Insight Focus
- India’s urea tender saw 2.7 million MT offered.
- Lowest offers of USD 316.80 CFR west coast India and USD 329.40 PMT CFR east coast India.
- Israel and Jordan potash ships avoiding the Suez Canal.
India’s NFL closed a tender for urea on January 4th with a total of 2.7 million MT offered although this number normally would include double counting as well as several offers that will no doubt be competitive. In a surprise move, price discovery was announced on the 6th of January as follows: West Coast India at USD 316.80 CFR and East Coast India at USD 329.40 CFR.
As expected, regular suppliers from the Middle East and Russia have offered the majority of the volume now that China is not exporting.
The issue of course is now how much India will buy – or how many companies will follow the lowest offers as mentioned above. There are not many other major destinations looking for cargo at this stage thus the India result will bring clarity on the direction of urea prices. The US market is said to be in need of around 1 million MT imports but this will come later. NOLA in the barge price for January is at around the USD 305 per short ton mark while February and March levels are between the USD 310-315 pers short ton range.
Peak demand in Brazil is over and bids for smaller volumes are heard at around the USD 320 PMT CFR mark with offers at USD 335-340 PMT CFR.
Pupuk Indonesia held a tender for 45,000 MT prilled and granular urea on January 5th for shipment in January. The highest price for the granular urea is said to be in the low USD 320s FOB. The last granular tender price was at USD 321.50 PMT FOB Bontang. There is no report on the prilled urea tender price with sourcing from Gresik. It is worth noting that bids as low as USD 280 PMT FOB Bontang were submitted for the granular urea.
Petronas of Malaysia is heard to be shipping products on a formula basis to regional destinations of Australia and New Zealand.China is still out of the market until possibly end March with the government imposing strict export restrictions.
Thailand’s January-November urea imports were 2.42m. tonnes, up 40% or 697,000t year on year. Saudi Arabia supplied 40% of the total imports at 964,000t with Malaysia and Qatar following at 506,000t and 417,000t, respectively. In November, 180,000t were imported of which 47,000t arrived from Malaysia and 41,000t arrived from Saudi Arabia. Oman and Bahrain supplied 29-30,000t each.
The processed phosphate market is following possible actions by the India government to increase subsidies on DAP allowing for imports at international prices. The current import price is sub USD 600 PMT which is more than USD 100 PMT less than the highest price paid in 2023. With China being out of the market until the end of March, the international availability remains tight. Ma’aden of Saudi Arabia reported sales of 313,000 MT this week to markets in India, Pakistan and Australia with one combination shipment reported to Vietnam and Thailand, the latter at a price said to be USD 635 PMT CFR.
Not much to report on potash this week with prices holding in both Brazil and SE Asia due to no activity. Potash prices are reported to have increased a tad in the US and Europe this last week. Potash prices are however expected to remain sluggish with lower prices expected in both Brazil and SE Asia. However, the Red Sea appears to be creating logistics issues for Jordan and Israel potash heading for the Far East with ships now going around the Cape of Good Hope instead of the Suez Canal adding substantial freight costs to be absorbed by buyers or eaten by the producers.
The ammonia market appears to be coming full circle with prices as expected for the start of 2024 lower in all regions. OCP of Morocco has felt the impact of the Red Sea issue with three vessels apparently having been diverted away from the Suez Canal with freight rates increasing by up to USD 70 PMT.
East of Suez it was reported that an ammonia cargo of 15,000 MT was sold from Luwuk, Indonesia at USD 400 PMT which is down almost 20% from last done.
The outlook for ammonia prices is sluggish.
