U.S. Gulf:
NOLA granular barges were reported at $630-$645/st FOB, compared to the week-ago $620-$670/st FOB. While prices did not slip below the week-ago low, the average price did inch down.
There were unconfirmed reports that prices this week may have dipped as low as $625/st FOB. Sources said early-week reports that prices might hit $700/st FOB during the week were wishful thinking.
U.S. Imports:
July-March urea imports were reported at 4.40 million st, up 43.9% from the year-ago 3.06 million st. March imports were off 21.2%, however, slipping to 757,614 st from the prior-year 961,873 st.
July-March imports from Qatar were pegged at 868,080 st, followed by Russia’s 595,499 st, and 694,685 st from Oman. Saudi Arabia added 594,845 st.
U.S. Exports:
March urea exports shot up 249.4%, to 165,187 st from the prior-year 47,284 st. July-March exports softened 22.6%, however, to 505,635 st from the previous 653,023 st.
Eastern Cornbelt:
Granular urea prices remained under pressure in the Eastern Cornbelt. Sources quoted the market at $680-$735/st FOB in the region, down from last week’s broad $680-$780/st FOB range, with the low confirmed out of spot river terminals in Illinois and the high at Cincinnati, Ohio.
Western Cornbelt:
Urea was quoted at $680-$715/st FOB in the Western Cornbelt, down from the previous week’s $680-$750/st FOB range, with the high reported in Iowa at midweek. The St. Louis, Mo., urea market was quoted at $680-$700/st FOB.
Urea pricing FOB Catoosa/Inola, Okla., covered a broad range at $675-$720/st FOB during the week, depending on supplier and timing.
Northern Plains:
Urea prices continued to fall in the Northern Plains. Sources reported the St. Paul, Minn., market in the $675-$715/st FOB range during the week, down from the prior week’s $690-$720/st FOB, and well below the mid-April range of $820-$840/st FOB.
Delivered urea was pegged at $760-$780/st in North Dakota, down $10-$20/st from the week before and considerably lower than the $875-$905/st DEL range reported in mid-April.
Great Lakes:
Urea prices were falling in the Great Lakes region, driven by NOLA pricing volatility and the previous several weeks of weather-related fieldwork delays.
Sources quoted the market at $775-$900/st FOB in the region, depending on location and supplier, with the high confirmed out of spot Michigan warehouses. The range was down dramatically from month-ago highs in the $965-$1,000/st FOB range.
Northeast:
Urea terminal prices in the Northeast were quoted at $750-$765/st FOB during the week, depending on location, significantly lower than the $975-$1,025/st FOB values reported in mid-April.
Eastern Canada:
Urea prices in Eastern Canada were reported at C$1,395-$1,465/mt FOB during the week, down from the prior low of C$1,440/mt FOB.
India:
The RCF tender closed on May 11 with 14 companies offering 2.64 million mt. Samsung came in with the lowest offers for both coasts with $716.50/mt CFR for West Coast delivery and $721.30/mt CFR for East Coast cargoes.
The West Coast price held steady from the mini tender held by IPL in April, while the East Coast price came down about $29/mt.Offers favored deliveries to the West Coast, with traders offering 1.5 million mt to those ports, plus 135,000 mt in a direct offer from a company representing a producer. East Coast offers were reported at 1.01 million mt.
