Insight Focus
- US/NOLA urea price now lowest since January 2021.
- Processed phosphate prices keep falling in major markets.
- MOP prices outside of Brazil also keep dropping.
Spot global urea demand has almost completely disappeared bar contract shipments. The downward spiral seems to have no end and the producers’ hope that India would return to the market with a big tender has also become a pipedream. India is now rumored to come into the market maybe late February or early March. Buyers at large are holding back in fear of ever lower prices.
US/NOLA got to USD 300 ST FOB in the barge, the lowest level since January 2021. SE Asia FOB levels are said to be around USD 380-390. Middle East producers are struggling to find homes for their product and there were rumors an offer had been made at USD 390 CFR to any destination in SE Asia. Brazil being served with large import volumes from Iran and Russia are at USD 340 CFR. On top of this it appears that Indonesia may enter the export market with a tender imminently adding further pressure on prices. Last year Indonesia exported 1.8 million MT, down 14% from the previous year. India and Australia combined received 700,000 MT. Australia imported a total of 2.8 million MT about the same as the year before.
The US exported 1.5 million MT, up a staggering 397.8% from the year before with a volume of 290.6 KT. US urea import in 2022 was 5.3 million MT, down 14% from the year before. Of this off-shore imports were 1.31 million MT, down from 2.19 million MT the year before. In general, the immediate future of the global urea industry remains depressed with further decreases of prices on the back of lackluster demand.
The processed phosphate market is also struggling with lack of demand and prices are falling in all major import markets like the US, Europe and India. US barge prices of DAP were reported at a range of USD 584-590 ST FOB down from USD 650 ST FOB in December. US import of DAP/MAP in 2022 slumped to 1.4 million MT, down 47% from the year before and the lowest level since 2015. Indian buyers are looking for USD 600 CFR whilst producers want closer to USD 700 CFR. The outlook for processed phosphates also depressed with lower gas prices and raw materials input prices like ammonia and sulphur. Buyers are holding back for lower prices.
The global potash market is also bearish. The market is still waiting for a contract settlement in India, and expect that by the end of February this could have taken place with a price expectation of USD 460-480 CFR versus the current contract price of USD 595 CFR. Standard grade MOP price in SE Asia fell another USD 15 this week to a range of USD 480-530 CFR with the expectations that prices will keep on falling on the back of buyers holding back for lower prices.Granular MOP price in Brazil is holding steady at USD 515 CFR. The US imported 10.8 million MT of MOP last year, down 20% from 13.5 million MT in 2021. Canada was the largest supplier with 9.36 million MT. Indonesian imports in 2022 were also down 22% to 3.22 million MT. Supplies from Belarus fell 85% to 133,400 MT from 905,538 the year before, all due to the western sanctions on Belarus.
Ammonia prices are sliding in Europe due to steady TTF gas pricing now reported at sub USD 17 mmbtu which equates to ammonia production cost of sub USD 700 CFR Europe. Ammonia production capacity in Europe is now 70% versus 30% in September of 2021. The ammonia index price in Europe is now in the range of USD 750-755 PMT CFR, down from the December index of USD 1,035-1,060. Further price decreases are expected on the back of both Indonesia and Malaysia both looking to place tons outside their own region of SE Asia/China. The US imported 2.350 million MT of ammonia last year, a drop of 7.1% from the previous year. Ammonia export increased 182.2% in 2022 to 907.8 KT from 182.2 KT the year before. The European gas prices encouraged US exports. Morocco being a large importer of ammonia for its processed phosphate industry imported 1.9 million MT last year, a drop of 14% from the year before. All eyes are again on the March Mosaic/Yara contract price which could see another steep drop.
