US Gulf:
NOLA urea for August-September fell to $350-$370/st FOB during the trading week, down from last week’s $355-$395/st FOB. Limited prompt August trades were reported in the $365-$370/st FOB range, with September business at $350-$365/st FOB.
Eastern Cornbelt:
Urea prices slipped to $430-$460/st FOB in the Eastern Cornbelt, down $20/st from the previous week, with the low confirmed at Cincinnati, Ohio.
Western Cornbelt:
Fueled by softening NOLA barge values, the urea market fell to $410-$450/st FOB in the Western Cornbelt, down from last week’s $430-$480/st FOB range. The high was confirmed in Iowa and the low at St. Louis, Mo.
California:
Granular urea pricing in California was steady at $550-$600/st FOB Stockton, with prilled urea available at the $620/st level FOB San Diego. Rail-DEL urea was reported in the low- to mid-$500s/st in mid-August.
Pacific Northwest:
Urea was quoted at $465-$470/st FOB in the Pacific Northwest, down from the previous $485-$490/st range, with the low confirmed at Rivergate, Ore. Delivered urea was pegged at $490-$520/st in the region, depending on location.
Western Canada:
Urea prices in Western Canada were reported at C$695-$720/mt FOB and C$680-$760/mt DEL in mid-August, up from the previous C$635/mt FOB and C$665-$680/mt DEL levels.
India:
All eyes remain on the Indian Potash Ltd. (IPL) tender. After the tender closed, word came from China over the weekend that more tons would be made available. The total amount of urea IPL is looking to take shot past the initial 1.5 million mt target, to as high as 1.9 million mt. At the end of the week, the quantity appeared to settle around 1.7 million mt as traders adjusted their orders to fit prices and freight costs.
All discussions reportedly ended on Aug. 17. India’s East Coast ports will receive 632,000 mt, according to sources, while West Coast ports will get 1.08 million mt, for a total of 1.7 million mt.
Of that amount, China will supply an estimated 1.1 million mt. Arab Gulf producers are expected to provide 250,000-300,000 mt, with another 200,000-250,000 mt anticipated from either the Baltic or Black Sea. Any remainder might come from Southeast Asian suppliers.
| Supplier | Quantity (mt) | Source | ||
| East Coast | West Coast | Totals | ||
| Midgulf | 100,000 | 200,000 | 300,000 | China-Arab Gulf |
| OQ Trading | 45,000 | 150,000 | 195,000 | China-Arab Gulf-Baltic |
| Ameropa | 192,400 | 192,400 | China-Arab Gulf | |
| Aries | 50,000 | 110,000 | 160,000 | China |
| Koch | 60,000 | 95,000 | 155,000 | China-Arab Gulf |
| Aditya Birla | 100,000 | 100,000 | China-Baltic | |
| EuroChem Singapore | 50,000 | 50,000 | 100,000 | China |
| Sun International | 100,000 | 100,000 | China | |
| Dreymoor | 97,000 | 97,000 | China-Baltic | |
| Samsung | 80,000 | 80,000 | China | |
| Prima Resources | 50,000 | 50,000 | China | |
| Liven Nutrients | 50,000 | 50,000 | China | |
| EuroChem Middle East | 45,000 | 45,000 | Baltic | |
| MacroSource | 45,000 | 45,000 | China | |
| Rayson Global | 45,000 | 45,000 | China | |
| ECI | WCI | Total | ||
| Total | 632,000 | 1,082,400 | 1,714,400 | |
Even with the larger-than-expected purchase, sources said India will still need another 2.2 million mt by the end of the year. The purchases will allow India to take a breather before issuing a new tender, however. Sources now speculate the next tender call may not come until mid-October at the earliest, depending on the level of demand. If demand exceeds current estimates, the call could come sooner.
Some traders continued to express concern that all of the Chinese urea may not clear the export inspection process in time to meet the tender’s Sept. 26 shipping deadline. One trader noted, however, that the government seems to have relaxed the rules surrounding when and where the inspections can take place. There are now a reported 800,000 mt at portside warehouses awaiting inspection and shipment. The inspectors have also reportedly been told to expedite the process.
When the next tender comes, sources said India will face competition from Australia and Brazil. The presence of Chinese urea in the export markets would act as a major price stabilizer, as the three large buyers compete for the same tons.
Indonesia:
Pupuk Indonesia has confirmed the sale of 30,000 mt of granular urea to Liven Nutrients at $414/mt FOB, sources said. The cargo will reportedly go to Australia.
Trade Data Monitor reported January-June urea exports at 642,000 mt, off 22% year-over-year from 822,000 mt. The top three buyers were all located in the Pacific region. The Philippines took 145,000 mt, Australia bought 116,000 mt, and Vietnam received 85,000 mt. Second-quarter exports of 535,000 mt were down 13% from the 619,000 mt logged in April-June 2022.
