05 September 2008 16:55 [Source: ICIS news]
By Carl Roache
With more than 2m tonnes offered for MMTC’s 3 September tender, including optional tonnage, all eyes are on ?xml:namespace>
No awards have been issued to date. The lowest offer in the tender came in at $854.50/tonne (€598.15/tonne) CFR (cost and freight) by trading company Transammonia, reflecting $790/tonne FOB (free on board) Yuzhny plus freight, financing and a small margin.
Some sources expect awards to be announced soon for traders Transammonia, Kisan International, Helm and Toepfer at prices between $854.50/tonne CFR and $860/tonne CFR.
Despite the massive response received, there is talk that the tender will be scrapped in a bid to secure lower prices.
MMTC is in consultation with the Indian Department of Fertilizers (DoF). There is market talk from
With some traders currently long having taken positions for
Trade slowed and global urea prices fell during
“They [the DoF] feel the prices will fall further,” said an Indian trader. “They feel the prices are too high as the quantities were secured some time ago [by the traders] back when the prices were lower. They want the prices offered to reflect this.”
Said a different trader: “This is a possible scenario. It is one of number that could happen."
The trader said this would only be a major problem for those who have unsold floating cargoes.
Added another trader: “I think they will scrap the tender. It is not positive news,” .
Another trader said that scrapping the tender was not likely and these rumours were an attempt to squeeze sellers into agreeing to lower prices.
As a major consumer of
However, one trader said Latin American buyers were likely to remain absent for the time being and just wait and see what happens in
Major Brazilian buyers covered their September requirements a couple of weeks ago, booking floating cargoes at $770-790/tonne CFR.
Offers have risen above $800/tonne CFR since then, but there are no sales reported. Importers are facing big problems with fertilizers piling up in port warehouses and want to move some of the inventory before buying more.
Elsewhere in Latin America, buyers have pulled out of the market and will wait until The Fertilizer Institute (TFI) conference in
This has been especially apparent in 2008 with the restrictions to Chinese exports tightening global urea supply.
Indian fertilizer demand outstrips domestic supply. As a result, the Indian government imports large quantities of urea through trading agencies IPL and MMTC.
($1 = €0.70)
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