Phosphate prices ended 2014 stable to firm in the west but flat to weak in the east. While prices for US DAP for export closed the month at $465-470 fob, barge prices increased to $435-440 ston fob NOLA and MAP buyers in Brazil have moved to purchase Russian tonnes in the range $505-510 cfr, $15 higher than prices last achieved on US MAP sales in this market. OCP has added to its order book with DAP, MAP and TSP commitments for US and Brazil and is comfortable for January. This is primarily on the back of a large NP and NPK order book for Africa, including the local market, but also thanks to Moroccan output continuing to run below capacity. Producers in the FSU have withdrawn offers, confident about achieving higher prices in the New Year.
Sensing the market turning, buyers in Pakistan have returned to purchase more Saudi Arabian DAP despite the lack of urgency for product in this market. This opportunistic move has permitted the buyers to secure lower prices in the absence of India as a significant outlet. There remains demand in Pakistan but suppliers in the Middle East are looking to move prices back up. Most are of the opinion that the scene is set for prices in the east to follow up those in the west although some remain cautious, uncertain about the volume that could be supplied from China.
The domestic market in China is in season and set to peak in the early months of Q1 2015. Provided this continues to limit the pressure of potential Chinese tonnes hanging over the market, then supply may be lower than feared by the sceptics.
Several markets postponed their purchasing decisions prior to the announcement of the export tax and should deferred demand find lower than anticipated Chinese supply, then prices would likely firm. This is by no means a given, however. Overall, additional demand both west and east of Suez will be required in January to keep the market on a firm footing and the local market in China will need to perform well to avoid tonnes being forced offshore. Producers that have deliberately implemented cutbacks in Q4 will also need to be cautious as they ramp up output to ensure the balance does not tip back in favour of the buyer.
Analysis of DAP prices in 1995 – 2014 years
