Phosphoric acid and phosphate fertilizers prices in 2013

By Magnus Berge Ethiopia's tender award business totalling 250,000 mt DAP for November-February 2013 shipment shows clearly downward pressure on prices for Q4. Estimated netbacks on sales based on a total costpackage for delivering the product at Djibouti in the low-to-mid $60s/mt from Ras Al-Khair, Saudi Arabia are in the high $530s/mt to the mid $550s/mt FOB Ras Al-Khair against delivered prices at $602- 617.30/mt CFRLO. The low end of the price range reflects shipment into the first quarter of 2013 while the high end shipment into the fourth quarter of 2012. However, Sabic claims returns in the mid $560s/mt FOB for Q4 shipment in line with netbacks against India contract business at $580/mt CFR benchmark to the $550s/mt FOB for Q1 2013 deliveries against a total cost-package of around $45/mt. The US domestic market remains far above the rest of the globe in terms of demand and price, essentially eliminating US tons from the export market for the near term. US producer Mosaic is as much as 30 days behind in some US deliveries, according to customer reports to Fertilizer Week. As a result DAP barge values now equate to at least $606/mt FOB US Gulf, not including any margin or transfer costs. The result has been to attract more import cargos, although that trade continues to be dominated by higher analysis MAP. India's Q4 phosphoric acid contract price has settled at $855/mt P2O5 CFR, down $30/mt on the Q3 price. The contracts cover around 80- 90,000 mt/month P2O5 ex-Morocco for Q4 deliveries with OCP's joint venture partners. The new price equates to a cash cost price for indigenous DAP in the mid $590s/mt CFR against ammonia pricing at over $700/mt CFR, which is above the prevailing price for imported DAP at $580/mt CFR.