International fertilizer prices remain stable this week, but stronger Rand brings relief to local prices.

Cost per kilogram of nutrient (R/kg):

Nitrogen

The outlook for Urea prices remains bearish as major producers look towards next week’s Indian urea tender. There is doubt that the tender volume will be large enough to boost prices.

Most of the major urea-producing regions showed small prices reductions this week, as demand continues to be a lot lower than the market expected and hoped. With November and December being the peak demand months in the annual fertilizer cycle and demand continuing to be weak, many players are voicing concerns that urea will not enjoy any upturn in price through this period. Barring any unexpected oil price shocks or plant outages, the urea price appears likely to fall steadily once we are passed the seasonal peak (i.e. from February onwards).

The Middle East FOB urea price was assessed at $15/t down this week, breaking through the $600/t level for the first time since July. There is speculation that next week’s tender could see prices below $600/t CFR India, which would translate to a Middle East price of $550-560/t. The Forward market already has Middle East urea at $540/t for December. Thus there are a number of indicators pointing to lower prices in the next month or so.

With prices falling in the big target markets of Brazil, USA and Europe, the Indian tender will be targeted by most of the export producers. Fierce bidding to secure some of the only current spot demand could lead to another hefty price reduction.

Ammonium sulphate prices saw a minor reduction as a number of tenders around Asia are open. With amsul continuing to trade at a discount to urea and urea prices apparently on the slide, amsul prices are likely to continue heading down. Ammonium nitrate prices have seen more, large downward adjustments as the price moves closer in line with urea and the wider nitrogen market. CAN in Europe was slashed by more than $50/t this week but buyer interest remains limited. With high stocks of urea already in Europe and European AN producers ramping up production as natural gas prices have declined, CAN/AN producers will be discounting heavily to attract buyers, who are currently spoilt for choice.

Some ammonia buying activity has emerged from a few Asian countries, which has brought some positivity to the ammonia sector. Prices however have remained unchanged and it is difficult to see producers succeeding with any increases, given how the rest of the nitrogen sector is seeing prices falling.


Phosphates

Phosphates prices fell in North America and Europe this week, as the sentiment around Phosphates remains negative.

The North American and European phosphates prices have lagged the downturns seen in most other regions over the past few months, so this week’s reductions bring these markets more in line with the international price.

The largescale Indian buying of MAP and DAP for November and December demand is now complete, so Indian demand will not appear until early in the new year. The Brazilian MAP price was unchanged this week, which is more a reflection of the lack of trading/sales activity than an indication that the supply/demand balance may be stabilizing. The US is reporting that its phosphate market is tightening up as a result of production outages in Florida following last month’s hurricane. While this is unlikely to send prices shooting up, it does mean that US exports will be limited.

Saudi Arabia has reported some production cutbacks too, due to one of their ammonia plants suffering a breakdown and with China phosphate exports restricted by its government, there is a degree of tightening supply around the world. This may be enough to slow the rate of decline in prices but until strong demand starts to appear, no one is expecting phosphate prices to rebound.

 

Potash

The Potash market maintains the trend of steady price reductions again this week.

Brazil continues to be at the forefront of downward adjustment in the potash price, with $15/t cut from the price. Potash sales are now taking place at $550/t on the low end of the range in Brazil. Price reductions of similar magnitude were seen in all other major potash markets this week.

With adequate potash supply into all regions, buyers are now confident to delay purchases and keeping purchase volumes to their minimum requirements in order to keep potash prices sliding down. Producers seem to have little option but to accept the steady decline in prices.

Indications for global potash consumption for 2022 are that around 63 million tons may be consumed, which is 9-10 million tons lower than 2021’s total demand. The cause of this reduction is purely high price – high prices have encouraged farmers to apply less potash and thus demand has been reduced. The global operating rate of potash capacity is estimated to be well below 70% this year, which also points towards the need for lower prices to incentivise demand.

 

General Market Outlook 

Brent crude oil firmed early this week on the back of China easing Covid restrictions but prices softened later in the week on the back of pessimism in the US economy.

Brent Crude prices rose to $99/bbl at the start of the week as the market anticipated Chinese demand firming. However poor economic data from the US and increased supply of crude around the world caused prices to slide back to $95/bbl. The Energy Information Administration, which is one of the foremost energy commentators, has revised its oil forecast for 2023 to $95/bbl. Looking at natural gas, the European TTF gas price turned back down this week, shedding $4/MMBtu from $37/MMBtu to $33/MMBtu currently. US natural gas prices have eased down steadily through the week, briefly going below $6/MMBtu and currently trading at $6.2/MMBtu after starting the week at above $7/MMBtu.

