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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

International Monthly Average Prices for selected Fertilizers

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

Market higlights


A tale of two tenders: It was a curious end of month, started and finished by two urea tenders from Indian government agencies. Coinciding with a major industry conference in Beijing, China, the 24 March IPL tender was the main topic of conversation and the source of a lot of pessimism there. Unusually, Arabian Gulf was the lowest in price and the successful offer of $212/t fob was $6-8/t lower than most traders had anticipated. But IPL was able to buy only 265,000t, mostly of AG origin; Iranian producers and Chinese suppliers refused to match the price level. IPL had planned to buy 700,000t or more. As a result of the relatively small awards, MMTC issued a new tender on 30 March to buy urea for shipment up to 19 May. The tender was to close on 6 April. The news was greeted with relief by many in the business, who saw it as a move that should halt the relentless fall in prices. Paper market prices for urea jumped about $10/t in an immediate reaction and traders who had begun to offer aggressively short against Chinese origin took a step back. Iranian and Chinese urea was offered at around $220/t fob to IPL and offers to MMTC were expected to be no lower. To secure 700,000t of urea, India would need to buy some Chinese urea and there was a reluctance, especially among suppliers of prilled urea, to sell even as low as $220/t fob China. Outside Asia, demand remained lackluster and the main event for the end of month was some sales from Egypt that finally set a level for March and early-April shipments. Sales were agreed totaling about 55,000t close to $220/t fob.


Egyptian producers finally found a level at which they could sell some of their unsold granular urea for March and early April shipment. OCI made sales on a cfr basis in Turkey (2 x 10,000t), Spain (7,000t) and Italy (10,000t), totaling 37,000t. Netbacks were reported in the range $220-225/t fob, but some Turkish business appeared to net below $220/t fob after allowing for 180 or 270 days’ credit. Ameropa bought 9,000t of granular urea from Helwan at $219/t fob for shipment to France in the first half of April. Mopco sold 10,000t to a trader at $220/t fob for shipment in the first half of April. The sales appeared to leave Egyptian producers with a carryover of close to 100,000t of granular urea from March into April, meaning that over 300,000t should be available for export in the coming month. Abu Qir was to hold a sales tenders on 3 April for 25,000t of granular urea for shipment from El Dekheila at a mutually agreed date and 20,000t of prilled urea for shipment from Abu Qir at a mutually agreed date.


Sorfert’s plant went down on 29 March and was expected to be offline for a week. It loaded 70,000t of granular urea in March. Trammo was scheduled to load 6,000t for Spain in early-April. AOA did not offer urea as it remained closed.


Indorama operated at 100pc of its 4,000t/day capacity on its granular urea plant. It had about 50,000t of domestic orders to fulfil through April. It offered granular urea to traders for April shipment at prices in the low-$220s/t fob. Nitron was loading 30,000t for West Africa, understood to be covering sales to Toguna. Helm was then to load 27,000t for Canada and Trammo had a cargo for second half April.


Ethiopian Agricultural Businesses Corporation (EABC) closed a tender on 20 March for 86,504t of granular urea. The lowest offers were submitted by Indagro and Samsung, who were in line for awards, which were expected to be confirmed on or after 3 April. Indagro was in line for a 50,000t award, expected to be shipped from Abu Dhabi, and Samsung 36,500t, expected to be shipped from Bahrain.


Sofitex was reported to be looking for an additional 7,000t of prilled urea, plus 20,000t of NPKs.


Keytrade was in the freight market for a vessels to load the following: 25-27,500t of granular urea in Sitra or Shuaiba 5-15 March for Beira/option Nacala, Mozambique 27-27,500t of prilled urea in Karachi prompt for Mombasa; a vessel was initially reported fixed at $19/t but was now being requoted.


ETG purchased 25,000t of prilled urea from Eurochem for end-March shipment from Yuzhny to West Africa. It also purchased 25,000t for April shipment from the Baltic. Doucoure came into the market early March for 25,000t of prilled urea for April shipment to West Africa. Yara was load 20,000t of prilled urea in the Baltic in late- March for Abidjan and Tema.


