US Gulf:
NOLA urea barge prices slipped to $355-$395/st FOB during the trading week, down from the prior week’s broad $375-$445/st FOB range. September business was reported in the $355-$370/st FOB range, with August barges confirmed at $365-$395/st FOB for new business.
US Imports:
Urea imports fell 20.4% in July-June, to 4.91 million st from 6.17 million st in the prior year. June imports moved 22.5% lower, to 338,118 st from the year-ago 436,473 st. Imports from Qatar totaled 1.13 million st for the fertilizer year. Russia sent 864,511 st, and Saudi Arabia added 664,939 st.
US Exports:
Urea exports rose 53.5% in July-June, to 1.35 million st from the year-ago 880,144 st. June shipments were 10,310 st, however, off 86.4% from 75,825 st in the previous June. July-June exports to Canada were 696,395 st, followed by 116,011 st to Mexico. Poland took 107,840 st.
Eastern Cornbelt:
Urea remained at $450-$480/st FOB in the Eastern Cornbelt, with the low confirmed at Cincinnati, Ohio, and the high at river terminals in Illinois.
Western Cornbelt:
Urea was pegged in a broad range at $430-$480/st FOB in the Western Cornbelt, depending on location, with the low confirmed at St. Louis, Mo.
Southern Plains:
Urea was in tight supply at Catoosa/Inola, Okla., with the market there quoted at $440-$460/st FOB. Urea pricing at Houston, Texas, was reported at the $450/st FOB level during the week.
South Central:
Urea prices covered a broad range at $410-$480/st FOB in the South Central region, with the low confirmed at Convent, La., and the high at Little Rock, Ark. Kentucky sources pegged the Ohio River market at the $440-$450/st FOB level during the week.
Southeast:
Urea firmed to $460-$470/st FOB port terminals in the Southeast, where available. Supplies were reportedly out at Wilmington, N.C., Norfolk, Va., and Savannah, Ga., in early August.
India:
The Indian Potash Ltd. (IPL) urea tender closed on Aug. 9, with 26 companies offering at total 3.4 million mt. The low price for West Coast delivery came from MacroSource, offering 45,000 mt at $399/mt CFR. The lowest East Coast price came from Samsung, with 80,000 mt offered at $396/mt CFR.
All other offers in the tender were priced above $400/mt CFR. Sources said IPL sent counterbids to the 13 companies with the next-lowest offers for East Coast deliveries, and to the 11 next-lowest offering firms for West Coast arrival. Traders have until Aug. 14 to respond to the counterbids. As of Friday, reports indicated that IPL had issued counterbids to cover all offers for East Coast deliveries.
Sources expressed concern that the offering companies may not be able to respond as IPL would like. The next 13 companies offering delivery for the East Coast showed a price range of $410-$425/mt CFR, covering a total 1.3 million mt out of the 1.6 million mt offered into the East Coast. The 11 companies offering West Coast delivery were priced in a $401-$423/mt CFR range, for 1.2 million mt.
Suppliers offering at $415/mt CFR and below might be able to meet the counterbids, some traders said. If so, that would draw in about 1.3 million mt, in addition to the 125,000 mt from Samsung and MacroSource that are already locked in place.
| IPL Urea Tender | |||||
| Offering Company | East Coast | West Coast | Total Offers | ||
| Quantity (‘000 mt) | US$/MT CFR | Quantity (‘000 mt) | US$/MT CFR | ||
| Aditya Birla Global | 180,000 | 420.50 | 200,000 | 423.75 | 380,000 |
| Agri Commodities | 25,000 | 419.40 | 90,000 | 432.00 | 115,000 |
| Agrifields | 50,000 | 434.00 | 50,000 | ||
| Ameropa | 144,550 | 410.00 | 238,950 | 414.00 | 383,500 |
| Aries | 160,000 | 414.19 | 110,000 | 417.19 | 270,000 |
| Continental | 100,000 | 425.00 | 50,000 | 423.25 | 150,000 |
| Dreymoor | 97,000 | 418.99 | 92,000 | 428.99 | 189,000 |
| EuroChem Agro Asia | 55,000 | 416.00 | 55,000 | 420.00 | 110,000 |
| EuroChem Middle East | 50,000 | 421.00 | 50,000 | ||
| Fertcom | 45,000 | 445.00 | 45,000 | 430.00 | 90,000 |
| Fertiglobe | 45,000 | 438.00 | 45,000 | ||
| Keytrade | 50,000 | 428.00 | 50,000 | ||
| Koch | 60,000 | 411.00 | 150,000 | 415.00 | 210,000 |
| Liven Nutrients | 50,000 | 414.17 | 50,000 | ||
| MacroSource | 45,000 | 415.00 | 45,000 | 399.00 | 90,000 |
| Medallion | 50,000 | 415.00 | 50,000 | ||
| MidGulf | 200,000 | 412.75 | 200,000 | 416.75 | 400,000 |
| OQ Trading | 90,000 | 424.00 | 150,000 | 422.00 | 240,000 |
| Prima Resources | 50,000 | 427.00 | 50,000 | ||
| Rayson Global | 45,000 | 420.00 | 45,000 | ||
| Samsung | 80,000 | 396.00 | 135,000 | 401.20 | 215,000 |
| Southern Cross | 50,000 | 480.00 | 50,000 | ||
| Sun International | 100,000 | 414.90 | 100,000 | ||
| Total | 1,631,550 | 1,750,950 | 3,382,500 | ||
The netback to China from the lowest East Coast offer was put in the upper-$370s/mt FOB, below what producers had hoped for, and may reduce the number of Chinese tons available for India. The netback to the Arab Gulf was put in the upper-$370s/mt FOB.
