This week’s review of the international urea market:
Influenced by Asian demand, spring demand in the United States and some European purchases, international urea prices rose this week. Urea factories in the Middle East and Egypt sell at nearly 270 US dollars per ton FOB, equivalent to 300 US dollars per ton CFR in the United States. Brazil’s market is an exception. Influenced by Iranian urea supply and payment problems, there is a gap between Brazilian urea prices and the mainstream international market.
The large demand in the urea market in India will support the international market in May and even June.
Second, this week’s international market focus:
1, India
The early announcement of urea import tenders and the extension of the window period indicate that India needs to buy a large amount of urea, and the current limited market supply may also affect its purchasing volume, prompting it to issue another round of tenders at the end of May.
2. Shortage of supply
Urea factories are increasingly digesting May supplies, and unplanned shutdowns of some urea plants in Qatar and Indonesia have also reduced market supply this month.
3. Relocation of Traders
Traders are filling short positions and have begun to turn long.
III. Trends in China’s Urea Import and Export Market
This week, urea prices in China first restrained and then rose. After the end of agricultural fertilizer use in spring, the demand for agricultural fertilizer in China was weak, and the market demand was still dominated by industry. Urea factories had to take part of orders in advance to cope with the 5.1 mini-long vacation next week. However, due to the impact of labeling and rising international urea prices, low-end domestic urea prices began to rebound on Thursday.
It is reported that a Beijing trader purchased 6,000 tons of large granular urea from a factory in Inner Mongolia at a price of US$291-293 per ton FOB. The ship was shipped to Korea in May and departed from Jinzhou Port.
According to uncertain information, a ship of 50,000 tons of Iranian urea has arrived at Zhenjiang Port and will be put into the warehouse of tax declaration for transshipment.
IV. Other urea market trends
India:
In India, MMTC issued a new round of urea import bidding, which opened on May 1 and is scheduled to ship until June 24. It is expected that MMTC will purchase at least 1 million tons of urea this time.
In fiscal year 2018-2019 (April 2018-March 2019), domestic urea sales in India reached 31.7 million tons, an increase of about 1.4 million tons compared with fiscal year 2017-2018; in fiscal year 2018-2019, domestic urea production in India reached 23.9 million tons, a decrease of about 125,000 tons compared with fiscal year 2017-2018; and in fiscal year 2018-2019, Indian urea imports amounted to about 7.45 million tons, an increase of about 1.5 million tons compared with fiscal year 2017-2018.
Egypt:
In Egypt, several new sales have taken place in the past week, as follows:
Abu Qir sold 25,000 tons of large granular urea on April 24 at a price of US$270 per ton FOB and loaded in late May.
Prior to that, Alexfert sold 10,000 tons of large granular urea at a price of $265 per ton FOB, due in May.
Last weekend, Helwan Fertilizer sold 5,000 tons of large granular urea at a price of $263 per ton FOB for May shipment.
Delta Fertilizers sells 50,000 tons of small granular urea to Midgulf and 30,000 tons of urea to ETG at a price of about $250 per ton FOB. The goods are shipped to India.
In the Middle East:
In the Middle East, the non-U.S. urea prices for May and June sold by urea factories this week ranged from $263 to $270 per ton FOB. Urea supply in Saudi Arabia and Qatar was tight. Neither Sabic nor Muntajat had any urea available in stock, nor did they plan to offer it to India for tender.
Market analysis:
Influenced by the printing standards, the international urea price has risen in an all-round way, and the situation of the market in short supply has gradually emerged. Demand in Asia and the United States is strong. At the same time, some buyers in Europe have also entered the market to purchase urea. On the supply level, the supply of urea in the Middle East is limited, and China still has no time to export urea. Despite the intention of purchasing at least 1 million tons of urea in the next round of Indian urea imports, it is expected that the procurement will be relatively difficult under the current situation of tight supply of urea in the Middle East and other regions. The international urea market will remain strong in May, supported by India’s large demand. At present, the FOB price of China’s Urea Export is still far higher than that of other regions in the world. Therefore, China’s Urea Export is still difficult. Although China’s current export is of little significance, the rising international urea price will continue to boost China’s urea market confidence.
