Global Urea Position

Release time：2020-06-05

The Brazilian market has awakened this week with buying activity boosted by
solid appreciation of the Real against the US dollar (up 5-6% on the week). From
a low of $208pt cfr for end-June/early-July shipment last week, granular urea has
sold at $215pt cfr up to the low $220s pt cfr and is now bid close to $230pt cfr. In
addition to small buyers, the majors have also been bidding at $215-225pt cfr.
The price gains have prompted Algeria to raise fixed price ideas for July to
$220pt fob. One Egyptian producer also managed to achieve higher levels
midweek with some business concluded in the high-teens. Meanwhile $230pt cfr
reflects around $215pt fob Middle East after freight. In addition to Brazil, Mexico
has been active with $235pt cfr west coast paid and $240pt cfr offered while Chile
has booked another US cargo from CF at a premium to domestic US values. US
Gulf prices have been stable but with business limited.
Heading into the off-season, Europe is also subdued. Some refill business has
been concluded in Germany around $228pt cfr duty paid but buyers are generally
holding back. In Turkey, Iranian and Turkmen product is dominating with the latter
sold at $203pt fob to cover earlier sales.
East of Suez, Chinese producers are holding prices above $230pt fob for prills
and granular. This, along with steady Indonesian prices ($233pt fob for granular)
has supported further spot business in the Middle East for Australia with a June
cargo bought at $212pt fob, marginally up from $210pt fob last done.
The main upcoming demand event in Asia, India’s tender, is expected to be
announced shortly with the slight delay due to Covid-19 impacting the DOF staff.
India will buy as demand is running well - sales in May were 0.9m. tonnes above
May 2019. If Chinese prices remain firm and the rebound in Latin American cfr
values persists, there will be no price downside from the last Indian tender award
levels, this even though Black Sea, Baltic and Egyptian urea will likely still
compete.