Latest FOB International Fertilizer Prices – updated at November 2017

Fertilizer Price Trends


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INTERNATIONAL MONTHLY AVERAGE PRICES FOR SELECTED FERTILIZERS

 

NUTRIENT FERTILIZER DEC-16 JAN-17 FEB-17 MAR-17 APR-17 MAY-17 JUN-17 JUL-17 AUG-17 SEP-17 OCT-17 NOV-17 1 MONTH 1 YEAR
N Urea (granular Arab Gulf) 229 256 252 212 192 177 178 175 201 237 256 239

-7%

4%

N Urea (granular Indonesia/Malaysia) 231 260 271 237 215 208 209 193 209 249 282 274

-3%

19%

N Ammonium Sulphate (China) 97 111 116 112 107 102 102 104 105 108 112 116

3%

19%

N Ammonia (Yuzhny) 229 274 305 317 316 305 251 199 193 202 243 269

22%

29%

P DAP (Russia Baltic/Black Sea) 311 319 347 378 358 341 336 334 329 328 338 357

6%

15%

P MAP (Morocco) 329 320 338 387 387 381 365 352 340 342 356 373

5%

13%

P TSP (Tunisia) 278 278 280 283 283 283 283 283 283 301 283 293

4%

5%

K MOP (Israel) 223 223 224 228 232 238 242 244 250 251 251 252

0%

13%

K SOP (in € North-West Europe) 435 435 435 435 435 435 435 435 435 434 428 420

-2%

-3%

NPK NPK 16-16-16 (Baltic/Black Sea) 248 245 255 271 268 262 251 260 260 266 270 272

1%

10%



10 YEARS – 3 FERTILIZERS UREA/DAP/MOP

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Argus Media Ltd is the source of the data, on which IFDC bases the above calculations

Fertilizer Market Comments

FERTILIZER PRICE TREND FOR NOVEMBER 2017


NITROGEN

Prices for urea throughout November, dropping back to levels last seen in July. Brazil was the worst affected market, granular urea trading down to $225/t cfr before rebounding at the beginning of December. But producers in North Africa were also forced to sell at $220/t fob to place their December tonnage and a Middle East cargo sold at $225/t fob. Activity has increased, however, and it is evident the market has bottomed out. End-buyers have been active in Europe as well as Brazil and Mexico, while traders have grabbed tonnage from African producers in the low-$220s/t, both to cover sales and to go long. There were several factors that encouraged the belief that the urea market was bottoming out.Prices in the US Gulf were higher than those in Brazil for the first time this year. January barges of granular urea traded at the equivalent of $245/t cfr. This puts the US back in play as a spot market for urea, providing a welcome alternative to an overloaded Brazilian market.Traders have begun to buy and discuss Middle East urea for import into China and for re-export from China. One 50,000t AG cargo was purchased for shipment to southern China and Iranian urea has been sold for north China with a view to re-export. China is potentially short of urea for spring, given low production rates, and needs to import to cover the gap between demand and supply.An estimated 200,000t of granular urea were bought in the last week of November by traders from Egypt, Algeria and Nigeria at $220-225/t fob for December, removing the supply overhang for the month.Besides this, a new tender announcement from India is imminent, which could spark further life into the urea market for December and first half January. But what comes after the Indian tender? Potentially more US buying, some European demand for the corn crop and eventually Mexico and Australia move into season. It is difficult to forecast any sustained rally in price on this basis. The immediate outlook is for price stabilization and probably a bounce once India tenders, but with little prospect of urea prices moving back above $250/t fob Middle East or $260/t fob North Africa.

 
 
Egypt
Producers have sold an estimated 85-100,000t of granular urea, plus some prilled urea, over the past few days for December shipment. A 3,000t parcel of granular urea was sold at $225/t fob, but the vast majority of the business was done at $220/t fob. Mopco sold about 60,000t to traders and Abu Qir 25,000t. Keytrade, Trammo and Ameropa were the main buyers. Traders were shipping the urea to Turkey and Black Sea markets. Egyptian urea was now largely committed for December, with Alexfert having some product and reported to be receiving bids up to $230 fob at press time. Trammo was in the market for a vessel to load 13,500t of urea in Abu Qir 7-9 December for Constantza, Romania.

