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Argus Events










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

NITROGEN

Lack of demand and surprising weakness in the US and China combined to pull urea prices down further in late-February. Interest from buyers was becoming evident for April shipment in several countries, but this was leaving a void for March and making it hard for suppliers to place their tonnage. The main selling took place in Egypt and Indonesia, granular urea prices finding support at $260/t fob in Egypt and $252-255/t fob Indonesia. These levels were $15-25/t lower than earlier business and represented a necessary correction. Arabian Gulf urea also moved down, but not enough to enable spot sales. The most striking prices were seen in the US and China, places where only a month earlier some were forecasting rising prices and shortages of urea. Granular urea traded as low as $219/st fob Nola, equivalent to $236/t cfr, while Chinese prilled urea sold at $232-233/t fob for March; scant evidence of any shortage. Rising production levels, a late spring and increased inventories pushed Chinese prices down. The continued fall in US prices was more of a mystery, deriving partly from a heavy line-up of vessels that arrived in February, concerns over a possible decrease in demand, as well as a large dose of sentiment. Low demand for March shipment appeared set to keep prices under pressure in the first and second week of March. Prices will fall closer to the levels at which buyers feel comfortable, but it appears that they will only stabilise when selling for April begins. At that stage, a stronger pull from large markets such as Thailand, Australia, India and southern Europe will be evident.

EGYPT

Abu Qir held sales tenders on 22 February for a total of 35,000t of granular urea, 25,000t for loading from El Dekheila and 10,000t from Abu Qir, and 20,000t of prilled urea for loading from Abu Qir. All the urea was for shipment by 15 March at the latest. It sold the granular urea at $260/t fob to Ameropa (25,000t) and Agrium (12,000t). Dreymoor bought prilled urea, reportedly at $252/t fob. Mopco sold a further 10,000t of Egyptian granular urea to Keytrade for February shipment at $260/t fob. The price was $3.50/t lower than its purchase from Mopco on 16 February. Alexfert also sold 10,000t of granular urea to Keytrade at $260/t fob and sold 6,000t to another buyer at the same price. Helwan sold 10,000t to Keytrade at $260/t fob for February loading. Egyptian producers said that the ministry of agriculture will take 40pc of the output of each export urea plant in the country in March, restricting availability for export to about 210,000t from the seven plants.

ALGERIA

Following an announcement by Sorfert on 20 February that its urea plant had closed for maintenance, it emerged that AOA's ammonia and urea plants had also been shut down. Reports indicated that AOA's plants were closed around 16 February and remain down. AOA has two granular urea units at Arzew with a capacity of 3,500t/day each and one 4,000t/ day ammonia unit. Sorfert operates two ammonia units and one 3,500t/day granular urea unit. Sorfert's plant was down for 7-10 days, losing 25-30,000t of production, but the duration of the AOA closures is likely to be much longer. Sorfert loaded two vessels in February, 29,777t on the Dorothea Oldendorff for Europe and 29,185t on the Great Reward for the US Gulf.

NIGERIA

Indorama was scheduled to restart its urea plant following the completion of a turnaround in early-March. After that, it was expected the plant would operate at its full capacity of 4,000t/day. Under a government programme to revive production at blending plants throughout Nigeria, Indorama has been asked to supply 30,000t of granular urea in February-March. The government indicated it may require up to 30,000t/month under the programme. Besides this quantity, Indorama had cargoes to load for Ameropa and Trammo in late- February/early-March.

