U.S. Gulf: After a few weeks of relatively stable NOLA barge prices, sources reported a surge in pricing last week.
The week began with many citing trades in the $190-$193/st FOB range for prompt trades. By Thursday, however, those numbers were quickly moving above the $200/st FOB mark, with trades toward the end of the week called as high as $204-$208/st FOB. Other ranges included November at $197-$212/st FOB, December at $203-$212/st FOB, and January at $211-$215/st FOB.
Prills were reported to be moving up as well, with sources calling the market $205-$212/st FOB. Sources said availability was an issue, and the reason for the higher numbers.
Eastern Cornbelt: Granular urea was quoted at $225-$235/st FOB in the Eastern Cornbelt, with the low out of spot river locations and the upper end inland.
Western Cornbelt: Granular urea pricing was pegged at $225-$230/st FOB in the Western Cornbelt, with the low reported in the St. Louis, Mo., market and reflecting a $5/st increase from last report. One source said he expects additional firming, noting that terminal market “should be higher” based on current NOLA barge values.
California: The granular urea market was pegged at $310-$320/st FOB port terminals in California, up $10-$20/st from last report, with sources citing stronger NOLA values for the increase.
Pacific Northwest: The granular urea market remained at $265/st FOB port terminals in the Pacific Northwest, with sources quoting the rail- and truck-DEL market in the $280-$290/st range in the region.
Western Canada: Granular urea was quoted at $370-$390/mt DEL in Western Canada, with the upper end reported in the Saskatchewan market and the lower half in Manitoba. Some suppliers were reportedly trying to firm the market to the upper end of that range, citing a stronger NOLA market and currency exchange rates.
“The sudden price increase globally is going to defer purchase interest for sure, but we hope that year-end closing will trigger some sufficient demand,” said one regional source.
China: Producers got their way. Deals were closed at $205/mt FOB, with traders looking to cover their awards in the Indian tender of last month. Sources said the deals could mean that traders will most likely swallow a loss, based on the $203-$205/mt CFR award prices into India.
At least two trading houses – Fertisul and MidGulf – ended up paying $205/mt FOB for their tonnage. With the conclusion of these deals, producers are now looking higher. Sources reported that China Blue is holding firm at $215/mt FOB, while some producers in the north are looking at $210/mt FOB.
Sources are clear that the new range for prices is $205-$210/mt FOB, with a strong indication that $215/mt FOB might be achieved.
The push for higher prices came soon after the Indian tender closed. Chinese producers led the way in the global campaign for higher prices. Soon after the Chinese producers told traders their bottom line was $200/mt FOB, Middle East producers followed suit. Once the Arab producers held firm at that level, the Chinese producers upped their offers to $205/mt FOB.
Sources said buyers pushed back hard against the price increases. However, the need to cover the Indian business led traders to accept the producers’ pricing ideas.
Pushback from Latin America is still reportedly strong. Brazilian buyers are said to be holding off on any price increase.
Middle East: Arab producers in the Gulf have been successful in upping their sales price to $202/mt FOB, and have moved to $210/mt FOB. The new asking price is closer to $212/mt FOB, but without any confirmed sales at that level.
Sources said the higher prices were achieved by taking advantage of traders looking to cover their short positions into India. The move was aided by the success Chinese producers had in getting a sales price of $205/mt FOB earlier this week, and then steadily moving upward throughout the week.
Egypt was also able to secure higher prices for its product. Sources reported sales at $208-$210/mt FOB, marking an almost $10/mt boost in pricing. As with the sales out of the Arab Gulf, sources report that the purchases were by traders covering shorts.
The new asking price out of Egypt is $212-$215/mt FOB. Sources said the $212/mt FOB might be reached over the weekend, but they are not as sure the higher end will be achieved.
Black Sea: Sources reported no new movement in prices or supplies out of the region. Expectations remain, however, that prices will bounce back to match the price shifts in China and the Middle East.
India: Sources said they still expect to see a new tender called by the first week of November at the latest, and the call may come as early as next week. The consensus is that India will still need another 1.5 million tons to close out the current year of buying.
When the next tender is called, sources said the buyer should expect to pay more than the current $203-$205/mt CFR level. Product from Arab and Chinese producers is reportedly tight after the sales in the previous tender and sales to Latin America.