Insight Focus
- Most of the market expects urea prices to keep falling once India tender details are published.
- Processed phosphate prices east of Suez keep falling.
- Global ammonia demand has disappeared and prices are under enormous pressure.
The long awaited India urea tender was released this week closing on March 3rd with shipments from point of origin by June 1st. The market reacted with mixed emotions for various reasons, one being the long shipment period and the other that India is seeking only around 1 million MT. In 2022 India imported an impressive 10.1 million MT of urea up 24.5% from 2021 at 8.1 million MT. Major suppliers were Oman at 1.9 million MT and Russia with 850,000 MT, up from 95,000 MT the year before. However, the price of urea appears to have reached a temporary floor with market participants expecting prices to fall further once price guidance in India is published from the tender. The expectation is that Middle East and Russian origin will fight it out with both regions having ample supplies to be placed. Price expectation for the upcoming India tender will be substantially below last year’s November 14th close at USD 573 CFR West Coast and USD 578.77 CFR East Coast with some expecting the winning number to be sub USD 350 CFR.
China appears not to have much on offer since urea at the ports cleared for exports have found their way back to a strong domestic spring demand. On February 13th the Chinese government issued a guidance which emphasized that there should be sufficient fertilizers for farmers this spring. It is now expected that the Chinese government will only relax its export restrictions on fertilizers only when the spring season is over thus June 1st is a likely date.
The phosphate market saw yet another week with low demand and decreasing prices in most major markets. Fresh sales to India were reported at btween USD 636-645 CFR, down another USD 17 PMT. Buyers in India are now seeking lower numbers for the next buying spree. India imported 6.8 million MT of DAP in 2022 up a staggering 44.8% from the previous year at 4.7 million MT. MAP imports also grew to 450,000 MT up from 160,000 MT the year before, an increase of 182%.
Chinese DAP/MAP production in 2022 was down 7.5% from the year before at 25.3 million MT. Exports of DAP/MAP was at 5.5 million MT, down 45% from the 10 million exported in 2021. MAP prices in Brazil remained the same at between USD 655-660 CFR.
The potash market is weak with little demand anywhere. The market is still anxiously waiting for contract price settlement in India. As time goes by and prices of standard MOP in SE Asia decrease by the week, India prices are now expected to around the USD 450 CFR level down USD 140 PMT from the last settlement at USD 590 CFR. In 2022 India imported 2.7 million MT of standard MOP whilst the 2021 figure was 3.2 million MT, down 14.7%. Another “disturbing” is the ase with which sanctioned Belarus MOP finds its way into major markets like Brazil and Indonesia keeping a lid on prices. Brazil’s granular MOP price this week is assessed at USD 500.520 CFR, down another USD 5 PMT from last week.
The ammonia market keeps being under enormous pressure with no spot buying anywhere and price guidance from the Mosaic Yara Tampa March CFR price still not settled. Ammonia prices in the Middle East are said to be in the USD 570-580 FOB range. India imported 2.2 million MT of ammonia in 2022 versus 2.4 million in 2021.
