Manufacturers reduce prices for nitrogen fertilisers. Ukraine in waiting of fertilizer embargo

Our news, Overview of the market for mineral fertilizers
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Commodity online exchange Kiev Mercantile Exchange – KME: the results of the last week of May 2019 on the markets for mineral fertilizers in Ukraine and the world.

Main events of the week:
  • Baltic countries successfully sell its urea due to lack of urea in North Africa
  • Ammonium saltpetre is constantly rising in price in the EU
  • Ammonia has fallen in price in the U.S. by another $17 USD/t

Compared to previous years, there is an imbalance in the nitrogen fertilizer market. Mostly in May, ammonia becomes cheaper, followed by nitrate and other nitrogen fertilizers falling in price. This year, ammonia has fallen in price, and nitrogen fertilizers have risen in price. Moreover, the rise in prices is intensified by trade wars between China and the U.S. and sanctions against Iran.

Russian exports were almost unaffected. Now it is from the Baltic States that the main sales of goods to Latin America and Asia are carried out. The prices have increased to 260 per USD/t, FOB. This is an incredibly high level for the Baltics, especially if we take into account that the price for ammonia there is only $210 to $215 USD/t, FOB.

The price of ammonia in the United States has fallen to 220 USD/t, CFR, and Trinidad has a price of $185 to $190 per ton, and the gap with the price of urea is up to 80 USD/t. This shows that the price of urea is inflated.

Ammonium saltpetre in Europe is becoming more expensive than last year. Prices were already rising in May, but Yara raised prices for nitrate fertilizers again in the 20th of the May. In the Baltic ports, saltpetre was offered for 190-195 USD/t, while in the North Sea ports it was 205 USD/t, FOB. Mixtures of saltpetre and ammonium sulphate are also popular. KAS price remained unchanged after the growth.

It should also be noted that the phosphate fertilizer market in the EU is moving very slowly, with a possible decline in summer prices to increase sales. However, some Russian producers have problems with raw materials, so Russian exports will decline. The domestic market of the Russian Federation makes it possible to keep the situation partially, the prices may slightly decrease, but not fall. The price of ammophos on the Baltic Sea starts at 355 USD/t, but there are very few spot offers.

News overview in the Ukrainian fertiliser market. Main events of the week:
  • Ukrainian producers reduce prices
  • Russian ammonia goes to Ukrainian plants
  • The fertilizer embargo has not yet been announced but may be introduced as of July
  • NPK fertilizer activity is growing among large buyers

Agroholdings are increasingly turning their attention to NPK fertilizers with the high phosphorus content. Thus, several tenders for NPK 10:26:26 are expected. Diammophos before that has fallen in price to 13-13.2 thousand UAH/t wholesale and in the retail market, the price is 13500-13700 UAH/t shows the best cost of active substances of all NPK fertilizers in Ukraine.

Belarusian NPK 8:19:29 is also very cheaply offered – 12800-13000 UAH/t, but the embargo, which is going to be imposed by the government of Groysman, calls into question the Russian import of all kinds of complex fertilizers, it inevitably will raise prices for all products from Belarus. Therefore, only high prices can be expected.

Last year, when sanctions were imposed on Russian companies, the prices of Belarusian NPKs rose during the month by 120 USD/t. It was a record jump. So far, the prices for Ukraine are higher than for other countries. Sumykhimprom remains the only NPK producer, its capacity does not cover even half of the needs of Ukraine, even the entire Belarusian production together with the Ukrainian one does not cover the needs of the Ukrainian market. NPK will become more expensive not only because of the season but also because of the embargo.

OSTHEM bought at least two batches of 10 thousand tons of ammonia from Russia to load saltpetre production in Ukraine. It is tentatively known that 10,000 tonnes will go to Rivneazot. The plant is not operating at full capacity, but its own storage capacity may not be enough. There is no demand for saltpetre, the plants will work in warehouses for traders. UkraAgroNPK and Eridon are the two main operators for OSTHEM, which now buys saltpetre. Now the prices for saltpetre have decreased to 7300-7400 USD/t, the plant. This does not stimulate demand, and also does not allow importing the product, especially taking into account the increased prices in Europe.

KAS and urea prices are dropping too. It is especially noticeable for UAN, it is known that with the delivery of goods you can buy much cheaper than 7000 UAH/t.

Note that the review is made on the basis of data from the tenders and applications for the purchase and sale of the commodity online exchange KME and data analytical group Info Industry.

For reference: Kyiv Mercantile Exchange – the newest Ukrainian online exchange. Realises the world standards of stock trading in the Ukrainian markets of agricultural, chemical and petroleum products. As of March 2019, the total turnover of trades in Kyiv Mercantile Exchange exceeded UAH 4.5 billion.

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