U.S. Gulf:
NOLA granular urea barge prices sank to $410-$470/st FOB early in the week and held within that range, versus the week-ago $470-$515/st FOB. Sources said several barges were sold for June in the new range, and some said barges were being snapped up for the export market.
U.S. Imports:
April urea imports were reported at 1.22 million st, up 15.9% from 1.05 million st in the prior year. July-April totals stood at 5.62 million st, rising 36.8% from the year-ago 4.11 million st.
July-April imports from Qatar were pegged at 1.47 million st, followed by Oman’s 806,311 st, and 790,808 st from Saudi Arabia. Russia followed with 716,905 st, a 7.0% decline from that country’s year-ago 770,563 st total.
Analysts questioned the accuracy of Qatar’s 600,207 st reported import total for April, as some expected a significantly lower number for the month. The Fertilizer Institute (TFI) announced that it had queried the Census Bureau to confirm the veracity of the Qatar numbers, although no response was reported as of June 16.
U.S. Exports:
Urea exports were up 362.3% in April, to 137,066 st from the year-ago 29,647 st. July-April exports softened 5.9%, however, to 642,701 st from the year-ago 682,669 st.
Eastern Cornbelt:
Urea terminal prices dropped again in the Eastern Cornbelt, fueled by softer NOLA barge values. Urea prices fell to $500-$550/st FOB in the region, down $50/st from the prior week, with the low confirmed out of spot river terminals in Illinois. The Cincinnati, Ohio, market was pegged $545/st FOB at midweek, below last week’s $570-$585/st FOB.
In the Great Lakes region, new urea offers were reported at $550/st FOB Toledo, Ohio, down sharply from the prior week’s $620/st FOB level.
Western Cornbelt:
Urea prices in the Western Cornbelt dropped to a wide $480-$540/st FOB range, down from the previous week’s $540-$610/st FOB. The St. Louis, Mo., market was quoted at $480-$510/st FOB at midweek, below the last reported $540-$570/st range, with the Catoosa/Inola, Okla., market pegged at $485-$505/st FOB.
In the Northern Plains, sources reported new delivered pricing at $540-$600/st in North Dakota, down from the last reported range of $670-$720/st DEL.
California:
Urea pricing was quoted at $760-$840/st FOB in California, down slightly from last report, with the low confirmed at Stockton and the high at West Sacramento. No current delivered prices were confirmed for urea in the state.
Pacific Northwest:
The urea market was pegged at $605-$625/st FOB terminals in the Pacific Northwest, down from $685-$690/st FOB at last report. Rail-delivered pricing was under even more pressure, with reports of $575-$600/st deals available from brokers in mid-June, down from the previous $728-$750/st rail-DEL range.
Western Canada:
With planting now complete across the Prairies, the first summer fill programs were announced for urea at significantly lower prices than the last prompt spring business.
“Prices were under pressure from brokers trying to liquidate their long position and we did end up with leftover inventory at the end of May,” said one regional contact. “This is partly due to the late spring and wet conditions, but also lower usage rates overall. This will be determined more clearly when the inventory and shipment reports come out. Overall, farmers used less nitrogen though.”
Urea fill offers were reportedly circulating in Western Canada at C$785-$825/mt FOB and C$785-$820/mt DEL, depending on supplier and time of shipment, down a full C$320-$330/mt from the last confirmed spring business at C$1,105-$1,150/mt DEL.
India:
Most bets are still on a urea tender to be called sometime during the first two weeks of July. However, there is a growing chorus of voices that claim demand in India is better than expected and global prices are coming off faster than expected. This combination could move the tender call up to the last week of June – or sooner.
Nailing down actual deals with lower prices is difficult because of the lack of any large-scale business. While some sales are made, such as recent sales out of Indonesia, the quantities are small. The market is looking for the kind of comfort and confirmation that only a large Indian purchase can give.
Pakistan:
Even as TCP pursues handling the approved government-to-government deal with China for 200,000 mt, local media reports indicate that some domestic urea plants may have to close.
Reportedly, the government is behind in its payments to local urea producers meant to cover the high price of natural gas. Without the payments, the producers told the media, the urea plants would be uneconomical to run and would have to be shut down.
The loss of any domestic production would require the government to return to the international market beyond the current 200,000 mt being handled by TCP. According to local media reports, the government limited its call for imports with the idea that the rest of the domestic demand could be produced in Pakistan.
The producers, at the same time, assured the government they could meet the demand, but only if they had some support to cover the ever-rising natural gas costs.
Black Sea:
Urea prices remain speculative because of the restrictions on Black Sea shipping due to the war in Ukraine. Prices around $500/mt FOB remain the center of discussion, but without any actual deals to test those levels. Discussions include taking prices even lower, with talk of the price dropping to $450/mt FOB.
The head of the Russian Association of Fertilizer Producers told Interfax he hoped exports of Russian fertilizers could be restored to previous levels by the end of the year. He noted that exports from Russia have dipped by 20% because of the war in Ukraine and the subsequent sanctions imposed on Russia by the U.S. and the E.U.
He noted that the absence of Russia in the global market is just part of the problem. Sanctions against Belarus have affected potash availability. At the same time, China has withdrawn from the global market, causing shortages in urea and phosphates in the marketplace. The impact of these three major fertilizer producers has caused concern around the globe.
Bloomberg also reported that the U.S. is quietly pressuring shippers, banks, and insurance companies to handle deals for Russian fertilizer. Exemptions to the sanctions against Russia allow for fertilizers and grain exports. Sources have told Green Markets the main concern is that if the bank or insurance company is not careful, they could run afoul of the sanctions.