Most cereals and oilseeds had a tough week as international prices fell, mostly due to gloomy economic outlooks in the major economies around the world. The CME maize price fell almost 4% week-on-week. To compound issues for local growers, the rand recovered almost 6% against the dollar, which had negative consequences for local prices. The full effect of the stronger rand has not played through into local maize, soya and sunflower prices yet – nevertheless, these products all lost around 2% on the Safex this week.

Importers of fertilizer have seen some relief on shipping costs consistently over the past month as rates have come down around 20% in this period. This has been caused by lack of demand for shipping to China, as covid restrictions there have impacted demand for hard commodities and even closed some ports to shipping. The slightly lower oil price has also translated to cheaper ship fuel costs. The outlook for handysize ships (the approx. 30,000t class of vessels typically used to serve African ports) is fairly negative for the rest of the year and shipowners are not anticipating rates increasing until late in Q1 next year.

Latest Direct Hedge quotes for urea and MAP swaps in USD:

Last week, we were pointing to some positive market sentiment for physical urea prices to have bottomed out and for some strength to return, although the Swaps prices were pointing to weaker urea prices. It seems the Swaps market had a more accurate thermometer, as this week urea market sentiment is very gloomy. The forward quotes see reductions of $50/t or more to the next three months. As is often the case, the next Indian urea tender (closing on 14 November) will give us a clear direction for urea prices in the short term.

If you would like to discuss these fertilizer price trends in more detail, or discuss other fertilizer products not addressed in this report, we would love to hear from you. We would also be happy to discuss your fertilizer procurement needs with you.

Andrew Prince 

This email address is being protected from spambots. You need JavaScript enabled to view it.

International Fertilizer prices resume downward march, as weaker Rand offsets some of the reduction in local costings.

Cost per kilogram of nutrient (R/kg):

Nitrogen

The conclusion of the Indian urea tender sees Urea prices dropping $20-30/ton across most regional benchmarks. Price outlook remains weak

The Indian Ureatender was settled with Indian delivered prices of $330/t CFR, which netbacks to $310/t fob Middle East. This dragged the Middle East benchmark price down almost 7% week on week. Despite the Indians being expected to lock in 1.3 million tons of product, instead of the indicated 1 million tons, the overall price sentiment remains gloomy. The market remains massively oversupplied, which is encouraging most buyers to keep buying their bare minimum requirements and leaving the opportunity open to take bigger positions if the price falls further.

The Northern Hemisphere spring season has disappointed and much of the remaining demand will be covered by contract cargoes, which means spot traders are battling to find any opportunities.

The US domestic season is now in full swing with the river system opening and all the urea imports delivered to New Orleans (the entry point to the Mississippi River system) over the Northern Hemisphere winter now starting to be distributed into the US interior. With high stock levels and a large lineup of urea cargoes already underway to New Orleans, American appetite for additional spot cargoes will be minimal. Maize and wheat futures falling in recent weeks haven’t helped to raise urea demand expectations either.

Brazil remains amply supplied with urea and local buyers are pressuring traders to match the recent price falls caused by the Indian tender. In other Southern Hemisphere markets, traders have contracted large volumes of urea for delivery to Australia from April, which is earlier than usual but an understandable move given current urea price levels.

Ammonium sulphate prices shed a few dollars this week, although traded volumes remain quite low. Ammonium sulphate is trading at a >20% premium over urea as urea prices have fallen much faster than amsul prices. Ammonium nitrate continues to move rapidly downwards – Russian fert-grade AN dropped 10% this week to fall below $250/t fob Baltic, which will be of interest to buyers not sensitive to Russian sanctions, such as Brazil and perhaps even some African buyers. This is certainly a price level that AN producers not integrated into ammonia production cannot compete with. CAN prices in Europe declined €30/t this week, meaning CAN has fallen by €100/t (22%) over the last month.

Ammonia prices maintained their bearish trend. with the Middle East price losing almost $70/t and the Far East price dropping $75/t as Asian requirements for ammonia are almost non-existent. The lower pricing did generate some purchasing activity but the ammonia sector remains heavily oversupplied and prices will keep tumbling until supply and demand move into balance.

