Since this year, economic sanctions and political tensions caused by the conflict between Russia and Ukraine have affected the global fertilizer market. Now the trend of chemical fertilizer is more and more difficult to predict, and the price shifts in various directions, and it is quite fast. The soaring cost of nitrogen fertilizer at the beginning of the year decreased by nearly half at the end of June, while the price of potassium fertilizer rose to a record high. What experts have talked about most recently is that this trend is reversing against the background of high oil prices, suppressed demand and product shortages. But these discussions are only based on a large number of assumptions. By the middle of the year, the quotation of major chemical fertilizers in the world was still at a high level, but it had begun to develop in different directions. At the beginning of the year, the price of nitrogen fertilizer began to rise, and caught up with that of phosphorus fertilizer for the first time. By the end of June, the price of potassium fertilizer was at a multi-year high. By June 30, fob817-1004 US dollars / ton of granular potassium Baltic Sea, 500-550 US dollars / ton of granular urea, 920-942 US dollars / ton of monoammonium phosphate and 745-950 US dollars / ton of diammonium phosphate. According to expert Elena sakhnova, by early July, nitrogen fertilizer had decreased by 30-50% compared with the end of 2021. For example, the price of ammonium nitrate in Baltic Haiti fell from $760 in December 2021 to $340 now. Urea also fell by nearly half. At the same time, in Brazil, another major sales market, urea decreased by 25% compared with the end of 2021. At that time, its price was more than 1000 US dollars, which was equivalent to the traditional price of phosphate fertilizer. In general, Nina adamova of Gazprom pointed out that the highest price of fertilizer was observed during the market panic from March to April: the long-term energy crisis and Russian supply problems affected fertilizer prices. However, the adjustment was made against the background of the short-term decline in natural gas prices, the review of Russian fertilizer export quotas and the general decline in global market trading activities. However, Ms. adamova stressed that the cost of fertilizer was "still very high". She believes that Russia's continued logistics difficulties, global market shortages and price increases have led to a decline in the demand for chemical fertilizers in developed countries: farmers "try to postpone the purchase of chemical fertilizers and wait for prices to fall".

An insider pointed out that the quotation of ammonia, the main raw material for the production of nitrogen fertilizer, now depends more on geopolitical factors than market factors. "The rise in the price of natural gas, as a raw material for ammonia, has led to a decline in its output and a further rise in the price. Due to the lack of access to and through the pipeline at the transfer terminal, the prospect of exporting ammonia from Russia itself is very vague. He also admitted that the high price limits the purchasing power of customers. Another source said that due to the competition between Russian and Iranian producers and the restrictions of sanctions, the price of urea" will face pressure "before the end of this year." 。 In the fourth quarter, delayed demand may support prices. At the same time, in the potash fertilizer market, the sanctions against Russia and Belarus will not promote competition, but lead to shortages, so prices will rise further. According to Elena sakhnova, the price of nitrogen fertilizer will remain at the current level until the end of summer. She explained that the planting season in Brazil will begin, as will autumn purchases in the northern hemisphere. If the price of natural gas remains at the current level, the price of nitrogen fertilizer may rise to $700-800 per ton. At the same time, analysts believe that phosphate and potash fertilizers may start to fall in winter: the prices of diammonium phosphate and monoammonium phosphate have been adjusted since March, and will continue to reach the level of 650-700 dollars by the end of this year (Baltic FOB).

Elena sakhnova said that the quotation of potash fertilizer is also gradually decreasing, which is related to the partial solution of the logistics problems in Belarus and the growth of uralkali's export (in April, the company's monthly average export volume to foreign countries was only 10% of the normal level, reached 60% in May and at least 70-75% in June). Therefore, analysts expect potash prices to fall: especially in Brazil, they may fall from the current $1100 per ton to $900 per ton by the end of this year.

Article source:FSHOW