U.S. Gulf:
NOLA granular urea continued to trend downward, but not by leaps and bounds. New trades were put in the $525-$545/st FOB range versus the week-ago $525-$575/st FOB. The new numbers were for second-half February and first-half March. Full March was reported at $515/st FOB.
The last done prill business was quoted at $560/st FOB.
Eastern Cornbelt:
Urea prices continued to fall in the Eastern Cornbelt. The market was quoted at $600-$620/st FOB, depending on location and time of the week, down from the prior week’s $625-$645/st FOB range. Urea pricing at Cincinnati, Ohio, reportedly fell to the $600-$605/st FOB level before rebounding slightly to $610-$615/st FOB on Feb. 17.
Michigan contacts pegged the urea market at $655/st FOB Toledo, Ohio, for February-March and $665/st FOB for 2Q tons.
Western Cornbelt:
Urea prices continued to slip in the Western Cornbelt. The regional market was quoted at $590-$615/st FOB, depending on location, down from the prior week’s $610-$630/st FOB range, with the low reported at St. Louis, Mo. Urea pricing FOB Catoosa/Inola, Okla., was pegged in the $585-$595/st FOB range, down from $600-$620/st FOB the previous week.
Northern Plains:
Sources reported slightly softer urea prices in the Northern Plains at mid-month. The market slipped to a broad $650-$725/st DEL range for prompt tons, depending on location and time of the week, with reports of spring pricing in the $710-$755/st range in North Dakota. The St. Paul, Minn., urea market was pegged at $625-$635/st FOB in mid-February, down from $650-$660/st at last report.
Northeast:
Sources reported softer urea pricing in the Northeast at mid-month. The regional market was pegged at $630-$650/st FOB, depending on location, with the low confirmed at terminal locations in southern Pennsylvania.
Eastern Canada:
The urea market was quoted in a broad range at C$1,165-$1,235/mt FOB in Eastern Canada, depending on location, with the low reflecting a C$35/mt drop from late January.
India:
The week opened with IPL accepting offers for 1,357,500 mt of urea. All but 90,000 mt will be bought at $596.45/mt CFR for both coasts. The remaining 90,000 mt will come directly from Fertiglobe at a reported $568.50/mt FOB. The Fertiglobe sale is from Abu Dhabi rather than Egypt.
Going into the weekend, sources were expecting IPL to buy 850,000 mt at most. The much larger purchase indicated to the market that producers had more material than expected and a desire to clear their warehouses before prices went down further.
| Awarded Company | Quantity(mt) | Total (mt) | ||
| ECI | WCI | FOB Basis | ||
| Swiss Singapore | 50,000 | 190,000 | 240,000 | |
| Fertiglobe | 87,500 | 90,000 | 177,500 | |
| Samsung | 94,000 | 77,000 | 171,000 | |
| Continental | 52,500 | 95,000 | 147,500 | |
| Midgulf | 25,000 | 118,500 | 143,500 | |
| OQ Trading | 42,000 | 84,000 | 126,000 | |
| Koch | 40,000 | 50,000 | 90,000 | |
| OCI | 90,000 | 90,000 | ||
| Amber | 33,000 | 45,000 | 78,000 | |
| Gavilon | 50,000 | 50,000 | ||
| Ameropa | 44,000 | 44,000 | ||
| Total | 468,000 | 799,500 | 90,000 | 1,357,500 |
Sources for the tonnage supplied by the trading houses is expected to come from every major urea producer east of the Atlantic Ocean. Sources said possibly two cargoes from Nigeria will be in the mix, along with tons from the Arab Gulf, North Africa, Indonesia, Vietnam, and Egypt. Reportedly, some material will come out of Russia and Georgia, but not Yuzhnyy.
Also, maybe one cargo will come from China, but that is more of a rumor rather than an expectation, said one trader.
India will still need product going into the second quarter. Even with the IPL tonnage shipping by March 20 and the recent arrival of the first cargo from the 1 million mt contracted from OMIFCO, sources reported supplies are lower than anticipated, but no longer at the critically short level.
Industry watchers are divided on how soon the next tender will be called. Some have said they expect one as soon as the tonnage booked in this tender is all assigned vessels. Others said the call may not come until the end of March, so all decisions about the tender will be made after April 1, when the new fiscal year starts.
Middle East:
Sources reported that Fertiglobe accepted the counterbid from IPL of $568.50/mt FOB for the 90,000 mt it offered directly in the last tender. Taken with the estimated netback of Arab Gulf material offered by traders, the area now shows a price range of $568-$580/mt FOB.
