Commodity online exchange Kyiv Mercantile Exchange – KME: the results of the first week of July 2019 in the markets of mineral fertilisers in Ukraine and the world.
News overview in the world fertiliser market. Main events of the week:
- Indian tender on July 1 showed price growth compared to May event
- Nitrogen fertilizer prices are being adjusted on the global market
- Europe continues to buy the most expensive nitrogen products
Up to 18 bids totalling 2,775 thousand tons were offered by traders and suppliers at the MMTS tender in India, which was held on July 1. The lowest price from the Black Sea was from Dreymur – 292.63 USD/t, east coast of India. MMTS asked traders to adjust the price for July 3. As a result, prices were reduced by 1-1.5 USD/per barrel. However, the purchase volume will be 2-2.5 times less.
Last time in May, MMTS bought 770 thousand tons urea for 10-13 USD/t cheaper. There is no doubt that India will buy another 0.8 – 1 million tons of urea, or maybe less, and after that, it will be able to return to the market in two months.
Expected events are taking place in the global market. Urea started to lose price. And not in vain, because the last three months its price has been heated up by North America. Farmers couldn’t bring in ammonia there since spring because of the short time window, so they caught up with KAS and urea. The price of KAS has already lowered a few times, and everyone was waiting for the price of urea to drop. If India and Brazil reduce their purchases, the market will start to decline dynamically.
In France, talks about the new season have already begun, the purchase of urea for August is expected at reduced prices. Traders and producers still offer goods for 295 EUR/t, FCA, while farmers expect the price of 270 EUR/t, FCA. A significant decrease in 10-12 euros may not be enough.
Saltpetre is also at risk. Brazil, Argentina, India and the EU are still active in the saltpetre market, which is why the price in Baltic ports does not fall below 210 EUR/t, FOB.
The price of ammophos on the Baltic Sea decreased by 10 USD/t to 345-350 USD/t, FOB. The activity of the Latin American market is rapidly decreasing, while other markets are not in a hurry. In India, subsidies have been delayed, and so have purchases of diammonium phosphate. On the other hand, the Russian producer EuroChem reported on the successful sale of phosphate rock for July-August.
News overview in the Ukrainian fertiliser market. Main events of the week:
- The DZMU will start working on a tolling scheme
- Severodonetsk Azot is expected to be launched, and preparations are underway
- Active phosphate fertilizer purchase phase has started in Ukraine
- The first grain harvest shows excellent prospects until the autumn, but the question is how to take it out?
The embargo already takes place. Importers have faced problems at the border, even if the goods were delivered before July 1, but they did not have time to clear it. During June, 43.5 thousand tons of NPK 16:16:16 were delivered. In total, 103.2 thousand tons of NPK was imported, which is 49% more than in May, and 23 thousand tons less than in April. In total, Ukraine imported 20% less NPK in the first half of the year than in 2017 (according to Info Industry news agency).
The embargo allows launching not only Sumykhimprom, but also DZMU. The plant has been producing only RKD, KAS and NP fertilizers for a long time. Now the production of NPK 16:16:16:16 is loaded. Production volumes are planned to be at least 20 thousand tons, but this is too little to overcome the deficit. Therefore, the import of the Belarusian NPK 16:16:16:16 will reduce the deficit by 18-20 thousand tons.
Severodonetsk Azot goes on gas! This miracle was expected by all Severodonsk citizens. It became possible due to the reduction of gas prices for industrial customers and relatively good fertilizer market conditions in Ukraine. The plant will produce ammonia, urea and saltpetre. The volume of saltpetre production will amount to 40-42 thousand tons per month, which, together with Rovno Azot and Cherkassy Azot can fully satisfy the needs of Ukraine.
Agroholdings start actively buying phosphate fertilizers. There is not enough for everyone, traders are trying to find alternative sources of phosphorus in Poland, the Balkans and Northern Europe. Ammophos has risen in price by 4 thousand UAH/t, simple phosphorus types 9:30 and 10:35 have already been purchased, and the rest in the warehouses is sold for 2-3 thousand UAH/t more expensive than in June.
Russian NP 12:52 is still available in warehouses at the price of 19700-20000 UAH/t.
The harvest has already started, and the first results are impressive. Agrarians started in the centre of Ukraine. At first, there was barley, and in the south, they are already harvesting wheat. This year we are waiting for the shaft of more than 60 million tons of grain.
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 May 2019, the total turnover of trades in Kyiv Mercantile Exchange exceeded UAH 6,3 billion.