U.S. Gulf: NOLA granular barges continued to trade lower last week, with most putting the market at $173-$185/st FOB for prompt trades. Most attributed this to very wet weather across the heartland and simply a lack of buying at the farmer level. Sources predicted that either there will be a mad rush in May to buy product, or a significant amount of urea will be left unsold.
Prills continued to follow granular downward last week, and were called $176-$190/st FOB.
Eastern Cornbelt: The granular urea market had reportedly slipped to $215-$220/st FOB Cincinnati, Ohio, for prompt tons, down $10/st from last report, with the upper end of the regional market pegged at the $245/st FOB level out of spot inland locations. “I really think if a guy wanted a block of tons, he could bid the market down,” said one source of the higher numbers.
Western Cornbelt: Urea prices were lower, but continued to cover a broad range in the Western Cornbelt. Sources quoted the St. Louis, Mo., urea market at $210-$230/st FOB, depending on supplier, with one contact claiming the upper end was “actually more common” at mid-month. Urea prices out of Iowa terminals ranged widely from $215-$240/st FOB, with the low reported at Muscatine and Port Neal.
In the Southern Plains market, urea prices FOB Catoosa, Okla., were pegged at the $220/st FOB mark or lower at mid-month.
Northern Plains: Granular urea pricing remained under pressure in the region. Sources quoted the Twin Cities market at $215-$220/st FOB at mid-month, down another $7-$10/st from late March pricing levels. Delivered urea was quoted at $250-$262/st in the North Dakota market, reflecting a drop of some $15-$18/st from last report, although reference prices reportedly remained as high as $280/st FOB Carrington, N.D.
“We think suppliers are getting nervous and starting to reduce supplies or make room for more unit trains heading this way,” said one urea contact.
Northeast: Granular urea pricing had reportedly dropped to $240/st FOB in western Pennsylvania, with the East Liverpool, Ohio, market pegged at the $245/st FOB mark. One Northeast contact put the delivered urea market at $270/st to his location, noting freight costs of $30/st. The last reported price out of Fairless, Penn., was put at the $255/st FOB level, down some $5-$15/st from late March levels.
Eastern Canada: Granular urea pricing in Eastern Canada was down $5-$10/mt from last report, with sources quoting the regional market at $430-$435/mt FOB at mid-month.
India: After MMTC and IPL took about 1 million mt in two consecutive tenders, sources said Indian buying may take a break until mid-May. The last of the IPL tonnage must be loaded by May 20.
Sources speculated that a new tender will be called near the end of May. One observer said the IFA annual meeting, which starts on May 22, may give the Indians an opportunity to meet with potential suppliers before calling a tender.
Even as the government claims the upcoming rainy season will be normal, some states are reporting drought-like conditions. Local press reports stated that urea purchases for the stricken areas have slowed to a standstill. One source said, however, that once the rains start, local farmers may try to make up for lost time by being aggressive in their urea applications.
The government has stepped up its rhetoric about curbing future imports. Recent interviews for local media by fertilizer ministry officials have stressed the government’s desire to make India urea self-sufficient by 2022.
Indonesia: Producers are still looking to secure a formula-based contract for the export of their product from May through December.
A tender closed earlier this month with no takers. Sources reported that a new tender will close April 20, with the producers looking for a series of formula-based sales broken up into 100,000-150,000 mt lots.
China: Sources reported that about 1 million tons remain in the ports for export. The waning domestic season has stopped the transfer of product from the ports back inland.
Loadings – especially the Indian-bound cargoes – are moving at a steady pace. Sources said buyers understand they only have about a week before China takes a “Golden Week” holiday to celebrate international Labor Day on May 1.
Prices have eased off just a bit, said one trader, calling the market at $215/mt FOB for both prilled and granular urea. Some material may be sold for a bit more, depending on quality.
Middle East: Egyptian product has come off about $5/mt as part of a general decline in urea prices. Sources now peg the Egyptian granular market at $214/mt FOB.
Officially, the price from the Arab Gulf producers is still at $221/mt FOB. However, sources said the downward pressure on prices has picked up again after a brief hiatus following the IPL/India urea tender.
While no public deals have been done below the official price, sources said the most likely level now is hovering right around $200/mt FOB.
Black Sea: Sources reported some softness coming out of Yuzhnyy. Prilled urea from the Black Sea port is now being pegged at $210/mt FOB, with some deals reported just under that level.
One trader commented that Romanian product is also coming out of Black Sea ports near $220/mt FOB, which also represents a drop in prices.
Bangladesh: Bangladesh will continue to import urea from the Middle East on state-to-state deals to address supply shortages in the country. Bangladesh Chemical Industries Corp. (BCIC) has re-invited international tenders for 50,000 mt of bulk prilled/granular urea in two shipments from Mesaieed, Qatar, with delivery in 50 kg bags at the outer anchorage of Chittagong Port. Bids are now due on April 24, 2017.
Pakistan: Exports of surplus urea from Pakistan are slowly progressing, ahead of an April 28 deadline set by the government for the urea industry to offload their surplus production, according to industry and market sources. Local urea demand for 2017 is expected to remain stable, thanks to an anticipated improvement in farmer income led by an increase in crop prices and the subsidy continuation in 2017.
Local fertilizer industry dynamics have undergone a major shift after 2016 witnessed a urea supply glut, in contrast to the urea shortfall prevalent in previous years. High inventory levels due to better gas supplies on the Mari and Sui networks, plus the availability of LNG, put significant financial burdens on manufacturers in 2016, and the glut is continuing in 2017.
According to market sources, one big cargo was already shipped by Engro. The industry has also committed, but not yet finalized, a 25,000 mt deal to Keytrade. Other small lots have also been committed – 9,000 mt to Trammo, 7,500 mt to Quantum, and 7,000 mt to Valency, all for Sri Lanka.