U.S. Gulf:
Most sources saw a quiet market over the holidays. There was speculation that the next trades would see softer prices than those last done in mid-December.
Cornbelt:
Urea prices were mostly unchanged in the Cornbelt in late December, with the last reported offers falling in the $810-$850/st FOB range, depending on location.
India:
Indian Potash Ltd. closed its Dec. 23 tender with 13 companies offering 2.75 million mt. The average offered price was about $940/mt CFR, which was approximately $50/mt lower than the average of the prices in the previous tender. In the end, IPL issued letters of intent Dec. 31 to buy about 1.2 million mt from five suppliers.
Swiss Singapore came in with the lowest offers for both the East and West Coasts, at $899.50/mt CFR and $894/mt CFR, respectively. Only two offers were higher than the winning prices from the Nov. 11 IPL tender. Even the lone offer from a producer at $925/mt FOB was lower than the offers from producers in the November tender.
| Offering Company | Quantity (mt) | US$/mt | Discharge Port | |
| CFR | FOB | |||
| Amber | 31,500 | 979.00 | ECI | |
| 31,500 | 999.00 | WCI | ||
| Ameropa | 288,250 | 909.50 | ECI | |
| 199,100 | 929.00 | WCI | ||
| Continental | 230,000 | 988.50 | ECI | |
| 953.50 | WCI | |||
| Dreymoor | 45,000 | 939.00 | ECI | |
| 152,000 | 919.99 | WCI | ||
| Fertiglobe | 45,000 | 925.00 | ||
| 155,000 | 955.00 | ECI | ||
| 950.00 | WCI | |||
| Eurochem | 50,000 | 942.27 | WCI | |
| Keytrade | 145,000 | 937.96 | WCI | |
| Koch | 50,000 | 941.00 | ECI | |
| 124,000 | 1,050.00 | WCI | ||
| Midgulf | 40,000 | 900.00 | ECI | |
| 95,000 | 897.00 | WCI | ||
| OCI | 100,000 | 956.00 | ECI | |
| 951.00 | WCI | |||
| Samsung | 231,000 512,000 | 901.00 | ECI | |
| 894.70 | WCI | |||
| Swiss Singapore | 90,000 | 899.50 | ECI-L1 | |
| 90,000 | 894.00 | WCI-L1 | ||
| Transglobe | 50,000 | 928.30 | WCI |
Reportedly, IPL was initially ready to buy as many tons as could be offered. Sources said the buyer was even willing to accept a range of prices for each coast instead of just the lowest offered price.
In the end, however, IPL settled on using only the lowest price for each coast. Sources also reported that IPL was ordered to cap purchases at no more than 1.2 million mt. One trader said the cap was a response to the offered prices, which, while lower than the previous tender, are still in record-high territory.
| Awarded Company | Quantity (mt) |
| Samsung | 689,000 |
| Swiss Singapore | 180,000 |
| Dreymoor | 145,000 |
| Midgulf | 135,000 |
| Fertiglobe | 45,000 |
| Total | 1,189,000 |
The material from Fertiglobe came from a counterbid to the producer of $867.70/mt FOB. The price fits in with the estimated netback to the Arab Gulf from West Coast India of $864-$869/mt FOB. The estimated netback to Egypt was pegged at $844-$849/mt FOB
Sources said the award-winning traders had been gathering up long positions during the past few months. One trader noted that Samsung will most likely be sourcing its nearly 700,000 mt from areas as diverse as Russia, Egypt, Nigeria, Malaysia, and the Arab Gulf, among others.
The deadline for shipping the material is Jan. 31, 2022. Sources said the tonnage will help ease the urea shortage in the country, but not end it. Once all deliveries from this tender are received, India will still be behind 2020 tender imports by about 200,000 mt.
Indian buyers also have to make up for the loss of about 1 million mt after the OMIFCO contract expired. As a result, traders tend to agree that India is about 1.25 million mt behind its urea needs for the rest of the fiscal year, which ends in March.
The tightness in the global urea market, coupled with indications that prices will not come off much more, has led many in the industry to think India will hold off until February or March before calling another tender. If India waits until March, the bulk of the deliveries would take place in the new fiscal year, and thus make more funds available to pay for the product.
