US granular urea prices stay below $400/short ton

13 February 2008 15:57 [Source: ICIS news]

LONDON (ICIS news)--US granular urea spot prices remain flat below $400/short ton (€276/short ton), due to ample supply and aggressive, low offers, traders said on Wednesday.

Last week, granular urea values slumped below $400/short ton FOB (free on board) Nola (New Orleans) for the first time since November 2007.

On Thursday, spot prices were quoted in the range $390-395/short ton FOB Nola, a fall of $15/short ton on the previous week, according to global chemical intelligence service ICIS pricing.

“During December and January we had lots of vessels coming into the US Gulf. This was far more than we needed and pushed the prices down,” explained one trader.

The US winter wheat season has since started, which led to expectations of a price revival. However, despite hopes of a rebound, granular urea barges continued to be priced at around $390-395/short ton FOB Nola for prompt delivery on Wednesday 13 February.

“It has not got any more bearish this week but is has not stepped up,” said a trader.

Aggressive offers in the market from certain producers were cited as the main reason for the price stagnation, while good availability of imported urea also continued to be a factor.

However, traders expected prices to rise in the coming weeks as demand increased and more barges were sold. Moreover, supply was likely to be less ample in the coming months.

“It looks like for February forward we won’t have that many vessels coming in,” said a trader.

($1 = €0.69)

By: Carl Roache
+44 20 8652 3214

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