PWNI falls further as India heavily influences most fob values
State purchasing agency RCF opened price bids this morning following the 9 October tender for urea for shipment by 16 November. As reported previously, offers were received for a record 3.6m. tonnes of urea with one trader alone offering over 1m. tonnes.
Lowest offers in the latest tender were received at $279.25pt cfr east coast and $279.94pt cfr west coast, $4-8pt below those in the August MMTC tender. Over 1.9m. tonnes were offered below $285pt cfr. Several producers offered direct on an fob basis with the lowest offer at $274pt basis shipment from the Middle East.
News of the cfr offer levels will be welcome to producers in the east and west. For Middle East producers, possible returns basis the cfr values reflect around $270pt fob, well above implied values in any other market. Indeed, values in Brazil so far this week reflect below $255pt fob. The position is similar for Chinese suppliers for whom India offers solid returns over $260pt fob at a time when domestic demand is sluggish.
The market now awaits further news from RCF with counter offers expected shortly. Producers and traders with positions will be hopeful that the agency moves to book a major volume, over 1.5m. tonnes, clearing October and first half November shipments.
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