Commodity online exchange Kyiv Mercantile Exchange – KME: the results as of September 18, 2019 in the markets of mineral fertilisers in Ukraine and the world.
News overview in the world fertiliser market. Main events of the week:
- Tender in India has lightened tensions in the urea market
- KAS in the US and EU again becomes cheaper, and the saltpetre is barely holding positions
- The saturation of the European NPK market continues, with prices for phosphorus rising slightly
Urea manufacturers have waited for the MMTS tender in India. This relieves global tension by mid-October. By some estimates, 600-700 thousand tonnes will be purchased in India by October 16. Applications were collected by Friday, September 13. We are waiting for the result.
Sales of urea on the Black Sea have continued. The Odesa Port Plant is already working steadily with Dreymoor. Another sold lot is intended for the Indian market. The parties do not disclose the principle of operation and the price per ton. Dreymoor also trades granulated urea produced by Socar.
Demand for ammonium saltpetre remains weak. Russian manufacturers deliver goods to Brazil and other Latin American countries according to the old or through their trading structures. The Black Sea price is nominally 170-185 USD/t, FOB, and Baltic is 5 USD more expensive. KAS prices are falling in the US and France. In other regions, there is still no change.
Comprehensive fertilizers will remain popular in the Northern Hemisphere, but the surplus of goods is felt.
DAP price reductions over two weeks in China and India have stopped and prices are mostly remaining the same.
Following a statement by Mosaic to stop production at its Louisiana plant, US prices rose by DAP and MAP to 311- 322 USD/t and 318 – 320 USD/t, FOB-New Orleans, respectively.
News overview in the Ukrainian fertiliser market. Main events of the week:
- The Ukrainian nitrogen market is saturated with commodities
- The Odesa Port Plant has time to sell most of it, there are free volumes for the domestic market
- Phosphorus fertilizers become cheaper again
After NPK from Belarusian and European suppliers had become cheaper, prices in Ukraine have dropped significantly. The Hryvnia against the US dollar has had an impact on reducing domestic prices.
The same course forces agrarians to keep selling finished goods. Currently, grain prices have fallen and sales have fallen.
It is also important to understand that until mid-September there was no rain, it is impossible to sow in a dry land. The short rainfall that is expected in central and western Ukraine will improve the situation. Small agricultural producers will start buying fertilizers. Warehouse sales should increase, though not as expected in the fall.
Ostham has increased saltpetre production to 140,000 tonnes per month. By the end of the year, no reduction is planned, and in the spring the unit will be repaired in Cherkasy, which will give an additional amount of 40-45 thousand tons.
So, saltpetre will be sufficient, but the price is still too high for farmers to purchase for winter storage.
The saltpetre in warehouses is offered for 7500-7700 UAH/t, bag. Other nitrogen is competitive: urea – 8400-8500 UAH/t, composition, and ammonium sulphate – 7500-7700 UAH/t. Although the sulphate in the active substance is more expensive than saltpetre, in the autumn it is ammonium nitrogen that is better for winter crops.
Odesa Port Plant plans to put 10,000 tons of urea in the domestic market. The product will be offered at the prices that exist in the market. Imports are almost not offered because they do not fall within the price range of Ukrainian manufacturers.
The low activity of the agricultural sector and the large volume of imports of phosphorus by sea have made the market somewhat oversaturated, but as with KAS in 2018. A lot of goods are in the south, and in the east, where they are bought better, there was a drought and many did not sow. Sulfoammophos is already offered for 11800 UAH/t, port. Ammophos – 15500-16000 UAH/t, port.
Traders are preparing for the nitrogen season, so all the complex fertilizers will be relegated. Only in December, the demand for NPK will resume.
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 end of June 2019, the total turnover of trades in Kyiv Mercantile Exchange exceeded UAH 8,5 billion.