U.S. Gulf: Prompt barge prices continued to wane last week, with players calling new business within the $275-$280/st FOB range. Prompt prills were called $295/st FOB, with mid-September about $10/st less.
Eastern Cornbelt: Granular urea pricing in the Eastern Cornbelt showed a slight decline from last report. The regional market was quoted at $325-$335/st FOB, down $10-$20/st, with the low FOB Cincinnati, Ohio. Urea pricing out of the Burns Harbor, Ind., market was quoted at the $330/st FOB level last week.
Western Cornbelt: The granular urea market was quoted at $325-$335/st FOB in the Western Cornbelt, down some $10/st from last report, with the low out of river terminals and the upper end inland.
Northern Plains: The granular urea market was pegged at $315-$320/st FOB the Twin Cities for late August tons. Delivered urea in North Dakota covered a broad range at $340-$380/st, “depending on where you’re going with it,” according to one source. “The farther west, the more money from Minneapolis.”
Great Lakes: The granular urea market was down some $25-$35/st from July pricing levels, although some regional terminals remained out of product in late August.
The dealer market was reported in a broad range at $330-$365/st FOB in the Great Lakes region, depending on location, with the upper end quoted by Michigan sources out of inland points. Wisconsin sources pegged the common dealer market for urea at $330-$340/st FOB for new sales.
Northeast: Granular urea was tagged at $340-$345/st FOB terminals in the Northeast for new sales, although some locations remained seasonally out of product in late August.
India: The industry took a series of deep breaths in the wake of the MMTC and TCP/Pakistan tenders. Sources now say another tender could be called as early as this week.
Sources say IPL is next in the rotation to call a tender, and prices are expected to be lower than the MMTC tender of July due to the devaluation of the Chinese currency.
Industry watchers are skeptical about how many tons India really needs. They cite the poor rains this season, combined with the extreme drought in some areas, as arguments against any large purchases.
One trader noted, however, that urea availability is a highly sensitive political issue, and that the government has allocated enough funds to import about 3 million mt this season. The psychological impact of buying less, argued another source, could lead to political problems for the government because farmers may perceive that there won’t be enough urea on hand for them.
To avoid the political angst, the government may go ahead and authorize up to 3 million mt of urea. Whatever is left over can be used as buffer stock for the next season.
Indian buyers are said to be looking at the impact of the Chinese renminbi devaluation and comparing the losses and gains based on the rupee’s strength against the U.S. dollar. Sources point out that while most Asian currencies were falling in relationship to the dollar, the rupee actually gained back some strength last week.
The big unknown is the proposed Chinese value-added tax (VAT) scheduled to take effect Sept. 1. How – or if – the tax will affect exports is still up in the air. For buyers, any gains won through devaluation for lower prices may be lost with the VAT.
Chinese urea has stabilized. Prills are now pegged at $270-$275/mt FOB, with granular running about $5/mt ahead.
Supplies are steadying out. Most of the prilled material heading for the ports is already booked for either India or Pakistan. Sources say Ameropa was able to secure Chinese tons within 24 hours of the aw