Algeria
AOA has sold three 25-30,000t cargoes of granular urea for December shipment, to Koch, Keytrade and Dreymoor. The cargoes were expected to go the US, Mexico and Turkey respectively. Sales to some destinations were based on formulae, but AOA was understood to have sold some of the urea at a fixed price of $220/t fob. Trammo was to load 10,000t of granular urea from Sorfert in early-December for Spain and Portugal, purchased in the fourth week of November at $250/t fob.

Nigeria
Indorama has sold 30,000t of granular urea to a trader at a price in the low-$220s/t fob for December loading, basis open destination.

Ethiopia
Ethiopian agency EABC has scrapped its 26 October tender for 550,000t of granular urea. After requesting suppliers to extend offers twice, EABC announced on 29 November that that it would not make awards under the tender.
The main reason was the big fall in urea prices since the tender took place. At the time, lowest offers were around $360/t cfr lo, including bags and local bagging, netting to about $290/t fob China or $300/t fob Middle East. Middle East fob prices have dropped $60-70/t since then. EABC has prepared a new tender to close on 27 December again for 550,000t, with delivery put back to January-May.

Ghana
Nitron has sold 9,000t of prilled urea for December shipment in combination with 15,000t of NPKs. The price was in the range $265-270/t cfr.

Mauritania
Sonimex issued a tender, which closed on 20 November, to buy 17,000t of urea and 7,000t of DAP for delivery to Nouakchott within 60 days of l/c confirmation.

 
 


PHOSPHATE

The phosphates market is undeniably firm and will remain so to year end. The reasons remain supply-based rather than demand-led and liquidity is limited during a seasonally quiet period. But, if buyers need product for shipment to year end, they have to pay a significant premium.
Mosaic’s decision to idle indefinitely its 1.7mn t/yr DAP/MAP plant at Plant City, which will see production cease in late December, takes around 140,000t/month of product out of the market as of 2018. This will mainly affect the north and south American markets. At the global scale, the closure is partially mitigated by the ramp up of the 3mn t/yr Wa’ad Al Shamal project in Saudi Arabia, in which Mosaic has a 25pc (roughly 750,000t/yr) share. But that product will remain in the eastern hemisphere, and will still need to be augmented by shipments from the US to traditional markets in India, Asia and Australia if Mosaic wants to retain market share (typical shipments east of Suez are around 1mn t/yr from the US). Either way, the west has a substantial deficit short term, and the closure takes out 20pc of US capacity at a stroke.
The short-term reaction has been a significant hike in domestic and export prices. Tampa has risen $30/t to $375/t fob with asking prices up to $385/t fob (achievable in Brazil now) while barges have risen by a similar amount to $350/st fob Nola for DAP with a substantial premium for MAP to around $370/st. This latter move runs the risk of pulling in MAP from Morocco and Russia as the US is technically on a par with Brazil in terms of netbacks for these producers west of Suez. Balanced against this is the fact that the US is at the tail end of its season. Nevertheless, the US will continue to be a strategic outlet, particularly for OCP in 1Q.
OCP will not start its fourth 1mn t/yr granulation plant at Jorf Lasfar until late 2Q or even early 3Q. It was earlier thought that this plant would start in late 4Q or January next year. Loading delays have been noted at the port, the result of logistical issues surrounding loading multiple-sized vessels with multiple grades of product. It is not clear whether this is related to increased output following the recent ramp up in capacity.
Supply tightness is most evident in China where the usual combination of healthy domestic prices, environmental restrictions and the dramatic rise in sulphur and ammonia costs have seen DAP prices rise on limited supply from the $370s/t fob to $390-400/t fob. MAP 10-50 availability is also a major issue and asking prices have risen into the $375-385/t fob range, almost on a par with DAP.
The lack of supply has been most evident in the Australian market, which has sourced from Saudi Arabia due to the paucity of Chinese material. Importers have also sourced from alternative supplies, most notably the US and even Jordan (for the first time in 20 years). So far Australia has sourced just over 300,000t DAP/MAP out of a 700,000t estimated requirement for 4Q and 1Q 2018. Saudi DAP/MAP was sold as high as $410/t fob, reflecting around $440/t cfr, roughly in line with US sales.
Indian DAP demand, the barometer by which the market is normally measured, has been extremely quiet in the face of rising prices. Just two cargoes were identified as spot deals, one at $380/t cfr and another in the mid/high-$380s/t cfr with latest offers up to $410/t cfr. All such deals represent a substantial loss for the importer given the current MRP and subsidy. Moreover, with an estimated import line up of 4.02mn t DAP for the April-December period, India is approximately 650,000t behind in terms of imports for this period compared to the same period of 2016. Much of this is down to improved local production as well as higher DAP prices internationally. Stocks at the end of October were around 1mn t DAP, 450,000t lower than in 2016 but not perilously low. Argus forecasts that DAP imports will remain at a minimum to year end, as the country runs down stocks as rabi ends. It will look to ramp up production in the first quarter to repair inventories.
This necessitates an agreement with phosphoric acid suppliers who will want an increase on 4Q due to the rise in sulphur prices which have risen from around $90/t cfr North Africa to $130/t cfr during the course of the current quarter. We believe that current production economics within India mean that producers can absorb some increase, but much depends on OCP’s strategy on price – we believe it will push for a $50-60/t P2O5 increase based on rising DAP and sulphur costs.
Pakistan’s rate of buying as slowed as it nears the end of the year, but imports at around 1.6mn t, with latest deals done in the $390s/t cfr and subsequently above $400/t cfr shows that this market has had to pay up for its requirements. Indeed, Argus’ analysis of the latest NFDC data still shows a substantial shortfall of 250,000t or so to the end of rabi. Several buyers remain in the market and deals are likely (if not already achieved) in the $420s/t cfr.
West of Suez has remained subdued. For several weeks, Brazil failed to respond to higher offers for MAP from all suppliers following the announcement over Plant City in the US. This reflected generally lacklustre demand and heavy imports already in the country (5mn t combined for various grades of MAP and MES). However, eventually one deal was confirmed in the mid/high-$390s/t cfr, up nearly $30/t, then another at $410/t cfr.

