Malaysia’s January-July urea exports rise

Malaysia's urea exports during January-July increased by 4pc from a year earlier to 1.17mn t supported by firm deliveries to Australia, despite multiple turnarounds and production disruptions at state-owned producer Petronas' plants.

Petronas took its 700,000 t/yr Bintulu urea plant off line on three separate occasions in February, early May and late June, with each turnaround spanning around two weeks or more. The most recent two-week turnaround at its Bintulu plant was completed in early July. Petronas also took its 693,000 t/yr Gurun plant off line in mid-May for around two weeks.

But Petronas was still able to cater to its term commitments, with deliveries rising slightly compared with last year, especially to key markets like Australia. Deliveries to Australia rose by 7pc during January-July, largely because of a good monsoon season and heavy rainfall on Australia's west and east coasts that spurred domestic urea demand. This encouraged Australian importers to seek more cargoes during the peak application season from southeast Asia producers like Malaysia and the Middle East.

Deliveries to Mexico also increased to 113,800t against 33,000t the previous year. Exports to New Zealand rose to 60,500t compared with 21,700t during January-July last year.

Exports to Thailand fell by 30pc as Thai importers sought more Indonesian-origin cargoes this year, likely during occasions where there had been unexpected production disruptions at Petronas' urea units. Some Malaysian urea deliveries to southeast Asia were likely also replaced by increased Indonesian urea exports. Pupuk Indonesia had abundant urea inventories and export availability because of fewer turnarounds at its Kaltim urea plants.

Exports to the Philippines fell by 44pc during January-July, largely because of reduced overall demand from Philippine importers citing high inventories. Bad weather and the absence of fertilizer subsidies also dampened overall urea demand.

Exports to Myanmar (Burma) also slipped by 53pc as its importers sought cheaper urea from Oman as an alternative.

Malaysia's urea exports in this year's fourth quarter are expected to increase. On top of term commitments, at least 40,000t of spot urea is to move to east coast India and some other cargoes and commitments are destined for regional markets and the west coast of Latin America.

By Dinise Chng