Insight Focus
- Urea prices are increasing on the back of lesser availability in Asia.
- Low phosphoric acid contract rumored in India down USD 120 PMT from previous contract.
- Global potash prices under pressure from low Chinese contract settlements.
International urea prices have been going up this week – not from much increased demand but rather production issues in Malaysia and Brunei plus Indonesian producers focusing on domestic supply which has seen Middle East products heading east towards prompt demand in Australia and possibly Myanmar. Egyptian producers have seen prices rise to USD 350 PMT FOB up from USD 280 PMT in early June. Middle East Urea price has increased from a low of USD 264 FOB sold to India last week to as high as USD 312 PMT FOB this week. Granular urea prices in China have also increased with the latest sale to Australia netting back between USD 310-320 PMT FOB.
Brazilian buyers have also stepped up although with small volumes but price increase to USD 310-315 PNT FOB up from USD 290 PMT FOB last week.
It remains to be seen if these price increases are sustainable with more production coming on stream in SE Asia over the next couple of weeks plus China expected to enter the international market with volumes in the next few months.Chinese exports for the January to May period increased 46% up from 538 KT to 785 KT. The Philippine imports increased a whopping 256.6% from 61.3 KT to 224 KT Y/Y. Turkish imports also increased 104.5% from 825 KT to 1.7 million MT. India imports reduced in the January to April period by 53.2% down from 3.6 million MT to 1.7 million MT. However, there are rumors in the market that India may enter with a tender in the next two to three weeks and that would certainly bring a boost to producers’ expectations that prices will hold or even increase in the next few months – this coupled with increased demand in Latin South America, notably Brazil in the next few months.
All eyes this week were on the reported contract agreed between India’s CIL and Nutrien on a 100% phosphoric acid price of USD 850 PMT CFR which is down USD 120 PMT from the Q2/2023 price of USD 970 PMT CFR. No official confirmation from either party has been forthcoming on this deal – but if true, the phosphoric acid price in India has come down from USD 1,715 PMT CFR from Q2/Q3 2022 settlements.
DAP price in India came down another notch this week at USD 455 PMT CFR.
Brazil’s MAP price is reported to have come up a bit from last week with a sale at USD 440 CFR.
However, in general the outlook for processed phosphates hinges on the production and output for export from both China and Morocco.
Global potash prices are adjusting downward on the back of low settlement prices in China of USD 307 PMT CFR upsetting the Indian agreed price of USD 424 PMT CFR and the market is now awaiting a renegotiated price in India.
However, there was a slight increase in potash prices in Brazil this week of around USD 5 PMT although observers note that this increase was more the exception than a sign of improved prices. SE Asia standard potash prices tanked this week now assessed between USD 305-330 PMT CFR down from USD 350-370 PMT CFR – again as a result of the low settlement price in China.
The outlook for potash prices is bearish with ample supplies coming from sanctioned Belarus as well as Russian producers on top of low demand globally.
The Tampa ammonia July price came off a robust USD 55 PMT CFR this week when Yara and Mosaic agreed to USD 285 PMT CFR. This surprised the market which had expected a lower reduction.
Demand for ammonia globally is low from Europe to the Far East. The Middle East ammonia price is being pushed towards USD 250 PMT FOB but buyers are holding back.
TTF month ahead gas prices in Europe are now back to around the USD 10-11 MMBTU level.
Far East ammonia prices are around the USD 300-310 PMT FOB but few buyers in between. KPI of Indonesia is still down as well as Yara’s Pilbara production unit.
The outlook for ammonia is bearish.
