US fertiliser price fears change to phosphate

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Publish time: 20th March, 2012      Source: www.cnchemicals.com
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March 20, 2012

   

   

US fertiliser price fears change to phosphate

   

   

   

Despite production cutbacks, worries over fertiliser prices changed to phosphate from potash as data showed US stocks of the nutrient continuing to build.

   

   

PotashCorp handed a second scrap of hope for potash groups by revealing that North America''s bloated inventories shrank last month, by 16,400 tonnes, in what is typically a time of rising stocks ahead of the spring sowing season.

   

   

Prices of the nutrient, as measured in the Vancouver spot market, were steady too at some US$500 a tonne, the group said, in data which came after K+S on Thursday (Mar 15) steadied nerves in the market by forecasting a lower drop in world demand this year than some other observers.

   

   

However, the PotashCorp statistics revealed a continuing build in US phosphate inventories, of 84,000 tonnes, with stocks of diammonium phosphate (DAP), the most widely used form of phosphate as fertiliser, ending 35% above average levels.

   

   

Furthermore, prices continued to decline, falling below US$500 a tonne in central Florida, down from nearly US$600 a tonne last summer.

   

   

The rise in US phosphate inventories comes despite efforts to stem output by groups such as Mosaic, North America''s top producer, which in December revealed production cutbacks of 250,000 tonnes for the first three months of 2012 in the face of market oversupply.

   

   

In Russia, PhosAgro, the largest phosphate producer in Europe and the former Soviet Union, on Thursday revealed its production of phosphate fertilisers would in the first three months fall by "more than" 22% on-year, above an initial announcement of an 18% decline.

   

   

In the April-to-June quarter, output will drop 15% on-year.

   

   

Indeed, while some European demand has become "evident" ahead of spring applications, prices are "static", Calum Findlay, fertiliser trader at UK-based Gleadell, said.

   

   

"Attempts in Germany to raise the price by US$8-10 a tonne have not been achieved," Findlay said, adding that "the long-term outlook for phosphates see the market trend lower".

   

   

NPK Fertilizer Advisory Services earlier this week forecast a "good possibility" of prices in 2013 extending their decline, which set in last August, noting rising production, notably as Saudi Arabia''s Ma''aden project ramps up.

   

   

Credit Suisse has forecast DAP prices, in the US Gulf, falling to an average of US$535 a tonne this year, and further in both 2013 and 2014, down from US$621 a tonne last year.

   

   

PhosAgro added in its statement that, while it was cutting back phosphate output, it had seen "significantly higher demand" for NPK products, compound fertilisers containing phosphates, potash and nitrogen.

   

   

A boost to NPK output meant that its overall fertiliser production would turn out higher in the first half of 2012 than in the same period a year before, despite the phosphate cutbacks.