10 September 2009 14:30 [Source: ICIS news]
By Carl Roache
LONDON (ICIS news)--An overriding lack of confidence among buyers has seen the global potash trade fail to pick up despite lower prices being offered in several regions, market sources said on Thursday.
In the past three months, potash prices have fallen in key markets as producers slashed offers in a bid to stimulate flagging demand.
In southeast Asia, a decline of $225/tonne (€155/tonne) was recently announced by potash suppliers, taking targeted standard potassium chloride (MOP) prices to $510/tonne CFR (cost and freight).
Nonetheless, southeast Asian buyers said they have continued to shun large-scale potash purchases, as they are unsure that a floor price level has yet been reached.
“The market is quiet and people have a lack of confidence. People want to buy small quantities – just hand to mouth,” said a southeast Asia-based potash producer.
The producer said that some of its customers expected prices to fall. On top of this, in many parts of the region, domestic inventories were ample.
“Right now, I believe the market is in [the buyers’] hands,” the producer said.
This situation was mirrored in several other markets, including the ?xml:namespace>
MOP barge prices have fallen from around $530-535/short ton FOB (free on board) Nola (
Sources have continued to report few
“There is no demand,” said a
The source suggested that barge prices would need to be around $350-360/short ton FOB Nola to see sizeable quantities move.
Now, however, certain regions in
“We do not know ourselves whether the price will hold up where it is at the moment, so just take by the lorry load and don’t expose yourself.”
An Italian importer echoed this view.
“All Italian importers think there will be another evolution in price. The producers need to reduce the price to get demand,” the source said. “The product is too expensive.”
The importer added that, at present, granular MOP was being offered at around €380/tonne CFR Italy.
But the importer said it felt prices would have to be nearer to €300/tonne to generate notable buying interest, considering current crop prices.
A European producer conceded that there was some hesitation in the market, and buyers were unwilling to sit on stocks.
“People are buying only what they really need. There is only very little going into pre-storage,” said the producer.
“There might be a certain lack of confidence as [buyers] still speculate that maybe the potash price will go further downwards.”
One of the only markets willing to buy sizeable quantities at present was
As a result, producers conceded that delivered volumes would likely be down sharply this month.
($1 = €0.69)
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