U.S. Gulf: Prompt NOLA granular barge prices dropped from the $190s/st earlier in the week to as low as $184/st on March 29, before rebounding back into the $190s/st FOB.
Prill trades were hard to find and sources were generally bearish, citing granular’s decline. At best, some still called the market $210-$220/st FOB. Yara is bringing in a vessel with 11,000 mt of Libyan product, which should give better guidance to the market going forward.
Eastern Cornbelt: Urea pricing volatility, driven by weakness in the NOLA barge market, continued to impact the Eastern Cornbelt terminal markets in late March. “It seems like these markets are very unstable at the moment, waiting on a trend to develop on purchasing intentions,” said one regional source. “I know I have more urea to buy, but I’m cautiously waiting to see whether something positive can develop with the market.”
Sources reported prompt urea pricing down to $225-$235/st FOB out of spot river locations in the Eastern Cornbelt, down significantly from last report, with the lower end quoted in the Cincinnati, Ohio, market. The upper end of the regional market was pegged at the $245/st FOB level at inland locations. Dealer pricing out of some inland points remained as high as $265/st FOB in late March, but sources reported no new business at that level.
Western Cornbelt: A falling urea market continued to dominate conversation in the region. Sources quoted urea pricing out of the St. Louis, Mo., market down to $220-$225/st FOB in late March. While reference pricing remained as high as $260/st FOB in Iowa on a spot basis, suppliers were reportedly “matching up as needed.” One contact pegged the high end of the regional range at the $240-$250/st FOB level during the last days of March.
The Catoosa, Okla., urea market had dropped as well, with sources quoting the market at $225-$230/st FOB for the week.
Demand and availability continued to be cited as key factors for the market. “Demand is getting closer with the weather looking to improve,” said one contact, who added that “barge availability looks good against the current demand.” He noted as well that new domestic urea production continues to make progress, but will “probably not be ready” for the spring push.
“The market still remains about the timing and magnitude of demand,” he said. “This still remains a very quiet market until it starts.”
Northern Plains: A softening urea market was the big story in the Northern Plains in late March. Urea pricing in the Twin Cities had reportedly fallen to $222-$230/st FOB, down $20-$30/st from early-March levels.
In North Dakota, sources pegged the urea market at $265-$280/st DEL, with the upper end of that range also quoted on an FOB basis out of Carrington. Sources reported minimal buying at that level, however. “Retailers figure that the price will go lower if they are out that low already,” said one regional contact.
Great Lakes: The granular urea market in the Great Lakes was down dramatically from last report, with one regional source saying the product “has gotten scandalously cheap and is dragging UAN-28 down with it.”
Warehouse urea pricing in the Michigan market was quoted at $265-$280/st FOB in late March, down a full $45-$55/st from February pricing levels. Wisconsin sources pegged the low end of the regional market at the $235-$245/st FOB level.
Northeast: Sources reported weakening prices for urea in the Northeast. The low end of the regional range was quoted at $260-$270/st FOB Fairless, Penn., down some $15-$20/st from last report, with the upper end tagged at $282/st FOB Baltimore, Md.
India: It looks as if IPL will take about 300,000 mt out of a tender that offered about 2.5 million tons. The limited take appeared to prompt an immediate call by MMTC for another tender.
The MMTC tender closes April 6, with a ship-by date of May 19.
IPL counterbid offers in its tender that hit as high as $246/mt CFR at $221.50/mt CFR for West Coast ports and $233.50/mt CFR for East Coast ports. The amounts are based on the lowest offer, which came from Fertil, plus freight costs of $9.50/mt to West Coast ports and $11.50/mt for the East Coast. Fertil and Sabic offered tons at $212/mt FOB and $215/mt FOB, respectively, leaving IPL and the industry to calculate the delivered price.
The average price offered to the West Coast was $236.39/mt CFR, with the average to the East Coast at $237.99/mt CFR. In the end, 250,000 mt is slated to be delivered to West Coast ports, with the remaining 50,000 mt going to an East Coast port.
The ratio of shipments between the two coasts is higher than the tender called for, which was 60 percent for the West Coast. However, sources said the issue facing the Indian buyer is not the East-West ratio, but rather the small quantity purchased.
As the tender closed, sources expected IPL to buy at least 700,000 mt, but the apparent refusal of Iran to back any deals at the counterbid price left only a handful of suppliers willing to deal. Sources said coming into the tender that Chinese product would be offered, but only at higher levels that would not be to the Indians’ liking. In the end, only one cargo from China was awarded, and that was offered by Dreymoor.
The lack of Iranian backing cost the Indians about 240,000 mt, sources said. No one could give a solid reason why the Iranians stayed out. One trader speculated that the Iranians were most likely tired of being perceived as the low-price leaders.
