After a slight pause mid-week, following chaos then clarity around Chinese trade with India, urea markets resumed their rally into the end of last week. MMTC wrapped up their most recent tender on Friday, securing 700kmt of urea at prices $19 and $15 higher for the east and west coast respectively, than the previous purchasing round. The anticipation and results of the tender spurred on the global urea market, with prices rising in international fob and cfr markets throughout the week.
The most significant moves however, were saved for the start of this week, following the announcement of a new tender by RCF over the weekend (within just 48hrs of MMTC’s closing). India’s desperation to secure additional volume to meet domestic sales further accentuated the recent surge in global prices, with Monday seeing values up over $20 in some markets from the week prior. India’s predicted import requirement for Aug-Sep of around 2mn tonnes, with just over 800kmt secured thus far is driving the global market. On international paper, the most traction has been in the nearby months, with September contracts having traded up to $272.50 for AG, $285 for Brazil and $280 for Egypt at time of writing. Sentiment is that the market is well supported near term, with attention turning to Q4 and whether price levels will be sustained.
Meanwhile, values on Nola urea also continued to firm – starting on Saturday when the RCF tender was announced. Traders in Nola started calling around shortly after the announcement and we saw Q4 trade $234 on Saturday, up from $227 done on the Friday. However this was just the beginning, we’ve now seen Q4 futures trade more than five times up to $250 (twice) this week, and continue to see conviction around those values ($247 last done on Tuesday afternoon). Traders who have been long are rejoicing and are starting to take profits, it feels like euphoria in a sense. Nola is riding the coat tails of firmer international values, despite this period of limited demand – values are still a relative discount to the rest of the world, providing support to the Nola market.