US Gulf:
NOLA barges were put in the $300-$335/st FOB range, up from the week-ago $290-$315/st FOB.
US Imports:
Urea imports for January softened 23.5% year-over-year, to 321,477 st from 420,468 st. Imports totaled 1.95 million st for July-January, off 38.6% from 3.18 million st in the year-ago period.
July-January imports from Qatar totaled 596,704 st, followed by 325,318 st from Saudi Arabia. Oman sent 284,748, while Russia added 215,211 st.
US Exports:
January urea exports were reported at 151,570 st, a 76.6% increase from the year-ago 85,816 st. Exports firmed to 1.02 million st for July-January, up 326.1% from the year-ago 238,824 st.
Eastern Cornbelt:
Urea was steady at $370-$390/st FOB in the Eastern Cornbelt, with the high inland and the low confirmed at Cincinnati, Ohio, and out of spot Illinois River terminals.
Western Cornbelt:
Urea was quoted at $360-$380/st FOB in the Western Cornbelt, with the low reported at Port Neal, Iowa, and St. Louis, Mo.
Southern Plains:
Urea pricing at Catoosa/Inola, Okla., was quoted in a broad range at $385-$410/st FOB, with the higher numbers reported later in the week. “The hand-to-mouth buying for the past several months has availability on the short side,” said one source. “Many are waiting on barges or limiting sales to stretch inventory.”
Recent urea offers at Houston, Texas, fell in the $365-$385/st FOB range during the week.
South Central:
Urea pricing remained in the $365-$390/st FOB range in the South Central region, unchanged from the prior week, with the low confirmed at Convent, La., and the high in Arkansas. The Memphis, Tenn., market was pegged at $385-$390/st FOB, while Kentucky sources quoted spot Ohio River tons at the $370/st FOB level at midweek.
Southeast:
Urea pricing out of port terminals in the Southeast was quoted at $400-$405/st FOB, with the high confirmed at Wilmington and reflecting a $5/st drop from last report. In the Northeast, urea pricing FOB Fairless Hills, Pa., slipped to $410/st FOB for March and $420/st FOB for April-May, down $5-$10/st from last week.
India:
Letters of intent to buy were sent out to the seven companies who will supply 1.1 million mt in the Indian Potash Ltd. (IPL) tender that closed earlier this month. The Indian buyer closed off the tender without taking the nearly 2 million mt that many in the industry hoped it would purchase.
Sources said that by taking only 1.1 million mt, slightly more than the tonnage it advertised it would buy in the tender documents, IPL has left the urea market with plenty of material in search of a home. One trader noted that even if major buyers such as the US and Brazil step in, there would still be a lot of urea left over to leave prices soft.
Most of the tons IPL will take are expected to come from the Arab Gulf, with supplemental tons coming from China and smaller suppliers such as Egypt and Indonesia. There were also reports that some tonnage may include third-party material re-exported out of China. Earlier in the month there were reports of three vessels laden with Russian product heading for China. At the time, sources expected the product would be turned around and sent to India.
Local media reports said the government has asked the Indian parliament to approve additional funds for the current fiscal-year budget. The call came as fiscal-year 2022 draws to a close at the end of the month.
According to the reports, the government is asking for $1.1 billion to cover subsidy payments for domestically-produced urea. An additional $782 million is being asked to pay for subsidies related to imported urea. This is not the first time the government had to ask for supplemental funds to cover fertilizer costs. The run-up in urea prices from April 2022 until now broke many expectations, leaving government planners to rush to find the necessary funds to ensure ample urea supplies for the country.
The fiscal-year 2023 budget reduces the amount set aside for fertilizer subsidies. Sources previously said that India is anticipating fewer imported tons of urea in the next fiscal year. They noted the government will be offering subsidies in power and inputs to new urea plants in the country to boost domestic production. At the same time, the government is putting a lot of faith in Nano Urea (Liquid) products to reduce the need for farmers to buy traditional urea.
Pakistan:
The government has approved a plan to guarantee natural gas supplies to previously-shuttered urea plants in order to ensure an ample supply of urea in the coming year, local media reported.
