Insight Focus
- Urea producers are lowering prices to encourage buyers with little success.
- Potash prices will fall further with India and China not expected to buy until April 2023.
- 2022 is ending with low demand for fertilizers and pressure on prices across the board.
International urea prices are now well rooted sub USD 500 FOB at most origination points with Middle East producers said to offer as low as USD 480 FOB without much buyer traction. The most recent India tender failed to inspire the market and producers are now awaiting the possible announcement of another India tender with shipments in January. European markets are said to be well stocked for the spring season thus not much assistance in improved urea prices. There are some signs that LATAM markets could become more active in the following weeks but ample supplies are again hampering much price improvements for the immediate term.
Processed phosphate prices in Brazil saw the MAP price improve this week to a range between USD 610-627 CFR, up from a stable USD 600-610 CFR. DAP prices on the other hand in India saw a decline of around USD 8 PMT settling at between USD 720-730 CFR. However, buying in both India and Pakistan will now come to an end with India having bought close to 8 million MT of DAP this year, up close to 50% year on year. Adding to this is that Chinese exports of processed phosphates officially are prohibited for Q1 2023 which could see limited supplies for Australia in 2023.
This combined with Morocco granulated phosphates down 9.6% year on year at 8 million MT.
Potash price sentiment is bearish with both India and China not expected to enter into supply contract negotiations until April 2023 and that the new agreed price most likely will drop from the current price of USD 590 CFR to closer to USD 400 CFR.Granular MOP in Brazil dropped another USD 10 PMT this week with a range assessed at between USD 500-530 CFR. The potash price in Brazil has dropped an average of USD 665 PMT since the peak in April 2022. SE Asian prices are also down with ample supplies from Laos, Belarus and Russia finding their ways competing with Canadian potash but with limited interest from buyers.
Ammonia import prices in Europe are around the USD 1,050 CFR duty paid mark but substantially below the European ammonia production cost. Gas prices in Europe have again increased and are well above import prices. However, urea prices and nitrate prices are not supporting current ammonia prices.
In summary, the year 2022 will end with lacklustre demand for fertilizers with substantial pressure on prices across the board.
