LONDON — International fertilizer markets are currently experiencing an unseasonal boost in prices and demand, with some prices hitting historical highs. The major question now for producers, traders, co-operatives and farmers, is if current levels will be sustained and what availability will look like moving through the second half of 2021?
While some markets are exclusively impacted by production cuts, rising feedstock costs, sanction cuts, rising freight rates a major driver giving the market confidence is record crop prices.
The unabated strength of ammonia, which has also been driving prices up for urea and nitrates, looks to remain a challenging market, where, on almost a daily basis, production problems are announced.
Because of this, spot prices have jumped significantly. Black Sea spot cargoes were sold into India and China at large premiums to last business, while Ma’aden also had to dig deep to secure free on board (FOB) volume from the UAE.
The price increases are mainly supply driven, with the unplanned shutdown of the 1.2m tonne/year SAFCO IV unit in Saudi Arabia compounding a potentially lengthy shutdown of a 1.1m tonne/year Ma’aden unit.
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