HOUSTON (ICIS)--In the US, the New Orleans (Nola) barge market experienced more trading for delivery this month, and it came at a slight uptick. The latest India tender lent some stability to the domestic tone, although it created less of a spark than some anticipated.
While the market continues to inch forward, questions remain over how the rest of November will play out with the onset of the winter season and the soon-fading demand from end users.
Nola was assessed at $290-299/short ton FOB (free on board), which is an increase of $3/short ton FOB on low end and $1/short ton FOB on high side week on week.
On Friday there was fresh activity for November delivery. One barge changed hands at $290/short ton FOB. Later in the day, one was concluded at $295/short ton FOB.
There was also a trades heard for December volumes, with values between $295-300/short ton, but these could not be further confirmed.
Terminals were running between $325-330/short ton but continued to experience decreased activity.
Some are comfortable holding on to the recent cautious tone, which is supported by the arrival of significant imports and hard questions over how the international urea segment moves forward.
That adds to a sense that more downside is coming. A trader said: "India tender came out, and really nothing has happen to this market. With the trades this week, there is a better chance of this market going down ... rather than it jumping ..."
Others thought the India activity was positive in the immediate, but its impact was limited. A buyer said: “It could continue to hang around this level for the time being. India coming in has provided some stability, but it is hard to think this could lead to another run up in pricing."
Weighing on the market is the amount of interest that will be forth coming from farmers once harvest is concluded.
Pre-pay buying has lagged compared with previous years. A market source said: “People are saying that there is starting to be people asking about it, kind of kicking the tires so to speak, checking on daily price change. But they are not ready to commit at this time.”
The quiet period is not unexpected. This is when fertilizer interests sag outside of the condensed period of refill buying and the post-harvesting applications, which have not yet fully emerged as wet, colder weather and the remaining harvest left are limiting factors.
As a buyer said: “There is very liquidity and very little terminal demand, but that is also very typical of this time of the year."
Focus article by Mark Milam