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India’s tender process: Several interesting developments _ Author/Source: China Fertilizer Network Date: 2021-05-10 Clicks: 3 On April 22, India’s MMTC company issued a tender announcement; the deadline for submissions was May 4, with the tender valid until May 11. Development 1: Although the issuance of this tender announcement did not lead to a situation where the domestic urea market was on the verge of collapse, it still had an impact on it. Before May Day, there was limited room for a decrease in urea prices in many areas; in some regions, prices even rose rapidly due to tight supply； The second interesting development: on May 4th, India announced that it had received bids from 14 suppliers for this tender, with a total bidding volume of 2.57 million tons. The lowest bid price at ports on the east coast was 356.99 dollars per ton, while the lowest bid price at ports on the west coast was 358.99 dollars per ton. However, according to market feedback, China’s share in these bids was relatively small; it is said that China bid only for 500,000–700,000 tons. Although the total amount bid by Indian companies was high, Chinese companies’ participation was low, and even if they won all the bids, the impact on China would be limited ； The third interesting development is that, according to market rumors and as a result of counteroffers, the total amount awarded in this Indian bidding process was 550,000 tons; no Chinese-supplied goods were part of this deal. With this, this Indian bidding process can essentially be considered over. The process of printing these labels was full of twists and turns: the bidding process started when domestic demand was somewhat weak, but in the end China lacked the necessary resources for this bidding process. Yet despite all this, domestic urea prices remained relatively high. Currently, the mainstream ex-factory price of urea in Shandong is 2100–2160 yuan. In Linyi, compound fertilizer manufacturers pay 2160–2190 yuan for urea. In Hebei, the mainstream ex-factory price of urea is 2110–2130 yuan, while in Henan it is 2100–2130 yuan. In Shanxi, the mainstream ex-factory price of urea is 2070 yuan, with large-grained urea costing 2050–2080 yuan. The reasons for the recent price increases in domestic urea despite the lack of labeling are as follows: First, the factories have relatively low inventory pressures. Even though the overall daily production of urea has remained above 160,000 tons recently, most plants have low internal inventories and thus face little sales pressure. Under normal circumstances, if the overall bidding price in India were acceptable, companies might consider exporting as a way to generate profits. However, the price implied by this Indian tender is less than 2,000 yuan per ton at the factory level in Shandong Province. Given this situation, companies have relatively little incentive to export at such low prices. Secondly, domestic market demand provides a decent level of support. Although the production of high-nitrogen fertilizers is coming to an end, demand from the industrial sector still provides support. Additionally, the agricultural top-dressing market in various regions is gradually picking up momentum; in the Northeast region, shortages of large-grained fertilizers once led to higher prices and a situation where such products were in short supply. Even though the peak period of demand from both industrial and agricultural sectors will not last beyond early June, given the factories’ own inventory pressures, there is no significant sales pressure in the short term, and overall prices can remain at relatively high levels. In summary, although domestic urea prices have entered an upward trend due to this pricing announcement, it is not the primary factor behind this trend. Recently, there is still demand for urea in certain regions, which could lead to further price increases. However, the domestic supply is substantial, and current stock levels at ports are also relatively high. Moreover, as the industrial demand is coming to an end, it is expected that price increases will be limited in the future, with prices in some key regions possibly even falling. (Wu Wenchao)