 

Phosphates

Similar sentiment to last week in Phosphates market with prices continuing to edge down as producers remain anxious to maintain buyer interest.

India has remained unusually active with its phosphates procurement, with its phosphates stock at the start of its fertilizer year in April looking likely to hit 3.7 million tons, compared to 2.7 million tons in April 2022. This is consequence of India experiencing some shortages of MAP and DAP during the season last year as well as prices being almost half of what they were this time last year.

DAP prices came off about $10/t in the large Northern Hemisphere markets. The US price was dragged down by a more pessimistic outlook for crop prices, and last week’s huge reduction in the Tampa ammonia price has reduced production costs for US DAP producers. The European DAP price remains the highest in the world and sales volumes are very low.

The Middle East MAP price dropped $10/t this week, as did the Brazilian price as MAP imports so far this year are almost 40% up on the same period last year. Exports volumes for the major phosphate producers in Morocco, Russia and China are all hugely lower than capacity, which underlines how supply of phosphates exceeds demand. Prices are likely to continue heading down until this balance tightens, especially if production costs keep falling too.

 

Potash

Potash price sentiment remains negative as prices fall again across most markets this week

The Indians postponed the signature of their annual contract price yet again this week. With many buyers delaying their purchases to see where the Indian numbers ends up, the lack of trading activity pressured potash prices again. The latest round of price reductions has prompted industry analysts to lower their estimates for the Indian contract price from $450/t down to $400/t cfr.

The potash price in Brazil fell $20/t this week as domestic demand was quiet and stocks remain high following numerous cargoes arriving from Russia.

No meaningful imports of potash into South Africa were reported for January, however with the Cape winter rainfall season nearing, the first potash cargoes for this year can be expected in the coming 4-6 weeks. This may see the local potash price being trimmed by a few dollars and importers are likely to be keen to shift volumes in case there are further price declines in the coming 2-3 months.

 

General Market Outlook 

Hard and soft commodity price outlooks take a more bearish tone this week. The Rand weakens by 2% against the USD.

Brent crude oil prices trended downwards this week, falling through $80/bbl lev3el by the end of the week. Various banks and other financial institutions have been vocal this week in cutting their price forecasts for crude oil for 2023, but most are still predicting oil to average $90-100/bbl for the year. The European TTF gas price is approaching $13/MMBtu as many of the gas storage facilities around Europe are close to full. High gas stock levels are an understandable response to the enormous concerns of gas availability following the cutting of Russian supplies. US natural gas prices returned to the $2.5/MMBtu level this week, although upcoming cold weather in the US may cause prices to rise in the very short term.

Maize prices worldwide seem headed downwards as latest indications for the US planting season point to big acreages and with US interest rates being hiked, demand for US corn from other countries is cooling off. Talks around a deal to export Ukrainian grains, while positive for Ukraine, have a dampening effect on prices as this could add significantly to grain supply into world markets.

Latest Direct Hedge quotes for urea and MAP swaps in USD:

The near-dated Urea Swap quotes were trimmed in line with the settlement price achieved in the Indian tender this week. The big debating point in the market is whether urea prices will recover/rebound at all before entering the Q2 low demand period when prices are traditionally at their annual lows.

If you would like to discuss these fertilizer price trends in more detail, or discuss other fertilizer products not addressed in this report, we would love to hear from you. We would also be happy to discuss your fertilizer procurement needs with you.

Andrew Prince 

This email address is being protected from spambots. You need JavaScript enabled to view it.

Sharp rebound in Urea raises questions over fertilizer prices bottoming out.

Cost per kilogram of nutrient (R/kg):

Nitrogen

Urea rebounds sharply as recent sales give producers the upper hand in lifting prices

To the surprise of much of the market, urea prices jumped up significantly at all benchmark points around the world. The price move is being explained as producers being in a more comfortable position after improved sales in the past few weeks and are therefore prepared to push their luck for higher prices as they are less concerned about losing sales volume. We are not so sure that recent sales have been remotely high enough to tighten a very oversupplied market to the extent that an 11% price hike is justified. Be that as it may, urea remains a highly volatile commodity that can respond quickly to market sentiment and this week’s price is further evidence of that tendency.

