argus fmb phosphates · 8/16/2012 · the lack of us tonnage competing in deepsea markets is...

Copyright © 2012 Argus Media Ltd

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Argus FMB PhosphatesFormerly FMB Weekly Phosphates Report

price guidemarket summary

producers comfortable in aug, indian demand over - strong us domestic demand now neededAll producers are sold out for August with OCP complet-ing three DAP/MAP vessels to Latin America this week at unchanged prices. Pakistan also buys Moroccan DAP. Indian demand has slowed and imports are mostly covered. US pro-ducers are shoring up domestic supply, building inventory and limiting exports - balancing the market in the process. A strong US fall application is now key.

Overall outlook: stable - some limited upside on MAP

Highlights this week:

▪ OCP sells DAP to Pakistan and MAP/DAP to LatAm

▪ US domestic stable at $502-508/st fob Nola

▪ PhosChem sells DAP at $570/t fob Tampa

dap FOB prices

An Argus Media company

This report offers a concise summary of the supply and demand issues influencing DAP prices in the major exporting and consuming regions for the next 12 months. Each issue includes estimates and four-quarter ahead projections for:

• Ammonium phosphates exports and imports• Monthly ammonium phosphates, DAP and MAP trade balances• Quarterly phosphate rock and phosphoric acid trade balance• Forecast DAP prices for 12 months ahead• Freight matrix for major DAP trade routes

For more information about this report, contact us at [email protected]

monthly phosphates Forecast report

raw material contracts

phosphoric acid/t - p2O5

cfr India $/t Q3-12 885 Q2-12 850-905cfr Western Europe $/t Q3-12 1070-1140 Q2-12 1050-1120cfr Brazil $/t Q2-12 1000-1050 Q1-12 1120-1150phosphate rock (% BpL)fob Jordan (68-70) $/t Q3-12 150-155 Q2-12 140cfr India (68-70) $/t Q3-12 175-178 Q2-12 175-180cfr India (70-72) $/t Q3-12 195-200 Q2-12 190-200fob North Africa (69) $/t Q3-12 160-200 Q2-12 160-200sulphurcfr Tampa $/lt Q3-12 170 Q2-12 180cfr north Africa $/t Q3-12 190-225 Q2-12 190-225Ammoniacfr Tampa $/t Aug-12 690 Jul-12 690* - No recent biz

spot prices

16-aug 9-aug

dap/map/tsp – fob bulkDAP Tampa $/t 550-570 550-565DAP Tunisia $/t 588-598 588-598DAP Morocco $/t 563-600 570-600DAP Baltic/Black Sea $/t 570-595 540-595DAP China $/t 560-565 558-560DAP Saudi Arabia (KSA) $/t 560-565 560-565DAP Mexico $/t 570-575 570-575DAP Australia $/t 575-585 575-585DAP US Gulf domestic barge $/st 502-508 500-510DAP Central Florida rail car $/st 475 475-485DAP China ex-works $/t 492-507 492-507DAP Benelux fot/fob duty paid/free $/t 620-625 620-625MAP Baltic $/t 570-605 570-605MAP Morocco $/t 580-605 595-615TSP Tunisia $/t 490-512 490-512TSP Morocco $/t 485-515 495-520TSP China $/t 380-390 380-390TSP Eastern Med (Lebanon/Israel) $/t 510-520 525-530dap /map – cfr bulkDAP/MAP Argentina/Uruguay $/t 605-610 605-610MAP Brazil $/t 600-610 610DAP India (contract) $/t 580 580DAP Pakistan $/t 595-600 590-610Npk 16-16-16 – bulkfob FSU $/t 450-465 440-455cfr China $/t 515-520 510-515cfr South East Asia $/t 495-505 495-505

Issue 12-33 | Thursday 16 August 2012

Copyright © 2012 Argus Media Ltd of 11

Argus FMB Phosphates Issue 12-33 | Thursday 16 August 2012

market aNaLysis

The market lacks clear direction and remains in a partly seasonal haitus. There is limited scope for upside and equally little chance of prices coming off dramatically either.

