US Gulf:
NOLA urea barges were quoted at $290-$315/st FOB for March business, down from last week’s $310-$335/st FOB. The upper end of the range was reported early in the week, with new business falling to $295-$305/st on March 7. Trades at the $290/st FOB level were confirmed at midweek before prices once again eased up to the $300-$305/st FOB level on March 9.
“I think we will see that price stay around there until we get some more direction from India and US demand kicks in,” said one contact.
Eastern Cornbelt:
Urea remained under pressure in the Eastern Cornbelt, with new offers quoted at $370-$375/st FOB Cincinnati, Ohio, down from $380-$390/st FOB. In the Great Lakes region, sources reported urea pricing at $415-$420/st FOB Toledo, Ohio, for March-April tons.
Western Cornbelt:
Urea was quoted in a broad range at $350-$390/st FOB in the Western Cornbelt, with the low reported at Port Neal, Iowa. The St. Louis, Mo., urea market remained at the $370/st FOB level for the latest offers.
Northern Plains:
Urea pricing fell to $360-$430/st FOB in the Northern Plains, down from $380-$440/st FOB, with the low confirmed for river-open tons at St. Paul, Minn., and the high reported at Carrington, N.D. Delivered urea was pegged at $450-$470/st in the region, below the $480-$500/st DEL levels reported in mid-February.
Northeast:
The low end of the regional urea market remained at $395/st FOB East Liverpool, Ohio, while new offers FOB Fairless Hills, Pa., were quoted in a wide range at $405-$425/st FOB, depending on time of shipment. Urea pricing FOB Baltimore, Md., slipped to $430-$440/st FOB for new offers, down $10/st from last report.
In the South Central region, new urea pricing FOB Convent, La., reportedly dropped to $365/st FOB, down from $385/st FOB.
Eastern Canada:
Urea slipped to C$720-$875/mt FOB in Eastern Canada, down significantly from the C$880-$1,020/mt FOB range reported in mid-February.
India:
In the end, Indian Potash Ltd. (IPL) held to its statement that it would only import 1.1 million mt in this tender. When sources saw that 3.27 million mt were offered in the tender, many in the industry figured that IPL could take up to 2.5 million mt. Sources said the Indian government had reportedly granted IPL permission to take the larger amount if it wanted.
After receiving the lowest offers from OQ Trading and Liven, IPL counterbid the next two lowest-offering companies proposing West Coast deliveries, and the next four lowest-offering companies with East Coast offers. All six trading houses accepted the prices set by OQ at $330/mt CFR for the West Coast, and by Liven at $334.80/mt CFR for the East Coast. In the end, some received smaller awards than they were hoping for.
| Award for West Coast Delivery at $330/mt CFR | |
| Company | Quantity (mt) |
| OQ Trading (L1 WCI) | 225,000 |
| Swiss Singapore | 250,000 |
| AgriCommodities | 100,000 |
| Total WCI | 575,000 |
| Award for East Coast Delivery at $334.80/mt CFR | |
| Company | Quantity (mt) |
| Liven (L1 ECI) | 45,000 |
| Swiss Singapore | 190,000 |
| Midgulf | 150,000 |
| OQ Trading | 90,000 |
| Continental | 50,000 |
| Total ECI | 525,000 |
| Total Awards | 1,100,000 |
Liven and OQ had their tons locked in as the lowest offering companies. The resulting total of 1.1 million mt will be added to the approximately 1.5 million mt India will receive through June 1 from contracts, such as its deal with OMIFCO. Sources said the contract and tender tonnage, along with domestic production, should be enough to get Indian farmers well into the second half of the year. Another tender will most likely be called with a closing date during the last week of May.
Once it was clear that IPL would not take anything more than what they advertised, sources said that urea markets around the world showed increased softness. The surplus that will be left following this tender will continue to provide downward pressure on prices. Brazil, another major urea buyer, saw a drop in prices on the heels of the Indian awards announcement. Many producers went silent, knowing they would not like the prices being bid.
Chinese and Arab Gulf producers are reportedly still unwilling to talk about the lower prices forced on them by the tender. The netback to the Arab Gulf was put at $310-$315/mt FOB, and to China at $315-$320/mt FOB. Sources said going into the tender that everyone expected the Arab Gulf to play a major role in supplying tons. So far, said sources, it has been difficult finding out who will be sourcing product for the West Coast India tons. Sources speculated that some Russian cargoes might be in play.
The East Coast suppliers are also said to be having some “interesting” talks with Chinese suppliers who object to the lower price. One trader said that given the long shipping deadline, traders will most likely be able to get supplies as prices remain under pressure.
One rumor floating around was based on reports that a Chinese trader bought three cargoes of Russian prills for shipment to China. Sources suggested the tonnage may turn around and be re-exported to India under the tender.
Black Sea:
Rumors are circulating that Russian material may play a role in the Indian tender. Reports that a Chinese trader bought three cargoes of Russian prills for delivery to China led to speculation that the tons may end up being re-exported to India as part of the awards issued by IPL.
