US Gulf:
The NOLA urea market slipped to $280-$297/st FOB for new business, down from $285-$308/st FOB last week, with the low reported for first-half June trades and the high for prompt/loaded barges. Full May business was quoted in the $284-$292/st FOB range during the week.
US Imports:
March urea imports softened 47.8%, to 64,837 st from the year-ago 124,280 st. Imports totaled 640,122 st in July-March, down 48.1% from 1.23 million st in the prior year. July-March imports from Russia were 1.02 million st, while Qatar sent 742,055 st. Saudi Arabia shipped 443,727 st, ahead of 407,820 st from Algeria.
US Exports:
March urea exports fell 47.8%, to 64,837 st from the year-ago 124,280 st. July-March exports moved down 48.1%, to 640,122 st from 1.23 million st in the prior year. Exports to Canada totaled 437,754 st in July-March, followed by 86,162 st to Mexico and 77,097 st to Chile.
Eastern Cornbelt:
Urea prices continued to slip in the Eastern Cornbelt, falling to $370-$390/st FOB river terminals for prompt tons, down from last week’s $390-$410/st FOB range. While the low was reported out of spot Illinois River terminals, the Cincinnati market slipped to $375-$385/st FOB for the latest offers, down sharply from the prior $400-$410/st FOB range.
Western Cornbelt:
Urea in the Western Cornbelt remained in a broad range at $365-$410/st FOB during the week, with the high reported in Iowa. The St. Louis, Mo., market was pegged at $365-$375/st FOB, down from last week’s $370-$380/st FOB range.
Northern Plains:
Urea prices were lower in the Northern Plains. Sources quoted the latest St. Paul, Minn., terminal offers at $370-$390/st FOB, down from last week’s $380-$410/st FOB, with reports that pricing could drop to $355/st FOB in June. Rail-DEL urea in eastern North Dakota was pegged at $440-$460/st, well below the last confirmed offers in the low-$500s/st DEL.
Northeast:
The urea market fell to $430-$445/st FOB regional terminals in the Northeast, with the low confirmed at Fairless Hills, Pa. Rail-DEL pricing in the region was pegged as low as $415/st on a spot basis, however, based on softer NOLA and Midwest values.
Eastern Canada:
Urea was quoted at C$620-$700/mt FOB in Eastern Canada, down C$25/mt at the high end of the range.
India:
Urea stockpiles in India remain at record levels, with sources noting reserves at approximately 10 million mt. The high inventories mean that India is in no rush to call its next urea tender, sources said. Should India call a tender in May, one trader noted, it will be for political reasons and not because of demand.
Urea supplies have always been a touchy subject in Indian politics. The product is the most heavily subsidized fertilizer in the country, and past efforts to ease these subsidies have led to major political confrontations. The current government has stepped up both domestic production and the introduction of alternative products such as liquid Nano Urea. These efforts have reduced the amount of urea being imported, allowing the government to lower its subsidy outlays.
International traders now expect the tender call to come sometime in June for July and August shipments. However, Indian companies have a tradition of announcing a tender around the time of the IFA world conference, some added, and this year’s event will be held in Singapore on May 20-22. A tender call around those dates would fit with prior expectations.
Even with large reserves on hand, more purchases may be necessary. Weather predictions indicate that the monsoon season might be slightly better than average, sources said, which could lead to more demand.
Black Sea:
Black Sea prilled urea prices remained at $250-$260/mt FOB.
Mediterranean:
Urea offers into Italy were heard at similar levels to last week’s $315-$320/mt CFR. In nearby Romania, offers were lower at $310/mt CFR. With no fresh sales confirmed in the Mediterranean region despite lower FOB Egypt indications of $285-$290/mt FOB, however, the price range remained unchanged at $315-$320/mt CFR.
Southeast Asia:
No further granular urea business was confirmed this week in Southeast Asia, with regional demand in Thailand, Vietnam, and Philippines reportedly delayed by lack of rains and nearby India sitting on high stocks. As a result, the Southeast Asia granular urea price remained at $305-$306/mt FOB.
Petronas’ Bintulu urea plant went down for unplanned maintenance at the end of last week and will remain offline for a minimum of two weeks. Separately, Pupuk Pusri awarded 5,000 mt of prills at $312.50/mt FOB, which will likely head to a nearby destination in Southeast Asia.
Indonesia:
Granular urea remains at $305-$306/mt FOB in Indonesia, the result of a late-April selling tender.
A new prilled urea tender, offering one cargo of 6,000 mt and another of 12,000 mt, closed this week at the unexpectedly high price of $312.50/mt FOB. Granular is typically sold at a premium to prilled.
One trader said the tender was called to accommodate demand from a buyer in Southeast Asia. Indonesian law requires urea exports to sell via a tender, a requirement enacted several years ago to avoid any perception of insider trading or corruption. Once the tender is settled, additional tonnage beyond the original offer may be sold, but only at the tender price.
The tender price falls in line with reports that TFC/Taiwan bought 6,000 mt of prilled urea, most likely from Indonesia, at $341/mt CFR. Sources also reported that Atlas, in the Philippines, is looking for 6,000 mt of prilled and granular urea. Indonesia is the main supplier to Southeast Asian buyers looking for small lots such as these.
