U.S. Gulf:
NOLA granular barges were reported to have traded at $875-$930/st FOB, up from the week-ago $865-$905/st FOB. The higher end of the range reportedly occurred late in the week. The last done prill business continued to be called $860/st FOB.
Eastern Cornbelt:
The urea market was quoted at $950-$980/st FOB in the Eastern Cornbelt, depending on location and time of the week, with the Cincinnati, Ohio, market pegged firmly at the higher end of the range on March 24.
Western Cornbelt:
The urea market was pegged in a broad range at $920-$960/st FOB in the Western Cornbelt, up $10/st from the prior week, depending on location and time of the week. Both the high and low were reported at St. Louis, Mo., during the course of the week.
Sources quoted the Catoosa/Inola, Okla., urea market at $955-$965/st FOB late in the week, with the same level reported at St. Paul, Minn. New urea sales in North Dakota were reported at $980-$990/st FOB and $1,000-$1,020/st DEL, up from last week’s $970-$1,015/st DEL range.
California:
Urea pricing in California was confirmed at $960-$1,010/st FOB during the week, depending on location, up from $940-$990/st the week before and a full $130/st higher than early March levels. Sources said the low was reported at West Sacramento, with the Stockton market generally falling in the $990-$1,010/st FOB range.
Bagged urea tons were quoted as high as $1,060/st FOB West Sacramento.
Pacific Northwest:
Urea prices were quoted at $990-$995/st FOB in the Pacific Northwest, up $25-$30/st from the previous week and a full $160/st higher than pricing levels in early March, with the lower end of the range confirmed at Rivergate, Ore. No current delivered prices were confirmed in the region in late March.
Western Canada:
Urea prices in Western Canada climbed to C$1,320-$1,390/mt FOB and C$1,350-$1,400/mt DEL for April-May tons, up some C$200/mt from early March.
“Buyers have been hesitant,” commented one regional source. “It’s mostly small volumes. Retailers are cautious and waiting for grower commitments.”
India:
The last vessels booked under the previous tender are now on their way to India. In the past, the passage of the shipping deadline would signal another tender call. However, higher prices and limited resources have delayed the call.
Sources said the next tender could easily see offers at $1,000-$1,100/mt CFR, and there may be limited tonnage available to be offered in the tender. China has voluntarily taken itself out of the global market into May. Financing for Russian material is blocked under sanctions imposed by the U.S. and the European Union.
Even if deals not involving the American or E.U. banks could be worked out, the Ukrainian ports in the Black Sea are closed. There are also reports that Baltic countries may ban the exporting of Russian product from their ports.
Besides the usual other suppliers in the Arab Gulf and North Africa, sources expect to see offers with Nigerian material in the upcoming tender. Reportedly, there may be a cargo available from Vietnam. Indonesia might also be a possible source of product, but rumors of delays in loading tons recently awarded in a tender could make those tons unavailable.
Industry watchers said the call could come at any time. Once the call is made, the buying house waits seven days before closing the tender and announcing the results. A call made on March 25 would take the closing of the tender into the next fiscal year, giving the buying house a new cache of cash.
Black Sea:
The closure of the Ukrainian ports by Russian attacks has also closed the ability to do price discovery from the area.
Some in the industry have begun to speculate about pricing, putting the estimated market at $1,005-$1,010/mt FOB out of Yuzhnyy. Traders in Asia, however, said the price cannot be verified because of the lack of any outbound traffic from the area.
Some deals might get concluded out of Russian ports in the Far East. This has happened in recent sales to India. However, the current costs of entering the Black Sea and approaching any Russian or Ukrainian port is much higher due to the War Zone premium imposed by insurance carriers.
Even if Russian material can be loaded and shipped through the Black Sea, sources note the real issues facing any deal are the sanctions against Russia and its financial institutions by the U.S. and E.U.
