Insight Focus
Urea prices are rising slowly but trade volumes remain low. Phosphate prices are expected to increase in India due to strong demand and tight supply to China. The potash market is slow with further downward pressure on granular mop prices in Brazil, while production issues in Saudi Arabia may affect ammonia prices.
Urea Market Muted
Following on from the August 29 India urea tender, the urea market has moved at a sluggish pace, although prices are coming up slowly. Egyptian prices increased from USD 340/tonne FOB to around USD 355-357/tonne with the latest sale reported at USD 360/tonne FOB. These are all small cargoes destined for the European market under the Egyptian duty-free designation.
There have been no spot sales reported in the Middle East where FOB netback values from the India tender range between USD 325/tonne and USD 323/tonne FOB. Spot prices have moved up to between USD 330/tonne and USD 335/tonne FOB.
Dangote of Nigeria is said to have sold a lot at USD 335/tonne FOB with some indicating as high as USD 338/tonne FOB. In Southeast Asia, producers appear to be sold out for September and well into October with prices reported in or around the USD 330/tonne FOB mark.
In NOLA/US, Hurricane Francine is creating uncertainties and both CF Industries and Mosaic have curbed production and loading operations.
China is still absent from the international market with theoretical FOB prices around the USD 280/tonne major ports for prilled urea. In China the winter storage program is under way and NPK producers also demand urea in their production. The international market has come to terms with China’s absence for the rest of 2024 and the first couple of months in 2025.
Brazilian imports are also rather dull with current prices offered at around the USD 360-365/tonne CFR range, but bids are USD 5-10/tonne lower. Iranian producers are struggling to sell but producer MIS is reported to have concluded 30,000 tonnes at USD 292/tonne, which is below the stated official price of USD 295/tonne FOB.
The outlook for the urea market is subdued, with large markets like Brazil, South Africa, the US and Europe required to start showing some major interest in order to carry the market.
Lull in Processed Phosphate
As has been the case for a few months now, the only excitement of note in the processed phosphate fertilizer market are India and Pakistan. With Chinese supply of DAP tight for the fourth quarter and Chinese producers wary of the Indian market, expectations are that the DAP price in India will increase.
The Chinese DAP FOB price is said to be around USD 620/tonne. The Chinese government is also dragging its feet on announcing export quotas for the fourth quarter.
OCP and Saudi Arabia DAP appear to be the only two meaningful suppliers to India. However, it has been reported that a Russian cargo of DAP was sold to India at USD 630/tonne CFR. Other markets active with DAP tenders are Ethiopia and Bangladesh.
MAP prices in Brazil are stable at around USD 635/tonne CFR for the tenth consecutive week with limited buyers due to affordability. Substantial amounts of substitute SSP/TSP volumes have replaced MAP as the preferred product viewed as with better value.
The outlook for the DAP price is bullish with India demand pulling the price higher. Other markets have been quiet.
Potash Prices Face Further Erosion
Global potash prices were little changed with further downward pressure on prices in Brazil. Pupuk Indonesia is rumoured but not confirmed to have scrapped its 125,000-tonne tender, citing high prices. Bids for granular MAP in Brazil are as low as USD 280/tonne CFR with prices said to be holding firm at around USD 295/tonne CFR.
The outlook for prices is forecast to remain stable-to-soft with further erosion of CFR Brazil prices expected.
Ammonia Quietens East and West
The ammonia market was quiet this week with major production curtailment at Ma’aden Saudi Arabia, which could remove as much as 140,000 tonnes from the market. In addition, the hurricane in the southern part of the US limited loadings of ammonia.
Except for the supply issues as mentioned, there are no major demand drivers as the need for spot cargoes from leading agricultural and industrial importers on both sides of Suez remains soft for now.
The outlook for ammonia prices is subject to supply/demand balances, but for now prices are again assessed stable to firm across all regions.
