Phosphates market in wait-and-see mode amid limited demand

Focus article by Sylvia Traganida

LONDON (ICIS)–The phosphates market is slow this week and trading sideways, with most buyers in the main regions adopting a wait-and-see stance, according to sources on Friday.

In India, almost 3.9m tonnes of diammonium phosphate (DAP) have already arrived since April which are expected to cover requirements for the current season.

Chances of further quantities requested are slim and will depend on the monsoon season, whose forecast for September is 10% deficient.

Chinese DAP producers are focusing on the export market, with some already sold out until mid-September. Overall DAP operating rates were at 70-75%, with hardly any turnarounds expected to be seen before October.

West of Suez, the Tampa DAP benchmark remains unchanged for the third week running following a Mosaic sale to Latin America. Domestic DAP barge activity at Nola is subdued and buyers are expecting imports to reenergise the market.

A US-based trader said: “Nothing is done, still very quiet and I wouldn’t be surprised to see some physical move lower with the recent retreat in crop prices.

“Supply is seen as tight and… it will likely take the arrival of imports to shake things loose and get more interest returning back to the market.”

In Brazil, the monoammonium phosphate (MAP) market is sluggish, with the depreciation of the Real and a lack of demand putting pressure on prices. Buyers can afford to wait to make purchases and there are enquiries in the market only for small MAP lots.

On the supply front, most producers are in negotiations for September tonnes. Tunisian state-owned producer Groupe Chimique Tunisien (GCT) is understood to be running DAP at 50% and Moroccan producer Office Cherifien des Phosphates (OCP) is heard shipping three DAP/MAP panamaxes to the US in August.