In June, urea finally appeared to rebound, either because of the upcoming demand or because of the boost from the Indian tender, the urea market ended nearly two months of continuous substantial decline and showed a small increase. Urea prices in the main production areas rebounded 2–3 days also accumulated an increase of 20–90 yuan per ton.
Overview of the Indian tender
In the afternoon of May 31, urea company RCF released a new round of urea tenders, with a tender date of June 12, 2023, a deadline of June 19, and a final ship date of July 17, 2023, with a quantity of about 800,000 tons.
With the release of the Indian tender news, urea futures again rebounded significantly. As far as China is concerned, some companies continued to export small quantities of urea in May, but the early arrival of the Indian tender still took most Chinese by surprise.
Rumor has it that China has prepared for this Indian tender with the bid source has been as high as 400,000-500,000 tons, the future once numerous international sources with the bid, will directly pull down the Indian tender prices, and India's final bid quantity if only a small amount, that will accelerate the decline in international urea prices.
Urea exports bottomed out and rebounded
International urea prices continue to maintain a weak loosening, since May, with the rapid decline in Chinese urea prices, Inner Mongolia, Hebei, Shandong and some urea plants in the south have continued to have a small amount of goods set for export.
However, purchases are not concentrated due to seasonal weakening of international urea demand.In the middle and end of May, the highest amount of foreign inquiries in China was a single order of about 30,000 tons, in addition to the remaining daily orders of a few hundred tons, a thousand tons or so have been in the implementation, but exports did not release.
Moreover, the urea export data released by China Customs, April 2023 domestic urea exports 75,800 tons, has fallen to the lowest in the year, the urea export data in May may be a significant rebound.
Export area is temporarily restricted
Chinese urea prices are still in the international price highlands, so urea exports can be docked only in high-priced regions such as Southeast Asia and some countries and regions geographically close to China.
In April, China's urea exports of production and marketing countries and regions are mainly South Korea, India, China Taiwan, Australia, Mexico, Japan and other regions, can account for about 60% of domestic urea exports in April.
Into May, urea exports of legal inspection time did shorten, and some have special preferential treatment, but China's urea prices are still one of the factors affecting urea exports, export regional still have restrictions.
All in all, the Indian tender is positive or negative although not yet determined, but the short-term boost has played an encouraging role.
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