| Offering Company | Quantity (mt) | US$/mt | Discharge Port | |
| FOB | CFR | |||
| Samsung L1 for East Coast and West Coast | 49,500 | 721.30 | Kakinada | |
| 45,000 | 721.30 | Krishnapatnam | ||
| 45,000 | 721.30 | Karaikal | ||
| 47,000 | 716.50 | New Mangalore | ||
| 45,000 | 716.50 | Kandla | ||
| 94,000 | 716.50 | Mundra | ||
| 94,000 | 716.50 | Pipavav | ||
| Swiss Singapore | 90,000 | 727.50 | ECI | |
| 45,000 | 718.50 | Mundra | ||
| 165,000 | 718.55 | WCI | ||
| Ferticom | 50,000 | 735.00 | Pipavav | |
| 50,000 | 750.00 | Paradip | ||
| Keytrade | 45,000 | 736.25 | Gangavaram | |
| 45,000 | 745.00 | Mundra | ||
| 45,000 | 735.00 | Kandla | ||
| Ameropa | 45,000 | 739.00 | Kakinada | |
| 47,250 | 725.00 | Mundra | ||
| 45,000 | 725.00 | Mangalore | ||
| Koch | 47,000 | 745.00 | Krishnapatnam-Vizag | |
| 50,000 | 745.00 | Kakinada-Karaikal | ||
| 50,000 | 750.00 | Mundra-Kandla | ||
| 47,000 | 750.00 | Adani Tuna-Dahej | ||
| Midgulf | 50,000 | 752.00 | Krishnapatnam | |
| 50,000 | 752.00 | Gangavaram | ||
| 50,000 | 742.00 | Adani Tuna | ||
| 50,000 | 742.00 | Mundra | ||
| Dreymoor | 163,000 | 755.00 | Pipavav | |
| 46,000 | 790.00 | Kakinada | ||
| Gavilon | 50,000 | 763.00 | ECI | |
| 50,000 | 767.00 | Mundra-Kandla | ||
| SABIC | 125,000 | 745.00 | Mundra-Kandla | |
| Medallion | 50,000 | 765.00 | ECI | |
| 50,000 | 747.00 | WCI | ||
| Grain Conservation and Warehousing Industries (OQ Trading) | 65,000 | 769.00 | Kakinada-Krishnapatnam | |
| 235,000 | 734.50 | Kandla-Mundra | ||
| Consolidated Shipping and Bulk Terminals (OCI Trading) | 70,000 | 807.00 | ECI | |
| 116,000 | 800.00 | WCI | ||
| Coastal Chemical (Fertiglobe) | 135,000 | 780.00 | FOB |
The offer directly from a producer was handled by Coastal Chemical, which seems to be representing Fertiglobe. The offered price was $780/mt FOB, which would equate to about $805-$810/mt CFR.
Two other companies – Grain Conservation and Warehousing Industries and Consolidated Shipping and Bulk Terminals – also attracted the attention of industry watchers. These two companies, plus Coastal Chemical, have the same people on their boards of directors. A fourth company that also shares the same directors, International Ore and Fertilizer, is affiliated with Rahimtula Group, a large Indian fertilizer trading company.
Industry sources calculated that Grain Conservation was working with OQ Trading, which handles urea sales out of Oman. Consolidated Shipping is linked with OCI Trading that primarily handles Fertiglobe product, as well as material from Egypt.
Sources said RCF is hoping to issue awards for 1.5-1.6 million mt. However, with 1.5 million mt priced at $750/mt CFR and higher, sources wondered how many tons will be available at the Samsung price. One trader noted that some of the product may have been offered to a trading house at a set price. The suppliers may not authorize a deal that dips to the $716-$720/mt CFR levels.
The $780/mt FOB offered by Coastal Chemical, reportedly on behalf of Fertiglobe, is much higher than recent business done out of the Arab Gulf, albeit lower than the $800/mt FOB producers had been proclaiming in recent weeks.
The buyer is guaranteed at least 420,000 mt from the Samsung offer. Second place Swiss Singapore, with another 300,000 mt, could most likely meet the Samsung price. After that, prices jump $15/mt or more above the lowest price. The remaining tonnage offered under $750/mt CFR amounts to another 419,000 mt, which would give RCF 1.14 million mt.
After looking at the prices, industry watchers began to calculate where the product will come from. Sources estimated Chinese urea could account for 300,000-500,000 mt, with maybe one or two cargoes also from Chinese ports but from other origins. The Arab Gulf is seen as being able to supply an equal amount, taking RCF close to its desired purchase level. That would leave some cargoes to be sent from Southeast Asia, such as Vietnam, and North Africa.
One trader noted, however, if the Arab Gulf is not willing to send as many tons as estimated, buyers might look for more tons from North and West Africa. If Nigeria is seriously tapped to help supply this tender, Brazil may become nervous about the diversion of material they feel should be directed west instead of east.
The softer price in the market was written off by traders as the result of inactivity clashing with pending demand. The industry kept looking at India, Australia, and Brazil as being poised and ready to buy. At the same time, buyers kept holding off until the tons were needed.
Sources noted the mini-tender of 78,000 mt held in April by IPL triggered some buying and a brief uptick in prices. Some in the market became concerned that the big buyers would soon move in and grab all the excess tons in the market.
As Brazilian buyers remained hesitant to commit to large orders, talk of lower prices kicked in right away. Even after the RCF tender was announced, talk of prices in the mid-$800s/mt CFR quickly ended as industry players looked to the lower $700s/mt CFR.
Black Sea:
The inability to move vessels into and out of Ukrainian ports continues to deny traders any opportunities to test prices. While some will make calculations based on the Indian tender numbers or the Arab Gulf price, sources are clear there is no urea coming out of Ukrainian ports.
