Opinions Focus
- Processed phosphate prices are falling across the board.
- Ammonia prices remain flat.
- The first in-person conference in 3 years saw little business done.
This week has been the International Fertilizer Association Crossroad conference in Singapore with around 400 industry people coming in from all over the world. The sentiment feels like a family reunion since this is the first time in 3 years that the fertilizer community has had the chance to meet. Very little if any business is being done.
The urea market is anticipating an India tender to be announced today or Monday for 1-1.5 million MT for end November full December shipment. If this happens it is very possible that we will see a small lift in the urea price.
Already, Egyptian prices rose around USD 30 PMT this week after having been offered at a ‘discount’ of USD 700 to encourage demand. All the products sold from Egypt will go to Europe.
OCP of Morocco this week agreed to phosacid prices in Europe reflecting a decrease of an average of USD 552.50 PMT. IFFCO of India has reached an agreement with Senegal for the supply of phosacid at USD 1,200 PMT which is down USD 515 from the previous contract price of USD 1,715 PMt.
India this week bought DAP at prices down USD 215 CFR from Q2/Q3 prices. Brazil MAP prices are down USD 635 PMT from the highs in April this year. Potash prices in Brazil also keep coming down due to lack of demand having bought substantial quantities in the first half of the year. Prices fell another USD 30 PMT this week and are now between USD 600-630 PMT CFR.
MOP prices in Brazil have fallen an average of USD 535 PMT or 45% since April 2022. Brazil prices are now an average of USD 170 PMT lower than SE Asia standard MOP prices and as much as USD 230 PMT versus granular MOP. Outlook is bearish for MOP and CRU predicts MOP contract price in both India and Brazil to fall from the current USD 590 CFR to as low as USD 475 CFR with contract discussions only to commence Q2 2023.
Ammonia prices in Europe are now reported at USD 1,250 CFR, well below production cost and 23% lower than the record prices paid in March at USD 1,632 CFR. The delivered benchmark price rose more than 70% in the last 12 months, more than USD 500 PMT. Asian producers are looking to take advantage of the arbitrage in European prices with suppliers in China and Indonesia trying to secure vessels for transport.
In general, fertilizer prices are under pressure and it is very likely that both processed phosphates and potash prices will remain under pressure for some time to come with ammonia and urea prices possibly to remain flat with some chance of slight increases.
