Fertiliser Market Update
Keep up to Date
Fertiliser is very topical at the moment. Please see below some market updates to assist you with your fertiliser purchasing decision going forward.
Please contact Brett in the office on 9765 1001 or email brett.southcott@boyupbrookco-op.com.au with any queries.
Nitrogen / Urea
- Markets weaker, MEGU only off US7.5$mt. Other markets off up to US55$mt.
- India secured the targeted volume of c.1.5mmt. Roughly half ex Middle East, others from China, SE Asia and Russia.
- Many had hoped this would stimulate market, however have seen weakness after the awards, even though much of the spot over next month was consumed for the tender.
- India now covered, Europe not buying and the rest of the world not buying… seeing some weakness in values.
- Key area to watch is the US. With continued dry and logistic issues with the Mississippi, some talk the US producer may export Urea Nov/Dec… need to watch this. Have included some photos of the Mississippi below.
- Expect further volatility in markets until we see more sustained demand emerge.
- The European gas prices continue to ease with more reports of production in Europe coming back online. At current gas/ammonia values, these plants now can make margin at current gas versus imported ammonia. Volatility to remain though as the northern hemisphere works towards cold weather.
Short-term Outlook
Urea prices across the globe will remain under downwards pressure until substantial demand from Europe emerges to provide a floor.
What should we do locally on N?
- Urea - any seeding urea requirements - sit and wait approach
- Banded UAN supply is still tight, so fill tanks to secure seeding requirements
- In season N is N/A to price at the moment anyway. Price as you can see in the above volatility - who knows what in season looks like?
- Urea will go up and down several times between now and in season May/June 2023
- What is clear though is the gap between Urea v UAN is massive & could continue to widen. Plenty of urea manufactures in the world with very limited UAN manufacture. At the moment rough numbers for 100 units N will cost you $100 H/A more to use UAN over Urea.
Phosphates
- Market mostly flat, KSU up slightly, others slight up and down depending on origin. US domestic off.
- Quiet week, however India has been done some last minute buying which led to some upside.
- The continued reports from Ma’aden breakdown in publications is different to what we are hearing. Pubs have them with no MAP till 2023. As of today, we know of some delays into Australia on the breakdown, however still Q4 tonnes coming to Australia as planned, just slightly delayed laycans.
Short-term Outlook
High stocks, demand destruction and lower raw material prices are set to continue pushing down phosphates prices in the near term though this is likely to be tempered by reduced supply from China, Saudi Arabia and Mosaic.
What should we be doing locally on P?
- Potentially start to look at doing a % of the programme at some stage. We just don’t know what event is around the corner!
- Have the tonnage and product mix sorted, so if we do need to react quicky we are working together and can action something quickly.
Potash
Short-term Outlook
Potash prices are likely to fall even further in Brazil over the coming weeks despite a 50% drop in the market since mid-April as demand remains lacklustre. Lower prices in Brazil should also lead to declines in Southeast Asia and Europe.
What should we be doing locally on Potash?
Fairly clear sit and wait approach.
I will let the above market graphs do the talking but unfortunately they are in US Dollars and with our weakening AUD against the USD, a large portion of falling market internationally has not translated into equivalent falls locally.
My disclaimer…
Volatility appears to remain, and with so much going on at the moment, the so called experts in world fertiliser say one thing - two days later the opposite happens internationally..
All we can do is make the decisions with the current information we have now.
Market Update provided by Nathan Cuthbert, Divisional Fertiliser Manager, Nutrien Ag Solutions