U.S. Gulf:
NOLA granular barges were reported to have traded at $880-$940/st FOB, up slightly from the week-ago $875-$930/st FOB. Sources reported a bit of a fall-off earlier in the week, which was attributed to initial speculation that the war in Ukraine might be on the wane and near an end. However, those ideas quickly faded.
Eastern Cornbelt:
The urea market was reported at $950-$960/st FOB in the Eastern Cornbelt, down slightly from the previous week’s high, with the low reported in Illinois and the high at Cincinnati, Ohio.
Western Cornbelt:
The urea market was quoted at $900-$950/st FOB in the Western Cornbelt, with the lower end of the range confirmed at St. Louis, Mo. Urea pricing FOB Catoosa/Inola, Okla., was pegged in the $920-$950/st FOB range during the week.
Northern Plains:
Urea pricing was quoted at $910-$950/st FOB St. Paul, Minn., depending on supplier and time of the week, with terminal values in North Dakota pegged at the $980-$990/st FOB level in late March. Delivered tons were reported in the $1,000-$1,020/st range in North Dakota.
Great Lakes:
The urea market was pegged at $965-$1,000/st FOB in the Great Lakes region, with the low reported at Toledo, Ohio. Most Michigan terminals were firmly in the $995-$1,000/st FOB range for spring tons, while pricing at Maumee, Ohio, was pegged at the $970/st FOB level for March-April.
Northeast:
Urea pricing jumped to $960-$980/st FOB in the Northeast region in late March. In the Southeast, new sales were confirmed as high as $1,000/st FOB Savannah, Ga., during the week.
Eastern Canada:
The urea market continued to strengthen in Eastern Canada, with new prices firming to C$1,425-$1,440/mt FOB in late March, up from C$1,375-$1,400/mt at last report.
India:
Sources said a call for a urea tender should come at any time. The big issue seems to be ensuring enough urea for the upcoming application season.
China has taken itself out of the global market through May and possibly into June. Getting Russian material is difficult because of the war conditions in the Black Sea and the sanctions against any financial arrangements with Russian banks. India and Russia are reportedly working on a ruble-rupee exchange program, but sources said it may not be ready in time for this tender.
Sources estimate that offered prices in the tender will end up being at least $1,000/mt CFR. One trader said this would represent the highest price ever paid by the Indian government for its urea. There is already pressure building to increase the amount of money available for fertilizer purchases in the new budget, which takes effect April 1.
The budget opened with funds for urea cut 17 percent from the previous year. The steady rise in prices in 2021, combined with the disruption in urea supplies caused by Russia’s invasion of Ukraine, has accelerated the price increase.
Local political leaders told the media that the funds in the budget are not sufficient to cover urea needs. The government treasury must not only pay for the product awarded in the tenders, but also cover the difference between the imported price and the subsidy price of $71/mt charged to farmers.
To push back against the higher international price, the government is leaning on domestic urea producers to raise production levels as high as possible. Assistance to the plants in the form of subsidized natural gas and electricity are part of the support the government is offering.
Black Sea:
Ukrainian ports remain closed under Russian bombardments or naval blockades. The inability to move any product out of these ports, and the designation of most of the Black Sea as a war zone by insurance companies, has muted confirmation of Black Sea market prices. Sources have speculated that prices should be just above $1,000/mt FOB.
Russia announced that it was increasing the allotment of exportable urea for April. The increase of 280,000 mt takes into account additional production from the Acron Group. Sources said the issue is not access to more Russian urea, however. Besides the inability to move tons out of the Black Sea ports, sources said the major obstacle to selling Russian urea is the economic sanctions imposed on the Russian financial system by the U.S. and European Union.
Traders said the Western banks are nervous about backing any deals that involve Russian product. The penalties for making one small error in the paperwork could place a bank or insurance company on the wrong side of the extensive sanctions imposed against Russia.
In the hopes of bypassing the sanctions, Russia and India are said to be expanding a ruble-rupee exchange program that will not involve euros or U.S. dollars. The system, however, would have to be greatly expanded to manage the volume of trades necessary to cover India’s urea and phosphate needs from Russia.
Indonesia:
Sources said no selling tender is coming soon. Kaltim has one line of urea production down for routine maintenance.
Middle East:
Arab Gulf producers continue to move out tons booked under existing contracts. Sources said some producers are preparing for the upcoming Indian tender by building reserves to make available to traders or to offer on their own.
Sources said producers are holding firm to the idea that the price should be at least $1,000/mt FOB. The absence of any new spot business, however, has not allowed for any price testing above that level.
Egyptian producers are looking to move the price beyond the $1,130/mt FOB done a few weeks ago. No new spot tons have been sold as producers, traders, and end users try to figure out how to operate when two major sources of urea – Russia and China – are out of the market.
China:
Talk continues of pricing at $1,000/mt FOB. However, the lack of any public statement from a seller or buyer to confirm that level makes any pricing idea speculative. Only small tons of urea are being permitted to be sent out – usually in containers – to buyers in the region.
Sources are said to be looking for potential opportunities after the export restrictions are lifted by the end of May. Some hope to secure material for a urea-hungry world. However, others speculate that tonnage will remain limited, as producers first answer a call by the government to use June production to help build a urea stockpile of an additional 1 million mt for the summer.
Brazil:
Prices of landed product have tightened to $1,000-$1,050/mt CFR. Sources said pricing fluctuations are occurring as holders of product restrict offers in the hopes of capturing better prices later, and as buyers remain hesitant to buy anything other than tonnage needed immediately.
Rondonopolis remains steady at $1,000-$1,200/mt FOB ex-warehouse. Buyers are only taking what few tons they need right away, and are rebuffing any offers for long-term deals. At the same time, sellers are holding firm with their ideas that prices will move up once the application season begins. Sources said both sides seem ready for a more expensive market.