Focus article by Sylvia Traganida
LONDON (ICIS)--Slow demand and limited business have been the main characteristics of the phosphates market this week.
Chinese diammonium phosphate (DAP) producers have increased their asking price as Indian buyers are slowly accepting higher prices following the settlement of the Q3 phosphoric acid contract at a $50/tonne increase, sources said.
Chinese producers are still focused on exports through September before they start winter stocking and turn their attention to the domestic market, when the low export tax window closes in mid-October.
Export availability is heard to be tight, but it will depend on whether producers increase production levels which might balance the supply demand situation.
In India, lacklustre business was heard as regular shipments from Saudi Arabia, China and Jordan keep trickling in. Buyers are expecting demand to pick up after the monsoon season finishes and before the Chinese low export tax window closes.
It is understood that phosphate rock discussions for Q3 deliveries will get under way next week.
West of Suez, the US Tampa export benchmark price remains unchanged due to a lack of business, as demand in Latin America seems to have died down.
A US-based trader said that the market feels soft and seems a little down which could be a temporary lull in the market.
US barge prices for DAP are talked in the $445-455/short ton FOB [free on board] Nola price range.
Domestic demand is heard to be limited and freight rates are edging upwards, as market players are expecting a big grain crop. Some barge rates have even gone up threefold over contract rates.
On the supply side, most producers are sold out for August and September, including Morocco’s Office Cherifien des Phosphates (OCP) and Jordanian producer JPMC.Saudi producer SABIC has raised its asking price to India and Pakistan for September and early October due to high demand in the main regions.