On the upside, all producers are committed for August, some into September, and there is little pressure to sell. Equally there is modest end user demand evident. This week has seen some steady sales in central and south America (OCP has sold three handy DAP/MAP vessels to Argentina and Brazil) essentially at unchanged prices.

The lack of US tonnage competing in deepsea markets is balancing the market. Domestic producers still seem more concerned with filling the domestic system, warding off imports than competing heavily east or west of Suez. If the US domestic season come autumn is strong, this augers well for continued stable pricing. But if the US market disappoints, there will be considerable DAP looking for a home outside the US, at a time when international markets begin to quieten down seasonally. US demand is unlikely to become evident for another two weeks at least.

The demand picture is patchy at best. Firm commodity prices mean potentially healthy profits for farmers hence greater demand for inputs. But nervousness over drought conditions in the US, India, Pakistan and Thailand have postponed demand. In the US, the perception that DAP/MAP will be plentiful plus continued logistical problems on the riverdue to low water levels, have seen prices erode marginally in the last couple of weeks but prices are marginally firmer this week. Traders point out, with some justification, that with trade so thin in a seasonal lull,

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Jul 10 Oct 10 Jan 11 Apr 11 Jul 11 Oct 11 Jan 12 Apr 12 Jul 12

Maize Dec 2012 (¢/bushel) Wheat Dec 2012 US (¢/bushel)

US Gulf DAP domestic ($/st)

cme grOup Futures vs us dOmestic dap price

dap/map producer exports & availability august (’000t)producer prod commitments Bal

PhosAgro 175 65 India 060 traders50 local markets

EuroChem 175 7 Baltic 86 Poland4 Czech Rep4 Hungary/Romania5 Germany3 UK6 Netherlands30 Turkey25 Argentina16 Ukraine34 Russia3 Finland3 Sweden2 Lithuania12 Canada7 Bulgaria/Serbia

UralChem 20 20 central Europe 0Maaden 150 180 India* 0OCP 350 30 Europe 10

50 US11 Tanzania110 India25 South Africa40 Pakistan25 Argentina50 Brazil

IPL Autralia 120 40 Pakistan -1090 India

PhosChem/Mosaic 630 25 Argentina 290160 India5 Central America

Mosaic 50 India100 contract

CF 150 55 India 7210-12 Latin America15 South Africa

Missphos 40 24 Brazil 16

Fertinal 90 30 Ameropa/LatAm 060 domestic

GCT 80 50 Europe 030 Turkey

JPMC 65 40 India 13

12 Bulgaria



prices are being defined on a few trades. Nevertheless, upside looks limited and the possibility of imports from Morocco and Russia look thin.

Russian producers look comfortable, however. This week there were reports of an imminent Belarussian tender for MAP which should keep PhosAgro and EuroChem occupied into Q4. EuroChem has no baseload in India, and has its September tonnes to sell. But for Brazilian MAP importers, options in September look confined mostly to North African suppliers or US. OCP sales in August to Latin America are steady but the push to raise prices has failed, with three DAP/MAP vessels sold in to Argentina and Uruguay at prices essentially unchanged from July. OCP’s additional DAP sale in Pakistan has left it committed for August.

Chinese producers have not shifted from $560-565/t fob for September DAP shipments. DAP offers are limited but other forms of phosphates and NPKs are more readily available. Traders hope prices will come off in September for residual spot business in India.

The other next battleground is expected to be Ethiopia, which is a stong Q4-Q1 DAP importer. Jordan, Morocco and Russian tonnage has traditionally been most competitive, but this year Saudi product will almost certainly be thrown into the mix, meaning a keenly contested tender is likely.

HigHLigHts tHis week

supply

▪ OCP sold out for August on sales to Pakistan/LatAm

▪ Most producers worldwide are covered for August

▪ PhosAgro sold out through September

▪ US DAP/MAP inventories rise 13% to 846,000st in July

▪ Chinese DAP snug but plentiful other phosphates

demand

▪ Brazil buys two MAP vessels from OCP for August

▪ Argentina takes Chinese MAP and Moroccan DAP/MAP

▪ Indian demand disappears

▪ Pakistan looks to be covered for kharif

▪ US demand seen as key for Q3 price discovery

pricing

▪ Brazilian MAP prices stable at $605-610/t cfr

▪ US DAP moves up to $570/t fob on Cen American sale

▪ Chinese DAP remains at $560-565/t fobUS DAP barges steady at $502-508/st fob Nola

cOmmOdities

The US Department of Agriculture has released its latest Wasde report with updates on its projections for the 2012/13 season:

tHe pHOspHates wOrLd tHis week

Brazil – imports of MAP con-tinue to lag 2011 levels – OCP sells two mainly MAP vessels around $605/t cfr

