Demand hope lends support to urea market sentiment
Interest for urea remains thin internationally but sentiment is improving as demand picks up.
There has been no big emergence in demand but purchasing is anticipated to pick up in Europe, Brazil and India over the next one or two months. As a result, prices are starting to stabilize.
“There is some demand in bits and pieces, no big weight to it. But we are expecting some more liquidity,” said an international trader.
Fresh import tenders in Ethiopia, Bangladesh and other south Asian countries are also likely to provide support to prices. The shipments were concluded by 23 August.
Offers in China increased as warehouses are empty after 16-17 panamax cargoes were shipped to India.
The jury is out on the next Indian tender announcement but there are indications it may be delayed to end September or early October. North African producers are comfortable after placing cargoes into Europe for September while the Arab Gulf prefers to wait for the next Indian demand.
“Demand hasn’t kicked in yet but producers in North Africa are already comfortable. [I] think there would be support for prices over the next one to two months,” said another trader.
Indonesian business was concluded at $257/tonne FOB (free on board) for over 50,000 tonnes with Kaltim now having limited spot available for September.
Black Sea producers are also actively exporting prilled urea around the $235-240/tonne FOB range with OPZ and Dnipro both producing.
Brazil has inched up a few dollars but any upside is limited as Iranian supply continues to be present in the market.
In the US, Nola barges continue to drift in a week marked by a public holiday and weather issues because of Hurricane Dorian.