Egyptian producers have not spoken out since the IPL tender closed. Sources point to the last done deals in the $750s/mt FOB for February and March shipments. Others, however, look at the Fertiglobe offer of Egyptian tons at $645/mt FOB as a starting point.
Most in the industry point out the estimated netback to Egypt from the IPL tender delivered price is $550-$555/mt FOB. The IPL-related prices, said one source, is the most likely to consider when looking at the Egyptian market.
Black Sea:
Sources said traders are leery of trying to book any tons out of a Ukrainian port as tensions rise between Russia and Ukraine. One source said the increased presence of the Russian navy has heightened concerns about doing any business out of Ukraine.
There are other ports, however, on the east side of the Black Sea that have handled previous sales to India from Russia and Georgia. Sources expect to see at least one cargo coming out of there to cover the Indian tender.
Sources put the current freight rate between the Black Sea and India at $45-$50/mt. That would indicate a netback of $545-$550/mt FOB from the Indian deal.
Indonesia:
Two quick-selling tenders closed on Feb. 16. Kaltim offered 12,000-45,000 mt of granular urea and Pusri offered 5,000-10,000 mt of prilled urea. Both tenders received several offers, and both were scrapped soon after the numbers were released.
| Kaltim Granular Tender | |
| Bidding Company | US$/mt FOB |
| Oracle | 529 |
| Synergy | 520 |
| Swiss Singapore | 506 |
| Samsung | 505 |
| Koch | 500 |
| Liven | 478 |
| Pusri Prilled Tender | |
| Bidding Company | US$/mt FOB |
| Ameropa | 581 |
| Oracle | 529 |
| Liven | 515 |
| Samsung | 495 |
Right after the tenders were scrapped, sources reported that Pusri sold 10,000 mt of its prilled urea to Ameropa at $581/mt FOB. In the past when Indonesia scrapped a tender, it then entered into private talks with the top bidding companies to try to secure a higher price. Sources noted with surprise how fast the scrapping and follow-up award occurred.
Shipment of the product is for late-March or early April.
Sources said only the granular product could have been considered for placement in the Indian tender. It would have been a tight deal, but it could have been possible to ship by the March 20 IPL deadline and still meet the Kaltim requirement of taking the product in the last half of March. As Green Markets went to press, however, no deals were announced for the Kaltim product.
China:
Sources confirmed that the Chinese government will be holding back at least 1 million mt even after it lifts export restrictions.
Sources said the main goal of the restriction on exports was not so much because the government feared the producers could not fully serve the domestic market – they can – but rather to build up reserves to force domestic prices down. Soon after the restrictions went in place, the price on the Chinese domestic market started falling. As February opened, sources quoted prices at $700/mt against an international price in the upper-$800s/mt.
The estimated netback to China from the IPL tender takes that price even lower. Calculating back from the IPL number, sources put the Chinese export market price at $575-$580/mt FOB.
If global prices continue to fall, sources said the Chinese government might consider easing back some of the restrictions that have kept their urea from the world, except in small lots to regional buyers. The 1 million mt reserve is designed to buffer the local market from any bumps that might occur when exports are once again allowed.
South Korea:
January 2022 imports of urea in South Korea were reported at 155,000 mt by Trade Data Monitor, representing a two-fold increase from the 76,000 mt imported in January 2021.
Six suppliers – Qatar, Vietnam, Saudi Arabia, China, Indonesia, and Malaysia – accounted for 98 percent of the imports in January, with individual shipments ranging from 15,000-32,000 mt.
The diversity of suppliers exemplified the impact that the Chinese export restrictions have had. In January 2021, only China sent any urea to South Korea. Sources noted that shipments to South Korea are small and done mostly to stay in the good graces of the Southeast Asian nations. Reportedly, the urea is shipped in containers and is designated for the emissions control program in South Korea.
Brazil:
Farmers’ expectations of lower urea prices are reportedly keeping them from the market. Anticipating a falling market and a traditionally slow period at this time of the year, the result was lower prices. Source now put the landed price at $540-$565/mt CFR.
Inland traders are mirroring the lack of enthusiasm for any major deals. Holders of product are reportedly anxious to sell rather than get caught holding tons in a falling market. However, the action is limited. Sources reported the Rondonopolis price at $839/mt FOB ex-warehouse for a few recent deals.