Opinions Focus
- Urea market stable despite large Indian tender.
- Lack of urea demand from Europe as ammonia production restarts thanks to lower gas costs.
- Brazilian Potash prices down 50% since April.
The international urea market failed to respond to India buying around 1.5 million MT of urea with prices in Egypt being cut by between USD 50-55 PMT to USD 650 FOB on the last sale. Lack of demand from European buyers on the back of plunging gas prices and resumption of ammonia production are the main reasons for the price cut. In addition, NOLA is awash with urea on the closure of the Upper Mississippi River for the winter season. Moreover, Brazil is being flooded with urea from sanctioned countries like Russia and Iran. India is expected to come back into the market with another urea tender in December but in the meantime demand needs to pick up in other places to stabilize or ignite prices.
Processed phosphates are also struggling and Brazil saw another drop in MAP prices now reported in the USD 600-640 CFR range.
Exports of processed phosphates from China dropped 51% in the January-September window reaching 6.1 million MT down from 12.4 million MT y/y.
DAP/MAP dropped 51% to 4.1 million MT down from 8.8 million MT of which DAP accounted for 2.62 million MT, a drop of 51%. MAP exports were 1.4 million MT, down 58%.
Potash prices in Brazil are down 50% since April 2022 with GMOP assessed at between USD 590-630 down from USD 600-650 from one week ago. However, some market sources indicate that GMOP could be available at USD 570 CFR.
Standard MOP prices in SE Asia are down USD 35 PMT this week to a range between USD 700-800 CFR. GMOP prices are assessed to be around USD 50 PMT down this week to USD 800-850 CFR. As can be seen there is a massive difference between Brazil prices and those in the SE Asia region and it is expected that prices will keep on falling, narrowing the gap with Brazilian prices.
The November ammonia price contract between Yara and Mosaic resulted in a conclusion of USD 1,150 CFR Tampa, down USD 25 from the previous contract in October. The market was surprised at the small reduction in price on the back of plunging European gas prices and resumption of ammonia production in Europe.
