U.S. Gulf: The granular urea market was building up some steam last week until the USDA numbers came out Thursday morning. By then, sources said prices had climbed to $413-$417/st FOB. However, they soon worked their way back down. What became $407-$410/st FOB was soon being called $400-$405/st FOB, with predictions that the next round of sales would be $395/st FOB – if not below.
In the meantime, the last done business in the thinly traded prill market was called $425/st FOB.
Eastern Cornbelt: Granular urea pricing in the Eastern Cornbelt was generally quoted in the $445-$450/st range FOB regional terminals last week.
Western Cornbelt: Granular urea continued to be quoted in the $435-$445/st range FOB regional terminals, with the low reported in southern Missouri and the upper end in the Iowa market.
Southern Plains: Granular urea pricing in the Southern Plains region was tagged in the $440-$450/st FOB range, with the low called the common dealer price out of the Tulsa market last week.
South Central: South Central sources pegged the granular urea market at $430-$445/st FOB most regional terminals, reflecting a slight increase from last report.
Southeast: The granular urea market was quoted at $435-$440/st FOB port terminals in the region. Those numbers were down from last report, but sources noted that the regional terminal market had not responded readily to the ups and down of the NOLA barge market in recent weeks.
Pakistan: The Jan. 9 purchasing tender did not go as planned. And for a while it looked as if the tender would be pushed back until the end of the month.
There were rumors as the year started that TCP would delay opening the tender until the end of the month. Those rumors led to concern that the global urea price would halt its tentative rebound. In the end, according to sources, the need for urea overruled any efforts to try to force the price down with a delay.
Pakistan needed 300,000 mt to be purchased as soon as possible. TCP had hoped to secure the full tonnage in the tender. Unfortunately for TCP, it was only able to pick up 50,000 mt.
Transfert had the lowest offer of $417.50/mt CFR. When the other companies were invited to match the Transfert price, they demurred. The big issue seemed to be the price gap between Transfert and the next lowest offer.
CHS and Koch each offered tons at about $432/mt CFR. The $15/mt difference was too large to close.
Once it was clear none of the other companies would match the Transfert award price, TCP called a follow-up tender to close Jan. 19.
The tally from the January 9 tender is shown below.
The estimated netback on the Transfert deal showed softer markets in the Black Sea and Arab Gulf. Sources called the equivalent Arab Gulf price at $400/mt FOB. The Yuzhnyy/Black Sea equivalent was pegged at $365/mt FOB.
The new tender calls for a minimum of 50,000 mt per offer, but does not specify the full quantity desired.
Pakistan’s production of urea for the January to November 2011 period has been recorded at 4.5 million mt, down 4 percent from the year-ago period despite capacity enhancement of some 1.15 million mt (Engro and Fatima plants).
The Karachi-based brokerage and research house InvestCap attributed the fall in urea production to the acute shortage of gas to the urea factories, which has brought operating capacity utilization down to 82 percent. However, consumption of urea remained passive during the period and was recorded at 5.2 million mt, down 5 percent from the year-ago period.