Central Florida: Phosphates offered by producers remained tight, sources said, and reseller inventory wasn’t much better. DAP was said to be difficult to come by, while MAP was effectively impossible.
“Product is real tight out of Florida,” one source said, “not that we could sell it today anyway.”
DAP prices were said to hold firm at $435/st FOB or above despite a dearth of both nearby interest and available supply. Resellers held out hopes that bottom-dollar corn prices stemming from the current record crop wouldn’t scare off too many end-users from September and October purchasing.
Phosphates shipped by truck were reportedly maintaining their premium over rail-loaded product.
Prices on the Central Florida DAP market were static in a range of $435-$440/st FOB, with truck-loaded product representing the upper level of the range. MAP was expected to command an additional $20/st FOB over DAP.
U.S. Gulf: Aside from a handful of confirmed transactions for the week, not much was traded on the NOLA phosphate market. “A couple of barges here, a couple of barges there,” one source said.
At least one sale, reportedly a barge of high-quality Chinese material scheduled for Aug. 13 loading, hit the $450/st FOB threshold, however.
One producer serving the NOLA market raised prices in anticipation of increased demand in the weeks ahead. Offers were floated at $455/st FOB for August and September, while October DAP was offered at $465/st FOB.
MAP was said to exhibit signs of severe tightening due primarily to intense offshore demand, and was believed to command a roughly $30/st FOB premium to DAP.
Some sources saw the recent typhoons in China as a possible driver behind the DAP price appreciation. Industry watchers estimated that roughly 200,000 mt of phosphates were lost or destroyed in the South China Sea storms, a significant amount that may have delayed or disrupted many traders’ import plans.
At a minimum, anticipated supply was reduced, and traders playing to market fundamentals expected to see rising price levels.
A portion of the market believed the typhoon and its effects may have been exaggerated, however. “I personally think the typhoon was overhyped,” one source said. “China is still supplying India at lower levels than other markets. They don’t seem tight on product.”
Though the typhoon may have affected some more strongly than others, many traders reported vessel delays of a week or less resulting from the storm.
Sources also decried the continued barge freight price explosion of recent weeks as a major contributor to the less-than-stellar volume of material traded.
Buyers have taken to requesting a $10-$15/st FOB price cut to compensate for prohibitive freight rates, sources said. With few, if any, sellers willing to accept such terms, purchasers opted to delay their acquisitions for a few weeks in hopes that shipping costs would return to more palatable levels.
Despite the perception of logistics costs dragging down the nearby market, some industry players believe the problem has been oversold in the market. Many traders have their freight prices locked in at contracted rates, sources said.
“Like the typhoon, it’s being blown up so someone can take advantage,” one trader said. “Everyone with low contract freight can now push higher freight to their buyers. It’s just a few import cargoes that will have to pay double rates.”
Prices on the NOLA barge market were quoted in a range of $442-$450/st FOB for the week, a slight uptick from $442-$448/st FOB in the previous reporting period. MAP, in high demand from international bidders, was quoted at a $30/st FOB premium to DAP.