01 February 2012 15:23 [Source: ICIS news]
LONDON (ICIS)--Moroccan fertilizer producer Office Cherifien des Phosphates (OCP) has agreed to cut first-quarter phosphoric acid prices with European buyers, as contract talks with Indian consumers continue, the company said on Wednesday.
Prices have been reduced by $50/tonne (€38/tonne) from fourth-quarter settlements, to $950–1,085/tonne FOB (free on board).
Usually, the contracts with northwest European buyers are concluded after Indian buyers have settled their first-quarter phosphoric acid contracts with OCP.
The buy side is pushing for a $150/tonne drop to $930/tonne CFR (cost and freight). OCP declined to comment on price discussions and negotiations are ongoing.
Such a discount has been provisionally agreed by Indian Farmers Fertilizer Cooperative (IFFCO) with west African supplier Industries Chimiques du Senegal in lieu of upcoming annual negotiations.
Rapidly declining export prices of finished phosphate fertilizers such as diammonium phosphate (DAP) at the end of last year have applied pressure to raw material negotiations scheduled during the first quarter of 2012.
Negotiations on first-quarter contracts for phosphate rock had been postponed because of declining margins and prices but market sources say discussions are due to begin shortly.
“Offers of a $10/tonne drop would be a fair approach to the negotiations,” said a market source. “”But I do not see the need for OCP to drop the price.”
Ammonia prices have also softened, on the back of reduced consumption given the delayed phosphoric acid agreement in India.
Latest spot ammonia business in India was concluded at $377.50/tonne CFR, down from deals agreed last week at $460–465/tonne CFR.
($1 = €0.76)
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