Black Sea urea surges to $290/tonne on trader speculation

13 August 2010 13:56  [Source: ICIS news]

LONDON (ICIS)--Black Sea urea prices have surged to a high of $290/tonne (€226/tonne) this week as a result of trader speculation, market sources said on Friday.

This week's run-up in global urea prices was supported by several factors, including higher crop prices and the recent tender announcement made by Indian Potash Ltd.

However, the most dramatic rise was seen in the Black Sea region, driven primarily by trader speculation, according to market sources.

International trader Fedcominvest was actively bidding and buying at progressively higher prices, prompting other traders to compete at similar levels, market sources added.

Fedcominvest was understood to have booked several cargoes of Ukrainian urea at prices up to $290/tonne FOB (free on board) Yuzhny – the highest reported price since February.

Fedcominvest confirmed it was looking to build a position of 100,000 tonnes or more in Yuzhny against expected demand.

However, Fedcominvest denied reports that it had agreed a deal with Indian Potash ahead of its 17 August purchase tender.

Ukrainian distributor Agrofertrans sold 10,000-20,000 tonnes of urea to a trader, which was not Fedcominvest, at $288/tonne FOB for September shipment.

Earlier in the week, Agrofertrans sold 15,000-20,000 tonnes in the low-$270s/tonne FOB, for shipment at the end of August/early September. 

Market sources said demand in India, Brazil and other markets was healthy but it was unclear if buyers would be prepared to pay the current high prices.

The highest Black Sea urea deal last week was reported in the high-$250s/tonne FOB Yuzhny.

Yuzhny, Ukraine, is a major port for urea and other fertilizers.

($1 = €0.78)

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By: Carl Roache
+44 20 8652 3214

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