Black Sea urea weakens $20-25/t in quiet market

15 August 2008 14:16  [Source: ICIS news]

LONDON (ICIS news)--Black Sea prilled urea prices have weakened $20-25/tonne (€13-17/tonne) on the back of limited buying activity, traders said on Friday.

With Indian buyers yet to re-emerge and the holiday/harvest season evident in the northern hemisphere, urea trade has been extremely slim, market participants said.

As a result, the key benchmark Black Sea prilled urea price has softened as many traders and buyers adopt a wait and see approach.

“India is not in a buying mood now so the Black Sea market has softened a bit,” explained a trader.

Traders Agrofertrans (AFT) sold 6,000 tonnes of prilled urea to Turkish buyers Gubretas for second-half August shipment.

The price was reported in the $840s/tonne CFR (cost and freight) including 180 days’ credit, which netted back to $785/tonne FOB (free on board) Yuzhny.

As a result of limited activity and this AFT sale, Black Sea prices were pegged at $785-800/tonne FOB Yuzhny by global chemical market intelligence service ICIS pricing.

A week previously, Black sea urea prices had been assessed in the range $810-820/tonne FOB Yuzhny.

Despite softening, Yuzhny prices had not dropped substantially as traders bidding for larger quantities have been unable to obtain offers below $800-805/tonne FOB.

The main Ukrainian producers were holding out for prices above this level.

India was expected to start purchasing urea again in the second half of August.

“When they [India] come back prices will go up,” said a trader. "It is just a question of when."

India, the world’s largest urea buyer, still requires an estimated 5m tonnes of urea for delivery through to March 2009.

($1 = €0.67)

For more on urea visit ICIS chemical intelligence
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By: Carl Roache
+44 20 8652 3214

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