Calum Findlay, Gleadell’s Fertiliser Manager, comments on the fertiliser markets

Urea

The urea market is experiencing a downward spiral due to surplus supply and limited demand. Chinese granular urea business was concluded in Brazil last week at levels well below previous traded values. However, little business is taking place in the Northern hemisphere due to the usual harvest trends.

In the UK granular urea is being offered at a near four-year low which, on a cost per unit basis, values ammonium nitrate at about £200/t. This level is rarely seen in the UK and even the biggest urea cynics are likely to consider this form of nitrogen as an alternative worth taking advantage of.

It is uncertain how far away from the floor the market is, but analysing historic trends and the anticipated forward demand, and given the ongoing political problems in Egypt, today’s values must present an opportunity.

Ammonium Nitrate

Urea levels may be tumbling globally, but the ammonium nitrate market remains fairly stable if quiet. Little business is taking place and producers are in no rush to chase levels lower, preferring to hold values with a large demand waiting to surface in Q4. GrowHow products still offer excellent value compared with imported product and some very competitive deals can be found in the Sept/Oct position.

P&K

Both globally and in the UK, the potash market remains weak and quiet in what would usually be a busy trading time of the year. Since the Belarusian Potash Company announcement a few weeks ago, traders are unwilling to take positions due to market uncertainty. In the UK both potash and phosphate levels are correcting further with traders being forced to liquidise positions to empty stores. It is not known what long term effects these problems will have, but if finances allow P, K and N represent a good buy.