Australia emerges as high point in Asia-Pacific urea

Australia is drawing urea spot cargoes as importers prepare for a potential record sales year, marking a sharp contrast to the rest of Asia-Pacific where demand is absent.

Australia is among the only highlights for sellers and traders in an otherwise quiet Asia-Pacific market. Demand has largely disappeared amid the general economic uncertainty. The return of Indian buying is awaited, with a tender announcement expected end-April or early May.

Spot cargoes from the Middle East, China and southeast Asia have all been booked for Australia in recent weeks, to supplement an already heavy base load of contract shipments from the Middle East and Malaysia.

Around 30,000t of Indonesian spot granular urea will load in Bontang in early May for a west coast importer. A 30,000t spot cargo will load in Bahrain at a similar time priced under formula, for Australia's east coast. This follows spot cargoes already booked for Australia to load in the Middle East during May.

A 30,000t spot cargo will load in Basuo, China in end-April/early May for shipment to three ports on the east coast of Australia, covered by a trader last week at around $250/t fob China. Another 20,000t will also load in Basuo soon for a different east coast receiver.

Freight rates have eased with shipments from the Middle East to three ports on the east coast of Australia estimated at around $22-23/t, from Bontang/Sipitang approximately $15/t and from Basuo around $14/t.

Australian urea sales peaked at 2.1mn t in 2016, but importers believed this could be exceeded if rainfall is sufficient over the coming months. The outlook is good for rainfall during May-July and this should boost fertilizer demand for use on summer crops like cotton, corn and rice. This has encouraged urea importers to slightly bring forward their buying programmes.

There is limited spot buying elsewhere in Asia-Pacific. Thailand, a major urea consumer, is ramping up contract deliveries but there is little in the way of open spot demand.

Indonesian producer Pusri is closing a sales tender on 23 April that offers 45,000t of prilled urea for May loading. Fellow producer Petrokimia Gresik is also closing a sales tender on 24 April that offers 25,000t of prilled urea for May loading.

By Carl Roache

source: Argus Media