Indonesia exported 341,000 mt of urea in January-March, Trade Data Monitor reported, a significant increase from the 107,000 mt shipped in first-quarter 2023. Australia took 201,000 mt, for 59% of the exports, followed by the Philippines with 46,000 mt. March exports were noted at 223,000 mt, more than double the 107,000 mt shipped in March 2023.
Philippines:
Atlas on May 14 will close a purchase tender for 6,000 mt each of prilled and granular urea, as well as 6,000 mt of caprolactam grade ammonium sulfate. Shipment is required by June 15. Sources named Indonesia as the most likely source for offers in the tender.
Middle East:
Urea deals were reportedly closed out of the Middle East this week at $265-$268/mt FOB, though no buyers or sellers were named.
The price drop was expected, said traders. Arab Gulf producers have returned to full production at a time when demand from large buyers is absent. India is in no rush to call a follow-up to its March tender. At the same time, Australian buyers previously engaged in a series of large forward acquisitions, leaving limited need for additional purchases.
The combination of steady production and reduced demand has producer warehouses filling more rapidly than planned, and some sellers are becoming desperate to move tons. In some cases, producers have reportedly urged buyers to take as many tons as their warehouses could hold, offering to work out the price later, a practice one trader called “stuffing the channel.”
The move gives buyers the security of knowing tons are available and that pricing will be determined when the product is moved out of the warehouse. Given the market’s growing softness, this is a good deal for buyers, said one trader.
No new business was reported out of Egypt during the week. Demand from Egypt’s primary market, Southern Europe, has reportedly gone flat.
In addition to the general softness in urea pricing, Egyptian producers will begin facing more competition in Argentina. Until this week, all non-Egyptian urea was hit with a 5.4% import tariff. The government of Argentina has now lifted that tariff, however, allowing suppliers from Algeria and Nigeria to compete against Egypt for Argentina’s business.
Egypt sent 364,000 mt of urea to Argentina in 2023, about 44% of that country’s 825,000 mt total for the year, while Egypt has sent just 10,000 mt of Argentina’s 202,000 mt imported in 2024 to-date. However, imports usually pick up during the second half of the year.
China:
Sources now expect Chinese urea exports to resume no earlier than June or July. Some predicted that serious movement may not come until August.
The country’s government-imposed export restrictions were part of an effort to build large stockpiles of urea for the domestic market. At the same time, the government expected prices to fall and remain low due to the growing reserves. Permission to export, when granted, was based on ensuring that domestic reserves remained high, along with the expectation that a plentiful supply will keep prices low.
Unfortunately for the government’s planners, demand has risen alongside inventories, and prices moved up as the expected window for exports approached – even as domestic reserves remained high. Traders who began the export clearance process in April are now finding they will have to start all over again, sources said.
The government has reportedly canceled export permits issued or initiated for 2024 shipments. Where the export process previously only included an analysis of urea stockpiles, sources said the new process will also include pricing. Urea being offered for export at prices deemed too high by the inspectors will not be approved for shipment.
The China Nitrogenous Fertilizer Association met on May 8-10 to review the country’s supply/demand balance and to look at ways to deal with differences between the domestic and international markets. The producers appeared hopeful they could return to their plants with a solid plan that would allow for some exports, sources noted.
Even without the pressure of exports on the domestic market, sources reported ex-factory prices rising once again. The latest prices were estimated at $311-$313/mt for prills and $317-$318/mt for granular. Including the cost to prepare the tonnage for export, the equivalent offshore price comes to $335-$338/mt FOB for prills and $342-$345/mt FOB for granular, players said. Earlier in the week, sources noted price discussions in the $310-$330/mt FOB range.
One trader stressed that whether the discussion price was $310/mt or $345/mt FOB, it was only a discussion. No deals were done at any level during the week, and none are expected until the government is satisfied that reserves will be sufficient to force prices down.
Brazil:
Granular urea prices fell $10/mt in Brazil, to $300-$305/mt CFR from last week’s $310-$315/mt CFR, with bids reported at $290/mt CFR. Players reported a slight uptick in nitrogen interest for the safra during the week.
Rondonópolis urea prices softened $5/mt to settle at a flat $450/mt FOB, while third-quarter urea was offered at $470-$480/mt FOB. Due to the market’s ongoing focus on phosphates, urea trades were limited, sources said.
January-April urea imports in Brazil stood at 1.97 million mt, according to Trade Data Monitor,up 8% from the 1.8 million mt received through the first four months of 2023. Nigeria sent 453,000 mt, followed by Qatar with 349,000 mt. April imports were 387,000 mt, down 14% from 451,000 mt in April 2023.
Argentina:
Argentina has removed its 5.4% tariff from all imported urea. Until the change was announced, only Egyptian material was exempt from the duty. The action will allow for Algeria and Nigeria, the second and third largest suppliers to Argentina, to push for a greater share of the market.
Ethiopia:
No awards have yet been announced from the most recent Ethiopian Agricultural Businesses Corp. (EABC) tender.
January-April urea imports to Ethiopia rose 84% year-over-year, Trade Data Monitor reported, to 276,000 mt from 150,000 mt. Egypt led suppliers with 203,000 mt, for 74% of the imports, followed by Nigeria with 44,000 mt. April imports totaled 29,000 mt, a sharp increase from 24 mt in April 2023, with all of the tonnage coming from Oman.