US Gulf:
NOLA urea trades during the week were reported at $303-$309/st FOB for August-September, down slightly from last week’s $303-$313/st FOB range.
Eastern Cornbelt:
Urea was quoted at $350-$370/st FOB in the Eastern Cornbelt, down $10/st at the bottom of the range, with the low confirmed out of spot Illinois River terminals. A similar range was also confirmed out of Ohio River terminals, with the Cincinnati market steady at $360-$365/st FOB in late August.
Western Cornbelt:
Urea remained at $340-$365/st FOB in the Western Cornbelt, with the low reported at Port Neal, Iowa. The St. Louis, Mo., market was quoted at $345-$355/st FOB in late August.
Southern Plains:
The urea market slipped to $360-$375/st FOB in the Southern Plains, down $10/st at the upper end of the range, with both the high and low confirmed at Catoosa/Inola, Okla., during the week.
South Central:
The urea market narrowed to $350-$370/st FOB terminals in the South Central region, with the low confirmed at Convent, La., and the high in Arkansas. Pricing at Memphis, Tenn., was reported at $360-$370/st FOB during the week, with the Owensboro, Ky., market pegged at the $355/st FOB level.
Southeast:
Urea pricing in the Southeast dipped to $360-$370/st FOB port terminals in late August, down $5/st at the low end of the range.
India:
The National Fertilizers Ltd. (NFL) urea tender closed on Aug. 29. The tender documents called for the tonnage and price envelopes to be revealed on Aug. 30, though some traders speculated late in the week that NFL might delay releasing the information by a few days, as has been done in the past. As of press time on Aug. 30, NFL released only the names of the 23 participating companies.
Two producers were included among the participating companies, PIC and SABIC. Offers from these companies are expected to be on an FOB basis. Fertiglobe was listed as well, though it is unclear if the offer was made by the company’s trading or producing arm. OQ Trading, which represents Omani producer OMIFCO, was also included on the list. Offers from these companies typically act as indicators for where Arab Gulf producers would like the market price to settle.
Leading up to the tender, speculation picked up regarding how many tons NFL might take purchase, and at what price. Sources agreed NFL might 750,000-1 million mt, though price predictions for the tons varied widely.
While opinions differed on the possible price, sources agreed that an award would likely come at a significant discount to the previous tender’s $350-$365/mt CFR. Players largely focused on possible pricing in the $330s/mt CFR.
Some argued the price would land in the upper-$330s/mt CFR, potentially touching $340/mt CFR, while others put the likely price in the mid-$330s/mt FOB. Some even argued for offers in the upper-$320s/mt CFR.
One trader was blunt in his assessment. “Your guess is as good as mine,” he said.
Sources estimated that Russia has about 400,000 mt available for the tender, a similar level to that of Arab Gulf producers. Another 200,000 mt could come from traders holding shorts from North Africa and Southeast Asia. None of the producers appear ready to accept prices in the $320s/mt CFR, but do seem willing to discuss pricing in the upper-$330s/mt CFR.
There are also reports of Iranian material currently housed in Chinese warehouses for re-export, though sources said the cost for that urea would exceed the estimated tender price. The material was most likely purchased at $300/mt FOB from Iran, giving the tonnage a re-export price of about $330/mt FOB.
Traders speculated on the impact of various purchase scenarios. If NFL takes only 750,000 mt against an offered tonnage of 3-4 million mt, the market is expected to crash. If, however, NFL goes for the full 1 million mt and offered tons total in the 2-3 million mt range, sources expect to see a price rebound.
Adding to the mix, rumors are circulating that China may allow 500,000 mt to be exported during October, a timeline that would work for the tender’s Oct. 31 shipping deadline. If Chinese tons are indeed available, a lot of previous calculations will be tossed out the window.
There are questions as to how many tons Russian suppliers will provide. If the landed price into India is too low, Russian producers may hold back rather than risk netbacks falling too close to their breakeven price.
Black Sea:
The price range for prilled urea in the Black Sea region narrowed upward this week, to $300-$305/mt FOB.
Mediterranean:
Urea prices in the Mediterranean were stable, with new sales occurring within the existing $370-$375/mt CFR range. French and Italian buyers are momentarily on the sidelines as they remain focused on the harvest while sitting on some stocks, while Spanish buyers were more active around $370/mt CFR.
Southeast Asia:
No new granular urea deals were reported in the region despite September offers at $335-$340/mt FOB, as most regional markets are currently in the offseason. With no new granular tender ex-Indonesia, the high end of the range continues to reflect the $366/mt level last done by Pupuk in its earlier tenders.