The dramatic rise in prices in 2021 hit the Indian treasury hard. Besides having to pay ever-higher prices, the government also had to cover the difference between the imported price and the approximately $72/mt charged to farmers.
The average price from nine tenders in 2021 was $632/mt CFR for West Coast deliveries and $591/mt CFR for East Coast Deliveries. The 2020 average price was $262/mt CFR for the West Coast and $263/mt CFR for the East Coast.
Indonesia:
Reportedly, the government issued the 2022 export permits for urea. Sources said the government will allow 1.2 million mt to be offered in public auctions throughout the year.
The allotment is about 100,000 mt lower than the 2021 numbers. Sources said the government remains concerned that the priority of the producers needs to remain the Indonesian domestic market. Traders said it is likely that no new major sales of Indonesian urea will occur until the second quarter of 2022.
Some small sales of 5,000 mt or less were authorized to Australian buyers. Sources reported two prilled urea shipments were booked for January shipment, with the price pegged at around $1,000/mt FOB. The government allowed the sale after the Australian government intervened, looking for urea for its emissions control formulation rather than agricultural use.
Middle East:
The netback to the Arab Gulf, based on the West Coast India price in the IPL tender, is reported at $864-$869/mt FOB. This represents about a $90/mt drop from the netback achieved in the previous tender. Some sources said an even more favorable freight rate could move the netback into the low-$870s/mt FOB.
The Arab Gulf is expected to be the main supplier of urea in the Indian tender, but not the sole source. Sources said supplies are not high enough to accommodate the needs of India, or even the 1.15 million mt booked in the latest tender.
Prices out of Egypt vary widely. Sources reported a MOPCO sale for January loading at $960/mt FOB. This would be the highest price achieved by an Egyptian producer. It would also confirm reports of a tight market and steady growth in the Egyptian price.
At the same time, however, there are reports of at least two cargoes from Egypt to cover awards in the IPL/India tender. Sources put the netback in the low-$840s/mt FOB for a Mediterranean port loading. One trader said the cargoes could be part of positions taken by a trading house, as prices were beginning a rapid rise in the third quarter of 2021.
Exports of Iranian urea for January-November 2021 were reported at 3.5 million mt by Trade Data Monitor. This reflects a 5 percent decrease from the same period in 2020, or 3.7 million mt. The main buyers in 2021 were Turkey with 1.3 million mt, South Africa with 361,000 mt, and Brazil with 349,000 mt.
November exports were reported at 267,000 mt, down 26 percent from November 2020 exports of 360,000 mt. Turkey took 70,000 mt, followed by Nigeria at 63,000 mt, with South Africa and Brazil rounding out the top takers.
China:
There is no movement on easing the urea export ban from China. Even information about the status of supplies for the domestic market is becoming difficult to obtain.
Sources said they expect little activity through January and into February. The Lunar New Year is Feb. 1. Even with COVID-related travel restrictions, sources expect little business to be transacted during the first week of February.
January-November 2021 exports were reported at 5.3 million mt by Trade Data Monitor, up 8 percent from 4.9 million mt during the same period in 2020. The main buyers in 2021 were India at 2.8 million mt, South Korea at 626,000 mt, and Mexico at 414,000 mt.
November 2021 was the first full month following the decision by the Chinese government to restrict urea exports, and the numbers assembled by Trade Data Monitor show the impact of that decision. November 2021 exports were reported at 500,000 mt, down from 846,000 mt in November 2020 and 740,000 mt in October 2021.
Thailand:
January-November 2021 urea imports in Thailand were down 4.4 percent, according to Trade Data Monitor, to 2.2 million mt from 2.3 million mt during the same period in 2020. November 2021 imports were reported at 116,000 mt, down 29.7 percent from the 166,000 mt imported in November 2020.
The second and third quarters of each year comprise the main buying season for Thailand. Limited imports are expected through March 2022.
Brazil:
Inland urea buyers in Brazil have been pushing back against the rising global prices, leaving sellers little option but to lower their prices. The softer prices in the IPL/India tender appear to have boosted the feeling that prices might continue to come down in 2022.