Central Florida: Sales of truck-loaded DAP were quoted in the $365-$370/st FOB range, up from the previous week’s $360-$370/st FOB. MAP moved up as well, to $375-$385/st FOB from the prior week’s $370-$380/st FOB range.
U.S. Gulf: Phosphate players described another week of barge market firming. Prompt DAP trades were reported in a range of $330-$339/st FOB, and MAP moved up as well to $335-$345/st FOB.
Additionally, Chinese tons unsold from a surprise fall cargo were reportedly offered in the $325-$327/st FOB range.
Sources generally attributed the higher prices to a segment of deferred winter demand coming due. Others pointed to weather improvements in the Northeast, where some forecasts said the Ohio River Basin was exiting the worst of the winter ice season.
Whether the firming market was indicative of long-term health or a short-term spike was up for debate. A hefty import lineup led some market players to predict softer values come March. “We’re seeing three EuroChem cargoes, one PhosAgro, and three OCP panamaxes, all for March arrival,” said one trader. “Most still see prices going down once imports arrive.”
Others believed the material en route would meet demand without tipping the market lower. “The cargoes coming appear to be needed supply, in my opinion,” argued another trader.
The market may also face a battle with itself once the March imports arrive. Some observers continued to express a belief that the imports’ expected formula pricing structure would limit upward price potential, but that idea also proved contentious.
“I think the formula pricing creates more upside,” said one contact. “If buyers come in and they see there’s not a price on something, I think they’re more likely to jump in.”
March paper trading also moved higher for the week. After reportedly trading as high as $342/st FOB early in the week, bids and offers settled in a range of $335-$338/st
FOB on Feb. 25.
The prompt NOLA barge market was quoted in a range of $330-$339/st FOB, up from $322-$335/st FOB at last report. MAP was called $335-$345/st FOB, above the previous week’s $322-$340/st FOB.
Eastern Cornbelt: The regional DAP market remained at $360-$370/st FOB in the Eastern Cornbelt, with several sources suggesting $365/st FOB as the common dealer level in late February. MAP was reported in the $370-$380/st FOB range in the region.
10-34-0 was steady at the $510/st FOB level out of most locations in the region.
Western Cornbelt: DAP continued to be quoted at $360-$370/st FOB terminals in the Western Cornbelt, with MAP $5-$10/st higher than DAP, depending on location.
10-34-0 was steady at $475-$500/st FOB in the region, with the low in Nebraska and the upper end in Iowa.
Southern Plains: Sources reported brisk movement of phosphates and potash on preplant rowcrop ground in the Southern Plains in late February, and DAP pricing appeared to be inching up. Sources quoted the Catoosa DAP market at $370-$380/st FOB, up $20/st from early February levels, with several sources quoting the market firmly at the $375/st FOB level or higher as the week progressed.
MAP was reported to be in short supply at the port, with the market quoted in a broad range at $380-$400/st FOB in late February.
10-34-0 was pegged at $475-$485st FOB in the Southern Plains, with “lots to go around at this time.”
South Central: DAP was reported in a broad range at $350-$370/st FOB out of warehouses in the South Central region, with the low reported at Blytheville, Ark. TSP was quoted at $335-$340/st FOB in the region, with the low in Memphis and the upper end in the Arkansas market.
Southeast: The Aurora, N.C., DAP market was quoted at $390-$400/st FOB, with reports that the market would likely firm to the upper end of that range as of March 1.
U.S. Export: Firming in a number of Latin American markets triggered a second consecutive week of Tampa export sales.
Mosaic announced an 18,000 mt DAP cargo for shipment into Latin America last week. The cargo netted back to $360/mt FOB Tampa, and was tabbed for March shipping.
The Gulf export market was called $360/mt based on recent sales, unchanged from the previous report.
Phosphate exports fell for the month of January, according to data released by The Fertilizer Institute (TFI). Producers shipped 113,195 st of DAP and MAP for the month, a 34.1 percent decline from the January 2015 total of 171,649 and considerably below the 204,763 st reported in December 2015.
