INTERNATIONAL FERTILIZER MARKET:
NITROGEN AND PHOSPHATE FERTILIZER PRICES REMAIN FIRM,
POTASH FERTILIZER AND COMPOUND FERTILIZER PRICES HIT NEW HIGHS
Nitrogen Fertilizer: Urea Prices Remain High
Urea Supply Tightens, Prices Remain Firm
Last week, the urea market was still affected by severe supply disruptions caused by Western financial sanctions against Russia, and prices rose again, but at a slower pace than the previous week.
The market's highest-paid prices were again in South and Central America, with prices in Mexico, Argentina, and Chile around CIF $1,100 (per ton, the same below). But other markets, such as Europe, were quieter, with buyers mostly on the sidelines after the rush in the previous week.
With several of the world's largest urea producers hampered by sanctions, the market has tightened, so urea prices are showing no clear signs of softening at the moment.
Russian Producers Hit Hard By Sanctions
Russian fertilizer producers hit by EU and U.S. sanctions are making aggressive corporate reforms, but so far have failed to offset their impact.
In some markets, the traded volume of Russian urea is currently 25% lower than the general market norm. Some buyers previously reliant on Russian urea are paying higher prices to secure new supplies.
High Prices Keep Buyers Away
The price of urea continues to rise, and buyers in many markets have retreated and are unwilling to accept the high price of urea, while buyers in other markets only purchase area to the land that must be fertilized to reduce purchases.
[Market outlook expectations]
Political decision-making will still lead to urea price volatility.
Phosphate Fertilizers: Market Remains Firm
West of Suez Prices Rose Further
The increase in phosphate fertilizer prices was again concentrated in markets west of Suez, with Latin America and Europe leading the way.
Last week, the trading price of Moroccan MAP was CIF 1,250 US dollars (ton price, the same below), which was an increase of 50 US dollars from the previous week. Argentine DAP/MAP prices ranged from CIF $1,250 to $1,272, $86 higher than the midpoint of the previous week. The spot price of DAP in the United States rose by $28/short ton at the midpoint to FOB $940-990/short ton, and the price of MAP rose by $33/short ton to FOB $950-975/short ton. In northwestern Europe, prices jumped to $1,240-$1,300 from $1,090-$1,150 of the previous week.
A sharp rise in prices west of Suez over the past month has also started to make waves in the east. DAP has reportedly been offered in India above CIF $1,000, but no sales have been generated. Based on potential factory prices in Latin America, Chinese producers have also raised expectations for a small number of exports, but that has yet to translate into firm sales.
Eurochem Cuts Lifosa Production
Producer Eurochem has "temporarily reduced" production at its subsidiary Lifosa chemical plant DAP and NPS plants in Lithuania, but some market players believe it will stop production entirely. The company's chief executive resigned following EU sanctions.
Indian Buyers Await Subsidies
Indian importers are awaiting the announcement of fertilizer subsidies for the upcoming fiscal year 2022-2023 (April 2022-March 2023), which will clarify future demand in India. Over the past month, India has been silent about its need for phosphate fertilizers.
[Market Outlook Expectations]
Market conditions west of Suez remained firm, but last week's price gains slowed slightly compared to the previous week's sharp gains. Buyers in India may have to pay more to compete with importers in Latin America, but that depends on the new level of subsidies.
Potash: Prices hit new highs
Market Price Rise
Potash prices rose again in key regions last week, with some markets still struggling to find a balance between buying and selling prices, and demand in parts of Africa and Asia may be reduced due to high prices.
Nutrien Boosts Potassium Chloride Capacity
Canada's Nutrien plans to increase its production capacity to around 15 million tons/year this year in response to the recent supply shock of Russian and Belarusian-origin potassium chloride. Production at the company's Canadian mines will take several months to ramp up, so new capacity additions will be concentrated in the second half of the year.
Brazilian Prices Hit New Highs
Last week, the price of Argus large granular potassium chloride in Brazil reached the highest level in history, which was CIF 1000~1050 US dollars (ton price, the same below). The last time that the price of large granular potassium chloride reached $1,000 was in November 2008. Producers are still unsure how to set prices, and more volatility is expected in the market in the coming weeks.
[Market Outlook Expectations]
The shock to Russia/Belarus supply will continue to impact the market and will continue to push prices higher. The announcement by Canada's Nutrien that it will supply an additional 1 million tons this year has only slightly eased the limited supply, and producers will soon signal that their orders are full as limited spot volumes dry up.
Compound Fertilizer: Supply Tightens, Prices Climb
Antwerp Shutdown Further Tightens Supply
Global compound fertilizer supply tightened further last week as the impact of sanctions on Russia, the world's largest compound fertilizer exporter.
EuroChem's 1.25 million t/y compound fertilizer facility in Antwerp, Belgium, has ceased production, after BASF AG denied Eurochem access to its Antwerp ammonia terminal, the producer has no access to synthetic ammonia.
The shutdown will affect key markets in China, Southeast Asia and Central America. But it is Europe that is most affected, which has now experienced a series of compost plant shutdowns and reductions, and Russia is unlikely to supply new imports. The tight supply in Europe continued to push up prices. Last week NPK 15-15-15 price was 840 euros (ton price, the same below), an increase of 180-210 euros compared with three weeks ago.
Eurochem has cut production at its Lifosa plant in Lithuania due to financial disruptions related to EU sanctions. The plant exported more than 300,000 tons/year of NPS last year, most of which was sold to the Americas.
Raw Material Prices Continue To Rise
Prices for ammonia, nitrate, urea, phosphate and potash have all continued to climb, with some hitting record highs.
[Market Outlook Expectations]
The rapid rise in raw material prices makes compound fertilizer suppliers basically wait and see when formulating compound fertilizer quotations. But it is clear that as production costs rise, compound fertilizer prices will climb. In addition, against the backdrop of production shutdowns and production cuts, coupled with reduced Russian supplies, global supplies have tightened further.
Article source: Agricultural Materials Herald
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