LONDON (ICIS)--There is uncertainty on the quantity of China urea exports in August with the government still focusing on keeping the domestic market well supplied and prices under check.
Floods in Henan, described as the worst rains in the region in 1,000 years, also led to concern about logistics and arrival of cargoes at ports.
“The floods are terrible. Particularly affected is Henan which is the logistics hub for north west and central china. Urea flow to ports will see disruption,” said a trader.
Exporters however are keen to ship tonnes as international prices are trading at a $30-40/tonne premium to domestic levels.
The domestic season is slowing, with agricultural demand expected to be over by the end of the month.
A majority of current purchases in the domestic market are from NPK (nitrogen, phosphate and potash) manufacturers for raw materials, and not for the agricultural sector.
Exporters are building inventory at ports ahead of the Indian tender on 22 July, which is seeking cargoes for shipment by 30 August.
An alternative for suppliers is to move cargoes to bonded warehouses, if exports are disrupted due to any announcement of an export tax.
Early estimates of exports were at 150,000-200,000 tonnes, but there is now talk of 300,000-500,000 tonnes available for India.
“If the government sees 10 vessels being exported, there could be curbs imposed. No one knows,” said an international trader.
These concerns on future policy direction over exports, unpredictable domestic demand and logistics will make China a wildcard for the next Indian tender.
Front page picture: Zhengzhou city in Henan
province, central China; fertilizers logistics
are set to be negatively affected by the
generalised disruption caused by the
Picture source: Shutterstock