06 January 2012 17:50 [Source: ICIS news]
LONDON (ICIS)--Moroccan-based Office Cherifien des Phosphates (OCP) is cutting production by 30% during the first quarter of 2012, the fertilizer producer said on Friday.
The move, taken in response to sharply declining export prices on the diammonium phosphates (DAP) spot market, will reduce output by around 250,000 tonnes during the quarter.
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OCP is following similar capacity reduction measures recently taken by other producers.
In addition, OCP has agreed to requests from Indian buyers to delay contract cargoes of DAP from December to January and February.
Although the phosphates market normally troughs towards the end of the year, the failure of demand to emerge in the
The benchmark US Gulf export price plunged $115/tonne (€89.70/tonne) during December, but has now potentially found a floor on the last sale at $485/tonne FOB (free on board)
Global financial concerns and lack of access to credit have underpinned delays to purchasing, especially in countries at the centre of the eurozone crisis such as
Although production at
GCT confirmed on Friday that production at the M’Dhilla, Skhira and Gabes facilities is sporadic, as rail blockades hinder phosphate rock being transported from the mines.
Although imminent, a re-start cannot be confirmed until the new government creates a sense of stability in the country.
“The government has said the plants should be cleared of demonstrators for the past two or three weeks,” said a company spokesman.
“But the government wants to negotiate rather than use force to remove the protestors,” they added.
The cuts in production coupled with firming corn prices sparked a run this week on the domestic US DAP market, which has lent some support to the weak export price.
The surge has lifted the export market to the $520-530/tonne FOB
($1 = €0.78)
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