Insight Focus
- The Chinese government suspended CIQ inspections which affected urea prices.
- Potash prices remain stable bar Brazil where end of the season sees reduced prices.
- The ammonia market awaiting resolution on Australian liquefied natural gas (LNG) strike.
The Chinese government created some disruption to the expected order of things: it suspended CIQ inspections until 11 September, when the National Development & Reform Commission (NDRC) meet to decide future actions. This change affected international urea prices. Domestic price increases saw farmers getting concerned over affordability. The Chinese government implemented an export stop to put pressure on domestic prices, which subsequently fell.
As many as 20 vessels for the current IPL India tender could be affected with shipment deadline set by India for 26 September. Other traders sought cover elsewhere and products sold in Indonesia at USD 367 PMT FOB. A Malaysian urea cargo was also reported sold at between USD 405-410 PMT. Egyptian prices rose from mid USD 360s PMT FOB to as high as USD 445 PMT in one day, surprising as traders sought to cover shorts in Europe.
In addition, India floated another import tender closing on 15 September with shipment by 14 November and without Chinese participation it is expected that prices will continue to increase in the weeks ahead. Already Arab Gulf indications are reported at USD 440 PMT FOB, significantly higher than the USD 360 PMT FOB sold by SIUCI of Oman for October shipment.
ACRON of Russia launched another 700 KT annual capacity at its Novgorod site with commercial output now totalling 2.2 million MT of both prilled and granular urea.
Thailand imports of granular urea totalled 1.4 million MT up from 1,240.7 year on year. Malaysia exports of granular urea increased 20.1% year on year from 840.1 KT to 1,008.7 million MT.
Processed phosphate prices were stable this week bar another 110,000 MT sale by OCP of Morocco to India for November shipment at between USD 570-575 PMT CFR. DAP prices in India started out at around USD 700 PMT CFR at the beginning of 2023 only to fall to USD 439 PMT CFR in middle of July – now climbing back to USD 560 PMT CFR for the most recent sales until OCP increased prices to around USD 580 PMT CFR.
Chinese DAP offers for small lots for SE Asia dropped USD 10 PMT this week to around USD 565-570 PMT FOB.
Chinese DAP exports of small lots to SE Asia are reported to have dropped USD 10 PMT this week to around USD 565-575 PMT FOB.
Brazil MAP price remained unchanged for the 3rd consecutive week at between USD 530-535 PMT CFR.
The outlook for the processed phosphate industry is determined by the Chinese government’s restrictions for the 4th quarter. However, it is expected that there will be around 1 million MT of processed phosphates available for export from China in the 4th quarter.
In the potash market there was little activity this week but some signs that the seasonal demand for MOP in Brazil is waning. Producers trying to sell at higher prices of around USD 370 PMT CFR did not get traction and prices are assessed at between USD 350-360 PMT CFR.
Chinese domestic prices however are going from strength to strength with a 27% increase since their lows in the middle of July this year. Strong demand from NPK producers is pushing prices higher. In China only about 5% of MOP is being used for direct application, about 75% is used to make NPK and the remaining is for SOP production and some technical use.
SE Asia standard MOP unchanged at USD 300-330 PMT CFR with the most recent PUPUK Indonesia tender price of USD 306 PMT CFR regarded as the floor. Granular MOP prices are around the USD 360-380 PMT CFR range.
The ammonia market is experiencing spot availability shortages with producers fulfilling supply contracts. Current Middle East ammonia price is around USD 400 PMT FOB but is expected to increase in the near future. India NPK producers are struggling to find spot ammonia with the most recent sale up USD 100 PMT from a previous sale now at USD 575 PMT CFR.
NW Europe ammonia is pegged at low to middle of USD 400 PMT CFR with TTF gas outlook a major concern with the possibility of a strike at the Chevron LNG facility in Australia now postponed until September 8th.
The outlook for the ammonia market is firm.
