The boom in phosphorus fertilisers and diammophos is starting to subside

Our news, Overview of the market for mineral fertilizers
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Commodity online exchange Kyiv Mercantile Exchange – KME: the results of the second week of August 2019 in the markets of mineral fertilisers in Ukraine and the world.

News overview in the world fertiliser market. Main events of the week:
  • India already has a shortfall of 200,000 tonnes of urea in August
  • The sharp decline in prices for urea in Asia has caused the dumping of commodities
  • “Grodno Azot” could not sell urea for 250 USD/t, the product is already being offered for Ukraine
  • The price of limestone saltpetre has collapsed in Turkey

In the foreign markets, traders were least concerned about the lack of activity in the trade of phosphate fertilisers.

Meanwhile, the market for nitrogen fertilisers did not rest. The price of urea in Asia collapsed first. China has begun to dump summer urea reserves. Even the 200,000 tonnes that were reserved for India were sold. Now MMTC is forced to hold a new tender and China will pay the fine.

The worst situation in the Baltic, during the week the price of urea decreased by 10-20 USD/t. “Grodno Azot” could not sell a lot of 20 thousand tons of sawn urea at the price of 250 USD/t, after all, they have decided to sell it in the domestic markets of Belarus and Ukraine. At the end of July, granulated urea was sold for 270 USD/t, FOB.

In the Baltic, the tension is rising. At the same time, producers on the Black Sea are beginning to cut prices by the end of August-September. The highest bid price was by “DniproAzot” – 250 USD/t, FOB, however, the pre-purchased batch from the plant has not yet been sold in the end markets. Traders are not ready for new purchases.

Turkey does not consume saltpetre, so Ukraine, the Balkans and beginning from this year India have been the main consumers. After long negotiations, the Turks were unable to sell the limestone saltpetre for 170 USD/t, the product was purchased for 150 USD/t, FOB for North Africa.

The pressure on Black Sea prices in the saltpetre market continues. So far, manufacturers agree to 185-190 USD/t, FOB, but obviously for autumn is too much.

News overview in the Ukrainian fertiliser market. Main events of the week
  • Traders rate the autumn 2019 season as the least successful for sale
  • “Rivneazot” and “Severodonetsk Azot” maximize nitrate production
  • DZMD begins to produce NPK
  • The real boom in phosphorus fertilisers and diammophos is starting to subside

Traders do not remember the worse season for fertilisers trading. The lack of activity among small and medium-sized enterprises in July led to (according to the estimates of experts of IA “Info Industry”) that compared with 2016-2017 in July only 15-18% of volumes were sold.

At that time NPK 16:16:16 and phosphorus were actively purchased. In the 2019 season, only certain types of phosphorus were relatively available, and at least 35-40 thousand tons of sulfoammophos were sold in the market. The same proportion of ammophos and not less than 20 thousand tons of superphosphates, instead of 100-120 thousand tons of nitroammophos. In July, no more than 30,000 tonnes were consumed, of which 18,8 thousand tonnes were imported.

Nitrogen fertilisers were bought really inactive, with high logistical activity and low sales in July.

“Rivneazot” and “Severodonetsk Azot Union” have launched the saltpetre at full capacity, even though at “Severodonetsk Azot Union” the good is produced of ammonia. Factories were shipped mostly to agro holdings and traders in July, and in August the product was actively offered to the general public. So far, the activity of the agricultural sector is not increasing. The impression is that the purchase of nitrogens, agrarians have postponed to September.

In mid-August, the Dniper Mineral Fertilizer Plant finishes its phosphorus fertilisers production program and begins to produce NPK. The goods were bought by traders through the operators of “Ostham” and remain to be sold to farmers. A low price will drive sales.

In June, a diammophos boom among agricultural holdings began. In part, the popularity of fertiliser was supported by demand among farms smaller than agro holdings. But the lack of goods led to a chaotic purchase of analogues, which has somewhat slowed sales.

In July, phosphorus fertilisers came to the fore in sufficient quantity and at a good price, as there were several suppliers. The phosphorus fertiliser boom is now ending. Agrarians will buy phosphorus until mid-October, though with less activity. Potash fertilisers come to the fore.

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.

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