DTN Fertilizer Outlook

Despite Record Fall Ammonia Deliveries From US Terminals, Wholesale Prices See Little Movement in October

The premium of MAP over DAP came under pressure during a slower period in the U.S. fertilizer market in October as buyers were incentivized to switch to DAP for cost savings of as much as $100 per ton. (Chart courtesy of S&P Global)

October in the U.S. fertilizer market was characterized by waiting games across nutrients. Phosphate and potash applications were on the cusp of breaking out, just waiting for the completion of fall harvest for the chance to clear out inventories from summer buying. The premium of MAP over DAP also came under pressure during this slower period as buyers were incentivized to switch to DAP for cost savings of as much as $100 per ton.

The following is a recap of fertilizer price trends and market developments for the month of October.


Domestic: Ammonia prices in the U.S. Gulf continued to appreciate in October alongside the previous month's swath of outages at nitrogen-producing plants across the country. Despite what market participants are calling another record year for fall ammonia deliveries from U.S. terminals, prices did not see too much significant movement, as most of the volumes hitting the ground currently were booked in late summer.

Corn Belt prices, for instance, were assessed in October unchanged from end-of-September price levels of $700-$725 per short ton (t) free-on-board (FOB -- or sales price without transportation costs included), despite another increase in the Tampa ammonia contract price.

Ex-works (a shipping arrangement in which a seller makes a product available at a specific location, but the buyer has to pay the transport costs) prices from ammonia production sites in eastern Oklahoma rose slightly by the end of October to $680-$700/t, up from offers as low as $650/t in September but flat from the highest prices in the prior month.

Significant supply is expected to be added to the U.S. Gulf next month with the long-awaited 1.3 million-metric-ton-per-year Gulf Coast Ammonia (GCA) plant expected to start up in December.

Ammonia prices are supported in the short term by healthy sales books and a weather forecast favorable for clearing out inventories across the system by Christmas.

International: There was a lack of clear direction in the global ammonia market through October, with Tampa settling higher for November but buyers in and around Europe resisting attempts to push delivered prices higher.

It emerged in late October that Yara and Mosaic agreed on a $50-per-metric-ton (mt) month-over-month increase at Tampa, settling at $625 per mt cost-and-freight (CFR, or sale price with transportation costs included) for November deliveries.

The monthly contract price settlement was in line with market expectations and gave a nod to supply constraints in the Middle East and North Africa, but only really brought the U.S. Gulf and Caribbean better in line with the wider ammonia market.

In the east, there was welcome news from the Middle East in October with confirmation that Ma'aden had restarted its 1.089 mmt-per-year ammonia plant in Saudi Arabia after a lengthy period of reduced output. The impact of the restart in Saudi Arabia had yet to be felt, though, with Ma'aden not expected to reach normal levels of output at the plant until the end of November.

Prices in the Middle East ended October at $400-$550/mt FOB, significantly higher than the previous month's range of $275-$550 FOB.

The outlook regarding global ammonia prices was stable in the short term.


Domestic: The U.S. urea market remained slow in October as traders followed the moves of India's purchase tender activity, with the country still yet to resolve its latest tender by the last week of the month.

NOLA urea barges were assessed at $345-$355/t FOB at the end of last month, down from $390-$410/t FOB at the start as the market drifted while waiting for direction from India during downtime in the domestic market.

River terminal prices at trading hubs along the Mississippi ranged from $465-$475/t FOB last month, mostly matching our view of offers at major terminals at the end of September at $450-$475/t FOB.

The Mississippi River saw some relief in late October with rains that assuaged some of the worst low-water restrictions placed on shipping barges across the industry, with strandings in especially low sections bringing further delays.

With ammonia, phosphate and potash retaining center stage of the fall fertilizer run, urea prices were expected to remain stable to softer pending further developments in the international market.

International: All eyes were on India in October, looking to find out how much volume would be secured in the latest purchase tender. Suppliers looked to other markets first, but finding no results, agreed to IPL's counteroffers.

By the end of October, IPL had secured acceptances for around 1.62 mmt at prices around $400/mt CFR West Coast India and $404/mt CFR East Coast India. This number was 500,000 mt higher than the initial round of acceptances on Oct. 23.

Brazil granular urea prices were assessed at $395-$405/mt CFR by the end of October, flat to slightly higher compared to indications from September. Buyers last month were cautious in key markets, including Brazil. Demand was delayed and postponed due to high prices. Buying strategies changed this year with a heavier emphasis on hand-to-mouth buying while keeping stockpiles to a minimum.

Black Sea prilled urea prices closed last month at $330-$355/mt FOB in a similar movement to Brazil, just $5/mt higher from September while flat on the low end.