The Middle East saw prices escalate by almost $30/t this week, with a large range between the high and low prices once again being evident. Egypt has also seen large price increases this week on the back of spot sales into Europe. Both Egypt and the Middle East have entered into the Eid al-Adha holiday in the latter part of the week, so the volume of trade/sales has been limited. Again, this causes us to speculate on whether the urea market has really turned as dramatically as the published prices suggest or whether the price movement is based on a small volume of trade that might not accurately reflect the real state of the market.

One region where the supply-demand balance has tightened materially is in South East Asia where urea sales have been fairly strong and a number of production facilities are down for various reasons. This is supporting increased import volumes, which Middle Eastern sellers have targeted and achieved their highest netback prices of the week. What is not clear is why China, which is the natural supplier from a geographic perspective, is not supplying much urea despite China having ample stocks and actively looking for buyers. Chinese product would land in SE Asia at much lower prices than the transactions reported this week.

Another contributor to positive price sentiment was the rumour of the next Indian urea tender pointing to a 1 million ton tender in mid-July.

The Brazilian urea price moved up by $25/t to $315/t at the high end of the range but this price was reported to be limited to one buyer who had an urgent requirement and most trades were done nearer $300/t.

With the Middle East price rising by $30/t and the Rand slipping by more than 1% against the dollar this week, the local import parity cost of urea rose by 11% to bounce back to the R6,500/t range. This should serve as strong encouragement for any local growers that have not yet fixed their urea/nitrogen requirements for the upcoming season to do so promptly or risk paying considerably higher prices later in the season.

The resurgence in the urea price gave some support to Ammonium sulphate prices which gained around $5/t this week. While by no means shooting the lights out, this small recovery in amsul values ended a 10 week slump in prices. There was increased buyer interest from Brazil ahead of their upcoming summer rainfall season which is giving amsul traders some hope of firmer prices in the coming months.

Unsurprisingly in light of recent higher gas prices, European ammonium nitrate and CAN prices have firmed this week. Urea buying in the region has also boosted nitrogen prices, which is helping EU AN producers achieve higher prices on late season sales.

Ammonia news was dominated by the Tampa contract price being cut by $55/t to $285/t – a price reduction was expected but not to this extent in light of urea prices moving in the opposite direction. This ammonia price is indicative of the usual Northern Hemisphere summer lack of demand.

 

Phosphates

Phosphate prices go nowhere as most regions see small adjustments. The Q3 Indian phos acid price looks like settling at $850/t

Phosphate markets were broadly stable as a mixture of small price changes were seen across the regions. DAP prices were slightly down in China and India but up in the USA.

As Q3 is about to commence, the Indian quarterly phos acid contract price negotiations are underway. So far one of the players has reported settling on a price of $850/t CFR India, which is $120/t down on the Q2 contract price. Thus far no other sellers or buyers have confirmed pricing although it appears likely that $850/t will be the outcome.

MAP prices were boosted by the $5/t increase seen in Brazil supported by improving demand in the country. This small increase was the first weekly upturn in MAP prices seen in Brazil since the start of the year. The positive sentiment from Brazil pulled through to the Saudi MAP price, which rose by $5/t as well – the Saudi benchmark price remains just below $400/t.

The Bangladeshi tender for 630,000t of various phosphate product was canceled due to zero bidder interest. The Bangladeshi government is over $700 million in arrears from prior tenders and this has led to banks withdrawing any credit facilities and no producers or traders are prepared to take a chance.

As we have mentioned previously, any strengthening in phosphate prices is heavily dependent on the operating rates of the major exporters, particularly the Moroccans and Chinese. Both have been operating at below 50% for some time now – already there are reports of the Chinese upping their production to above 50%. Our view of phosphates bottoming out at the $400/t mark remains – at sustained prices much below this level, a number of producers would likely cut back on production which would tighten the supply-demand balance and support prices.

 

Potash

Potash prices appear to be stabilizing as regional adjustments take place to align the overall market

As was seen with nitrogen and phosphates in Brazil, the emergence of their summer season buying is supporting all fertilizer prices and Brazilian potash prices rose by $5/t this week. While this is a very small increase, market analysts are pointing to this inflection point as a sign that the market may have hit the bottom.

In South East Asia, the potash price dropped more than $40/t as it adjusted towards the recent Chinese contract price. The SE Asian price is now around $320/t compared to the Chinese contract price of $307/t. Unless there is a major, unexpected disruption in the Asian potash sector, it seems probable that these prices will prevail for the next few months at least.