Pakistan – Engro buys Moroccan DAP at close to $600/t cfr, Chawla heard finalising another cargo but kharif demand largely covered

US – DAP/MAP invento-ries climb in July, Pho-sChem sells for export at $570/t fob but Trammo again lower at $550/t in Brazil. Us barges trade in the low/mid-$500s/st fob Nola

India – demand is on the wane – drought concerns continue

Morocco – OCP much more comfortable following sales of DAP to Pakistan plus three DAP/MAP vessels to Latin America

China – producers remain steadfast at $560-565/t fob for DAP but there is plenty of other phosphates available

Russia – PhosAgro sold out through September

Ethiopia – the next major battleground for Middle East, North African and Russian DAP?



summary: The USDA has lowered its US corn projection for 2012/13 by 55 M mt based on lower yield of 123.4 bu/acre, down from 146 bu/acre, as a result of the sustained hot and dry conditions in the major corn growing regions. Soybeans have also been revised downwards, with the US yield estimated at 36.1 bu/acre, down from 40.5 bu/acre. In contrast, the US wheat production forecast has been increased slightly, based on a higher yield.

corn – Global corn production has been reduced by 56.22 M mt to 849.01 M mt, mainly due to the lowering in US production. US corn production for 2012/13 is forecast at 10,779 M bu, down by 2,191 M bu, based on a lower yield estimate. The reduction in the US corn production estimate equates to 55 million mt when converted from bushels. The USDA has lowered the yield estimate to 123.4 bu/acre, down by 22.6 bu/acre, which is the lowest since 1995/96. The estimate for Brazil’s corn production has been increased by 3 M mt to 70 M mt, and China’s has been increased to 200 M mt, an increase of 5 M mt. The US and China represent 56% of estimated global production for 2012/13. The projection for Mexico’s corn output has been increased by 0.5 M mt to 21.5 M mt.

wheat – Global production is projected lower at 662.83 M mt, down by 2.5 M mt, based on further reductions for Russia (6.0 M mt) and Kazakhstan (2.0 M mt). Turkey’s wheat projection has been lowered by 0.8 M mt and Argentina’s has been lowered from 12.0 M mt to 11.5 M mt. Canada’s production estimate has been increased by 400kt to 27 M mt.

The estimate for wheat production in the US has been increased by 44 M bu, based on higher yields for winter wheat, durum and other spring wheat. The new production estimate is 2,268 M bu, based on a yield of 46.5 bu/acres (up from 45.6 bu/acre) while harvested acreage remains the same at 48.8 M acres.

soybeans – Global soybean production is projected at

260.46 M mt, down 6.7 M mt from last month’s report. Lower production is projected for the USA, Canada and EU-27 due to lower yields resulting from high temperatures and dry weather. In contrast, the production estimate for Brazil has been raised by 3 million mt up to a record 81 million mt.

In the US, soybean production is projected at 2,692 M bu, down 358 M bu based on lower yield and harvest area. The yield has been lowered to 36.1 bu/acre, down from 40.5 bu/acre, and the harvested area is estimated at 74.6 M acres, down from 75.3 M acres.

As of late Thursday, on the CME Group’s futures board, the December contract for corn is currently $8.06/bu, up from $7.90/bu two weeks ago. The December wheat contract has climbed to $8.84/bu but below the recent highs in excess of $9/bu, and soybeans for November remain above $16/bu at $16.24/bu.

N. america

us exportPhosChem has sold 5,000t of DAP to Central America at $570/t fob for August shipment. Reports that it had sold late last week in the $550s/t fob also to Central America have been categorically denied. Trammo has sold 8,000t DAP to Brazil at $580/t cfr reflecting $550/t fob Tampa.