According to these reports, the government has estimated that demand will exceed domestic production by 300,000 mt. The panel reviewing the situation reportedly had two options: import the urea, or provide support to domestic plants to produce the shortfall amount. The panel chose the domestic production option.
Plants that were closed in January after limited natural gas supplies were diverted toward consumer use are expected to reopen soon. The guarantee for natural gas will only last through May. Producers told the government that this is how much time they needed to make up the 300,000 mt supply deficit.
Prior to the decision, some international traders had noted that importing urea would be difficult for Pakistan. They said the country’s economic situation – particularly its limited reserves of foreign currency – led trading houses to question the timeliness of payments in previous tenders.
Black Sea:
Sources reported a sale into Turkey at $330-$340/mt CFR. The product was reported as either Russian or Iranian in origin.
Indonesia:
Pupuk Indonesia, the holding company for the urea producers, on March 17 closed a selling tender for 30,000-45,000 mt of granular urea and 6,000-12,000 mt of prilled.
Sources reported the highest bid for the granular product came from Samsung at $331/mt FOB. However, the bid was for only 6,000 mt. Indications are that Pupuk wanted bids for a minimum of 30,000 mt. Aries submitted its bid at $315/mt FOB for 30,000 mt. Other bids reportedly were closer to $310/mt FOB.
The prilled portion saw bids in the $340s/mt FOB. Samsung reportedly bid for the full 12,000 mt of prilled urea at $341/mt FOB. Close behind was Liven at $340.44/mt FOB. Sources said the limited amount of Chinese urea available for export is keeping prills at a premium against granular.
The last Pupuk tender took place in February, when Pupuk sold 45,000 mt of granular urea at $378.88/mt FOB and 12,000 mt of prilled urea at $360/mt FOB. The softer prices in the most recent tender were not a surprise to industry watchers.
The high prices offered for both types of urea make using the tons as to cover an award into India untenable.
Middle East:
With the Indian tender closed, sources were comfortable calling the netback to the Arab Gulf $310-$315/mt FOB. The region’s producers are expected to supply the bulk of the urea in the IPL tender.
Traders called the Egyptian market $375-$380/mt FOB. Sources said producers are even willing to discuss business at these levels, even though the last wave of deals was priced at $403/mt FOB. Despite the softer values, sources believed the prices were still too high for most buyers in the current market.
China:
A number of tons from China are expected to be used to cover awards from the IPL/India urea tender. The netback to China was pegged at $315-$320/mt FOB.
In addition to urea from Chinese plants, sources said that tons – possibly from Russia and Iran – might also be sent to India from Chinese ports. Earlier this month, three cargoes of Russian material were reported headed to China. At the time, sources said the product would most likely be re-exported to India.
South Korea:
Trade Data Monitor reported January-February urea imports at 154,000 mt, down 36% year-over-year from 241,000 mt.
February imports were noted at 52,000 mt, off 40% from 86,000 mt imported in February 2022. Qatar sent 30,000 mt, followed by 22,000 mt from China.
Brazil:
Urea prices remained under pressure due to limited buyer interest. Sources put the landed price at $315-$325/mt CFR, reflecting a slow-but-steady slide in prices into Brazil.
Pricing at Rondonopolis saw some softening, with sources putting the inland market at $485-$500/mt FOB ex-warehouse. The market is looking to the upcoming 2024 corn season to increase sales.
Poland:
Grupa Azoty total urea output fell 45% in February, the group reported, to 70,000 mt from the year-ago 127,000 mt.
Azoty also confirmed it will continue a temporary shutdown of the ammonia and urea plants at the Azoty Zakłady Chemiczne “Police” subsidiary through March 31. The decision reflects “the deteriorating negative supply-demand situation in the market,” Azoty said. Production capacity at the facility totals 450,000 mt/y of urea and 660,000 mt/y of ammonia, according to the Green Markets database.
Azoty’s production of nitrogen fertilizers declined by 34% in February, to 196,000 mt from 297,000 mt in February 2022. Azoty said it adjusts production in response to demand changes in the European market.