Urea International: steady growth
Source: Zhongyu information time: October 9, 2020
The urea market strengthened later this week, driven by the rise in spot sales in the Middle East before India’s bid. The market fluctuated and the trading was narrow until it was confirmed that the trading price was $10 / T higher than the last reported trading. This has prompted a range of other producers, including Indonesia and China, to raise their price targets because sellers are looking higher.
In other areas, however, the response has been more moderate. In Brazil, the resistance to the granular price of more than US $270 / T CFR has gradually weakened, but in Europe, many buyers are still willing to wait and see.
The fundamentals of the market have not changed. It is expected that the target of RCF will exceed 1.5 million tons, and India needs to buy a large number in January / February to meet Rabi demand. However, on the eve of bidding, market sentiment increased and price expectations for India also increased.
RCF is expected to purchase a large number of products. As India’s import volume is expected to exceed 10 million tons in this fiscal year, the company will continue to increase the spot quantity in the first quarter.
The prospect of competing with India for spot tons has not aroused buyers’ interest. As of September, imports had increased by 38% year-on-year, and the market looked very comfortable.
The slowdown in demand has dragged down prices. But buyers still have time before they need to sell.
Outlook: India’s bid will test the current location and is expected to validate higher FOB prices.