Insight Focus
- US DAP prices also collapse with fall of USD 153/st
- Global potash market inactive with pressure on prices.
- Ammonia market in hibernation with pressure on prices.
NOLA/US urea prices collapsed in stunning fashion this week. At one point there was a difference of USD 100 PMT between May and June prices. NOLA/US high of USD 450 ST FOB barge came down to May prompt trades at USD 385 ST FOB barge.This is now drawing suppliers to other markets – that said, there is still no spot demand to speak of anywhere else with demand in Brazil being seasonally muted and with imports from Iran and Venezuela at USD 330-340 PMT CFR.
Pupuk Holding, Indonesia, held a sales tender May 4th for 30,000 MT and for mysterious reasons, the highest official bidder at the auction did not get the cargo. Some back door fiddling resulted in another buyer getting the cargo. Although price has not been published it is expected that the price will be in the mid/high USD 330s PMT FOB. This is a sharp drop from the previous sale by Pupuk Holding to Petronas at a reported USD 345-350 PMT.
It is agreement in the trade that June urea prices will come down from current levels with the Middle East selling – or offering – prices of around the USD 320-330 PMT FOB.
An Indian tender appears to be a good month away thus giving no support for higher prices. Then there is the Chinese export situation which will result in more urea becoming available now that export restrictions are said to have been eased with CIQ clearance of exports down to around one week, from as much as 60 days previously.
The short term outlook for the urea industry is bearish with too much product chasing few buyers.
NOLA/US grabbed the headlines also on processed phosphates with DAP prices collapsing and fell USD 153 ST with buyers now at USD 520 ST FOB versus previous prompt sales at USD 646-700 ST FOB. US export prices followed suit albeit a more modest decline of around USD 40 PMT to USD 550 PMT FOB Tampa.
The January-April Brazil lineup of DAP/MAP is more than 100% up year on year at 2.1 million MT but with low domestic demand which saw MAP prices fall another USD 13 PMT to a range assessed at USD 555-570 PMT CFR with some indicating USD 550 PMT CFR possible.
India DAP prices fell another USD 7/ USD to as low as USD 529-535 PMT CFR with USD 525 PMT CFR deemed possible. Chinese export price of DAP is now around USD 515-525 PMT FOB – down from the producers agreeing not to sell below USD 550 PMT FOB!
The outlook for the DAP/MAP market is bearish with low demand, much power production costs and high inventories in key markets.
The Indian contract agreement of USD 422 PMT CFR has proved to be a lightning rod for much lower prices in most potash markets in the world. SE Asian buyers are hoping for lower prices, still encouraged by lower granular potash prices in Brazil which saw prices drop below USD 400 PMT CFR, the lowest since May 2021.
Focus is now on China’s contract price for potash which now is pegged at USD 350 PMT CFR with some thinking that China will aim lower closer to USD 300 PMT CFR.
The outlook for the potash market is bearish with ample supplies and low demand.
The global ammonia market has gone into hibernation. Very little if any activity has been noticed this week with Middle East ammonia assessed in the range of USD 240-275 PMT FOB. European prices are said to be in the range of USD 410-425 PMT CFR with Baltic supplies putting even more pressure on prices.
Chinese buyers are showing some interest in USD 300 PMT CFR but no business has been reported.
