Insight Focus
- Small increase in North African FOB Urea levels from traders covering shorts into Europe.
- NOLA/USA urea prices fall to 6-month low.
- High EU gas prices sees ammonia imports at lower prices.
The International urea market is under severe pressure.
Although Egypt sales took place at around 100,000 MT at slightly higher prices the general perception is that these sales were made to cover shorts by traders in Europe. There is a growing supply overhang leading into 2023. Producers are hoping for another India tender but there are no signs from India that this will happen anytime soon. Current FOB pricing in the Middle East assessed at between USD 460-490 FOB. Baltic FOB granular price is reported at between USD 430-470 whilst the prilled urea price is around the USD 420-460 FOB range.
NOLA/US price reached a 6 month low this week with December barges trading between USD 450-475 short ton and January volume at between USD 450-468 short ton. This is 50% from the year high price of USD 920 FOB. Brazil is being flooded with discounted Venezuela, Russia and Iran granular urea with prices at USD 490-500 CFR. SE Asia producers are reported to be offering prices as low as USD 460 FOB. Unless India comes into the market we will see further price erosion on urea.
The processed phosphate market east of Suez has come to a halt with India finished buying for the Rabi season and no demand appears to come from Pakistan. The only market coming alive is the Brazilian MAP where prices reportedly increased around USD 7 PMT to reach a range of USD 620-630 CFR. Offers are now at around USD 640 CFR. Buyers in Brazil are taking advantage of limited supplies thus acting proactively.
Potash prices may be approaching a temporary floor with Brazil prices reporting a wide range between as low as USD 480 CFR and as high as USD 535 CFR. Demand outside of Brazil is limited. Northwest Europe is slow with prices as much as USD 317 higher than those of Brazil due to the lack of Belarus and Russian MOP. SE Asia MOP activity this week has been slow with prices unchanged from last week but with buyers anticipating further declines in prices in the near future.
High gas prices in Europe have seen some fresh imports of ammonia with prices ranging between USD 1,035 – 1,060 CFR duty paid. However, prices in Turkey are reported to be as low as USD 900 CFR which could imply lower prices in Europe.
Demand for fertilizers in general is depressed with substantial pressure on prices across all fertilizers. Major buying countries like Brazil, the USA, Europe and India will need to increase demand for prices to stabilize – until then we may see further price erosion.
