U.S. Gulf: Prompt NOLA granular barge prices continued to sag, with the market for the week put in the $169-$179/st FOB range, down from the prior week’s $173-$185/st FOB. Even though the wet weather has put a damper on inland ammonia use, sources said it has not caused a huge surge in interest or prices for NOLA urea.
Prills continued to be called $176-$190/st FOB.
Eastern Cornbelt: Sources continued to report a soft urea market in the Eastern Cornbelt. The low end of the regional market was quoted at $215-$220/st FOB at Cincinnati, Ohio, and spot river locations in Indiana and Illinois, with the upper end at $230-$240/st FOB out of inland locations.
Western Cornbelt: Sources said urea pricing remained under pressure in late April. The terminal market was tagged at $215-$235/st FOB in the Western Cornbelt, with the St. Louis, Mo., market quoted in the $215-$220/st FOB range for the week.
Pricing in the Twin Cities market in Minnesota was also quoted at roughly $215-$220/st FOB for new business, although some argued that deals could be had at lower levels.
Southern Plains: Granular urea pricing had reportedly slipped to $210-$215/st FOB Catoosa, Okla., down a full $20/st from early April levels, although most sources touted the upper end of the range as the more “common” dealer level in late April.
South Central: The granular urea market was quoted at $215-$230/st FOB in the South Central region, depending on location. The low was confirmed by Kentucky sources out of river locations, where sources said the “truckload market is under a little pressure.” Other spot prices included $220/st FOB Memphis, $225/st FOB Convent, La., and $230/st FOB Little Rock, Ark.
“We have seen urea prices all over the board and volatility of as much as $10/st per day,” said one regional contact. “There is not much urea movement to rice yet, but we should begin next week, weather permitting.”
Southeast: The granular urea market was pegged at $260-$265/st FOB port terminals in the Southeast, down a full $20/st from last report, with the low reported at Savannah, Ga., and the upper end at Wilmington, N.C.
China: Sources reported that NPK producers have stepped up their buying of prilled urea to build reserves for a major push for July and August exports. The additional buying has helped firm the floor of prills due to continued strong domestic demand right around the $215/mt FOB level.
Granular urea remains softer in prices and not so much in demand. Sources said the better grades of granular are at parity with prills, and regular grade or less accessible product is about $10/mt less.
China will be shutting down next week to celebrate the May 1 International Labor Day. The period is known as a Golden Week. Sources said workers will start the celebrations early by leaving for their vacations on Friday and not returning to their shops and offices until May 9. The break will mean minor delays for loadings of urea for the most recent Indian tender and for other buyers. Sources said the ports will be operating with skeleton crews to ensure product goes out and vital imports are unloaded.
Some producers – especially those turning out granular urea – will be shutting down for the Golden Week. The shutdowns are officially for routine maintenance turnarounds. One trader noted, however, that the maintenance work will be limited because the holiday period will mean a lot of people who would normally be working on the plants will be traveling.
The shutdowns are expected to last about two weeks. There is still demand for granular product in Mexico, South Korea, and Thailand, said sources. This demand, along with the shutdowns, could help stabilize prices, said one trader.
Indonesia: Kaltim closed formula-based deals with a handful of international traders. Sources reported that the companies will be allowed to lift 70,000-150,000 mt each this year.
The initial deal for the price of each cargo was without a premium and was to be based on averages of published prices from several locations, including the U.S. Gulf. After the traders received their allotments from Kaltim, the producer tacked on another limitation: the price floor was set at $225/mt FOB for any May liftings.
Kaltim’s action called into question just how pricing will now work for May. Sources pointed out that the average price of urea for May cargoes from the Arab Gulf to the U.S. Gulf is well below $225/mt FOB. Traders were puzzling over which will take precedent, the floor or the agreement to set prices by averaging published rates.
The trading houses are said to be slated to meet with Kaltim officials on April 28 to work out the details of how pricing will work under the new regime.
The trading houses that won allotments for this year include Ameropa, Koch, Liven Brio, FertComm, and Bai Feng. A couple other trading houses also earned allotments, but their awards could not be confirmed at press time by sources.
Middle East: Sales to Thailand at $222-$225/mt CFR put the netback of contracted tons at $200/mt FOB for Arab Gulf product. The paper market for the region has been trading at $195/mt FOB for May and early June material.
Sources said the Thai deals are indicative of how the market is moving, but should not be used to set spot prices. The public price remains at $221/mt FOB because of the lack of any public business since the Indian tender last month. This last public price is out of sync with the global market, said sources. Arab Gulf product has been running in parity with Chinese granular. Sources put the Chinese granular market at $210-$215/mt FOB. This rate is still seen as high for the Arab product.
Kuwait is expected to shut down its urea production next week for a routine maintenance turnaround.
Egyptian producer MOPCO got hit with the lack of demand for urea in its traditional markets. Sources reported a sale this week of 60,000 mt at $295/mt FOB. Reportedly, Turkish buyers are now bidding closer to $190/mt FOB for other May cargoes. Sources said the main buyer of Egyptian product is now Turkey. Demand for material in Europe – the other major Egyptian market – has dried up, said sources.
Algeria reportedly has some production problems with its urea units. Sources speculated that the lines will be taken down soon to set things straight.
Black Sea: Sources reported that urea production at OPZ stopped late this week. The company maintained operation of one of its two lines to provide tons for export, but now with prices sliding, sources said OPZ management pulled the plug on that line.
Prices are now reported in the mid-$180s/mt FOB, with little hope of recovery any time soon, said sources. The drop in Yuzhnyy prices match those in China and in the paper market in the Arab Gulf.
The shutdown by OPZ leaves Azot as the only operating Ukrainian producer. Sources said this move means there will be little, if any, urea available for export. Azot primarily sells its product within the country. One trader said a cargo or two might become available for export as domestic demand wanes, but only if the global price improves.
Turkey remains an active buyer. Sources said the country needs to keep buying urea and other N-based product to make up for a ban the government imposed on ammonium nitrate.
India: Sources expect to see another Indian tender by late May. The call could come as early as the opening of the IFA annual meeting in Morocco. Several observers, however, are expecting the call to come after the industry delegates get home, and even as late as the first week of June.
The country is now receiving the tonnage from the March tenders. Sources said official reports of a normal monsoon season have bolstered buying ideas in the country.
Latin America: Demand for granular product in Mexico and Central America is helping maintain steady sales out of North Africa and the Arab Gulf.
Incofe in Central America will close two tenders on May 3 for 30,000 mt of prilled urea for delivery to Guatemala and Nicaragua. The second lot is for 25,000 mt of granular for Colombia and Costa Rica. Both cargoes are to be delivered by June 10.