For these companies, the traders said, it is easier to stay away from any deals involving Russian material. For ship owners, moving product out of the Black Sea – a war zone – is also problematic.
Middle East:
Sources said no spot deals out of the area have taken place, leaving the price at the $685-$690/mt FOB level set from the last Indian tender. However, sources said the likely price is closer to $650/mt FOB for June and $500/mt FOB for July.
The paper markets for urea in the area indicated a serious drop in pricing. The June price was pegged at $635-$650/mt FOB. July pricing was put at $490-$510/mt FOB.
Ever since the last Indian tender, the Arab Gulf producers have been tight-lipped about pricing. Sources said with a quiet market and prices in flux, the producers seem to be hesitant to get out ahead, lest they encourage a large price drop or get left behind with pricing ideas too expensive for the market.
Even now, with more discussion of ever-lower prices, producers reportedly are not engaging with traders about potential prices once a new Indian tender is called. They seem to be waiting for the actual tender call before committing to support a price level.
Iranian exports for January-May 2022 were reported at 1.7 million mt by Trade Data Monitor. This is up 38% from the 1.3 million mt exported during the same period in 2021. Sources had been reporting that more Iranian tons were being made available to help make up for the losses incurred with the withdrawal of China from the market and the sanctions against Russia.
Of the top five buyers so far this year, three – UAE, Oman, and Nigeria – are also major urea producers. Sources speculated that the purchases of Iranian material into these countries is a way to wash the tons through a third country to avoid penalties that could come from the U.S. sanctions against Iran.
The top buyer was Turkey with 632,000 mt. Turkey has long been a direct buyer of Iranian material.May 2022 exports were reported at 461,000 mt, up 34% from the 300,000 mt exported during May 2021. Turkey took 32% of the exports in May with 145,000 mt.
The Helwan plant in Egypt is reportedly slowly coming back online. That leaves the Abu Qir plant down for a routine maintenance turnaround.
Like their Arab Gulf counterparts, Egyptian producers have been hesitant to talk with traders about pricing ideas for June and July. However, the paper market is showing $665-$675/mt FOB for June and bids for later in the third quarter at $550/mt FOB, against potential offers of $600/mt FOB.
The lack of any new spot deals, however, leaves the public price at $720/mt FOB. This is a level that is not possible in the current market, traders reported.
The Libyan Fertilizer Company announced that its second urea line is back up and running. The company said it has a rated production value of 1,487 mt/day.
Indonesia:
A new tender confirmed softer urea prices, but only for limited tonnage. A deal was closed at $547/mt FOB for 6,000 mt of granular urea and at $546/mt FOB for 10,000 mt of prilled urea.
The quantities sold are far below what was available, said sources. The prices, however, are in line with traders’ discussions. More tonnage could be found to back an offer into the upcoming Indian tender. In the meantime, sources said the market is taking whatever signals it can to discover a price trend.
South Korea:
Imports of urea for January-May 2022 were reported at 525,000 mt by Trade Data Monitor. This is up from the 431,000 mt imported during the same period in 2021. The main suppliers were Qatar with 157,000 mt and China with 135,000 mt.
The imports from China were dramatically lower than the 332,000 mt imported during January-May of 2021. The decline is from the decision by the Chinese to limit exports in favor of ensuring lower prices and full inventories for its domestic market.
May 2022 imports were reported at 93,000 mt, up 20 % from the 78,000 mt imported in May 2021.
Ethiopia:
Urea imports are primarily handled through large-scale tenders. Delivery is often based on funding to cover the tenders and global availability. The January-May 2022 imports of urea were reported at 151,000 mt by Trade Data Monitor. This is about half of the 301,000 mt imported during the same period in 2021. Egyptian urea dominated the imports this year, with 105,000 mt.
May 2022 imports were reported at 96,000 mt, with Egypt sending 50,000 mt and the balance from the UAE. This is down about 15% from the 112,000 mt imported during May 2021.
Brazil:
Import prices reflect the general global decline. Sources put the landed price at $570-$590/mt CFR. Growing inventories in Brazilian warehouses are putting downward pressure on prices. Sources said the talk at the end of the week is already at $550/mt CFR, with $500/mt CFR expected to be achieved soon.
The issue of plentiful supplies reaches into the country to local distributors. The Rondonópolis prices came off to $730-$760/mt FOB ex-warehouse, a drop of $60/mt.
Imports of urea for January-May 2022 were reported at 2.6 million mt by Trade Data Monitor. This is about 10% down from the 2.9 million mt imported during the same period in 2021.
The top-five suppliers accounted for 1.7 million mt of the material sent. Imports from Nigeria have stepped up in recent years as other suppliers waned. Material from Oman came as a result of the fractured relationship between OMIFCO and its Indian partners. Last year OMIFCO was able to offer its product on the open market, instead of selling exclusively to India.
| Supplying Country | Quantity (mt) | ||
| 2022 | 2021 | 2020 | |
| Nigeria | 546,000 | 205,000 | 309,000 |
| Oman | 493,000 | 419,000 | 0 |
| Qatar | 482,000 | 783,000 | 698,000 |
| Russia | 413,000 | 682,000 | 363,000 |
| Algeria | 289,000 | 336,000 | 555,000 |
May 2022 imports were reported at 571,000 mt, up from the 488,000 mt imported during May 2021. A bit more than half of the May imports came from Oman with 167,000 mt, and Qatar with 131,000 mt.