Urea prices began to fall this week as the international market turned to short selling and importer demand slowed.
The urea tender in India is an important event this week, with the lowest price CFR396 / ton on the East Coast and CFR399 / ton on the West coast. Net profits from the Indian deal to producers were much lower than last week, but after the Indian tender, market prices in most regions have fallen and the short-term outlook is weak.
Small lot prices in Brazil have steadily fallen to $FR415 / ton, down 10% from last week's peak and only half of last week's volume. In October, the price of FOB NOLA in the United States dropped to 350 US dollars/ton (CFR380 US dollars/ton). European market demand is general, the total demand this week is only a few thousand tons, the price dropped to FR430-435 US dollars/ton.
There is new demand in Southeast Asia, Mexico and Canada, but buyers seem to want to buy only when they know the impact of the stamp.
The scale of shipments from China to India, and the ease of execution in the coming weeks, will have a significant impact on the balance of the overall market. The return of Indonesia and Brunei to the spot market will ease the tension in the urea market to a large extent.
While the market is weak in the short term, concerns over winter energy prices are likely to continue to support unseasonally high demand throughout the third quarter.
