FERTILIZER MARKET REPORT March 31, 2023

Ammonia Weakness Not Helping Urea; India Still in the Driver’s Seat

Tampa ammonia for April fell 26% or US$155/mt to US$435/mt cfr from March’s US$590/mt cfr. Most sources had been expecting a sizeable drop in light of lower natural gas prices in Europe and the US, as well as plentiful ammonia supplies.

Highlights from Argus Commentary

Key highlights 
♦: NOLA urea volatile through the week
♦: Ammonia production under pressure in Europe
♦: DAP cfr India hits US$590/t cfr
♦: Granular urea down to US$315-US$320/t cfr Brazil

Last week, urea traded in the US at as low as US$305/st FOB Nola. Urea levels in Brazil slipped to US$315-US$320/t cfr, down from US$315-US$330/t cfr a week earlier. Middle East FOB levels were slightly softer at US$289-US$312/t FOB.

A number of ammonia plants in NW Europe are running at low rates because of slow demand from the fertilizer sector.

The NW Europe ammonia price closed the week at US$485/t cfr, down by US$30/t from March 17.

Elsewhere, weak demand in India saw ammonia price fall by nearly US$70/t on the week to US$435-US$470/t cfr.

The phosphates market remains comparatively elevated versus urea and ammonia, but there was further weakening this week.

Most recent business saw DAP slip to US$590/t cfr in India, with a trader selling 50,000t for April. This marks a drop from US$640-US$645/t cfr a month earlier.

Expectations remain that phosphates shipments out of China will pick up in the coming months. Latest Jan-Feb data show MAP exports tripled on a year earlier in the first two months of the year. DAP shipments were up by 2pc.

MAP fell to US$620-US$630/t cfr Brazil down from US$630-US$640/t cfr a week earlier. DAP FOB NOLA closed the week stable at US$600-US$610/st FOB.

North America Urea Last Two Weeks

According to Green Markets, urea pricing in Western Canada last week weakened to a range of C$670-C$680, down from C$665-C$730 the previous week.

Early this week, urea prices in Eastern Canada slipped slightly to C$700-C$875/mt FOB, depending on location and supplier, below the previous low of C$720/mt.

Last week NOLA barge trades were put in the US$305-US$327/st FOB range, narrowing from the week-ago US$300-US$335/st FOB, according to Green Markets, while early-week business suggested an increase for the week, $305-$310/st FOB trades reported later in the week lowered the average.

Early this week, NOLA urea was as low as US$295/st FOB in early-week trading, with the initial range called US$295-US$310/st FOB, down from the week-ago US$305-US$327/st FOB.

North America Phosphate Last Two Weeks

Last week, MAP pricing in Western Canada reportedly dropped to C$1,030-C$1,080/mt FOB for the latest offers, below the previous C$1,080-C$1,100/mt FOB range. Rail-DEL pricing in the region was pegged at C$1,050-C$1,060/mt midweek, down C$10/mt from last report.

This week, phosphate prices were under pressure in Eastern Canada. New MAP offers were pegged in a broad range at C$995-C$1,280/mt FOB, depending on location and supplier, down C$25/mt at the low end of the range.

According to Green Markets, sources noted little price movement last week on the NOLA barge phosphate markets.

With high water levels complicating travel on the lower Mississippi River, barges located at Cairo continued to trade at a premium to NOLA-loaded tons. Upriver barges were reported in a US$620-US$625/st FOB range.

The NOLA MAP market was also slow. Domestic tons changed hands at US$575/st FOB, while most players described the product’s low end as steady at the week-ago US$565/st FOB.

Offers for domestically produced DAP were quoted at US$610/st FOB, while MAP barges were offered at US$575/st FOB. Both prices were unchanged from the prior week.

The NOLA DAP barge market was reported in a US$600-US$610/st FOB range, unmoved from the last check. MAP barges ran US$565-US$575/st FOB, also unchanged from one week earlier.

This week, NOLA DAP/MAP prices were in line with week-ago levels with little business to report.

Green Markets Global Macro Comments

India

There are conflicting rumors circulating around when the next urea tender might take place. India’s fertilizer minister said the country will not need to buy urea on the spot market for the upcoming kharif season, leading some to question if a new tender would even be held. A few traders argued that it would make sense for India to call a tender in April to take advantage of the softening market. However, the bulk of sources were of the opinion that by waiting until the end of May, when many had previously expected the next tender, India could push the price down even further.

Brazil

Traders keep saying the price floor has been hit. At the same time, the price keeps falling. Sources reported a slight dip to US$310-US$320/mt cfr, a price that some players said looks close to a positive barter ratio, which could lead to additional deals being cut in the near future.

China

Sources reported the domestic China market at US$410-US$415/mt ex-plant. At the same time, traders are quoting export prices at US$370-US$380/mt FOB.

China is reluctant to export urea while the domestic season is still in full swing. Sources estimate the season will end in late April. At that point, said one trader, the excess urea built up by the government’s restrictive export policy will exert a great deal of downward pressure on prices.

Industry Tidbits

• Western Resources Corp., Vancouver, recently announced that its wholly owned subsidiary Western Potash Corp. is expected to complete construction of the Milestone Potash Phase 1 Project in Saskatchewan in May 2023, with commissioning coming thereafter. First production is expected by the end of the year.