Some market participants believed the market could be finding its bottom with supply strings getting tighter and buyers getting ready to return. Others say it will take more time to figure out whether the market is tight or still long.


The annual TFI world conference was held last month in Washington, D.C., with conversations revolving around the recent run-up of ammonia prices due to limited supply and increasing demand, as well as the urea market keeping in a holding pattern while awaiting further news from India regarding forthcoming purchases.

UAN, however, has remained mostly insulated from price changes in other nitrogen markets through the end of the year, with much of this season's demand having already been filled through prepaid sales. Barge prices at NOLA were reported stable throughout October at $240-$260/t FOB for 32% N product, unchanged from the previous month.

East Coast UAN import markets climbed slightly to $275-$280/mt CFR, up from $260-$270/mt CFR, based on stronger ex-tank indications at $265-$270/t CFR.

Offers for UAN 32%N at eastern Oklahoma production sites also edged higher in October to $280-$290/t ex-works, up from $265-$275/t at the end of September.

One distributor in the market noted strong demand for the fall period was continuing to provide support for prices at current levels with expectations that UAN pricing would be somewhat stable through the end of 2023.


Domestic: Major news came in October that the U.S. Department of Commerce lowered the countervailing duty rate on Moroccan phosphate imports from 19.97% to just 2.12% while increasing the rate on phosphates produced by PhosAgro from 9.19% to 28.50%.

Distributors who spoke to Fertecon believe OCP will not resume Moroccan imports in full force, however, until the pending trade case is fully resolved, hoping for a complete elimination of the duty like the outcome of this year's Russian UAN investigation.

The Fertecon NOLA DAP assessment fell from $540-$545/t FOB in September to $525-$540/t FOB last month. Most buyer interest on DAP barges centered on upriver barge sales for delivery to river terminals, causing U.S. Gulf prices to slip.

MAP barges declined from $635-$650/t FOB in early October to $600/t FOB toward the end of the month. One factor for the decline was the around $100/t premium for MAP over DAP, which drove down demand for the nutrient as buyers opted to switch to DAP.

Phosphate prices at Mississippi River terminals were adjusted slightly lower last month, following a somewhat quiet period ahead of November application activity. Terminal prices for DAP declined from $590-$640/t FOB to $580-$595/t FOB, while MAP prices decreased from $695-$755/t FOB to $690-$710/t FOB throughout the month.

Robust demand for the fall period was expected to support phosphate price levels in the short term.

International: The main action in the phosphate market in late October was seen east of Suez where 90,000 mt DAP were bought by India to the benefit of Saudi Arabian and Russian producers.

Business in late October was steady at values in the mid-$590s/mt CFR as India brought 2023-24 fertilizer year DAP imports to 4.8 mmt-4.9 mmt -- at price levels flat from the end of the prior month. Against a considerable cut in nutrient-based subsidy rates for the October 2023-March 2024 period, this likely limited the amount the country was set to purchase for November/December shipment to arrive in time for the Rabi season closes.

Relatively good demand for DAP opposite strong producer order books for November saw reports of Brazilian MAP importers accepting $560/mt CFR, although this had yet to be confirmed by the end of October, which left our assessment flat from the end of September at $550/mt CFR. This price firmness held on despite market demand for safrinha remaining low, largely owing to a weak barter ratio, especially in the center-west part of the country.

The outlook for the global phosphate market at the end of October was firmer on tight supply.


The potash market overall remained flat last month with expectations of fall post-harvest application runs yet to emerge by the end of October in much of the Corn Belt until November.

NOLA potash barge prices were assessed at $345/t FOB, flat month-over-month compared to the previous assessment at the end of September. October and November barge prices seem to have consolidated at the $345/t FOB mark, compared to the $5/t premium on October barges seen earlier in the month.

River terminal prices were flat, meanwhile, in a range of $380-$395/t FOB, unchanged from the month prior on similar fundamentals to NOLA barges but with less volatility. Transportation conditions continue to deteriorate with no relief to low-water levels, which have reached historic lows for the second consecutive year in some areas.

Both U.S. potash imports and exports in the first eight months of 2023 were lower compared to the previous year, although imports were less than 1% behind for the period, according to customs data. Heavier totals from Israel and Chile helped offset fewer shipments from Russia and Jordan compared to 2022.

Canpotex, which exports Nutrien's mined potash through Canadian ports and rail lines, reported last month that it was sold out on shipments through the end of the year, indicating that the news was the result of strong demand from its global customers.

Editor's Note: This information was supplied courtesy of Fertecon, S&P Global Commodity Insights.