Prilled urea prices have surged to 290-300$ per tonne fob in the Black Sea, the high end for March tonnage. Traders have thrown caution to the wind viewing good sales prospects in Europe/Turkey, Africa and Latin America. There is also the firm chance of an Indian tender which would be the icing on the cake.
The run up in prilled prices has been caused by a number of factors:
Prills were cheap at 270$ per tonne compared with granular (the position has now been reversed).
Production has been lost due to gas. shortages, cold weather and technical problems in Romania and the FSU.
Latin American demand has gathered momentum.
AN is unavailable which is pushing more buyers to prilled urea.
On the supply side in Asia, Chinese prilled urea is being offered for February at315$ per tonne fob ex-bonded store.
In the Middle East producers are generally free from selling spot tonnage due to heavy, continuous contract shipments to the US, Thailand, South Africa and the improving Australasian markets.
Granular urea; further major sales of Egyptian product have taken place this week at 335$per tonne fob, a 7$ per tonne increase on last week. The product is bought for Europe where current returns are 10$ per tonne lower due to the weaker Euro.
However, granular is now cheap versus prills which should result in a new price run up soon for the premium grade.
UAN prices are edging up in France but are still some Euros 10-15pt below replacement cost. The US is also gaining but again does not reflect current exporters' asking prices. With other N prices firm, it is expected that some swicthing to UAN will be evident in the US and France.
-Sources: Argaam, Profercy Report, Fertilizer-index.
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