US DAP exports in July continued their recent modest trend, with 207,272st exported, down nearly 35% on July last year. The paucity of contract shipments to India (just one panamax) is probably misleading given that a couple of vessels are thought to have loaded for India in early August

Forecast production changes for 2012/13US Global

Corn Down 2,191 M bu Down 56.2 M mt

Wheat Up 44 M bu Down 2.5 M mt

Soybeans Down 358 M bu Down 6.7 M mt

http://www.europeanmachinetrading.com/



and we expect the rate of shipment to accelerate between now and October. Even so, the fact that contract shipments to Japan (at 57,308st) were the second largest volume of exports and a vessel to Kenya the third largest reveals the lack of DAP shipments to traditional markets in Latin America.

MAP shipments were relatively unchanged from last year at around 156,000st, more than half of it destined for Brazil (58,000st) and Argentina (39,000t). Colombia took another 10,000st.

us domesticMost traders report business done in a narrow $502-506/st fob range - liquidity remains thin as farmers continue to adopt a wait-and-see attitude in view of it being off-season and the continued drought which continues to affect barge movement. There are isolated reports of $508-510/st fob

having traded. Prices will continue to vacilate up and down amid thin trade for another two weeks until demand for fall really kicks in.

DAP production in the US is recovering following the recent spate of outages at PCS and MissPhos. July production was reported in by the TFI at 609,000st, up a healthy 17% on June, although slightly behind the July 2011 level by 5%. MAP was also up by 13% TO 372,000st giving a combined DAP/MAP output of 981,000st, up 16% on June.

With production up and exports modest, DAP inventories built in July to 467,000st from 357,000st in June, a rise of 31%. MAP stocks however fell modestly from 392,000st to 379,000st (a drop of 3%). Overall DAP/MAP stocks were still a manageable 846,000st, an inventory build of 13% on June.

Producer disappearance rose 21% for DAP to 499,000st, while MAP reached 385,000st, up 42%. Overall DAP/MAP producer disappearance rose 29% to 884,000st.

L. america

BrazilOCP has sold two mainly MAP vessels this week at $605-610/t cfr for the MAP and $10/t less for DAP. The vessels will load in August. Trammo meanwhile has sold a further 8,000t US DAP at $580/t cfr. Prices are unchanged relative to July and upside looks limited given that Brazilian MAP import demand remains sluggish.

Latest import data for July shows just 109,646t were imported last month, (around 70,000t from OCP and 36,000t from Russia). US exports were just over 4,000t. Other than spot sales by US traders plus whatever Mosaic decides to ship in August, the import number for this month looks similarly unimpressive, at least compared to last year.

For the year to date, MAP imports are lagging behind 2011 levels by 24% at 849,593t, compared to 1.11mt last year for

[email protected]/fertilizer

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Combined DAP/MAP ProductionCombined DAP/MAP Closing InventoryCombined DAP/MAP Exports

us dap/map prOductiON/cLOsiNg iNveNtOries/expOrts



the same period, down over 250,000t.

For a start, Brazilian MAP imports are notoriously variable, and 2011 was phenomenally strong year for MAP imports. In contrast, imports this year are still relatively healthy. But given the extraordinary rise in crop prices, there had been expectation that import requirements would rise.

One reason for the drop off in imports is the reported rise in domestic MAP production, which is understood to be up by around 250,000t year on year.

argentinaA buyer is reported to have taken a cargo of Chinese 10-50-0 MAP at $570/t cfr, thought to be a floating vessel. Reports link the sale with Ameropa. OCP has meanwhile sold a mainly MAP vessel with some DAP to its partners Bunge and ACA at $605-610/t cfr for the MAP and $10/t less for DAP. This is for August shipment.

In other news, Argentina’s biodiesel industry group Carbio has publicly requested a meeting with government officials following last week’s measure that increased export duties as well as decrease the price of the product in the domestic market.

Although Carbio chose to take a largely conciliatory tone in responding to the decrees published at the end of last week, it highlighted the new measures could not come at a worse time for a growing industry that is now facing trouble exporting to Europe, which has been its most important market.

