US Gulf:
NOLA urea prices drifted lower this week. New business was reported $395-$406/st FOB for March tons, down from last week’s $403-$417/st FOB for March, with the higher numbers quoted for prompt/loaded barges.
April 1-5 trades were reported at $390/st FOB, compared with last week’s $382-$385/st FOB, but the market dropped off after that, with first-half April business pegged at $354-$369/st FOB, down from $375-$380/st last week. Full April business was reported at $342-$351/st FOB.
US Imports:
Urea imports for July-January firmed 9.5%, to 2.14 million st from the year-ago 1.95 million st. January imports moved up 52.4%, to 489,993 st from 321,477 st in January 2023. July-January imports from Russia were 636,087 st, while Qatar sent 531,009 st. Algeria moved into third place with 323,262 st, ahead of both 261,925 st from Saudi Arabia and Canada’s 215,410 st.
US Exports:
January urea exports were 74,378 st, a 50.9% decrease from the year-ago 151,570 st. Exports softened to 518,975 st in July-January, off 49.0% from the prior 1.02 million st. Exports to Canada totaled 324,658 st in July-January, followed by 80,149 st to Mexico and 77,039 st to Chile.
Eastern Cornbelt:
Urea slipped to the $450-$460/st level FOB regional terminals in the Eastern Cornbelt, with the low reported out of spot Illinois River terminals and reflecting a $5/st drop from last week. The Cincinnati, Ohio, market remained at $455-$460/st FOB, unchanged from the prior week.
In the Great Lakes region, the latest urea offers in Michigan remained at $490-$500/st FOB and $500-$510/st DEL on a spot basis for March-April tons.
Western Cornbelt:
Urea prices were quoted at $445-$465/st FOB in the Western Cornbelt, with the high confirmed in Iowa and the low reported at St. Louis, Mo. The latest offers in the Northern Plains moved to $480-$485/st FOB St. Paul, Minn., while Southern Plains pricing in late March included $495-$510/st FOB Catoosa/Inola, Okla.
California:
Granular urea pricing in California strengthened to $545/st FOB Stockton, up $10/st from last report, with prilled urea remaining at the $580/st level FOB San Diego. Rail-DEL urea prices were confirmed at the $560-$570/st level during the week.
Pacific Northwest:
Urea prices were up $25/st in the Pacific Northwest, to $525/st FOB Rivergate, Ore., and $530/st FOB Aurora, Ore. Railcars, while reportedly hard to find in the region, were pegged in the $580-$590/st DEL range in late March.
Western Canada:
Delivered urea in Western Canada was quoted at C$770-$780/mt, up from the prior C$750-$765/mt range.
India:
Industry players spent the week making their best guesses about what might happen in the Rashtriya Chemicals and Fertilizers Ltd. (RCF) urea tender slated to close on March 27. A lot of that talk will settle down as traders crunch the numbers and prepare their final offers, sources said.
Shortly after the tender was announced, some players speculated that RCF would take as many as 2 million mt at prices in the upper-$350s/mt CFR. As the week progressed, however, talk moved toward both fewer tons being purchased and a much smaller price increase from the $316-$329/mt CFR achieved in the previous tender.
A growing number of traders are now speculating that the final take will be no more than 1 million mt, with a price in the mid- to upper-$330s/mt CFR.
The lower estimated take would make sense under current market conditions, sources said. A smaller purchase will not absorb the growing surplus of urea that is already forming in the Arab Gulf, while additional product is expected to be made available from China after mid-May, adding to the amount of urea looking for a home. This situation is expected to give India a chance to secure many more tons at a lower price in a follow-up tender.
Traders also noted that India is under no great pressure to buy, even though the government reported February urea production at 2.3 million mt, down from the six-month average of 2.8 million mt.
At the same time, the country reportedly has at least 7 million mt of urea on hand for the current application season. Sources said the push to complete a large purchase in the tender is mostly political. National elections begin in April, players noted. It is beneficial to the current government’s reelection plans to be seen as aggressively importing urea whether it is needed or not, said one trader.
The Indian buying houses will want to be very aggressive in each of their tenders, while the government will be looking to get as many tons as possible for as cheaply as is feasible. While that attitude has long been shared by India’s urea buyers, this time there will be less money available to work with.
The government reduced the fertilizer subsidy in the provisional budget set to take effect on April 1. Once the results of the election are known, the new government will enact a permanent budget for the rest of the fiscal year, though no increases in fertilizer subsidies are expected to be part of the final plan.
As the old fiscal year winds down, the government announced it was renewing its permission for Indian Potash Ltd. (IPL), National Fertilizers Ltd. (NFL), and RCF to act as the country’s sole buyers of agricultural urea. There were some rumors that IPL might be dropped, but the company was ultimately included in the renewal order.
Black Sea:
Prilled urea shipping from the Black Sea was noted at $300/mt FOB. Sources continue to expect Russia to be a major player in the RCF/India tender set to close next week.
Mediterranean:
Urea demand in the Mediterranean was muted. Spanish and Italian buyers are largely out of the import market, with product still available at warehouses. The consensus among sources is that $400/mt CFR is no longer workable and bids in the $380s/mt CFR have emerged, which are in sync with Egyptian indications of $350/mt FOB.
