Q1 Fertilizer Review
KEY HIGHLIGHTS
Urea: Prices continued their increase from the fourth quarter in anticipation of large buying from India. Prices peaked in February at $455 CFR before falling in March.
DAP: Tight supply as no exports were approved from China in the first quarter.
MOP: Prices remain affordable, but all suppliers are increasing prices for the second quarter.
Sulphur: The price increased over 150% in the quarter and over 700% year-over-year, partially because of high DAP/MAP prices. This impacts all fertilizers using sulphuric acid.
U.S. Dollar: Concerns across commodity markets about tariffs proposed by the new administration and when they will become effective.
Irrigation Water: water volumes are ahead of 2024 levels and remain healthy according to the Thai Royal Irrigation Department
Freight Rates: Container shipping costs from China eased from the 4th quarter but remain elevated ($38-$40 pmt from N. China).
Raw materials remain firm. Global uncertainty continues.
UREA
Urea ended the quarter up 2.6% to $395 CFR. Prices were as high as $455 CFR at the end of February. Local wholesale prices ended the quarter at around 15,000 Baht per metric ton in bulk ex-warehouse.
The quarter started strong in anticipation of a new Indian tender for 1.5m tons for loading by 5 March. The winning offers were $427 pmt CFR east coast and $422 pmt CFR west coast, but only 500k tons were accepted. Production from Iran was also severely reduced on limited gas supplies for most of the quarter. India’s inventories remain seasonally low. Most anticipated another tender in February, but when it did not materialize until the end of March, prices fell.
On 26 March, India announced a tender for 1.5m tons with results to be announced on 8 April for loading by 12 June. The results should set the mood for the 2nd quarter. Buying is expected to pick up in April in Thailand after Songkran ahead of the main application season. Sabic loaded four urea vessels and Bahrain and Petronas each loaded one urea vessel for Thailand at mid/end of March. China continues to be absent from the urea export market. Pending the Indian tender results, supply should be tight.
The urea market will most likely trend sideways for the second quarter
DAP
DAP prices remained elevated in the 1st quarter. The price of DAP increased 1.2% in the quarter to the $650-$655 CFR level. Local wholesale prices surged to 25,200 – 25,400 Baht per metric ton at the end of the quarter.
There was steady DAP demand from India and Ethiopia and much of the demand was filled by Morocco, Jordan, Saudi Arabia and Russia. Most of the Thai demand is being filled by Phosagro (Russia) and SABIC/Ma’aden (Saudi Arabia).
The story continues to be the lack of supply from China due to the export ban on MAP/DAP. The Phosphate Association is expected to meet 23-25 April to decide when to export policy. Most expect DAP exports will resume at the end of May after China’s main season is finished.
The EU has proposed additional tariffs on Russian MAP, DAP, NPK, NP and NK of 40 Euros per ton from 1 July 2025 on top of the 6.5% current import duty and raising them each year onwards. It is not clear if the resolution will be approved.
The DAP market will remain firm until China resumes exports. Demand is healthy.
MOP
Granular MOP prices have bottomed in January and have started to increase with healthy demand from Brazil. Prices at the end of the first quarter were up 7.8% to around the $340-$345 CFR level. Local wholesale prices ended the quarter at 12,300 Baht per metric ton for non-Laos origin and 11,800 per metric ton for Laos MOP.
The international banking / SWIFT sanctions against Belarus and Russia, have caused several Thai buyers to switch to Jordanian MOP for ease of import. There are concerns around the threat of U.S. tariffs and the uncertainty around the treatment of fertilizers. Canada supplies over 12 million tons or 85% of U.S. potash and 25% of U.S. nitrogen fertilizers. There currently is a pause on most new tariffs for a 90-day period though the policy as well as the exempt items are not yet clear.
Suppliers are actively trying to increase prices, and the trend will continue in the 2nd quarter. Both Russia and Belarus are cutting production and Nutrien is fully committed for the first half of 2025.
Standard grade MOP contracts for China and India will most likely be settled in April and will further tighten supply once agreed. MOP prices will continue firm with little downside.
#fertilizer