The price for prilled urea out of the Black Sea is reported at $305-$325/mt FOB.
Igsas reportedly closed a tender on March 8 for 50,000 mt of granular urea. So far, no information is available on who participated or on the offering prices. There have been other inquiries for small lots from industrial buyers, and buyers looking for lower prices will be focusing on Russian and Iranian tons. Those looking for immediate shipment with no concerns about pricing could cut a deal with Egyptian producers.
Urea imports to Turkey were counted at 298,000 mt in January, according to Trade Data Monitor, a 72% increase from 173,000 mt in January 2022. Oman led suppliers with 127,000 mt, Egypt sent 81,000 mt, and tons from Russia totaled 69,000 mt.
Indonesia:
No word was reported either from producers or the government about a new selling tender. The last tender took the market by surprise and settled at $349/mt FOB. The results of the Indian tender show a softer market, leading producers to hold off.
Middle East:
The netback to the Arab Gulf from the Indian West Coast was put at $310-$315/mt FOB. This represents a drop of at least $20/mt from the last publicly traded deal.
Producers offered 90,000 mt into the IPL tender at $350-$353/mt FOB. Sources said the move appeared to be an effort to prop up prices in a falling market. Reportedly, the producers did not respond to a counterbid by IPL.
There are reports that some producers are pushing back against the estimated netback price by refusing to talk with traders about the Indian tender. Some of awarded traders were reportedly looking to the Arab Gulf for backing. Sources said the producers will most likely back off eventually, and accept the price well before the tender’s June 1 shipping deadline.
One bit of support for the producers came from reports that the estimated netback to the Arab Gulf from the Sri Lanka Ministry of Agriculture tender is about $330/mt FOB. However, sources quickly pointed out that the winning award will most likely not involve Arab Gulf material.
January-February exports from Iran stood at 443,000 mt, according to Trade Data Monitor, up marginally from the year-ago 429,000 mt. Turkey was Iran’s largest buyer, taking 201,000 mt, followed by Iraq with 70,000 mt. South Africa and Vietnam each took 62,000 mt.
February exports were reported at 249,000 mt, up 69% from 147,000 mt recorded in February 2022. Turkey took 53% of the material at 132,000 mt, followed by South Africa with 62,000 mt.
Egyptian producers remained quiet, focusing on fulfilling their sales to traders covering European deals.
China:
The netback to China from the India tender was put at $315-$320/mt FOB. Producers were said to be unhappy with the almost $80/mt drop in pricing from the last public deal.
Prices have been slipping in the Chinese market because the government has been enforcing its restrictions on exports, guaranteeing full warehouses throughout the country. If agreements are reached with producers to cover some of the 525,000 mt going to India’s East Coast, sources said the traders and producers might need the tender’s full shipping period, open through June 1, to make sure all of the government-mandated export paperwork is properly processed.
Reports are circulating that a Chinese trader bought three cargoes of Russian prilled urea for delivery to a Chinese port. Sources speculated that the tons will be processed and reloaded on a vessel to cover an award from the Indian tender.
Thailand:
Imports of urea for January totaled 62,000 mt, Trade Data Monitor reported, doubling Thailand’s 31,000 mt imported in January 2022. Malaysia supplied 55% of the imports, sending 34,000 mt, followed by Oman with 23,000 mt.
Sri Lanka:
The Ministry of Agriculture closed a tender for 25,000 mt of granular urea this week. Valency International reportedly had the low offer with $399.75/mt CIF bagged. The next two lowest offers, from Ameropa and Liven, were within $4/mt of the Valency offer. The rest of the offers were above $412/mt.
Sources estimated the netback to the Arab Gulf at $330/mt FOB. However, the winning tender will most likely come from Russia or Iran, according to traders. No awards were reported as Green Markets went to press.
Brazil:
The market reacted to the results of the Indian tender with falling prices. Sources said the market is now down to $330-$335/mt CFR, with unconfirmed reports of a deal at $325/mt CFR.
Sellers are hoping this latest price drop represents the floor. Some argued that once the US starts buying, the market price will rebound, and they expected US buyers to enter the market soon.
Rondonopolis was pegged at $500/mt FOB ex-warehouse, a drop of about $60/mt. Sources put the decrease to limited demand and the news from India.
Trade Data Monitor reported January-February urea imports at 1 million mt, off 10% year-over-year from 1.1 million mt. The two main suppliers were Oman with 248,000 mt and Nigeria with 277,000 mt.
February imports were pegged at 349,000 mt, down 53% from 738,000 mt imported in February 2022. Nigerian tons totaled 111,000 mt, followed by 69,000 mt from Algeria.
Ethiopia:
January-February urea imports were counted at 100,000 mt, according to Trade Data Monitor, up from 3 mt recorded through the same period of 2022. All of the imports were from Egypt.