nitrogen
The sharp rise in European natural gas prices has driven the urea market and made the urea price rebound sharply. Due to the rising production costs, nitrate in Europe also showed an upward trend, while ammonium sulfate continued to soften.
The sudden European purchase surprised the urea market and reversed the 8% decline last week. The urea market is now paying close attention to the upcoming urea bidding in India and the procurement in Brazil. Indian bidding is scheduled for mid July (it is said that this bidding will exceed 1million tons), and it is expected to be delivered by the end of August. In Brazil, the procurement in the summer rainfall season is about a month later than usual, so it is expected that the purchase of urea will pick up and add some support to the urea price.
With the arrival of the third quarter, the purchase speed in the southern hemisphere will accelerate, and the urea price may have reached the low point of this year. Buyers are paying attention to the speed and level of urea price recovery.
Due to insufficient demand, ammonium sulfate continued to fall by 13%. Ammonium sulfate is now a cheaper nitrogen fertilizer than urea. Due to the rebound of urea, the value of sulfur in ammonium sulfate is ignored. As the price of urea rebounds again, the price of ammonium sulfate may start to rise. The gap between the two price categories in the two-stage ammonium nitrate Market is widening - the price of ammonium nitrate in Russia has weakened again, while the price of ammonium nitrate from other sources, like urea, is also rising.
Because most buyers / consumers currently have sufficient inventory, ammonia prices have not changed. Although the price has not changed, the soaring natural gas price in the European Union has led people to speculate that ammonia prices may start to rise.
In South Africa, the Durban port has a reasonable urea inventory, and the product supply is about 12000 Rand per ton. The slight strength of Rand will help alleviate the pain of rising urea prices. As the market continues to fluctuate, the seller will adjust the price every week, so it is recommended that the buyer be decisive and quickly lock the price after deciding to buy.
phosphorus
Although the prices of most benchmark sites remain unchanged, the phosphate Market is still under price pressure. China's phosphate exports continue to accelerate, while demand in most regions continues to be weak because buyers believe that prices are too high.
The demand for spring phosphate application in North America and Europe has disappeared, and manufacturers are now waiting for the southern hemisphere to start buying. Buyers in the southern hemisphere are unwilling to over buy at the current price, so the buyer and the seller are currently at a stalemate. Brazil's price fell by $10-15 / ton, which is not a meaningful decline and will not make buyers excited about buying. But it does give a signal that phosphate prices are under pressure. Unlike urea, Brazil's phosphate pool is high in all Russian exports to Latin America.
The Asian market has not bought too many spot phosphates. Most of the current activities are related to the delivery of phosphates and NPK, which are purchased by Asian countries through bidding. India's subsidy program cannot make private sector traders profit from phosphate imports. Therefore, India's purchases are only made by state entities and in a limited number.
Foskor, a phosphate producer in South Africa, has been operating well in recent months and continues to produce. The lack of phosphate inventory in the region means that all its products will be quickly transferred to buyers before the upcoming season. At present, phosphate import goods at Beira port and Durban port have been booked, so it is expected that the inventory level at the port will gradually increase. Of course, large-scale berthing delay is still a worrying problem, and it is likely to become a key factor, that is, the rainy season from September to October is coming. At present, it is estimated that the delay is about 30 days, which not only increases the import cost (the demurrage fee is about $40 / ton), but also increases the risk that growers cannot obtain fertilizer in time.
potassium
The price of most potash fertilizer benchmark positions is flat. Potash prices in some Asian markets have begun to fall, and the overall outlook for potash prices will be weak.
With Brazil obtaining a large amount of potash from Russia, it is difficult to see the price of potash declining anywhere. Everyone's question is "when" and "how much". As the third quarter approaches, the demand in the southern hemisphere starts slowly, and the sales of potash fertilizer will begin to pick up, which will slow down any price decline. If the price does not decline in the next oneortwo months, rising demand should ensure that the price of potash remains stable. The supply of potash fertilizer is still limited, so the balance of supply and demand will not swing to oversupply soon.
Market outlook
Crude oil prices fell by nearly $10 / barrel as concerns about the economic recession intensified. The rise in US interest rates led to a decline in stock markets and commodities.
Brent crude oil fell from US $120 / barrel to US $111 / barrel, which was reduced due to the increasing concern of the market about the economic recession. The Fed's interest rate hike to curb inflation has cooled commodity markets, and crude oil prices have responded accordingly. In terms of natural gas prices, TTF natural gas prices in Europe have risen to more than $40 /mmbtu, and are currently slightly lower than $40. European gas prices are unlikely to ease in any way until the European gas supply situation is resolved in some way. Natural gas prices in the United States have fallen to $6.25 /mmbtu, which has brought relief to U.S. natural gas consumers, including nitrogen producers.
As the broad forward selling continued, the US CME corn price continued to show losses. Safex corn prices also fell with the rise of US dollar prices, and the strength of Rand exacerbated the decline in local prices. For similar reasons, oilseeds also fell across the board.
As the freight rate was reduced by a few dollars, the net return value of fertilizer sellers and exporters was improved.
Article source:FSHOW
