Under the dual pressure of high supply and strong guidance after the shift of export policy to cap-and-press, real demand on the demand side remains cautious, and speculative demand has stalled temporarily. As a result, the upstream inventory was accumulated 100 thousand tons directly from 250 thousand tons last week, and the port inventory also continued to accumulate and slightly expanded to 40,000 tons. On the basis of the market continuation of the collection port, the inventory pressure of the manufacturers still increased significantly, which further verified the current weak demand. Among them, agricultural demand is affected by weather factors, cautious attitudes and end-use capacity issues, There is no obvious sign of large-scale repair in a short time, and most of the industrial demand is mainly lukewarm and lukewarm. The utilization rate of Hefei compound fertilizer enterprises, which supports the largest demand for urea in the early stage, also dropped to below 40 percent. The main reason is also that the stock of its own finished goods is still at a year-on-year high, and although there are signs of decline, it is small and reflects the weakness of final agricultural demand in the same time as the business start-up declines. Taken together, shorts added to the short-term weak reality amid a combination of lower-than-expected sentiment for exports and cautious demand, as well as expectations of further weakness in off-season demand.
*Supply tight*
Limited spot availability reported.
*Weather impact*
Rain delays in key regions.
*Inventory update*
Levels at 37% capacity.
*Policy watch*
Export policy changes expected soon.
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*Supply tight*
Limited spot availability reported.
*Analyst note*
Market sentiment: 40.
*Weather impact*
Rain delays in key regions.
*Analyst note*
Market sentiment: 38.
*Policy watch*
Export policy changes expected soon.
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*Freight steady*
No major changes in rates.
*Analyst note*
Market sentiment: 21.
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Customs just announced by phone:
1. Urine and phosphate can be started to be reported.
2, binary, ternary compound fertilizer from next week will not accept Hefei
All fertilizers are not allowed to go to India
All of a sudden, CIQ for NP/NPS have been suspended.
-UREA MARKET IN A FLUX WITH CHINESE EXPORTS EMERGING AND WITH THE EUROPEAN UNION RUBBER STAMPING SANCTIONS AGAINST RUSSIA AND BELARUS. INDIA IS EXPECTED ANNOUNCE ANOTHER UREA TENDER WHICH WOULD PROVIDE SUPPORT FOR DECLINING UREA PRICES
-PROCESSED PHOSPHATE PRICES KEEP INCREASING ON THE BACK OF LACK OF CHINESE MATERIAL HOWEVER CHINA IS EXPECTED TO ENTER THE EXPORT MARKET IN EARNEST SOME TIME IN JUNE AND PRICES WILL COME UNDER PRESSURE
-POTASH PRICES REMAIN STABLE WITH CHINA AND INDIA LONG TERM CONTRACTS PROVIDING PRICE GUIDANCE
-AMMONIA MARKET IS AWAITING JUNE CONTRACT SETTLEMENT BETWEEN MOSAIC AND YARA FOR PRICE GUIDANCE IN AN OTHERWISE BEARISH MARKET.
The urea spot market is remarkably quiet. The long awaited Chinese export program has yet to come off with any meaningful activity except for offers in the Ethiopian EABC tender. Rumours are plentiful and the latest unofficial action plan is for CIQ processing to start Monday May 26th at the earliest with processing time at best another 7 working days with some inland production areas may take 30 days to get the certificates. What is clear is that traders alike are holding back on offering Chinese products due to the uncertainties involved.
The European Parliament voted 22 May to impose tariffs on fertilizer imports from Russia and Belarus as the bloc seeks to ratchet up the pressure on the two countries following the full-scale invasion of Ukraine in February 2022. The Commission said in a statement ahead of the vote that it may suspend the tariffs if there is a significant surge in fertilizer prices in the European market and it may also suspend import duties on other fertilizer suppliers to the EU. The implication of this is obviously that Russian producers will have to look elsewhere for markets. One solution could be that Nigeria and Algeria supply Europe and more volumes from Russia go to Brazil and the US.
Interesting times indeed!
In other news, Pupuk Indonesia apparently sold 4 trading companies one lot each of between 30-40 KT at USD 370.50 MT FOB for shipment stretching into June. Both Petronas of Malaysia and BFI of Brunei appear to be sold out for the intermittent period. Further, there is no news on the Gurun urea plant of Petronas which has/is under maintenance. Iranian producers have also been active with reports of sales of 90,000 MT of granular urea by producer Pardis at USD 338 PMT FOB Assaluyeh for June loading. In addition, Lordegan sold 20,000 MT at USD 334.30 PMT FOB and MIS sold 26,000 MT at USD 334.20 PMT FOB, both sales from BIK port. Kermanshah is the latest to sell, placing 30,000 t at $335/t FOB BIK for June loading following its tender. In comparison, SABIC is reported to have sold 50,000 MT at USD 380 PMT FOB with destination Ethiopia, this down from USD 387 PMT FOB on last sold. Egyptian output of urea continues to be down due to gas supply issues.Apparently only three granular urea lines keep operating between 6 urea producers with reduced rates at 70%. With limited volumes in storage the latest sale for a small parcel destined for Europe was sold at USD 402 PMT FOB.
US/NOLA values continue to edge lower with loaded barges offered at USD 445 ps FOB NOLA against bids USD 30 ps lower. Brazil is getting closer to the main buying season with some bids around the USD 395 PMT CFR mark although liquidity is low.