Brazil was January’s largest buyer at 30,460 st, a 32.0 percent increase from January 2015’s 23,076. Australia was second at 27,391 st, down 0.4 percent from the year-ago 27,500 st. Coming in third was Colombia at 18,061 st, 3.2 percent above last year’s 17,506 st.
TFI traced the year’s weak start to lackluster purchasing from several countries. Canada received 13,577 st for the month, representing a 55.6 percent year-over-year decline. Mexico’s 5,058 st was down 70.9 percent from its January 2015 total, and Honduran buyers notched 76.0 percent fewer January imports at 2,630 st. Costa Rica, Ecuador, Guatemala, and several smaller markets bought zero U.S. tons after receiving a combined 33,903 st in January 2015.
The numbers represented a slow start to calendar-year 2016, a trend echoed by weakness in the fertilizer year-to-date. By that metric, 1,070,430 st of phosphates were shipped through January, 16.7 percent below the year-ago 1,284,789 st. TFI cited weak buying from both India and Brazil for the lackluster numbers.
Phosphoric acid sold to India was priced at $715/mt CFR for the first quarter, down $95/mt from $810/mt CFR in second-half 2015.
Brazil: Brazil MAP market players noted new life in the market. MAP transactions were quoted up to $360/mt CFR for the week, putting most-recent transactions in a $350-$360/mt CFR range, up from $325-$330/mt CFR at last report.
Sources said the market was only likely to move higher. “People are proud of their product right now,” said one source. “We’re seeing offers as high as $375/mt CFR. I don’t think that price has traded, but we’re probably headed for $365/mt CFR.”
One trader reported that Brazil closed a TSP deal from Morocco or Tunisia in the low $280s/mt CFR after a bit of hard-ball haggling.
Latin America: Sources reported that a number of inquiries circulated, but none of them to the liking of producers.
Bunge in Argentina reportedly bid $348-$349/mt CFR for product against offers from Russia and Morocco at $355-$365/mt CFR. Another offer closer to $370/mt CFR was made to another Argentina buyer, but was immediately rejected.
Saudi Arabia: The Saudi Arabian DAP market continued to be called in the $375-$385/mt FOB range.
China: A recent sale to Pakistan at $360/mt CFR put the netback to China at $350/mt FOB. Sources say the deal was handled by a private Pakistan company rather than the state importing arm TCP. The deal could be handled privately because Pakistan does not put restrictions on phosphate imports the same way it does on nitrogen-based material.
Reportedly the Chinese phosphate producers are slated to meet next week to discuss the low prices being offered for their product. Industry watchers say one possible result could be a call for producers to reduce output.
International traders expressed little sympathy for the producers. Traders noted that prices for DAP components are dropping. Reports of a dramatic decline in sulfur and ammonia prices indicated to traders that the break-even price for the DAP producers should also be falling.
India: The Indian government is looking at a test program in 20 districts to pay subsidies for phosphates and potash directly to farmers.
According to a government release, the Department of Fertilizer is looking to nail down details of farmers’ purchases so it can prepare a plan to pay the subsidies directly to the farmers instead of to producers or brokers.
Phosphates and potash, unlike urea, are not price controlled. Subsidies for these inputs are handled through the Nutrient Based Subsidy plan, which went into effect several years ago.
Basically, the government provides a subsidy based on the P or K content of a particular fertilizer. The idea was to wean farmers off specific fertilizers such as just DAP or MAP in favor of a more balanced input regime.
Europe: GCT is reported to have sold DAP to Spain and Italy at about $378/mt FOB. OCP is understood to have around 70,000 mt of DAP/MAP under shipment to Europe this month, with the product sold at prices ranging between $380-$400/mt FOB.
Nepal: State-run Agriculture Inputs Co. Ltd. said it is still assessing the offers received under its tender for 15,000 mt of DAP for delivery to the buyer’s warehouses. Wilson was said to have submitted the lowest offer with Chinese-origin material. The tender closed on Feb. 15 and offers are to remain valid for 21 days after tender closing.