One trader said some tons could be shipped out of the ports on the far eastern side of the Black Sea. However, if the urea is Russian, no Western bank will be willing to help finance the deal. Even if the tons are Georgian, the loading will have to take place at a Russian port, which could also cause problems because of the sanctions against Russia.
Even if a trading house is willing to move on a Russian cargo using its own money, sources said it would have difficulty depositing the money in any Western bank.
Middle East:
The netback to the Arab Gulf from the RCF/Indian tender is in the upper $680s/mt FOB. This represents a $40/mt drop from the last spot deal done out of the Arab Gulf.
The price was not seen as a surprise to traders. For weeks producers had been arguing the price should be $790-$800/mt FOB, while buyers were saying the softness of the market mandated a price closer to $700/mt FOB.
Once RCF issues its counterbid to the traders to match the Samsung price, sources said the world will learn how many tons were tied to specific higher prices. In an uncertain market, sources said it is not unusual for a producer and trader to agree to a minimum price for these tenders. If the awarded price is below that minimum, the parties may not respond and seek to sell the product elsewhere. Brazil and Australia will be looking for urea soon and might provide a good market for the tons.
The Coastal Chemical offer of $780/mt FOB, reportedly from Fertiglobe, allowed Arab Gulf producers to indicate where they think prices should be without formally putting their names to the offer. If the market went the other way, they would be spared the shame of offering at too low a price. As it is, the price offered will be significantly higher than the estimated netback from India.
Egyptian producers remain silent, as does any discussion of material in the area. Sources said for all practical purposes the market is non-existent. Industry observers said that might change once awards get issued from RCF. Some material from Egypt is expected to be included in the final orders.
China:
Sources estimated that China could supply 300,000-500,000 mt in the RCF tender. The tonnage would be in addition to the few cargoes of non-China origin sitting in Chinese bonded warehouses.
The netback to China from the Indian tender is estimated in the low-$690s/mt FOB. The price would be in line with the Arab Gulf price. In recent years, the Chinese and Arab prices have been within $5-$10/mt of each other.
The main issue will be getting proper customs clearances to export the urea. Sources said COVID restrictions have made it difficult to nail down an accurate account of how some plants are operating and what reserves they may have on hand. The customs officials are ordered to ensure that the country maintains a strong reserve of urea into the summer. Sources said estimates at this point indicate there should be no problem clearing the tons for export.
Ethiopia:
Imports for the first four months of the year are lagging behind last year. Trade Data Monitor reported January-April 2022 imports at only 56,000 mt, down 70% from the 189,000 mt imported during the same period in 2021.
April 2022 imports were at 55,000 mt, all from Egypt. This is a jump up from April 2021 imports of only 123 mt. Imports are expected to pick up in May and June and into the third quarter.
Ethiopia usually depends on tenders for its urea supplies. The shipments are often sporadic due to funding and logistic issues. The total amount of urea imported in 2021 was 531,000 mt.
Brazil:
Buyers remain hesitant to purchase unless absolutely necessary. Sources said this attitude has been pushing down prices. The landed price saw a dramatic dip to $700-$740/mt CFR from a high last week of $900/mt CFR.
Global traders said the hand-to-mouth style of buying in Brazil helped lead to softer-than-expected prices in the Indian tender. Prices could move up, however, if India takes the 1.5-1.6 million mt it said it wants.
Under ideal conditions, most of the tonnage to India would come from China, Southeast Asia, and the Arab Gulf. This situation would leave untouched some of Brazil’s suppliers.
If, however, traders have to reach to North Africa and Nigeria to fulfill an Indian award, Brazilian buyers could become nervous, said one Asian trader. Likewise, if the Arab Gulf producers decide the Indian price is too low, they could hold on to their higher pricing ideas and make new and higher offers into Brazil. At that point, Brazilian buyers may not have any choice but to accept the new levels.
The price in Rondonopolis tightened to $900-$940/mt FOB ex-warehouse. Buyers had been buying only when needed. This action has causing reserves to build up and pressure sellers to lower prices to clear out storage space for newly arriving tons.
Imports of urea for the first four months of the year were reported at 2 million mt, down 16% from the same period in 2021, according to Trade Data Monitor. The main supplier of urea in this period was Nigeria with 460,000 mt, up 180% from the same four months last year. Qatar, Oman, and Russia were also suppliers of 320,000-350,000 mt each during the period.
April 2022 imports of 371,000 mt were down about 9% from the 406,000 mt imported during April 2021. Qatar topped the list of suppliers with 108,000 mt, representing 29% of all urea imported last month. Nigeria accounted for another 23% of imports with 85,000 mt.