Argentina imports for the January-April period were 82,000 MT, down from the 240,000 MT imported in the same period last year. Fertilizer consumption in South Australia and Western Australia, including urea, is down due to dry weather conditions.
India appears to hold the key to maintain urea prices at current levels. Since only one vessel is left to be nominated under the earlier IPL purchasing tender of shipments to 12th June, rumors are again circulating that another tender may be imminent. Until that happens and with major markets still coming to the fore, urea prices may still be under pressure.
Processed phosphate prices keep going up on the back of limited supply. Chinese origin products of DAP and MAP should start becoming available in June thus upward price pressure is expected to decrease with the distinct possibility of lower prices. However, for now, MAP prices in Argentina are pegged at around USD 750 PMT CFR whilst DAP prices are reported around the USD 750 PMT CFR mark, up from USD 730 PMT CFR last week.
In other news, EABC awarded 60,000 mt Chinese diammonium phosphate at $690/mt FOB. It included 30 days credit for May 25-30 loading, and two cargoes of 60,000 mt each Saudi Arabian DAP to Midgulf at $712.52/mt FOB Ras Al Khair for June 5-10 and June 15-20 loading against its May 13 tender for 425,390 mt of DAP.
Indian importer buys 30kt Russian DAP at $738/mt CFR for June loading in the Baltic. Also, Australian Incitec Pivot has sold a duty free DAP cargo to India at USD 752 PMT CFR.
NFL received no offers against its re tender for two cargoes of 50,000 mt, plus/minus 10%, of black/ dark brown/dark grey DAP for shipment by June 15.
Chinese MAP 11-52 has been offered at $715/mt CFR Brazil for June loading,
DAP prices in Southeast Asia are reported to have firmed further this week to around $740pt cfr with offers at even higher levels. A Chinese producer is suggested to have sold DAP to Thailand at $720pt fob or around $740pt cfr, though further details were unclear. Offers to Thailand had been reported by local sources at $740-745pt cfr. Offers to the wider Southeast Asia region are suggested to range from as low as $730pt cfr to as high as $755pt cfr.
Southeast Asia’s DAP prices were last week assessed up $12-13pt at $725-735pt cfr, with bids at the lower end of the range and offers at the upper end.
Demand at current prices has declined in the region, and buyers will be hoping that an imminent increase in export availability from China will result in some DAP price respite over the short term.
Potash prices remained largely unchanged this week, as momentum in the market slowed across most key regions following the IFA conference. Attention has fully shifted to the upcoming potash contracts for China and India, with market participants closely monitoring developments. The Chinese MOP contract remains under negotiation, with no new settlement or price reached yet. At the IFA conference in Monaco, discussions reportedly centred on a range of $330-360/t CFR. Meanwhile, in the domestic market, traders are still attempting to push prices higher. Port wholesale prices have firmed slightly to an average of RMB3,100/t FCA ($431/t), despite supply and demand being well balanced. Demand in the region has eased significantly with the end of the spring application season and limited potash needs for the upcoming summer corn season. In India, contract negotiations remain stalled, with neither Indian importers nor overseas producers engaging yet. India is reportedly waiting for a fresh benchmark from China before moving forward with its own settlement. In the meantime, estimated stock levels have declined by 13% week-on-week to 195,000 t. The drop is attributed to demand from the Kharif season and the lack of fresh cargoes arriving in the country. While India is not in a rush currently, this could put pressure on them to come to the table sooner rather than later. The main story this week has been the outcome—or rather, the lack of clarity—surrounding the Pupuk Indonesia tender, which finally concluded on 9 May after a month-long wait. Rumours suggest the tender volumes have been reduced, with only BPC confirming an award at $360/t CFR for 25,000 t of firm cargo and 25,000 t of optional cargo of red standard
MOP. Two out of the five remaining producers in the tender have confirmed they did not receive volumes. Overall, producers are relieved that the tender concluded at the initial offer level of $360/t, especially after Pupuk Indonesia counter bid twice, first at $330/t CFR and then at $338/t CFR. At one point, the tender was at risk of being scrapped. Despite this, the Southeast Asia market remains quiet, with attention on the final results of the tender and the upcoming potash contracts. These events are expected to provide a fresh benchmark for the region and support the ongoing bullish market sentiment. The Brazilian market remained unchanged this week, with no sales reported at the $370/t CFR level for July, a price producers have been pushing for over the past month. Movement in the market has been limited, with some suggesting that buyers are already pretty well covered for the 2025-2026 soybean crop compared to this time last year.
Potash prices are likely to firm slightly in the coming weeks as the market awaits the settlements of the China and India contracts.
With new spot business continuing to be carried out on undisclosed terms, ammonia markets on both sides of the Suez are looking for firm price direction for June, although general supply-demand fundamentals would still suggest most benchmarks are positioned towards the downside. While no fresh deals were concluded out of Algeria this week, market players were divided as to where current prices are, with a wide differential emerging between buy- and sell-side targets. The Algerian range continues to shape delivered price ideas into NW Europe, where LAT Nitrogen will soon receive a second Russian spot cargo in as many weeks from EuroChem. This is despite the same buyer championing European Union (EU) measures to impose tariffs on imports of Russo-Belarusian fertilizers into the bloc in the name of reducing regional reliance on “regimes actively undermining European security and democracy.”
Prices should remain stable-to-soft moving into June, with Tampa likely to provide a helpful barometer for just how bearish the market – particularly west of Suez – currently is.