US Gulf:
NOLA urea barge values remained under pressure. Prompt, loaded barges reportedly firmed from $310/st FOB early in the week to $330-$340/st FOB by midweek, only to fall to a reported $280/st FOB level on June 8. Full-June was generally pegged in the $260-$280/st FOB range for the week, with reports of 3Q offers in the mid-$270s/st FOB.
US Imports:
July-April urea imports softened 25.9% year-over-year, to 3.81 million st from 5.13 million st. April imports were off 21.2%, at 573,500 st compared to the year-ago 727,638 st.
July-April imports from Qatar totaled 1.07 million st, followed by Russia with 632,497 st. Saudi Arabia sent 579,783 st, beating 477,944 st from Oman.
US Exports:
Urea exports moved up 102.7% in July-April, to 1.30 million st from the year-ago 643,440 st. April cargoes were counted at 70,604 st, however, down 48.5% compared to 137,066 st reported one year earlier.
Eastern Cornbelt:
Urea slipped to $460-$490/st FOB in the Eastern Cornbelt, down from last week’s $490-$500/st FOB range. The Cincinnati, Ohio, urea market was quoted at $480-$490/st FOB for the latest offers.
Western Cornbelt:
Urea was pegged at $460-$480/st FOB in the Western Cornbelt, depending on location, with the St. Louis, Mo., market reported in the $460-$465/st FOB range, down from last week’s $485-$495/st FOB level.
Southern Plains:
Extremely tight supply kept urea prices firmly at the $495-$500/st FOB level at Catoosa/Inola, Okla., during the week, though sources said inventories were starting to recover with the arrival of barges later in the week. The market in Texas was pegged at $480-$495/st FOB, with the low at Houston and the high reported at Borger.
South Central:
Urea prices covered a wide range in the South Central region, stretching from a low of $385/st FOB Convent, La., to a high of $500/st FOB Little Rock, Ark. The Memphis, Tenn., market was pegged at $485-$495/st FOB in early June, while most Ohio River terminals in Kentucky were reported in the $460s/st FOB.
Southeast:
The latest urea offers in the Southeast slipped to $425-$435/st FOB, down from $460-$480/st at last report, with the low confirmed at Wilmington, N.C.
India:
The Rashtriya Chemicals and Fertilizers Ltd. (RCF) urea tender closes on Monday, June 12. Sources said the entire area was focused on what will happen in the tender. As the week closed, sources continued to speculate that offer prices will land in the upper-$270s/mt CFR.
Immediately after the tender was announced last week, sources speculated that Chinese urea might dominate the tender, especially after two sales to Southeast Asian buyers dropped the price from China into the $270s/mt FOB. However, Chinese prices have since rebounded, leaving sources to speculate that no more than four cargoes might come from China. Expectations are now that the bulk of the offered product will come from Arab Gulf producers and Russia.
Sources noted reports that some Russian cargoes are being shopped around in the hopes of landing an award in the Indian tender. At the same time, Arab Gulf producers have pulled back from talking publicly about the tender. Sources said that producers have more than enough availability to cover the Indian tender.
With the price for Baltic prilled urea at $245-$263/mt FOB and freight to West Coast India around $30/mt, the price just touches the upper-$270s/mt CFR pricing expectations for the tender. With RCF looking to buy only 800,000 mt under a relatively brief shipping period, sources are convinced another tender will be called shortly after the last of the awarded tonnage is loaded to a ship.
Pakistan:
The government of Pakistan has ordered TCP to suspend its preparations for a government-to-government deal to secure 200,000 mt of urea, according to local media reports.
At the same time the government originally authorized the deal, it also ensured natural gas supplies through December for domestic producers to supply urea for upcoming demand. At the time, estimates indicated that demand could only be met by this two-pronged approach. However, the government has now decided to analyze how much urea can be produced locally before stepping into the international market.
Black Sea:
Prilled urea came down about $20/mt, to $250-$260/mt FOB. With freight to India’s West Coast around $32/mt, the price would have to come down a bit more to meet pricing expectations in the RCF urea tender. Sources reported that Russian urea from Black Sea and Baltic ports will be offered into the Indian tender. One trader said that a number of tons may be transshipped through other countries, a common maneuver making it easier to trade the product.
