Urea

The urea market has slowed despite over 800,000 tonnes being booked by India under its 24th June tender and prices have weakened in several markets.

Several factors have influenced this: the psychological impact of the Chinese low export tax window opening, India and Pakistan both likely to be out of the market for a while having just bought, the perception that the recent price run up in prices was unsustainable, and shaky crop prices over recent weeks have all combined and therefore a correction was always likely.

After a period of rapid price rises – close to $200/tonne in three months - a slowdown was inevitable. But based on the supply/demand outlook, a prolonged correction looks unlikely.

A short correction is most likely as more major demand is still waiting in the wings for late July/August shipment, demand that could easily produce another quick price run.

This means that Urea buyers may see a buying opportunity in the next 2/3 weeks and our advice today would be to take it, as other markets like ammonium nitrate and Sulphur products remain extremely tight and in Europe there is speculation that another major increase in AN prices is likely, with some expecting another £ 15/tonne in the next few weeks.

Gleadell have Granular Urea, Lithuanian 34.4% AN and a very high quality N + Sulphur compound all to offer for delivery in the forward positions.

Potash

The focus of the potash market this week is the settlement of Chinese MOP contracts for the second half of 2011. A $70/tonne increase from first half contracts has demonstrated the firmness of the market.

Phosphate

Phosphate prices remain firm as the lack of Chinese DAP and MAP exports onto the world market keep availability tight.