Mid-East urea sellers happy to wait for India deals

19 February 2008 13:11  [Source: ICIS news]

Waiting for India to changeLONDON (ICIS news)--Middle East urea producers will refrain from short-term sales to wait for imminent large-scale Indian buying which could cause prices to firm after a period of softer prices, sellers said on Tuesday.

Producers said they were in no rush to sell their tonnage, as the likely return of India to the market in March could see prices rise.

India was estimated to require a massive 2 million tonnes for shipment between March and June, with China, the Black Sea and the Middle East the most likely supply sources.

India’s State Trading Corp (STC) was expected to approach producers for long term contracts in the coming weeks.

“We see no reason to rush into selling second-quarter tonnes,” said one Middle East producer.

“Everybody is waiting for India and I think prices will slowly start improving.”

Saudi Arabian producer SABIC was yet to offer its April tonnes, while United Arab Emirates producer Ruwais Fertiizer Industries (Fertil) and Kuwait’s Petrochemical Industries Co (PIC) have yet to offer second-quarter product.

The last Middle East spot sales in early February, saw Qatar Fertilizer Co (Qafco) sell 30,000 tonnes of its March product at $407-408/tonne (€277/tonne) FOB (free on board), but international urea price sentiment has since weakened.

Granular urea prices in Egypt fell around $25/tonne this month to $435/tonne FOB, Black Sea prilled urea prices fell and are now flat around $330/tonne FOB, and Chinese prilled urea prices have stagnated at $350-360/tonne FOB.

“Prices have softened and that level is difficult to get now,” said one Middle East producer, commenting on the recent Qatari sales.

“I do not think it is really possible to get that level now considering the Black Sea and Chinese levels.”

The producer added that hopefully the market would react to the entrance of India, with prices rising as a result.

Qafco has 15,000 tonnes to sell of its March availability. Africa is a possible destination due to the size of the cargo. April spot tonnes are yet to be offered.

($1 = €0.68)

By: Carl Roache
+44 20 8652 3214

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