Gleadell Fertiliser Market Report - 29/11/2011

UREA

Thanks to covering for Pakistan, Ukrainian Urea prices have held this week. Traders have had little time to wait for lower levels given the strict shipping timetable required by Pakistan under the tender awards.

Returning to the West, the disruption to Egyptian production and shipping this week has been shrugged off by buyers in Europe, however, US prices did briefly pop up once again. It does appear that this may be more a reflection of the true market value of Urea compared with the high prices recently paid by Pakistan.

Despite the fact that it has been a mixed week for Urea producers, the latest drop in prices in the Baltic is not seen as the start of a downtrend. The supply/demand figures point to this being another correction in what is essentially a range bound market.

AMMONIUM NITRATE

Ammonium Nitrate in the UK is remaining stable but with little demand. Demand is set to pick up as we enter December. In Europe, Yara is not looking at changing its CAN/AN prices in Germany or France for the time being, although the supplier will keep assessing the situation. Economic uncertainty is making buyers cautious at present.

PHOSPHATE

The phosphates market has been lifeless in terms of new business this week but imminent spot deals are likely to keep it ticking over until the end of the year.

Europe is casting a shadow, as importing is slower than expected to meet the emerging demand. The financial instability has created a nervous sentiment and purchases are likely to be hand-to-mouth until there is a clearer view that the debt crises are being resolved.

POTASH

The potash market has shown strength this week. New business has been confirmed in Southeast Asia and there are expectations of a price hike there soon. Most of the activity is restricted to Asia. Buyers in Southeast Asia have begun discussions for shipments for the first quarter of 2012 and are expected to conclude negotiations next month. In China, there is a lot of speculation in the market surrounding first half 2012 MOP contract negotiations, which will start in December.

Other markets have remained quiet with sentiment still cautious in Europe because of the debt crisis. Buyers in Brazil continue to resist the new prices as they have high inventory.

SULPHUR

The softening tendency in the sulphur market remained this week, with demand from major markets still slow. However, the return of Chinese buyers into the market is seen as a positive price influence.