On 10 August, the Argentinian government announced an increase in the biodiesel export duty to 32%c, up from 20%. It also reduced the domestic biodiesel price to 4,405.3 Argentinian pesos/t ($957.4/t), a 15% decline from the price approved last month.

Carbio has requested a meeting with a new intra-ministerial group also created 10 August that has been tasked with oversight of the sector.

After investing 4.8bn pesos in the industry, installed capacity is now at 3.4mn t/yr, which will increase to 4mn t/y by the start of 2013. Last year Argentina produced 2.43mn t of biodiesel, with 69% of that total exported, according to the government’s INDEC statistics agency.

Fsu/eurOpe

FranceDAP prices are softening, partly a sign of a strengthening euro (now back to $1.23/€ compared to $1.21/€) with offers now at €505-510/t fot bulk French Atlantic, or $621-627/t fot bulk. Both Fertilore and Agrium are thought to have bought 4-5kt each of Moroccan DAP for France, for August shipment, with the purchase price estimated about $590-595/t fob bulk Morocco. At the start of this week Agrium was offering DAP at €515-517/t vdb at La Pallice for end Aug/early Sept arrival. Mid week other distributors said prices were softening. Three weeks ago DAP was being offering €523-530/t ex warehouse in bulk. DAP at $625/t ex warehouse at $1.23/€ equals €508/t. DAP in the Antwerp

argus FmB spot sales selection 16 august 2012

product Origin seller Buyer destination 000t $/t bulk shipment

DAP

US PhosChem Central America 5 570 fob August

US Trammo Brazil 8 550 fob August

Morocco OCP Engro Pakistan 40 598-600 cfr August

China TBC ICP Thailand 15 580s cfr August

DAP/MAP

Morocco OCP Bunge/ACA Argentina 25 595-605 cfr August

Morocco OCP Brazil 2 x 25 595-605 cfr August

MAP

Russia PhosAgro Trader Open 25 570 fob August

10-50 MAP

China Ameropa TBC Argentina 25 570 cfr August

TSP

Morocco OCP TBC Brazil 25 505-510 cfr August



Ghent range is $620-625/t fot bulk, with little demand.

GCT is thought have allocated 6-8,000t of DAP for the French market for 2H July/August shipment, basis prices in the range of $590-595/t fob vsl bulk for the Med, less the usual discount for Atlantic shipments. While traders have been trying to develop interest, no firm information has come to light about sales in ports.

TSP prices are soft around $530-535/t fot bulk, which translates to around €430-435/t fot bulk, which is roughly the same range as three weeks ago. Agrium has lined up 8,000t of Bulgarian TSP to arrive the end of this week at Rouen. It’s understood that Agrium bought 15,000t from Agropolychiim, for shipment to Ghent and Rouen, priced on a formula basis. Some believe the FOB level is about $500/t fob Varna. GCT is understood to have sold 10-12,000t TSP for August shipment to Mediterranean markets at around $495/t fob. Another trader was trying to drum up interest for TSP (possibly Bulgarian) with buyers late this week. Trammo has shipped 5,000t Bulgarian TSP where they have been selling ar $505/t cfr Ravenna in bulk.

While Yara and Timac are both keeping their price for NPK 15-15-15 steady ar €405/t franco in bulk, one smaller producer in the south was still listing a price of €10/t lower, or ar €395/t franco, early August for the same grade. PK -25-25 is steady at €415/t franco in bulk for August delivery but business is quiet. Interore is offering NP 12-27 for early

September arrival at La Pallice for roughly €330-332/t vdb.

italyDAP is indicated at $625-630/t fot bulk Ravenna for truckloads, which is roughly equivalent to the price of three weeks ago, when DAP was available at $615-620/t cfr bulk.

There is stronger interest for Mini-DAP type products, using some less expensive organic matter for part of the nitrogen content, such as NP 7-28 or NP 10-30. NP 10-30 is indicated at €260-270/t fot bagged.

GCT has reportedly reserved 20-25,000t of DAP for shipment end August/September with price ideas at $595-600/t fob vsl bulk.

