Urea International: mainly strong
Source: Zhongyu information time: April 23, 2021
This week, the strong price of urea in China brought some gratifying reassurance to the market. The asking price in May rebounded to US $340 / ton FOB. Lower production, increased domestic demand and expectations of large-scale bidding in India contributed to the rise in prices.
Another move this week occurred in North Africa, where a small sale was made in May at an FOB price of more than US $330 / ton, followed by a sale of a larger tonnage at an FOB price of US $340 to US $344 / ton. It is estimated that 300000 tons of urea have been sold in the region in the past week. This should set a level for Europe and bring other buyers who have been hesitant into the market.
The next support will come from India. At that time, the bidding for shipment in May / early June will be postponed, possibly in the first week of May. The reduction in Indian production has raised import requirements, and sources expect mmtc to seek more than 1 million tons of urea in the bidding.
The strong pull of the domestic market and the production reduction caused by turning losses into profits should support prices before Indian bidding.
Novel coronavirus pneumonia swept away India’s next tendering, but is expected to take place in early May.
Grain prices are very favorable, and demand is expected to remain healthy in May and June.
30-60 DAY outlook
Firm to stable
Prices have found a bottom in May, and there may be some growth in delayed demand. Despite the strong fundamentals, the FOB price level from June to July may still face new pressure.