China's MAP prices to rise on strong demand, high feedstock cost

15 May 2012 12:19  [Source: ICIS news]

SINGAPORE (ICIS)--China’s monoammonium phosphate (MAP) prices are expected to rise, as producers are keen to increase prices on expectations of demand picking up in June and high feedstock costs, industry sources said on Tuesday.

In China, 55% powdered MAP – the most commonly used form of the product in the country -  was sold at yuan (CNY) 2,650/tonne ($2,067/tonne) EXW (ex-works) on 15 May, up by CNY50/tonne from early May, according to Chemease, an ICIS service in China.

Prices of 55% granular MAP for delivery to China's eastern ports for exports rose to CNY2,830/tonne 15 May, up by CNY100/tonne from early May, according to Chemease.

Producers and traders were holding low inventories of  MAP in April as global and domestic demand is traditionally lower then and producers tended to limit production, industry sources said.

However, there have been significant spot deals over last two weeks, as producers in Hubei received over 300,000 tonnes of MAP export orders, the sources said, adding that most producers sold out their May output.

An MAP producer in Hubei province said the export orders will arrive to China’s eastern ports for shipment before June.

Export demand will increase in June when custom duties are lowered until September, an exporter said.

The demand from the downstream nitrogen phosphorus potassium (NPK) factories will pick up in June as well, said an MAP trader in eastern China.

If the MAP demand from the global market and NPK factories strengthens in the coming quarter, MAP prices will be pushed up further, market participants said.

In addition, higher prices of feedstock phosphate rock have been applying upward pressure on MAP prices, industry sources said, adding that phosphate rock prices have risen by CNY30-50/tonne since early May.

“Our MAP margin is limited if we sell at the mainstream level of CNY2,650/tonne,” an MAP producer in central China said.

 ($1 = CNY6.32)

By: Elly Zong

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