06 January 2012 16:12 [Source: ICIS news]
LONDON (ICIS)--A run on diammonium phosphate (DAP) in the US domestic market has lifted barge prices by $40/short ton (€31.20/short ton) and lent support to softening export prices this week, market sources said on Friday.
Traders are selling in the $480–485/short ton FOB (free on board) Nola range, as dealers buy DAP to rebuild inventory and blend for retailing to farmers.
The spark in activity on the domestic market has lent some support to a weakening US Gulf export price, which may have found a floor over the Christmas and New Year holiday season.
“Traders are cautious about stepping up and nobody is chasing for exports but this run has legs to continue for a while,” said one market source.
The pick up in demand – usually seen after the fall application – was expected last month but did not materialise against a background of a globally weak phosphates market and worldwide financial woes.
The softening domestic barge market ended 2011 at $445/short ton FOB Nola, which is equivalent to a US Gulf export price of around $511/tonne FOB ?xml:namespace>
Export prices were undermined as suppliers and traders considered buying and reselling DAP barges on the international market.
But lack of demand in Europe, Latin America and
Cargoes had been sold at the beginning of December at $600/tonne FOB
After a three-week lull, during which the absence of expected demand caused US DAP barge market prices to slump, the next export cargo was sold at $485/tonne FOB
DAP production cuts during the first quarter of 2012, recently announced by Mosaic in the
The surge in domestic DAP demand has lifted the export market although there is still a risk of a second price dip if DAP sales into Europe and
“There is more optimism that
“Sales will not move the European market but it should tick over and stop the price decline during January.”
Export price indications are in the $520–530/tonne FOB
For more on DAP visit ICIS pricing fertilizers
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