Indian fertilizer importer and supplier IPL closed a tender today to buy urea, receiving lowest offers of $350.50/t cfr west coast and $365/t cfr east coast, with a total of 2.68mn t offered (see list below).
Trading firm Liven offered 50,000t at $350.50/t cfr west coast and Oman's OQ Trading offered 100,000t at $365/t cfr east coast. There was a comparatively tight spread of offers. OQ was the next highest on the west coast at $351/t cfr, with two trading firms at $366/t cfr east coast.
Suppliers offered 1.24mn t to the east coast and 1.44mn t to the west coast.
The prices were lower than some on the sell-side had expected and producers are now waiting for IPL's counterbids and mulling whether or not to accept.
Russian and Middle Eastern urea is set to dominate supply. Netbacks reflect around $330/t fob Middle East for the west coast to the low $340s/t fob for the east coast, accounting for approximate trader margins. Russian producers are facing netbacks of around the mid $280s/t to the mid $290s/t fob Baltic.
A tight supply-demand balance east of Suez adds another layer of complexity, with the closing import windows of major destination markets, such as Australia and those in southeast Asia, leaving producers with potentially higher returns elsewhere from India in the immediate term. The premium prices available were evidenced by Indonesian producer Kaltim's sale of 30,000t of granular urea at $366/t fob Bontang today under its 5 July tender, likely to a major importer in the Philippines.
| IPL's 8 July urea tender offers | ||||
| Supplier | East coast tonnage ('000t) | East coast price ($/t cfr) | West coast tonnage | West coast price ($/t cfr) |
| Ameropa | 194.3 | 378.00 | 194.3 | 372.00 |
| Midgulf | 100.0 | 382.00 | 100.0 | 377.00 |
| RE Energy | 50.0 | 372.91 | ||
| Fertistream | 47.5 | 379.00 | 47.5 | 372.00 |
| Samsung | 90.0 | 367.70 | 90.0 | 358.70 |
| Aditya Birla | 50.0 | 377.40 | 50.0 | 368.40 |
| Medallion | 50.0 | 368.10 | 50.0 | 353.10 |
| OQ Trading | 100.0 | 365.00 | 300.0 | 351.00 |
| Dreymoor | 90.0 | 378.00 | 90.0 | 372.00 |
| Hexagon | 50.0 | 371.26 | 50.0 | 371.26 |
| Alkagesta | 45.0 | 370.00 | 45.0 | 360.00 |
| Macrosource | 45.0 | 385.50 | 45.0 | 379.50 |
| Liven | 50.0 | 350.50 | ||
| Indagro | 42.5 | 373.40 | 42.5 | 369.40 |
| Koch | 47.5 | 377.90 | 47.5 | 379.80 |
| ETG | 45.0 | 366.00 | 45.0 | 355.50 |
| Sun International | 100.0 | 374.15 | ||
| Fertiglobe | 45.0 | 377.00 | 45.0 | 370.00 |
| Continental | 100.0 | 366.00 | 100.0 | 352.00 |
| Total | 1,241.8 | 1,441.8 | ||
| — Tonnages are provisional | ||||
