*Policy watch*
Export policy changes expected soon.
<img src='https://images.unsplash.com/photo-1465101046530-73398c7f28ca' alt='Demo image' style='max-width:100%;height:auto;border-radius:8px;margin-top:10px;'>
*Freight steady*
No major changes in rates.
*Freight steady*
No major changes in rates.
Three predictions if the new ceasefire between the US and Houthis holds and allows traffic to return through the Suez Canal:
– Container freight rates will fall as capacity increases, diverted back from longer Cape of Good Hope route
– Chemical imports to Europe from Asia will become cheaper and much more attractive as journey times fall by 15 days on average from 37 to 22 days
– European chemical producers will come under even more pressure from Asia imports, depressing prices and margins
Hello Phil! Where do you see AGU levels this week? I'm hearing Egyptian offers still at $460-470/t fob, Vietnamese offers at $460/t fob. No offers from Indonesia so I suspect they're sold out, but I'm hearing Chinese producers were swamped with enquiries this week, obviously. GNFC is India is back online, so I haven't heard of any sales so far this week except for a Chinese trial order but I'm not sure if that's going to come through…
Morning. NDRC meeting y'day, wheels in motion for China's return, but detail still lacking. Tone on Int'l paper softer w/ activity on Egypt and Brazil contracts, while May Nola phys values slumped $25 from last done on Tues.
AG
May $376//$380
Jun $350//$360
Jul $345//$360
Cfr Brazil
May $372//$385
Jun $355//$365
Jul $348//$360 – traded $360, $355
Aug $353//$360 – traded $357 (500t)
Sep $345//$360
Egypt
May $365//$380
Jun $357//$360 – traded $360, $358
Jul $352//$360
Nola
Phys: May traded $480, $475; mid jun $410
Paper:
May $470//$485
Jun $385//$410
Jul $345//$360
Aug $340//$355
Sep $345//$355 – traded $350
Q4 $335//$360
UAN Nola
May $350//$360
Jun $340//$350
Aug $250//$290
Sep $255//$295
DAP Nola
May $635//$660
Jun $635//$660
Q3 $645//$660 – traded $645 (500st)
Q4 $630//$655
Today's Urea-Related Meeting Discussions (May 7)*
1. Export Quota System for Phosphates and Urea
– Storage-qualified enterprises and supply-guarantee enterprises will gradually be allowed to export phosphates and urea under a quota system.
– The proposal on urea exports was a key discussion topic in today's meeting.
2. Price Control for Domestic Supply Stability
– Urea factories must revert their ex-factory prices to the levels of April 29 to prioritize domestic supply and price stability.
– If price hikes are reported, the export quota for urea will be revoked.
3. Policy-Driven Urea Exports in May & June
– May: ~100,000 tons (primarily to Sri Lanka as aid).
– June: ~200,000 tons (policy-driven exports).
4. Quota-Based Exports from July to September
– Storage and supply-guarantee enterprises will export urea under the quota system.
– Exact export volumes will depend on domestic supply conditions and require further discussions.
5. Policy Flexibility to Halt Exports if Prices Fluctuate
– If abnormal price movements occur during the trial export phases, authorities reserve the right to immediately suspend exports.
6. Strict Ban on Exports to India
– Direct exports or transshipment of urea to India are prohibited.
7. Domestic Priority: Supply Stability & Price Control
– The overarching policy remains ensuring domestic supply and price stability.
– Factories and traders are banned from speculative price manipulation*.
Here’s a concise summary of the discussion covering phosphate rock, China’s potash contract, and Ethiopia’s DAP tenders:
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Phosphate Rock Prices:
• Prices remain historically high, especially for medium- to high-grade rock.
• Recent declines are occurring despite high finished fertilizer prices.
• This is due to increasing supply, especially from Morocco and others, reversing prior supply tightness.
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China Potash Contract (Forecasted at $340/ton):
• Forecast raised from $320 to $340, reflecting rising global potash prices.
• Tight supply and strong demand—particularly in Southeast Asia—are driving prices up.
• The China contract typically tracks the low end of the Southeast Asian price range (currently around $345/ton).
