US Gulf:
NOLA urea barge prices retreated after a one-week rebound. New business was reported at $445-$475/st FOB, compared to the week-ago $470-$495/st FOB.
US Imports:
Urea imports softened 3.6% in September, to 252,481 st from the year-ago 261,779 st. Imports totaled 572,716 st in July-September, off 41.8% year-over-year from 983,981 st.
Tons loading from Qatar totaled 217,811 st for July-September, ahead of both 144,524 st from Saudi Arabia and 104,283 st from Canada. Russia sent 65,845 st.
US Exports:
Urea exports were up 1,212.6% in September, to 212,080 st from the prior-year 16,158 st. Exports jumped 1,169.7% to 615,399 st in July-September, rising from the year-ago 48,467 st.
Eastern Cornbelt:
Urea prices dropped to $530-$550/st FOB in the Eastern Cornbelt, down from the prior week’s $540-$580/st FOB range, with the low confirmed at Ottawa, Ill. The Cincinnati, Ohio, market was pegged at $530-$540/st FOB during the week.
Western Cornbelt:
Urea continued to weaken. The regional market was quoted at $525-$550/st FOB in the Western Cornbelt, down from the prior week’s $540-$580/st FOB range, with the low confirmed at St. Louis, Mo., at midweek.
Southern Plains:
Urea pricing in the Southern Plains slipped to $520-$550/st FOB Catoosa/Inola, Okla., depending on timing and supplier, with the high reported early in the week and the low confirmed on Dec. 15. The Houston, Texas, urea market as of Dec. 5 was pegged at the $545/st FOB level.
South Central:
Urea was quoted at $530-$560/st FOB terminals in the South Central region, down from the prior $550-$585/st FOB range, with the low confirmed in Arkansas and the high at Memphis, Tenn. Kentucky sources pegged the market at the $540/st FOB level out of Ohio River terminals, while the latest offers FOB Convent, La., were confirmed at $550/st.
Southeast:
The latest urea offers in the Southeast were quoted at $590/st FOB Wilmington, N.C., with no inventory available in Savannah, Ga.
India:
Sources still expect another Indian tender to be called in 2022. Hopes for a Dec. 19 date are fading, as most industry watchers now said the tender will most likely be called in the last week of the month
Prices in the tender are expected to be down from the current $573-$579/mt CFR to at least $500/mt CFR. Some traders are even predicting prices sub-$500/mt CFR.
The week started with meetings in India for all the players involved with calling the tender. The Department of Fertilizers has reportedly signed off on a new tender and has been assured that the funds needed to buy up to 1.5 million mt of urea will be available.
Sources said the government should be anxious to call a tender as soon as possible, as importing urea is quickly becoming cheaper than what domestic producers can supply. Many of the older, less efficient plants are reportedly showing a production cost of $1,000/mt. The Indian government has been slowly replacing these older plants with new or updated facilities, but even with government subsidies, the cost of natural gas to the new plants is making urea production expensive.
January-October urea imports were noted at 7.4 million mt by Trade Data Monitor, a20% year-over-year increase from 6.2 million mt. Oman led suppliers with 1.3 million mt, followed by China with 911,000 mt, and the UAE with 696,000 mt.
October imports were counted at 573,000 mt, up dramatically from 149,000 mt received in October 2021. The United Arab Emirates accounted for 35% of the import market with 202,000 mt, followed by Oman with 91,000 mt.
Middle East:
Producers are focused on sending out product secured under the last Indian tender or under long-term contracts. Sources said no spot deals were possible this month.
The paper market puts the December price at $450/mt FOB. This fits in with estimates of where the market should be based on China-related deals and discussions among traders. Sources said that for any deal out of the Arab Gulf to make sense, the price needs to be no more than $480-$490/mt FOB. Producers are reportedly willing to talk with buyers at this level, but then claim there is no tonnage available.
The week featured another burst of sales out of Egypt, along with an ensuing price rise. Sources reported Kima selling a cargo at $538/mt FOB early in the week, quickly followed by sales from Alexfert at $540/mt FOB, and the Abu Qir and MOPCO at $545/mt FOB by midweek. As the week ended, the price moved up further to $550/mt FOB, followed by $560/mt FOB, and ended at $565/mt FOB. Reportedly, all the deals – about 10,000 mt each – were for European buyers.
In addition to the sales into Europe, Egyptian urea is playing a role in Ethiopia. Sources reported Fertiglobe will be sending three cargoes of urea to the east African country. At least two cargoes of 50,000 mt each will be shipped in January 2023, while the third cargo will most likely load in February. The deal is part of four shipments, totaling 50,000 mt each, awarded to Fertiglobe in the EABC tender that closed in November.
China:
Sources estimated the price out of China is now in the $470s/mt FOB following a small deal into South Korea. The price drop comes after more cargoes than expected will be loaded from China to service the most recent Indian tender.
Traders speculated that only one or two cargoes will be available for the anticipated new Indian tender. Exports of urea during the first quarter of 2023 are expected to be even more restricted than what has been experienced so far.
Malaysia:
Trade Data Monitor reported January-October urea exports at 1.5 million mt, off 11% from the year-ago 1.7 million mt. The market’s primary buyers were Australia, taking 435,000 mt, followed by Thailand with 316,000 mt. Both counties increased their take compared to 2021.
Brazil:
Sources reported prices down to $500-$505/mt CFR. There were also reports of sanctioned material from Iran or Venezuela being dealt at $490/mt CFR.
Buyers continue to push for lower prices. Brazilian and international sources pointed to plentiful supplies on hand combined with limited buying interest as the reason prices keep coming off. Some international traders commented that they would not be surprised to see the bulk of the Brazilian market dip below $490/mt CFR soon.
Rondonopolis was reported down to $650-$680/mt FOB ex-warehouse. Sources said that some of the drop is coming from blenders looking to ammonium sulfate instead of urea.