U.S. Gulf:
New NOLA urea trades were reported at $680-$710/st, up from the week-ago $560-$695/st FOB.
Eastern Cornbelt:
After the previous week’s dramatic rise, urea prices in the Eastern Cornbelt firmed to the $720-$740/st FOB range for new offers, with both the high and low confirmed at Cincinnati, Ohio, as the week progressed. In the Michigan market, new pricing FOB Toledo, Ohio, was pegged at the $765/st FOB level for September business.
Western Cornbelt:
The urea market was pegged at $710-$735/st FOB in the Western Cornbelt, with the low confirmed at St. Louis, Mo., and the high in Iowa. The Caruthersville, Mo., market was also quoted at the $735/st FOB level at midweek, while pricing at Port Neal, Iowa, was pegged in the $725-$735/st FOB range.
In the Northern Plains, urea prices jumped to $725-$750/st FOB St. Paul, Minn., and $745-$770/st DEL in North Dakota, up from the prior week’s $645-$670/st DEL range.
Southern Plains:
Urea prices were up significantly in the Southern Plains. The Catoosa/Inola, Okla., market reportedly ranged from $722-$735/st FOB during the week, depending on timing and supplier, with reports of December-January offers moving to as high as $740/st FOB.
The Enid, Okla., market was pegged at $725-$730/st FOB, with pricing at Borger quoted at the $735/st FOB level. No urea offers were reported at Houston, with all tons currently committed. Sources said the Houston market should have some urea in about two weeks, pending barge arrival.
South Central:
Urea prices were up dramatically in the South Central region, driven by surging NOLA barge values. The market was quoted at $710-$735/st FOB regional terminals, up from the prior week’s low of $600/st FOB, with the high reported in Arkansas and Kentucky and the low confirmed at Memphis, Tenn. Tons at Convent, La., were reportedly sold out after pricing at that location surged from a low of $600/st up to $670/st FOB the previous week.
Southeast:
New urea offers out of port terminals in the Southeast were confirmed in the $700-$725/st FOB range, up from the prior week’s high of $675/st FOB, with both the low and high ends of the range reported in Wilmington, N.C.
India:
RCF called a urea tender for 1 million mt to close on Sept. 9. The call came just as urea prices were catching fire in North Africa and the Arab Gulf.
While the buyer hopes to get 1 million mt, sources said it might be lucky to get 800,000 mt, based on the potential suppliers for the tender. China might supply one or two cargoes, said one trader. Indonesia will have limited urea for export until it gets its Kaltim V facility back to full operations. That leaves the Arab Gulf and Russia.
Reportedly, Russia and India have worked out a deal that would allow for a ruble-rupee exchange to cover any tons offered from Russia. Even without the special arrangement, 148,000 mt of Russian product was part of the shipments that arrived as a result of the July 20 IPL tender.
While there are no sanctions against Russian fertilizer or against banks and insurance companies backing Russian fertilizer sales, sources said many traders are nervous about making sure every aspect of the exceptions are followed, lest they end up being challenged by European or American sanctions monitors.
As of Sept. 1, India still needs 4 million mt of urea to close out the year properly. The limitations of available urea, largely because of the Chinese export restrictions, make it difficult to buy what they need at a price the Indian government considers fair. The last tender came in at $517-$520/mt CFR because there was a surplus of urea in the market and IPL indicated it only wanted 500,000 mt.
Now with demand for at least 1 million mt and a smaller surplus of tons on the market, sources expect prices to be much higher. Soon after the tender was announced, one trader predicted a price of $725/mt CFR. However, as the week progressed, deals out of the Arab Gulf moved the price closer to $800/mt FOB, leading traders to re-evaluate their potential offers.
A move by GAIL, the national natural gas supplier, could help with urea supplies through the end of the year. Bloomberg reported that GAIL will close a tender for 57 trillion btu of natural gas on Sept. 7. The gas is for October-December delivery and will be earmarked for fertilizer plants.
The final tonnage booked under the July IPL tender came out to 592,800 mt, just a couple hundred mt below expectations. The shipping deadline was Aug. 31.
| Sources and Tonnage of July IPL Tender Urea | |||||
| China | Indonesia | Russia | Kotka/Finland | Arab Gulf | Unknown |
| 134,800 | 45,000 | 148,000 | 100,000 | 135,000 | 30,000 |
Sources said the urea sent out of the Kotka/Finland port is most likely Russian material. The shipments will send 408,000 mt to India’s West Coat and 184,800 mt to East Coast ports.
