In the first part of May, world ammonia prices were largely stable with just some minor upward movements in parts of the market. Early in the month, Yuzhnyy export ammonia traded at $270 per metric ton fob. By the end of the month, Yuzhnyy prices had firmed up to $280 to $290. Early in the month, there was a $10 increase in the monthly Tampa price settlement for May deliveries at $320 cfr, caused mainly by supply restrictions, with some scheduled maintenance turnarounds and/or technical issues at a number of ammonia manufacturers. Supply was reduced from Saudi Arabia by the maintenance turnaround at Safco II. There were several maintenance turnarounds at western European ammonia plants and Algerian exports were delayed by internal export licensing issues. Import demand from South Korea is expected to increase in June due to the planned restart of the second caprolactam plant at CaproCorp, but even so, slightly lower ammonia values were reported at month's end, where LFC announced a new spot purchase at $365 mton cfr down $5 from previous. Demand from India is stable and end-of-month prices were running $365 to $395 mt cfr. Late in the month, the June Tampa import price was settled between Yara and Mosaic at $315 cfr, $5 below the May settlement at $320 cfr. We look for world ammonia market prices to run flat to slightly lower in the short term. Domestic ammonia prices decreased through May at central Illinois terminals. Early in the month, ammonia sold for $550 per short ton and by month's end, prices had fallen to $475. There is still much demand to serve in the Eastern Corn Belt, and wet conditions have hurt application activities in the Western Corn Belt all spring. Some wholesalers are expecting producers to start pushing summer fill programs soon. In late May, LSB Industries announced that its new 375,000 tons per year ammonia plant at El Dorado, Arkansas, is operational and ammonia production is now underway. The OCI/Iowa Fertilizer Company nitrogen project at Weaver, Iowa, is in the final stages of construction and is expected to start ammonia production in September/October 2016. We look for domestic ammonia prices to move lower in the short term.
World urea prices fell steadily through May. Yuzhnyy prills sold at $205 to $207 metric ton early and at month's end were at $190 to $194. Prices for Middle East material decreased from $203 early to $179 to $190 late as South American buyers limited purchases. Slow demand in Europe forced North African suppliers to run prices down from $220 mt fob early to $190 to $195 late. Late in the month STC, India, stepped in and bought a massive 1.36 million tons from offers in its tender. Over 3 million metric tons were offered into the tender and that volume available proved how weak and oversupplied the market will be for June. Even so, India saved the day and cleared out many producers for the month, albeit at a reduction of $10 on the east coast price of $226 secured last time around. Chinese prilled material sold at $217 mt early and moved down to $208 to $212 late. Middle East producers are now very comfortable for June, picking up several cargoes in India either directly or through traders. Yuzhnyy picked up another panamax sale to India, which will help balance June availability, and there is even talk of a second panamax shipment. Baltic producers found some relief with a panamax also taken from there and supply is now quite tight for June. China should pick up several sales in India, but not enough to clear the inventory and the continued movement to the port. We look for world urea prices to run flat with an undertone of weakness in the short term. Domestic urea prices at NOLA and at interior terminals fell through May. NOLA barge prices traded at $225 to $300 per short ton early and fell to $180 to $185 late. The stop-start nature of demand created by rainy conditions has given large wholesalers fits, but there is really nothing to be done about it. While much demand remains to be served, supply in place is easily sufficient to meet it. With downward pressure continuing on world urea prices, we look for prices here to keep moving lower in the short term.
NOLA UAN barge prices moved lower through May, trading at $195 to $200/32% early and units crossing at $175 to $180 late. Wet field conditions have slowed demand throughout the Midwest. Many wholesalers are expecting strong corn sidedress movement to begin soon, which should work to support UAN terminal prices in the near term. In the medium term, however, lower urea prices and lower priced imported UAN could work to keep downward pressure on UAN prices.
World DAP/MAP prices traded mostly flat through May. While Tampa export prices showed a small increase, rising from $345 to $350 mt early to $350 late, other exporters needed to cut prices to secure new sales. Indian buyers came into the market in late May and ordered product from Chinese, Saudi Arabian and Moroccan producers. The new business has been agreed at unchanged prices for non-Chinese DAP, although Chinese material is showing signs of slightly firmer pricing. South American market prices were also little changed through the month as imported Russian MAP sold at $350 to $355 mt cfr, both early and late. In late May, EuroChem, FSU, accepted a lower $330 to $335 fob price for product moving into in Europe to find a home for uncommitted Lithuanian DAP, down from $341 secured early in May. Late in the month, MAP and DAP prices were steady in India, softening in Argentina to the high $350s but rising in Pakistan to the low $350s. We look for world DAP/MAP prices to run flat to lower in the short term. Domestic DAP/MAP prices at NOLA moved lower through May. Mosaic indicated a few DAP barge sales accomplished at $330 early in the month, but barges of imported product sold at $320 early, and prices for foreign material crossed at $305 to $315 late. Prices at interior terminals sank $25 to $30 through May as central Illinois prices dropped from $385 early to $350 late and St. Louis quotes fell from $375 early to $350 late. Many wholesalers remain determined to finish the season with DAP/MAP bins empty. We expect domestic DAP/MAP prices to run flat with an undertone of weakness in the short term.
Domestic potash prices were flat through May with NOLA barges trading at $180 to $195 both early and late. Wet field conditions kept demand muted through the month and with significant volumes of product placed on consignment, wholesalers were able to keep buying only on an as-needed basis. Product on consignment has kept a lid on prices. and we look for potash prices to keep grinding lower in the short term.
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