US Gulf:
NOLA urea barges dropped from last week’s $450/st FOB high, falling to $390-$408/st FOB, with the low reported for first-half October trades and the high for prompt, loaded tons. September business reportedly fell in the $400-$408/st FOB range during the week.
US Imports:
July urea imports softened 62.4% year-over-year, to 66,358 st from 176,578 st in July 2022. Imports from Canada totaled 30,760 st, Russia sent 25,215 st, and Algeria shipped 3,919 st.
US Exports:
July urea exports were noted at 73,109 st, down 75.8% from 301,655 st recorded one year earlier. Exports to Chile were 35,979 st, followed by 27,958 st to Mexico. Canada took 8,120 st.
Eastern Cornbelt:
Urea terminal prices were down slightly from last week as NOLA barge values softened. Sources quoted urea terminals in the $465-$480/st FOB range in the Eastern Cornbelt, with the low at Cincinnati, Ohio, and the high reported at Peru, Ill.
Western Cornbelt:
Urea slipped to $450-$470/st FOB in the Western Cornbelt, down from last week’s $460-$480/st FOB, with the low reported at St. Louis, Mo.
Northern Plains:
Urea prices fell to $450-$475/st FOB St. Paul, Minn., down from last week’s $480/st FOB peak. The market in North Dakota was quoted at $475-$500/st FOB terminals and $525-$550/st DEL in mid-September.
Great Lakes:
Urea prices were up in the Great Lakes region, fueled by last week’s spike in NOLA barge values. Sources quoted the terminal market at $510-$525/st FOB in the region for new offers, up from $470-$490/st FOB at last report.
Northeast:
Urea prices broadened to $440-$470/st FOB Baltimore, Md., depending on supplier, with the latest Fairless Hills, Pa., offers quoted at the $465/st FOB level for truck tons.
India:
The Rashtriya Chemicals and Fertilizers Ltd. (RCF) tender closed on Sept. 15, with a shipping deadline of Nov. 14. Only the technical offers had been opened as Green Markets went to press. Sources reported offers from 18 companies totaling 3.62 million mt, the most tonnage presented in about three years.
Going into the tender, sources said RCF would be looking to buy 2 million mt to ensure sufficient supply through the calendar year. However, sources are now predicting the final take will be 710,000-715,000 mt.
In addition to the limits on exports from China, the urea market’s subsequent price increase following the tender call would argue for the buyer taking fewer tons, sources said. Predictions at the close of the tender put prices at $412-$420/mt CFR, up marginally from the $396-$399/mt CFR seen in the August Indian Potash Ltd. (IPL) tender.
| Offering Company | Quantity | ||
| ECI | WCI | Total | |
| Ameropa | 316,950 | 358,850 | 675,800 |
| Swiss Singapore | 200,000 | 300,000 | 500,000 |
| Samsung | 165,000 | 177,000 | 342,000 |
| Midgulf | 150,000 | 150,000 | 300,000 |
| Coastal | 135,000 | 135,000 | 270,000 |
| Dreymoor | 129,000 | 80,000 | 209,000 |
| Aries | 100,000 | 100,000 | 200,000 |
| SABIC | 200,000 | 200,000 | |
| Koch | 93,200 | 93,200 | 186,400 |
| EuroChem Trading | 85,000 | 43,570 | 128,570 |
| Overseas Oil and Gas | 100,000 | 100,000 | |
| Compagnie Indo Francaise de Commerce | 45,000 | 45,000 | 90,000 |
| Fertcom | 45,000 | 45,000 | 90,000 |
| MacroSource | 45,000 | 45,000 | 90,000 |
| Sun International | 90,000 | 90,000 | |
| Agri Commodities | 26,000 | 26,000 | 52,000 |
| OQ Trading | 50,000 | 50,000 | |
| Keytrade | 48,000 | 48,000 | |
| Total | 1,625,150 | 1,996,620 | 3,621,770 |
Traders with awards from the IPL tender have gotten nervous over reports that China would limit urea exports. One trader noted that even if the inspection process in China picks up speed, there remains a problem getting vessels loaded on time due to port congestion.