PHOSPHATE

The phosphates market saw supply tightened further, with April sales already being lined-up as March offers swiftly dried up. Late February saw a flurry of tenders with demand being raised in Argentina, Central America, Pakistan and Iran for various phosphates products. In the Indian subcontinent, the market was focused on the prices being offered under Pakistani Fauji’s 40,000t DAP enquiry. Offers were primarily backed by Chinese product, and prices ranged $385-390/t cfr. The hike in prices is despite the lack of Indian import demand. India all but abandoned its buying enquiries – both GSFC and NFL were inquiring for 100,000t of DAP apiece but there existed a wide chasm between the offered prices under the aforementioned tenders, and India's buy-side price indication, which was previously reported in the mid-$350s/t cfr levels (much higher prices are not workable under the subsidy and MRP schemes). High stocks and subsidy uncertainty mean India will remain out of the market for a while at least. West of Suez, Latin American markets seemed to be at the forefront of activity during end February. With Brazilian offers jumping at the rate seen in early February, Argentina’s Profertil tendered for 25,000t of MAP for April delivery. It was a strategic move in the region, especially in the light of various global producers clamouring for Brazil to break the $400/t cfr ceiling very soon. This was significant - Argus' Brazilian cfr price index had remained below $360/t cfr for most of 2016. And with Argentina in no rush to buy DAP tonnes (DAP imports seasonally accelerate from April onwards), the tenders may well be a price-checking move. Within the region, it was also reported that Incofe tendered for small volumes of DAP and MAP as part of a bigger combo vessel arrangement, but no prices were established under that tender. In Brazil, Saudi Arabia sold a DAP/MAP cargo at a reported price of mid-high $380s/t cfr. Most reports suggested that the Brazilian cfr range had increased to $395/t cfr. Low stocks and a need to cover blender sales saw imports jump dramatically for MAP.

MOROCCO

OCP sold 70,000t of MAP to Brazil for March loading, with netbacks reflecting around $385/t fob. OCP reported that it was completely sold out for March. The producer was offering product for April/May delivery, DAP price targets ranged from $385-395/t fob dependent on destination. OCP’s March line-up is as follows:
  • 300,000t of DAP/NPKs/NPS to West Africa
  • 50,000t of DAP to Nigeria
  • 150,000t of DAP/MAP to US
  • 130,000t largely of DAP to Europe
  • 70,000t of MAP to Brazil
TOTAL: 700,000t
Production: 600,000t

OCP Morocco February commitments            '000t
Europe                                      150 DAP
US                                          150 DAP/MAP
Nigeria                                     50 DAP
Bangladesh                                  25 DAP
Africa                                      225 NPKs
E. Africa via trader                        15-18 DAP/MAP
TOTAL                                       600
PRODUCTION                                  520-550
BALANCE                                      -

TUNISIA

GCT reported no further sales as it was sold out for February.
GCT Tunisia January commitments             '000t
Domestic & Libya                              10
W. & E. Europe                                30
Italy, France & Spain                         20
TOTAL                                        60
PRODUCTION                                   60
BALANCE                                      -

POTASH

The potash market in China saw no reason why the consortium of buyers should be in any hurry to settle 2017 seaborne contracts. Suppliers are pinning their hopes of a successful year, in part, on an early settlement for seaborne contracts to China. But with custom-cleared stocks still at over 2mn t in ports, as well as reports of as much as 5mn t elsewhere in China, and railed shipments coming in steadily from Russia, the spring application season is covered. Domestic spring season buying has begun already, and demand was described as normal. This, coupled with the improved supply from domestic suppliers such as QHSL, all slowed the urgency with which suppliers hope China will need to settle. And with no product available for China until at least May-June from many of the major suppliers who are, or are nearly, fully committed well into the second quarter, some market participants are already seeing a later signing date than last year. But prices were firming globally. Brazilian demand has been strong all year, and prices were up to $245-250/t cfr for granular MOP in the last week of February, with suppliers confident about future increases. European prices firmed on the top end of the assessment, to €235-255/t cfr for granular MOP. Nola barge prices increased to $217-225/st fob in the fourth week of February, up from $215-222/st the previous week. Mosaic even lifted its March price to $230/st fob Nola. And standard MOP prices in southeast Asia looked set to increase, as low inventories and limited supply drove prices upwards. If the consortium sees no incentive to sign early on demand requirements this year, perhaps the focus will move to the possibility of signing early on future price increase expectations. MOP prices have been inching up across the globe since July last year, and seem to be defying the fundamentals of an over-supplied market, at least for now.

AFRICA

NPK: Around 8,000t of 15-15-15 ex-Baltic was sold to a West African market at $230/t fob, equivalent to around $255- 260/t cfr. The cargo was to load at the end of February. A company in Ghana was heard to have bought 5,500-6,500t of granular MOP. Details were unconfirmed but the transaction was heard to have been completed by a trader that had MOP from Canada or northwest Europe.

Source: Argus FMB


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