After digesting the numbers, there appeared to be a consensus that most traders may not be able to meet the low prices set by Samsung and MacroSource. The estimated take for this tender circled around 800,000-900,000 mt, well below the 1.5 million mt that industry watchers said India needs to stay even with demand.
Any final agreement short of 1.5 million mt could lead to another tender, said traders. However, the Indian government would be reluctant to call another tender until all the tons from the current one are committed to vessels and assigned loading dates. That would mean no new tender is likely until the end of September.
Sources added that if IPL cannot secure 1.5 million mt, the urea market will continue to strengthen as producers anticipate the next tender. If the buyer is able to pick up more than 1 million mt, however, the market could see prices softening in the knowledge that no large buying will be needed for some time.
Black Sea:
Prices fell to $340-$360/mt FOB, fitting with the low price offered to the Indian West Coast in the IPL tender.
Indonesia:
Pupuk closed its selling tender for granular and prilled urea on Aug. 9. Liven Nutrients took both awards, sources said. Liven will reportedly take 30,000 mt of granular at $414/mt FOB, and 5,000 mt of prilled at $406/mt FOB.
The price makes the Indonesian product unsuitable for India unless the trader is willing to take a financial loss. Sources said Australia could be the targeted buyer. One trader noted that Australian buyers often try to use the Indian tender price as a benchmark for their own purchases, however. If the buyers in Australian hold to that tradition, selling there will also be difficult.
Middle East:
The netback from the Indian tender puts the Middle East price at $375-$380/mt FOB, a drop of $20-$25/mt from previous estimates. Sources said that even without the $399/mt CFR low price offered into India’s West Coast, the next lowest offer of $401/mt CFR would still lead to a netback below the Middle East’s recent $400/mt FOB price.
No producers offered tons into the Indian tender on an FOB basis. In the past these prices were an indication of where producers thought the market should go. This time, however, sources identified two direct offers from producers using their own trading operations. OQ Trading offered 240,000 mt into India’s West Coast, for a netback to the Arab Gulf of $407-$412/mt FOB. Fertiglobe offered 45,000 mt, for an effective netback of $423-$428/mt FOB.
Sources speculated that OQ and Fertiglobe might be willing to accept IPL’s $396-$399/mt CFR counterbids just to ensure movement of product.
With all discussions focused on India, Egyptian producers were quiet this week. No new deals were reported.
China:
Sources estimated the netback to China from the East Coast India tender offer at $375-$380/mt FOB, about $10/mt lower than producers had expected. The price may cause producers to hesitate about making cargoes available for sale to India.
Tonnage at export warehouses was put at 200,000-300,000 mt. This product will most likely be used to cover awards in the Indian tender. Another 300,000 mt was noted in domestic warehouses, ready to be transferred to the ports. Producers must first secure permission from the government to move the product, however.
Moving urea from domestic warehouses to the ports could take 2-3 weeks once permission to export is granted, sources said. At that time, it would take another three weeks to line up a Panamax to get to the proper port, one trader said. This time frame cuts very close to IPL’s Sept. 26 shipping deadline. Producers and traders were said to be considering whether it is worth the risk to accept the lower price and commit to the Indian market, on the off chance the shipping deadline could be missed and penalties assessed.
One trader offered a more optimistic view, claiming that up to an additional 300,000 mt could easily be made available, giving India a possible 400,000-600,000 mt. In addition, he noted that some of the export inspections could take place at the ports, rather than at factories or local warehouses.
Any tons that come out of China will be prilled urea. Sources reported a lack of granular being offered for export. One trader noted that a major trading house recently paid $420/mt CFR for a small cargo of granular. At the same time, prilled was being quoted at $390/mt FOB.
Brazil:
With the market at a virtual standstill due to the global focus on the Indian tender and its lower-than-expected prices, levels at Brazil fell to $410-$430/mt CFR from last week’s $440-$450/mt CFR, a nearly 5.5% decline.
Sources noted sanctioned product transacting in a $410-$420/mt CFR range. While material from sanctioned origins typically carries a $20/mt discount non-sanctioned product, players quoted similar prices for both grades as the market awaits confirmation of purchase volumes at India.
Levels at Rondonopolis followed the import price lower, to $540-$560/mt FOB. Despite the drop, farmers expect additional declines through October. Up to 60% of purchases for the corn safrinha have been delayed in some areas, sources estimated.
Urea imports totaled 3.5 million mt for January-July, according to Trade Data Monitor, offfrom 3.8 million mt reported through the same period of 2022. Brazil imported 647,000 mt in July, below 671,000 mt received in the prior-year period. Oman supplied 177,000 mt for the month, followed by Qatar with 170,000 mt. Russia added 68,000 mt.