U.S. Gulf:
NOLA granular urea trades were quoted at $525-$575/st FOB for February and first-half March. Full-March cargoes were reported as low as $520/st and as high as $582/st FOB. The week-ago range was $575-$650/st FOB.
Speculation over the Indian tender caused some uncertainty in the market. Sources said should India not meet its needs at the lower prices offered, it may have to retender soon and face higher prices.
U.S. Imports:
Urea imports rose 106.2 percent for the July-December period, to 2.76 million st from the prior-year 1.34 million st. Imports were up 122.2 percent in December, to 336,002 st from 151,218 st.
Qatar imports totaled 482,600 st for July-December, 10.8 percent off from the year-ago 540,915 st, followed by 458,748 st imported from Saudi Arabia, up 53.4 percent from the previous-year 299,131 st. Russia sent 383,273 st to the U.S., a 95.6 percent climb from 195,904 st recorded for the year-ago period. Algeria added 364,685, after sending zero tons to the U.S. one year earlier.
U.S. Exports:
Urea exports were off 73.1 percent in July-December, to 152,269 st from the year-ago 565,693 st. December exports totaled 65,840 st, falling 29.8 percent from the year-ago 93,809 st.
Eastern Cornbelt:
A softer NOLA barge market contributed to lower urea terminals prices in the Eastern Cornbelt. Sources pegged the regional market at $625-$645/st FOB, depending on location, down from the previous week’s $680-$710/st FOB. The low end of the range was confirmed at Cincinnati, Ohio.
In the South Central region, urea pricing at Convent, La., was reportedly down to $635/st FOB from the prior week’s $660/st FOB level.
Western Cornbelt:
Urea pricing continued to bounce around in the Western Cornbelt, fueled by more NOLA volatility. One source described urea as a “call daily for a quote market” in early February, while another suggested most terminals were “probably in the lower $600s,” but with very little interest from buyers.
When pressed, most sources pegged the regional urea market at $610-$630/st FOB, down from the prior week’s $655-$695/st FOB range, with the low reported at St. Louis, Mo. The Catoosa/Inola, Okla., market had reportedly slipped to $600-$620/st FOB, down from the prior week’s $685-$705/st FOB range.
Urea pricing in the Northern Plains was reported at $640-$650/st FOB St. Paul, Minn., with delivered urea in North Dakota pegged at $670-$705/st for prompt tons and $710-$740/st for spring.
California:
Sources continued to report a broad range of urea prices in California, from a low of $810/st FOB Stockton to a posted high of $910/st FOB West Sacramento. On a rail-DEL basis, recent offers as low as $725/st were confirmed on a spot basis in the state, with sources citing lower prices in the Midwest and at NOLA.
Pacific Northwest:
The urea market FOB Rivergate and Aurora Ore., was quoted in a broad range at $700-$750/st FOB during the week, down from the last reported $790-$815/st FOB. Some prompt delivered urea business was confirmed at the $770/st level in the Montana market.
“I think the late January bobble/bounce on urea, coupled with India’s many suitors for urea, has the market spooked for a bit,” commented one regional contact.
Western Canada:
The urea market in Western Canada dropped to C$1,150-$1,240/mt FOB regional warehouses for March-April tons, down from the last reported C$1,220-$1,250/mt range. While some sources suggested that rail-DEL offers for imported tons could be had in the low C$1,100s/mt on a spot basis in the region, that pricing level was described as a moot point because of the limited availability of railcars.
India:
The IPL urea tender closed on Feb. 7, with 20 companies offering 3.27 million mt. The low price came from Amber at $596.45/mt CFR for both coasts.
The Amber offer was way off the average from the bulk of the participating companies. Also, the trading house only offered 33,000 mt for the East Coast and 45,000 mt for the West Coast.
Other traders offered many more tons at higher rates. Samsung, for example, offered 370,000 mt for the West Coast at $668.30/mt CFR and 135,000 mt at $672.70/mt CFR. Many more traders also offered in the $660s and $670s. Some offered in the $680s/mt CFR and one – EuroChem – offered at $670.73/mt CFR.
