Insight Focus
- Chinese ammonia imports slumped 70% year on year.
- EU imported ammonia prices down $70/mt in 3 weeks.
- India buys 1.5m tonnes urea.
There is a bearish sentiment across all fertilizers in all global markets this week.
The Indian Urea tender which attracted around 2 million MT of offers with shipment required by December 22, with the Indians buying close to 1.5 million MT, failed to ignite the market and prices on urea kept on falling. FOB Malaysia price is now around the USD 535 -545 FOB range with the Middle East pegged at between USD 550-560 FOB. There is nothing in the immediate horizon to think that prices will rebound. Brazil and Europe markets need to come into play. The USA market broke the USD 500 FOB ST NOLA price with full barges sold down to USD 490 ST FOB for the first time in a very long time. This could have been triggered by a desire to clear inventory before Thanksgiving.
DAP prices are also falling either side of the Suez with iNDIA CFR price falling another USD 15 PMT this week to a range of USD 730-745 CFR. This despite Chinese DAP and MAP exports to October slumped y/y 52% to 4.7 million MT. There is demand destruction in most markets globally for phosphates and it is hard to see any immediate increase in prices.
The European ammonia price also fell another USD 75 on a deal reported on imported ammonia from Trinidad at USD 1,052.50 – down from USD 1,125 CFR duty paid three weeks ago. Speculation about the future ammonia price is intensifying with Putin again restricting gas supplies to Europe and thus the TTF gas price is again on the increase. China’s import of ammonia through October slumped 70% at 194,917 MT, down from 754,825 MT according to reports by S&P Global.
Potash prices are under continuous pressure with spot prices falling in Brazil and SE Asia. SE Asia standard MOP price came down another USD 45 PMT this week to an average range of USD 580-650 CFR. This is an average drop of USD 323 or 34% from the June 2022 peak. However, the standard MOP SE Asia price is still an average of USD 80 PMT higher than the granular MOP price in Brazil thus further declines are expected. Prices in Brazil this week fell another USD 30 PMT to reach a range between USD 520-525 CFR.
European prices on the other hand.carries a premium of around USD 300 PMT over levels in Brazil thus it is expected that prices in Europe will fall further in the weeks to come.