Phosphate prices rarely, if ever, rise when there is no liquidity, and the paucity of interest in India dragged the market down thanks to the lack of clarity on the subsidy and MRP for 2017-18. This was reflected west of Suez too, with bids/offers falling into the high-$370s/t cfr in Brazil for MAP. Buyers sense blood. Chinese producers stuck to the $370-375/t fob minimum target for DAP, with yet another 6+2 top public sector production meeting held on the eve of the conference. The logic goes: as producers were comfortable for April, why offer ever lower into the market when there was no demand anyway? Moreover, there was gathering evidence that the stricter environmental controls placed on phosphate producers in 4Q 2016 have real teeth. One private sector producer said it had had to cut its production from around 80pc of capacity to around 60pc as a result. Despite the fast start to exports in 2017 due to carryover port stocks in 4Q, rising international prices and the abolition of the export tax, there was an expectation that DAP exports would be materially lower in 2017. There was some logic to this holding position. Why chase the market down? The demand scenario for 2Q was the concern. Pakistan does have significant demand but would not move unless a) there was also clarity on its subsidy in the face of recently rising cfr values and b) India moves on the MRP/subsidy. On that front there was zero progress. With stocks high, no subsidy announcement and the NFL tender delayed, India is playing a waiting game still. The expectation was that India would buy piecemeal through 2Q. In other news, Peruvian phosphate rock producer Compania Minera Miski Mayo (which operates the Bayovar mine in northern Peru) declared force majeure on supply to Mosaic after continuous rain shut its operations. The US producer was evaluating the impact on DAP/MAP production in the US and it was uncertain how long the shutdown would last. This has prompted the US producer to buy two panama cargoes of phosphate rock from OCP to supplement the supply shortage from Miski Mayo. The price of these cargoes was not disclosed. One cargo was load in early April and the other in early May.


Senegalese phosphate producer ICS loaded 26,500t of DAP at Dakar on 25 March for shipment to Argentina. The cargo was sold to Nitron. The shipment would be ICS' first DAP cargo out of Africa since 2008. Its 250,000 t/yr MBAO phosphates plant principally produces NPKs for the West African regional market. DAP exports have been sporadic over the past few years and the last time it exported any DAP as seaborne trade was 2011, according to IFA statistics. But after overcoming technical issues in November, production was moving towards full capacity and this has increased export availability.


There were no new sales but production at the third of four 1mn t/yr DAP/MAP/NPK plants at the JPH started granulation with commercial production ready by 2H April. The fourth line should start in 2H 2017.
OCP Morocco February commitments            '000t
W. Africa                                   300DAP/NPK/NPS
Nigeria 50 DAP
Europe 130 DAP
Brazil 70 MAP
TOTAL                                       700
PRODUCTION                                  600
BALANCE                                      -


The potash market was largely steady in the last week of March, with the price for granular MOP in Europe remaining at €245-255/t cfr, and at $235-260/t cfr for standard MOP in southeast Asia. But in Brazil, the range for granular MOP shifted to $250-260/t cfr, from $250-255/t cfr, with Uralkali confirmed to be selling at the new high end of the assessment. Market participants who attended the Beijing Argus FMB conference had the opportunity to discuss Chinese MOP contract talks. Suppliers still hoped for an early settlement, but the Chinese consortium of buyers may not have shared that view. With higher port stocks than at the same time last year, local Chinese production at normal rates, and around 2mn t shipped in January-February, there was no urgency to settle from a supply point of view. That said, the steady-to-firming global spot price trend was playing a part, as it appeared likely to incentivise purchasers to agree something sooner rather than later, if they believed that prices would continue to firm. And as suppliers were keen to point out, China needed to get in line to secure MOP from the major suppliers such as Canpotex, Uralkali, BPC and APC — all of which were fully committed, or nearly fully committed, until June. The earlier that China signs, the earlier it could see MOP seaborne imports ramp up, but the contract remains unsigned for now. The market was also absorbing preliminary data from the International Fertilizer Association, which showed that potash deliveries last year were unexpectedly higher than in 2015, at 63.5mn t, compared with 63.3mn t. The figure was all the more surprising because suppliers to China were late in fulfilling 2016 contracts, with some of the deliveries pushed back to early this year.


Jordan’s APC said it sold around 1,000-2,000t of granular MOP to an east African buyer for around $290/t cfr.


NPK blend initiative begins production: Nigeria started producing locally-blended NPKs under the government's Presidential Fertilizer Initiative. The initiative aims to replace imported NPKs with cheaper, domestically-blended product, and to produce 1mn t of locally-blended NPKs for application during the 2017 farming season. More than 4,000t of blended NPKs were produced in the first week of production. A total of 200,000t was expected to be produced by the end of March. The NPKs were to be sold to Nigerian farmers at a starting price of 5,500 naira/bag — the equivalent of around $17/bag — compared with 8,000-9,000 naira/bag for imported NPKs. Following a supply deal with OCP, blenders are to source their DAP from Morocco. MOP will also be sourced from outside of Nigeria, while urea and limestone granules are to be supplied from domestic sources.

Source: Argus FMB

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