Market Insight

Market Insight

Historical price trends $/tonne

Source: CRU

PRICE TRENDS

Market snapshot, 17th October 2024 Urea: Prices firmed in a thin market in mid-October. Middle East values shot up $20/t on expectations that Indian Potash Limited (IPL) would announce another tender to secure tonnes for India in December. If correct, this will follow hot on the heels of the latest Rashtriya Chemicals and Fertilizers (RCF) purchase tender for 0.56 million tonnes of urea. Sohar International Urea & Chemical Industries (SIUCI) sold a November cargo at $390/t f.o.b. with further trader interest reported at $385/t f.o.b. This demand was probably generated by traders positioning themselves for IPL’s expected tender, given that other markets generally remained quiet.

In Algeria, AOA placed small volumes – likely destined for Latin America – at $405/t f.o.b., while Dangote in Nigeria placed another cargo at $352-355/t f.o.b. In a quite period, the NOLA urea price slipped back to $325/st in mid-October. Egyptian prices, meanwhile, were fairly solid with November priced at $410/t f.o.b. but with nothing traded and no apparent rush to buy or sell either.

Ammonia: Benchmarks were more or less stable across the board in mid-October with supply-demand dynamics little changed. Demand from NW Europe remains quiet, although CF Industries UK is set to receive a 15,000 tonne spot cargo from Hexagon in November, with that reportedly sourced at around $530/t f.o.b. Turkey. While regional supply does appear tight at present, steadily improving output from Trinidad and the US Gulf could alleviate recent pressures, with many players expecting Yara and Mosaic to agree a $560/t cfr rollover in the November Tampa contract price.

East of Suez, Middle East exports remains constrained while maintenance work at Ma’aden’s No 3 unit is ongoing. The producer had planned to move 125,000 tonnes in October, with 60% of that total originally lined up for India. Buyers there continue to resist higher cfr offers, with phosphate fertilizer producers holding back on purchases until further clarity on phosphoric acid supply contracts emerges. Further east, another sale from Parna Raya into Vietnam was reported at $510/t cfr, with the cargo in question potentially loading from Malaysia in early November – in what appears to be a swap deal with Petronas. Tonnes continue to move out of Indonesia, where Trammo picked up a formula-priced spot cargo from Mitsubishi for loading from Luwuk.

Phosphates: Prices firmed in the US in mid-October in the wake of Hurricane Milton (see page 10) as buying in India slowed and prices there stabilised. US supply is still exceptionally tight. DAP prices at NOLA have gained $35/st since the start of October to reach their highest levels since March.

Global trade was noticeably slower with just one DAP cargo booked into India. India’s DAP import price has been on a tear since May. The benchmark hit a low this year of $510/t cfr on 9th May and has since rallied an average of $133/t, or 26%, to $643/t cfr, as of mid-October. India’s importers are struggling to secure cargoes as availability in the DAP market is severely limited. China, meanwhile, is expected to tighten DAP/MAP export restrictions in the fourth quarter to secure domestic supply and limit price increases for the autumn application season. There appear to be specific limits on fresh export sales from China to India, with this likely to last several months.

Market price summary $/tonne – mid-October 2024

In Brazil, a lack of demand and low spot availability have left MAP prices little changed since mid-July. Similarly, phosphate fertilizers prices in Europe – range-bound since the start of the year – have been unchanged for the last five weeks. With Morocco’s OCP managing its supply, there seems little to console those holding out for lower finished phosphate prices, especially given the deepening production difficulties in North America, lower exports from China, high demand in India, and a looming one million tonne DAP import tender from Ethiopia.

Potash: Firmly flat prices in Brazil set the tone for the potash market in mid-October. Producers are, however, expecting upward price momentum in Southeast Asia in anticipation of Pupuk Indonesia’s latest tender. This tender should provide direction to the market, with offers rumoured at $310/t cfr.

In Brazil, the MOP market was assessed unchanged at $280-285/t cfr in mid-October. Prices there have declined steadily since May, driven mostly by ample supply, strong competition and, in recent weeks, limited demand.

The Indian potash contract was recently reassessed at $283-285/t cfr for the remainder of its term. Consequently, Food Security Solutions (FSS) – the company formed after Uralkali’s restructuring – has agreed a new contract rate of $283/t cfr with IPL starting from October, with the Belarusian Potash Company (BPC) expected to follow suit. China’s domestic wholesale port prices, meanwhile, rallied to RMB 2,335/t fca ($328/t) in mid-October – its first increase since July – supported by a demand influx.

Sulphur: Global sulphur markets were relatively quiet in mid-October, due to typically muted end-of-year demand – and participants also watching geopolitical developments. Chinese port prices settled to RMB 1,240-1,260/t fca ($174177/t), equating to around $148/t cfr. Trading in the other Asian markets was sparse with fresh transactions remaining scarce. Delivered prices to India decreased to $140-145/t cfr amid a lack of import demand currently.

Mediterranean supply remains tight with prices assessed at $115125/t cfr. The region is still recovering from a fire in the Motor Oil refinery on 17th September and water shortage issues at Tunisia’s GCT. Motor Oil did, however, close a tender on 17th October for 5,000 tonnes, while GCT signed a sulphur supply contract with Total Energies on 11th October.

OUTLOOK

Urea: The short-term outlook remains firm despite the absence of any significant purchasing activity in Brazil or Europe and NOLA prices again sliding. The prospect of India stepping back into the market, without any sign of Chinese exports resuming, seems sufficient to maintain the current upward trajectory. Prices are therefore forecast slightly higher over the next six months, based on rising import demand from India and the expectation of extremely limited exports from China over this period.

Ammonia: Prices should remain stable for the duration of October, with any further increases likely to be capped by a lack of demand. The outlook for November is more positive for buyers, with prices set to ease off once turnarounds at key export hubs are concluded.

Phosphates: Prices are likely to remain firm or higher in the near term as availability globally is currently extremely tight. Further out, delivered prices to India are expected to increase further before stabilising, with prices elsewhere broadly steady as limited availability offsets poor affordability. The Chinese government is expected to again tighten DAP/MAP export restrictions in the fourth quarter to secure domestic supply and limit price climbs during China’s autumn application season.

Potash: Prices in Brazil appear to be at or near the price floor currently. In Southeast Asia, the Pupuk Indonesia tender is expected to provide further price clarity in coming weeks. Looking further ahead, softto-flat potash spot prices are forecast for the fourth quarter.

Sulphur: Global sulphur prices are still rising in certain regions, albeit at a slow pace. Higher prices for China’s port-held stocks may have an effect on import purchases as the price gap between the two has narrowed. Sulphur affordability remains good – with phosphate price gains in recent weeks cementing this position.