SSP prices are stable with prices about €235/t fot bagged on pallets at Ravenna, or €225-230/t fot big bags. On the supply side, traders with Egyptian are indicating EFIC GSSP at $240-250/t cfr and Abu Zaabal perhaps $10/t above this level. Good solubility GSSP at $255-260/t cfr Ravenna would equate to €240-245/t fot bagged and at $1.23/€. Three weeks ago Puccioni was offering Abu Zaabal GSSP about €198-200 pt cfr, or €7-8 pt below these new offers of Egyptian. So for these new offers to work, the older less expensive tonmage will have to clear first.

Trammo bought 5,000t of Bulgarian GTSP for shipment to Ravenna in late July/Early August, which is now being offered $505-510/t cfr Ravenna to local distributors. This would equal about €435/t fot big bags, or roughly where prices were three weeks ago, or €430-440/t fot big bags Ravenna. GCT is understood to have sold 10-12,000 TSP for August shipment to Mediterranean markets around $495/t fob. Israeli TSP should arrive 2H August at Ravenna.

germanyIn the German Baltic DAP business is slow, so prices are stuck in the range of $620-625/t fot bulk, the same as three weeks ago. Helm discharged 6,000t of Phosagro DAP late July at Ghent, which shipped to buyers in Austria, Benelux, France and Germany at prices between $621-625/t fot bulk. Witt has taken 5-6,000t of Eurochem DAP, half for shipment to Pappenberg and the remainder for Lubeck. Eurochem advised last week that it had sold 5kt of Lithuanian DAP to Germany and another 6,000t to Holland at $585/t fob vsl bulk.

russiaPhosAgro has sold its final MAP cargo for August shipment to a trader for open/Latin American destinations, reportedly at $570/t fob. Traders now have two PhosAgro vessels for August. The line up is also dominated by domestic and

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regional shipments with 50,000t MAP for the domestic market as well as 90,000t various NPKs (mainly 9-25-25). One cargo of 20-20-0 has also been sold to a trader. This is in addition to two panamaxes for India (one DAP one NPK) under contract.

September production is also committed with a MAP cargo sold to a trader plus 45-50,000t sold to the domestic/CIS markets. Another 100,000t NPKs will also go regionally/domestically plus another two DAP/NPK panamaxes for the Indian market.

red sea, middLe east, aFrica

moroccoOCP is now sold out for August. OCP has placed a 40,000t DAP cargo to Pakistan at a price netting back to the mid-$560s/t fob. The producer is now comfortable for August.

OCP has made significant sales of DAP/MAP/TSP to Latin America with four vessels now in the line up for August shipment. DAP/MAP sales total around 75,000t and this, coupled with its previously reported sale of 40,000t DAP to Pakistan, mean OCP is largely committed on DAP/MAP for

August. Latest sales comprise a mostly MAP vessel plus some DAP sold to Bunge/ACA in Argentina at $605-610/t cfr for the MAP and just below $600/t cfr for the DAP – freight is estimated in the mid/high-$20s/t netting around $580/t for MAP and $10 less for DAP

There are two mainly MAP vessels to Brazil at the same price levels and OCP is working on a third vessel for Brazil currently.

On TSP, OCP has sold one vessel to Brazil at $505-510/t cfr and will also ship a contract vessel to Bangladesh and small volumes to Ghana that will account for August’s 70-75,000t of output.

saudi arabia There are no additions to the DAP line up this week. However, it is now understood that Sun International’s DAP vessel will load for India in August. I

iNdiaN suB-cONtiNeNt

indiaRCF has opened prices under its 3 August tender for 150,000t DAP and 50,000t DAP lite (no offers having been received for the 125,000t various NPKs). Offers were as follows:

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indian dap arrivals august/early september

vessel 000t product Origin Buyer

kandla

Jin Da 33 DAP S Arabia IPLPrabhu Gopal 30 DAP China DeepakJia Tai 34 DAP S Arabia ZuariJin Chao 32 DAP China ChambalTransocean 20 DAP Jordan Sun IntNew Glory 47 DAP Morocco PPLIrene 55 DAP US IPLDoro 50 DAP US IPLmumbaiHai Yu 26 MAP China RCFSh Grace 26 MAP China RCFKrishnapatnamSea Lord 59 DAP China IPLkakinadaVega Eternity 49 DAP China IndogulfShao Shun 6 63 DAP China KribhcoIbis Bulker 52 DAP China IndogulfJS Comet 30 DAP China ZuariTeng Chang 35 DAP China KPRYellow Fin 51 DAP China CoromandelvizagFederal Satsuki 30 DAP China PPLOcean Star 26 DAP China IPLEast Ambition 28 DAP China IPL



