Phosphoric Acid, Phosphates & Fertilizers Experts

Unsettled fertilizer markets firm

Phosphates and potash make noise in wake of nitrogen rally.

The nitrogen train may have already left the station and now phosphates and potash are starting to rumble as September trading winds down.

Ammonia lagged behind when urea rallied but is starting to catch up, with higher costs noted on some world markets. Retail prices here in the U.S. are also rising as dealers reset price sheets after the $22.50 turn higher at the Gulf for September contracts. Average retail prices are up $3 this week to $373.25. but dealers raising offers are adding $30 to their charges. That’s taken costs up to the $360 level on parts of the Plains, with Midwest dealers typically higher. Fair retail value on average is around $400, but likely to go higher next month.

Urea was calm for a time after the summer price increase, but that mood didn’t last. Prices shot up some $25 at the Gulf in one day alone after the market heard talk of a new tender from India. Prices in that deal could be $35 higher than one done just a few weeks before. October swaps at the Gulf settled Tuesday at $240, which translates into a retail charge of $365. Our retail average is still below $300, a price that won’t pencil out because Midwest terminals jumped to $275 last week. Dealers on the southwest Plains raised offers to a range of $275 to $315 last week, and some Midwest dealers are already at $375.

UAN hasn’t shown much of a reaction to all the moves in the rest of the nitrogen complex. Retail prices are flat, with the average cost of 28% stuck at $208 this week. That tone should change soon. September swaps for 32% at the Gulf have held steady above $120, October is set for a jump to $150, with November-March another $5 to $10 higher. That could take retail prices back up to $240 or higher.

Phosphates have been a phlat market, with little change on the retail side since March. Wholesale costs for DAP at the Gulf were also little changed. But some production in central Florida was lost due to Hurricane Irma, raising Tampa export prices and firming the tone elsewhere. U.S. prices are below the world market, which could also lead to higher prices. Our average retail price of $425 continues to look reasonable, based costs into October and November.

Potash was another flat market as fall began at both the wholesale and retail level. Our average retail price remains around $320, $20 higher than fair value though few offer sheets have changed recently. Midwest terminal prices edged $1 higher last week to $255, a price that’s unlikely to get a lot cheaper. Canada doesn’t have a lot to sell right now and some more mines there will be closed into winter, keeping the pipeline tight.