Argus FMB Nitrogen Formerly FMB Weekly Nitrogen Report Issue 13-06 | Thursday 7 February 2013 MARKET SUMMARY PRICE GUIDE Pause or plateau? FMB nitrogen fertilizer price guide Urea prices have risen nearly $50/t in two weeks to reach 7-Feb 31-Jan $445/t fob Yuzhny. The increase is based on sales for Prilled urea – fob bulk February shipment to nearby markets that are in peak Yuzhny 435-445 408-430 season, principally Turkey and Italy. Baltic 405-430 396-408 Croatia/Romania 455-465 440-450 Traders are selling long positions taken for February and Arabian Gulf 420-425 412-415 making good money on them. However, there is a growing China 420-422 410-415 reluctance to reposition for March, raising the question Brazil (cfr) 430-440 423-430 whether the market is pausing for breath after a rapid run Granular urea – fob bulk up or has reached a plateau. Arabian Gulf all netbacks 410-455 405-455 Arabian Gulf – US netback* 442-454 436-455 Certainly, buyers were deserting the paper market on Arabian Gulf – non US netbacks 410-455 405-450 Thursday and the only trading company buying physical Iran 400-405 395-400 tonnage in Yuzhny this week appeared to be Trammo. Egypt 495-510 495-510 Indonesia/Malaysia 415-444 413-444 Against this, trader positions are dwindling, Latin American Southeast Asia (cfr) 430-435 428-435 buyers are snapping up Baltic cargoes, Egyptian urea Venezuela/Trinidad 420-446 415-439 exports are likely to total less than 100,000t in February US Gulf (pst barge) 432-442 425-442 and Turkey and Italy need more urea. Moreover, Middle East US Gulf (cfr metric) 468-480 461-480 urea prices have moved up, with a trader paying $455/t fob French Atlantic (fca Euro) 390-393 385-395 for granular. * Basis 35-45,000t freight Ammonium sulphate – bulk While prices may have risen too fast to be sustainable, fob Baltic (Caprolactam) 215-220 210-215 there is little reason for prices to fall back in the short fob Blk Sea (Caprolactam) 220-225 215-220 term. The second quarter is a different story, though. fob Kherson (steel grade) 190-193 190-193 cfr S.E. Asia 213-215 210-213 The US market has traded sideways this week lending no cfr Brazil 230-232 220-230 RUN UP IN PRILLS STARTING TO CAUSE CONCERN Ammonium nitrate fob bulk Baltic 345-347 323-325 YUZHNY VS ARAB GULF UREA PRICES fob bulk Black Sea 348-350 325-327 UAN (32%) Nola (short ton) 325-330 322-330 AG Granular (All) Yuzhny Prilled 550 Rouen 30% N fot (€ Euros) 245-248 240-241 fob Black Sea 325-330 315-325 Argus nitrogen index 500 Argus nitrogen index 266.331 270.905 * Composite based on Argus FMB assessments for a basket of nitrogen-based fertilizers. The index is calculated such that 3 450 January 2009 = 100 for each component class of fertilizers. 400 Argus FMB Nitrogen An Argus Media company View the methodology used to assess nitrogen prices at www.argusmedia.com/methodology. Your 350 feedback is always welcome at [email protected] Copyright © 2013 Argus Media Ltd Argus FMB Nitrogen Issue 13-06 Thursday 7 February 2013 real support to either side. Granular urea barges are selling Yuzhny urea line up in the $430s/st fob Nola, with prices trending slightly lower Date Vessel t Shipper/Destination at presstime. This behaviour is not unusual ahead of an industry meeting and a clearer trend should emerge at TFI’s OPZ February conference in Florida in the coming week. Comp Amisos 7,30 0 AF T/Turkey Comp Oruba 8,000 AF T/Turkey Highlights this week 9 Gokan Keran 27,50 0 Trammo/ Trammo buys Yuzhny prills at $445/t fob 11-12 Pagona 25,000 NF/ ▪ Total 67,8 0 0 ▪ Turks buy another 50,000t of urea Brazilians reject prills at $440/t cfr TIS February ▪ Egyptian gas problems continue into February Comp Rainbow H 27,50 0 NF/Italy ▪ US market moves sideways ▪ Kaltim signs term contract with Universal Ldg Mustafa S 5,600 Koch/Turkey ▪ 3 Louise Bulker 15,700 Keytrade/WCSA ▪ Sri Lanka awards urea tender AN price rises to $350/t fob Black Sea 6 Kamil 10,000 Dreyfus/Cameroon ▪ Yara moves CAN prices up for March 11 Sapphire 3,100 Keytrade/ ▪ UAN prices rising across the board ▪ 12 Tanais Leader 20,000 Mekatrade/ Total 81,900 Total Yuzhny February 149,700 BLACK SEA Yuzhny Tuapse Prices have risen further reaching $445/t fob for February loading, the highest level since June. Trammo has been It is understood that Salavat will deliver 10-20,000t of the main buyer again this week, paying $435/t fob Yuzhny prilled urea to Tuapse during March to be sold and