As a result, the granular urea spot market dropped to $380-$390/mt CFR this week. In nearby Turkey, Iranian material is quoted at $355/mt CFR, but this sanctioned product falls outside of the Green Markets range.
Southeast Asia:
Tight availability continues to be the main theme in Southeast Asia, with Brunei now largely committed through April and the expectation that Petronas will have to catch up on contract shipments once Gurun and Bintulu return online, which could happen as early as this week.
Granular urea exports from Indonesia are not expected to pick up again until late April or early May. Sources said the government is not planning to issue any new granular export permits until it has fully assessed the country’s domestic needs and supply. So far, media reports from the area indicate there are more than adequate supplies on hand.
Prilled urea continues to be offered for export, however. The latest offering from Gresik showed bids in the low-$320s/mt FOB, down from a Gresik deal closed earlier this month at $355/mt FOB.
Granular urea is typically sold at a $5-$10/mt premium to prilled, leaving the estimated granular price at $325-$330/mt FOB, significantly below Indonesia’s last granular sale at $386/mt FOB. Sources described the upper-$320s/mt FOB price as fitting well with the rest of the global market.
Middle East:
Production facilities in the Arab Gulf are now said to be mostly back up and running. With major buyers in the US and Australia now reportedly stepping away from purchasing, surpluses are reportedly building.
Arab Gulf producers are expected to act as the main suppliers for the RCF tender closing on March 27. However, if RCF takes less than 1 million mt, as many are now predicting, the producers will find themselves holding excess tons without a home. To make their situation worse, Chinese urea is expected to become available in the global market by the second half of May, adding further pressure to the supply/demand equation.
For now, producers are closemouthed about pricing ideas, as are traders looking to secure product for the Indian tender. No new deals were reported to move the existing price.
Reports from North Africa and Europe indicated some small-lot sales done in the low-$350s/mt FOB for Egyptian granular urea. While no concluded business was confirmed, bids from Europe in the $380s/mt FOB – a level many consider to be realistic – would indicate pricing from Egypt in the $350s/mt FOB.
Even as buyers argue for pricing in the low-$350s/mt FOB, producers are reportedly saying the market is closer to $360/mt FOB. If nothing else, the comments from producers have further strengthened the argument for a lower price out of Egypt.
China:
Rumors are now circulating that the Chinese government will not accept any export-related paperwork for urea until May 1. Sources initially believed the government’s plan was to allow for paperwork to be accepted on April 15, so that exports might begin during the first week of May.
If the rumors are correct – and the market may not know until April 1 at the earliest – export applications will kick off on May 1. The processing time is usually 10-15 days, meaning the first cargoes of urea may not ship until the second half of the month.
Traders previously speculated that some Chinese urea might be offered in the Indian tender if the export paperwork could be finished by the end of April. Under the new rumored plan, exporters would not know if they are allowed to ship their urea until just days before the RCF tender’s May 20 shipping deadline. While some companies might risk booking a vessel to arrive at port while the paperwork is still being processed, that would constitute a big risk, one trader said.
The lack of spot sales out of China has left sources guessing the export price based on domestic market dynamics. The export restrictions have had the desired effect of building up large domestic reserves in China, and domestic prices have been falling as a result.
This past week, the ex-plant price for prilled urea was reported at $298-$300/mt FOB, translating to an export price in the low-$330s/mt FOB. The market’s limited amount of granular urea was discussed in the $350s/mt FOB.
These prices fit with the general softness of the global urea market. Without any actual business to test the prices, however, those levels remain purely speculative. When the Indian tender results are announced, the industry will have a firm number from which to calculate a more accurate export price, sources said, and larger numbers of spot sales will be available shortly after the tender to confirm or adjust the estimated pricing.
The government’s export restrictions were evident in the shipping numbers reported by Trade Data Monitor. January-February shipments stood at 21,000 mt, down 95% from the 406,000 mt exported during the same period of 2023. South Korea took 11,000 mt.
Sources said that tonnage most likely consisted of urea related to South Korea’s pollution control devices rather than for agricultural use. February exports were 7,500 mt, a major drop from the 165,000 mt reported going offshore in February 2023.
South Korea:
January-February urea imports firmed significantly year-over-year, Trade Data Monitor reported, to 238,000 mt from 154,000 mt, with Qatar, Vietnam, and Indonesia topping the supplier list. While China is a typically a major supplier to South Korea, the export restrictions imposed by Beijing reduced the Chinese tonnage registered by South Korea to just 13,000 mt, down from 69,000 mt in January-February 2023.
February imports were also significantly higher, firming to 105,000 mt from the 52,000 mt received in February 2023.
Brazil:
Granular urea prices were reported at $355-$360/mt CFR in Brazil, off from the week-ago $365-$375/mt CFR and down 9.5% from early March. Prilled product was offered at $360/mt CFR, players noted, while feed urea of Russian origin traded in the $365-$370/mt CFR range. Granular tons from Venezuela were offered at $340/mt CFR, sources said.
The Rondonópolis market remained quiet due to ongoing low seasonal demand for nitrogen. Lacking buyer interest for the 2025 corn safrinha, many players neglected to include urea on their price lists during the week. The few available references indicated levels in the $500-$510/mt FOB ex-warehouse range, with the lower limit based on negotiations carrying special conditions.