Opinions Focus

  • EU spot natural gas prices have more than halved in the last 2 months.
  • Ammonia production has resumed in Europe.
  • Surplus supplies in the US and Asia are adding to the pressure.

Lackluster demand for ammonia in Europe and surplus supplies from the US, SE Asia and resumption of production in Europe are contributing to price pressure. Buyers are reluctant to step into the market anticipating downward prices in the near future.

Sulphur prices are exceptionally volatile and now on the move up with the current FOB Middle East range of USD 125-135, up from USD 101-110. However, the sulphur price is still down 73% from the high in the middle of June of USD 470-485, but the price has increased 83% since early August. Looking back the spot Middle East midpoint price jumped from USD 101 at the start of 2021 and USD 40 at the start of 2020.

This week’s India tender resulted in total offers of close to 3 million MT and it is anticipated that IPL, the government agency, will buy close to 1.5 million MT. However, international prices did not create a spark since demand in other important regions like Brazil and Europe is dormant. Middle East granular urea FOB price is around the USD 625 FOB mark with SE Asia prices a bit lower at around USD 615-620 FOB. Prilled urea in Indonesia was sold at USD 603 FOB this week.

Potash prices are showing significant disparity with Brazil taking the lead on downward pressure on prices with granular MOP now at around USD 600 CFR, down from a high of USD 1,200 in April this year. Standard MOP prices in SE Asia have a range of USD 720-850 CFR with rumors that major buyers in Malaysia are buying at USD 680 CFR.

MOP prices in China are also under significant pressure with port prices down to RMB 3,625, down from RMB 5,125 in June. It is expected that MOP prices will fall further in the time to come with increased supplies from sanctioned Belarus and Russia and muted demand in Brazil.

With phosphoric acid contracts in India now established at USD 1,175 CFR for 100% P2O5, down from last contract price of USD 1,715, DAP and MAP prices are falling across the board. Most recent DAP deal this week is reported at USD 750 CFR India.

High stocks, demand destruction and low sulphur prices are putting pressure on processed phosphate prices.

Stein Chingen Haugan

Stein C Haugan, boasting four decades of experience and an extensive global fertilizer network, founded Fertimetrics Pte Ltd in Singapore in June 2019. The company offers advisory, consultancy, and brokerage services aimed at helping businesses and individuals enhance their core competencies and create sustainable incremental value.

Stein’s fertilizer expertise encompasses senior management roles and board representation positions with Yara International ASA and Ma’aden Phosphate Company. He has also successfully established and managed fertilizer trading companies. Stein holds a master’s degree in business from the University of Oregon and has completed postgraduate studies at IMD.

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