UREA

The global Urea market appears to be stabilising after last week’s correction, with regional prices falling more in line with traditional pricing relationships.

Prices look set to firm, supported in part by more than 1.5mt being booked under India’s tender, and the fact that traders started buying substantial quantities from the Black Sea, Baltic Sea, Middle East, Egypt and even China to cover short positions and prepare for the expected Pakistan tender.

There are indications that traders still have not fully covered positions out of India and there is more buying to be done. It appears the floor of this price correction has been established, with Yuzhny’s October availability sold out and November also partially booked now.

European and Latin American demand is still lacklustre, but this does not seem likely to severely disrupt the supply-demand balance as there is more demand possible from India and certain demand expected out of Pakistan.

AMMONIUM NITRATE

Ammonium Nitrate still remains firm as global production problems continue to keep supply tight. In France, the GPN ammonia plant will be down for another three months following a fire. In the UK, the GrowHow ammonia plant at Billingham also remains down following an explosion.

PHOSPHATE

Cautious but confident probably sums up this market, with little build-up of stocks for transhipping in Benelux ports. All origins have slipped slightly on cif values, but fundamentals still based on demand being solid and factories comfortable with sales going forward to end of the year. There is firm interest from India and Pakistan, with little price erosion throughout Asia, this being supported by export tariffs at 110% ex China from October going forward.

SULPHUR

Although prices for good quality continue firm, volume availability is still problematic. This is reflected by very few offers of NS products into the UK, and it is unlikely the situation will change in the medium term.

Summary

With buyers still cautious and producers comfortable, the only area of movement is for blends as producers reduce inventory in the short term. However, with stores relatively empty, the closer we get to spring with up to 40% of the market left, this is not an optimistic figure. Supply and demand will kick in and bulls likely to reappear after a long period in the doldrums.