Suppliers achieved small increases in prices for urea in some markets at the end of January, but the overall
market appeared to have reached a plateau. Barring a sudden upsurge in US demand, there appeared to be
limited upside to prices from current levels for February shipment.
Sales took place in the range $275-280/t fob Arabian Gulf and in the high-$280s/t cfr Brazil, both slightly
higher than previous business. The buyer was reported to be the same in both instances – Yara.
In most other markets, prices have stagnated. Two or three lots of Egyptian granular urea were sold at
$285-286/t fob, but a tender for 25,000t on 26 January failed to find a buyer. The main exception was for
Baltic prills, where active demand in Latin America saw prices move up from $250/t fob in the third week of
January to $256-261/t fob at the end of the month. Chinese granular urea was sold in the mid-$260s/t fob
from northern ports.
One Iranian cargo was sold in Italy in the fourth week of January for about $15/t below comparable prices
for Egyptian urea. French prices also eased as vessels arrived in Atlantic ports with some unsold product.
Traders were liquidating long positions taken on January cargoes at below replacement cost for February
Nola prices remained below $260/st fob, equivalent to $281/t cfr at best and was not encouraging anyone to
buy. Opinion was divided on whether US prices would rise enough to show a premium to world markets in time
to suck in more imports.
February and March arrivals in the US Gulf are forecast to be high. CF’s Port Neal plant is producing urea,
although by no means at full capacity, and distributors are content to wait.
A new, temporary, competitor emerged for prilled urea suppliers with the approval for export of 300,000t of
Pakistani urea. Producers in the country have over 1mn tonnes of inventory and have been pressing to export
some of the surplus for several months. The government finally acquiesced and Fauji, Engro and Fatima each
had about 100,000t of urea to sell.
It was available for shipment up to 28 April and traders were checking possible destinations such as Turkey,
East and West Africa and southeast Asia.
Availability of granular urea for export in February was estimated at 210,000t, based on production of
450,000t and domestic market requirements of about 240,000t. Sales to date for February amounted to about
Mopco held a sales tender on 26 January for 25,000t of granular urea for February shipment but failed to
find a buyer at satisfactory price.
Abu Qir held a sales tender on 24 January for 20,000t of prilled urea for February shipment. It sold the
cargo at $262/t fob, $13/t up on its previous sale. The buyer was reported to be Global.
Helwan Fertilizer sold 10,000t of granular urea to a trader at $286/t fob under a tender that closed on 20
January. The cargo was to be shipped to Romania.
OCI sold 5,000t of granular urea on 23 January for February shipment to France at a price netting to $285/t
AOA reported a sale of granular urea for February shipment at $282/t fob. Sorfert was to load 35,550t of
urea in January. It was to negotiate prices for February shipments in the first week of that month.
Ameropa was reported to have fixed a vessel at $15.50/t to load 30,000t of granular urea in Onne 23-28
January for the Mississippi River. Indorama’s plant was closed for maintenance and will remain down until
second half of February. Helm is scheduled to load a cargo when the factory restarts.
The phosphate market strengthened in January. Prices globally continued to firm basis some decent demand in
Europe and east Africa plus the continued near-total absence of Chinese DAP from the market (notional offers
were reported at $350-360/t fob with some business done higher still, basis interest in Vietnam for small
lots above $380/t cfr reflecting the $360s/t to $370/t fob). The firming remained primarily supply-side
driven in the east, but it was clear that Indian DAP demand was stirring. Two tenders were announced in the
fourth week of January for a total of 200,000t DAP while there was also an invitation to supply a further
200,000t DAP under long-term MoU. Much of this was undoubtedly price checking but Indian importers would be
concerned at the rapid and inexorable rise in Chinese DAP prices and the paucity of supply from other
sources. This may indeed be behind news that the inter-ministerial group recommended to the Indian cabinet
that the subsidy for DAP be raised almost Rs 800/t although currency depreciation would have also played a
The lack of Chinese supply once again saw Saudi asking prices move up into the higher-$340s/t fob on
business in east Africa.
There was little action east of Suez. In Indonesia there was a succession of tenders, the latest concluded
in the lower-$360s/t cfr while Pusri issued an inquiry for another 15,000t. There was also interest in
Vietnam although availability was tight. Pakistan meanwhile put a stop to all further imports of DAP pending
resolution of the $45m still owed to importers from September under the subsidy scheme. Residual DAP import
demand was limited in any case. But any thought of imports for the sugar cane crop have been banished.
