Zhongyu information report:
The reduced bidding volume in India reduced the optimism for urea
Due to financial reasons, India reduced the urea output tendered on December 27 to 710000 tons, instead of the expected 1-1.1 million tons. About 200000-300000 tons may come from Chinese ports and 4-500000 tons from other countries.
But this will not support the market for a long time. Middle Eastern producers sold 130000 tons directly FOB at US $244 per ton, but it remains to be seen whether this price can be repeated in other markets. Baltic and Black Sea producers will miss the comfort of India’s January sales.
Market attention will turn to Europe and the United States, which will be the main market driver in the first quarter. The FOB price in Egypt has increased in the past two weeks. Now the FOB price in February is 250 US dollars / ton, not 245 US dollars / ton.
India usually suspends bidding before April, resulting in a three-month gap in the Asian market, which is difficult to fill.
Turkey / Europe
Turkey’s market is very active, while most European countries lag behind in importing urea in spring. In January, demand here should support higher prices in Egypt.
With the progress of the first quarter, urea transportation should increase. The current price is equivalent to 240 USD / T CFR, but the price needs to be increased to attract more urea.
Outlook: some active demand areas will support stronger prices, but overall, the news from India is unfavorable to the market in the first quarter.