9 February 2017 Published by Profercy Phosphates SC Editor Tom Jago World Producer Position Tabulation comment: Our Feb opening world DAP, MAP producer stock change was at +47kt. Big deferred demand from Q4 is back along with strong prompt interest from all N Hemisphere markets. Cash costs up, but behind P prices: S import prices up $15-17t for Q1 in N Africa & NH3 up $60t vs December raise MAP costs $15pt & DAP by $20pt in the last 60 days. DAP, MAP are up $40-43pt in the same period. Phosphates bull-run continues: Brazil, Argentina, US, EU, China local & SE Asia all up; India takes NPs Phosphates are bullish with buyers still in a rush to complete on import needs earlier deferred. This demand is overwhelming producers, who can now to pick and choose between certain priority markets. The load congestion and continual delays at Jorf Lasfar are contributing to the rally, as did the load issues seen at Tampa during most of January. NOLA still looks short DAP, but especially MAP. Offers on NOLA MAP now equate to $380 pt cfr metric US Gulf, while Tampa MAP offers to Brazil are now at $390pt cfr. One possible limit on the price rally could be defensive moves by OCP to limit gains in Brazil, to pre-empt a Q2 boom in Chinese export offers. But for now, Chinese local markets are hot, and the load issues at Jorf mean OCP is not in a position to offer big prompt volumes to any market. New capacity is poised at the JPH III, but with granulation seen fired up in March, before phosacid. This is possible by diverting existing acid from the Jorf platform. This provides the answer on OCP’s Q2 tactics; more granulation, more exports to be offered into Brazil, and less phosacid for India. While most Indian DAP importers wait, hoping for guidance from the DoF on scope for MRP increases, one big Indian buyer has bought Indonesian NP 20-20 (13S). One-minute briefing Phosphates bull-run continues: Main driver still China. Other markets back to buy… …are Vietnam, EU & NOLA. Tentative new interest in Pakistan, Bangladesh G2G Add to this, new Ethiopia tender due in March for fresh enriched NPs for May load The rate of increase is fast, but P ferts are still affordable bouncing off 7-year lows Brazil buyers delay, first taken aback by $381 cfr Argentina, then seeing offers… …surge higher to $390pt cfr. Last hope for claw-back is if OCP gets “defensive” Brazil buyers claim avails of Chinese 11-44, but only offers so far are to Uruguay Indian buyers hope for MRP increases, as subsidy frozen. Forex uptick is helping No moves by GSFC on DAP tender offers. One big India buyer takes NP20-20 S NOLA market stays firm; DAP now to $335pst fob barge; MAP offers $355pst fob Europe buyers again pay up, as strong demand finds squeeze on prompt avails 225 260 295 330 365 400 435 $ pt fob cfr Brazil, India & $pst fob NOLA Spot DAP, MAP vs Profercy 2H 2016 calls & Q1 2017 outlook $390 cfr Brazil $370 cfr India $355 st NOLA Our March August: Confusion in China over new corn policy is set to cut China local market pre-season, creating big export surplus & price slump Outlook comments from recent Profercy Phosphates & NPKs Reports. We maintain the bullish view we have held since late Q4, extending price gains now into April/May, as below. We had been bearish for Q3/Q4, often with the lowest Tampa, NOLA & China readings. 1H Dec: Expecting China export tax removal to cut prices is a mis-judgement. Prices to rise following local market End November: US is behind on imports. NOLA "pricing in" driven lows are bargain re-fill, or long position opportunities 1H Jan: $325 cfr is "pricing in", repeat of Q1 2016, again likely auguring big upside DAP cfr India MAP cfr Brazil DAP pst fob NOLA World DAP MAP NP snapshot Exporter +/- Kt USA +32 Mexico +10 Russia +13 Lithuania +9 Morocco +15 Tunisia +7 Saudi Arabia +5 Australia +10 Jordan +11 China port warehouse -65 Stock change Feb-open +47
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9 February 2017 - Profercy · 2021. 2. 2. · One big India buyer takes NP20-20 S NOLA market stays firm; DAP now to $335pst fob barge; MAP offers $355pst fob Europe buyers again
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Phosphates are bullish with buyers still in a rush to complete on import needs
earlier deferred. This demand is overwhelming producers, who can now to pick
and choose between certain priority markets. The load congestion and continual
delays at Jorf Lasfar are contributing to the rally, as did the load issues seen at
Tampa during most of January. NOLA still looks short DAP, but especially MAP.
Offers on NOLA MAP now equate to $380 pt cfr metric US Gulf, while Tampa
MAP offers to Brazil are now at $390pt cfr. One possible limit on the price rally
could be defensive moves by OCP to limit gains in Brazil, to pre-empt a Q2 boom
in Chinese export offers. But for now, Chinese local markets are hot, and the load
issues at Jorf mean OCP is not in a position to offer big prompt volumes to any
market. New capacity is poised at the JPH III, but with granulation seen fired up
in March, before phosacid. This is possible by diverting existing acid from the Jorf
platform. This provides the answer on OCP’s Q2 tactics; more granulation, more
exports to be offered into Brazil, and less phosacid for India. While most Indian
DAP importers wait, hoping for guidance from the DoF on scope for MRP
increases, one big Indian buyer has bought Indonesian NP 20-20 (13S).
