U.S. Gulf:
NOLA granular barges continued to drift lower at $615-$635/st FOB, down from the week-ago $630-$645/st FOB. Some sources were hopeful that better inland weather would mean firm prices next week, at least for inland markets.
Eastern Cornbelt:
Urea prices continued to decline at mid-month. The regional market was pegged at $685-$705/st FOB, depending on location. Most river terminals in the Illinois and Indiana markets fell in the $685-$700/st FOB range, while the Cincinnati, Ohio, price was reported at $695-$705/st FOB during the week, down from $725-$735/st FOB the week before.
In the Great Lakes region, new urea offers FOB Toledo, Ohio, were reported at the $760/st level during the week.
Western Cornbelt:
Urea was quoted at $680-$705/st FOB in the Western Cornbelt, down $10/st from the previous week’s high, with the low confirmed at St. Louis and the upper end reported on a spot basis in the Iowa market. Pricing FOB Caruthersville, Mo., was pegged at the $700/st FOB level at midweek.
Southern Plains:
The Southern Plains urea market was quoted at $670-$710/st FOB, with the low at Catoosa/Inola, Okla., and sellers reportedly “willing to consider offers.” The high end of the range was reported at Houston, Texas, at midweek.
The drought was impacting movement in the region. “We had a pretty fair run at the end of April, but above-normal temps and below-normal precipitation has been a recipe for limited activity the past couple of weeks,” commented one Texas source.
Added another Kansas contact: “Buyers are looking at the end of the season, buying single loads, one at a time and as they need them.”
South Central:
Fueled by further declines in NOLA barge pricing, urea terminal prices continued to fall in the South Central region. Sources quoted the market at $685-$720/st FOB, down another $5-$10/st from the previous week, with the low confirmed out of river terminals in Kentucky and the high at Convent, La. Other spot prices during the week included $700/st FOB Shreveport, La., $705-$710/st FOB Memphis, Tenn., and $715/st FOB Little Rock, Ark.
Southeast:
Urea prices in the Southeast slipped to $780-$810/st FOB port terminals in mid-May, down significantly from the $950-$1,010/st FOB levels reported in late April. The high end of the range was confirmed at Savannah, Ga., with the Wilmington, N.C., market quoted in the $780-$790/st FOB range. No urea was reportedly available at Norfolk, Va.
India:
RCF will take 1.7 million mt of urea from its tender of May 11. The price was earlier set at $716.50/mt CFR for West Coast deliveries and $721.30/mt CFR for East Coast deliveries.
The tonnage to cover the awards will primarily come from the Arab Gulf, sources reported. There will be cargoes from Vietnam, Indonesia, and Egypt as well. Sources also noted that Dreymoor had indicated sourcing from the Black Sea. Traders said these tons are most likely from Turkmenistan or Uzbekistan rather than from Russia, because of the difficulty getting financing for any Russian product.
| Offering Company | Quantity | Source |
| Samsung | 420,000 | Middle East-Vietnam-China-Egypt |
| OQ Trading | 300,000 | |
| Swiss Singapore | 300,000 | |
| SABIC | 135,000 | |
| Dreymoor | 112,000 | Black Sea-Baltic Sea |
| Ameropa | 92,000 | Middle East-Indonesia |
| Keytrade | 90,000 | Oman |
| OCI Trading | 80,000 | |
| Midgulf | 45,000 | |
| Koch | 47,000 | China |
| Fertchem | 50,000 | |
| Total | 1,671,000 |
The take in the tender will ease pressure on the Indian government to deliver much-needed urea to the farmers as the application season begins. However, sources said the government will have to repeat this order at least twice more to get the supply chain in shape for the rest of the year.
Another tender will have to called soon. Traders speculated the next call may not come until vessels are nominated to cover the tons awarded in this tender. This means the past practice of an Indian company calling a tender during an IFA meeting may not happen.
The annual IFA conference will be held the last week of May in Vienna. Sources said this does not give enough time to prepare for another tender. The earliest source said another tender might be called is mid-June.
Pakistan:
The government upped the amount of urea it wants imported. Earlier in the year the government was ready to authorize the importation of 100,000 mt. Now it wants 200,000 mt.
Initially, the committee discussing the proposal wanted TCP to open talks with urea producing countries for a government-to-government purchase of 200,000 mt, and to prepare documents to purchase the same amount in a public tender.
An outcry from the financing agencies reportedly forced the committee to back off on the two-prong approach. When international traders first heard rumors that Pakistan might try to import some urea, they shared a universal concern. Where, they wondered, would Pakistan get the money to purchase the product, especially at a time when prices are still at high levels?