The Indian renegotiations of their contract price have not been concluded yet but it seems a safe prediction that they will achieve a price somewhere in line with the Chinese value.

The South African import price moved down by $10/t in sympathy with world market prices. With prices still close to $400/t, there appears to be some scope for further reductions for committed buyers. It is a risky game for local buyers to delay purchasing in anticipation of further reductions versus the probability of port congestion and delays in discharging vessels in Durban as Q3 approaches.

 

General Market Outlook 

Energy prices stable this week but the weakening Rand and falling Crop prices are a concern.

After a short dip to $72/bbl midweek, Brent crude oil is closing out the week where it began, at $75/bbl. The OPEC+ group is set to cut oil production but oil demand is also declining on ongoing fears of recession so oil prices remain in the mid-70/bbl range. Gas prices were stable this week, with the EU TTF gas price trading at $11/MMBtu and the US natural gas price $2.7/MMBtu.

The Rand lost 25c to the US Dollar this week, fast approaching R19 to the dollar once again. While Rand weakness is nothing new, the timing is unfortunate as the bulk of agri-inputs are being imported and priced now, meaning that growers are faced with an increasing US Dollar exposure (in other words, if the Rand strengthens closer to harvest time, growers will face reduced profit margins).

In a big reversal, crop futures lost all their gains of last week. CME maize dropped 12% week on week to reach a new low for 2023. Rainy weather in the US overturned concerns of hot weather impacting the current crop and prompted a sell off. Despite the Rand continually weakening, the Safex maize fell by 8% and local maize prices are once again below export parity. The international wheat was also a big loser this week as good yields in North America point to surpluses – this will be of concern to local growers that have winter wheat on the lands.

Latest Direct Hedge quotes for urea and MAP Swaps in USD:

This week saw a marked upwards adjustment in the Middle East urea Swaps quotes, as the physical urea price leapt up. The biggest revision was for the July forward market where the ‘buy’ increased by $30/t. The Q3 price quotes are now in the $320-325/t range which is more in line with our expectations for the urea price direction. Early indications for Q4 show values of $340/t which broadly matches our predictions, although we do feel that there is $10-20/t possible on the upside (i.e. $350-360/t during Q4).

Urea price does an about-turn, as Phosphate leaps up.

Cost per kilogram of nutrient (R/kg):

Please note there will not be a report next week (18 August).
 

Nitrogen

The Indian urea tender surprised the market with lower-than-expected prices – will this slow the upward price trajectory?

The latest Indian Urea tender closed earlier this week and delivered a few surprises. Firstly, the price was a good $20/t lower than predicted, settling just below $400/t CFR India. This netted back to around $380/t FOB Middle East and $375/t FOB China. A smaller surprise, given the market gossip about how tight producers are on inventory, was that 3.4 million tons of urea were offered. The Indians indicated that they were looking for approximately 1 million tons, so the tender was more than three times over-subscribed. Hardly a message of product availability being limited.

A sharp 35% spike in European gas prices raised concerns about European buyers returning promptly to the market, especially in light of the supposed shortage of urea. No European buying interest materialised which suggested that there is no meaningful shortage of product at this late stage of the season and perhaps buyers are unconvinced about the strength of urea prices going forward. Egypt, who is usually the first choice supplier to Europe, reported no sales this week.

Predictably urea prices in other major markets fell substantially on the news of the Indian tender. Prices in Brazil dropped $30/t and US barge values dropped $45/t. With seasonal lulls fast approaching for both markets, nobody is keen to be stuck with high priced positions.

Where do these latest developments leave urea prices for the next month or so? The Northern Hemisphere surge in demand for Q4 can be expected to lift prices from October. But for August and September we may well see relative stability in pricing. Once the dust settles on the Indian tender, our feeling is that many producers will be looking for sales but will be cautious about over-selling and sending the price tumbling again. A urea price in the mid to high $300s looks about right (i.e. $350-375/t FOB Middle East) for the next month or so.

The about-turn in urea prices caused Ammonium sulphate prices to give up much of their recent gains. Granular product dropped almost $10/t and crystalline amsul declined almost $20/t. The recent surge in amsul price has encouraged buyers to be cautious and sales volumes have shrunk this past week. With the Brazilian import window closing, prices in Brazil dropped by $30/t this week as sellers chase buyers.