One-minute briefing
Phosphates bull-run continues: Main driver still China. Other markets back to buy…
…are Vietnam, EU & NOLA. Tentative new interest in Pakistan, Bangladesh G2G
Add to this, new Ethiopia tender due in March for fresh enriched NPs for May load
The rate of increase is fast, but P ferts are still affordable bouncing off 7-year lows
Brazil buyers delay, first taken aback by $381 cfr Argentina, then seeing offers…
…surge higher to $390pt cfr. Last hope for claw-back is if OCP gets “defensive”
Brazil buyers claim avails of Chinese 11-44, but only offers so far are to Uruguay
Indian buyers hope for MRP increases, as subsidy frozen. Forex uptick is helping
No moves by GSFC on DAP tender offers. One big India buyer takes NP20-20 S
NOLA market stays firm; DAP now to $335pst fob barge; MAP offers $355pst fob
Europe buyers again pay up, as strong demand finds squeeze on prompt avails
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OLA
Spot DAP, MAP vs Profercy 2H 2016 calls & Q1 2017 outlook
Series2
Series3
Series5
$390 cfr Brazil
$370 cfr India
$355 st NOLA
Our March
August: Confusion in China over new corn policy is set to cut China local market pre-season, creating big export surplus & price slump
Outlook comments from recent Profercy Phosphates & NPKs Reports. We maintain the bullish view we have held since late Q4, extending price gains now into April/May, as below. We had been bearish for Q3/Q4, often with the lowest Tampa, NOLA & China readings.
1H Dec: Expecting China export tax removal to cut prices is a mis-judgement. Prices to rise following local market
End November: US is behind on imports. NOLA "pricing in" driven lows are bargain re-fill, or long position opportunities
1H Jan: $325 cfr is "pricing in", repeat of Q1 2016, again likely auguring big upside
transmitted in any form or by any means, without the prior written permission of the Copyright owner. 06
Vietnam: There is fresh import demand for March shipment out of China, as
buyers stream back to market to make up for the heavy Q4 import purchase
deferral. There is new business emerging in the first days back to work after
the New Year/Tet break at $385pt cfr bulk and $395pt cfr bagged HCMC.
• But fresh offers for March load are said suspended as producers re-
assess local vs export price ambitions, and DAP vs MAP output priorities.
• Parallel with Europe: Buyer behaviour is similar to that in Western
Europe, where Q4 importer apathy (and tactical deferral) led to
widespread missed opportunities in November and December.
• Earlier bad calls: Many buyers in both Vietnam had expected Chinese
DAP would be available in abundance into Q1, under-estimated the draw
of the Chinese local market. The mis-calculation in Europe was both on
the scale of Moroccan commitments on NPs and NPKs to Africa and the
USA, plus the exposure to high swells interrupting Jorf Lasfar load rates.
South Asia India: Several importers are testing traders on price ideas for March-
shipment DAP, any origin. There is a hope (rather than a belief) among some
buyers and analysts that Chinese producers will return with export offers this
week, the first full week working after the Spring Festival (more opposite).
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China: DAP vs Local corn; Rebound extends gains into peak pre-Spring demand
Local DAP markets have recovere around 65% of the loses during 18 months to Dec 2016, in which
local DAP had lost 28% (a). Export DAP has recovered one-third of its 38% price decline since early 2015 (b)
Dalian corn futures RMB pt China local RMB pt fot ex store northeast $pt fob China export Prohibitive export tax window
b.
a.
c.
In earlier times of big high/low export tax spreads, export DAP prices generally rebounded going into low-tax periods. This was as buyers held back until tax was low, then demand boomed.
2015 & 2016 tax rates were flat, with no market impact. But true to form, the removal of tax for 2017 triggered an increase. Despite past experiences, many buyers saw 2017 export tax removal as a cue for lower export prices, overlooking the huge power of local in-season demand surge.
transmitted in any form or by any means, without the prior written permission of the Copyright owner. 08
Russia: There are reports from Russian producers that fresh bids for
March/April shipments to the Americas (mainly for the US are into the $370s
pt fob Baltic. At NOLA, MAP is today just $5pst short of a US Gulf delivered
value at $388pt cfr. This would be roughly in line for a low $370s pt fob Baltic
netback.
North America US export: Mosaic has reported selling 15,000t DAP to unspecified Latin
American markets at $358pt fob Tampa for March shipment. It then achieved
$360pt fob for 20,000t DAP, MAP to various Latin American markets also for
March shipment. It is understood part of these sales were to regular buyers in
Colombia, and other business to Brazil at $380pt cfr. Export prices have now
ramped around $40-42pt at Tampa, or around 13%, since early January.
• New offer targets: Offers to Brazil are now $390 pt cfr Brazil (see Latin
America items below).
Extending gains vs. local market values: NOLA DAP as below is
currently equivalent to around $343pt fob NOLA netback, a strong $15pt
below export. But the big local MAP premium over DAP puts NOLA MAP
equivalent at $365pt fob Tampa.