Indian urea imports for January-June 2022 were reported at 4.6 million mt by Trade Data Monitor. This is a dramatic leap from the 2.5 million mt imported during the first semester of 2021. The main suppliers for the first half of 2022 were Oman with 878,000 mt, Qatar with 425,000 mt, and Saudi Arabia with 404,000 mt.
Second-quarter 2022 imports of 1.4 million mt were about on par with the 1.3 million mt imported during the same period in 2021.
June 2022 imports were reported at 751,000 mt, up 53% from the 491,000 mt imported during June 2021. Oman with 263,000 mt, Vietnam with 94,000 mt, and Saudi Arabia with 78,000 mt accounted for 58% of all imports during June 2022.
Black Sea:
Prills from the Black Sea are being quoted at $535-$571/mt FOB, with the bulk of the business being done in the middle of the range.
It is unclear how many Russian tons will be offered in the upcoming RCF Indian tender. Handling the financial arrangements might be easier after word circulated that a ruble-rupee exchange has been worked out between Russia and India.
SOCAR in Azerbaijan closed a tender this week for 30,000 mt. No details were available at press time. Other tenders from Turkmenistan and Uzbekistan are also expected soon. All three could ship out of the port of Poti on the far east of the Black Sea.
Imports of urea by Turkey for January-July 2022 were reported at 1.3 million mt by Trade Data Monitor, down slightly from the 1.5 million mt imported during the same period in 2021. Of note were the 114,000 mt imported from Russia. During the first seven months of 2021, Turkey only imported 1,700 mt from Russia. Iranian imports were down about 26%, to 100,000 mt in 2022 from 135,000 mt in 2021.
July imports were reported at 287,000 mt, up 141% from the 119,000 mt purchased in July 2021. Oman dominated the sales at 136,000 mt. The next closest was Russia with 57,000 mt.
Indonesia:
Small tenders were awarded in the past week. Liven won an award for 12,000 mt of prilled urea at $522.89/mt FOB. It also took a 30,000 mt award for granular urea at $557/mt FOB. The granular material is most likely headed to Latin America.
| Indonesia Prilled Auction | |
| Bidding Company | US$/mt FOB |
| Liven | 522.89 |
| Swiss Singapore | 518.00 |
| Ameropa | 486.00 |
| Hearty Chem | 478.00 |
The granular price is only $10/mt higher than an awarded price of several months ago. The tender and awards took place before the rest of the urea market began its dramatic price increases.
Kaltim V is expected to begin producing granular urea by the end of October. It is taking ammonia that would have normally been sold on the spot market, as well as ammonia being diverted from less efficient plants.
Indonesian urea exports for January-June 2022 were reported at 822,000 mt by Trade Data Monitor, down 20% from the 1 million mt exported during the first half of 2021. The top two buyers were Australia at 220,000 mt, and India at 207,000 mt.
Second-quarter 2022 exports were reported at 619,000 mt, down from the 676,000 mt exported during the same period of 2021.
June 2022 exports were reported at 204,000 mt, down from the 271,000 mt exported during June 2021. Australia with 84,000 mt, India with 47,000 mt, and Myanmar with 25,000 mt accounted for 76% of all exports.
Middle East:
The rumors of deals closing around $700/mt FOB last week were apparently accurate. Sources said even as the ink was drying on those deals, higher prices were being bid and offered. Done business is reported in the low-$700s/mt FOB, with all the current talk taking place closer to $800/mt FOB.
The push for higher prices came on the heels of the Indian announcement of a new urea tender. With China out of the urea export market the only competition to the Arab Gulf is Russia, and questions remain about how many tons will be able to be shipped out of Russia.
Right after the tender was called, sources said Arab Gulf producers pulled back from active discussions. One trader said they most likely want to see how the market reacts to the tender call before moving ahead with commitments to back traders or to offer tons directly. With a Sept. 9 closing, the producers will have almost another full week to assess their situation and that of the global market.
