Central Florida: Prices in the Central Florida market held steady through the holidays, sources said, amid year-end pressure to burn capital for tax purposes and preempt a looming increase in the price of rail freight out of Florida. The market maintained its $425/st FOB price floor, with truck sales pushing $5-$10/st FOB higher.
Activity was predictably slow given the relatively few business days available through the holidays, but some traders reported buyers taking advantage of purchase windows leading up to the New Year.
Motivators included the Dec. 31 close of the 2014 tax window, and rail rates expected to increase $5-$10/st in January. Sources also spoke of a price increase of approximately $5/st FOB expected in early 2015 as the Florida market responds to upward pressure from rising NOLA rates.
DAP prices on the Central Florida market were steady in a range of $425-$435/st FOB, unchanged from the previous report. Rail-loaded product was put in the $425-$430/st FOB range, while DAP trucks were called $430-$435/st FOB.
MAP was quoted at a $20/st FOB premium to DAP. As in recent weeks, however, MAP was said to be essentially unavailable.
U.S. Gulf: Despite minimal activity reported during the New Year’s week, the NOLA DAP market continued to strengthen over the holidays, industry sources said, extending a steady price climb that began around Thanksgiving.
Recent transactions fell in a range of $430-$440/st FOB, though a few barges traded at $425/st FOB prior to Dec. 25. New offers were quoted in a range of $435-$442/st FOB as of Dec. 30, and paper trading for March 2015 touched the $445/st FOB mark.
The market was DAP-centric, and demand for MAP was sluggish. MAP was thinly traded over the holidays, with some traders claiming the product struggled to maintain its premium to DAP.
Some voiced concerns that the recent price increases were driven in part by end-user motivation to purchase before the end of the year, suggesting short-term demand could taper after Jan. 1. The concerns were not universal, however. Barge supply continued to be tight at NOLA, others countered, which by itself would go a long way to supporting the market.
Sources expected a healthy lineup of import vessels to begin arriving in January, including cargoes from Morocco, Russia, and other locations. Speculation was in high gear whether vessels from China would be among the arrivals. “The Chinese are the wildcard,” one trader said.
With NOLA prices nearing the $445-$450/st FOB level, sources said it might make fiscal sense for Chinese sellers to target the U.S. “To attract (Chinese) imports you have to go to $450/st,” said one industry veteran. At prices below this level, he said Chinese producers can get better netbacks on sales to Australia, as well as internally.
Another contact agreed, noting that with paper trading up to $445/st FOB for the week, “Chinese DAP starts to get some attention here in the states.”
The NOLA barge market firmed to a range of $430-$440/st FOB for the week, up from $425-$435/st FOB at last report. MAP struggled to keep pace, and was generally quoted in a range of $435-$450/st FOB.
Eastern Cornbelt: DAP remained at $460-$475/st FOB regional warehouses in the Eastern Cornbelt, with the low reported at Cincinnati. MAP was reported in the $480-$500/st FOB range in the region, depending on location.
10-34-0 remained firm at $520-$540/st FOB for limited tons in the region.
Agrium’s phos acid postings moved up on Jan. 1 to $1,065/ton of P2O5 for rail-DEL SPA and MGA in Wisconsin, and $1,100/ton of P2O5 for rail-DEL SPA and MGA in Michigan. Those levels were up $10/ton of P2O5 from Agrium’s December postings.
Western Cornbelt