▪ Dreymoor: DAP $579.75/t cfr; DAP lite $546.50/t cfr

▪ Ameropa: DAP $582.00/t cfr; DAP lite $547.50/t cfr

▪ Rare Earth: DAP validity expired; DAP lite $547.75/t cfr

▪ Quantum: DAP $584.40/t cfr; DAP lite $552.50/t cfr

▪ Midgulf: DAP lite $556/t cfr

▪ Aries Fertilizer: not qualified

The prices show few surprises, with contract DAP prices already agreed at $580/t cfr and mostly reflect Chinese DAP at $560-565/t fob. DAP lite ex-China is still reported in the low-$520s/t fob.

RCF has meanwhile issued a tender closing 24 August for 2 x 18-20,000t DAP/MAP. Further tender details are pending.

Following heavy rains in eastern Rajasthan, Gujarat, interior Karnataka and the southern peninsular region during the last week, the deficiency in the south-western monsoon (June-September) has come down to 16% from 22% a week ago. According to the Met department data, the country has so far received 473 mm of rain against a normal year of 561 mm, a 16% deficiency. The north-western parts of the country have been the worst affected, with a 30% deficiency. While rain deficiency has declined to 22% in eastern Rajasthan, the western part of the state continues to reel under a dry spell, with a 53% rain deficiency. Punjab and Haryana are the most rain-deficient states at 65% and 68%, respectively. Central Maharashtra is now short ofrain by 21%, while the Vidarbha region has received normal rainfall. Marathwada continues to be rain deficient at –37%.

pakistanEngro is understood to be the buyer of a 40,000t Moroccan DAP vessel loading late August. The price is $600/t cfr. Chawla is also reported to finalising an August DAP loader. There are reports that another Australian DAP cargo is under discussion for September shipment.

NepalAICL closed a tender on 14 August for 20,000 t DAP. The complete offer tabulation is not yet available but it is understood that Desh Trading was the most competitive at $669.87/t CIP AICL warehouses in Nepal. The offer stipulated Australian/Chinese origin.

se asia/OceaNia

china Chinese producers are comfortable on DAP for August with traders reporting not much product being around. Asking prices remain a solid $560-565/t fob. Small sales to Thailand reflect the high end of this range.

Other phosphate products look less positive, with reports of plentiful 11-44 particularly in the Yangtze river ports, on offer at $440/t fob. 10-50 is priced around $510/t fob with 14-34 at around $410/t fob. Demand for such products is thin with interest from India in NPs/NPKs noticeably down on 2011 levels.

chinese domesticThere is a significant split in production rates for DAP and MAP. DAP production is running healthily at 80% on a steady export line up and movement to the domestic market. MAP output on the other hand is paltry given the lack of demand from the NPK sector. The average operating rate is reportedly around 70% but some producers are running considerably below this level. Interest in MAP for export markets is also thin.

DAP prices are stable but there is little pull as yet from the domestic market as producers concentrate more on exports. MAP is weaker at RMb 2,550-2,650/t ex works.

philippinesIt has emerged that there was a sales tender that closed on 7 August for 30,000t 15-15-15 ex-Petrokimia Gresik was partially awarded to Universal Harvester at $430/t fob. The cargo will most likely ship to the Philippines.

thailandSmall lots of Chinese DAP are reported sold to ICP in the mid-$580s/t cfr for bulk blending. Generally, the drought has severely limited interest in nearby imports. There are also significant stocks of previously imported Russian DAP.

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as trade finance and commodities trade mainly in

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your name, company, address and contact details and

any other information you care to provide.



