Urea International: weak market
Source: Zhongyu information time: April 2, 2021
Market weakness after India cuts tender incentives
India Limited the number of awards of RCF in the bidding on March 22 to 800000 tons, although it received more than 1.3 million tons of acceptance from suppliers. The country does not need 1.3 million tons of urea to be shipped in April, and it is estimated that it will be able to buy cheaper goods in subsequent bidding.
But the move left a considerable ton of urea for traders, who mainly bought it from China because they expected to win a bid. It will be very difficult to find an alternative market for China’s granulated urea, and the excess tonnage may put pressure on China’s domestic price.
In fact, the whole market has turned to downturn, especially in the West. The price in Brazil has fallen to about 390 US dollars / ton. Lower freight rates help to mask the decline in FOB levels, but these will follow. Much of the discussion in this week’s trading was about how far prices could fall.
The lower than expected winning in the RCF bidding has dampened confidence, but the next bidding may take place within 2-3 weeks.
At current prices, the huge potential export supply in the second quarter surprised many and may encourage short selling.
The tonnage in May is unsold, and the price needs to be corrected before the buyer intervenes. The extent of the decline will affect other markets.
30-60 DAY outlook
weak from fatigue
Prices are slowing down, but the balance of supply and demand and crop prices support the market, indicating that there is limited downward space.