U.S. Gulf:

Potash barge prices were reported in the $280-$314/st FOB range, up from $270-$282/st FOB last week. While most sources argued that prices were over the $300/st FOB mark, others said some of the lower-priced business came in before Nutrien officially announced its $50/st FOB increase. Still others have reportedly been involved in profit taking.

Late March to April barges were called $315-$320/st FOB, with domestic producers putting upriver equivalents at $345/st FOB.

U.S. Imports:

December 2020 MOP imports totaled 1.14 million st, 42.6 percent above the year-ago 799,230 st. Totals were noted at 6.27 million st in the July-December 2020 window, a 10.0 percent increase from the year-ago 5.70 million st.

Canada dominated the U.S fertilizer year-to-date with 5.40 million st received through December, an 8.2 percent increase over the 4.99 million st recorded through same period of 2019. Russia’s 454,824 st stood 80.3 percent above the 252,267 st total posted for the year-ago, while material sourced from Belarus slipped 4.1 percent to 352,116 st.

Eastern Cornbelt:

Following the $50/st price increases announced by Nutrien and Intrepid earlier in the week, potash prices reportedly firmed to roughly $340-$385 FOB across the Eastern Cornbelt and Great Lakes regions, depending on location, up from $305-$335/st FOB at last report. Spot quotes at midweek included red tons at $350/st FOB Ottawa, Ill., and $385/st FOB Toledo, Ohio, with white potash offered at $354/st FOB out of some Michigan warehouses.

Some sources speculated that wholesale suppliers who took positions at earlier, lower prices may jump back in the market to resell those tons at levels that are still below the new producer postings, especially since some producers claim to be sold out through April.

Western Cornbelt:

The week began with a Feb. 8 announcement from Nutrien that it was raising potash prices by $50/st for all new orders, which pushed Midwest terminal reference prices to $375-$380/st FOB. Nutrien said huge demand has depleted inventories, with current volumes in its distribution system at only half of year-ago levels. The company at midweek confirmed that it had booked small volumes for May-June at the higher postings.

Nutrien’s announcement was followed on Feb. 8 by another from Intrepid, which also posted a $50/st increase on new orders of potash at all locations. New postings FOB Carlsbad, N.M., include $430/st for 60 percent white granular and $437/st for 62 percent white standard, while postings FOB Moab and Wendover, Utah, jumped to $425/st for 60 percent white standard and $430/st for 60 percent white granular.

Intrepid said the new prices reflect a $140/st increase over 2020 summer fill values. Orders taken at the previous price level are expected to be delivered by the end of April.

“Intrepid continues to benefit from great early season demand for fertilizer as increasing commodity prices, tightening inventory levels, and strong farm economics are quickly leading to the best spring season in years,” said Bob Jornayvaz, Intrepid’s Executive Chairman, President, and CEO.

“After two years of lackluster application, farmers are eager to replace nutrients and maximize yield in this increasingly strong commodity environment,” he continued. “Last week, we finished booking historic second quarter volumes at the full $40 per ton price increase announced in December and are confident moving prices higher immediately. We expect to achieve this higher pricing on spot tons in the second quarter.”

Northern Plains:

Sources quoted potash pricing in a broad range at $340-$375/st FOB St. Paul in the wake of recent posting hikes from producers, but the new levels are untested. “It hasn’t traded that high yet, but it will get there,” said one contact.

The market to U.S. buyers FOB Saskatchewan mines had reportedly firmed to $330-$340/st for Q2 after netbacks, depending on grade.

Northeast:

Potash pricing for prompt and Q2 shipments in the Northeast was quoted at a firm $360/st FOB Fairless for 60 percent red MOP, up roughly $50/st from last report.

Eastern Canada:

Sources reported the potash market at C$490-$545/mt FOB regional warehouses in Eastern Canada, depending on location and wholesale supplier, with the upper end reflecting higher producer postings that took effect during the week.

China:

Belarusian Potash Co. (BPC) announced on Feb. 10 that it has reached an agreement with the Consortium of Chinese Buyers (Sinochem, CNAMPGC, CNOOC) on a new annual contract price of US$247/mt CFR for seaborne potash deliveries. The supplier said the price is valid for 2021 and covers a delivery period through Dec. 31, 2021.

The new price is up $27/mt, or 12 percent, from last year’s contract, and is the same price that BPC negotiated with India two weeks ago (GM Jan. 29, p. 17). According to a Bloomberg report, the China increase beat the estimates of some analysts in China.

BPC said the new agreement is the next important step in strengthening the stability of the global potash market and “a positive signal” for further price increases. If past practice is followed, the new price will set a benchmark for other producers supplying seaborne contract deliveries to China this year.

Uralkali Head of Trading Alexander Terletskiy told Bloomberg on Feb. 10 that the Russian producer has recently started contract talks with China. Elena Sakhnova, an analyst with Russia’s VTB Capital, said the China price “is fair for this part of the year,” supports global demand through the whole of 2021, and will unlock spot price growth, according to Bloomberg.

In a Feb. 11 statement on its website, Canpotex said the new China contract price “is significantly below current market levels for potash in key offshore markets.” Canpotex reiterated that it is fully committed for potash sales through April 2021 “even without new contract settlements with our customers in China and India.”

