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FERTILIZER MARKET REPORT February 3, 2023
Urea NOLA Falls Agressively Again
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Last week, the average urea NOLA price was down another US$36/st or 8.8% week-over-week. Western Canada delivered urea price was flat, supporting our view that the prices in this region still have room to fall to catch up to NOLA prices. Remember that Western Canada urea is priced off NOLA plus freight to the region.
North America Urea Last Two Weeks
Urea pricing in Eastern Canada slipped to C$905-C$1,020/mt FOB in late January, depending on the location and supplier, down from the prior C$945-C$1,120/mt FOB range.
Urea delivered Western Canada price was flat week-over-week in a range of C$840-C$900/mt.
In my view, urea Western Canada delivered prices should be in the range of C$775-C$800/mt. I still believe that there is more downside risk as we have been predicting in the last few issues.
A large Western Canada distributor/retailer recently dropped prompt FOB prices once again to $795 South Saskatchewan, down another C$20/mt since last week.
According to Green Markets, last week, NOLA granular urea prices dropped as low as US$340/st FOB early in the week before rebounding. The final range was reported as US$340-US$392/st FOB, down from the week-ago US$385-US$418/st FOB.
Early this week, NOLA urea prices were reported in the US$350-US$360/st FOB range, toward the lower end of the week-ago US$340-US$392/st FOB.
North America Phosphate Last Two Weeks
According to Green Markets, last week, MAP in Eastern Canada slipped to a broad C$1,100-C$1,280/mt FOB for recent offers, down C$60/mt at the low end of the range. The latest DAP pricing at Montreal was quoted at the C$1,090/mt FOB level, down C$30/mt from earlier in January.
MAP Delivered Western Canada price was flat week-over-week at an average of C$1120/mt.
NOLA phosphate players described a market in search of direction, noting the rising DAP values, while MAP retreated from its prior-week high. NOLA MAP barges tracked in a US$595-US$615/st FOB range, off from the week-ago US$595-US$618/st FOB.
Green Markets Global Macro Comments
India
While the world waits for another urea tender to be called, the Indian government adjusted its urea import policies to allow for companies to directly import urea for agricultural use. The government said it will be issuing bills of entry for urea marketing firms to allow for the importation of subsidized urea.
In the past, only urea secured through joint-venture contracts, such as the previous deal with Oman, could be imported outside of the tender process. The Indian government has been looking for ways to purchase more urea outside of the volatile tender process.
A large spot tender is still expected to be called in mid- to late-February. The growing softness in the global urea market could see a dramatic drop in what India will pay.
This new type of importing adds to the list of changes in India that will keep the market guessing as to how the pricing mechanism will impact the global urea market.
Brazil
The week opened with urea quotes of US$420-US$425/mt CFR and ended with a deal done for Nigerian product at US$405/mt CFR. Sources called the market US$405-US$425/mt CFR, noting growing pressure to secure more material at the lower end. Sellers are pushing back against the dramatically lower price with new offers at US$415/mt CFR, but with few interested parties.
Sources said that the lack of any major player in the global market – specifically India delaying its tender and US buyers yet to engage – is preventing any upward price correction from taking place.
Industry Tidbits
- The US International Trade Commission (USITC) on Jan. 20 determined under a five-year sunset review that revoking the existing antidumping and countervailing duty orders on ammonium sulfate from China (GM Feb. 10, 2017) would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.
- The Russian government has increased the quota for mineral fertilizer exports by almost 500,000 mt, including for ammonium nitrate (AN) exports by 375,000 mt, according to an Interfax report, citing a government press service.
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