U.S. Gulf:
NOLA granular urea barges were reported at a flat $750/st FOB, compared to the week-ago $750-$800/st FOB range. Several players cited a lack of trading due to wet weather in the heartland.
U.S. Imports:
July-February urea imports were up 73.8 percent, to 3.65 million st from the prior year’s 2.10 million st. February imports stood at 463,367 st, rising 46.3 percent from the year-ago 316,780 st.
July-February imports from Qatar were reported at 755,257 st, followed by Russia at 533,370 st, Oman at 530,996 st, and Saudi Arabia at 503,904 st.
Eastern Cornbelt:
Urea prices remained under pressure in the Eastern Cornbelt, with the regional market quoted at $810-$850/st FOB, depending on location. The Cincinnati, Ohio, market reportedly fell to $820-$845/st FOB for new offers during the week, down $40/st from the previous week.
Western Cornbelt:
Urea terminal prices continued to fall amid ongoing weakness in the NOLA barge market, with the wet weather cited as a “major concern.” The regional urea market was reported at $790-$820/st FOB, depending on location, with the low end of the range confirmed at St. Louis, Mo.
The Catoosa/Inola, Okla., urea market was pegged at $790-$820/st FOB during the week, down from $835-$845/st FOB at last report.
Northern Plains:
The St. Paul, Minn., urea market was quoted at $820-$840/st FOB during the week, with the Carrington, N.D., price pegged at the $860/st FOB level.
Delivered urea reportedly fell to $875-$905/st in North Dakota, down from recent highs in the $1,000-$1,020/st range, with some sources discussing limited new offers as low as $850-$870/st DEL on a spot basis as the week progressed.
Northeast:
The urea market was quoted in a broad range at $975-$1,025/st FOB in the Northeast, with the low confirmed at Baltimore, Md., and the high reflecting new pricing FOB Fairless Hills, Pa., for tons from a resupply vessel that were expected to be available on April 22.
Eastern Canada:
The urea market continued to strengthen in Eastern Canada, with new spring prices firming to C$1,440-$1,465/mt FOB in mid-April, up another C$15-$25/mt from last report.
India:
A urea tender was finally called, but it is not the one the industry was waiting for. IPL called a tender to close on April 26 for 78,000 mt to be shipped by May 15. The tender calls for 42,750-45,000 mt to go to Mundra and 31,300-35,000 mt to Kakinada.
Reportedly, the tonnage is to make up for product that was not delivered under the February IPL urea tender. Some traders had speculated that once word circulated that the final tons would not be delivered, IPL would call a tender for 100,000 mt to recover its product and test the waters on pricing. Expectations were that a second more traditional tender would be called within a week of the smaller tender’s closing.
Sources still think there will be a larger tender called soon, but some believe the call might wait until the 78,000 mt have vessels nominated and the tonnage locked in.
Reportedly, there is still some concern that even with softening urea prices popping up in conversations around the world, the Indian government will have to adjust its budget to ensure it has enough money to buy and subsidize urea.
The current budget reduced the amount of money available for subsidies. Even before the budget took effect on April 1, sources said the government would have to amend it to accommodate the high prices seen in the global market.
Some relief will be seen once Plat II at the RCF facility in Kakinada is operating. Subsidies for domestic urea are lower than the subsidies necessary for imported product. As a result, the Indian government is encouraging urea producers to re-activate plants shuttered in the past. The NFC facility is expected to start turning out product by the end of the month.
Black Sea:
The only urea possible from the Black Sea will come from the far eastern ports, said sources. Even then, the designation of the whole Black Sea as a war zone by insurance carriers could make the transportation costs dramatically more expensive.
The closure of the Ukrainian ports because of attacks by the Russian army and navy means that no product is coming from the major facilities that once serviced the world.
Sources said, however, that if product could be exported from the area, the most discussed price is in the mid- to upper-$880s/mt FOB. Observers said this price is only talk and not confirmed sales.
Indonesia:
Sources now question the $945/mt FOB reportedly done in the last, but scrapped, tender. Sources said following the scrapping of the tender, Kaltim and buyers went into private talks. The initial reports were that the $945/mt FOB was agreed to by all, but sources said this may not be correct.
For now, however, sources are still calling the last price at $945/mt FOB. They have also said that the trend in the market is for a lower price. One trader said the producers are now claiming they want to focus on the domestic market rather than exports. Traders also said producers are not happy with the lower price trends popping up.
Middle East:
While producers cling to the mid-$900s/mt FOB, sources said buyers were trying to lower the price and grab tons for the pending India tender.
However, the latest tender was not the major event that traders and producers were hoping for. Sources said the 78,000 mt being sought by IPL could easily be handled by urea already available from the Arab Gulf. One observer said there is little incentive for the producers to lower their prices for such a small amount.
While the Arab producers continue to argue for prices in the $900s/mt FOB, sources said their Iranian counterparts are engaging in talks in the $600s/mt FOB. Sources could not point to specific deals at that level, but the discussion fits with a general sense that prices are coming down.
Iranian exports for January-March were reported at 847,000 mt, up about 8 percent from the 784,000 mt exported during the same period last year. The main buyers so far this year have been Turkey at 305,000 mt, Brazil at 114,000 mt, and Oman at 100,000 mt.
March exports were also up, according to Trade Data Monitor, to 418,000 mt versus 315,000 mt in March 2021. Turkey accounted for about one-third of Iranian urea exports in March at 143,000 mt. Brazil took another 27 percent at 114,000 mt, and Mozambique took 63,000 mt, representing 15 percent of Iranian exports.
Egyptian producers are lying low as the market tries to figure out what will happen with prices and transportation.
China:
Some product is being allowed out in limited quantities. Demands for urea exports are reviewed by customs officials to make sure the domestic reserves will not be affected.Sources reported that as more containers are returned to China, small quantity buyers might find it easier getting product.
Reportedly, urea plants are only operating at 60 percent of their rated capacity. Some have cut back even further, said sources, because of COVID-related restrictions.
International traders expect to see the availability of urea improve as COVID eases and as domestic demand steadies. Even with increased output, sources said they do not expect exports to return to the previous high levels for some time.
January-March urea exports were reported at 303,000 mt by Trade Data Monitor. This represents a 62 percent drop from the 802,000 mt sent out during the first quarter of 2021.
March 2022 exports totaled 66,000 mt, down from the 367,000 mt exported in March 2021. The main buyers in March, accounting for more than three-quarters of the tonnage exported, were South Korea, India, and Taiwan.
South Korea:
January-March imports of urea were reported at 327,000 mt by Trade Data Monitor, up 24 percent from the 263,000 mt imported during the first quarter of last year.
March imports were reported at 85,000 mt, up from 77,000 mt in March 2021, with product from China, Qatar, and Indonesia accounting for 85 percent of the March 2022 tonnage.
Nepal:
A tender for 30,000 mt of granular urea will close on April 22. The product will most likely come from China and be bagged in India. It will then be sent by river transportation to a receiving warehouse for distribution.Another tender is expected in the last week of May.
Brazil:
Imported prices reflect the softening of the global urea market. Sources put the landed price at $800-$900/mt CFR. Buyers in the country are said to be holding off for further declines in prices, but will step up when the product is finally needed.
Prices at Rondonopolis are stable, with only a slight variation at $1,050-$1,150/mt FOB ex-warehouse. Buyers are said to be waiting for more stability in the urea market before stepping up. This lack of interest is placing a downward pressure on prices.