Canpotex said it remains “committed to the competitive supply of all of its valued customers throughout the world, and it will independently do so at levels appropriate to the market fundamentals that we see and on commercial terms and conditions that are acceptable to Canpotex.” The export organization said record potash shipments were made in 2020, and it anticipates further export market demand growth in 2021.

No other major potash suppliers have commented publicly on the new contract price.

Canpotex, Nutrien, Uralkali, and K+S Group earlier rejected the new India contract price of $247/mt CFR reached with BPC, arguing that it is not reflective of current market trends and is significantly below current market price levels (GM Feb. 5, p. 16 ). Canpotex, Nutrien, and K+S said they would not supply potash to the Indian market at that price level.

“This is the third time in the past decade that the Chinese and Indian contract prices have matched and therefore reaffirms the industry’s view that BPC settled too low with India,” said Scotiabank analyst Ben Isaacson, cited by Bloomberg. He noted that with many potash producers sold out for the next few months, volumes moving to China/India “will only accelerate price gains” in Southeast Asia.

Andrew Wong, also cited in the Bloomberg report, said he expects other potash producers to wait until later this year before re-entering negotiations with buyers from China and India with the goal of securing a higher price. However, Bloomberg cited BMO’s Joel Jackson as saying other producers will likely settle at the same terms in India and China.

“If the producers are serious that they do not want to sell this low into India and presumably China, then we would assume the producers would need to forecast lower company-specific potash sales volume in 2021, as there is no way to make up such large tonnages in the other markets,” Jackson said.

BMO said it continues to believe Belarus is focused on volume this year because of ongoing politics. Belarus’ potash exports last year increased by 14 percent over 2019, reaching 11.75 million mt, according to Trade Data Monitor.

Israel:

At an earnings call on Feb. 11, ICL President and CEO Raviv Zoller said the Israeli group is “in no rush to sign contracts.”He noted that 35 percent of ICL’s potash sales go to China and India, but he said ICL is already sold out until the end of April.

“We had assumed the new China contract price would be settled at a $10/mt discount to India, like it usually is,” Zoller said. “At the same time, we also saw an average sale price of about $270 for granular potash in the U.S. in January. $270 is equivalent to about $250 for standard potash, so it’s not so different from the $270.”

But Zoller said ICL’s last potash sales in the U.S. were concluded a couple of days ago at $303, and prices still seem to be still spiking up. “We would like to see more clarity about what other large suppliers are doing [with regard to India and China], and we are following developments and trying to optimize our position,” he said.

Russia:

Russian potash exports reached 9.52 million mt in 2020, up 2 percent from 9.35 million mt in the previous year, according to Trade Data Monitor.

Russian exports to China rose 26 percent, to 2.29 million mt in 2020, while exports to Brazil fell 11 percent, to 2.69 million mt. Other notable year-over-year increases included India up 83 percent, Estonia up 92 percent, Uruguay up 113 percent, Mexico up 92 percent, and Vietnam up 88 percent. Nigeria imported 185,117 mt of Russian potash in 2020, a first for the country, according to the Trade Data Monitor.

Notable declines in Russian potash export volumes in 2020 included Indonesia down 21 percent, the U.S. down 39 percent, and Romania down 46 percent. Russian potash exports to Nigeria were absent last year, according to Trade Data Monitor.

Russia potash exports

‘000 mt	2020	2019
Total exports	9,523	9,354
Brazil	2,694	3,044
China	2,286	1,818
Estonia	837	437
India	823	450
Indonesia	498	627
U.S.	407	669
Finland	387	382
Vietnam	213	113
Poland	189	226
Belgium	188	199
Uruguay	134	63
Bangladesh	121	85
Mexico	102	53
Romania	60	111
Nigeria	0	185

Source: Trade Data Monitor

Brazil:

Potash prices in Brazil began rising before the international contracts were signed with China and India, and appear to be on an upward slope. Sources said the upper end of the MOP range at Paranagua moved up about $10/mt, leaving the new range at $280-$305/mt CFR.

Sources said July-September prices are expected to firm up in the $280s/mt CFR. The rest of the year is then expected to see prices move up to $300/mt CFR by January 2022.

Rondonopolis showed a dramatic increase in just one week. The new rate being quoted by sources is $380-$425/mt FOB ex-warehouse, against last week’s $365-$385/mt FOB. The Sorriso price also showed a big shift, firming to $399/mt FOB ex-warehouse from the $345-$355/mt FOB range in late January. The barter rates for 1 mt of MOP remained at 55 bags of corn or 20 bags of soybeans.

Brazil MOP Prices
Terminal/City	US$/mt FOB
Week ending 02/05	Week Ending 02/12
Rondonopolis	365-385	380-425
Sorriso		399

January 2021 imports of MOP were put at 770,000 mt, according to Trade Data Monitor, against 545,000 mt in January 2020. The bulk of the tons this year came from Russia at 235,000 mt, Belarus at 177,000 mt, Canada at 146,000 mt, and Israel at 103,000 mt. The remaining 100,000 mt or so was split between Chile and Germany.