U.S. Gulf:
Granular urea barges moved lower following early-week trading at $885/st FOB NOLA, sources said. Tons for April loading were seen softening to $835-$860/st FOB on April 5, followed by a further drop to $780-$800/st FOB on April 6. Players noted multiple barges trading at $740/st FOB on April 7, leaving values in a wide $740-$885/st FOB range for the week.
Sources noted reduced demand stemming from a burst of cold, wet weather in the Midwest as largely responsible for the falling values, while also pointing to USDA’s reduced corn acreage estimate.
“(Sellers) can keep putting out lower numbers, but no one needs it and no one is buying.” said one source. “(The market) doesn’t feel heavy, it just feels nervous.”
Eastern Cornbelt:
Fueled by softening NOLA barge values, the urea market in the Eastern Cornbelt fell from highs in the $915-$935/st FOB range at the start of the week to lows in the mid-$800s/st FOB by April 7, depending on location.
Sources reported the Cincinnati, Ohio, market at $900-$935/st FOB for the week, down from the prior week’s $950-$960/st FOB range.
Western Cornbelt:
Urea pricing ranged broadly in the Western Cornbelt, depending on location and timing, but prices were down significantly from the previous week. Sources said the St. Louis, Mo., market started the week at the $910/st FOB level, but pricing slipped to $850-$860/st FOB from some suppliers as the week advanced, driven by lower NOLA barge prices.
The St. Paul, Minn., urea market fell even lower, to a reported low of $845-$855/st FOB during the week.
Southern Plains:
One source described the urea market as “in a state of confusion” in early April, due both to ongoing supply concerns, the worsening drought, and volatile NOLA barge pricing. “No buyer (trader, dealer, farmer) wants to own anything until it’s going to hit the ground,” he said. “If demand hits the fan, most sellers will empty fast and be waiting on product to arrive. There’s a real catch-22 going on now.”
While the Houston, Texas, urea market was holding at the $870/st FOB mark at midweek, the Catoosa/Inola, Okla., urea market reportedly fell from $865-$880/st FOB earlier in the week to $835-$850/st FOB by April 7, down significantly from the $910-$920/st FOB levels reported late the previous week.
South Central:
Fueled by softer NOLA barge prices, the granular urea market ranged broadly in the South Central region, depending on location and time of the week.
While sources quoted the high end of the range at $910-$920/st FOB Memphis, Tenn., and $945/st FOB Convent, La., at the beginning of the week, prices down to $840/st FOB Shreveport, La., and $845/st FOB Little Rock, Ark., were confirmed as the week progressed.
Southeast:
Urea prices in the Southeast firmed to $1,000-$1,025/st FOB, with the low reported at Savannah, Ga., and the high confirmed at Wilmington, N.C., and Charleston, S.C. Sources said urea supplies at Norfolk, Va., and Brunswick, Ga., were tapped out at midweek.
India:
Sources said the final paperwork was being done to allow IPL to call a urea tender soon. Part of the delay might have been related to the Indian government working out a ruble-rupee exchange program that would allow for Russian product to be offered in the tender.
Sources said pricing speculation for the tender was lower this week than last week. Traders speculated that offers in the tender could be at $880-$900/mt CFR, down from the nearly $1,100/mt CFR that sources discussed at the end of March.
Even if India is able to work out a fiscal exchange program that bypasses the American and European banks – and thereby the sanctions against Russia – sources still wonder how the urea will be delivered. The Ukrainian ports are closed, and the entire Black Sea is designated a war zone by insurance companies. Shipping from Russian Baltic ports would increase freight rates that could make the Russian product too expensive.
Black Sea:
The Ukrainian ports remain closed because of the Russian invasion of Ukraine. The inability to move any cargo out of the major ports in the upper Black Sea has negated any efforts to nail down a secure price for urea from the area.
While some cargo might be able to be shipped from Russian ports in the far eastern portion of the Black Sea, sources said because the entire Black Sea is listed as a war zone, insurance companies are hesitant to issue protection for any vessels entering the area.
Sources said there are discussions about what prices might be if the ports were open and if the war ended, but without any actual deals, sources said this is just speculation.
Turkish January-February 2022 urea imports were reported at 338,000 mt by Trade Data Monitor, a 35.5 percent drop from the 517,000 mt imported during the same period last year.