Reportedly, Russia and India are looking at expanding an already operating system of rupee-ruble exchange. The plan is said to remain free from any entanglement with U.S. or European banking facilities, and without fear of being hit with penalties for violating the sanctions.
Indonesia:
There are reports that Kujang sold a cargo at $989/mt FOB. The deal is on the heels of a tender that recently closed with prices at $938/mt FOB. No details of the Kujang sale were reported.
Sources said the tonnage sold under the previous auction may not be available as soon as expected. Initially, the cargo was to be loaded in mid-April. Sources speculated this would allow the urea to be offered in the upcoming Indian tender. Now, according to one trader, the loading may not take place until the end of April. This could make it too late for the Indian business.
Middle East:
Sources said the latest offers from Arab Gulf producers are at $1,100/mt FOB, but with no business concluded at that level. The price, said sources, remains at $990-$1,000/mt FOB.
Reportedly, some Iranian material is being offered at $900/mt FOB. Traders said this nearly $100/mt discount from the Arab Gulf price is the largest seen. Usually Iranian material is $25-$30/mt off the Arab Gulf price. Sources expect to see Iranian material included in the Indian tender, but not necessarily listed as Iranian origin.
Egyptian producers continue to call for higher prices. The lack of any new business this week has prices holding at $1,130/mt FOB, however.
China:
For now, the only urea being allowed out of China seems to be small cargoes of 5,000-6,000 mt. However, some larger cargoes have been released in government-to-government deals, such as the 101,000 mt shipped to Pakistan in February. Other efforts by countries to secure tons are also underway, sources said.
Traders and other industry watchers said quotes out of the Chinese ports were coming in at $1,000/mt FOB, but with no new deals to actually confirm these levels. One trader noted that the $1,000/mt FOB price is closer to market prices than previous calculations based on the ex-factory price. Using basic calculations for an export-equivalent price from the factory showed a price around $700/mt FOB, which everyone agreed was too low.
While government leaders are talking with their Chinese counterparts for permission to buy more urea, sources said permission for exports is getting harder to arrange. The lack of transparent business out of China continues to effectively remove them from the global market.
January-February exports this year were reported at 237,000 mt by Trade Data Monitor. This is a 45 percent drop from the 434,000 mt exported during the same period last year. February 2022 exports were up 6.5 percent from February 2021, to 152,000 mt from 143,000 mt. Pakistan took the bulk of the February 2022 shipments at 101,000 mt.
Brazil:
Urea prices showed a slight uptick to $1,000-$1,100/mt CFR. Sources said the increase came as no surprise following reports of higher natural gas prices.
Rondonopolis saw a tightening of the range to $1,000-$1,200/mt FOB ex-warehouse. Demand for urea and other nitrogen products is reportedly low because buyers are hesitant to make any commitments while prices remain so high. Reportedly, the few deals being done are for small quantities and for immediate delivery.
Nigeria:
Dangote announced that its new 3 million mt/y plant is now fully operational. The company has indicated that 2 million mt will be dedicated to export, mostly to Brazil. The remaining 1 million mt will be for the domestic market and neighboring African countries.
While Brazil is expected to be the main beneficiary of the new plant’s output, the company told the press it would also be selling tons to India and the U.S. The Indian business is no surprise to international trades. Some Nigerian product was included in the last two Indian tenders, partly because of the absence of Chinese product.
Vietnam:
Sources reported offers at $850-$875/mt FOB for prilled urea cargoes. Some of these tons might be included in the upcoming Indian tender, said one trader. Sources said they were unsure why the Vietnamese price was so far off the rest of the markets, which were all in the upper-$900s/mt FOB.
Nepal:
A tender closed on March 22 for 22,000 mt of urea. No results from the tender were public by press time. Another tender closes on March 25 for the same amount.
In the past, tenders with such small quantities would have been covered by product out if India. However, the tightness of the urea market moved the Indian government to clamp down on re-exporting urea to its neighbor or sending Indian-made urea.