Middle East urea producers target $20/t increases

13 November 2007 11:35  [Source: ICIS news]

LONDON (ICIS news)--Middle Eastern urea producers are targeting $20/tonne (€13.80/tonne) increases for new business compared with their last sales, they said on Tuesday.

 

The latest Middle Eastern business at the end of October-early November saw United Arab Emirate supplier Fertil, and Saudi Arabian producer, Saudi Basic Industries Corp (SABIC), sell at $345/tonne FOB (free on board) to India and East Africa.

 

Now Middle Eastern producers with remaining tonnes to the end of the year are targeting higher numbers.

 

Fertil offered in the mid-high $360s/tonne in MMTC’s 1 November Indian tender, and will look for prices of at least this level for the 25-35,000 tonnes of urea it has left to sell this year.

 

Qatar Fertilizer Co (Qafco) noted buying interest in the $350s/tonne from end markets including Latin America, the US and Europe, but will target at least $365/tonne for its remaining 50,000 tonnes of urea.

 

Qafco said it would wait for the right price before selling.

 

Kuwaiti producer, Petrochemicals Industries Company (PIC) is yet to sell its remaining 25,000 tonnes and does not expect sales below $365/tonne.

 

Again interest from the US and Latin America was noted.

 

Strong demand and a general rise in fertilizer prices were supporting the producers’ drive.

 

Black Sea, US and Chinese prices were also showing strength.

 

The strong international prices are illustrated by the benchmark FOB Yuzhny price.

 

At the start of the month, prices were assessed at $350-353/tonne FOB Yuzhny.

 

However, by 9 November, business had taken place at $370/tonne FOB.

 

Traders active in the Middle East conceded that the producers’ demands were achievable.

 

“It is a realistic number, if you consider Yuzhny business close to $370/tonne FOB, it is possible,” said one trader.

 

($1 = €0.69)

By: Carl Roache
+44 20 8652 3214

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