US Gulf:
NOLA granular urea prices dropped as low as $340/st FOB early in the week before rebounding. The final range was reported as $340-$392/st FOB, down from the week-ago $385-$418/st FOB.
Eastern Cornbelt:
Urea was reported in a broad range at $450-$490/st FOB in the Eastern Cornbelt, with the Cincinnati, Ohio, market pegged at $460-$470/st FOB. In the Great Lakes region, Michigan sources quoted the latest urea offers at $495-$510/st FOB, depending on location and time of shipment.
Western Cornbelt:
Urea prices remained at $400-$450/st FOB in the Western Cornbelt, with the low reported at Port Neal, Iowa. The St. Louis, Mo., urea market was unchanged at $430-$450/st FOB in late January.
Northern Plains:
Sources said urea pricing slipped to $430/st FOB St. Paul, Minn., during the week, below the prior week’s $460-$480/st FOB range. The latest offers FOB Carrington, N.D., were pegged at the $515/st level, down from $570/st FOB earlier in January. Delivered urea in North Dakota was pegged at the $530-$545/st level for prompt tons.
Northeast:
Urea was quoted at $460-$500/st FOB in the Northeast, down from the previous week’s $500-$520/st FOB range, with the low reported at East Liverpool, Ohio, and the high at Baltimore, Md., and Fairless Hills, Pa. Delivered urea in central Pennsylvania was pegged at the $530/st level, down from $600/st DEL at the start of January.
In the Southern US, new urea offers FOB Convent, La., were quoted at the $430/st level.
Eastern Canada:
Urea pricing in Eastern Canada slipped to C$905-$1,020/mt FOB in late January, depending on location and supplier, down from the prior C$945-$1,120/mt FOB range.
India:
While the world waits for another urea tender to be called, the Indian government adjusted its urea import policies to allow for companies to directly import urea for agricultural use. The government said it will be issuing bills of entry for urea marketing firms to allow for the importation of subsidized urea.
In the past, only urea secured through joint-venture contracts, such as the previous deal with Oman, could be imported outside of the tender process. The Indian government has been looking for ways to purchase more urea outside of the volatile tender process. It encouraged the recent contract with OMIFCO for steady deliveries of urea during a one-year term. It also authorized IPL to call a tender, open to producers only, to secure an additional 600,000 mt under another one-year contract. This tender closes Feb. 1.
Sources said that the bills of entry will allow authorized urea importers to purchase urea on the spot market. These purchases could be used to fill supply gaps at prices lower than what might be achieved if quick tenders had to be called. One cargo each from Russia and China were reportedly secured by IPL and are heading for Indian ports under the new system, said sources.
One trader said that IPL is looking for ways to remain in the urea importing business. Its authorization to import is reportedly under review by the Indian government, and one source said that there appears to be a political dispute between the government and the IPL leadership. Others said that the government may be favoring state-owned companies NFL and RCF over IPL.
The proposed fiscal-year 2023/24 budget will be released Feb. 1. There are already expectations that the subsidies for fertilizers will be reduced from the current allotment of $26.4 billion. Sources said that if the budget is reduced, buyers will have to find innovative ways to purchase lower-priced urea.
A large spot tender is still expected to be called in mid- to late-February. The growing softness in the global urea market could see a dramatic drop in what India will pay.
India imported 8.4 million mt of urea in January-November, according to Trade Data Monitor, a21% increase from 7 million mt imported during the same period of 2021. India’s largest suppliers were Oman with 1.5 million mt and China with 1.1 million mt. The imports from China were markedly down from the 2.8 million mt imported during the first 11 months of 2021.
November imports totaled 1.1 million mt, up 28% from the prior-year 824,000 mt. Product from Oman accounted for 22% of the market with 231,000 mt. China was second with 196,000 mt, ahead of 140,000 mt from Russia.
Middle East:
Arab Gulf producers were said to still be quoting $420-$430/mt FOB, and they are still getting no response from buyers. Sources said that the asking price is too high for current market conditions.
Egyptian producers reportedly offered tons at $445/mt FOB. Sources said some small deals may have been concluded at that level in the past week or so, although no details of the tonnage or destination were available.
China:
December exports were reported at 534,000 mt, according to Trade Date Monitor, up sharply from 35,000 mt shipped in December 2021.
Second-half 2022 exports shot higher as customs officials eased restrictions on offshore sales. July-December exports totaled 2.1 million mt, compared to 724,000 mt exported in the first semester of 2022. Even with the dramatic second-half increase, 2022 exports totaled 2.8 million mt, down 47% from the 5.3 million mt in the previous year.
India led 2022 buyers with 1.2 million mt, down from the 2.8 million in 2021, followed by Pakistan with 434,000 mt, increasing from just 17 mt received in 2021.
Sources said that customs officials were more strict with export permits in the first half of the year, and only allowed more tons to flow out of the country after officials were satisfied that domestic supplies were sufficient.
Some traders expressed hopes that more Chinese urea will be available in 2023, although others noted that the Chinese government usually limits exports early in the year to ensure a steady, low-cost supply to the country’s domestic market. The current domestic reserves of urea are reportedly well above the previous year’s averages.
Black Sea:
Prilled urea out of the Black Sea is now estimated at $355-$410/mt FOB even as limited tonnage flows out of the area.
Brazil:
The week opened with quotes of $420-$425/mt CFR and ended with a deal done for Nigerian product at $405/mt CFR. Sources called the market $405-$425/mt CFR, noting growing pressure to secure more material at the lower end. Sellers are pushing back against the dramatically lower price with new offers at $415/mt CFR, but with few interested parties.
Sources said that the lack of any major player in the global market – specifically India delaying its tender and US buyers yet to engage – is preventing any upward price correction from taking place.
Sources said the price at Rondonopolis has also dropped as more material is being offered in the area, putting the price at $600-$630/mt FOB ex-warehouse. The market’s main focus seems to be on forward purchases, as warehouse space will be needed for the February crop harvest.