Among the offering companies were three traders who offered a total of 415,000 mt at $645-$670/mt CFR. Sources calculated the price to India at those rates would be $665-$680/mt CFR.
| Offering Company | Quantity (mt) | US$/mt | Discharge Port | |
| CFR | FOB | |||
| Amber | 33,000 | 596.45 | ECI-L1 | |
| 45,000 | 596.45 | WCI-L1 | ||
| Swiss Singapore | 100,000 | 612.75 | ECI | |
| 190,000 | 604.65 | WCI | ||
| Koch | 40,000 | 649.69 | ECI | |
| 50,000 | 665.00 | WCI | ||
| Midgulf | 200,000 | 651.00 | ECI | |
| 200,000 | 667.00 | WCI | ||
| OQ Trading | 42,000 | 681.00 | ECI | |
| 84,000 | 654.00 | WCI | ||
| Continental | 55,000 | 662.38 | ECI | |
| 95,000 | 657.75 | WCI | ||
| Fertiglobe | 105,000 | 659.38 | ECI | |
| Gavilon | 50,000 | 682.00 | ECI | |
| 50,000 | 665.00 | WCI | ||
| Transglobe | 48,000 | 699.00 | ECI | |
| 48,000 | 665.00 | WCI | ||
| OCI Fertilizer | 100,000 | 665.25 | WCI | |
| Samsung | 135,000 | 672.70 | ECI | |
| 370,000 | 668.30 | WCI | ||
| Dreymoor | 100,000 | 689.00 | ECI | |
| 134,000 | 668.92 | WCI | ||
| Ameropa | 45,000 | 669.00 | Mundra | |
| 45,000 | 669.00 | Mundra | ||
| 45,000 | 674.00 | Kakinada | ||
| 45,000 | 674.00 | Krishnapatnam | ||
| Eurochem | 45,000 | 670.73 | WCI | |
| Medallion | 50,000 | 679.79 | ECI | |
| 50,000 | 697.79 | WCI | ||
| Keytrade | 30,000 | 689.00 | Gangavaram | |
| 160,000 | 684.00 | WCI | ||
| VHL | 25,000 | 693.00 | WCI | |
| Valency | 45,000 | 750.00 | Kakinada | |
| FOB Offers | ||||
| Fertiglobe | 180,000 | 650.00 | Ruwais FOB | |
| 45,000 | 645.00 | Adabiya FOB | ||
| Sabic | 100,000 | 665.00 | Saudi FOB | |
| Sun International | 90,000 | 670.00 | Qatar FOB |
The Indian buying house had set a deadline of Feb. 10 for traders to accept their counter bid at the Amber price of $596.45/mt CFR for either coast. However, sources said IPL was having a hard time getting as many tons as they would like at this price. The deadline for acceptance got pushed back to Feb. 11. At the same time, IPL asked offering companies to extend the validity of their offers from Feb. 12 to Feb. 16 to allow more time to nail down sales.
As Green Markets went to press, sources reported that IPL had secured 800,000-850,000 mt. The tonnage offered for less than $660/mt CFR adds up to 892,000 mt, with 414,000 mt for the East Coast and 478,000 mt for the West Coast.
Initially, IPL had expressed a desire for 1.2 million mt. The issue now is not the availability of urea, but rather the availability of urea at the price set by Amber. If IPL has to settle for just the 850,000 mt it is rumored to have already secured, sources said India will have to call another tender – most likely in mid-March – to ensure a proper supply of urea for the upcoming season.
Sources said IPL also counterbid to the producers. Reportedly, IPL bid $568.50/mt FOB for the Arab Gulf material and $560.30/mt for the Egyptian material out of Adabiya. The counterbids are about $10/mt lower than the estimated netback from the Amber offer.
The tonnage offered by the traders is said to represent a wide range of urea suppliers, with the exclusion of China. Tonnage reportedly is being offered from Vietnam, Nigeria, and North Africa. There are also reports that Amber is already shopping for a vessel to pick up a cargo in Indonesia.
The one bit of good news for India is that the first cargo of a 1 million mt contract with OMIFCO arrived this week. The deal was signed by the Department of Fertilizer with OMIFCO last month calling for 1 million mt to be delivered over the next three years.
