Market Insight

PRICE TRENDS

Market snapshot, 2nd January 2025

Urea market starts year on positive note. In India, National Fertilizers Limited’s latest import tender secured only 187,000 tonnes of urea, just a fraction of the 1.5 million tonnes NFL was seeking. Market sentiment remains firm despite this, with the lack of sales to India being seen as a bullish sign. Interest from Turkish buyers, for example, with bids at up to $330/t f.o.b., allowed Baltic Sea suppliers to ignore Indian demand. In a similar move, SIUCI made a successful sale out of Oman at $375/t f.o.b..

The New Orleans market has been lacklustre over the festive holiday, but has rallied back to $333/st f.o.b. NOLA since. This price falls way short of what can be attained in the Middle East, in India and elsewhere. Even Brazil has edged ahead of NOLA again.

Brazilian prices, while they have risen to $370/t cfr, have so far fallen short of the $375-380/t cfr offered by some. Egypt has managed to trade with Europe at up to $403/t f.o.b., although the region has remained relatively quiet.

Ammonia little changed outside Tampa settlement. Ammonia prices were largely unchanged in the first week of the New Year with some participants not yet back at their desks. Many in the market expect higher supply to begin to weigh on prices in the weeks ahead – with the decline in the Tampa settlement, down $32/t to $538/t cfr for January pointing the way.

Northwest Europe’s spot price remains assessed at $610-620/t cfr currently. Offers from Algeria, meanwhile, are now at $550/t f.o.b., down around $10/t from late last year.

Phosphate prices steady as China exports still restricted. Global spot market activity for DAP/MAP was limited at the start of the year, although tight availability remains a concern while China’s export restrictions remain in place. In China itself, export restrictions – along with lacklustre domestic demand – have continued to push domestic DAP/MAP prices downwards.

The latest sales tender from Ethiopia’s EABC, which closed 23rd December, has been a recent market talking point. This buyer has made a counter offer to suppliers at $639/t f.o.b. and requested that all cargoes are shipped in January and February, according to sources.

While India’s government has extended the special package subsidy for DAP, this has not changed market fundamentals. Elsewhere, prices for MAP barges at New Orleans declined further in early January while DAP prices inched up – the upshot being that MAP’s price premium over DAP has now almost gone.

Potash prices firm in SE Asia, Brazil. The Brazilian and Southeast Asian markets have paved the way for higher potash prices, despite sluggish demand entering the New Year.

Brazil’s potash prices increased to $305310/t cfr. This increasing price trend may be hindered by high stock turnover and the persistent weakness of the Brazilian Real.

In Southeast Asia, standard MOP prices firmed $10/t to an average of $300/t cfr – its highest level since April 2024. The majority of producers were looking for prices above $300/t cfr as 2025 began. Chinese potash market sentiment remained firm, with port wholesale prices rising in the first week of January.

Sulphur prices decreased in China but flatlined elsewhere. Delivered sulphur prices into China decreased as January began. Elsewhere, other benchmarks remained flat with limited transactions taking place due to new year celebrations.

Demand has remained subdued and most markets are seeing stable prices. Weak demand has kept prices from fluctuating In India, for example, while demand in Brazil is not expected to return until the middle of January once prices decrease. Spot prices in the Middle East also remained unchanged, despite slight increases in the monthly prices released by Kuwait and Qatar.

China’s price decreased to $182-185/t cfr following reports that the country’s buyers were reluctant to consider prices above $185/t cfr. This has come at a time when the price difference between domestic port stocks and international cargoes has widened.

OUTLOOK

Urea less bearish. Shaking off December’s bearishness, the short-term forecast for urea has been revised higher on renewed demand in Europe, ongoing activity in India and production curtailments in Iran.

The backdrop to rising global urea prices remains the total absence of China from the export market. Indeed, CRU does not expect Chinese urea supply to reach international markets before July.

India ended 2024 with 6.5 million tonnes of urea stocks, lower than last year’s closing stock of 7.3 million tonnes. Availability for the next India import tender will depend timing and competition for tonnes from Australia, Thailand and the US, which is expected to be fierce.

Ammonia prices to extend declines. Having reached their 2024 peak in last year’s first quarter, ammonia prices appear to have turned a corner and should (for the most part) extend their declines over the next six months.

Support for prices west of Suez should remain limited during 2025’s first half, with most benchmarks expected to bottom out around June-July, moving in line with seasonal norms.

East of Suez, the Middle East benchmark is also set to undergo declines during January-June, with output having vastly improved since Ma’aden concluded lengthy maintenance works. Although prices have held in the low-$400s/t f.o.b. for several months, a lack of demand from the Far East and only modest interest from India should see prices decline over the next two quarters.

Phosphates steady. While relatively steady prices are expected throughout the first quarter, some slight declines are likely in the second quarter as supply improves.

In India, stocks remain relatively low with potential for off-season demand to add price support. Still, buyers remain sensitive to prices and are likely to limit purchases, given that import margins remain heavily negative at current prices and under existing subsidy levels.

Fresh export agreements from China are expected to remain minimal duering the first quarter, as authorities seek to push domestic prices down to an acceptable level. The lack of China exports will add further support to bullish global market sentiment. Exports from China should pick up in the second quarter, however, giving buyers another supply option.

Upwards trajectory for potash. The bullish market sentiment of recent weeks is expected to persist in 2025, with spot prices set to rise modestly in the months ahead. Affordability is expected to drive the market, with 2025 consumption projected to slightly outpace last year’s demand. Producers have held their ground on offers heading into the new year, with the opportunity of hiking prices after a year of lows.

Brazil’s spot MOP price – in the $305310/t cfr range at the end of 2024 – is forecast to rise gradually over the next six months, culminating in a high of $315/t cfr in June. In the Southeast Asian potash market, CRU expects the average standard MOP price to rise steadily from $300/t cfr in January to a high of $308/t cfr in June.

Sulphur prices set to decline. Despite recent price increases, subdued demand is expected to drive sulphur prices down during the first half of 2025.

In the Middle East, prices are forecast to peak at around $167/t f.o.b. in January and then decline to an average of $147/t f.o.b. in February and $125/t f.o.b. around April. The January price for product into China has been revised upwards to $183/t cfr, with prices then expected to decline to an average of $147/t cfr by April before rising again to $152/t cfr in May.

In Brazil, prices are forecast to remain around their current $182/t cfr level during January before declining – in line with other benchmarks – to around $164/t cfr in February and $141/t cfr by April.