Indonesia:
Some traders continue to hold out hope that Pupuk will call a selling tender soon. There is little chance of granular product being offered, some traders said, but prilled urea could find its way to the market.
Sources noted that a new NPK plant in Indonesia has increased the domestic demand for urea. The new plant will add 300,000 mt/y to the country’s existing NPK facilities, and sources added that existing plants have stepped up their production, from 80% to 85% of rated output.
The likelihood of a prilled urea tender remains strong, said one source. Prilled prices in the Southeast Asian market have begun to exceed that of granular due to the absence of Chinese material in the region. At the same time, domestic demand remains strong for granular tons but not prills.
In the absence of a tender, the last-done price for granular product from Indonesia remained at $366/mt FOB. This is likely much too expensive for the current regional market, however, where recent sales from Brunei at $340/mt FOB and Malaysia at $335/mt FOB have lowered pricing expectations for the area.
Middle East:
Sources reported the current Arab Gulf paper urea market at $325/mt FOB, at the upper end of expected netbacks from the India tender.
No new deals were concluded to move the public price from the low-$340s/mt FOB achieved in the last India tender. However, current offers from producers were reported in the mid-$330s/mt FOB against bids in the upper-$320s/mt FOB. With freight from the Arab Gulf to West Coast India pegged at $15-$16/mt, producers’ pricing ideas are too high. Even the market’s current bids are high compared to some of the prices estimated into India.
Arab Gulf producers are said to have about 400,000 mt available through October to be offered into the India tender.
Sources said the 100,000 mt of Iranian material shipped to Chinese warehouses for re-export will most likely find its way to Nepal and other regional Asian buyers. The cost to ship these tons to India under the NFL tender would most likely make the price too high.
The growing softness in the global urea market is impacting selling expectations in Iran. The government has dropped its $300/mt FOB price floor and is reportedly willing to accept $297/mt FOB, sources said. Bidding has reportedly been focused in the upper-$280s/mt FOB, however.
January-June urea exports from Iran stood at 2.8 million mt, according to Trade Data Monitor, a 35% increase from 2.1 million mt in first-half 2023. India led buyers with 1.3 million mt, Brazil took 499,000 mt, and Oman received 329,000 mt.
June exports of 538,000 mt were up 12% from the 481,000 mt shipped in the prior June, while second-quarter exports were reported at 1.5 million mt, up slightly from the 1.4 million mt shipped in April-June 2023.
Egyptian producers have once again gone silent following the market’s recent $345/mt FOB deal. European buyers are quiet and expected to remain so through the short-term, sources said. While producers are reportedly asking $345-$350/mt FOB for product, they are willing to talk with potential buyers about pricing in the low-$340s/mt FOB, players noted.
China:
Rumors that China could make 500,000 mt of urea available for export in October are being discounted by many in the industry. So far, said sources, the government has not indicated any intent to ease its restriction on urea exports.
The purpose of restricting exports has been to build domestic reserves and lower the price. Prices have moved lower, with sources indicating an estimated export price of $290/mt FOB. Stockpiles remain limited, however. One trader put current reserves at 500,000 mt, compared to a government preference to keep at least twice that amount on hand.
Brazil:
Granular urea prices declined 4.2% in Brazil to trade at $340-$345/mt CFR, a $15/mt decline from last week. Bids reported at $330/mt CFR failed to attract a seller.
While international players awaited the results of the Indian tender and the Brazil market focused on the 11th annual ANDA event, buyers found sellers willing to meet their bids. Other sellers held offers firm at $350-$355/mt CFR, however, expecting prices to rise on an expected imminent surge in seasonal demand.
Inland pricing for short- to medium-term supply was reported at $480-$495/mt FOB Rondonópolis amid steady-but-weak demand in the runup to soybean planting. Suppliers have been pushing for higher prices, particularly as the market awaits pricing from the India tender, while domestic buyers have continued to press for lower prices.
Argentina:
The Argentina granular urea market remained at a standstill as players await the government’s final announcement on reducing import tariffs on fertilizers from 17.5% to 7.5%, which will officially take effect on Sept. 2. Following the announcement, players predicted demand totaling 120,000-150,000 mt for September and October loading.
Trade Data Monitor pegged urea imports at 411,000 mt through the first half of the year, a significant increase from the 172,000 mt received in January-June 2023. Algeria sent 136,000 mt, Nigeria added 110,000 mt, and Egypt shipped 67,000 mt. June imports were 131,000 mt, rising from 77,000 mt in June 2023. April-June imports were reported at 210,000 mt, a 46% increase from the 144,000 mt received in second-quarter 2023.