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Ethiopia’s Impact on DAP Market:
• Ethiopia has been aggressively tendering for DAP since late 2023, targeting ~1.2 million tons.
• So far, they’ve secured around 700,000 tons, largely in 2024, including initial shipments from China.
• Their ongoing tenders have had a significant tightening effect on an already tight DAP market.
• However, they’ve recently struggled to secure volumes and are unlikely to meet the full target.
• Timing missteps—not booking more earlier when offers were better—are contributing to their current difficulties.
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Would you like a chart summarizing these fertilizer market dynamics?
Here’s a concise summary of the key points regarding CBAM (Carbon Border Adjustment Mechanism) and its impact on fertilizer markets:
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CBAM Overview and Timeline:
• CBAM enters full implementation in January 2026.
• Companies will then be required to submit annual reports and purchase CBAM certificates for emissions related to imported goods.
• As free carbon allowances are phased out, CBAM costs will rise sharply, impacting European prices directly—especially for fertilizers like ammonium nitrate, urea, and ammonia.
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Impact on Pricing:
• European domestic prices will include CBAM costs, similar to how EU ETS carbon costs are currently embedded.
• Imported products into Europe will reflect these costs, but FOB/export prices outside Europe will not.
• This effectively adds a carbon cost to imports, leveling the playing field for EU producers.
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Crew’s Role in Price Reporting:
• Crew plans to integrate CBAM costs into European fertilizer price assessments, depending on transaction location.
• They will also provide an “emissions value”—a metric reflecting the carbon intensity of each product.
• This will help incentivize lower-carbon production from non-EU exporters.
• Low-emissions producers can use this to negotiate better prices, as it reduces CBAM liabilities for EU importers.
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Market Implications:
• CBAM will significantly raise import costs for carbon-intensive fertilizer products.
• It introduces a carbon price signal into international trade, potentially reshaping supply chains.
• There’s a clear incentive for non-EU producers to decarbonize to remain competitive in the EU market.
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Would you like a visual summary or timeline of CBAM’s phases and how it applies to fertilizers?
Here’s a concise summary of the trade and tariff impacts on the fertilizer market, with a focus on the U.S. and Europe:
⸻
1. U.S. Fertilizer Market:
Nitrogen (Urea, Ammonia, UAN):
• New U.S. import tariffs (10%) are now applied to most nitrogen suppliers except Canada and Russia.
• Russia has grown to supply 25% of U.S. urea imports, and is currently exempt—an unusual dynamic.
• Tariffs are increasing U.S. prices, especially NOLA premiums, by an estimated $30–$40/tonne.
• Trade flow shifts likely: Suppliers like Algeria may divert product elsewhere due to high tariff costs (up to 30%).
• UAN and ammonia are also affected, but impacts are less severe than for urea.
Phosphates (DAP/MAP):
• Long-standing countervailing duties on Morocco and Russia have already tightened U.S. phosphate supply since 2020.
• With recent new tariffs, Saudi Arabia and others now face 10% duties, further restricting supply.
• Only Mexico remains a duty-free phosphate supplier, but its volumes are limited.
• Result: Persistent U.S. phosphate premiums versus global markets, now set to grow further.
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2. European Market:
• The EU is considering tariffs on Russian fertilizer, but it’s uncertain whether they’ll be implemented.
• Default industry expectation is they won’t proceed, due to:
• Other incoming costs like CBAM (Carbon Border Adjustment Mechanism).
• Already significant trade barriers with China.
• Still, the proposals have advanced further than expected, creating some market uncertainty.
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3. Potash:
• Potash is now exempt from U.S. import tariffs.
• It contrasts sharply with phosphate and nitrogen, having no current tariff pressures and enjoying a more favorable trade environment.
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Bottom line: U.S. fertilizer markets are tightening further due to expanding tariffs, especially in phosphates, while Europe awaits clarity on Russia-related trade decisions. Expect continued price pressure and shifting global trade flows.
Would you like a visual showing global trade flows before and after the U.S. phosphate tariffs?
