Insight Focus
- Ammonia settlement for may delivery to tampa down another usd 55 pmt to reach usd 380 pmt cfr.
- Nola/us urea prices reach the highest in 2023 at usd 450 st fob.
- Processed phosphate prices keep falling with india buying phosphoric acid from nutrien at usd 970 pmt cfr down usd 80 pmt.
The international urea market this week was driven by a flurry of late NOLA/US buying and cutbacks in production at Sipitang, Malaysia and at BFI, Brunei. Petronas of Malaysia bought a 30 KT Urea cargo at a reported USD 345-350 PMT FOB ex Bontang to fulfill contract shipment with most likely destination Australia.
NOLA/US CFR prices for granular urea have now surged to USD 450 ST FOB barge, the highest in 2023. This gives a netback to the Middle East as high as close to USD 450 PMT FOB. This compared to a reported sale by Fertiglobe at USD 331.50 FOB Middle East, most likely for the Australian market.
Question remains if this inflated NOLA/US urea pricing will hold through to the end of May early June when the US market comes to a halt. There is the possibility that India may return to the market with a spot tender some time late May/early June and that Brazilian demand could contribute to stable or increased pricing. On the other hand, all signs are that China again will feature in a possible India tender with May 1st reported as the release date for exports with CIQ export clearance processing time of between 7-10 days versus the current 60 days. The emergence of China in the international market will surely put a damper on any price increases for the short term.
On the processed phosphate side it has emerged that India’s CIL has agreed with Nutrien on a phosphoric acid contract at USD 970 CFR for 100% P2O5. This is a drop of USD 80 PMT from the previous price. This of course is great news for producers of processed phosphates in India combined with much lower ammonia prices will give robust production margins of around USD 100 PMT. Imported DAP to India saw another fall of USD 5 PMT this week reaching around USD 550 CFR. Chinese DAP producers failed to show discipline on their agreed USD 550 PMT FOB minimum price with exports now taking place in the USD 528-538 PMT FOB range, down another USD 12 PMT week on week. NOLA/US DAP fell USD 7 ST after gaining USD 100 ST in the first three weeks of April. MAP prices in Brazil fell another USD 10 PMT this week reaching a range of USD 570-580 with reports suggesting that Chines 11-44 MAP is on offer at USD 560 PMT CFR.
Morocco’s DAP exports in the first two months were down 63% year on year to 215,673 MT. MAP export on the other hand surged 182% to 502,427 MT of which Brazil received 256,767 MT. Chinese Q1/2023 DAP increased 24% to reach 1.2 million MT. China’s 2023 DAP export quota is set between 4-4.5 million MT up from 3.6 million MT in 2022 but down from the 2021 volume of 6.3 million MT.
The international potash market took no notice of the India contract price of USD 422 CFR with Brazil’s granular import price reaching an average of USD 415 PMT CFR, down USD 100 PMT since the start of 2023, and the SE Asia standard MOP price reaching USD 420 PMT CFR. On top of this, some reports indicate that China is looking for USD 300 PMT CFR for the new contract price for 2023.
China’s Q1/2023 imports of MOP is up 22% to 2.6 million MT, up from 2.1 million MT year on year. Of this sanctioned Belarus supplied close to 800,000 MT, Russia supplied 650,000 MT and Laos 380,000 MT, the latter up from 145,000 year on year.
The new Tampa ammonia price between MOSAIC and YARA saw another USD 55 PMT shaved from the previous price and the May 2023 price is at USD 380 PMT CFR. Very little trade of ammonia took place this week.
Q1/2022 export of ammonia from China surged to 126,398 MT up from a paltry 393 MT year on year. Chinese imports Q1/2023 is up 31% to 105,312 versus 91.000 Q1/2022.
In summary, overall sentiment in the fertilizer industry is still bearish with the hope that major markets like India and Brazil will come to its rescue on prices.