shipped for March from AFT and $445/t to DniproAzot for its final from the Russian terminal, which is owned by Eurochem. February tonnes. Kuibyshev is also reported to have sold 5,000t at $438/t fob. Romania Interagro has sold prilled urea for March at prices up to Traders are selling February positions, but are hesitating $465/t fob to traders. There is a heavy schedule of small about buying for March, uncertain whether netbacks from vessels loading for Turkey in February. Mediterranean markets will rise to cover the increased asking prices. Sales in Turkey netback to the mid-$430s/t BALTIC fob and NF is netting up to $440/t fob on some business in There have been no fob sales reported this week in the Italy. Baltic, so prices cover a wide range of $405-430/t fob based on netbacks to northern ports from Latin America at the February is largely sold out, with one or two trader longs low end and bids in the Grodno tender, which was scrapped, still to place. March, though, is uncommitted, apart from at the high end. the tonnage that will move to the Ukrainian domestic market. Phosagro - Trammo and Keytrade are reported to be offering February contract cargoes at $440-445/t cfr in On Thursday, buyers became very scarce on the paper Brazil, reflecting $405/t fob. market as a reaction set in and offers dropped to the low- $430s/t fob Yuzhny for March on FIS. Grodno - Held a sales tender on 5 February for 25,000t of prilled urea for end-February/early-March loading in Trading firm Blue Deebaj made the lowest offer of urea in Klaipeda. It claimed to have received bids up to $430-433/t the Ethiopian tender on 7 February, based on Ukrainian fob but did not sell. It is holding a re-tender on 8 February origin. Its offer at $499.50/t cfrlo including 180 days’ credit for the same tonnage. and local bagging is estimated to netback to $410-415/t fob Yuzhny. The tender requires April delivery. Uralchem - Helm has sold 25,000t of Uralchem urea to Guatemala for mid-February shipment from the Baltic. The Stocks at OPZ total about 28,000t of urea. netback is put at $410-412/t fob. Copyright © 2013 Argus Media Ltd Page 2 of 10 Argus FMB Nitrogen Issue 13-06 Thursday 7 February 2013 SBU - Keytrade has been offering a 25,000t mid-February offering granular at €395/t fca, with Koch quoting the same cargo of prilled urea for shipment to east coast Mexico price. OCI has a 25,000t Middle East granular cargo loading in Ruwais in February that will discharge part in Sete, part Biofert - Salavat has not achieved consistent production of in the Spanish Med, completing in Santander. granular urea yet at its new plant. Prilled urea production has been cut back while efforts continue and Biofert has no Germany product to offer for the present. The urea market is covered for the first application at least. Prices are static: granular offered at €370-375/t fca in Baltic EUROPE ports; and prilled at €340-345/t. Turkey Spain Importers have booked 45-50,000t of urea this week from Granular urea prices have moved up to €405-410/t fca in Yuzhny and Romania at prices netting back to $430-435/t Med ports and Sevilla, equivalent to $530-535/t cfr. The fob Yuzhny, based on freight at $12-13/t to southern ports. market is very tight and further increases in price are expected during February. Prilled urea is quoted at $475/t Gubretas is reported to have purchased another 25,000t of ex-vessel in Med ports. prilled urea from Trammo and some smaller buyers have also stepped in. Cfr levels up to $465/t cfr with credit have AFRICA been achieved for urea for February loading in the Black Sea. At presstime, there were rumours of lower prices on Egypt offer as traders tried to work Baltic positions taken for The production situation is unchanged from last week and February. can be summarised as follows: Kastamonu bought 3,000t of prilled urea from Trammo Alexfert - not producing due to inadequate gas supply under its 31 January for 2 x 3,000t of urea. The price was in ▪ OCI - not producing due to inadequate gas supply the mid-$460s/t cfr duty free/paid with 180 days’ credit. ▪ Helwan - producing at 60-70% of capacity ▪ Mopco - producing at 70-80% of capacity A trader is in the market for a vessel to load 31,000t of urea ▪ in Iskenderun prompt for Tartous, Syria. Mopco may hold a sales tender in the coming week, but will wait until most of the product is in its warehouse before Italy selling to ensure product is available.