RCF announces new purchasing tender
Shortly after going to print last week, India’s RCF announced a new purchasing tender on Wednesday. The tender is for an unspecified amount of urea closing on the 9th of October for shipment by 15th November. From ICIS: There is ample availability for the RCF tender but final volumes would depend on prices. It is expected 1m tonnes is available in China, 300kmt in the Arab Gulf, while Black Sea will have 100-150kmt. Egypt and Indonesia are expected to have 100kmt each, while Malaysia, Baltics and Algeria could also have a cargo available each.
International urea futures stall
After an initial rebound in prices following the tender announcement, caution has returned as we wait to see what price and volumes the tender will produce. Combined with lacklustre buying interest in Europe and Latin America, futures markets remain subdued. Buying interest on paper beyond November remains limited, on uncertainty of where demand will come from beyond India. Nola urea has also been quiet in the nearby months, with focus currently on Q121, as players with long physical positions sell forward on paper to lock in margins, pressuring prices around $230/t.
The market continues to expect softer prices into Q4 – evident in the backwardation on the futures curves (most notable on AG and Egypt). With any moves in Oct/Nov paper following the Indian tender largely priced in, we see opportunity currently on the buy side for Q121 on intl paper vs Nola urea. Spread players and bears continue to seek bids into Q1 on intl, with bids in the $240s on AG/Egypt and $250s on Brazil paper likely to attract attention.
Hurricane Delta
In the physical market we’re starting to see some conversation over Hurricane Delta, as its potential path based on the various spaghetti models looks to be heading in the direction of Nola. The consequences are too early to tell, but there are some conversations growing on the topic and we are watching the path as the hurricane progresses through the Gulf.