Ammonium nitrate prices stabilised this week after urea lost all momentum – it seems likely that AN will soften a little in the coming weeks until urea prices stabilize. CAN prices were unchanged this week.

Ammoniaprices were flat this week – the market appears tight with a number of producers suffering outages but the urea price drop may have caused ammonia buyers to hold back in hope of ammonia prices being affected. The EU gas price jump this week would also point to European ammonia production being cut back in favour of cheaper imports but as yet, no new import purchases have been seen.

 

Phosphates

Phosphates prices climb rapidly as availability from China tightens and buyers act quickly to cover

It was active buying from India that kept DAP pricing heading upwards this week. There was no confusing the price direction as the Indian price leapt by $70/t to rise above $500/t CFR. The Chinese DAP price rose by close to $75/t as concerns about Chinese supply are clearly rising.

Other importing markets showed more modest increases, although a $20/t increase in the US and Europe is certainly considerable. Buying activity has picked up across most regions.

The Moroccans enjoyed a second week of decent sales, with over 200,000t of phosphates reportedly being sold to South America and Europe.

Despite the lateness of the season, Brazil was prepared to pay an extra $20/t for MAP prices with prices there now above $500/t. The window has now closed for exports from China to reach Brazil in time for the soya planting season so prices in Brazil may start to quieten.

The Indian quarterly phos acid contract price was finally settled this week – the final number was agreed at $850/t CFR India for 100% P₂O₅ concentration.

Opinions remain divided on the direction of phosphates prices for the rest of the year – there is a school of thought that prices will resume their decline by the end of the year because demand overall remains rather weak and farm economics aren’t looking great. But for the short term at least, phosphates look set to remain high.

 

Potash

Potash prices edge up slightly in Brazil and the US
 

The US led potash markets this week as their summer fill programme (stocking up for next spring before winter impacts Canadian exports and US distribution in the Corn Belt) picked up speed. The Canadian port strike now seems to be over thus supplies are expected to resume.

Late season purchases into Brazil supported another $5/t increase with the Canadian strike possibly adding some support to sellers.  

As a counter to the recent upward movement in potash, a tender in South East Asia saw 300,000t being sold at a price of $306/t CFR, which is the lowest price seen this year in any region. This deal will give encouragement to other big buyers that low prices are still obtainable.

A 40,000t cargo of granular potash was reportedly sold to South Africa this week, at a price of $390/t CFR. This is broadly in line with the current price level in Durban.

 

General Market Outlook 

Rand keeps weakening as Crude Oil price strengthens.

Brent crude prices firmed this week as production cuts seem to be taking effect – the price rose from $84/bbl to end the week at $86.7/bbl. There is a fair bit of talk about raising the forecasts for oil for the rest of 2023 and for 2024. The European TTF gas price jumped sharply this week, bouncing from $9.5/MMBtu to approach $13/MMBtu as concerns over strikes at Australian LNG sites sent concerns throughout the global gas market. US natural gas prices reacted too, although to a much lesser extent, finishing the week at $2.8/MMBtu.

The Rand remained weak this week losing another 1%, briefly rising above R19 to the Dollar and looks set to end the week around R18.8:$.

Latest Direct Hedge quotes for urea and MAP Swaps in USD:

The Urea Swaps quotes last week predicted the pull-back in physical urea prices seen this week. The forward prices saw further reductions, with most of the changes being for Q4. As we warned last week, urea does have a tendency to overshoot and very steep increases are often followed by a sharp downward correction. The Swaps prices given above suggest urea should remain in the high $300s for the rest of the year, which we think is a reasonable prediction overall. But expect some sharp movements along the way.

If you would like to discuss these fertilizer price trends in more detail, or discuss other fertilizer products not addressed in this report, we would love to hear from you. We would also be happy to discuss your fertilizer procurement needs with you.

Nitrogen

Urea prices were higher across most benchmarks as the latest Indian tender closed on Thursday

Prices have not yet emerged from yesterday’s Indian urea tender but indications are that the price will land in the $360-370/t CFR India bracket.

The Middle East urea price rose by around $4/t going into the mid-$350s and the Indian tender price will largely dictate where the benchmark price finishes the year. Some late season spot trades to Australia helped lift the Middle East top end price.

