Fertilizer Prices Report (weekly)

7. Mar. 2010

PRILLED UREA
Again as expected, prices have rallied from last week's lows, bolstered by resugent Latin American demand. FSU prills have sold at $282-285pt fob Ukraine while Baltic prices have also gained to $275-277pt fob from the icefree ports. The outllok for balance March is firm.

Buyers in Mexico and, to a lesser extent, Brazil have stepped into the market to book over 200,000t of urea over the past few days, mostly from the FSU. This demand has mopped up unsold tonnage in the Baltic and Black Sea and, as expected, prices have begun to recover. At presstime Mexican buyers were bidding in the low-$280s pt fob Yuzhnyy equivalent for new cargoes – one sale already nets $283-284pt fob Yuzhnyy. Initially the run of buying did not encourage traders to book new tonnage at $285pt fob Yuzhnyy, but this price has now been achieved in the expectation that further gains will be seen in the weeks ahead. Indeed, it is possible that prices will test the highs witnessed in late January/early February.

GRANULAR UREA
As expected Egyptian granular urea prices have dropped sharply towards $315pt fob. Interest is evident close to this level for Canada and Europe. Thus, Egyptian prices are probably close to the floor. Venezuelan product has been sold to Mexico at $313pt fob, in line with returns possible in the US Gulf.

Egyptian prices have tumbled with the latest sales tender bringing a highest bid $15pt below last done. However, this may be close to the floor as European demand should begin to build as weather improves. Further, US prices for April reflect above $320pt fob and, finally, Egyptian producers have been requested to supply 400,000t to the local market April-July.

In Asia, Chinese export prices remain high at $325pt fob for prills, $10pt extra for granular. Middle East suppliers are comfortable for the month and have rejected approaches for granular sub $315pt fob.

While the urea market has not changed from cool to super-hot, a floor level has now been found for FSU product and perhaps also in Egypt and the US Gulf. However, for the market to really take off beyond Q1, major demand will be needed from the Indian subcontinent to fill in the gaps as Western offtake slows.

UAN
The general outllook for UAN is good in N America and France as this nitrogen source is cheap. However, with tanks full in France traders are competing to secure small business at lower prices. This will continue until spring movement begins later in March.

Source: Argaam, Profercy report, Fertilizeer-Index.