PhosAgro expects stable prices for phosphate fertilizer in H1
MOSCOW. Jan 19 (Interfax) - PhosAgro expects prices for phosphate fertilizer to remain at the current level in the first half of 2024, the Russian fertilizer producer's chief analyst, Andrei Ryabinin said in a webinar organized by Aton.
Prices for DAP/MAP stabilized at about $500 per tonne, FOB Baltic, in the second half of 2023 amid restrictions on exports from China, which has a 25-30% share of the world market for phosphate fertilizer.
Chinese exports are currently absent from the phosphate fertilizer market and will remain so the whole of the first quarter and, possibly, at the beginning of the second quarter, so "we don't see risks of a significant drop in prices," Ryabinin said. In the second half of the year, the resumption of exports from China could put pressure on prices, he added.
Prices for nitrogen fertilizer turned upward thanks to a seasonal increase in demand, with prices for urea, FOB Baltic, climbing to $280 per tonne after falling to $230-$240 in the fourth quarter of 2023, Ryabinin said. The average price for the year is expected to remain at the current level, though there might be significant fluctuations in the course of the year due to the volatility of gas prices.
Potash prices are under pressure from higher than expected exports from Russia and Belarus, which have now essentially reached the 2021 level, or about 1 million tonnes monthly from Belarus and over 1 million tonnes from Russia, Ryabinin said. Potassium chloride prices are not at $200-$250 per tonne, FOB Baltic, he said.
PhosAgro expects the recovery of demand for fertilizers, which have become more affordable for farmers thanks to the drop in prices last year, to continue in 2024. Prices for agricultural products might stabilize at current levels, which remain higher than 2016-2020 levels, which will also promote the recovery of demand for fertilizers, Ryabinin said. However, consulting agencies project that global fertilizer consumption this year will not reach the level seen at the peak in 2020-2021.
Last year, world prices for nitrogen and potassium fertilizers fell 30%-50% depending on the market, while prices for phosphate fertilizer dropped 10-15%, Ryabinin recalled. This was due to a drop in prices for agricultural products, growth of fertilizer supply and low affordability for farmers, he said.
Global fertilizer consumption, according to preliminary data, grew by 2%-3% last year after slumping by 7%-8% in the previous season of 2021-2022 amid high prices and supply chain disruptions, Ryabinin said.
The logistics of Russian fertilizer exports normalized in 2023, PhosAgro deputy CEO for finance and international projects Alexander Sharabaiko said during the webinar.
"No problems with logistics were seen in 2023. Moreover, rates [for Russian freight shippers] normalized. Competition in 2023 led to us getting rates by the end of the year that we had before the start of the special military operation on many routes," Sharabaiko said.