U.S. Gulf: Prompt granular barges continued to be firm last week, with the range called $232-$255/st FOB. Loaded barges were reported as high as $245-$255/st FOB, with those further out at the low end of the range. First-half May was called $218-$225/st FOB, with all May quoted at $218/st FOB.
Prills were still reported to be in short supply for prompt material, with that market continuing to be called $240/st FOB. However, May was being quoted at $220/st FOB.
Eastern Cornbelt: Granular urea remained at $275-$295/st FOB in the Eastern Cornbelt, with the low out of spot river locations and the upper numbers inland.
Western Cornbelt: Granular urea remained in a broad range at $270-$300/st FOB in the Western Cornbelt, with the low reported in the St. Louis, Mo., market and the upper end in Iowa. One source said he expects brisk urea movement on rowcrop ground over the next 7-10 days if weather conditions cooperate.
California: The granular urea market was pegged at $320-$340/st FOB port terminals in California, with the upper end reflecting a $10/st increase from last report.
Pacific Northwest: The granular urea market was steady at $330-$340/st FOB port terminals in the Pacific Northwest, with the rail-DEL market unchanged at $348-$360/st in the region.
Western Canada: Granular urea was quoted at $500-$510/mt DEL in Western Canada, down $5/mt from last report. One source said tons contracted for May delivery were higher at $525/mt DEL.
India: The announcement by MMTC that it would close a urea tender April 25 stirred up the global urea market. Sources said attendees at an industry conference in Beijing indicated the move would have little impact on the current prices out of China.
India does not need urea to start the upcoming application season. Sources said the country currently has stockpiles of about 1 million tons on hand. The move to buy product now seems more along the lines of setting up a buying pattern that will help keep the monthly import numbers to 1 million tons.
India will need to import 7-8 million tons before the end of the year, according to government estimates. Sources said buying needs to start now so the first set of purchases will arrive in May. Each month after that, an average of 1 million tons will have to be imported to satisfy expected demand.
Sources said demand for 2016 application is expected to be higher than the previous two years. The Indian weather service reported this week that the annual monsoon rains are expected to be back to normal after two years of drought. Local media have given the prediction wide coverage, leaving sources with the impression that the government is hoping to boost agriculture output this year.
If MMTC was hoping to get a break in pricing, sources said they will be disappointed. Chinese producers reportedly have no incentive to drop their prices for material purchased in April and shipped by May 23. The domestic Chinese market continues to be strong, offering producers better netbacks than offshore sales.
China: Producers remain happy with the prices they are getting in the domestic market, and apparently have yet to focus on the international market.
Export prices are pegged at just under $220/mt FOB for prills and about $215/mt FOB for granular. At the same time, sources said producers could get a $235/mt FOB port equivalent on sales to the domestic market.
Domestic buying is expected to remain strong until the end of the month. By the second week of May, sources said, the last of the major in-country buying will have reduced to a trickle.
The urea tender call by MMTC/India, said one trader, helped put a floor under the Chinese prices. By calling for shipment by May 23, the Indians kept their buying demand time within the just-waning Chinese domestic market. Sources said this confluence of lessening domestic demand and strengthening international demand will most likely leave prices stable for a while.
Major industry players attending a conference in Beijing said the announcement by MMTC caused a minor stir among participants. A consensus developed that prices would most likely not go any lower than the current level.
One trader noted that so far no one is carrying a long position on Chinese product. Trading houses are expected to spend the next few days talking with Chinese producers about pricing ideas and then make their offers to MMTC. Only after the awards are made are traders and producers expected to seal the deal.
Middle East: At least one Arab producer is expected to directly offer tons in the MMTC/India tender. Iranian producers will go through their regular sources to participate in the tender. The difference is that the Arab producers are expected to put in a high price, while the Iranians are expected to follow China’s price lead.
Until the tender results are posted, sources say the public prices from the region have not changed. The new numbers when the tender is announced should closely reflect the Chinese product price plus the transportation cost difference between the two locations, said one trader.
Egyptian production is getting back in full force. The last price paid out of Egypt was pegged at $235/mt FOB. Sources expect to see an uptick in pricing even as more product comes online.
The return of natural gas supplies allowed Helwan to kick into full gear April 11. Alexfert started up April 7 and was nearing production at 70 percent of its rated capacity. MOPCO 1 and 2 finished their two-week maintenance shutdown and should be fully up and running next week. At that time, MOPCO 3 will shut down for its maintenance check-up.
Renewed gas supplies also allowed OCI/EFC to slowly start up this week.
Latin America: Guatemalan company Incofe has called a tender tor 25,000 mt of prilled urea and 20,000 mt of granular urea for second-half May shipment. The product is reportedly for multiple deliveries in Central America.
A recent purchase of 20,000 mt of prills for a May 10 delivery to Guatemala and Honduras reportedly came in at $210/mt CFR. The product is from the Baltics.
Southeast Asia: Thailand buyers are reportedly buoyed by weather predictions that the rains expected next month will be on time and back to normal after two years of severe water shortages.
Sellers are reportedly ready to try to inch the price up on expectations of stronger demand. Sources said, however, that the Thais are expected to remain true to form and drive hard bargains for lower prices.
The Indonesian government has apparently told producers to allocate all prilled production for domestic use. The move came after weather predictions called for a strong rainy season.