Please note that we will not be publishing reports on the weeks of Christmas and New Year
Nitrogen
Yet another Indian tender announced, lifting Urea prices
The Indian urea tender that was being gossiped about last week, turned into reality this week. The urea market was further boosted by indications from the Indians that they will be looking for 1.5 million tons. The tender closes on 19 December, so the offer prices should reflect in next week’s published prices before things close off for Christmas.
The Middle East benchmark rose by $5/t on the back of the tender news. The Middle East price has now moved into the $350s and looking likely to move into the $360s off the back of the Indian tender. Forward prices are showing $365 for Q1 next year, which is probably a fair number given current fundamentals. Should American buying in January be stronger than anticipated, prices could run up higher although it probably won’t break the $400 level.
Brazil saw a marked increase in prices this week as they were impacted not only by the rise in the Middle East price but more significantly by developments in Iran. Iran made big sales last week of their inventory and this week saw them cutting back on production because of gas shortages within the country. This has quickly tightened availability out of Iran and has restricted the supply to Brazil of its cheapest source of urea. The Brazilian price rose almost $20/t which pushed their price up into the $350s.
Egypt set the bar for world urea price levels, with sales to Europe this week raising the Egypt FOB value to $380/t.
China remains absent form world urea markets, however the domestic market is becoming oversupplied with urea. Should urea prices continue to run up, we may see the Chinese opportunistically returning to the market early in the New Year.
Two Iranian cargoes sold last week are destined for the East and South African markets. These ships will be docking very early in the New Year.
Ammonium sulphate prices were mostly unchanged this week. With urea seemingly on an upward trajectory once more, there is speculation that this will lift amsul prices. There is a counter-argument that Brazil is well-covered for amsul and is by far the biggest market, thus upside on prices may be limited. Brazilian amsul imports passed the 5 million ton mark during November, which is a record volume. Given that amsul did not decline much in recent weeks when urea prices were falling, it appears that there is not a lot of scope for much higher prices.
Ammonium Nitrate prices are mostly stable, despite producers doing their best to raise prices. Most of the major European players have put out list prices showing higher values for AN and CAN in anticipation of spring buying but right now there is minimal activity. The AN price in Brazil has dropped a few dollars as demand is relatively weak and there is a lot of urea available in the market.
Ammonia prices were unchanged this week across most benchmarks. North American and European trade is fairly active, especially with a lot of the European production sites down, and imports being needed for downstream operations.
Phosphates
Lack of trade this week kept Phosphate prices mostly flat
The Saudi benchmark prices for both MAP and DAP declined as recent Saudi sales returned lower netbacks, causing the high-end of the published price range to be reduced. Saudi MAP dropped by $15/t and DAP by $7/t. The phosphates sector remains stuck between buyer resistance to current or higher prices and lack of product availability enabling sellers to maintain current price levels.
Moroccan phosphates major, OCP, confirmed a number of new sales to Asian markets this week – a move that would have pressured the Saudi prices downwards.
In Brazil speculation is rising of a cut to MAP prices as import and sales volumes have slowed as buyers have switched to alternative products such as SSP and TSP. The slowdown in Brazil’s appetite for MAP is evident in the latest trade data, which shows that Brazil imported 15% less MAP in the January-November period compared to the same timeframe last year.
Potash
Potash sales continuing to rise across SE Asia and Brazil
Potash prices were flat in most markets this week but the upward sentiment around prices persists. Trade will likely slow for the holidays but once players return in early January, we could see prices rise considerably.
While it’s too early to expect the fixing of the annual Indian potash contract price, indications from the FAI conference that took place in India this week point to potash prices for 2025 likely being up by $10-15/t, which would put the number just below $300/t CFR
Brazil looks set to break its potash import record this year, with imports on track to exceed 14 million tons for 2024, compared to 13.4 million tons in 2023.
The published price for Durban CFR rose by a couple of dollars this week, reflecting the tightening of supply as importers are reluctant to look at additional cargoes this late in the season.
General Market Outlook
Dollar strength impacts Commodity values
Brent Crude oil rallied late this week climbing from $71/bbl to touch above $73.5/bbl on Friday. It appears that threats of sanctions on Russian oil exports have driven prices higher. On a different tack, the Bank of America has issued a forecast for 2025 suggesting that the weak demand for oil will push prices much lower and Brent crude could average around $61/bbl next year. This appears excessively pessimistic.
The TTF gas price dropped below $14/MMBtu this week, giving some small relief to European gas buyers. Lower than normal gas storage levels in the US pushed the natural gas price up 15% this week to hit $3.45/MMBtu.
The Rand performed well against the Dollar this week going as low as R17.6 to the Dollar.
Most of the major crop indices were in the black this week with maize both locally and internationally up over 1%. Oilseeds were also reasonably strong and only wheat showing weakness due to large export crops from Argentina and Australia.
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