Tampa Feb line up P10
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$p
t
Brazil MAP and NOLA DAP prices 2015-17: Q1 rally comparison 2016 vs 2017
Series3
Series5
MAP pt cfr Brazil
DAP pst fob NOLA
MAP rebounds in Brazil, now exceeding the February 2016 rebound, which saw prices surge from $325 cfr to $362 cfr in 4 weeks. The current surge has gone from $320 cfr to $380 cfr
transmitted in any form or by any means, without the prior written permission of the Copyright owner. 011
Russia DAP, MAP balance
Phosagro sales Kt
Phosagro West Europe 45
Brazil (M, D, NPKs) 33
E Eur (M, NP, NPK) 45
Local, FSU (M, NPK) 185
Growmark USA (D, M) 40
IPL (MoU) India (D, NPK) 0
South Africa 32
container Africa (D,NPKs) 15
container SE Asia (D, NPKs) 20
Eurochem sales Kt
Eurochem E Eur, Baltic (M, D) 25
West Europe 22
Local, FSU (MAP) 40
USA (M combo) 15
Brazil Tocantins 35
South Africa (MAP) 30
Uralchem sales Kt
Uralchem Local MAP, NPK 12
E Europe MAP 12
Total Sales 607
Production Estimate Kt
Phosagro Cherepovets D 60
Cherepovets M 115
Balakovo M 65
NP/NPKs (all units) 190
Eurochem Fosforit 95
Belorechensk M 70
Uralchem 25
Total avail 620
Stock change Feb open +13
Lithuania balance DAP
Lifosa Jan Kt
Eurochem Germany 17
France, Spain 15
Benelux 14
Baltic, East Eur 10
Total sale 56
Production Estimate Kt
Jan 65
Total avail 65
Stock change Feb open +9
are heard from residual port storage at $345pt fot ex store, equating to
$315pt cfr, or at $375pt fot ex-port store for 10-50, in turn equivalent to
around $345pt cfr. These reflect direct nutrient equivalent in the low
$360s pt cfr for 11-52, a relatively slim $16-17 below actual 11-52 offers.
Other MAP alternative NP products: Apart from the 10-50, and 11-44
above, traders are offering a range of alternative enriched NPs and NPKs
from various origins. There are other formulations that look tailor made for
Brazil – these usually under trader requests for a particular formulation to
suit particular customer requests. One such is NP7-40-0 (5S) heard
indicated in minor volumes (bulk and containers) at $305-308pt cfr, or
roughly a $330pt cfr 11-44 equivalent. Other Russian NPS formulations
are also being talked.
• From the US: Mosaic's US MAP, MES export volumes to its Brazilian
operations are still relatively thin. There have been just 4 vessels moving
since the start of January, each one smaller than the typical handy-max
size seen in 2H last year. The latest lot is due into Maceio in late
February with 28,000t MAP, MES.
Mosaic import interest: There have been hints of Mosaic again
approaching traders for fresh 3rd party origin 11-52, but this may simply
be a continuation of the earlier discussions. Mosaic’s last import moves
raised Brazilian import MAP prices from $330-335 to $345-350 in several
days. The US producer is offering at $390pt cfr (as above).
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$ p
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r
Indian phosacid vs India DAP, NOLA DAP 2010-17
Phosacid $pt P2O5 cfr India DAP cfr India DAP pst NOLA barge
DAP surges at NOLA, but Indian import DAP still unmoved at below-market prices
The next key issue is Q1 phosacid for India, offered by OCP at a roll-over, but now potentially allowed to lapse to squeeze local DAP, NPK stock rebuild
transmitted in any form or by any means, without the prior written permission of the Copyright owner. 014
DAP $ BULK 9 Feb 2 Feb
Tampa, US Gulf fob 358-360 345-350
Simulated net on Brazil, Arg spot* 340-360 335-340
Metric netback from NOLA 340-348 338-340
Netback on Mosaic India system** 330-335 325-330
NOLA fob barge (st) 330-335 319-325
Florida fot (st) 330 330
KSA fob 344-346 330-345
Baltic, Black Sea fob 343-370 333-341
Morocco fob 350-355 345-355
Metric netbk from NOLA 344-348 328-320
Tunisia fob 355-360 340-350
China fob 360-375 355-360
China fot bgd ex wks ($ equiv.) 355-365 345-348
Mexico fob 350-358 345-350
Jordan fob 330-335 325-330
India cfr spot 339-341 339-341
Pakistan cfr 360-365 n.m.
Brazil cfr 370-375 360-362
Argentina, Uruguay cfr 375-380 365-370
Benelux, N France fob/fot 380-390 378-383
*Any-origin sales to Brazil, Argentina; *Mosaic India netback is now assessed basis prevailing retail values at Rs21,000 pt, subsidy still at Rs8,945pt; and net internal logistics, costs, taxes, forex
+China export tax at zero on DAP, MAP, NPs & TSP in 2017
MAP $ BULK 9 Feb 2 Feb
Baltic, Black Sea fob 343-375 332-340
Tampa fob 358-360 349-350
Morocco fob 350-360 342-345
KSA fob (formula netbk from Brazil) 350-360 340-342