Phosphoric Acid, Phosphates & Fertilizers Experts

OCP faces cut in EU phosphoric acid prices, after India wins discount

OCP, the Moroccan phosphates giant, looks like facing a cut on prices of phosphoric acid charged to European customers, after a deadlock over talks with Indian buyers ended with a discount.

State-controlled OCP, the world’s leading phosphate exporter, is in talks, seen as unlikely to end before next week, with European customers over phosphoric acid contract prices for the July-to-September period.

After a cut in Indian values, it is now widely anticipated that European contracts will also decrease although the magnitude has yet to be determined.

OCP supplies almost half of all European Union imports of phosphoric acid, which is used predominantly as the key raw material of phosphate fertilizers, but also in the likes of rust removal products, soap, toothpaste and as a food additive.

Negotiating positions

OCP earlier this week settled its Indian phosphoric acid contract price for the July-to-September quarter at $567 a tonne, on a cost and freight basis.

That represented a decrease of $23 a tonne from the price agreed for the April-to-June quarter, and followed talks which had revealed widely distant price expectations from OCP and its buyers.

Entering the quarter, OCP in Morocco was targeting a price increase of $25-30 a tonne, whereas buyers were seeking decreases of the same magnitude.

Other suppliers were understood to be targeting rollovers.

EU imports

The EU imported 395,000 tonnes of phosphoric acid in the first four months of 2017, more or less in line with volumes for the same period of 2014 and 2016, but down from 488,000 tonnes in the same period in 2015.

April imports, at 87,847 tonnes, were notably down on the 103,078 tonnes for the same month of last year.