While Russian urea has not been sanctioned by either the US or the EU in response to the war in Ukraine, financing the purchase of the urea poses difficulties for buyers looking to avoid possible sanctions violations. Because of the extra steps needed to safely buy the Russian product, the urea is often priced at a discount to the general market. Likewise, processing the product through a third country sometimes reduces the risks to traders and end users.
Southeast Asia:
Sources reported a limited supply of urea available from local producers. Malaysia is coming back online, Brunei is just now beginning to offer small quantities to local buyers, and Indonesia is not offering new buying opportunities. Chinese producers have been able to step in with small cargoes of less than 10,000 mt to cover the regional demand. The sales had the effect of boosting the Chinese export price.
The lack of new sales out of Indonesia has prompted a series of rumors and speculations. Sources noted reports the government ordered a halt to urea exports until it can determine whether Kaltim and other producers agreed to more exports than allowed by the government. Some rumors even have the national attorney general’s office looking into trades made during the March-May period.
International traders said that recent selling tenders seemed to have provided opportunities for sales that exceeded the advertised amounts. One trader said his vessel had a nearly two-week wait to dock and receive the urea purchased for late-May or early-June shipment. Other vessels were said to still await their June tonnage.
Reports are circulating that the government wants to hold off on any new June sales until it is sure there are sufficient tons on hand for the domestic season. Even though the main season is now over, sources said the government is anxious to ensure enough reserves for any near-future demand.
Sources said no new selling tenders are expected until the end of the month, at the earliest. Producers and their government minders will reportedly be looking at the results of the June 12 RCF/India tender to determine their next step.
Urea exports fell 41% in January-April, Trade Data Monitor reported, to 277,000 mt from the prior-year 471,000 mt. April shipments were counted at 170,000 mt, down 37% from 268,000 mt in April 2022. The Philippines bought 38,000 mt and Chile received 33,000 mt, while the US and India each took 27,000 mt.
Middle East:
The market has gone quiet as producers and traders calculate their offers into the RCF/India tender. Sources said producers have been willing to entertain prices at $275-$280/mt FOB. However, if current predictions for the tender’s final price come to fruition, the producers will have to shave off at least another $20/mt.
Iranian offers are now noted at $260/mt FOB for possible deals into Turkey. Other buyers are said to be facing higher prices.
Traders said the Egyptian price is hovering at $308/mt FOB. However, no deals have been confirmed at this level. Egyptian sellers have reportedly been happy making smaller sales to traders for European markets. The sales provided a steady income at levels slightly above the prevailing rates from other urea-producing areas.
China:
Prices bounced back into the $300s/mt FOB. Prills are now said to be firmly locked in at $300/mt FOB, while the granular price was put at $310-$330/mt FOB. The rebound came after a couple of recent deals to Southeast Asian buyers prompted a dip into the $270s/mt FOB for prills, and near $300/mt FOB for granular.
Producers were said to react to reports that the lower prices would fall by at least another $20/mt in order to allow Chinese product to be competitive in the RCF/India tender. However, sources said the producers also saw that some regional buyers were interested in prompt shipments of small cargoes – mostly under 10,000 mt – and at higher prices. As a result, the producers not only moved up their pricing ideas, but also made it clear they would not entertain any bids that go below $300/mt FOB.
One trader speculated that one or two producers might break ranks to offer material in the Indian tender. At best, however, sources said that China will only supply 150,000-160,000 mt instead of the 500,000 mt discussed immediately after the tender was called.
Brazil:
The call for an Indian tender did not excite the Brazilian market. Sources indicated the limited tonnage sought by RCF was not enough to reverse the steady drop in pricing. The landed price of urea came off slightly to $280-$290/mt CFR, while sources described new bids closer to $260/mt CFR.
The Rondonopolis price was reported steady at $420-$430/mt FOB ex-warehouse. Sources said the flat pricing came with a general feeling of malaise in the regional markets.
Trade Data Monitor put January-May urea imports at 2.4 million mt, a 6% decline from the year-ago 2.6 million mt. May imports stood at 592,000 mt, up slightly from 571,000 mt logged in the previous May. Oman and Qatar each sent about 137,000 mt, followed by Venezuela with 112,000 mt. Russia added 82,000 mt.
Ethiopia:
Urea imports totaled 200,000 mt in January-May, according to Trade Data Monitor, risingfrom 151,000 mt reported for the same period of 2022. May imports were 50,000 mt – all from Egypt – falling from the year-ago 96,000 mt.