The most orderly Indian urea tender for some time took place on 25 April and surprised many with the relatively high level of offers. Traders pitched the lowest offers at the equivalent of $217/t fob China and $218-219/t fob Middle East.
This was slightly below the level at which Chinese producers were prepared to sell and they resisted any bids lower than $218/t fob. As a result, only 90-120,000t of Chinese urea have been sold so far.
Urea prices are expected to remain firm through first half May, but the outlook for June is more bearish. The paper market is showing a $10-15/t decline for all origins between May and June, and when selling for June starts during May, buyers will seek lower prices.
The principal exception in the short-term is North Africa. Algerian and Egyptian urea prices are sliding due to declining demand from Europe, which obliges producers to compete for sales in more distant markets. When the AOA plants are finally handed over by the contractor in May, Algerian production is likely to rise to about 300,000t/month. Algerian urea prices have fallen to $215-216/t fob this week: the first cargo has been sold in Mexico and another for the US.
In Egypt, Mopco again managed to find a buyer needing urea for prompt loading and secured a favourable price – rumoured to be $223/t fob - for 25,000t, but other Egyptian sales took place below $220/t fob.
Sorfert is reported to be committed through to mid-May. AOA is inviting bids for 30,000t of granular urea it has for first half May loading. Prices for Europe are moving closer to Egyptian fob levels, with some cargoes agreed at a premium of $3/t over Egypt fob.
Keytrade is in the market for 8,000t + 10pc of urea to load 28-30 April in Arzew for northern Spain.
High temperatures in the country led to gas again being diverted from fertilizer plants to power generation. The two ENPC plants at Damietta and the two EFC plants at Ain Sukhna were shut down on 25 April, leaving one urea unit operating at Mopco. Alexfert and Helwan's factories are reported to be operating at 65pc of capacity.
Chinese producers, apparently comfortable with pull from the domestic season, held DAP fob prices at $335-340/t fob. Similar to the situation in the urea market, this was barely workable in India and Pakistan and liquidity temporarily dried up with traders caught in the middle. Pakistan withdrew its interest for now, while in India, the rate of buying slowed significantly after an initial glut of sales thanks to healthy import economics. The May line up into India is very healthy as a result at close to 500,000t with another 250,000t in the June line up. Indian buyers still want the low-$340s/t cfr and are achieving it but prices are stable.
Some further argue that it is the non-settlement of 2Q phosphoric acid contracts which is also stifling activity. On that score, there was no development with OCP towards the end of April reportedly asking $660/t P2O5 cfr versus bids $60/t P2O5 lower. Moroccan DAP sales in May are likely as a result with reports of close to 150,000t DAP already agreed.
West of Suez, Tampa DAP slipped to $350/t fob on a sale to Central America. Argentina and Brazil saw cfr prices slip further with Brazil reportedly trading in a $348-352/t cfr range (with OCP reporting sizeable sales for May in the higher- $350s/t cfr) and Argentina in the high-$350s/t cfr. Overall, prices here too are stable but with no evidence of upside being seen.
Brazilian imports will have to ramp up seasonally at some stage. But we still envisage overall Indian DAP imports for 2016-17 to be below 2015-16 levels based on high stocks. In this scenario it is hard to see price upside short term unless Brazil recovers to import levels seen in 2014.
OCP reports a significant May line up of NPKs to Benin, Togo, Nigeria and Mali. These commitments total around 185,000t. In addition there are the two MAP cargoes of 30,000t each for South Africa and 15,000t DAP to African markets sold around $350/t fob. European shipments for May are minimal. In India, OCP has agreed 100,000t DAP with a buyer under formula also for May shipment and is understood to have sold another cargo.
For Latin America, OCP reports it has placed 200,000t MAP/NPS so far for the Brazilian market in May, with the MAP priced in mid-$340s-350/t fob range based on a freight of $9-12/t and cfr prices in the high-$350s/t cfr. This takes DAP/MAP/NPS/NPK commitments to around 600,000t.
Mosaic and Intrepid joined Agrium in announcing $15/st increases to US MOP offer prices. While potash buyers did not dive in to purchase higher-priced MOP, the formal moves by these suppliers bolstered short-term demand and prompted trades at prevailing levels.
Granular MOP assessment of $180-185/st fob Nola marked the first increase since December 2014, so the rise was significant, albeit a very modest $5/st. It is too early to say the US market has turned, but the signs of stability were clearly evident after the steady declines.
Elsewhere there was little change. In Asia, international suppliers and traders were focusing on Bangladesh which tendered for 290,000t in early May. The tender was expected to be competitive and without Chinese or Indian contract benchmarks to guide, prices were hard to anticipate.
Local distributors/traders in Indonesia and Malaysia talked of lower prices for the early buying taking place for second half 2016 quantities. International suppliers were yet to support these lower levels and further clarity was expected as the tender season ramps up over the coming weeks.
The global market outlook remained uncertain, but the start of formal Chinese contract talks coupled with spot price stability and improved near-term demand in the US was a fillip for suppliers in need of some positives.
OCP remained in talks with suppliers for its second quarter standard MOP needs. Its total requirement was understood to be 40,000t but reports suggest it has bought 10,000t from K+S for May shipment. This could not be confirmed directly.
West Africa/Central Africa
Dole/Compagnie Fruitiere was back in the market for its second half 2016 fertilizer requirements for Ghana, Cameroon, Senegal and Ivory Coast. Various fertilizers were being requested including 1,800t of standard MOP and 90t of SOP.
Somdiaa is understood to have awarded two traders under its recent tender for 2,400t of granular MOP for shipment to Douala, Cameroon and Port Noire, Congo. One will deliver tonnes from local stores and the other from the Baltic Sea.
Source: Argus FMB
Copyright © 2015 Argus Media Ltd
All intellectual property rights in the data and other information published on this page are the
exclusive property of Argus, and/or its licensors, and/or IFDC (where applicable) and may only be used
under licence. Without limiting the foregoing, by reading this page you agree that you will not copy,
reproduce any part of its contents in any form or for any purpose whatsoever without the prior written
consent of Argus. All rights reserved.
ARGUS, ARGUS MEDIA, the ARGUS LOGO, ARGUS Publication titles and ARGUS index names are trademarks of
Argus Media Ltd. Visit www.argusmedia.com/trademarks for more information.
IFDC obtains data from Argus Media under licence, from which data IFDC conducts and publishes its own
calculations set out in the tables and graphs on this website. Argus makes no warranties, express or
implied, as to the accuracy, adequacy, timeliness, or completeness of its data or IFDC’s calculations,
or fitness for any particular purpose. Argus shall not be liable for any loss or damage arising from any
party’s reliance on Argus’ data or IFDC’s calculations, whether published on this page or otherwise, and
disclaims any and all liability related to or arising out of use of the data and/or calculations to the
full extent permissible by law.