Indonesia prilled urea rises on high freight costs

07 November 2007 11:19  [Source: ICIS news]

LONDON (ICIS news)--Indonesian prilled urea prices have risen more than $13/tonne (€9/tonne) in a month buoyed by high freight costs and congestion at Chinese ports, recent sales tenders showed on Wednesday.

 

Kujang closed its sales tender for 15,000 tonnes of prilled urea and made an award to PT Graha Curah Niaga at an equivalent of $333/tonne FOB (free on board) Tanjung Priok bagged for November shipment.

 

On a FOB bulk basis, this would be around $326/tonne. The cargo is expected to be shipped to Bangladesh.

 

Pusri’s 2 November tender, in which it sold 5,000 tonne prilled urea cargoes to Limardi, Summit Prakasa and Indevco at $326.50/tonne FOB bulk Palembang for November-December shipment, also confirmed higher prices were now established.

 

These two tenders showed a marked rise from the previous Indonesian tender on 5 October, when Kujang sold two lots of 5,000 tonnes to Intisarwaboga at $313/tonne FOB bulk Palembang.

 

With large scale congestion at Chinese ports and high freight charges, Chinese urea is no longer an attractive option for some Asian markets, despite being priced cheaper at around $300/tonne FOB bagged.

 

For example, one trader said freight from China to the Philippines for a small parcel could be as high as $40/tonne.

 

Additionally, in some end markets, Indonesian urea can command a premium due to its established reputation.

 

As a result, traders said purchasing more expensive Indonesian urea was a better option.

 

($1 = €0.69)

By: Carl Roache
+44 20 8652 3214

< previous article(ICIS Chemical Business podcast November 2, 2009)

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