Nitrogen
Urea prices were higher across most benchmarks as the latest Indian tender closed on Thursday
Prices have not yet emerged from yesterday’s Indian urea tender but indications are that the price will land in the $360-370/t CFR India bracket.
The Middle East urea price rose by around $4/t going into the mid-$350s and the Indian tender price will largely dictate where the benchmark price finishes the year. Some late season spot trades to Australia helped lift the Middle East top end price.
Prices in Brazil continued to run up as lack of Iranian product and demand from the Indian tender drove prices higher. The Brazilian price is now at $360/t CFR, which rules out supply from the Middle East at present. Brazil will go through a lull in demand as the summer rainfall season ends but their Safrinha season will start from February and will require more nitrogen.
Egypt enjoyed rising urea prices on the back of traders looking for cover for the Indian tender and European buying as domestic European production remains down due to uneconomically-high gas prices. Egyptian urea is now approaching the $400/t FOB mark.
Ethiopia closes a urea tender for 820,000t early next week, which is also contributing to demand at present. This tender calls for delivery from January through to June next year, so the demand is somewhat spread out.
Iranian production remains limited because of gas restrictions in country – this has put Turkey under pressure and forced them to look to the Middle East, Russia and Egypt for product, which added to price support this week.
Ammonium sulphate prices are being pressed downwards because of a slowdown in Brazilian buying – the season in Brazil is close to an end and record volumes of amsul have already been committed. While there were no major price movements, the key Chinese amsul benchmarks were showing values being down by a dollar or two. Chinese export data for January to November shows that they exported over 15 million tons this year, 20% up on the same period in the prior year.
Ammonium Nitrate markets are moving in different directions in different markets. In Europe, producers are trying to push prices up as the spring season approaches, whereas in Brazil prices are falling as demand ends.
The outlook for Ammonia points to lower prices coming as supply has improved relatively and demand remains soft.
Phosphates
Phosphate prices remained steady on limited market liquidity
Most price benchmarks were unchanged this week as spot trades were few and far between. The general sentiment is that prices are arguably a few dollars up this week.
The big producers in Morocco and Saudi continue to shift big volumes of MAP and DAP under formula pricing, which does not shift the spot price quotations. Large volumes have been sold to Europe, Australia, India and some of the other Asian markets this week.
In the US MAP and DAP prices converged with each other, as the premium for MAP declines.
As the Dollar continues to strengthen against most currencies, the Brazilian Real took a beating this week, dropping to record lows against the dollar. This is hurting demand for fertilizer as local prices are rising as a result. At least the fertilizer season is almost over and most of the product has been bought – on the flip side the weak currency will be helping Brazil’s exports of grains and oilseeds.
Potash
Potash prices gathering upward momentum as producers focus on Q1 2025
With the holidays approaching and Southern Hemisphere buying coming to end, potash markets were slow this week although continuing to show steady upwards momentum.
The Brazilian price rose $10 on the high end of the spread and there is not much product on offer below $300/t. Whether Brazil will be a serious buyer in Q1 remains to be seen – the Safrinha season usually relies on utilization of nutrients already applied from the summer season, especially P and K. But if potash prices are set to rise through 2025, Brazilian buyers may be astute enough to keep buying now, as prices are unlikely to be lower in the middle of the year when they would otherwise buy.
South East Asia is also showing more positive demand and producers and traders are optimistic about prices for Q1.
General Market Outlook
SA Maize reaches record high prices as Rand weakens
Brent Crude oil continues to float in the low $70s/bbl after a brief spike early in the week to $74/bbl. Various conflicting macro-economic drivers have caused volatility in oil prices this week, with US oil stocks showing a big drawdown leading to higher prices, before indications from the US Fed of impending interest rates cuts causing pessimism around oil demand and sending prices lower. Brent Crude is currently trading at $72.5/bbl.
European gas markets got a small measure of relief this week as tensions with Russia have lowered somewhat and the TTF gas price has fallen to $12.6/MMBtu. US gas prices have continued to climb and now sit at $3.6/MMBtu.
After last week’s strong (and surprising) performance, the Rand devalued sharply versus the Dollar this week, dropping to R18.4 to the Dollar – a decline of almost 5%.
Maize prices had a major lift this week – the international CME price was up around 2% but increasingly negative news about the current summer season in Southern Africa has boosted local maize values massively. The Rand devaluation has added to this. So this week saw Safex white maize approaching R6,800/t and yellow maize almost reaching R5,500/t which are all-time record high prices for South African maize.
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