West of Suez, Tampa DAP levels rose $5-7/t to $335/t fob on a sale to Latin America whilst the domestic DAP
barge price in the US also firmed again. Meanwhile in Europe, north African producers managed to achieve
prices in excess of $350/t fob on latest sales. Asking prices in northern Europe rose to $380-385/t fca.
Latin America was quiet but Brazilian prices were largely stable. Mosaic's sales were to central America
reflecting $350-360/t cfr. OCP notably said it was unlikely to offer in Brazil before March and would target
$360/t cfr minimum.
The consistency of Chinese DAP fob offers, the tight supply due to production curtailments and pull from the
domestic sector remained fundamental factors behind the price hike. But the effect is being felt globally.
This will continue throughout the first quarter. The real test of Chinese resolve will be seen once the
domestic sector is completed. This will coincide with the downturn in demand in Europe and the US.
OCP sold around 35,000t DAP for February shipment to European markets in a $350-356/t fob range. Its
remaining sales were NPKs which had again limited supply. The January export line up from Jorf Lasfar
currently included the following (there were reports that US vessels have been delayed due to heavy rains):
TOTAL: 222,000t approx (does not include exclusively NPK/NPS shipments)
- Sabahat Sonay 12,000t DAP/MAP/NPKs Helm/Romania
- Desert Calin 46,000t DAP Nigeria
- Karg Shun 50,000t DAP/MAP CHS/US
- Norma 7,000t DAP/NPKs Indagro/Greece
- Adalady 7,000t DAP Ameropa/Romania
- Gulf 4,000t DAP Unifert/France
- Anzoras 5,000t DAP Koch/France
- Nord Manzanilo 28,000t MAP Heringer/Brazil
- Susanne 3,000t Goulding/Ireland
- Silver Lady 50,000t DAP/MAP Koch/US
- Karla C 6,000t DAP Koch/France
- Lady Nurgul 4,000t DAP Koch/France
OCP Morocco January commitments '000t
US 180 DAP/MAP
Ethiopia 150 NPS
Nigeria 40 DAP/75 NPK
Europe 110 DAP
Brazil 35 MAP/45 NPS
Domestic 60 DAP
GCT reported a sale of 15,000t DAP to various buyers in Italy in the $350s/t fob for late January/early
February shipment. 40,000t DAP have been sold to buyers in France, Spain and UK/Ireland for late
January/early February at a minimum $350/t fob. Domestic commitments will be around 7,000t for February with
operating rates between 50-60pc.
GCT Tunisia January commitments '000t
Spain, France, UK&Ireland 30-35
BALANCE + CARRYOVER (~20) -10-15
Awarding of the Kenyan DAP tender remained opaque with some suppliers reportedly receiving notification of
orders for NP/NPK and DAP for the tender but not the final contracts. No volume had been specified. It was
unclear whether other potential suppliers also received these notifications.
MOP prices were steady in Brazil, Europe and southeast Asia again in the fourth week of January, as China
prepared for new year celebrations, which started on 27 January and lasted for around two weeks.
Much of Asia was expected to be quiet in the meantime and, with northwest Europe still slow to pick up its
demand levels in some countries and Brazil in low season for buying, there was little activity across the
PotashCorp forecast that global potash shipments will be 61mn-64mn t this year, well up on its forecast of
59mn- 62mn t for 2016. It also crucially said that it anticipates consistent customer engagement "throughout
the year", a welcome relief to all suppliers that battled with slow firsthalf demand last year, and a tight
end to the year in supply terms as a result of the late signing of the China consortium contracts.
PotashCorp identified its expected key growth markets in 2017 as China, India, Latin America, and "other"
Asian markets, most likely southeast Asia. It sees flat demand in North America.
PotashCorp sold 8.6mn t of potash in 2016, well within the range that it forecast in its fourth-quarter 2015
results, but down from 8.8mn that year. It predicts sales this year of 8.7mn-9.4mn t, potentially an
800,000t increase on the year. And chief executive and President Jochen Tilk said he expects potash price
increases to continue in 2017.
BPC sold a vessel of granular MOP to Nitron at around $250/t cfr, according to the supplier, while Nitron
reported the deal in the mid-$250s. The 27,827t vessel Ismini loaded at Klaipeda on 2-5 January, destined
for Dakar. Nitron sold the quantities to three buyers in Mali and Senegal.
Source: Argus FMB
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