SABIC officials flew to Thailand to hold talks with the Thai government about shipping more urea to that Southeast Asian country. According to the Thai commerce minister, they are looking for an additional 100,000 mt of urea for this year. As of the end of July, Saudi Arabia has already sent 495,000 mt of urea out of 2.5 million mt imported.
SABIC has long provided Thai buyers with favorable prices. In the past, the landed price in Thailand has been equal to or lower than the posted FOB price out of Saudi Arabia. A market analyst said SABIC is willing to offer lower prices to preserve a strong market presence in Thailand.
Exports of urea from Iran for January-July 2022 were reported at 2.5 million mt by Trade Data Monitor, up 24% from the 2 million mt exported during the same period in 2021. The single largest buyer was Turkey, taking 824,000 mt. South Africa, Nigeria, the UAE, and Brazil finished off the top-five buyers with a total of 851,000 mt.
July 2022 exports were reported at 316,000 mt, down from the 334,000 mt shipped out in July 2021. Turkish buyers accounted for 26% of the July exports at 188,000 mt, followed by Thailand with 66,000 mt for 21% of exports, and Brazil with 65,000 mt for 20% of exports.
The export of urea from Iran to urea-producing countries such as Nigeria and the UAE raises questions for some traders. The sanctions imposed on Iranian product by the US affects mostly the shipping and insurance related to the cargoes. Sources have suggested the urea could be used within those countries, freeing up more of their own urea for export. Sources have also suggested that the Iranian material could be processed in a way that might hide the origin of the product to avoid the sanctions.
Egyptian producers led the way in price rises. As the previous week closed, producers announced a jump from $785/mt to $865/mt FOB. The opening of this week showed more movement.
MOPCO reported a sale of 5,000 mt at $885/mt FOB. Kima said it closed a deal at $895/mt FOB for 15,000 mt, and Helwan reportedly sold an October shipment at $900/mt FOB. Reportedly, all the deals were for open destinations, but sources suggest the tonnage is bound for European ports. The high natural gas prices in Europe make importing urea cheaper than producing it, even at these levels from Egypt.
China:
Limited tonnage for export could mean China might not be a major factor in the upcoming India urea tender. Sources note the big concern is getting the necessary clearances from customs officials to export. Reportedly, the process is very slow and subject to multiple delays. Sources said traders now working to secure tons to offer into the Indian tender are not sure the process will be completed in time to meet the Oct. 21 shipping deadline.
Prilled prices are reported at $560-$570/mt FOB. So far, only prilled urea is being discussed. Sources reported Fudao looked at exporting some granular product, but was discouraged by the process to get permission to do so and decided to stay with the domestic market.
Thailand:
The Thai government met with SABIC officials to increase the urea offtake another 100,000 mt. Local media reports said the main topic is not the availability of the product or the unwillingness of SABIC to deliver, but rather the price.
The Thai government is expected to subsidize the urea to help farmers afford the product. If the imported price is too high, the finance ministries might object to the deal. In the past, SABIC has provided significant discounts to Thailand.
Imports of urea for January-July 2022 were reported at 1.2 million mt, according to Trade Data Monitor, down about 13% from the 1.4 million mt imported during the same period in 2021. Saudi Arabia topped the list of providers at 495,000 mt, followed by Qatar with 293,000 mt.
July 2022 urea imports were reported at 293,000 mt, up 24% from the 235,000 mt imported during July 2021.
Sri Lanka:
A tender for 125,000 mt closed this week for delivery by Oct. 20. The tender was a follow up to a failed tender in July. Sources said the letters of credit for the latest tender are now backed by the World Bank.
Sri Lanka has faced a crisis in crop nutrients after former President Gotabaya Rajapaksa implemented a ban on all non-organic fertilizers in 2021. The ensuing drop in crop output, especially in the vital tea production area, led to a financial crisis.
Since the replacement of Rajapaksa, countries have helped by sending fertilizers under loan or grant programs. India has already sent two cargoes of urea to the island nation.
Brazil:
Urea prices in Brazil jumped on word that India was holding another urea tender and that it wanted 1 million mt. Sources reported the portside price at $770-$830/mt CFR, with the upper end reflecting firm offers late in the week.
Buyers at Rondonopolis were reluctant to commit to deals under the old pricing. Sources said the new price of $855-$930/mt FOB ex-warehouse will not make them any more eager to step up.