Insight Focus
- Ammonia prices in europe saw a slight increase despite ttf gas around between 8-9 mmbtu
- Processed phosphate prices east of suez continue to decline with the latest dap sale in india at usd 437 pmt cfr
- Potash prices in brazil increased for the third week running but ample supplies could stem continued increased prices
Urea prices keep going up across all regions on late season demand in Australia which has seen farmers in eastern Australia truck products from western Australia to secure product for their crops due to a downfall in imports estimated at around 150,000 MT. In addition Brazil appears to have come alive for its main import season. In addition, all eyes are on China to see what they plan to do once the domestic season starts to wane. Producers and traders in China have expressed a desire to take part in the next India tender which may be announced early August – or as some indicate – late July.
Middle East prices have reached USD 350 PMT FOB which is up from USD 263 PMT FOB just a few weeks ago. Egyptian producers have sold products as high as USD 380 PMT FOB. The supply situation in SE Asia has improved somewhat with the re-introduction of production in Brunei and there are reports sales have been made closer to USD 340 PMT FOB for August shipment most likely to Australia. However, Petronas has announced that their Binutul plant will go down for 45 days for additional maintenance – this factory has an annual capacity of around 660,000 MT. Petronas has been busy trying to meet contract volumes both domestically and internationally. The urea market appears to be on a good footing for producers for the next 30-40 days and market observers are looking towards China to see if they will come actively into the market at the end of July onwards in which case there could be some pressure on prices once again.
Phosphate prices are still declining bar MAP in Brazil which jumped USD 25 PMT this week now reported at between USD 440-450 PMT CFR. However, the market believes this increase will be short lived. Ample supplies and limited demand saw another decline in the India CFR price to USD 437 PMT CFR down from last week’s sale of around USD 445 PMT CFR. Pakistan is not buying and Bangladesh cancelled its private processed phosphate tender which the producers were hoping for, giving some hope for stemming price reductions
Although there has been a slight increase in potash prices in Brazil for the third week running with assessed prices now at between USD 335-340 PMT CFR, the timing to bring more potash into Brazil is getting tight with application in September and the product needs to be at the farm gate by then. SE Asia potash prices are unchanged from last week and buyers are holding back awaiting results from the upcoming Indonesia tender which should give some direction on the market. India is expected to buy potash from sanctioned Belarus at very competitive rates now that Belarus has set targets to export at pre-sanctioned times.
Ammonia market price in Europe has seen an uptick despite one month forward TTF gas pricing in the USD 8-9 MMBTU range making ammonia production cost for European producers fall to around USD 385 PMT. European producers may be tempted to re-start their production of ammonia reducing import demand. In the Far East production curtailment at Yara’s Pilbara unit and KPI in Indonesia may end in August bringing more supply to the market. Chinese buyers are still looking for USD 300 PMT CFR. The outlook for the ammonia market is still bearish with prices being under pressure.
