Insight Focus
- Urea prices fall on lower-than-expected demand
- Potash prices could fall further if no rebound in Brazilian demand
- Phosphate market bucks trend on Chinese export restrictions
Most fertiliser prices are in a state of flux with further falls likely. The exception is di-ammonium phosphate (DAP) which is being supported by Chinese export restrictions.
Urea tenders smaller than expected
Urea prices are looking soft after IPL of India announced a 500,00-tonne tender for urea this week, which disappointed both producers and traders, who were expecting up to 1.5 million tonnes.
Although both Bangladesh and Sri Lanka came onto the market each of them was seeking much smaller volumes.
In reaction to this a Middle East producer decided to sell a small parcel of 10,000 tonnes of urea at a discounted price of around USD 560/tonne, FOB, down from the around USD 600 it was previously seeking.
There appears to be little chance of a price increase as the strong dollar is also acting as a brake on prices.
Potash demand falls
Potassium chloride, or potash, (MOP) prices are also falling both on an FOB and CFR basis due to lacklustre demand and lower freight rates. Brazil’s granular MOP price dropped another USD 75 to USD 900-1,000/tonne CFR.
Standard grade MOP prices in Southeast Asia also fell another USD 25 this week to USD 900-950/tonne CFR. Unless demand picks up in Brazil prices may fall further in the weeks ahead.
Limited origin choice buoys phosphates
Processed phosphate prices ticked up due to 800,000 tonnes of DAP bought by Indian buyers and another 400,000 tonnes are under negotiation. DAP prices have rebounded to around USD 950-965/tonne CFR from around USD 925. Chinese exports are restricted by the government thus Morocco and Saudi Arabia are the two main remaining options.
Domestic DAP prices in China have dropped significantly, driven by a USD 110 fall in sulphur prices to USD 330-350/tonne CFR although there have been reports of prices below USD 300/tonne.
