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Fertilizer Market Report – July 24, 2024
Notes from Southwest Fertilizer Conference
In this week’s fertilizer report:
- Notes from the Southwest Fertilizer Conference
- Urea: Market in Stalemate Post-IPL Tender
- Urea Outlook from Yara Q2 Earnings Report
- North America Urea and Phosphate action Last Week
- Industry Tidbits
News of the Week: Fertilizer Market Report
Notes from Southwest Fertilizer Conference
We attended the Southwest Fertilizer Conference in Nashville last week. It was well attended with over 2,200 fertilizer industry players. Our meetings, scheduled and impromptu, were fruitful. Given we are from Western Canada, our conversations centered around nitrogen, phosphates and specialty fertilizers.
The view on nitrogen is that prices are listless and lack direction as the market awaits news on Chinese export restrictions, the next Indian tender, which is expected in September and news on restart of Egyptian production. During the conference, trade was slow and generally flat out to Q4. September urea NOLA traded at US$315/st and Q4 traded down US$5 to US$310/st. Tuesday of this week, September physical urea NOLA was offered at US$320/st and Q4 was offered at US$320/st indicating that sellers are trying to move the market up.
The view on phosphates is important for Canadian producers. It was indicated to us numerous times that MAP is extremely tight in North America and will likely remain that way through at least October and potentially all year. This indicates that prices in Western Canada will likely not decrease substantially this calendar year. As indicated in the chart below, MAP Western Canada Delivered prices remain elevated. Producers might have to live with this situation going into next spring.
Urea: Market in Stalemate Post-IPL Tender with LatamBuyers Yet to Move
Once again, Profercy does a great job of painting a picture of global urea market and why it is subdued. On the demand side of the equation, India’s take on the most recent tender was very lowrelative to expectations,Brazilian demand has been light. On the supply side, Egyptian energy woes continue to impact production. We have two weak demand signals fighting a weak supply side issue. This makes for a market that will likely sit and wait and see.
Urea: Market in stalemate post-IPL tender with Latam buyers yet to move | Profercy
Urea Outlook from Yara Q2 Earnings Report – Supports the Genesis Fertilizers Business Plan
With farmer incentives close to average levels and 10-year consumption growth trending at 1.9% per annum, demand fundamentals are supportive for upcoming seasons. Despite a 7.7 million tonnes supply increase in 2023 (IFA estimate), urea pricing in 2023 and so far in 2024 has been generally demand-driven, with positive production margins also for swing producers. While the peak of capacity additions is behind us, urea supply has recently been strong due to increased production mainly in China, India, Iran, Russia and Europe. However, the market has tightened during second quarter, due to the absence of Chinese exports and supply restrictions in Egypt. Industry consultant projections show significantly lower supply growth from 2024 onwards. Combined with supportive demand fundamentals, this indicates a tightening supply-demand balance longer term.
North America Urea Last Week
According to Green Markets, urea prices in Western Canada were flat at C$630-$640, for the third week in a row. Global urea prices are directionless.
Last week, NOLA urea prices were flat in a range of US$288-$302/st for the third week.
According to Direct Hedge, this week started with urea Nola spreads of US$290/st bid and $300/st offer for July, US$310/st bid and US$320/st offer for August and US$310/st bid and US$320/st offer for September. Q4 is US$305/st offer and US$310/st bid.
North America Phosphate Last Week
According to Green Markets, the latest delivered Western Canada MAP price range was flat for the third week in a row at C$1,040-$1040/mt with little activity.
MAP NOLA was Flat WoW in a range of US$645 – $650/st for the fourth week in a row.
Industry Tidbits
Grain movement looks good but faces challenges | The Western Producer
Good demand expected for Canada’s two biggest crops – AGCanada – AGCanada
Market outlook: Where are grains, fertilizer and fuel headed? (farmprogress.com)
Charted: 800 Million Tonnes of Wheat Production by Country (visualcapitalist.com)
China fertilizer exports plunge 86% after rising government intervention