The cargo that arrived this week will also show those concerned about a urea shortage in the country that a steady supply of urea, not affected by seasonal fluctuations, is available.
Industry watchers have begun to raise concerns in the local media about the proposed national budget that will take effect on April 1, which reduces the amount of money available for urea subsidies by 17 percent. This reduction comes on the heels of the government having to increase the amount of funds available for urea subsidies in the current fiscal year.
Experts explained that the reduction of subsidies to farmers should not impact the availability of urea, because more domestic urea plants will begin operations soon. The plants received some financial help from the government to begin operations, and will continue to receive subsidized gas and power to ensure steady production.
The move to build new plants and rehabilitate old ones has been a long-term policy of the Modi government. Initially, the government wanted to take India away from needing any urea imports by 2022. However, delays in plant construction, COVID, and financial issues threw the schedule off. Government officials now say the country will be self-sufficient in urea in 2023.
China:
Sources said port warehouses have limited material. The lack of product in the ports, said one trader, is an indication that not only is limited tonnage being allowed out for export, but product from other locations is not being shipped to China for re-export.
Buyers of Iranian urea have, in the past, moved the product through Chinese ports in an effort to muddy the waters about the source of the product. In the past year, China has stepped up its own enforcement, blocking Iranian urea from its bonded warehouses.
Some small tons of urea will continue to be allowed out by customs officials. Most of the material being shipped is for emissions control programs in South Korea and Japan. Sources now say the rest of the world may not see any large shipments from China until July.
Middle East:
Producers appear to be fighting a rear-guard action against ever-lower prices. The offers from the producers into the IPL tender showed a drop of $200/mt from the last tender. The netback from the Amber price in the tender and the counterbid from IPL represent a drop closer to $300/mt.
Sources speculate that the producers will not accept the IPL counter bid of $568.50/mt FOB for Arab Gulf material. Even though the companies reportedly have the product on hand, sources said the most likely scenario will be that the producers will quietly back some of the traders’ offers. In this way, said one trader, no producer will have to publicly admit to a dramatic drop in price and the market will be kept guessing as to the actual level for a few weeks.
The estimated netback to the Arab Gulf from the IPL tender is calculated at $576-$578/mt FOB. This price is seen by industry watchers as a viable price because it is higher than the IPL bid and below the producers’ offers into the tender. The paper market is pegged at $605/mt FOB for February and $508/mt FOB for March.
The last confirmed Egyptian business was in late January at $735-$755/mt FOB. That could change if IPL accepts an offer from Fertiglobe for the Adabiya material. Sources said Fertiglobe is most likely ready to pass on the counter bid of $560.30/mt FOB. However, it might be willing to back a trader if the netback is better and if the trader keeps quiet about the deal.
The paper market for Egyptian granular is reported at $640/mt FOB for February and $580/mt FOB for March.
Indonesia:
Sources speculate that Kaltim might call a prompt tender to try to get some of its material included in the sales to India. Already, sources reported Amber is looking for a vessel to load a cargo in Indonesia for China. The speculation is that Amber and Kaltim came to a private agreement after Kaltim scrapped its tender earlier in the month. Such private deals are commonplace, said a trader.
Black Sea:
Sources said there will probably be little or no material coming from the Black Sea to the IPL tender. Product out of Yuzhnyy is limited to contracted tons, leaving little for spot deals.
The netback to Yuzhnyy from the Indian tender is calculated at $546/mt FOB, but there has been no business to justify the price yet.
Brazil:
Strong demand in the north and weaker demand in the south is leading to wide price ranges in Brazil. The landed price at ports this week is pegged at $550-$680/mt CFR. Buyers and sellers at Rondonopolis had fewer differences over pricing. Source said the market this week settled at $839/mt FOB ex-warehouse.
Urea imports in January 2022 were reported at 408,000 mt by Trade Data Monitor. That amount is 25 percent down from January 2021 imports of 545,000 mt.
Only Nigeria showed an increase in exports to Brazil. January 2022 imports from Nigeria were reported at 111,000 mt, up 87 percent from the 60,000 mt sent in January 2021. Russian exports dropped 39 percent, and Algerian exports were down 17 percent.