US Gulf:
NOLA urea prices remained under pressure, though prompt, loaded barges continued to garner a premium. Prompt NOLA barges firmed to a high of $320/st FOB on June 15, up from $285-$295/st FOB earlier in the week. Full June business was reported at the $280/st FOB mark, with July barges reported in the $245-$270/st FOB range and August at $265-$270/st FOB.
Eastern Cornbelt:
Urea was pegged at $460-$480/st FOB in the Eastern Cornbelt, with the high reported at Cincinnati, Ohio. Pricing in the Northeast reportedly dropped to a low of $440/st FOB Fairless Hills, Pa., for June offers.
Western Cornbelt:
Urea remained $460-$480/st FOB in the Western Cornbelt, depending on location, with the St. Louis, Mo., market steady at $460-$465/st FOB. In the Southern Plains, the Catoosa/Inola, Okla., market continued to be quoted firmly at the $490/st FOB level for limited supply.
California:
Urea was steady at $560-$600/st FOB in California, with the low at Stockton. No current rail-DEL urea prices were confirmed in mid-June.
Pacific Northwest:
Urea pricing dropped to $475-$480/st FOB in the Pacific Northwest, down from the prior $520-$525/st FOB range, with the low confirmed at Rivergate, Ore. Rail-DEL urea pricing dropped even more, to a reported $467-$520/st range, depending on location, down from the previous $535-$625/st DEL. The upper end of the DEL market was reported in Montana.
Western Canada:
Urea pricing in Western Canada dropped to C$530-$535/mt FOB and C$545-$700/mt DEL, depending on location and time of shipment, down significantly from the prior C$670-$730/mt FOB and C$720-$760/mt DEL ranges.
Black Sea:
The urea price range widened. The lower end of the range dropped $10/mt to $240/mt FOB, while the upper end took a slight move upward to $265/mt FOB.
India:
The Rashtriya Chemicals and Fertilizers Ltd. (RCF) tender left many in the industry disappointed. A number of traders had predicted prices landing around $275/mt CFR. Instead, the low price for East Coast deliveries came in at $284.90/mt CFR, and $279.70/mt CFR for the West Coast. The prices are about $50/mt lower than India’s previous urea tender, held by Indian Potash Ltd. (IPL) in March.
Samsung set the low price for the West Coast with 45,000 mt and Sun International with 50,000 mt for the East Coast. As soon as RCF released the tender prices earlier in the week, RCF countered the other trading houses at these levels. As Green Markets went to press, RCF has already accepted 600,000 mt. Of that tonnage, about 490,000 mt is for West Coast ports. Final awards are expected to be issued early next week.
| Estimated Tonnage East Coast | |
| Company | Quantity (mt) |
| Fertiglobe | 45,000 |
| Sun International | 50,000 |
| Estimated Tonnage West Coast | |
| Company | Quantity (mt) |
| OQ Trading | 260,000 |
| Swiss Singapore | 145,000 |
| Samsung | 45,000 |
| Agricommodities | 40,000 |
The total number of tons offered was 2,565,000 mt. East Coast offers were 1.1 million mt and West Coast offers were 1.4 million mt. There was only one offer on an FOB basis, for 90,000 mt from Fertiglobe, offered at $280/mt FOB. RCF countered the Fertiglobe offer at $265.45/mt FOB.
| East Coast | |||
| Offering Company | Quantity (‘000 mt) | US$/MT CFR | Discharge Port |
| Sun | 50 | 284.90 | Vizag-Kakinada-Paradip |
| Samsung | 90 | 285.00 | Kakinada |
| AgriCommodities | 40 | 296.10 | Krishnapatnam-Kakinada |
| Fertiglobe | 90 | 298.00 | Kakinada-Gangavaram-Vizag |
| Dreymoor | 45 | 298.49 | Kakinada |
| OQ | 50 | 298.50 | ECI |
| Continental | 100 | 298.75 | ECI |
| Aries | 50 | 299.97 | Kakinada-Krishnapatnam-Karaikal-Gangavaram |
| Midgulf | 150 | 303.00 | Kakinada |
| Swiss Singapore | 100 | 303.50 | ECI |
| Indagro | 100 | 304.75 | ECI |
| Ameropa | 47.5 | 308.45 | Kakinada |
| Fertcom | 45 | 310.00 | ECI |
| Koch | 50 | 316.15 | Krishnapatnam-Kakinada |
| MacroSource | 45 | 321.00 | Karaikal-Krishnapatnam-Kakinada- Gangavaram |
| Agrifields | 50 | 328.00 | Vizag |
| Total ECI | 1,102,500 | ||
| West Coast | |||
| Offering Company | Quantity (‘000 mt) | US$/MT CFR | Discharge Port |
| Samsung | 45 | 279.70 | Kandla |
| AgriCommodities | 40 | 280.20 | Mundra |
| OQ | 310 | 280.50 | WCI |
| Continental | 150 | 281.75 | WCI |
| Sun | 50 | 286.90 | Mundra-Kandla |
| Fertiglobe | 45 | 291.00 | Mundra-Kandla |
| Swiss Singapore | 150 | 293.80 | WCI |
| EuroChem | 50 | 295.00 | Mundra |
| Dreymoor | 45 | 296.49 | Pipavav |
| Midgulf | 150 | 298.00 | Mundra-Adani Tuna |
| Fertcom | 45 | 305.00 | WCI |
| Aries | 50 | 305.79 | Mundra-Pipavav-Adani Tuna-Rozy |
| Medallion | 50 | 306.50 | Mundra-Kandla-Pipavav-Tuna |
| Ameropa | 47.5 | 308.45 | Mundra |
| Koch | 50 | 312.00 | Mundra-Kandla |
| Keytrade | 50 | 312.00 | Kandla |
| MacroSource | 45 | 323.00 | Mundra-Kandla |
| Total WCI | 1,372,500 | ||
| FOB | |||
| Offering Company | Quantity (‘000 mt) | US$/mt FOB | |
| Fertiglobe | 90 | 280.00 |
The East Coast price shows a netback to China of $270/mt FOB. This is significantly lower than what Chinese producers can get from regional buyers, and right at China’s reported break-even production cost.