Exports totaled 153,000 mt in June, a 25% decline from the year-ago 204,000 mt. The Philippines, Vietnam, and Myanmar combined to take 103,000 mt., while Uruguay purchased 39,000 mt.
Middle East:
Following confirmation that some Arab Gulf producers will supply tons to India under the IPL tender, sources estimated netbacks in the $380-$385/mt FOB range. Sources estimate Arab Gulf producers will supply up to 300,000 mt in the Indian tender.
A previous sale out of the UAE at $414/mt FOB to an Australian buyer was closed just as the IPL tender numbers were released. The initial reaction to this sale prompted some to believe prices were moving up. Once the Indian numbers came out, however, sources saw prices shifting to a lower, more stable level.
With Arab Gulf urea now in the $380s/mt FOB, market watchers were not surprised to see Iran drop its price offering to $370/mt FOB. Even at that level, sources said there were no takers. Egypt remained quiet, with no new activity reported.
January-July urea exports from Iran were 2.6 million mt, Trade Data Monitor reported, a marginal increase from the year-ago 2.5 million mt. July exports were counted at 491,000 mt, rising from 314,000 mt shipped in July 2022. Turkey received 53% of the July market with 262,000 mt, followed by Mozambique with 80,000 mt.
China:
Sources reported up to 800,000 mt of urea awaiting export clearance at portside warehouses in China. The granting of permission for the tons to be deposited at the warehouses prior to inspection was a concession to producers looking to meet the IPL tender’s Sept. 26 shipping deadline. Sources estimated China will supply about 1.1 million mt into the Indian tender.
Under normal circumstances, export inspections will take place at the producer’s factory or warehouse. Once approved, the urea is then allowed to be sent to export warehouses. Of the 800,000 mt at the ports, sources estimate only 200,000 mt have already been cleared for export. The remaining 600,000 mt will be inspected at the ports. The inspectors have reportedly been told to expedite the process.
Having the tons already at the ports makes it easier for traders to schedule vessels. Under the normal procedure, the urea would be sent to the ports after a 2-3 week inspection, adding an additional 2-3 weeks to the process. Now, said sources, once the inspection is done, the urea can be loaded immediately if a ship is on hand.
There are still some concerns about delays unrelated to the inspection process. This is typhoon season, sources noted, and some ports are already backed up due to foul weather. There were also reports of worker shortages leaving the ports shorthanded and stretching loading times.
The netback from the Indian tender was put at $375-$380/mt FOB. Sources said the shipments will consist only of prilled urea, as no granular is available for export. Producers were initially disheartened by this price, and had been hoping for a netback closer to $400/mt FOB, especially after a deal or two were reported at $390/mt FOB just before the tender figures were released.
While the producers have apparently agreed to lower their prices for the large sales into India, sources said they are not giving the traders much wiggle room. One trader noted that if a port becomes so backlogged that loading the product slips past the Sept. 26 deadline, the tons could be shifted to another port. That will cost more money, however, and could eat up what limited profits the traders once had.
At the same time, traders with IPL awards and tons waiting at port will want a vessel to arrive as soon as possible. That also means completing the inspection process as soon as possible. Sources estimated port storage costs at $2-$3/mt per day. Each day the urea is not being loaded represents an extra cost to the trader.
Sources noted that in the six weeks between the awards being issued and the shipping deadline, China is slated to ship more tonnage than it exported during the first six months of this year. Trade Data Monitor reported January-June exports totaling 1 million mt. For this tender alone, China is expected to ship 1.1 million mt.
It is not unusual for China to show more exports in the second semester of the year than in the first. First-half 2022 exports were reported at 724,000 mt against second-half 2022 shipments of 2.1 million mt. While this was not the norm, a typical spread is for the second semester to show an increase of 45-50% over first-semester shipments.
Black Sea:
The price for prilled urea out of the Black Sea tightened to $350-$360/mt FOB. The lower end of the range came up $10/mt, with no change to the upper level from last week.
Brazil:
Import urea prices in Brazil softened to $380-$400/mt CFR from the prior week’s $410-$430/mt CFR, a roughly 7% decline, while the paper market was reported in the $370-$375/mt CFR range. Sources noted international price confusion following the Indian tender, with decreases at Brazil contrasting against increased pricing reported out of China.
Rondonopolis trailed the international urea market lower, softening $20/mt week-over-week to $520-$540/mt FOB ex-warehouse. Despite the drop, sources believe farmers will continue to press for lower prices ahead of the safrinha, while barter ratios remain compromised due to the low price of corn.