Insight Focus
- Tampa ammonia price drops USD 120/tonne.
- US prices are now in line with EU prices
- EU gas prices squeeze local ammonia producers.
Despite India buying close to 1.5 million MT for delivery by December 22nd global urea prices are under pressure. US NOLA barge prices dropped below USD 500 CFR equivalent after Thanksgiving holidays. Iranian urea is reported sold in the high USD 400s FOB to Turkey and Brazil keeping a lid on price increases from other origins. Current Middle East urea pegged at around the USD 500-520 FOB mark down from the mid to high USD 500s a few weeks ago. However, producers are taking some comfort in a possible another India urea tender expected to be announced 1H December. Further, the US market should come back in full force early 2023 to make up for lack of imports and large re-exports in 2022 vs that of 2021.
The processed phosphate market remains much unchanged from last week. Indian DAP buying is expected to come to a standstill in December and January already having bought close to 7 million MT in 2022 for the >Rabi season, up 45% year on year. Brazilian MAP prices are reportedly offered at between USD 600-610 cfr VS bids at between USD 570-580 CFR.
Spot potash prices are under severe pressure everywhere with further declines witnessed in SE Asia, Brazil and the US on the back of weak demand. SE Asia granular and standard MOP dropped another USD 25-40 PMT this week. SE Asia standard MOP is now only around USD 50 PMT above granular MOP prices in Brazil having been at a premium of around USD 170 PMT only two months ago.
Brazilian granular MOP prices now reported between UNSD 520-530 CFR less than half of the April 2022 level with affordability relative to soybean prices still not favorable to induce buying thus prices are expected to fall further.
Attention is now on India and China whose current supply contracts at USD 590 CFR will expire at the end of December. However, with MOP prices continuing to decline there appears to be no rush on either side to enter the negotiation table.
Tampa, US, ammonia contract price for December dropped USD 120 PMT reaching USD 1,030 PMT now in line with European prices. Gas prices in Europe have increased this week with the TTF above 46 MMBTU making nitrate production a loss proposition thus ammonia producers will need to decide whether to continue producing or importing ammonia.