US Gulf:
The week started with word that barges were trading at $330-$335/st FOB. By week’s end, however, trading was put in the $310-$335/st FOB range, the same as the previous week.
Eastern Cornbelt:
Urea was quoted at $380-$400/st FOB in the Eastern Cornbelt, with the lower end of the range confirmed at Cincinnati, Ohio.
Western Cornbelt:
The urea market was pegged at $370-$390/st FOB in the Western Cornbelt, down $5-$10/st from last report. Urea slipped to $370/st FOB St. Louis, Mo., for the latest offers, down from last week’s $375-$380/st, with delivered pricing in the Northern Plains falling to $450-$470/st from last week’s $480-$500/st DEL range.
California:
Urea pricing in California fell to $650-$660/st FOB Stockton, down from $660-$700/st FOB, with rail-DEL offers quoted at the $585/st level in Northern California for March shipment.
Pacific Northwest:
Urea dropped to $500/st FOB Rivergate, Ore., and $505/st FOB Aurora, Ore., down from the previous $540-$545/st FOB range. Rail-DEL offers were reported as low as $400-$459/st in the Pacific Northwest, depending on location.
Western Canada:
Urea pricing in Western Canada was quoted in a broad C$665-$730/mt DEL range for March-April tons, down from previous C$745-$800/mt DEL range. The terminal market slipped to C$640-$720/mt FOB, depending on location and supplier, well below the prior C$750-$820/mt FOB range.
India:
In the run up to the closing of the IPL tender, sources speculated about where prices will end up, with a low of $320/mt CFR to a high of $360/mt CFR. In the end, the price came out in the $330s/mt CFR. OQ Trading has the lowest offer for West Coast delivery, with 220,000 mt at $330/mt CFR. Liven took L1 for the East Coast with 45,000 mt at $334.80/mt CFR.
The prices reflect a drop of about $240/mt from the last urea tender, but are in line with estimates of where pricing should be in the Arab Gulf. The East Coast price indicates a netback to China of $315-$320/mt FOB, markedly down from the $380-$400/mt FOB producers claim should be the price. Two offers came in from producers at much higher levels. Fertiglobe offered 45,000 mt at $353/mt FOB and PIC a similar quantity at $350/mt FOB.
In the tender documents, IPL called for 1 million mt. As the tender closing date approached, more sources were predicting as many as 2 million mt could be secured. The long shipping period that ends June 1 will allow for traders to secure material over the three months without overheating the market. Achieving awards of 2 million mt might not be difficult. The offers totaled 3.27 million mt, about the same among offered in an IPL tender February 2022. At that time the awards were only for 1.4 million mt, but prices were in the mid-$590s/mt CFR.
| Offers to East Coast India | ||
| Offering Company | Quantity (mt) | US$/mt CFR |
| Liven | 45,000 | 334.80 |
| Swiss Singapore | 190,000 | 339.33 |
| OQ Trading | 90,000 | 339.75 |
| Continental | 50,000 | 343.50 |
| Midgulf | 156,000 | 349.50 |
| Dreymoor | 90,000 | 351.00 |
| Ameropa | 141,000 | 352.50 |
| Fertcom | 50,000 | 355.00 |
| Agri Commodities | 200,000 | 355.50 |
| Samsung | 180,000 | 356.00 |
| Aries | 100,000 | 357.79 |
| Gavilon | 45,000 | 359.00 |
| Koch | 150,000 | 380.00 |
| Total ECI | 1,487,000 | |
| Offers to West Coast India | ||
| Offering Company | Quantity (mt) | US$/mt CFR |
| OQ Trading | 220,000 | 330.00 |
| Agri Commodities | 100,000 | 330.30 |
| Swiss Singapore | 400,000 | 333.11 |
| Continental | 50,000 | 338.50 |
| Fertcom | 50,000 | 338.75 |
| Ameropa | 141,000 | 345.24 |
| Keytrade | 120,000 | 347.00 |
| Samsung | 135,000 | 347.70 |
| Midgulf | 156,000 | 348.50 |
| Dreymoor | 100,000 | 349.00 |
| Alkagesta | 30,000 | 350.00 |
| Medallion | 50,000 | 351.00 |
| Koch | 50,000 | 353.00 |
| Aries | 50,000 | 359.79 |
| Gavilon | 45,000 | 369.00 |
| Total WCI | 1,697,000 | |
| FOB Offers | ||
| Offering Company | Quantity (mt) | US$/mt FOB |
| PIC | 45,000 | 350.00 |
| Fertiglobe | 45,000 | 353.00 |
| TOTALFOB | 90,000 |
The Department of Fertilizer (DoF) released basic import numbers for January. According to the DoF, India received 1.1 million mt during the first month of 2023, compared to 1.2 million mt in January 2022. A more detailed review of the urea sources will be available soon.