The tally of the offers follows:
| Offering Company | Quantity | US$/mt FOB | Discharge Port | |
| Fertil | 90,000 | 212.00 | West Coast | |
| SABIC | 25,000 | 215.00 | West Coast | |
| Offering Company | Quantity (mt) | US$/mt CFR | Discharge Port | |
| Firm | Optional | |||
| Koch | 45,000 | 232.10 | Krishnapatnam | |
| 60,000 | 227.75 | Mundra | ||
| CHS | 44,000 | 227.97 | Mundra | |
| 55,000 | 232.37 | Krishnapatnam | ||
| Keytrade | 100,000 | 50,000 | 228.79 | Mundra-Kandla |
| TransAgri | 195,000 | 234.50 | Mundra | |
| 238.00 | Kandla | |||
| 237.00 | Pipavav | |||
| 232.50 | Rozy | |||
| Ameropa | 42,000 | 232.73 | Mundra | |
| 30,000 | 239.71 | Gopalpur | ||
| Allied Harvest | 63,000 | 233.50 | Krishnapatnam-Gangavaram-Karaikal | |
| 234.50 | Kakinada | |||
| Comzest | 60,000 | 233.30 | Rozy | |
| 45,000 | 233.67 | New Mangalore | ||
| 45,000 | 233.76 | Pipavav | ||
| 30,000 | 237.90 | Kandla | ||
| 60,000 | 239.70 | Gangavaram | ||
| 60,000 | 237.90 | Kakinada | ||
| Dreymoor | 150,000 | 234.34 | Gangavaram | |
| 234.69 | Krishnapatnam-Kakinada | |||
| 234.69 | Hazira | |||
| 235.49 | Mundra | |||
| 235.89 | Pipavav | |||
| 235.99 | Rozy | |||
| 236.04 | Kandla | |||
| Sinochem YUC | 60,000 | 234.56 | Krishnapatnam | |
| Amber | 130,000 | 234.75 | Krishnapatnam-Gangavaram-Kakinada-Karaikal | |
| 235.25 | Mundra-Kandla | |||
| Transglobe | 120,000 | 235.00 | Mundra | |
| 240.00 | Pipavav | |||
| New Horizon | 45,000 | 236.00 | Mundra | |
| Continental | 60,000 | 237.45 | Gangavaram-Krishnapatnam-Kakinada-Karaikal | |
| 236.45 | Mundra-Kandla | |||
| Dragon | 60,000 | 60,000 | 236.97 | Gangavaram |
| 238.95 | Mundra | |||
| 238.80 | Kandla | |||
| Swiss Singapore | 60,000 | 60,000 | 237.90 | Pipavav-Krishnapatnam |
| 60,000 | 239.70 | Vizag | ||
| 60,000 | 237.90 | Gangavaram | ||
| Aries | 63,000 | 237.99 | Gangavaram | |
| 63,000 | 239.99 | Rozy | ||
| 50,000 | 238.69 | Vizag | ||
| Fertisul | 65,000 | 238.90 | Gangavaram | |
| 239.90 | Krishnapatnam-Karaikal | |||
| 240.66 | Kakinada-Pipavav | |||
| 240.90 | Mundra-Tuna | |||
| 241.90 | Hazira | |||
| Gavilon | 100,000 | 238.90 | Krishnapatnam-Gangavaram | |
| 80,000 | 237.90 | Mundra-Pipavav | ||
| Fertrade | 60,000 | 239.95 | Krishnapatnam | |
| Agri Comm | 62,500 | 240.00 | Krishnapatnam | |
| 241.00 | Mundra | |||
| Indagro | 60,000 | 244.00 | Krishnapatnam-Karaikal | |
| MidGulf | 60,000 | 245.00 | Krishnapatnam-Kakinada-Gangavaram | |
| 246.00 | Kandla | |||
The awards issued as of press time are as follows:
| Offering Company | Source | Awarded Quantity | Discharge Port |
| Fertil | UAE | 90,000 | West Coast |
| Sabic | Saudi Arabia | 25,000 | West Coast |
| Keytrade | Oman | 50,000 | West Coast |
| MidGulf | Kuwait | 40,000 | West Coast |
| CHS | Oman | 45,000 | West Coast |
| Dreymoor | China | 50,000 | East Coast |
Sources reported a rumor that Koch was also issued an award for 45,000 mt, but the deal could not be confirmed by press time.
The Dreymoor tons are reportedly part of a prepay deal that Dreymoor has with a producer in China. One source said Dreymoor had the tons and had to find a place for them. The netback to China is about $210/mt FOB, well below the current market price.
Middle East: Fertil led the way to lower prices with their offer of $212/mt FOB in the IPL/India tender. Other Arab producers fell in line. The only producers to not follow suit in the area were the Iranians.
Sources reported that Iranian producers had about 240,000 mt on the table through a handful of traders. In the end, sources said the Iranians refused to accept the counterbid of $221.50/mt from India for West Coast deliveries.
The new Arab Gulf price came as netbacks to the region from sales to Brazil were being pegged at $206/mt FOB. At the same time, Thai buyers are bidding at prices equivalent to $200/mt FOB. While no specific sales at these levels can be confirmed, sources said the combination of the rumors and the falling paper market for the region created a slight panic among Arab producers.
One source said the Arab producers knew China would not be a player because of the strong domestic season in that country. They also had excess tons looking for a home. By selling at $212/mt FOB, the producers could sell off many of those tons at a price level closer to their liking rather than that of the paper market. Now, said one trader, when other buyers come to the producers for new product, the producers can say they are sold out and can only make tons available at a higher price.
Iranian producers are facing increased pressure from the U.S. Sources said the Trump administration has approached the Indians to re-evaluate joint venture projects under discussion. International traders said the Indians have also understood the U.S. entreaties to include cutting back on Iranian imports.
Helwan in Egypt sold 9,000 mt to Ameropa for $219-$220/mt FOB. Sources said the deal came just a week after Abu Qir turned down bids at $232/mt FOB.
The dramatic decline in price comes on the heels of the Arab Gulf producers aggressively going after Indian tender business.
China: The domestic market continues to keep prices strong. Prilled urea remains at a $10/mt premium to granular, with prices reported in the low-$230s/mt FOB.
Sources said the producers saw no value in backing traders in the IPL tender once the counterbids came out for an estimated netback just above $200/mt FOB.