Malaysia’s urea exports slide in January-June

Malaysia's urea exports fell by 10pc to 905,400t during January-June, likely owing to multiple production issues at Petronas' urea plants which reduced the producer's export availability.

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 producer also took its 693,000 t/yr Gurun plant off line in mid-May for around two weeks. The series of turnarounds likely curbed production volumes available for Thailand and Australia, reducing overall regional exports from Malaysia.

Thailand was the top destination for Malaysian urea in January-June, as the country usually takes in regular contract cargoes to prepare for the main fertiliser application season during May-October. Australia also procures large volumes of Malaysian urea during its peak seasonal demand. But deliveries to Thailand and Australia fell to 178,000t and 161,000t in January-June, down by 39pc and 24pc respectively from a year earlier.

Exports to the Philippines also fell by 44pc in the first half of the year, because of overall reduced demand from importers citing high inventory levels. But January-June exports to Mexico and Vietnam more than tripled to 113,800t and 57,700t, respectively, from 33,000t and 17,300t a year earlier.

Malaysian urea shipments are expected to pick up in the third quarter of the year, given increased spot availability from the region.

A drop in spot availability from other Asian producers could also raise demand for Malaysian cargoes and raise Malaysian exports. Indonesia's urea deliveries for the third quarter of the year are likely to be hampered by congestions at the Bontang port, which would restrict volumes of granular urea exports. There also appears to be little likelihood of Chinese urea exports emerging for the rest of the year.

By Dinise Chng