Here’s a concise summary of the current phosphate (DAP/MAP) market outlook:
Global Market Trends:
• Prices Rising Sharply: Key benchmarks (e.g. DAP India, MAP Brazil, FOB prices) have climbed above $700 CFR, with a short-term forecast peak near $800 CFR.
• Main Driver: Exceptionally tight global availability, primarily due to a sharp decline in Chinese exports (Q1 down 54% YoY; full-year may not exceed 5 million tonnes — 23% lower than 2024).
Supply Constraints:
• Most major origins are at or near capacity.
• Morocco is the only origin with additional supply potential but is expected to remain cautious to support prices.
Demand Factors:
• India: Facing critically low stocks and must import despite affordability issues.
• Attempts to impose price ceilings have failed due to market pressure.
• Ethiopia: Shifted from NPS to DAP, adding unexpected demand pressure.
• Brazil: Demand rising but more gradual due to prior MAP imports and substitutions.
Affordability Concerns:
• Despite poor affordability, buyers have little choice, especially in India.
• Market tightness overrides price resistance in the short term.
Outlook:
• Prices expected to climb through mid-Q3, then stabilize or ease slightly, though overall levels will remain relatively high.
• Volatility tied to China’s export timing and volumes.
U.S. Market Specifics:
• DAP/MAP expected to maintain a premium vs. global markets due to:
• Countervailing duties (e.g. Morocco, Russia),
• New tariffs on other origins (e.g. Saudi Arabia, Jordan),
• Very limited import options.
Brazil Market Notes:
• Price increases will lag India slightly, as buyers are more price-sensitive and better supplied.
• Possible temporary India MAP premium over Brazil during India’s peak demand phase.
Would you like a visual graph showing the projected DAP price trend across regions?
800 CFR India for DAP expected
Here’s a clear and concise summary of the UAN and nitrogen fertilizer market outlook:
U.S. UAN Market:
• Tight Supply: Imports are down ~300,000 tonnes year-on-year.
• Rising Demand: Driven by expected large U.S. corn acreage (95–97 million acres).
• Possible Substitution: Users may shift to urea to meet nitrogen needs.
• Price Trend: UAN values likely to decline sharply post-application season (late spring).
Buying Pattern Shifts:
• Quiet Period: December–January now see low activity.
• Buying Rush: Concentrated between February–April 2026, likely driving price increases.
France Market:
• Slow Start: New season offers (~€300/ton SEA) haven’t generated strong interest.
• High Premium: UAN remains expensive relative to urea, discouraging buying.
• Forecast: Prices expected to decline from May to September, with rebound not likely until Q4 2025.
Germany & Baltic Sea Forecasts:
• Germany (SeaAgain): Follows UAN trends — expected to dip in new season, then gradually rise.
• Baltic Sea AN Index:
• Stable in short term.
• Uptick expected in August due to Brazilian sugarcane demand.
• Quiet period forecasted in late 2025, followed by demand recovery in Q1 2026.
Ammonium Sulfate (AS):
• Prices driven by Thai copper-lactam AS supply.
• Forecasted decline in June, possibly linked to rumors of Chinese urea exports.
• Prices expected to stabilize toward the end of the forecast period.
Would you like a regional breakdown chart showing forecasted price trends across these nitrogen products?
FOB NW Europe for amsul
Here’s a concise summary of the phosphate affordability situation:
• Affordability at Historic Lows: Phosphate affordability is at its worst in over a decade, comparable to the 2022 peak when demand destruction occurred.
• Demand Impact:
• Price-sensitive markets (e.g. India) have seen reduced demand due to high prices.
• In some regions like Brazil, there’s been product substitution (e.g. shifting to superphosphates).
• Overall global demand hasn’t drastically dropped, partly because China has maintained strong domestic production.
• Complex Drivers: It’s challenging to distinguish between actual demand destruction and supply limitations preventing buyers from accessing product.
• DAP/MAP Under Pressure: These key phosphate fertilizers are facing the greatest affordability strain, leading to purchasing adjustments.
• Potash Contrast: In contrast, potash remains relatively affordable. Though affordability is worsening slightly, it is still much better than phosphates or nitrogen, supporting strong global deliveries.
Would you like a side-by-side comparison of phosphate vs. potash affordability trends?