U.S. Gulf: It was the most volatile granular urea market in recent memory, according to observers last week. Some say the volatility will only be temporary, however. Sources say there is plenty of urea in NOLA, but it is just a matter of getting it upriver.
Delays in getting product from vessel to barge, coupled with slower tows due to higher water rates, have put a premium on upriver and loaded barges. Buyers finding one of those two were willing to pay last week. Upriver barges already in place were netting back to NOLA in the $325-$340/st FOB range – if not higher – last week. Loaded barges were easily called $300-$325/st FOB.
There was more contention over first-half May barges or barges to load in the new few weeks, however. Some sources put early week trades as low as $280/st FOB.
Prill barges continued to be called $270-$280/st FOB.
Eastern Cornbelt: The granular urea market had reportedly firmed to $345-$365/st FOB regional terminals in the Eastern Cornbelt, fueled by tight supplies on the river system.
Western Cornbelt: Sources reported a firming urea market in the Western Cornbelt, fueled by barge logistics issues and increased demand. “There is very little supply available on the river,” said one contact.
Granular urea was quoted at $345-$365/st FOB in the Western Cornbelt, up $20/st from the week before, with the low reported in southern Missouri and the upper end in Iowa. The St. Louis, Mo., market was reported firmly at the $360/st FOB level as the week advanced, while dealer pricing in Minneapolis, Minn., had reportedly strengthened to as high as $380/st FOB, up a full $30-$40/st from just one week earlier.
Some sources were worried that a conservative hand-to-mouth buying strategy may result in more supply outages as the season winds down. “Everyone is worried about carryover, and thus will run out at warehouses and just stay out of the market,” said one regional supplier last week. “But customers just think there is plenty of product and will not commit. I think product will not be in the right places when needed at the end of the season.”
Southern Plains: Granular urea pricing moved up significantly last week, with sources quoting the dealer market firmly in the $340-$345/st range FOB Catoosa and Inola, Okla. That level was up $20-$25/st from early April pricing, and reflected a $10-$15/st increase from just one week earlier.
South Central: Sources reported a rapidly firming urea market in the South Central region due to weather-related logistics issues, particularly for barge tons trying to move upriver out of NOLA.
“Volatility in urea seems to be as bad as I can remember,” said one regional contact. “Transportation has affected the price, with upriver spreads as high as $50/st-plus over NOLA.” Added another source: “The market is a mess because of NOLA weather; barges are behind and the prompt price is very strong.”
The dealer market for urea out of regional terminals was quoted at $340-$350/st FOB last week, up some $20/st from last report, with the low reported in Memphis and the upper end in Little Rock, Ark.
Southeast: Granular urea was consistently quoted at the $360/st FOB mark out of port terminals in the Southeast.
India: Indian Potash Ltd. (IPL) called a tender to close May 9 with validity through May 16. Sources say IPL will want to buy at least 1.5 million tons to ensure a ready supply of product for the next application season. One trader figured IPL will go for 2 million tons.
The extra tonnage is necessary because STC only purchased about 500,000 mt, and about 120,000 mt of that may not be deliv