OCP set to settle India Q4 phosacid down $400/t

25 September 2008 14:20  [Source: ICIS news]

LONDON (ICIS news)--Morocco’s Office Cherifien des Phosphates (OCP) is likely to agree to fourth-quarter India phosphoric acid contracts down $400/tonne, despite being countered with values down $600/tonne by customers, traders said on Thursday.

The reduction would afford domestic phosphate producers a healthy margin, traders added.

The OCP delegation, which arrived in India on 23 September, was understood to have issued a letter to its customers – Paradeep Phosphates Ltd (PPL), Zuari and TataChem - formalising its final phosphoric acid offer at $1,920/tonne CFR (cost and freight).

The lower price was on account of lower sulphur feedstock prices.

This represented a significant drop from third-quarter phosphoric acid prices at $2,310/tonne CFR.

However, customers countered at $1,700/tonne CFR, arguing that they needed to recoup some margin lost in the previous quarter, said one Indian trader source.

OCP representatives had since left India without an agreement, and an OCP spokesperson would not confirm whether or not an agreement had been made.

“The [negotiations] are a charade,” said another trader. “Even at $1,920/tonne CFR this is a good deal for Indian producers who can still make a healthy margin on domestic phosphate fertilizer production.”

“I think OCP will eventually be successful in settling Q4 contracts at $1,920/tonne CFR,” the source added.

This would also encourage more domestic phosphate fertilizer production in September according to briefings given by the fertilizer industry to Department of Fertilizer officials, the source said.

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By: Mike Nash
+44 20 8652 3214

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