10 November 2010 10:23 [Source: ICIS news]
HANOI (ICIS)--Vietnam could import as much as 100,000 tonnes of urea and the same amount of diammonium phosphate (DAP) by the end of 2010 to make up for the low amount of product the country took in during the first half of the year, market sources said on Wednesday.
Traders and producers concurred that a combination of drought and floods, an inability to secure foreign exchange and a larger-than-expected carryover of stocks in to 2010 had all contributed to muted import activity, for which Vietnam could now pay the price.
Sources were speaking on the sidelines of the International Fertilizer Industry Association (IFA) Asia-Pacific Crossroads conference in ?xml:namespace>
“We have had a succession of natural disasters,” said Pham Tuan Son, deputy general manager of PetroVietnam’s fertilizer division, the country’s largest producer and importer of fertilizer.
The disasters included floods and a severe drought in the first half of the year, he said.
“Our carryover stocks were also much higher – 25% of all our 2009 imports were carried over into 2010 due to low off take,” added Pham.
Nguyen Quang Hien, a trader with Samsung, said in reference to
Pham estimated that
“We’re running at 104% of production capacity,” said Pham. PetroVietnam’s current urea capacity is 740,000 tonnes/year.
A similar situation was emerging with DAP fertilizer.
“Phosphate rock supply is a real issue,” said one trader.
Most sources agreed that the plant had been running at about 50% of capacity, producing 10,000-15,000 tonnes/month of DAP, mostly used by VinaChem for blended-fertilizer production.
In Vietnam’s latest fertilizer business, reports of a sale of 15,000 tonnes of DAP from the Philippines by trader Mekatrade at close to $600/tonne (€432/tonne) CFR (cost and freight) were denied by traders, who said that there was no DAP available from South Korea or the Philippines.
However, DAP at $600-610/tonne CFR was easily achievable, according to traders, which was up by $20-30/tonne from last week, with bids already at the low end of this range.
Demand for DAP imports could top 150,000-200,000 tonnes in the fourth quarter, but availability of product from China was virtually non-existent as a result of the imminent export tax that will effectively ban Chinese exports.
Sources said there has been discussion of a cargo from
It may only be a matter of time before importers pay up, given the lack of supply out of
The IFA Asia-Pacific conference runs from 8-10 November.
($1 = €0.72)
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