US Gulf:
NOLA urea barges were reported in the $540-$570/st FOB range, down from the week-ago $580-$600/st FOB. One source attributed the softness to the river situation. “Who would want a urea barge with nowhere to ship?” he asked. Nitrogen products positioned upriver were reported to be faring much better.
Another player, however, added that river conditions and water levels at some major terminals were starting to improve, though slowly.
Eastern Cornbelt:
Urea terminal prices were reported at $660-$680/st FOB in the Eastern Cornbelt, with the low confirmed at Cincinnati, Ohio. Urea prices were under pressure in the Great Lakes region, with reports of new offers falling to $685/st FOB Michigan warehouses and $680/st FOB Toledo, Ohio, for 4Q shipments.
Western Cornbelt:
Urea pricing slipped again to $650-$670/st FOB in the Western Cornbelt, depending on location, with the low confirmed at St. Louis, Mo., and the high in Iowa.
Northern Plains:
Urea prices remained under pressure in the Northern Plains, with reports of new offers slipping to $685-$730/st DEL in North Dakota, down from recent highs in the $730-$750/st DEL range. The St. Paul, Minn., urea market was pegged at $680-$700/st FOB in late October, with pricing out of North Dakota terminals quoted at $700-$705/st.
Northeast:
The urea market was pegged at $690-$705/st FOB in the Northeast, with the low at Baltimore, Md., and East Liverpool, Ohio, and the upper end reported at Fairless Hills, Pa. Delivered urea was pegged at the $740/st level in Pennsylvania during the week.
Eastern Canada:
The urea market in Eastern Canada was reported at C$1,060-$1,120/mt FOB in late October, depending on location and supplier, down C$30/mt from last report at the low end of the range.
India:
The IPL tender settled with the company awarding 1.528 million mt. This amount reflected 57% of the offered tonnage, which is above the average take of most tenders.The urea will be sourced from a variety of locations.
| Company | Quantity (mt) | Source |
| OQ Trading | 296,000 | Oman-Qatar-Malaysia-China |
| Ameropa | 271,000 | Oman-Qatar-Bahrain-Malaysia-China |
| Swiss Singapore | 180,000 | Middle East-Brunei-Baltic |
| SABIC | 175,000 | Saudi Arabia |
| Samsung | 170,000 | China-Georgia-Egypt |
| AgriCommodities | 120,000 | Middle East-Malaysia-Open |
| MidGulf | 97,500 | Oman-China |
| Aries | 47,350 | China |
| MacroSource (Gavilon) | 45,000 | China |
| Fertiglobe | 45,000 | UAE |
| Fertcom | 45,000 | Baltic |
| Koch | 37,000 | Oman |
Sources noted the lack of Indonesian and Vietnamese urea in the mix. Reportedly, at the regional IFA meeting in Singapore just before the tender was called, representatives from Indonesia were assuring traders that they would have up to 250,000 mt of urea available for the tender.
After the tender was called, however, sources said those same representatives claimed a surge in domestic demand made it impossible to supply product. Reportedly, the Vietnamese agents were always hesitant about committing to support offers into the tender, noting that they might be able to get a better price from other customers. In the end, they did hold back.
The earlier estimates that IPL would take close to 2 million mt were based on Vietnam and Indonesia participating in the tender. Without the approximately 350,000 mt estimated from these countries, IPL had to settle for 1.528 million mt.
While the awarded tonnage matches the target quantity set in the tender documents, sources said all this amount will do is keep Indian supplies from falling too far behind expected demand. Reportedly, there were hopes that a larger take could provide enough tonnage to get ahead of demand and allow for a longer wait before the next tender.
Now, said sources, the next tender will need to be called close to the Dec. 5 shipping deadline of the IPL tender.
Pakistan:
The second attempt by TCP to purchase 300,000 mt closed on Oct. 26. Three companies offered tons at wildly different prices. Makhdoom International offered product at $520/mt CFR, Pacific International offered at $645/mt CFR, and AgriCommodities offered at $801/mt CFR. The tonnage offered by each company was not released by TCP.
Normally there is a difference of $15-$25/mt between the West Coast India price and the Pakistan price. This would indicate a likely price at $670-$680/mt CFR. None of the three offers were anywhere near this level, noted traders.
Sources said many of international traders stayed away from the tender because of unfavorable payment procedures. They also noted that Pakistan has been late in making some of its payments in the recent wheat tenders it has called. Sources agreed, however, that Pakistan has not defaulted on any of its contracted deals.
Reportedly, TCP has also been talking with Chinese diplomats to arrange for a government-to-government deal for urea, similar to one worked out for DAP some time ago. Traders said such a deal might be better for Pakistan, because it would guarantee urea from China at a time when rumors are circulating of a stricter export regime from Beijing.
