Ongoing Russian-Ukrainian war keeps most wholesale fertilizer prices high

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The lull in activity was attributed to uncertainty in commodity markets with Russia announcing its intention to end military operations near the Ukrainian capital. Prices soared in the first part of the month and commodity prices soared, but then calmed down as the market digested news of the invasion and lost fertilizer supplies.

River Terminal urea offers rose mostly in line with the gains seen on urea in the US Gulf, reaching as high as $935-$950/t FOB from February levels in the 500s $ to $600 low.

Attention is focused on US supplies ahead of spring applications, with year-to-date imports well ahead of the previous two years. But previous discussions of re-exports during the quiet period of January and February call into question exactly how many of these volumes will be available for in-season demand.

US producers like CF Industries have prioritized ammonia and UAN production in recent months, which has also likely left domestically produced urea at lower levels than in recent years.

In the near term, prices are expected to remain somewhat volatile and subject to market activity in India, Brazil and Russia. However, there could be more support once the weather turns and the US starts trading on its own fundamentals.

International:

With little business reported at the end of March and bids below a Southeast Asia tender, market sentiment began to deteriorate with a more bearish tone evident as prices moved higher. capped or slightly lowered.

Brazil was notably absent from the market for much of the second half of the month, with offers falling from $980/mt CFR to around $900 for non-Russian urea at the end of March and being reduced around CFR$900 for Russia. .

Sales out of North Africa were non-existent as bids remained at recent highs with no interest from traders. Prices ranged from $1,120 to $1,130/mt FOB, up sharply from $730 in February.

The market remained in limbo, waiting for India to step in for at least 1 million tonnes or more, with the hope that a new tender would be announced, providing a stabilizing force in the short term. Egyptian and Algerian producers are also comfortable for April and expect additional demand from Europe, as well as offshore markets depending on how Russian trade flows develop.

Global urea prices are viewed with a slightly lower tone as high prices keep trade tight, leading to demand destruction. With no activity from India and Brazil, prices are likely to erode further, although fundamentals are relatively strong on tight and uncertain supply.

UAN

Alongside urea, March was also a rather quiet month for UAN, with producers pushing up prices despite weak demand to speak of. Barges at NOLA, for example, were priced higher at $620/t FOB for UAN32%, compared to $545-$550 in February.

March saw further price increases not only at NOLA, but also within the US, with river terminal offerings increased based on barge values ​​to $645-$650/t F.O.B. Terminal volumes had just crossed the $600/t mark in February. Bids in Cincinnati were valued at premium at the end of the month at $665/t FOB, before the other river markets were quoted online at $660 in April.

Last month also saw a review of US import damage investigations regarding UANs from Russia and Trinidad. Dumping rates for the latter nearly doubled from 63% in January to almost 112% in March, although previous rates have already prevented any UAN from Trinidad from being profitable in the United States.

Also in March, Sen. Roger Marshall, R-Kan., and Rep. Tracey Mann, R-Kan., introduced the Emergency Relief From Duties Act, aimed at creating emergency waivers for fertilizer duties by the US International Trade Commission (USITC). If the bill goes through the legislative process, it would create a pathway to establish a one-year countervailing duty (CVD) or anti-dumping duty (AD) exemption for emergencies – defined as including natural disasters, war, epidemics, labor disputes or major accidents – according to a statement from Marshall’s office.

In the near term, we expect US prices for UAN and other nitrates to remain firm due to global production disruptions, high natural gas costs in Europe and strong domestic fundamentals heading into the spring.

PHOSPHATES

Domestic:

After seeing some price decline in February, phosphate soared in March to price levels not seen since 2008. Supply shortages in the global market and rising prices in other markets d Imports such as Brazil supported price increases, well ahead of spring demand in the United States.

DAP barge prices in March reached $960 to $1,010/t FOB NOLA, compared to $770 to $775 for DAP and MAP in February. MAP was valued in a range similar to DAP of $960 to $1,000/t FOB. The low end of the DAP and MAP barge ranges consisted of Mosaic’s first barge offerings after the producer lowered prices in late February.

Further along US waterways, DAP prices at the river terminal ended March between $1,010 and $1,040/t FOB, a month-over-month increase of more than $200/ t. MAP prices varied wildly in March, far from being reduced compared to DAP, on the basis of weaker demand and more abundant supply, while a complete lack of activity on other markets prompted sellers to maintain a premium of $10-20 for MAP.

The chatter in the nitrates sector has suggested that possible exceptions or suspensions of tariffs on UAN could also apply to phosphate duties applied to products of Russian and Moroccan origin over the past year. However, none of these efforts have yet borne fruit and leaves the US market without a clear answer as to where additional volumes of phosphate might be sought in such a tight market.

With an extended U.S. winter retreat also underway, however, fewer days suitable for fieldwork this spring could also reduce phosphate requirements.

Our price outlook for phosphates in the United States remains stable to firm.

International:

Prices in the phosphate market remained stable in March, supported by the conflict in Ukraine and the ripple effect of higher prices, as major exporters were unable or unwilling to supply more of the market.

Brazil’s MAP was trading as high as $1,300/tonne CFR at the end of March, having just broken through the $900 mark in February.

In India, prices stagnated in the FOB range of $920/mt, unchanged from February, as the Indian government waits to announce the new subsidy rates to be provided to each nutrient for the next year of fertilizer.

With the latest DAP deal of March concluded in India in the CFR $920-$926 range, the industry expects the government to consider raising subsidy rates to mitigate import price losses. current.

Concerns over Russian supply, as well as Black Sea and Baltic raw materials to make phosphates elsewhere, eventually led to an increase in demand for non-Russian materials in several markets around the world. As a result, global phosphate prices are firm, but lower prices for available Russian supply could limit potential price increases.

POTASH

The loss of Russian tons from the export market had an additional knock-on effect on potash prices, and as Belarusian tons previously left the world market without a new shipping route, prices rose in almost all main buying regions.

In the United States, NOLA potash barges ended March at $810-835/t FOB, around $150 more than between $660 and $670 in February. $805 had already been traded for loaded barges in the second half of the month and believed to be part of an export effort, while new sales and offers continued to rise alongside increased demand with the imminent arrival of spring weather.

River Terminal potash followed the increases in the US Gulf a bit late, crossing the $800 mark, but with slower terminal activity making price increases less urgent. Most terminals were in the $800 to $810/t FOB range, with Cincinnati seeing prices up to $815. Prices in February ranged from $690 to $710.

March also saw the threat, execution and resolution of the shutdown of potash volumes transported into Canada. Canadian Pacific Railway Limited has agreed with the Train and Engine Bargaining Committee of the Teamsters Canada Rail Conference to enter into binding arbitration and end the work stoppage, which began March 20. Services resumed Tuesday, March 22 at noon local time, just days after initial operations. stopped.

Despite the lack of Russian and Belarusian products in the U.S. in March, fears over potash-related supply shortages were either a lower priority or pale in comparison to the effect of the Ukrainian nitrogen crisis, as the United States saw river terminal prices decline slightly. late March/early April on Canadian products.

Potash prices in the United States are stable in the short term and could firm up once spring conditions arrive. There is no easy solution in sight for the supply gap between Belarus and Russia globally, which could affect prices with a firmer tone in the wider market for some time to come. .

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Editor’s Note: This information was provided courtesy of Fertecon, Agribusiness Intelligence, IHS Markit.

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