Granular urea fob Middle East prices have slipped by $5/t at the low end to $340-350/t fob on latest spot business taking place, with little reaction in the market to increased tensions in the region.
A Middle Eastern producer has sold 25,000-35,000t of granular urea at $340-345/t fob to a market east of Suez, loading in the first half of August, defining the low end of indications spanning $340-350/t fob. Argus assessed spot non-US granular prices at $345-350/t fob last week.
Other Middle Eastern producers with tighter availability held indications mostly at $345-350/t fob. One producer reported rejecting a bid in the mid $340s/t fob this week for late August/early September.
Overall, there is little non-sanctioned urea available from the Middle East for potential loading in August, with most producers allocating tonnage for India under the latest tender earlier this month, as well as Australia, Sri Lanka and southeast Asia.
Iranian urea fob levels have been more pressured by increased availability for August, with producers looking to hold granular urea offers at $300/t fob after a sale was concluded in the high $290s/t fob last week.
The softer physical prices out of the Middle East are in line with sentiment in the derivatives markets, with urea paper contracts falling along the curve earlier today, despite the ratcheting up of tensions in the region and rising crude oil prices.
Hamas' chief political leader Ismail Haniyeh was killed in Tehran on 31 July, the Palestinian militant group said. The news came only hours after Israel claimed responsibility for a strike in Beirut that targeted a senior Hezbollah military commander.
The muted reaction in the urea market is at odds with crude prices. Brent crude futures shot higher on the news from Iran with the front-month Ice September Brent contract, which expires later today, at $80.77/bl at 12:41 GMT, up by $2.14/bl from the settlement on 30 July.
The Middle East is the largest export region globally and ships around 20mn t/yr of urea, of which Iran accounts for about a quarter.