Black Sea:
Sources said urea designated as coming from the Black Sea in the IPL tender is actually Georgian product that will be loaded on the far eastern side of the Black Sea. The only potential for some Russian material is expected to come from the Baltic ports.
Estimates for the price of prilled urea coming out of the Black Sea are now put at $490-$525/mt FOB.
Russia:
September exports of urea are reported at 766,000 mt, according to figures from Russian port authorities. The tonnage is coming out of Baltic ports.
Shipments to Latin America dominate the vessel line-ups with 342,000 mt. Central and Western European buyers are taking 183,000 mt. These orders are thought to have been made to replace the tonnage lost in Europe after production shutdowns due to high natural gas prices.
Indonesia:
Right after Indonesian producers pulled back their tonnage from consideration in the IPL/India tender, claiming a surge in domestic demand, Gresik reportedly sold a cargo to Sri Lanka for a better netback than it would have gotten from IPL.
The Gresik move, and some additional phone calls by international traders, cast doubt on the domestic surge story. Reportedly, Kaltim is getting ready to call a tender to move some of the 200,000 mt it was originally going to allow to be considered for IPL.
While a tender could come as soon as this weekend, traders said Kaltim might also be looking to hold off until the next Indian tender is called, which could be in the first half of December. The determining factor will be how many tons are left in the export quotas. If the number is sufficiently high, said one trader, an auction might even be held in January.
Urea exports from Indonesia for January-August were reported at 1.3 million mt by Trade Data Monitor, down 18% from the 1.5 million mt exported during the same period in 2021. The main buyers were Australia with 335,000 mt, India with 280,000 mt, and the Philippines with 123,000 mt.
August 2022 exports were reported at 223,000 mt, up 35% from the 166,000 mt exported during August 2021.
Middle East:
Arab Gulf producers are slated to send about 750,000 mt of urea to India under the IPL tender. Sources said this amount, along with other contracted tons, will keep the order books full through November.
The IPL tender set the price in the mid-$620s/mt FOB. Producers are expected to push the price higher for buyers looking for prompt spot tons.
The netback to Egypt from the IPL tender was pegged at $610-$620/mt FOB. Almost immediately after the IPL awards were issued, sources were reporting efforts to move the price up quickly. One trader said $650/mt FOB could be done soon.
A November shipment of 10,000 mt to Europe closed at $625/mt FOB late in the week. Additional deals at ever higher prices are expected. European buyers are looking to import urea because many of the European plants are closed due to high production costs.
China:
Chinese producers are expected to supply 300,000 mt of urea to IPL from its tender. The price remains in the upper-$620s/mt FOB based on the IPL tender results.
Rumors are circulating that the Chinese government will ban all fertilizer shipments except ammonium sulfate in 2023. This has led some traders to move aggressively to ensure that their urea cargoes, already cleared for shipment in December, are loaded and gone before the end of the year. One trader said he will not be discussing any January orders until the situation is made clear.
Exports of urea for January-September 2022 were reported at 1.6 million mt by Trade Data Monitor, down 61% from the 4 million mt exported during the same period in 2021. The main buyers were India with 529,000 mt, South Korea with 301,000 mt, and Pakistan with 255,000 mt.
Third-quarter sales were reported at 849,000 mt, about half of the 1.6 million mt exported during the July-September 2021 period. September 2022 exports were down dramatically, to 347,000 mt from the September 2021 exports of 1.1 million mt. India accounted for 57% of the purchases with 197,000 mt, followed by Pakistan with 51,000 mt for 15% of the exports.
Ethiopia:
The Ethiopian Agricultural Business Corp. (EABC) is trying to cut a direct deal with Chinese producers for 500,000 mt of urea.
The EABC closed a tender for 930,000 mt the end of September for shipment through June 2023. Potential delivery issues and questions about financing led to limited participation in the tender. This lack of strong participation led EABC to go directly to major producers in China to secure the tonnage they need.
The export controls currently in place in China could make this deal difficult to pull off. Sources noted that if the rumors of a ban on exports in 2023 are true, the deal would be impossible.
Brazil:
Urea prices in Brazil keep softening, with the landed price now at $630-$640/mt CFR. Reports are also circulating that limited tonnage from sanctioned countries such as Venezuela and Iran are being offered at $610/mt CFR.
Buyers are looking to take advantage of the softening market and the presence of cheaper material. Reportedly, bids are now starting at $600/mt CFR, with expectations that in the near future the price will drop to sub-$600/mt CFR levels.
Some hesitation in buying is not only related to the strict needs of the farmers. Sources said both sides are watching the results of the Oct. 30 presidential election as closely as they are the grain futures markets.
Rondonopolis urea pricing is reported down to $735-$790/mt FOB ex-warehouse. Sources said once the elections are over, the market will react to the planting expectations instead of the political debates and possible policy fluctuations.