Last week, global urea prices fell on the back of India's Rashtriya Chemicals and Fertilizers (RCF) cutting urea purchases. At the same time, market trading activity is relatively limited as several major urea producing countries celebrate Eid al-Fitr. Some trading companies have tried to lower CIF quotes in major markets to increase trade volumes, but buyers are mostly on the sidelines.
India's bidding purchases have been cut by more than half
Last week, only 340,000 tonnes of RCF urea import bids were confirmed, far lower than the previous forecast of 724,000 tonnes. This result sparked turmoil in the global nitrogen fertilizer market, and the industry was bearish on the trend of urea, which in turn triggered a large global sell-off. The RCF did not comment on the reasoning behind its decision, but local sources noted that India's urea stocks were increasingly abundant, reaching 8.8 million tonnes as of the end of March.
It is reported that affected by this, the supply of the main suppliers of this tender has also changed to a certain extent. Russian Baltic producers had previously estimated that they could supply six shipments of about 300,000 tonnes, but are now likely to supply at least one shipment of small granular urea, a sharp drop from previous estimates. In the coming weeks, Middle Eastern producers are likely to ship most of the urea to India, at least four shipments, or 200,000 mt.
Prices in the Middle East fell and transactions were limited
Affected by India's reduction in imports, the spot FOB price of large granular urea loaded in the Middle East in May has dropped to 295~310 US dollars (ton price, the same below), and the FOB price of large granular urea loaded in May has fallen to about 300 US dollars. But the Eid al-Fitr holiday weakened the liquidity of the market, and no new business for spot trading took place.
It is reported that the FOB price of urea supplied by Egypt to Europe has dropped to 310~320 US dollars, but due to the impact of the Eid holiday, activities have also decreased significantly. The trading company hopes to sell urea to the Mediterranean European market at the equivalent price of 300~305 US dollars. There is news that once sellers return from their Eid holiday vacation, market prices will fall further.
Nigerian sales tender fell through
Dangote, Nigeria, held a sales tender on April 9 for two batches of 30,000 tonnes of urea, both to be loaded later this month. After the tender, no sales were reached, and Dangote revised the tender on April 11. In light of the decline in Brazilian prices, the low-end offer for new business in Nigeria has dropped to around $255 FOB.
Prices fell in Brazil and the United States
In the west of Suez, with the decline in the international price level, the CIF price of large granular urea in Brazil fell to 290~300 US dollars, the sales price was 290~295 US dollars CIF price, the widely reported quotation was 300~305 US dollars CIF price, and the bid price was 280~290 US dollars CIF and below.
Also affected by the Indian side, the trading price of nora urea barge fell sharply last week. It is reported that the FOB price of nora urea barge fell by 32.50 US dollars to 280~345 US dollars / short ton. However, the downward trend of the entire nora urea price curve gradually dissipated, and by the end of the trading week, urea barges loaded throughout April were changing hands at about $290/stt fob, slightly lower or even lower than the price of just-in-time loading barges.
At present, although there is no strong demand in the market to stop the downward trend in prices, and China is also expected to ease exports, but in the process of further price declines, demand will also begin to appear, Australia and Thailand will return to the market in May, and the short-term price bottom may not be too far away.
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Editor: Ma Xiaoru Review: Zhai Yiting Producer: Wu Junsheng