US Gulf:
Most sources put NOLA urea trades in the $310-$335/st FOB range, up from the week-ago $302-$325/st FOB.
Eastern Cornbelt:
Urea prices in the Eastern Cornbelt rebounded slightly on firming NOLA barge business. Most terminals were reported at $390-$400/st FOB on the Illinois and Ohio Rivers during the week, but very little was trading. “Dealers are scared it’s not going to last,” commented one source about the bump in pricing. “Most have a layer of urea bought in the $500s.”
Western Cornbelt:
Urea prices firmed to $375-$400/st FOB in the Western Cornbelt, with the St. Louis, Mo., market quoted at the $375-$380/st FOB level at midweek.
Southern Plains:
New urea pricing at Catoosa/Inola, Okla., was quoted at $385-$410/st FOB during the week, up from $370-$390/st FOB last week. The Houston, Texas, urea market was reported at the $450/st FOB level for the latest offers.
South Central:
Urea was quoted at $385-$400/st FOB in the South Central region, with the low confirmed at Memphis, Tenn., and Convent, La., and the high at Little Rock, Ark. Kentucky sources quoted new offers out of Ohio River terminals at $390-$400/st FOB, with the low for prompt and the high for prepay.
Southeast:
Urea pricing out of port terminals in the Southeast was reportedly down to $410/st FOB, well below the previous week’s $425-$450/st FOB and the $460-$470/st FOB level confirmed earlier in February.
India:
The long-awaited urea tender call finally came from IPL. The closing date is March 3, with the buyer calling for 1 million mt and a shipping deadline of June 1.
Industry watchers had been expecting a shipping period longer than the usual six weeks, but most were surprised by the 12-week time frame. Sources said the longer shipping window will help prevent the urea market from overheating as trading houses scramble to gather tons to offer to India, and will allow for purchase deals to be spread out over the three-month period instead of being concentrated.
Sources also noted the longer shipping time could allow for more Chinese product to play a role in the tender. Buying from China requires clearances from customs officials that have taken 2-3 month to be issued. Even with word from Beijing that the clearance process will be streamlined, the process could still require multiple weeks before the urea is cleared for export. The longer shipping period offered by IPL could make it possible for tons to be approved for shipment in May.
Besides the possibility of more Chinese product than expected, sources said the Arab Gulf producers will most likely lead the way. Producers from Indonesia, North Africa, and possibly Nigeria could also become part of the supply chain.
Sources were generally hesitant to offer predictions on where the price will end up, although one trader speculated that the recent Indonesian selling tender was a possible floor. The price in Indonesia was $349/mt FOB, leaving this trader to suggest Indian prices ranging $360-$400/mt CFR.
No matter the price, sources said the final amount will be dramatically lower than the last tender price of $573-$579/mt CFR, which closed on Nov. 14, 2022 (GM Nov. 18, 2022).
Middle East:
Egyptian prices moved up smartly all week. Sales of small 5,000-6,000 mt lots to European buyers started the week at $387/mt FOB and ended at $395/mt. Most of the deals were done by MOPCO, but sources reported that Abu Qir also sold some small lots late in the week.
Traders said the sales all seemed to be covering shorts into Europe. Sources expect to see at least one cargo from Egypt offered in the Indian tender.
Algerian producer AOA followed Egypt’s lead with sales to European buyers at $380/mt FOB. Deals with more distant buyers, such as those in Latin America, were put in the $340s/mt FOB. AOA told those inquiring later in the week that they were sold out for March.
No new spot deals were reported in the Arab Gulf, leaving industry watchers to estimate where prices might be. Sources said that discussions widened target prices down to $330/mt FOB, and as high as $340/mt FOB. One source said the higher end was being offered by producers, with buyers pushing hard for the lower end.
Arab Gulf urea is expected to be the dominant product offered in the IPL urea tender, set to close on March 3. Sources said the tender’s long three-month shipping window could allow more participation from producers.
Sources said that weak demand from the United States, Brazil, and Australia could allow Arab Gulf producers to shift potential tonnage from those buyers to India, giving traders even more product for offers than expected.
Indonesia:
The mid-February selling tender surprised many in the industry. One trader noted that even one day before the tender call, Indonesian sources predicted that no sales would be made until March.
The change of heart, said one trader, might have occurred after reports of reduced domestic demand circulated in the country. Even if this was the main factor, sources said the government remains hesitant to push for more exports until the very end of the current season, as the government does not want the domestic market to appear short of product in an election year.
Even with concerns for the domestic market, sources said that 1-2 cargoes of Indonesian product will most likely be offered into the Indian tender.
Brazil:
Carnival celebrations cut into the work week, leaving just a few days for trading. Even with the short week, sources reported a large upward shift in the market. Deals rumored at $360/mt CFR came on the heels of sales at $350/mt CFR. By the end of the week, new offers were reported at $370/mt CFR, but without any confirmed business at that level
Rondonopolis was reported up a few dollars as well, with sources putting the price at $550-$565/mt FOB ex-warehouse. The inland market was not yet hit with the large increase seen at the ports. Many local buyers are only getting product as they need it rather than buying too far in advance.
South Korea:
Urea imports were counted at 102,000 mt for January, down 34% from 155,000 mt imported in January 2022, Trade Data Monitor reported. China supplied 47% of the imports with 48,000 mt, followed by 26,000 mt from Qatar.
Black Sea:
Prilled urea from the Black Sea is now reported at $285-$295/mt FOB, down from $320/mt FOB a week ago.