World ammonia prices moved lower through August. Export tons from Yuzhnyy, former Soviet Union (FSU), traded at $210-$220 per metric ton early and fell to $190-$200 late. (All prices in this column are wholesale.) Export ammonia prices from Middle East suppliers plunged from $295-$315 early to $225-$270 late. In the U.S., Yara and Mosaic agreed on the contract price for deliveries of imported ammonia in September at $240 per metric ton cfr (cost and freight), which is $30 down from the previous month. In the mid-month the OPZ, FSU, ammonia urea plant went down due to lack of gas supply. Also, the Sorfert, Algeria, plant remains down for a major turnaround which is expected to be completed in early September. Late in the month, Mitsubishi sold 7,000 tons of ammonia to CPDC in Taiwan at a price of $280 cfr, which was $27 below previous business. Despite the unexpected ammonia plant closures, the sentiment in ammonia markets continued to be widely bearish. We look for world ammonia prices to run flat to lower in the short term.
Domestic ammonia prices were flat through the month, with ammonia selling at inland terminals at $385-$405 per short ton both early and late in the month. Oklahoma producer prices were slightly lower at $300-$310 early and the low end of the range falling to $290 late. There is likely to be substantial new production coming on stream at Waggaman, Louisiana. For the short term, we expect domestic ammonia prices to run flat with an undertone of weakness.
Through August, world urea market prices firmed moderately. Early in the month, Yuzhnyy prilled prices traded in the $175-$181 range and moved up to the $184-$186 level by month's end. Middle East granular priced also firmed, moving from $162-$186 to $184-$193. Late in the month, India ran a small tender taking just 120,000 tons, which did little to firm the market; even so, the price was around $15 higher than what was paid in the last tender. While India offers little demand to the market today, a positive sentiment is that China chose not to compete, and their export volumes are significantly down on last year because of the lower export prices. Egyptian granular prices traded up to $200 fob (free on board -- the buyer pays for transportation of the goods), largely on the back of the tightness in Yuzhnyy as OPZ remains down and cannot fulfill August commitments. Late in the month, Sorfert, Algeria, reported the sale of 15,000 tons to a trader for September shipment to Europe at $202 fob. There is still concern in the market that prices will soften further out as Algerian and Egyptian production comes back on stream. There are, however, considerable shorts to cover for Europe and this may well help to prevent prices sliding back below the $190 fob Egypt level seen several weeks ago. For the short term, we look for world urea prices to run firm but flat.
Early in the month, NOLA (New Orleans, Louisiana) urea barge prices were trading in the $170-$180 range and moved up to the $184-$193 range by month's end. Late in the month, prices went up as high $199 but then fell back. End-user demand remains seasonally slow, but some large wholesalers are needing to come to market to get product in place for the fall wheat preplant run. Low crop prices are also weighing on farmer attitudes. For the short term, we look for domestic urea prices to run steady to slightly higher.
In early August, the CF UAN fill program came out higher than many expected for NOLA barge product, around $145/32%. Response was very limited for those numbers and NOLA UAN barge prices subsequently fell $5 through August, trading in the $135 to $140/32% range as of late. Interior demand for UAN has been light, besides some buying ahead of wheat preplant, and most interior prices were off slightly with UAN tons in St. Louis now trading in the $175 to $180 range. Prices for competing forms of N are variable; ammonia prices are looking weak and urea prices are running flat. Also, natural gas prices remain well below $3.00 per million cubic feet (mmcf), keeping producer margins wide. We look for domestic UAN prices to run firm but flat.
World phosphate market prices were stable or lower in most countries through August, with the U.S. NOLA barge market the only one to have bucked the trend. Moroccan DAP prices were flat, remaining in the $340-$355 mt fob range. Early in the month, OCP, Morocco, sold a large volume of mainly MAP at $355 cfr for September shipment to Brazil. However, in the wake of the Moroccan sales, buyers took to the sidelines, showing little to no interest at $355 cfr for new vessels for September/October loading. In the Far East, traders seem to have started to go short, lacking confidence in the phosphate market for the remainder of the third and into the fourth quarters. There were reports of lower prices of just above $340 cfr secured for Chinese DAP in Pakistan, with an Indian tender late in the month awarded at $335 cfr. Prices for Russian MAP also came down through the month to the low $330s fob as prices in Brazil remain static at $355 cfr. The relative lack of appetite for DAP in India continues to hinder trade not just in this market but elsewhere. Importers are purchasing tonnage gradually and only when needed, keenly aware that unless India is taking considerable volumes, there is a significant surplus of supply over demand in the market. We look for world DAP/MAP prices to keep moving lower in the short term.
Domestic DAP prices at NOLA traded at $307-$311 early and gradually rose through the month with trading in the $325-to-$328 range late. Interior DAP/MAP market prices firmed over light demand as buyers who use product in the fall need to get material moving their way or risk having little to sell when fall farmer/dealer demand does finally appear. In the very near term, DAP/MAP prices could firm slightly, but given the world supply/demand balance, upside potential is limited at best.
Domestic potash prices moved higher through the month. NOLA barge prices traded at $175 early and moved to $185-$188 late. Interior potash prices also moved higher, with prices in St. Louis posted at $210 early in August rising to $220-$235 by month's end. In the mid-month, producers announced a $20/ton price increase. Many wholesalers/dealers decided to accept consigned product at the price available before the announced price increase. Fall demand is approaching in many markets, and wholesalers/dealers decided to cover in some of their expected needs. At month's end, at least part of the newly increased asking prices for potash by producers was holding. For the short term, we look for domestic potash prices to run steady to slightly higher.
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