Insight Focus
- Processed phosphate prices declining globally bar map in Brazil.
- Granular potash prices increase second week in a row but global prices flat on ample supplies.
- Ammonia market dormant and looking for price guidance in Europe.
The global urea market has been dormant this week with a few exceptions – one being sales to Australia at USD 312 PMT FOB Middle East and an export sale in Vietnam at just above US 310PMT although some reports indicate the price closer to USD 320 PMT FOB. In addition, Egypt FOB prices with destinations to Europe were reported at USD 370 PMT FOB.
All eyes are now on Brazil and their import program for the 2nd half of the year and what the Chinese will do on exports. Brazil reported a price of USD 310 PMT CFR which is up from sub USD 300 PMT of last week. Chinese prilled urea is said to be at around USD 290-300 PMT FOB whilst granular urea price is pegged at around USD 310-320 PMT FOB.
There is no production of urea in Brunei due to apparent technical issues – exports from Malaysia are contract focused and Kaltim of Indonesia is concentrating on the domestic market. Although the market was thinking that the urea price could see a dip in the second half of July, the consensus is now that producers are comfortable and buyers are holding back. and that there is every chance that urea prices will hold and even move up a tad.
Thailand imports of urea in May was at 329,000 MT vs only 83,000 MT y/y. Urea imports to date are up 44% y/y to 931,000 MT, up 283,000 MT y/y.
A sale of 40,000 MT of DAP to India this week at USD 440 PMT CFR confirms softness in the market with prices of DAP heading south towards USD 400 PMT FOB in China. Buyers India took advantage of Bangladesh cancelling its annual contract for processed phosphates and coupled with increased operating rates in China more processed phosphates became available.
MAP prices in Brazil have come up to between USD 430-440 PMT CFR but the increase in prices are believed to be short lived with more product becoming available putting pressure on prices.
India imports of DAP in the period January – April are down 17.3% from 1.861 MMT in 2022 to 1.560 MMT in 2023.
The outlook for processed phosphates prices is bearish over the next few months with prices increasing only in 2024.
Granular potash prices in Brazil increased for the second week in a row and are now reported at between USD 330-340 PMT CFR on the back of greater affordability on increased soybean prices. However, the rest of the world is seeing flat price movement with the expectation that prices will decrease with the sanctioned BPC of Belarus expected to achieve pre-sanctioned export levels.
German producer K+S is rumored to have agreed a 800,000 MT contract sale with Chinese importers at the prevailing contract price of USD 307 PMT CFR. No confirmation has been forthcoming on this settlement.
The outlook for potash prices is still bearish with ample supplies available in the months to come.
The global ammonia market is also quiet with the market looking towards European buyers and what they will do on the back of the USD 285 CFR Yara Mosaic Tampa settlement for July shipments, However, at this point no real action has taken place with Algerian prices leading the way indicating a USD 330 CFR Europe as a possible benchmark. Middle East FOB is around the USD 230 PMT level and with the reintroduction of import duty of 5.5% CFR prices will probably exceed USD 330 PMT CFR.
The Far East has remained quiet this week.
The outlook for the ammonia market remains soft.