The West Coast price has an estimated netback to the Arab Gulf at $265-$270/mt FOB, about $10/mt below previously-done business from the area. RCF’s $265/mt FOB counterbid to Fertiglobe aligns with general pricing expectations from that region.
Soon after the prices were released, sources reported rumors that RCF would try to take more than the 800,000 mt indicated in the tender documents. However, sources said the short shipping period, with a deadline of July 17, will limit the ability to load vessels in time. At the same time, Chinese export warehouses were said to have only 86,000 mt available. Traders were unsure whether the export clearing process could be concluded in time to allow for multiple cargoes to ship from China within that window.
Even with the complications of ensuring timely shipments from China, sources reported that RCF was in direct talks with Chinese producers for at least three cargoes. How these sales will be handled is up in the air. Later in the week some talks indicated the only tonnage expected out of Chinese ports will be a re-exported Middle East Cargo.
Sources expected that Arab Gulf and Russian material – shipped mostly from the Baltic – will dominate the awards issued by RCF. There is more than enough tonnage reportedly on hand in the Arab Gulf to cover RCF’s needs. In addition, there was also said to be enough material available from the Baltic Sea to fill out demand.
As the week closed, some traders expressed concern that RCF might not be able to issue awards for the full 800,000 mt. Traders reported difficulties in nailing down Chinese product due to pricing, which has has all eyes looking to the Arab Gulf and Russia.
Southeast Asia:
Pupuk, of Indonesia, remains out of the international market to focus on the domestic market. Sources said this absence is expected to continue through at least mid-July. The lack of new offshore deals has essentially made the last-done price of $330-$335/mt FOB for Indonesian granular urea irrelevant to the current market.
Malaysian production has resumed after a brief unscheduled shutdown in May. Petronas is focusing on covering its contracts, leaving nothing for the spot market.
Brunei offered a small cargo of granular for sale in the low-$330s/mt FOB. No takers were reported.
Middle East:
The estimated netback from the RCF/India tender was put at $265-$270/mt FOB, with the lower end of the range representing limited or no margins for traders. This is about $10/mt below the last public business out of the area. Sources expect to see a great deal of Arab Gulf urea used to cover awards in the tender.
Fertiglobe offered 90,000 mt at $280/mt FOB into the tender. The offer appeared to be an effort to hold on to the $280/mt FOB mark in a declining market. The RCF counterbid, reported at $265.45/mt FOB by one source, more accurately reflects the current Arab Gulf price.
After the Indian tender closed, traders looking to cover shorts out of Egypt made their moves. The end of the week showed a steady rise in the Egyptian pricing. MOPCO, Alexfert, and Helwan all sold several small lots starting at $290/mt FOB and moving to $303/mt FOB. Abu Qir stepped up the process, selling several cargos to traders at $305-$310/mt FOB as the week closed. All told, Egyptian producers sold about 110,000 mt this week in small lots of 3,000-10,000 mt.
China:
The estimated netback to China from the RCF/India tender was put at $270/mt FOB. Unfortunately for anyone hoping to use Chinese urea to cover an award into that tender, Chinese producers were reported successfully selling cargoes at higher prices to regional buyers. In addition, sources put the break-even price for urea production for many producers around the $270/mt FOB mark.
At the beginning of the week, sources reported deals to South Korea and other Southeast Asian buyers at $280-$285/mt FOB for granular urea. Traders reported that other deals had taken place at higher prices, but did not provide details. Prilled urea is generally seen to be selling at $300-$305/mt FOB, without much haggling over the price.
By the week’s end, however, sources said a tender for 3,000 mt of granular urea out of South Korea showed an estimated netback to China just above $270/mt FOB. Details of the deal were not clear as Green Markets went to press.
The initial higher price producers could get from smaller regional sales compared to the Indian tender led some sources to speculate there will not be any Chinese product included in the Indian awards. Some also point to the limited tonnage at the export warehouses. Sources said there are reports of only 86,000 mt, as opposed to the average of 286,000 mt being prepped for export.
Even if traders are not able to secure tons from China for the tender, rumors are circulating that RCF is in direct talks with Chinese producers. These rumors included reports that at least three cargoes could be made available for India by the July 17 shipping deadline.
Brazil:
Imports were noted softening to $275-$280/mt CFR. Bidding was reported as low as the $260s/mt CFR.
While aggressive buyers continue to try pushing the landed price down, sources noted the potential for higher prices out of North Africa due to rising natural gas prices to producers. They also pointed to limited urea availability out of China, at least until international prices rebound to much higher levels.
Not helping the sellers, however, were reports that the supply of urea on hand is well above that of previous years. The country reportedly has 1.5 million mt more product on hand than at the same time in 2022.
The inland market at Rondonopolis showed a minor downward tick, to $420-$425/mt FOB ex-warehouse. Demand remains focused on the most aggressive offers, which represent deliveries in the last quarter of the year, rather than any prompt orders. The recent drop in corn prices has led farmers to hold off on long-term buying. Sources said the main push for more tons may not come until after the completion of soybean planting in the third quarter.