes the discussion moot. Without any new spot deals to test market, the published price based on the RCF tender still stands in the low-$620s/mt FOB.
Reports circulated this week that at least two cargoes slated for India under the Oct. 1 RCF tender were not allowed to be shipped. Sources said Swiss Singapore and Medallion were the companies hoping to export the material. Swiss Singapore reportedly pulled out all the stops looking for replacement tons.
Sources said Medallion also went looking. With fewer resources than Swiss Singapore, however, Medallion may end up having to declare a force majeure on their award.Besides shipments to India being affected, sources said cargoes slated for South Korea and Australia were also canceled because of the new orders.
Exports for January through September 2021 were reported at 4 million mt, up 37 percent from the 2.9 million tons exported during the same period in 2020, according to Trade Data Monitor. The main customers for the nine months were India at 1.9 million mt, South Korea at 564,000 mt, and Mexico at 286,000 mt.
Third-quarter 2021 exports were up about 32 percent, to 1.6 million mt from 1.2 million mt shipped during the same period in 2020. September shipments were reported at 1.1 million mt against September 2020 exports of 828,000 mt.
Sources said because of the export ban taking effect on Oct. 15, the next report on offshore sales will show a drop in tonnage. November and December exports are expected to be dramatically lower as the full impact of the ban is felt.
India:
People are still saying a tender will be called “any day.” Sources said even if the tender is called, the Indian buyer will face dramatically higher prices and severely limited tonnage because of the Chinese urea export ban.
To try to ease the pressure to buy massive quantities in upcoming tenders, Indian buyers reportedly opened talks with OMIFCO in Oman for immediate shipments. The Indian-Omani joint venture once supplied India with 2.2 million mt at deeply discounted prices. When the contract expired last year and the two sides could not reach a new accord, OMIFCO allocated some of its tons to Ameropa, Swiss Singapore, and Yara to find new markets.
Purchases of the OMIFCO tons by buyers in Brazil, Thailand, and the U.S. picked up dramatically as a result. Some of the OMIFCO tons were also included in previous Indian tenders, but at much higher rates than the previous contract allowed.
By the end of the week, sources reported the two parties were still talking about OMIFCO supplying at least 1.1 million mt to India. Now, however, the tonnage all seems to be earmarked for 2022 shipment. Sources also said they did not know what pricing levels were being discussed between the two. An OMIFCO sale this week of 10,000 mt of granular urea at $760/mt FOB will make it more difficult for India to get any serious discounts.
Middle East:
Bids in an OMIFCO tender for 10,000 mt of granular urea showed a high price of $760/mt FOB. Reportedly, the Indian-Omani joint venture is ready to issue an award at that level.Sources said about four companies participated in the tender as the urea market tightened following the Chinese urea export ban.
At the beginning of the week, there were rumors OMIFCO had reached a deal to ship about 2 million mt to India through the first quarter of 2022. However, as the week progressed, the number of tons being discussed dropped, the “sure thing” became less sure, and the time frame shifted to deliveries only in early 2022.
Reportedly, OMIFCO cancelled the tons it was going to allot to Yara and Swiss Singapore for offshore sales. The tonnage is expected to be shipped to India early next year. The deal is being handled through the OMIFCO trading arm, OQ.
Sources said OMIFCO parceled out tons to Ameropa, Swiss Singapore, and Yara to move its tons as quickly as possible and give it time to set up its trading arm. Reportedly, OQ is not ready to handle the urea deals without outside assistance from traditional trading houses.
The rest of the Arab Gulf producers continue to turn out urea for their contracts, leaving precious little for any spot business. Sources said when India comes back in with a tender, it will have to depend on the limited supplies coming from the Arab Gulf.The paper market for the Arab Gulf is reported at $810/mt FOB for October and November.
Abu Qir in Egypt sold 7,000 mt of granular urea at $845/mt FOB. The buyer was most likely in Europe. Sources said European buyers have been willing to keep paying more for product from Egypt as demand in Europe picks up.The paper market for Egyptian urea is now pegged at $845/mt FOB for October and November.
Iranian urea exports for January-September 2021 were up 52 percent, according to Trade Data Monitor, to 2.9 million mt from 1.9 million mt exported during the same period in 2020. The main buyers this year were Turkey at 1 million mt, South Africa at 301,000 mt, and Brazil at 299,000 mt.
Third-quarter 2021 exports were reported at 1.2 million mt, up from 1 million during the same period in 2020.September 2021 exports of 405,000 mt were about the same as September 2020.
Pakistan:
Sources now speculate that TCP will not call a urea tender for 100,000 mt.The Pakistan government authorized the importing of the tonnage to fill in gaps from the domestic production. However, the limited tons that are available and the ever-rising prices may give the government and TCP second thoughts about jumping in at this time.
Indonesia:
The tightness of the global urea market is affecting the Indonesian market. Tons awarded last month in a tender to Liven are now being held back for November shipment, said traders. Additional tons sold to Amber have been cancelled.
South Korea:
Sources reported that at least two urea cargoes slated for shipment to South Korea from China were denied permission to be sent under the new rules limiting exports from China. No details as to why the tons were held back were forthcoming. One trader suggested the export paperwork was not completed in time to meet the Oct. 15 deadline.
Urea imports for January through September 2021 were reported at 703,000 mt, up from 647,000 mt during the same period last year, according to Trade Data Monitor. Third-quarter imports were up 66 percent, to 214,000 mt from 129,000 mt during the same period in 2020.September 2021 imports were up dramatically, to 84,000 mt from 23,000 mt in September 2020.
Brazil:
The lack of new urea deals at Paranagua has kept the price at $800-$830/mt CFR. However, this price may not hold, according to international traders. The lack of Chinese urea on the global market and India’s demands for product could push the price higher.
Brazil has imported 819,000 mt of urea from Oman so far this year. In the past six years, according to Trade Data Monitor, Brazil imported an average of 265,000 mt each year. Sources said if OMIFCO does cut a deal to move more tons into India, Brazil could face the loss of a major new source for its urea.
The price in Rondonopolis has shifted to $920/mt FOB ex-warehouse. The lack of a range indicates how the local market has tightened. The price in Sorriso has also moved up to $1,000/mt FOB ex-warehouse.
The price of crops has not kept pace with the rising cost of urea. The Sorriso barter rate has moved to 111 bags of corn for 1 mt of urea.