In reaction to the potential for delays in China, sources said some of the traders appear to have made deals with Arab Gulf producers for tonnage to cover their awards if it looks as though shipping from China will drag beyond the Sept. 26 deadline. There is even talk of some traders declaring force majeure based on unforeseen actions by the Chinese government.
Black Sea:
Urea prices dropped to $340-$360/mt FOB as the market waited for the RCF tender to close, as well as on reports that Russia will stop offering discounted fertilizers to India.
Indonesia:
Pupuk Indonesia Holding Co. has gone quiet. Sources said the company will most likely come out with another selling tender next week, after the RCF/India tender numbers are made public.
The last sale out of Indonesia concluded in August at $367/mt FOB for granular urea. However, Petronas, in Malaysia, made a sale last week in the low-$400s/mt FOB. This level is seen as the basis for future Indonesian pricing ideas.
Urea exports were counted at 653,000 mt for January-July, according to Trade Data Monitor, a 37% decline from the 1 million mt shipped one year earlier. July exports were noted at 11,000 mt, all to a buyer in the Philippines, against 220,000 mt shipped in July 2022.
Middle East:
Producers quoted urea prices in the $400s/mt FOB for September shipments and $450/mt FOB for October and November cargoes, sources said. Unconfirmed reports put a number of deals at $350-$400/mt FOB, while sources confirmed business at $360-$380/mt FOB this week.
Traders initially thought the deals were being made in preparation for the RCF tender. However, views then shifted to the idea that purchases were being made to cover awards issued by IPL. These new purchases are said to be replacing tons that were supposed to come from China. Between the export inspection process and congested ports, there is growing anxiety in the market that IPL-bound urea might not be loaded at China by the Sept. 26 deadline.
Egyptian producers remained quiet as the urea world prepared for the RCF tender, though sources said any pricing discussion had to begin where the market ended last week, at $455/mt FOB. Traders said there is no material available below that level, and $455/mt FOB will set the floor for talks next week.
Iranian producers boosted their pricing idea to $380/mt FOB for October shipments, above the $340s/mt FOB that producers discussed for September cargoes late last week. The lack of Chinese material in the global urea market has given producers the idea that they are under no pressure to lower prices.
China:
The week opened with concerns that urea already booked for the IPL tender might be held back, and that slow export inspections could cause problems in meeting the tender’s Sept. 26 shipping deadline. By the end of the week, however, both concerns were superseded by worries of port congestion causing a delay in shipment.
Traders earlier in the month said logistics would be the main concern, rather than export inspections. At the time, however, many were looking at the problem of getting the urea from the port to the docks in time, as well as potential delays in the berthing and loading of vessels. Now the spotlight is on getting ships into a port facility and loaded in time. Some traders have reportedly stepped away from their Chinese product in favor of purchases from other suppliers to ensure a timely shipment.
Sources now expect to see no more than 800,000 mt shipped out of China for the IPL tender, instead of the 1.1 million mt previously predicted.
Urea producers will reportedly be focused on ensuring plentiful stocks for the domestic market. Some exports will be allowed, but only in small lots. Sources said the 45,000-50,000 mt cargoes needed by India would not be permitted. Instead, the deals are expected to be much smaller, in the 4,000-8,000 mt range. One result of this policy, said one trader, is that these small shipments will set the export price instead of the larger, cheaper deals.
The process has already begun. Sources said a sale to Atlas in the Philippines for 6,000 mt of granular and 6,000 mt of prilled has shifted the export price. The granular deal reportedly settled in the high-$440s/mt CFR, for a netback to China of $410-$420/mt FOB. The prilled deal was done in the $430s/mt CFR, for a netback of $400-$405/mt FOB to China.
Brazil:
Imported urea prices fell to $415-$425/mt CFR in Brazil, a roughly 7.2% decline from the week-ago $450-$455/mt CFR. The market saw minimal activity as players await the results of the Indian tender on Sept. 15. Most offers were positioned at the higher end of the price range, while sanctioned product has transacted at $385/mt CFR.
No new urea negotiations for the corn safrinha season were reported at Rondonopolis, leaving the range unchanged at $540-$590/mt FOB ex-warehouse.
The prior increase in urea prices, combined with the devaluation of corn in the futures market, has left barter ratios unfavorable for farmers. As a result, buyers are expected to delay purchase decisions for corn production until the last minute.