US Gulf:
NOLA urea moved higher on reports of firming international prices and escalating tensions in Ukraine. July barges were reported at $335-$365/st FOB, up from last week’s $315-$330/st FOB, with loaded barges quoted in the $341-$365/st FOB range for confirmed trades. August tons were reported at $335-$352/st FOB for the week.
Eastern Cornbelt:
Urea strengthened to $395-$420/st FOB in the Eastern Cornbelt in the wake of firming NOLA barge prices, up from the prior week’s $380-$400/st FOB range. Both the high and low were reported at Cincinnati, Ohio, during the week.
Western Cornbelt:
Urea prices firmed slightly to $370-$400/st FOB in the Western Cornbelt, up $10/st from last week, with both the high and low confirmed at St. Louis, Mo.
Southern Plains:
Urea was pegged at $370-$410/st FOB in the Southern Plains, with the low confirmed at Houston, Texas, and the high reported at Catoosa/Inola, Okla., for limited tons. The Catoosa/Inola market was up from last week’s $380-$390/st FOB range.
South Central:
Firming NOLA barge values pushed urea terminal prices to $385-$415/st FOB in the South Central region, up from $350-$400/st the week before. The low was confirmed at Convent, La., with other regional terminals ranging from $390-$415/st FOB, depending on location.
Southeast:
Urea prices tightened to $400-$410/st FOB port terminals in the Southeast, down slightly from the previous $400-$425/st FOB range.
Black Sea:
The price of prilled urea from the area widened during the week. Sources now report the market at $295-$330/mt FOB.
India:
The lack of a tender call this week disappointed many in the industry. Sources now say the tender could be called as late as mid-August.
The Department of Fertilizers (DoF) is reportedly concerned with the rising price of urea. Sources estimate that India will need to take 1.2-1.5 million mt in the upcoming tender. The DoF may be hoping that by delaying the tender for another week or two, sources said, surpluses will build up in the urea market, forcing prices down.
While this strategy worked in the past, the number of potential suppliers for the tender has been reduced. Sources noted that China will not be able to provide large quantities of urea due to delays built into its export approval process, while Russian product is also not readily available for large quantities of exports.
Indonesia is also expected to stay out of the export market well into August, leaving the Arab Gulf as the only large supplier able to support offers into the tender.
South Korea:
January-June urea imports totaled 399,000 mt,according to Trade Data Monitor, a 29% decline from last year’s 561,000 mt. Second-quarter imports were counted at 133,000 mt, off 43% from the year-ago 234,000 mt. Chinese urea accounted for 82,000 mt, while Qatar supplied 38,000 mt.
South Korea received 31,000 mt in June, down slightly from 36,000 mt in June 2022. China dominated the June market, sending 30,000 mt.
Middle East:
No urea spot sales were reported from the region, leaving the price just under $320/mt FOB. The price should be about $10/mt higher, sources said, based on the historical pattern of Arab Gulf and Chinese export urea prices holding roughly even.
With the July 17 shipping deadline from the previous Indian tender now passed, producers are turning attention to their other contracts. Most production is reportedly going into storage, however. These reserves are expected to represent the bulk of offers into the next Indian tender.
At midweek, sources put the Egpyt paper market at $415/mt FOB for August. That price was quickly passed, however, as producers satisfied strong demand from both domestic buyers and European traders.
The week started with Kima selling 10,000 mt at $389/mt FOB, about $10/mt up from the close of the prior week. Abu Qir then came in with a sale at $400/mt FOB, quickly followed by MOPCO, selling 6,000 mt at $411/mt FOB.
Before the end of the week, MOPCO pushed the price further, selling cargoes of 5,000 mt and 3,000 mt at $420/mt FOB. Not to be outdone, Abu Qir added a 7,000 mt granular urea sale at $422/mt FOB, along with a 7,000 mt sale of prilled urea at $400/mt FOB. All of the cargoes were slated for August loading.
Prices may have also received a boost from a government request that producers cut output by about 30% for a short period. The government wishes to divert the natural gas from industrial use to consumer use. Sources speculated that the high temperatures plaguing the Mediterranean are increasing the use of air conditioning, putting a strain on the country’s power grid. Natural gas is needed to help produce enough electricity to avoid brownouts and power failures.
The production cutback is not expected to interfere with the fulfillment of existing sales agreements, producers said. Future deals could be more expensive, however, and for limited tonnage.
China:
Export prices are moving up, sources said. Prilled urea is now pegged at $330-$340/mt FOB, with granular at $340-$350/mt FOB. No one has been able to confirm deals at these levels, however.
One trader noted that a $320/mt FOB bid for a prilled cargo went unanswered. At the same time, reports indicated small lots of granular being sold in containers at $380/mt FOB.
Limited requests for small tonnage from Southeast Asian buyers currently account for the bulk of the market’s business. Traders are hesitant to secure large lots of urea for the upcoming Indian tender until the shipping window is known. Sources said that if the deadline is early, such as end-September, it may be difficult to ensure the tonnage can clear the export approval process in time.
While a shipping deadline of mid- or late October could ease concerns, industry watchers seem convinced the shipping deadline will fall in September.
Brazil:
The urea price continues to move up under steady demand, with sources putting the market at $370-$385/mt CFR, a $20/mt jump from the previous week. Players reported low-cost offers of sanctioned material available in the market, with no takers confirmed so far.
Urea traders expect more price increases to come. Russia’s withdrawal from the Black Sea grain deal could push prices as high as $400/mt CFR, some said. At that level, traders said buyers should be expected to step away, forcing prices back down.
Sellers suspended their price lists this week due to the ever-shifting market. Suppliers tried to push more sales for the Safrinha season but failed to secure any new deals. The stalemate left the Rondonopolis price at $480-$515/mt FOB ex-warehouse. However, sellers may soon make a push for $550/mt FOB ex-warehouse.
Argentina:
January-May urea imports fell 53% year-over-year, Trade Data Monitor reported, to 95,000 mt from 201,000 mt. May imports were reported at 61,000 mt, down from 97,000 mt in May 2022. Nigeria shipped 45,000 mt for the month, while Russia sent 9,400 mt.