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Insight Focus
- Nola urea prices also fell this week.
- Potash prices in Brazil the lowest in two years.
- Ammonia prices stabilize with Middle East at around USD 250 FOB.
Across the board the international fertilizer market is showing depressed conditions with downward pressure on all fertilizer prices.
The physical urea market price is heading sub USD 300 FOB Arab Gulf with the paper market for the next few months hovering just above USD 300 PMT. A sale this week was reported at USD 310 PMT FOB but nobody owned up to this rumour. Suppliers are for the most part fully open for June and July shipment with nothing, zip zilch zero, on the order books. A perfect storm is in the brewing with massive amounts of urea being made available chasing few buyers. The US season is coming to an end and the summer in the northern hemisphere is approaching with little or no demand for fertilizers.
China’s re-entry into the export market is also spooking the market with export restrictions being lifted and now CIQ processing is expected to take less than 10 days. This week a sale of prilled urea took place to Sri Lanka with an estimated FOB price of USD 325 PMT. Brazil import prices are also falling with the latest price range between USD 314-320 PMT CFR with prices from Iran and Venezuela reported to be USD 10 PMT less.
US imports of urea for the March 22- April 23 period was at 2.93 million MT down from 4 million the previous period. Exports for the same period was 1.12 million MT up from 459,368 MT.
The same applies to the processed phosphate market where prices in the US fell USD 100 Short ton this week marking the end of the spring application season. India is reported to have bought a DAP cargo from China at USD 511 PMT CFR resulting in a FOB price China of well below USD 500 PMT. Export restrictions in China are now giving qualified exporters a lead time of less than 10 days to process documents – down from as high as 60 days previously. The expectation is now that China will enter the international market in full force resulting in much lower prices.
Exports of DAP from China in April was 330,000 MT up 60% year on year. January to April exports reached 970,000 MT, up 3% year on year.
MAP exports from China in April were 140,000 PMT with January to April exports pegged at 670,000 MT up 65 % year on year.
The potash market prices are also sliding with demand in Brazil weak and prices are now sub USD 400 PMT CFR reported at a range of between USD 370-400 PMT CFR. This development is breaking a two year low and prices have dropped 35% or USD 130 PMT since the start of 2023. Sanctioned Belarus availability is being blamed for this price erosion and conventional suppliers are resisting selling sub USD 400 PMT CFR.
Imports of potash in India dropped 55% between January and April to 362,000 MT with April imports at 118,000 MT down 32% from 174,000 MT year on year.
SE Asian standard potash price is reported to be sub USD 400 PMT CFR with a tender in Indonesia resulting in USD 390 PMT CFR said to be sanctioned Belarus product.
The potash market is still waiting for contract negotiations in China but it appears August could be the next target.
Global ammonia market prices have stabilized with Middle East FOB prices around the USD 250 PMT mark giving CFR Europe prices of between USD 360-370 PMT CFR.
European producers are now contemplating restarting their production of ammonia with the TTF gas price getting closer to USD 10 MMBTU giving a production cost of around USD 405 PMT.
Far East ammonia prices are around the USD 300 PMT CFR mark with Chinese buyers not successful in seeking sub USD 300 PMT.
In summary, the fertilizer market in general is heading into a perfect storm for potential buyers with too much product chasing few buyers.
The annual International Fertilizer Association meeting will take place in Prague next week and it could become a somber occasion, this after a three year absence due to COVID.