Imports for 2022 totaled 10.1 million mt, according to TDM, up 25% from 8.1 million mt imported through the prior year. Oman topped the list of suppliers with 1.9 million mt, representing 19% of the market, while China added 1.4 million mt. January-June imports totaled 4.6 million mt, followed by 5.5 million mt in the second half of the year.
December imports were noted at 1.7 million mt, up from 1.1 million mt received in December 2021. Oman, China, Saudi Arabia, and Qatar combined for about 70% of the market.
Indonesia:
Sellers went quiet following a $349/mt FOB sale in February. Sources expect Indonesian producers to sell about 1 million mt in 2023, depending on the strength of the domestic market.
Indonesia exported zero urea tons in January, according to Trade Data Monitor. The Indonesian government does not typically allow exports until late in the first quarter in order to guarantee a plentiful supply for the domestic market. January 2022 exports were reported at 3,600 mt.
Middle East:
Once India called its urea tender, producers pulled back and refused to publicly discuss prices. Sources said that no matter what price indications producers offer, they will end up on the wrong side of the market.
One trader noted that if producers make a big scene about higher prices, they might price themselves out of sales in a large tender. Conversely, if they indicate prices too low to ensure a lot of awards in the tender, they could take the market lower than what the Indians were willing to accept.
Going into the tender, the working price from the Arab Gulf was put in the upper-$350s/mt FOB. The two offers made by producers showed a desire to move the price into the $350s/mt FOB. However, netbacks from the OQ Trading offer of $330/mt CFR to India’s West Coast shows a netback to the Arab Gulf of $310-$315/mt FOB. Chances are this is where prices will settle. Sources said the lack of any other large-scale buying will lead producers to accept the new price level.
The Egyptian market is the only one moving up in price. MOPCO closed another deal this week for March shipment into Europe. The deal was for 5,000 mt at $403/mt FOB.
China:
Prices were estimated in the $380s/mt FOB prior to the closing of the Indian urea tender. The numbers released for delivery to the West Coast of India indicate a netback to China of $315-$320/mt FOB. Sources said the fact that about 1.7 million mt were offered into the West Coast indicates there could be strong support from Chinese producers.
Sources had expected several traders to take a chance that large quantities of Chinese urea would be available for the tender. The long shipping period will allow the traders and producers to work with the Chinese customs officials to get the paperwork through in time for shipment. Even if the current rate of three-four weeks for processing continues, the product could be shipped under the Indian deadline.
Sources noted rumors that the Chinese government may be moving to speed up the export approval process. One trader said the new reported timeline would hope to have the paperwork done in less than a week. Even if the government streamlines the approval process for exports, it is not expected to ease up on the regulations that require approval for each deal.
Black Sea:
Prices bounced back up to $300-$315/mt FOB for prilled exports.
Bangladesh:
The Bangladesh government announced that it has opened talks with SABIC and the Saudi Arabian government to set up a joint-venture urea plant in the Saudi kingdom. The plant would produce urea exclusively for Bangladesh, reducing its need for regular open tenders.
Brazil:
Prices widened to $345-$360/mt CFR as the industry awaited news from the Indian tender. The Rondonopolis price tightened to $560-$565/mt FOB ex-warehouse. Low demand for urea is providing a steady downward push on prices, both at the ports and inland.
Argentina:
Trade Data Monitor reported January imports at 3,600 mt, up from 1,400 mt imported during the year-ago period. Argentina will make the bulk of its urea purchases during the third quarter of the year.