Monday, October 21, 2013

Global phosphate fertilizer market to maintain steady in the rest of 2013

Unlike China's, the phosphate fertilizer export outlook of Morocco, headquarter for the OCP Group SA (OCP), is brighter in price as well as in inventory. Although FOB prices of OCP's DAP exports to Europe suffered a decrease of around USD10/t to USD15/t in early Sept., the FOB price of OCP's DAP small-lot exports to Europe still held at about USD440/t. Furthermore, after scaling back production to meet a weaker demand, OCP has announced that its phosphate fertilizer inventory has cleared out. Meanwhile, OCP's strategy of setting phosphate fertilizer prices according to nutrient content may draw further attention from importers in Latin America, especially from smaller traders. The result of OCP's production control may also have its drawbacks, however. From Jan. to Aug., in Latin America's MAP market, OCP's market share fell to 46%, while Russia's increased to 31% and China's also increased significantly, due to a low export prices strategy.

In addition, according to statistics from The Fertilizer Institute (TFI) in Aug., the market performance of MAP in the US was slightly better than the bleak situation of DAP. In order to cater to the relatively lower demand for MAP than for DAP, some Chinese fertilizer manufacturers have turned to producing MAP from DAP.

In China, the approaching end of the fertilizer export window (May 16–Oct. 15) and a consequent reflux of inventory in ports may further exacerbate the oversupply. It has been reported that FOB prices of China's 64% DAP have decreased to USD368/t–USD380/t in Sept.

India, the world's largest phosphate fertilizer importer, saw a 30%–40% decrease YoY in its DAP import volume from China from May to Sept.

The main reasons for that were cuts in India's government subsidies for the purchasing of fertilizer, the ongoing depreciation of the INR and a high phosphate fertilizer inventory in the beginning of 2013. However, on Sept. 19 the exchange rate of USD/INR improved to 61.835 from a historical low of 68.85 on Aug. 26, which may slightly extend the profit margin of Indian phosphate fertilizer importers, and stimulate imports from China and Saudi Arabia. It would seem that some international phosphate fertilizer suppliers are trying to maintain the CFR price of DAP exported to India above USD400/t, rather than let it decline further after the closing of China's phosphate fertilizer export window.

Latin American, including Brazilian phosphate fertilizers faced a dimmer outlook. The CFR price of Brazilian DAP hovered around USD420/t in Sept., and the correspondent FOB price reached USD385/t in the Tampa port.

Pakistan is expected to be one of the most active phosphate fertilizer importers in Oct. The country is still in need of 100,000–150,000 tonnes of DAP, and its CFR price is currently quoted at USD400/t–USD410/t.

Source: Phosphorus Industry China Monthly Report, issued by CCM in October.

Editor's Note
Phosphorus Ore
Xingfa Group and Wengfu Group set up new phosphorus R&D centers
Yellow Phosphorus
Yuntianhua's profits and revenue down in H1 2013
Fine Phosphate Chemicals
Yuntianhua launches another reorganisation to peel off its glass fibre assets
Ten organophosphorus pesticides to be banned, effective Nov. 2013
Global Insight
Global phosphate fertilizer market to maintain steady in the rest of 2013
Brief News
Kunming Niumi to launch a microporous membrane program
Gansu Jingtianfu launches a phosphogypsum comprehensive ultilization program
Supply & Demand
Market review of prime phosphate chemicals in Sept. 2013
Import & Export
International trade of phosphate chemicals in Aug. 2013
Price Update
Price monitoring of some phosphate chemicals in Sept. 2013

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