U.S. Gulf: Prompt granular barge business spanned a broad range last week, and was called $318-$332/st FOB. The high end of the range occurred early in the week, but prices soon worked their way down. The drop was attributed to a big uptick in imports, with sources expecting February imports to be particularly heavy.
Some were still holding out for $335/st FOB for prills, but others put that market in the $322-$330/st FOB range and doubted that product could remain strong in light of dropping granular prices.
Eastern Cornbelt: Granular urea was quoted at $367-$385/st FOB in the Eastern Cornbelt, with the lower number reported in the Cincinnati, Ohio, market for prompt tons.
Western Cornbelt: Granular urea was steady at $375-$385/st FOB most regional terminals in the Western Cornbelt.
Northern Plains: The granular urea market was quoted at $370-$380/st FOB the Twin Cities for river open tons, with the spot market there reported as high as $390/st FOB from some suppliers for “very limited” inventories.
In North Dakota, the urea market was tagged at $420/st FOB Hannaford for prompt tons, with the Carrington market reported at $425/st FOB for prompt and $430/st FOB for prepay. Delivered urea into North Dakota was pegged at $435-$450/st.
Great Lakes: The granular urea market was pegged at $380-$390/st FOB in Wisconsin. Michigan sources reported the market at $395-$415/st FOB, with the low FOB Courtright and the upper end FOB Webberville, Mich.
Northeast: Granular urea was reported at $375-$385/st FOB in the Northeast, with the low FOB Fairless, Penn., and Savannah, Ga., and the upper end FOB East Liverpool, Ohio.
India: Prices in the MMTC tender that closed Jan. 27 pretty much came in where people expected, with about 500,000 mt under $300/mt CFR.
All told, about 2.4 million mt were offered, with prices ranging from $297/mt CFR to $314/mt CFR. Sources report that MMTC has already accepted the lowest prices for the ports of Krishnapatnam at $297.10/mt CFR, Mundra at $299.10/mt CFR, and Kandla at $300.10/mt CFR. Talks are reportedly expected to last through the weekend.
Lower freight rates, thanks to a declining petroleum market, drove the softer prices rather than any willingness by the Chinese producers to lower their prices. Freight rates once pegged at $13-$16/mt from northern China to India’s east coast are now put at $8-$10/mt.
Winning companies who may have taken the lower freight into consideration when forming their offers are now facing stubborn Chinese producers on the netback. Sources say producers are holding firm on their pricing ideas for prills in the low $290s/mt FOB. One trader said a few deals might be cut at $288-$289/mt FOB, but even with cheaper transportation, those prices do not offer any opportunities for even a minimal profit on the deal.
The tally of offers follows:
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MMTC Urea Tender – Jan. 27, 2015 |
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Offering Company |
Origin |
Quantity (mt ‘000) | |||