Egyptian producers bit the bullet and sold all the rest of the availability in February and March at prices below $ 230 mt FOB, down from $ 257 to $ 285 at the end of January, levels at which it made sense for traders in step in and cover shorts for Europe and Turkey. This then led to a surge in FOB sales in Egypt, ending the month at $ 254 FOB high.
There was a report of a sale on the west coast of North America during the last week of the month, possibly reflecting below $ 230 FOB Arabian Gulf. However, there were also a few pockets of better news, with Brazilian CFR (cost and freight) and Baltic FOB prices stabilizing, as well as China remaining mostly non-participating in the export market.
Even though the Chinese seem to be excluded from the market, it remains difficult to see demand drivers leading to stability. For now, it is likely that we will continue to see further reductions in the coming weeks.
Domestic urea prices were lower in February as demand remained limited due to weather conditions. The barges traded between $ 229 and $ 233 / t FOB at the end of February, against $ 243 to $ 250 at the end of January.
High humidity levels caused by winter conditions and heavy rains reduced the possibilities of application in the Corn Belt, Midsouth and Wheat Belt areas. However, application in central and western Texas has started.
On the positive side, good urea demand is expected this spring when it arrives. Expectations of strong urea demand in the spring are bolstered by the increased area seeded to corn and a poor fall application season, combined with a likely tight preplant window. This means that more nitrogen requirements will have to be met after planting by urea and / or UAN.
There is also optimism about the future of winter wheat demand as application in recent months has been postponed.
The price outlook is generally stable as end-user demand increases to largely match supply.
UAN prices fell in February due to a price drop of CF $ 10 in Cincinnati, Mt. Vernon and St. Louis to $ 210 / t FOB for 32%. It is believed that the continued lack of movement in the field put the producer in a difficult position with sales books at the end of the first quarter. In addition, the producer could take a more defensive approach as the EU anti-dumping investigation looms and producers abroad are more likely to place cargoes elsewhere than there.
The UAN barge market has also weakened with the latest prices between $ 175 and $ 180 / t FOB NOLA (New Orleans, Louisiana), against $ 190 to $ 200 at the end of January.
As with urea, market participants are bullish on UAN’s spring demand, but widespread end-user activity remains too far away to be excited by many now.
The price outlook for UAN is slightly soft in the near term, due to lower urea prices and the expectation of increased pressure from imports due to the imminent outcome of the anti-dumping investigation by the EU.
Global phosphate price levels recorded further weakness in almost all regions in February. The Americas continued to record the largest declines.
In Brazil, a spot sale was reported at less than $ 400 per tonne CFR, up from $ 425 at the end of January. However, even at $ 395 CFR, the Brazilian market looks attractive compared to the US barge market, which equates to around $ 360 / mt at NOLA.
Looking east, India was inundated with import tenders, but prices edged down over the month.
In Australia, severe flooding caused the closure of the railway line between Townsville and Phosphate Hill. Consequently, Incitec Pivot Limited had to look to the import market to cover the shortfall of its Phosphate Hill plant for the domestic market. Four shipments have now been booked from China for March shipment, with more to follow if the issue takes longer to resolve.
The outlook for prices is weak and weak global demand should continue to weigh on prices.
The phosphate barge market has taken another turn for the worse with DAP barge prices falling an average of $ 30 from last month to $ 330 at $ 338 / t FOB. MAP follows the DAP lower, with the latest indications between $ 335 and $ 343 / t FOB.
A combination of postponement of fall, late spring, logistical problems and oversupply has put relentless pressure on the market, pushing prices down for 20 consecutive weeks. Importers are considering re-export options, but opportunities here also seem limited, with the recent weakness of Brazilian CFRs making the economy less attractive. The range of imports for March looks light, but unless activity in the countryside improves, any volume would seem too large for this market.
On the positive side, upstream and inland prices remain well above what NOLA’s replacement costs would imply. With a demand for apps hopefully on point and warehouses full of more expensive products, wholesalers are in no rush to cut prices. River terminal prices for DAP vary, but are between $ 380 and $ 400 / t FOB with MAP at an equal spread or $ 5 more.
The outlook for domestic phosphate prices is weak in the very near term, as buyer interest is expected to continue to be low while imports appear to be strong. However, with imports starting to slow from March and end-user demand expected to pick up, prices are expected to stabilize at some point in the coming weeks.
February did little to change the domestic potash market. Prices were mostly stable and weather conditions continue to hamper application work in the Midwest, with the exception of a few pockets where frozen soil is applied. At this point, there is a growing concern that late spring will lead to a shortening of the pre-plant window and, consequently, a reduction in potash applications.
Barge prices were slightly lower with indications now at $ 274 to $ 282 / t FOB, compared to $ 275 to $ 285 at the end of January. River terminal prices are unchanged at $ 305 to $ 315 / t FOB, as are Canadian producers’ bids of $ 330 to $ 340 / t FOB inland Midwest warehouse.
The outlook for potash prices is stable in the near term, but prices should firm up to producer values ââduring the spring season. After that, it seems likely that growers will look to lower prices for the summer filling period.
Editor’s Note: This information was provided courtesy of Fertecon, Informa Agribusiness Intelligence.
(AG / CZ)
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