US Gulf:
NOLA urea barges were reported at $520-$530/st FOB, softening from the week-ago $508-$550/st FOB. Sources said the prior week’s prices had shot up to $550/st FOB after news broke of the new Indian tender. However, that news soon lost its luster and prices were once again on the decline at NOLA and at major inland US price points.
Players had much broader price ideas for December cargoes, reporting $535-$570/st FOB.
Eastern Cornbelt:
The urea market was pegged at $590-$635/st FOB in the Eastern Cornbelt, with the low confirmed in Illinois on a spot basis. Urea pricing at Cincinnati, Ohio, was quoted in the $610-$625/st FOB range at midweek, depending on supplier.
Western Cornbelt:
Urea prices dropped to $580-$610/st FOB in the Western Cornbelt, down from the prior week’s $600-$630/st FOB range, with the low confirmed at St. Louis, Mo. Sources quoted the Catoosa/Inola, Okla., urea market at $590-$605/st FOB, while pricing at St. Paul, Minn., was reported at $615-$630/st FOB.
California:
Although urea postings remained as high as $780/st FOB Stockton from some suppliers, sources said the market for new offers was closer to $700-$725/st FOB most port terminals in California. No current delivered prices were reported in the state.
Pacific Northwest:
Urea prices were down $60-$70/st from last report, to $675-$680/st FOB in the Pacific Northwest, with the low confirmed at Rivergate, Ore. Rail-DEL urea pricing was pegged in the $675-$695/st range in early November, with truck-DEL tons reported at $730/st on a spot basis.
Western Canada:
Urea prices were down significantly in Western Canada. Sources quoted delivered pricing in the C$1,040-$1,060/mt range, below the previous C$1,110-$1,130/mt DEL level, while FOB offers fell in the C$1,025-$1,060/mt range, down from C$1,085-$1,135/mt FOB in mid-October.
India:
Traders and producers are quietly trying to figure out how to deal with the NFL tender that closes on Nov. 14. So far, expectations are that prices will be lower than the $649-$655/mt CFR from the IOPL tender last month.
The amount of urea to be secured is also expected to be less. Sources speculated that the take will most likely be less than 1 million mt. The shipping deadline is Dec. 22, and traders said the short delivery time could mean fewer tons will be available for offer.
Because the material will be arriving so late in the season, sources speculated it would most likely be used as buffer stock to build up reserves for the beginning of the next application season.
Pakistan:
While doubts remain that Makhtom Logistic International will be able to fulfill its offer of 300,000 mt at $520/mt CFR, TCP moved ahead and secured a government-to-government deal with China for the same amount.
The Pakistan government authorized TCP to issue the award to Makhtom. Many in the industry said the award was made, but now sources are doubting whether that indeed happened. The low price offered, which sources said was way off the market norms, would make it difficult for the company to perform.
In the end, the TCP talks with China have paid off. A deal for 300,000 mt from China on a government-to-government basis became public on Nov. 11. Sources said Sinochem and CNOOC were involved in the deal. Initially, the delivery period was set for November and December. Sources said the deadline has been extended to January/February 2023.
Initially, sources said TCP was pursuing both the deal with China and the Makhtom award. It is now unclear if that was the case.
Apparently, TCP remains interested in securing a government-to-government deal for 300,000 mt with China. So far, said sources, TCP is still in the early stages of the talks, which only involve representatives from the Chinese embassy in Pakistan.
Bangladesh:
According o local media reports, the government gave BCIC clearance to buy 60,000 mt of granular urea. Half of the allotment will come from Qatar under a government-to-government arrangement. The other 30,000 mt will come from domestic producer KAFCO.
Indonesia:
Traders are still trying to figure out why Persero made a big deal about the MOU with Fertiglobe to handle international sales of Indonesian urea. One trading house said they, too, were offered an MOU for the same purpose.
Some traders suggested the fanfare over the urea agreement seems aimed at gaining some publicity. The real focus, said sources, is more on obtaining green ammonia production technology for Indonesia.
Middle East:
Producers have gone quiet. Sources said they are processing their orders from the IPL/India tender and quietly calculating what they want to charge for the NFL tender. Rumors rose that $610/mt FOB was being discussed, but as is usual, no new spot business was concluded so near the closing of an Indian tender.
Traders said nothing public is expected from the producers until after the NFL prices are revealed on Nov. 15. Even then, said one trader, the producers are more likely to let the numbers speak for themselves rather than letting statements from the production side underscore the expected price shift.
After a quick run-up in prices in Egypt, trade there also went quiet. Sources said the bulk of the business last week is aimed at covering short sales into Europe. Prices are expected to come off the $625-$630/mt FOB levels achieved last week once the NFL tender numbers are released.
China:
Sources said prilled sales for lots of 6,000-12,000 mt were done at $560/mt FOB. At the same time, a granular sale was also reported at $600/mt FOB.
The transactions took place while talks were taking place with Ethiopia for a government-to-government deal of 500,000 mt. TCP in Pakistan is asking for a similar arrangement for 300,000 mt. Sources said the Ethiopians appear to have a better chance at securing a deal.
Deals with Chinese producers for 300,000 mt to Pakistan and 200,000 mt for Ethiopia were revealed on Nov. 11. The sales are government-to-government arrangements. Sources said these deals could take China out of the spot export market. With exports restricted, having these large deals in hand could allow producers to better manage the paperwork for approval and shipping of their product. It will also eat up the tonnage normally offered on the spot market to India and other buyers.
Ethiopia:
A deal was done late this week for 200,000 mt of granular urea to be shipped to Ethiopia by a Chinese producer. The arrangement appears to have been part of talks EABC held with the Chinese government and the urea producer.
The talks began when little interest was shown in a September EABC tender for 930,000 mt of granular urea. The urea was to be shipped in scheduled lots through June 2023. Sources said additional talks will continue with two of the tender participants – Fertiglobe and a Chinese trader – to secure more material.
Urea imports for January-October 2022 were reported at 546,000 mt by Trade Data Monitor, down about 14% from the 531,000 mt imported during the same period in 2021. The main suppliers were Egypt with 355,000 mt and the United Arab Emirates with 100,000 mt. No imports were reported for October 2022, compared with 100,000 mt imported in October 2021.
Black Sea:
The latest estimate of the price for prilled urea out of the Black Sea is put at $505-$530/mt FOB.
Brazil:
After initial indications that prices might move up because of the NFL/India urea tender call, sources said the landed price remained stable at $580-$630/mt CFR. Earlier reports that the range would be higher were dismissed by international traders. By the end of the week, their description of the Brazilian urea market as being dead proved accurate.
Deals at the lower end of the range reportedly involved product from North Africa. As previously reported, urea imports showed a year-over-year drop of 7.5% for January-October. Demand for urea has backed off, said sources, partly because of the higher prices throughout the year. Ammonium sulfate took up the slack for the nitrogen demand of blenders. Looking into November, the vessel line-up shows a reduction of about 4% from November 2021 deliveries.
The Rondonopolis urea price tightened to $755-$780/mt FOB ex-warehouse. Demand is slow, partly because of demonstrations by farmers and other rural activists against the results of the presidential election, which are causing delays in shipments and access to supply centers. Demand is expected to pick up for the corn season application, however.