Urea: Chinese prilled availability to be tested as India returns with fresh tender

Shipments under the 11 August purchasing tender are still being finalised, yet India is once again in the market for urea.

Indian Potash Limited (IPL) has today issued a fresh purchasing inquiry to close on 7 October.

Up to 1.7m. tonnes of urea are sought, slightly below the 1.799m. tonnes lined up by Rashtriya Chemicals and Fertilizers (RCF) in the prior inquiry.

The tender allows for a lengthy shipment window, running to 15 December.

The RCF tender saw offers sub-$395pt cfr, with prices ultimately dictated by available Chinese prilled supply. Chinese suppliers committed 1.6m. tonnes, with the balance of the 1.799m. tonnes lined up from the Middle East and Malaysia. Product under that inquiry was sought for shipment by 24 September.

A handful of cargoes from China are yet to be supplied, basis market reports.

Notably, Russian prilled suppliers opted to skip the business, in part due to high freight rates. Most pursued options in Latin America instead.

Many expect China to lead pricing once again, unless the supply situation in the Middle East improves.

As detailed in Profercy's reporting, global granular values have made steady gains since the last tender, while prilled values have registered only modest increases due to a lack of inquiry elsewhere for the product.

Since mid-August, Chinese granular values have advanced from sub-$390pt fob to $450–455pt fob.

With granular availability tight, both in China and internationally, steady demand from Latin America, Turkey and, most recently, Australia has lifted spot prices.

In contrast, prilled values have advanced by just $30pt and currently stand around $380pt fob. The majority of Chinese urea production is prilled, and there are few major outlets for it beyond India.

Significant Chinese participation is anticipated once again in the forthcoming inquiry, although there is some debate as to the precise volumes that will be available.