Prices in Brazil continued to run up as lack of Iranian product and demand from the Indian tender drove prices higher. The Brazilian price is now at $360/t CFR, which rules out supply from the Middle East at present. Brazil will go through a lull in demand as the summer rainfall season ends but their Safrinha season will start from February and will require more nitrogen.

Egypt enjoyed rising urea prices on the back of traders looking for cover for the Indian tender and European buying as domestic European production remains down due to uneconomically-high gas prices. Egyptian urea is now approaching the $400/t FOB mark.

Ethiopia closes a urea tender for 820,000t early next week, which is also contributing to demand at present. This tender calls for delivery from January through to June next year, so the demand is somewhat spread out.

Iranian production remains limited because of gas restrictions in country – this has put Turkey under pressure and forced them to look to the Middle East, Russia and Egypt for product, which added to price support this week.

Ammonium sulphate prices are being pressed downwards because of a slowdown in Brazilian buying – the season in Brazil is close to an end and record volumes of amsul have already been committed. While there were no major price movements, the key Chinese amsul benchmarks were showing values being down by a dollar or two. Chinese export data for January to November shows that they exported over 15 million tons this year, 20% up on the same period in the prior year.

Ammonium Nitrate markets are moving in different directions in different markets. In Europe, producers are trying to push prices up as the spring season approaches, whereas in Brazil prices are falling as demand ends.

The outlook for Ammonia points to lower prices coming as supply has improved relatively and demand remains soft.
 

Phosphates

Phosphate prices remained steady on limited market liquidity

Most price benchmarks were unchanged this week as spot trades were few and far between. The general sentiment is that prices are arguably a few dollars up this week.

The big producers in Morocco and Saudi continue to shift big volumes of MAP and DAP under formula pricing, which does not shift the spot price quotations. Large volumes have been sold to Europe, Australia, India and some of the other Asian markets this week.

In the US MAP and DAP prices converged with each other, as the premium for MAP declines.

As the Dollar continues to strengthen against most currencies, the Brazilian Real took a beating this week, dropping to record lows against the dollar. This is hurting demand for fertilizer as local prices are rising as a result. At least the fertilizer season is almost over and most of the product has been bought – on the flip side the weak currency will be helping Brazil’s exports of grains and oilseeds.

 

Potash

Potash prices gathering upward momentum as producers focus on Q1 2025

With the holidays approaching and Southern Hemisphere buying coming to end, potash markets were slow this week although continuing to show steady upwards momentum.

The Brazilian price rose $10 on the high end of the spread and there is not much product on offer below $300/t. Whether Brazil will be a serious buyer in Q1 remains to be seen – the Safrinha season usually relies on utilization of nutrients already applied from the summer season, especially P and K. But if potash prices are set to rise through 2025, Brazilian buyers may be astute enough to keep buying now, as prices are unlikely to be lower in the middle of the year when they would otherwise buy.

South East Asia is also showing more positive demand and producers and traders are optimistic about prices for Q1.

 

General Market Outlook 

SA Maize reaches record high prices as Rand weakens
Brent Crude oil continues to float in the low $70s/bbl after a brief spike early in the week to $74/bbl. Various conflicting macro-economic drivers have caused volatility in oil prices this week, with US oil stocks showing a big drawdown leading to higher prices, before indications from the US Fed of impending interest rates cuts causing pessimism around oil demand and sending prices lower. Brent Crude is currently trading at $72.5/bbl.

European gas markets got a small measure of relief this week as tensions with Russia have lowered somewhat and the TTF gas price has fallen to $12.6/MMBtu. US gas prices have continued to climb and now sit at $3.6/MMBtu.

After last week’s strong (and surprising) performance, the Rand devalued sharply versus the Dollar this week, dropping to R18.4 to the Dollar – a decline of almost 5%.

Maize prices had a major lift this week – the international CME price was up around 2% but increasingly negative news about the current summer season in Southern Africa has boosted local maize values massively. The Rand devaluation has added to this. So this week saw Safex white maize approaching R6,800/t and yellow maize almost reaching R5,500/t which are all-time record high prices for South African maize.

Latest Direct Hedge quotes for Urea and MAP Swaps in USD:

Unfortunately no Swaps prices have been published this week, so there is no update or commentary.

If you would like to discuss these fertilizer price trends in more detail, or discuss other fertilizer products not addressed in this report, we would love to hear from you. We would also be happy to discuss your fertilizer procurement needs with you.