Possible bottoming out of nitrogen prices
Forward rates from Sept. 20, 2013
| In $ per t |
Sept 13 |
Oct -13 |
Nov 13 |
Dec 13 |
| Urea Black Sea fob Yuzny |
298 |
287,50 |
282,50 |
- |
| Granulated urea Egypt |
320 |
322,50 |
322,50 |
- |
| Urea (fob US Gulf Coast) |
295,75 |
290,00 |
287,00 |
287,50 |
The months-long decline in fertilizer prices appears to have bottomed out. The speed of the downward trend in the previous curve and the forward prices for the coming delivery months have slowed down considerably. Egyptian urea is even showing slight signs of recovery.
The main reason for the development so far is the falling grain prices, which provide an important orientation for the level and direction of fertilizer prices. Rising natural gas prices may also have contributed to this, as production costs are highly dependent on energy.
Only China is still breaking ranks with its temporary tariff-reduced urea exports. However, based on previous experience, it is likely to be a matter of time before this window closes again.
The development of other fertilizers, especially potash, remains uncertain in light of the collapse of the Belarus-Uralkali cartel. The expectation of a price drop of more than 25 % has not been confirmed by the companies, but the announcements of increased production are an indication of price-squeezing competition.
A stabilization of the price trend is not 100 % certain. The coming month of October will provide more clarity. The price trend will then become much more interesting for early buyers!
