US granular urea stagnates on lacklustre buying

17 January 2008 18:16  [Source: ICIS news]

LONDON (ICIS news)--Lacklustre buying amid plentiful supply has seen US granular urea prices soften and then plateau, traders said on Thursday.

US traders bemoaned the subdued activity and pointed to the ongoing closure of the US upper river system and seasonal quietness as contributing factors.

One trader went as far as to describe the market as ‘dead’.

The substantial number of vessels bringing imported product to the US is also a factor and has prompted a wait-and-see approach among some buyers holding out for lower prices.

ConAgra, Helm, Mosaic and Yara are among those bringing in urea from other regions including China and the Middle East.

“It is slow,” said one trader.

“There is no demand right now. This is why the barge price has come down.”

As a result of purchasing inactivity and abundant supply, US granular urea prices softened at the start of the year before stabilising over the last week.

Spot prices were assessed around $420-425/short ton (€286-289/short ton) FOB (free on board) Nola (New Orleans) for non-Chinese origins, largely unchanged from the previous week, but approximately $5-8/short ton weaker than at the start of the month.

Chinese product is the cheapest on the market and available below $420/short ton FOB Nola.

Despite this, traders were optimistic of improvement in price next month with the onset of the winter wheat season. One trader said he estimated the US needed another 250,000-300,000 tonnes of granular urea to cover the requirements.

“All we need to do is start moving something and the price will move up.”

($1 = €0.68)

By: Carl Roache
+44 20 8652 3214

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