International Phosphate Fertilizer Market Cold and Hot Differentiation

Last week, the international phosphate fertilizer market was divided. India’s sharp decline in the value of the rupee refusing to accept any higher price than the USP’s CIF price of US$520 (t price), and the sellers are still promising for India’s ability to pay. However, this is certainly not possible in the case of a devaluation of the rupee.

However, the markets in Argentina, Uruguay, and Brazil are still relatively active. The prices of phosphate fertilizers have not dropped. At the same time, the U.S. market also needs a make-up store before the fall, which will support prices. It is expected that in the short term, the western hemisphere market will be dominated by stability.

Last week, the phosphate market in the western hemisphere was stable, and the price of diammonium in the US barge gradually became stronger. However, due to the large range of price changes in the Latin American market due to different destinations and purchases, it is not easy for traders to reach a deal. In general, the market price in the western region is stable, and the markets in Brazil, Uruguay and Argentina are relatively active.

The market conditions in the Eastern Hemisphere are completely different. Since April, the American Phosphorus Association had reached a 400,000-ton diammonium transaction with India at a value of USD 520 for CIF (and there are also many rumors that the price is based on a discount of US$ 520). After that, India has no Any imports, but this still allows sellers to hold the hope that the Indian market CIF 510 US dollars, Saudi Basic Industries Corporation's current offer to India at this level. However, China’s diammonium price is based on a US$10 discount on the basis of US$510. At this price, Chinese manufacturers still have a meager profit, and some offer even as low as US$505, but Yuntianhua said that they rejected it not long ago. The sale of 500,000 to 700,000 tons of diammonium at 505 US dollars is currently trading at 3 to 4 ships at around US$ 510. The real catalyst for India to slow down its purchases is that the exchange rate between the rupee and the U.S. dollar fell by nearly 5% in one month, and the current exchange rate is closer to the lowest point since June 2012.

The prospects of phosphate fertilizers in the medium term are still uncertain, but one thing is certain that India can only purchase spot goods, and the purchase volume will decline, and the prices will only be valid for short-term delivery of goods in order to cope with possible raw material price declines and exchange rate changes. India has already purchased 1 million tons of diammonium, so it is not necessary to continue purchasing it in July. India will need to purchase another 3 million to 3.5 million tons before November, and the price will be determined again when it is ready.

The key now is how Chinese manufacturers will act in June. The current feeling is that Chinese producers are eager to cut prices in order to achieve the export of diammonium to India. One of the reasons for doing so is to ease China's domestic inventory pressure in order to avoid fall. Backlog of excessive supply, in addition to China wants to diammonium operating rate dropped to 70% to 75%. The main problem now is that if China’s diammonium is sold to India at the FOB price of US$490, the profits (if any) of suppliers (traders) will be too thin, and several manufacturers can afford such What about low prices?