In the end, the committee authorized TCP to move forward with the government-to-government deal. Such arrangements have been done in the past, with Saudi Arabia being the main backer. Product from SABIC has been sent to Pakistan under friendly terms from lower prices to long-term payment plans. In this case, the Pakistan government is hoping for both.
Middle East:
The netback to the Arab Gulf from the RCF/India tender is put at $685-$690/mt FOB. The price is a sizable drop from the $780/mt FOB that Fertiglobe offered into the tender. However, it is better than the $682.30/mt FOB countered by RCF. Fertiglobe rejected the counterbid.
Also prior to the awards being issued, Fertiglobe reportedly said it was shipping two cargoes of granular urea at $716/mt FOB. One cargo reportedly is for an African buyer and the other for an Asian buyer.
Sources expect Middle East prices to firm. After RCF takes its cargoes from the area, another tender will need to be called by India. About the time of the second tender, sources said, Australian buyers will begin inquiring about material for the second half of the year. Pakistan is also looking for 200,000 mt from the area in a government-to-government deal.
Stepped up interest in purchasing product from the area will come as China remains out of the market as a major supplier. Russia will also be out as a viable source of urea unless the situation changes in Ukraine. All told, supply is expected to be tight as demand picks up.
Soon after RCF began announcing its awards, Egyptian producers stepped up with sales. The week opened with MOPCO selling 6,000 mt at $700/mt FOB. By the end of the week, $720/mt FOB was done and producers were pushing for $730/mt FOB.
Sources said buyers in Europe saw the Indian prices as a solid floor and decided to move to cover their summer and fall needs before prices moved too far up on further demand.
Indonesia:
Kaltim closed a sale for 45,000 mt of granular urea at $680/mt FOB for June shipment. This is a drop from the last done business just a few weeks ago at $720/mt FOB, but one that fits with the Indian tender numbers.
Reportedly, Kaltim was hoping to move about 120,000 mt in June and July loadings. Sources said talks are taking place with traders to secure deals for the remaining quantity.
Southeast Asia:
Sources said Vietnamese urea was able to be offered into India as a result of several factors falling into place.
Farmers in Vietnam have been pushing back against the rising prices coming from the domestic producers. While the price was high for the domestic market, sources said they fit in nicely with the Indian tender. Reportedly, Samsung picked up two cargoes to be part of its awards from RCF.
A sale to the area came in at $745/mt CFR with more buyers clamoring for material. The price reflects the strength provided to prices from the price floor set by India and by the aggressive selling of material from Egypt.
China:
The netback from the Indian tender to China was put at $685-$690/mt FOB. This amount supports a rule of thumb that the netback prices out of China and the Arab Gulf run at about the same levels despite the differences in freight costs to India.
Sources said the Chinese government is reviewing the list of fertilizers that will remain under export restrictions. Urea is bound to remain on the list, said traders. Sources also said the government is prepared to keep the export restrictions in place through June 2023.
The restrictions are not a full ban on exports. Customs officials give plants permission to export their product once the government officials are convinced supplies to the domestic market will not be affected.
Sources said the permission to export is unique to the plant making the request. Reportedly, one company applied for permission to fulfill an order with an international trader and was given permission to send its urea offshore. As the vessel was loading, however, sources said the ship was seized and the plant was fined. It seems the urea being loaded came from a different factory under the aegis of the first company.
International traders noted that this is the first time customs officials secured urea as it was loading. Sources said the process to seek permission had to start all over again, but this time with the customs officials looking at the impact shipping urea from the second company would have on the domestic market.
The action also made it clear to producers and traders that swaps – once a standard practice in the industry – will not be allowed.
South Korea:
Imports for January-April 2022 were reported at 432,000 mt by Trade Data Monitor. This is a 22% jump from the 353,000 mt imported during the same period of 2021.
April 2022 imports were reported at 105,000 mt, compared to the 90,000 mt in April 2021. Chinese urea accounted for 40,000 mt, or 38% of the imported urea during April. Qatar came in with another 34,000 mt for 32% of imports. Vietnam and Indonesia came in with 16,000 mt and 14,000 mt, respectively.
Brazil:
The lower end of the market softened as demand dropped for immediate loadings of product. Sources put the landed price at $690-$740/mt CFR.
Sources said dryness in the sugar cane and corn areas have farmers holding off on making their purchases for 2022/23 use. At the same time, farmers are rebelling against the high price of urea, refusing to buy anything until absolutely needed. The lack of major movement in the market is having the desired effect of lowering prices – at least desired by buyers.
The Rondonópolis price dropped significantly as buyers refuse to buy product at higher prices. Sources put the level this week at $820-$900/mt FOB ex-warehouse. Sources said only a few small deals took place, forcing distributors to keep holding on to product while more tons come in from the ports.