Brazilian MAP prices holding despite surge in P2O5 stocks
Ammonium nitrate prices gained by $10pt in the Baltic to move above $190pt fob for the first time in nearly six months. The increase follows major buying for Brazil and an unexpected shutdown at Acron’s Dorogobuzh facility due to a fire.
The price increase follows months of stagnations and weak international demand as the focus of Russian producers shifted to supplying domestic markets. Domestic demand is now all but over. However it crucially was able to absorb supply over the past few months limiting excess supply pressure on producers.
With FSU product subject to duties, and European demand coming to an end, producers were reluctant to chase business for European markets. Producer price ideas in the $180s pt fob were unattractive with European buyers reluctant to be caught with high-priced product at the end of the current application season.
However, producer resolve was rewarded this week with the emergence of major demand for Brazil. It became apparent midweek that buyers were not willing to wait with a major Brazilian distributor securing significant volumes of AN for May and June shipment from two Russian producers.
The buyer had to pay up in order to secure the volume. The decision to do so followed an expectation that supply would remain tight over the next few weeks for June shipments and likely further out too. In addition to Brazil, demand is also expected to emerge shortly for North Africa and Central America.
The supply situation was further worsened last week with the unexpected shutdown of Acron’s Dorogobuzh plant due to a fire in the prilled tower. The shutdown is understood to only affect ammonium nitrate production with annual output at 700,000t. It is unclear how long the shutdown will last.
Lending further support to AN prices, granular and prilled urea values have gained recently, bolstered by major demand in the east. Producers are currently targeting over $255pt fob for next shipments of prilled urea from the Baltic, up from a low of sub-$230pt fob mid-March.
By Michael Samueli, Nitrogen Market Reporter
Related News
