Urea: India raises the stakes for markets requiring April arrivals

India's latest foray into the market saw Rashtriya Chemicals and Fertilizers (RCF) secure 1.3m. tonnes of urea at $508-512pt cfr. LOIs were issued yesterday (24 February) with suppliers now focused on executing business.  

The sizeable volume secured is around 200,000t above earlier availability estimates with India scooping up the majority of remaining spot availability for March, raising the stakes for buyers elsewhere.

In response, the US market has been on a firmer footing while recent sales tenders in SE Asia have seen spot values advance for the balance of March shipments.

Late last week, offers into the RCF tender consolidated the price gains seen in the east in recent weeks.

Middle East spot values were established in the mid-$490s pt fob with returns for SE Asian suppliers in the $480s pt fob. In subsequent sales tenders in Indonesia and Brunei, granular values advanced into the $490s pt fob with two 30-45,000t cargoes placed for March.

In both cases, spot values are close to multi-year highs, testing the levels seen in July 2025 when major supply disruption and conflict in Iran impacted trade flows.

Crucially, the tender saw significant participation not only from eastern spot suppliers, but also those in Nigeria and, to a lesser degree, North Africa.

For those in the former, returns up to the mid-$470s pt fob have led to at least four cargoes totalling close to 150,000t being committed. Suppliers ultimately opted to back business to India over the USA, where forward barge values have lagged those for nearby movement.

In Egypt, a handful of cargoes, including prills and granular urea, are anticipated for shipment from Adabiya. This represents Egypt's first notable sales into India for some time and comes at the expense of availability for Europe.

Prior to the tender, North African spot values had been softer with producers struggling to find liquidity in the $490s pt fob and prices down from earlier highs over $500pt fob.

Further, participation from Russian prilled producers does not appear to have been stemmed by significant ice issues in the Baltic.

For the USA, the tender has raised the stakes. Few are significantly concerned about March arrivals for the time being, despite competition from Canada for African tonnes. Nevertheless, prompt supply has been tight since January with loaded values trading at a premium to those for later movement.

Yet, the extent of sales by offshore suppliers to India again raises questions over April arrivals for the US Gulf and the east coast. The movement of volumes from Nigeria to India in particular will limit the extent to which the April import line-up can advance.

With many optimistic that strong corn plantings will support demand, nearby values in the US Gulf ran up to $480ps ton fob Nola earlier in the week with March established in the $470s ps ton late last week. April has traded at a discount into the low-$460s ps ton, reflecting just over $500pt cfr metric equivalent.

Many expect looser global trade balances to emerge for Q2. However, for those markets requiring April arrivals, India has once again raised the stakes.