Insight Focus
- Processed phosphate prices edged up on the back of tightening supplies from China and increased demand in key markets.
- Global potash prices increased west of Suez but remain flat east of Suez with Indonesia scrapping a 300 KT tender.
- A positive sentiment is creeping into the global ammonia market with OCP of Morocco expected to re-enter the market.
The international urea market saw flashles of some bearishness this week although Fertiglobe of the UAE reported a sale of 30 KT granular urea at USD 411.50 PMT FOB for shipment in September likely to Australia. This price is about USD 7 PMT higher than the previous level achieved. Some say that the timing of the sale was auspicious ahead of the India tender closing on August 9th for shipment by September 26th. India is reported to be looking for up to 1.5 million MT of which a substantial quantity is anticipated to come from China. However, CIQ export clearance days have increased in China and subject to province the time could be as much as up to 30 days in certain provinces. Current prilled urea price in China is hovering around the range of between USD 390-410 PMT FOB. It is expected that the L1 price in India could be around the USD 410 PMT CFR mark. Current production rates in China have increased this week to reach 178,000 MT per day, up 2,000 MT per day more than last week.
Brazilian buyers took a step back this week with levels around the USD 445 PMT CFR with producers and traders expected levels above USD 450 PMT CFR.
The market is looking to the India tender to see the intermediate direction of the urea price thus activity this week was slow.
Processed phosphate prices saw an increase on the back of tighter supplies coming from China and more demand coming from markets like Brazil. The India DAP price was up an average of USD 7 PMT reaching USD 450 PMT CFR. However, OCP of Morocco has reported a 100,000 MT sale of DAP in the range of USD 490-525 PMT CFR for September shipment. This on the back of limited Chinese supplies and represents a price increase of between USD 40-75 PMT versus last deals done.
Brazil MAP price jumped an average of USD 20-25 PMT CFR this week to reach a range of USD 485-500 PMT CFR.
The potash market saw some increases also and Brazil is now at USD 355 PMT CFR. The planned Indonesian standard MOP tender of 300 KT is reportedly scrapped due to management changes at Pupuk Holding. Also, it is rumored that Indonesia would seek prices sub USD 300 PMT CFR.
India on the other hand is said to have renegotiated its Uralkali potash price from USD 422 PMT CFR to USD 319 PMT CFR but neither Uralkali or the Indian buyer IPL has confirmed this arrangement which came as a result of the USD 307 PMT CFR settlement in China.
The labor strike at the port of Vancouver is up for a vote on August 4th which has seen no potash leaving the port for some weeks.
The ammonia market has been quiet this week.
Trinidad ammonia production has seen a curtailment due to 45% reduction in gas supplies. Less availability from various production units globally plus OCP of Morocco reported re-entering the market has provided a positive sentiment in the market. European TTF month ahead gas pricing saw prices start at sub USD 8 mmBtu this week only to climb above USD 10 mmBtu which made ammonia production go from an estimated USD 345 PMT to USD 420 PMT. This volatility creates uncertainty among European ammonia producers deciding to either import or produce themselves.
Prices in the Far East saw an increase with the Chinese CFR price of around the USD 380 PMT mark.