 
 
Tunisia

GCT is running at 50pc of capacity and has made limited sales. It placed 20,000t DAP into Italy in the mid-$380s/t fob before raising offers to $400-405/t fob in line with OCP’s offers.

Morocco
OCP increased its November shipments of NPS to Ethiopia to 200,000t and would also ship 150,000t of 15-15-15 to African markets. OCP also shipped a DAP/MAP panama to the US and signed a MoU with Sinochem for 5mn t of phosphates shipments to China. The first DAP vessel loaded in November under this deal. OCP sold forward into December with another 200,000t NPS for Ethiopia, 100,000t for Africa, 60,000t DAP for Europe and another 1-2 vessels for the US. DAP prices escalated during the month to the low-$410s/t fob on the sale of 15,000t to France and eastern Europe for December loading.
Meanwhile it was reported that OCP would delay the start-up of its fourth 1mn t/yr DAP/MAP/NPK line to late 2Q or early 3Q. The port of Jorf Lasfar is struggling logistically with the increased volume of production and the different types of grades being produced.

South Africa
Foskor halted production on one line at its Richards Bay facility, citing high sulphur costs and low phosphoric acid prices in the export market. The plant went down on 3 November for extended maintenance. A mid-December restart was plausible, the company said.

Mauritania
Sonimex tendered for 7,000t DAP on 20 November for shipment to Nouakchott. It was understood OCP took the award at $390/t fob.

 

POTASH

Demand for granular MOP in Thailand and Vietnam continued to be strong, and prices have firmed by $5/t compared with the fourth week of November because of continued tight supply. A major importer confirms accepting $290/t cfr for January arrivals of granular MOP. Many tender results in Malaysia were still pending, but $255/t cfr remains the standard MOP floor for now. Early indications suggested that some standard MOP tenders were being settled at around 1,150 ringgit/t for bagged, equivalent to the low $260s/t cfr, although more clarity will emerge in December. A weaker US dollar and softer rival vegetable oil prices sent crude palm oil (CPO) front-month futures tumbling below 2,500 ringgit/t on the Bursa Malaysia — the lowest level since August 2016. If sustained, the CPO price downtrend will impact plantation sentiment and could dent forward fertilizer demand. In Indonesia, fertilizer producer Petrokimia Gresik was exercising its options from the tender that it announced in June, when it requested 250,000t of MOP, plus 100,000t of options for delivery during the second half of 2017. Gresik was heard to have paid around $250/t cfr in June, and the latest prices were around Rp4,350/kg fot bagged — including 10pc VAT — reflecting the mid-$260s/t cfr at current exchange rates, after costs.
Granular MOP prices were steady in Brazil and Europe during the last week of November, as many buyers have secured their needs.

 



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