Insight Focus
- India urea tender on March 3rd saw prices just above USD 200 PMT less than the November 2022 tender.
- Tampa March ammonia price settlement down USD 200 PMT.
- Processed phosphate prices keep tumbling due to lack of demand.
All eyes WERE on India’s 1 MILLION MTE urea purchase tender closing Friday March 3rd with shipments up to June 1st. A TOTAL OF CLOSE TO 3 MILLION METRIC TONS WERE OFFERED WITH THE LOWEST PRICE DELIVERED TO EAST COAST INDIA OF USD 334.80 CFR AND THE WEST COAST INDIA PRICE LOWEST WAS USD 330 CFR. THESE PRICES ARE JUST ABOVE USD 200 PMT LOWER THAN THE INDIA UREA TENDER HELD IN NOVEMBER 2022.
The future outlook for the urea industry NOW hinges on the India tender, particularly since the shipment period has been extended to June 1st and this would provide an opportunity for producers to clear stocks and maintain production. IT COULD VERY WELL BE THAT INDIA DECIDES TO BUY MORE THAN THE 1 MILLION MT NOW THAT PRICES ARE SUGGESTED TO BE ATTRACTIVE TO THE BUYER. However, other markets like the US, Brazil and Europe need to come into the market with purchases for the urea price to not come under further pressure. Current Brazil CFR price is reported at around USD 345-350 CFR which could be a guide for the India L1 price. US FOB barge prices are around the USD 340 short ton level.
Malaysia exported 2.205 million MT last year, about the same volume from last year. Egypt exports through October were much lower than the same period last year with volumes of 1.026 million MT down from 3.390 million MT in the same period last year.
Phosphate prices are under continued pressure with a reported DAP sale to iNDIA from China at USD 625 CFR. DAP prices in India are down around USD 75 PMT since the start of 2023. With decreasing cost of production through lesser ammonia prices, low demand and high inventories DAp prices may come down further in the next couple of months. Brazil’s MAP price also saw a reduction this week by about USD 5 PMT from previous now with a range assessed at USD 650-655 CFR.
OCP of Morocco, being the largest exporter of processed phosphates in the world, saw DAP exports in 2022 increase by 21.1% from the previous year logging in at 4.110 million MT versus 3.393 million MT the year before. MAP exports were down 38.3% to 2.202 million MT down from 3.566 the year before. NPK exports dropped 45% to 647,517 MT with Brazil and India receiving zero tons, respectively down from 213,147 MT and 172,928 MT the year before.
The outlook for processed phosphate prices over the next couple of months is bearish.
The Tampa ammonia March price settlement between MOSAIC and Yara saw a price reduction of USD 200 PMT from the February settlement. Ammonia prices are under continued pressure with little if any demand anywhere and with producers in the Middle East, Trinidad and Indonesia needing to export. Further price corrections on ammonia appear to be inevitable, unless production curtailments limit exports. BASF has announced closure of its Ludwigshafen plant.
Contract settlement on potash in India is still yet to be concluded and the market is looking for guidance. Prices on potash are decreasing week on end which surely is being noticed by the India buyers. This week’s standard MOP price in SE Asia dropped another USD 20 now reported at a range between USD 450-500 CFR. Chinese buyers are not appearing to have any interest in a contract settlement with monthly supplies from both Russia and Belarus said to be in excess of 400,000 MT.
Malaysia last year imported 1.668 million MT of MOP versus 1.863 the year before, down 10.4%.
Sulphur, being a crucial raw material for the processed phosphate industry, has shown unprecedented price volatility over the past few months. The current FOB spot Middle East price is assessed between USD 130-140 PMT which is 72% lower than the FOB mid June 2022 price of USD 470-485 PMT. The benchmark price is down 26% since early December 2022 but up 93% from early August 2002 at USD 70 PMT.
Morocco imported 6.265 million MT of sulphur in 2022 down 6.7% from the previous year’s 6.718 million MT.
