US Gulf:
The NOLA urea market was quoted at $370-$420/st FOB for confirmed trades during the week, down from last week’s $385-$435/st FOB, with limited prompt September business reported at the upper end of the range.
October barges were reported in a wide $370-$405/st FOB range for the week, with the low reported for full October and the high for first-half October business. Further out, sources said the market dropped to $360-$390/st FOB for November physical barge trades.
Eastern Cornbelt:
Urea remained at $450-$470/st FOB in the Eastern Cornbelt, with the low confirmed in Illinois. The Cincinnati, Ohio, market was pegged in the $455-$460/st FOB range during the week, down from $465-$470/st FOB the week before.
Western Cornbelt:
Urea pricing was unchanged at $450-$470/st FOB in the Western Cornbelt, with the low reported at St. Louis, Mo., and the high in Iowa.
California:
Granular urea remained at $550-$600/st FOB Stockton, with prilled urea priced at the $620/st level FOB San Diego. Rail-DEL pricing was reported at the $510/st level or higher in the state.
Pacific Northwest:
Urea slipped to $495-$500/st FOB in the Pacific Northwest, down from $530-$540/st FOB at last report, with the low confirmed at Rivergate, Ore. The latest rail-DEL offers fell in the $515-$558/st range in the region, depending on location, down from the prior $540-$570/st DEL range.
Western Canada:
Urea pricing in Western Canada was reported at C$740/mt FOB and C$765-$785/mt DEL in late September, down from the prior C$755/mt FOB level.
India:
Following a flurry of talk suggesting a tender was about to be called, industry watchers settled down to a view that a new tender call will most likely come late next week, with a closing date of Oct. 15-18.
Even though India needs more urea in the pipeline, the delay in calling the tender made sense, sources said. Not all of the paperwork in the Rashtriya Chemicals and Fertilizers Ltd. (RCF) tender has been completed, and traders said the buyer wanted to make sure it had firm deals in hand with the companies set to supply 525,000 mt before another tender is announced. The big fear seemed to be that without having contracts in place, a trader could withdraw from the hand-shake agreement in order to offer the same tons at a higher level in the next tender.
Prior to the closing of the September RCF urea tender, sources had estimated that India needed 3-3.5 million mt to successfully close out the year. The hopes of meeting that goal were dashed when RCF was only able to secure 525,000 mt instead of the desired 1.5 million mt. The import deficit prompted speculation about another tender being called almost immediately after the conclusion of the RCF tender.
Sources said the next tender will most likely land in the $420-$430s/mt CFR, which is more in line with the majority of offers from the previous tender. Sourcing will most likely rely on the Arab Gulf, with some material coming out of Nigeria and North Africa. No Chinese tons are expected to be offered, as the Chinese government is encouraging producers to focus on the domestic market.
MCF shut its ammonia and urea production for a routine maintenance turnaround, and the company said it should be back in operation by the end of October. While MCF called the closure “routine,” international traders said many were caught by surprise. The reduction of the plant’s urea output comes at a time when India is still short of the product it needs for the rest of the year.
The Indian government reported August urea sales at some of the highest levels seen in a long time, according to media reports. Buyers purchased an estimated 4.9 million mt during the month, against 4.1 million mt bought in August 2022. Domestic production for the month was put at 2.8 million mt, up from 2.5 million mt in July.
Urea imports fell 42% in January-July, Trade Data Monitor reported, to 3.3 million mt from 5.8 million mt in the prior year. July imports stood at 447,000 mt, off 61% from the 1.1 million mt received in July 2022. Oman sent 164,000 mt, the United Arab Emirates added 118,000 mt, and Russia shipped 45,000 mt. Local media reported August imports at 262,000 mt.
These import numbers do not include the 1.7 million mt awarded in the Indian Potash Ltd. (IPL) tender, nor the 525,000 mt from the RCF tender. The deadline for shipping product under the IPL tender was Sept. 26. Product must ship by Nov. 26 for the recent RCF tender.
Black Sea:
Prilled urea shipping from the Black Sea was steady at $340-$360/mt FOB.
Indonesia:
PT Pupuk Indonesia Holding Co. closed a tender on Sept. 29 offering 8,000-40,000 mt of granular urea and 20,000 mt of prilled urea. Initial reports showed granular bids down and prilled prices up from the Sept. 19 tender.
While all of the numbers from the tender were not available as Green Markets went to press, sources said at least one bid came in at $405/mt FOB for the full 40,000 mt of granular product, off from the $415/mt FOB paid by Aditya Birla in the earlier tender for only 6,000 mt of the 40,000 mt offered.
Bids for the prilled urea came in the upper-$390s/mt FOB, above the sub-$390/mt FOB bids submitted in the last tender. Pupuk scrapped the previous prilled tender rather than accept the low bid.
The bid prices could put Indonesian urea in play for the upcoming Indian tender, and both allotments are slated for October shipment under the existing export permits issued by the government. Sources said Pupuk is evaluating the bids and may make awards next week.
Middle East:
Producers quietly finished up the last of the loadings from the IPL tender to meet the Sept. 26 shipping deadline and are now assembling the paperwork for tons to be shipped under the RCF tender. Any discussion of new pricing levels is being done quietly between producers and traders in preparation for the next Indian tender.
Offers into a recent Ethiopian Agricultural Business Corp. (EABC) tender showed much higher pricing ideas than are expected for India. The tender, which closed on Sept. 14, called for four lots of 50,000 mt each to be shipped in September and October. The September lots were offered at $428-$455/mt FOB from various sources including the Arab Gulf, while the October lots were priced at $480-$495/mt FOB.
Even without awards being issued in the EABC/Ethiopia tender, sources said the pricing indicates where producers think the market should be. These levels, however, will not be workable into India, one source noted. If the next Indian tender comes in at $420-$430/mt CFR, it would show a netback to the Arab Gulf of $405-$415/mt FOB against the current $380-$385/mt FOB, based on the most recent tender.
MOPCO sold two cargoes out of Egypt to different traders for October shipment, sources said. The first lot was sold at $420/mt FOB for 6,000 mt. The second lot of 8,000 mt went for $425/mt FOB.
China:
Activity in China wound down this week as the country prepared for its Mid-Autumn Festival, Golden Week holiday, and National Day celebrations. Most operations are expected to be shut down or have reduced output through Oct. 8. The lack of any new spot business left the price at $385-$390/mt FOB, set by the previous Indian tender.
The last of the IPL tons were loaded to meet the Sept. 26 deadline. Sources said those lots will most likely be the last of any large cargoes coming out of China. With the government pushing producers to focus on the domestic market, only small cargoes, mostly shipped in containers, are expected to be allowed for export throughout the fourth quarter.
Brazil:
Brazil urea import prices fell to $390-$410/mt CFR. Players cited limited trading volumes, as most sellers have pulled out of the market in anticipation of a new Indian tender, an expected increase in future demand, and an absence of large volumes supplied from China. Most of the week’s transactions reportedly involved material of North African origin.
Low regional demand for urea saw Rondonopolis prices soften to $525-$545/mt FOB ex-warehouse, below the prior $535-$545/mt, as farmers focus on 2023/24 soybean sowing over the corn safrinha season. The low side of the range was associated with product of Russian origin.