September Fertiliser Market Update: Shifts and Trends

September brought significant changes to global fertiliser markets, driven by evolving supply dynamics, agricultural demand, and broader macroeconomic policies. Across key regions such as the Arabian Gulf (AG), Brazil, Egypt, and Nola (New Orleans), notable price increases occurred, likely due to supply chain constraints and heightened agricultural demand. Events like India’s NFL tender further influenced these market shifts.

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China Fertiliser Markets: Key Movements and Policy Impacts

In China, Yellow Phosphorus (P4) prices dropped significantly to USD 3,286/MT FOB, driven by weak demand in the phosphorus chloride market. The National Day holiday has softened demand further, as buyers have stocked up in advance.

Phosphoric Acid (P.A.) supply remains tight due to strong export orders and rising demand for iron phosphate. Disruptions in long-distance transportation during the holiday period have prompted factories to maintain current offers. The price gap between hot and wet phosphoric acid has narrowed due to tighter supply.

The urea market experienced a price drop to USD 265/MT FCA, a reduction of USD 6/MT. Production remains robust, with weekly output at 1,347,000 MT and daily production at 192,500 MT. The operating rate of urea facilities has increased to 86.3%, with growing inventories at both factory and port levels, now reaching 1,000,000 MT. FOB prices in China fell to USD 274/MT, reflecting continued market pressure.

Potash prices in China have remained stable, with the average price at USD 343/MT FOB. Qinghai-origin potash is priced higher at USD 357/MT FOB, imported potash is trading at USD 346/MT FOB, indicating a balanced market. In the phosphate sector, MAP/DAP (Monoammonium Phosphate/Diammonium Phosphate) prices experienced contrasting movements. The price for 55% powdered MAP dropped significantly to USD 434/MT FOB, while TMAP held steady at USD 800/MT FOB, reflecting varying demand levels.

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Chinese Macroeconomic Policies and Freight Costs

China’s recent macroeconomic policies, particularly Quantitative Easing (QE), aim to boost consumption, stabilise the real estate sector, and improve stock market conditions. These measures are expected to positively influence market sentiment and may help offset some declines in key sectors.

Freight costs continued their downward trend. The Shanghai Containerised Freight Index (SCFI) fell to 2,135 and the China Containerised Freight Index (CCFI) dropped to 1,638. These lower shipping costs are easing logistical pressures for many industries. The USD exchange rate has stabilised around 7.00, with a slight improvement to 6.98 over the weekend. While this could offer a modest boost to Chinese exporters, ongoing currency volatility remains a factor affecting trade competitiveness.

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European Nitrogen Market: Subdued Demand and Stable Prices

The European nitrogen market remained subdued, influenced by incomplete autumn planting, ongoing corn and soybean harvesting, and limited farmer cash flow. Bulk CIF prices for CAN (Calcium Ammonium Nitrate) and AN (Ammonium Nitrate) remained stable across Europe, with some localised variances. For instance, Germany’s CAN was offered at USD 268-273/MT CIF, while urea prices hovered between USD 373-389/MT FCA. Adverse weather in Spain further weakened demand, and rising ammonia and natural gas costs are expected to drive up freight rates.

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Egypt’s Urea Market and Gas Supply Issues

Egypt’s urea market faced headwinds due to erratic gas supplies, with factories operating at 70% capacity. Urea sales were recorded at USD 340-351/MT FOB, and further October sales reached as high as USD 370/MT FOB. In contrast, Europe’s market sentiment was more restrained, particularly in France, where distributors made smaller-than-expected purchases.

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Potash, NPK's and Phosphate Markets in Europe

Potash prices in Europe remained stable, with granular MOP (Potassium Chloride) trading at USD 348-359/MT FCA, while phosphate prices held steady due to subdued demand.

DAP Prices in Europe: In Germany, DAP prices remained stable at USD 650-655/MT FCA bulk. Meanwhile, prices in Szczecin fell to USD 635-641/MT FCA bulk, likely due to the recent arrival of 8.8k MT of OCP DAP. In the Benelux region, DAP dipped by about USD 5/MT, now at USD 650-655/MT FCA bulk in Ghent. France’s prices remained steady at USD 644-655/MT FCA bulk, and Spain saw OCP offering USD 675/MT FCA bulk for truckloads.

TSP Prices in Europe: TSP demand dropped significantly, with ICL holding steady at USD 555/MT FCA bulk in France, and other sources quoting USD 544-555/MT FCA bulk.

NPK Prices: NPK 15-15-15 was stable at USD 462-468/MT FCA bulk across regions from Ghent to Santander. Imported NPK was priced at USD 474-480/MT FCA bulk in Ravenna, with low import interest. The cost for raw materials for bulk-blend NPK ranged from USD 393-416/MT FCA bulk.

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Freight Rates and Rising Energy Costs

Freight rates across key destinations such as Algeria, Spain, and France showed variability. As European producers brace for rising energy costs, shipping prices are expected to rise in the coming months. Looking ahead to Q4 2024 and into Q1 2025, Paper Markets anticipate potential supply shortages and increased costs. Europe is expected to see demand resurge once autumn planting resumes and farmer cash flow improves. Globally, the market remains cautiously optimistic, with steady upward price trends likely shaping the early months of 2025.

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Paper Markets Leading Price Growth: Brazil and Egypt

Brazil and Egypt saw the strongest price growth within Paper Markets, largely fuelled by regional demand and local supply challenges. In October, Egypt’s Urea Paper prices surged from USD 335-345/MT to USD 368-375/MT, while Brazil’s prices increased from USD 340-345/MT to USD 360-375/MT. Nola experienced more modest growth, with October prices rising from USD 300-308/MT to USD 310-318/MT as North America prepared for its winter planting season.