US Gulf:
NOLA urea barges once again covered a broad range for the trading week, but prices were up from last week’s $355-$425/st FOB.
After reaching a reported high of $445/st FOB for prompt tons late on July 28, new trades slipped to $400-$415/st FOB for August-September business on July 31 and Aug. 1. Another drop on Aug. 2-3 pushed the market to a low of $375-$395/st FOB for August-September business, with the focus reportedly on September tons as the week came to a close.
Eastern Cornbelt:
Urea prices firmed to $450-$480/st FOB in the Eastern Cornbelt, up another $20-$25/st from last week, with the low confirmed at Cincinnati, Ohio, and the high at river terminals in Illinois. Pricing out of Michigan warehouses jumped to $525-$535/st FOB during the week.
Western Cornbelt:
Urea strengthened to $450-$470/st FOB in the Western Cornbelt, up another $10-$20/st from last week, with the low confirmed at St. Louis, Mo.
Northern Plains:
Urea prices were reported at $475-$485/st FOB St. Paul, Minn., with delivered tons firming to a broad $485-$525/st range in North Dakota, depending on location and point of origin.
Northeast:
The urea market was quoted at $475-$490/st FOB in the Northeast, with the upper end also reported for delivered tons in Pennsylvania. Sources reported very tight supplies at Fairless Hills, Pa., and Baltimore, Md.
Eastern Canada:
Urea firmed to C$705-$770/mt FOB for the latest offers in Eastern Canada, up from C$615-$660/mt FOB in early July.
India:
The urea market has gone quiet as traders contemplate the price increases that followed the Indian Potash Ltd. (IPL) tender announcement. The tender will close Aug. 9. Sources said they expect to see prices significantly above India’s last tender. IPL is expected to try to purchase 1.5 million mt of urea.
So far, prices seem to be focusing on $410-$415/mt CFR based on the current Arab Gulf price and expectations reported from Chinese producers, an increase of $135/mt from the last tender. If the final price comes in at that level, it will be about $185/mt below the average 2022 tender price of $635-$640/mt CFR.
Pakistan:
Pakistan’s Fertilizer Review Committee (FRC) has warned the country could face a shortfall of urea due to reduced domestic production. The FRC estimated the supply gap at 200,000-600,000 mt through the 2023-2024 season.
The reduced urea production was attributed to domestic producers having less access to natural gas, the panel said, thus curtailing their output. Prices for farmers have already been affected by the reduced availability. Local media reported the price of a 50-kg bag of urea firming from Rs2,600 ($9) to Rs4,000 ($14).
Black Sea:
Prilled urea in the Black Sea followed the Arab Gulf and China markets higher. Sources reported the new price level at $380-$410/mt FOB.
Several cargoes of Russian urea are being assembled for possible sale to India as part of the IPL tender, sources reported. Some tonnage from neighboring countries could also be offered. Poti, located in the far east of the Black Sea, was named the most likely port of shipment, as routes from this port avoid the war zone in the northern part of the Black Sea.
Turkey imported 2 million mt of urea in January-June, according to Trade Data Monitor,up from 1 million mt recorded in first-half 2022. Oman supplied 46% of the market with 901,000 mt, followed by Egypt with 563,000 mt and Russia with 250,000 mt.
June 2023 imports firmed 53% year-over-year, to 278,000 mt from 181,00 mt. Oman sent 172,000 mt, followed by Egypt with 84,000 mt. Second-quarter imports were 1.1 million mt, more than double the year-ago 477,000 mt.
Indonesia:
Rumors continue to circulate that Pupuk is getting ready to hold a selling tender. Sources said the call could come as early as next week, citing a common view that the tender will be called as prices are revealed in the Indian tender on Aug. 9. Others argued that Pupuk might call the tender just before the Indian tender closes.
The argument for waiting until the IPL numbers are released suggests that Pupuk is looking to maximize prices. If the Indian tender price comes in at $410/mt CFR, as some have predicted, the price would translate to a netback of roughly $390/mt FOB Indonesia.
If the selling tender is called before the Indian tender closes, sources speculated that buyers will try to lowball the price into the $370s/mt FOB or lower. By waiting, said one trader, the producers will have the backing of the Indian business to justify a higher price.
Various estimates have been tossed about regarding how many tons might be offered in the tender. Pupuk could be looking to move as many as 300,000 mt through September and October, sources said. The production lines at Kaltim III and Kaltim V are expected to be back online and at full capacity by the end of August.
Middle East:
Arab Gulf producers have gone quiet as they and traders work out pricing for the upcoming Indian tender. Sources said producers are hoping to not only maintain the $400/mt FOB level achieved by SABIC last week, but to move the price higher.
A lack of any deals from Egypt left the last-done price at $467/mt FOB.
China:
Expectations that a large amount of Chinese urea would be offered in the Indian tender received a shock during the week, as the Chinese government appeared to object to a sizable transfer of material from domestic warehouses to portside facilities for export, sources reported.
Approximately 200,000 mt of urea were reportedly sent to export facilities from the domestic supply pipeline. Once the move was discovered, the Chinese government decided the tonnage needed a closer look to ensure the action would not impact domestic supplies, sources said.
The government appears to be angling toward a more intensive export inspection, which could throw the material’s availability for the Indian tender into question. Sources have already reported that pricing out of China appeared to be on the rise because of the action.
So far, the public price was put at $410/mt FOB for granular urea and $400/mt FOB for prilled urea. These pricing ideas, while not yet achieved, were higher than expectations from last week. The move prompted some traders to speculate that the $400/mt FOB price could be treated as the basis for sales into India.
Ethiopia:
Trade Data Monitor reported January-July urea imports at 398,000 mt, off from 406,000 mt received through the first seven months of 2022. Egyptian urea totaled 350,000 mt for the period, accounting for 88% of the market.
Shipments into Ethiopia are typically based on the country’s annual urea buying tender. July traditionally marks the zenith of the Ethiopian import season, with limited tonnage arriving through the rest of the year. July imports were pegged at 148,000 mt, compared with 61,000 mt received in July 2022. Egyptian urea accounted for 100,000 mt.
In the previous three years, Egypt has come to lead the Ethiopian market. In 2020, Egypt urea accounted for 52% of Ethiopia’s urea imports, while Egyptian tons made up 45% of the Ethiopian market in 2021. Egypt supplied 78% of Ethiopian imports in 2022, sending 355,000 mt.
Brazil:
Urea prices rallied $30-$40/mt, to $440-$450/mt CFR, on the expectation that the Brazil market will be in direct competition with the Indian tender for available supply. Offers subsequently moved up to $455-$460/mt CFR, but no transactions were confirmed at that level. An import price of $455-$460/mt CFR would effectively kill farm-level demand, buyers said.
With the domestic Brazil market continuing to seek direction, Rondonopolis urea prices jumped as much as $40/mt this week to $550-$595/mt FOB ex-warehouse. Given the wide price range, buyers seeking product for the corn safrinha, planted in February of next year, will likely hold out for better prices.