16-20 is on offer in the low-$400s/t cfr. Keytrade is reported to be offering Russian product from a handysize at around this level.

pHOspHate rOck

BangladeshBCIC closes a tender on 23 August for 30,000 t of phosphate rock (72% BPL minimum) for delivery to Chittagong in one lot.

canadaMBAC Fertilizer Corp has entered into an agreement with Canaccord Genuity Corp., on behalf of a syndicate of underwriters led by Canaccord Genuity Corp., pursuant to which the underwriters have agreed to purchase, on a bought deal basis, 5,760,000 common shares of the Company at a price of $2.70 per Common Share for gross proceeds of $15,552,000. The Corporation has granted the underwriters an option to purchase an additional 864,000 Common Shares at the offer price and on the same terms as the offering, exercisable at any time, in whole or in part, for a period of 30 days after and including the closing date of the offering. If this option is exercised in full, an additional C$2,332,800 will be raised pursuant to the Offering, for total aggregate gross proceeds of C$17,884,800. The net proceeds are intended to be used by the Company to advance the Santana and Araxá projects in Brazil and for general working capital purposes.

usStonegate Agricom Ltd has announced updated Mineral Resource estimates for the Lower Phosphate Zone and new Mineral Resource estimates for the Upper Phosphate Zone at its Paris Hills Phosphate Project in Idaho, U.S.A. All Mineral Resource estimates were completed by Agapito Associates Inc. of Grand Junction, Colorado. Highlights of New Mineral Resource Estimates:

▪ Lower Zone estimates of Measured and Indicated Mineral Resources have increased by 33.6% to 29.8 million tonnes from a previously reported 22.3 million tonnes due to the inclusion of assay results from six additional drill holes

▪ Average grade of Lower Zone Measured and Indicated Mineral Resources continues to be estimated at 30.1% P2O5, unchanged from the previous estimate

▪ Measured and Indicated Mineral Resources in the Upper Zone are newly estimated at 60.3 million tonnes with an average grade of 22.7% P2O5

cOmpaNy News

usPhosphate Holdings has reported second quarter of 2012 net income of $0.9 million, or $0.10 per diluted share of common stock, compared to a loss of $1.8 million, or $0.21 per diluted share of common stock for the same period in 2011. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter of 2012 were $5.1 million, compared to EBITDA of $2.0 million for the second quarter of 2011.

Total net sales for the second quarter of 2012 were $78.5 million, a 2.4% decrease from total net sales of $80.5 million for the second quarter of 2011. The average sales price per short ton of DAP during the second quarter of 2012 was $482.42, an 11% decrease from the prior-year period average sales price of $542.54. During the second quarter, the Company sold 161,045 tons of DAP, with 106,364 tons moving into export markets and 54,681 tons moving into domestic markets. This compares with 146,213 tons of DAP sold in the second quarter of 2011. The Company had operating income of $2.0 million for the second quarter of 2012, compared to an operating loss of $2.6 million for the prior-year period.

FreigHt

panamaThe Panamanian government has approved toll increases for ships traversing the Panama canal, along with a restructuring of shipping segments. The new tolls take effect in two stages, the first starting in October and the second in October 2013, according to the Panama Canal Authority (ACP).

The ACP will increase tolls for seven segments, including general cargo, dry bulk, tanker, chemical tanker, LPG, vehicle carrier and ro-ro, and others.

The canal currently charges a laden tanker $4.46 per Panama Canal/Universal Measurement System ton (PC/UMS t) for the first 10,000 t. A net Panama Canal ton is equivalent to 100cf of volumetric capacity.

Under the new formula, this rate will rise by 5pc to $4.68 per PC/UMS t in October 2012 and by 10pc to $4.92 in October 2013.

The canal is currently undergoing a $5.25bn expansion that will double its current capacity to 600 PC/UMS tons and allow the transit of longer and wider vessels. The expansion will enable over 80pc of the world’s LNG fleet to transit the



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For further swaps information contact:

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canal, compared with only 7% now. The expansion project is due to be completed in the first quarter of 2015.

FreigHt iNvestOr services

Fis cash settled swaps – 15 august 2012

month Bid Offer mid

dap fob Nola (st)

Aug 12 493 502 498

Sep 12 505 510 508

Oct 12 493 507 500

dap fob tampa (metric tonne)

Aug 12 545 565 555

Sep 12 540 547 544

Oct 12 520 532 526

argus fmb phosphates · 8/16/2012 · the lack of us tonnage competing in deepsea markets is...

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