Uncertain summer ahead for nitrates as bullish sentiment cools
Offers in the latest RCF Indian import tender, announced earlier today, fell short of producer price ideas prior to the tender and are set to test Chinese fob values. Formal offers were revealed today with the lowest offers for both coasts in the high $230s pt cfr, in line with earlier market reports.
Samsung submitted the lowest offers for both coasts, with the east coast at $237.35pt cfr Gangavaram, and west coast at $238.45pt cfr New Mangalore.
This is the third tender in the current campaign, and saw a total of 2.09m. tonnes offered firm.
Beyond the lowest offers from Samsung, only one other trader submitted an offer below $240pt cfr, at $239.85pt cfr Gangavaram. Around 1.4m. tonnes were offered at or below $245pt cfr.
Although the offers are higher than the previous Indian purchasing tender, they are lower than hoped for by producers and suppliers. Many had anticipated lowest offers over $240pt cfr, a view supported by last done spot business in the Middle East. Despite this the L1 prices in today’s tender do appear to be workable for traders basis shipment from positions booked earlier. They are also likely to be met by producers in the FSU and Middle East.
The east coast price reflects around $225pt fob China, below offer levels earlier this week in the high-$220s pt fob, while the west coast offer reflects the mid to high-$220s pt fob Middle East, subject to load port and volume.
The bigger question is whether China will follow. China has largely been absent from the international market since Q1, lending support to international urea values which had advanced rapidly over the past three weeks. With the Chinese domestic season coming to an end, the latest Indian tender will provide a real test of Chinese suppliers’ willingness to commit tonnes below $230pt fob, a price level that has not been evident since 2017.
By Neha Popat, Nitrogen Market Reporter
Related News