Suppliers for the first two months of the year were Oman with 165,000 mt, Egypt with 63,000 mt, Iran with 46,000 mt, and Turkmenistan with 39,000 mt.February 2022 imports were at 166,000 mt, down 38 percent from February 2021 imports of 270,000 mt.
Indonesia:
Pupuk Holdings closed a urea tender on April 6. The company was offering 30,000-45,000 mt of Kaltim granular urea and 20,000-45,000 mt of Pusri prilled urea.In the end, Pupuk scrapped the tender because bids did not reach the undisclosed levels desired.
Reportedly, the bids were at $890-$895/mt FOB for the granular and $780/mt FOB for the prilled. Sources said Pupuk was looking for a price in the mid-$940s/mt FOB for the granular and $928/mt for the prilled.
Sources said Pupuk went into talks with the bidding companies to try to work out a better deal for the producers. Reportedly, a separate deal was done for a 45,000 mt cargo of granular urea at $945/mt FOB. Sources said Amber walked away with the tonnage.
Indonesian urea exports for January-February 2022 were reported at 5,600 mt by Trade Data Monitor, down 96 percent from the 162,000 mt exported during the same period in 2021. The limited exports were expected, said sources. The Indonesian government held back issuing export permits until February and applied pressure on the producers to first service the domestic market before considering exports.
The emphasis on the domestic market also showed up in the February exports, which were reported at 2,000 mt against February 2021 exports of 71,000 mt.
Thailand:
Imports of urea for January-February 2022 were reported at 111,000 mt by Trade Data Monitor, down 55 percent from the 245,000 mt imported during the same period in 2021. February 2022 imports were reported at 80,000 mt, down 57 percent from the 187,000 mt imported in February 2021.
Middle East:
No new spot deals came out of the Arab Gulf, leaving only older contracted tons – at formula-based prices – to represent the movement of urea out of the area. Sources said the shift this week toward softer prices could mean discussions might begin to occur under the last-done price of $1,000/mt FOB.
If the rumors of pricing in the upcoming Indian tender hold, the netback to the Arab Gulf would be around $855-$865/mt FOB.
Egyptian producers are remaining quiet as traders and end users try to figure out where the market is heading. With reports of softer prices, the producers have an extra incentive to stay quiet and try to keep prices in the $1,100s/mt FOB.
Iranian exports of urea for January-February 2022 were reported at 423,000 mt by Trade Data Monitor, a marginal drop from the 469,000 mt exported during the same period in 2021. Turkey and Oman took the bulk of the shipments in 2022 at 162,000 mt and 100,000 mt, respectively.
February 2022 exports were reported at 142,000 mt, up 29 percent from the 110,000 mt exported in February 2021. The top destination in February 2022 was Nigeria with 66,000 mt, followed by Turkey with 26,000 mt, Ukraine with 22,000 mt, and Oman with 17,000 mt.
China:
Limits on exports may extend into July 2022. Sources said the formal restrictions might still be lifted on June 1, but a government mandated “summer fertilizer program” with reserves of 1 million mt may keep tonnage out of the global market longer than previously expected.
In addition to the emphasis on building strong domestic reserves, sources said heavy-handed COVID restrictions could also limit vessel arrivals at ports to ship out whatever tons might be available. Likewise, COVID-related shutdowns in major industrial areas could also cut back on production, leaving fewer excess tons after satisfying the domestic needs.
For now, the lack of any meaningful tonnage and the absence of any other active urea market to use as a basis for calculation makes determining urea pricing out of China nearly impossible.
Brazil:
The general sense of softening urea prices hit the Brazilian import market. Sources pegged the price at $950-$1,000/mt CFR, a drop of about $50/mt from last week.
Sources said buyers in the country were pushing back against the ever-higher prices. Their lack of interest in buying material, combined with the global price trend, helped push prices down at the ports.
Rondonopolis remained stable at $1,000-$1,260/mt FOB ex-warehouse on limited activity. Sources said buyers were already hesitant to make any long-term commitments for product, preferring to take just what limited tonnage they needed at the time.
This past week, however, even the short-term buyers were holding back, leaving very few deals upon which to base market trends for the week.