Urea International: steady decline
Source: Zhongyu information time: November 6, 2020
Due to insufficient liquidity, urea prices fluctuated in an inactive week. Suppliers feel relieved in the short term after selling a large number of products to RCF in India, but they are not willing to expand their business through price reduction. However, traders expect the Indian stock market to weaken, and they are not prepared to repeat the mistakes of the last time without obvious exports. As a result, as the market readjusts, the market is at an impasse.
In the absence of India, there is a clear gap in demand. Brazilian purchases are sporadic, with granular prices hovering around $260 per ton CFR. European buyers are still on the sidelines, with French FCA prices stagnating at 250-255 euros / ton. China was the exception this week, with domestic demand and prices driving exports to $FOB / T 270. But at this level, no traders are interested.
In the absence of alternative demand, the international market seems to continue to swing until India makes another move.
China
The rise in domestic demand and prices, coupled with the decline in output, may cause China’s exports to fall below initial expectations for the rest of the year.
India
Despite the slowdown in domestic sales, Rabi still needs 2.5 million tons. Logistics will be tested with record RCF shipments.
Middle East
About 750000 t is used for RCF, cleaning length. However, the quotation in the second half of November has not attracted buyers.
Outlook:
Prices will adjust horizontally and fall before India takes measures to support the market.
