Aug. 13, 2012
Calum Findlay, Gleadell’s fertiliser manager, comments on fertiliser markets:
The urea market remains very quiet in Europe and the UK. The continuing global firmness, due to intermittent buying activity in the US and Latin America, has made a correction very unlikely in the short term, although we have seen prices ease slightly over the past week.
Current market conditions are nervous and it is unknown whether this sporadic buying will keep the market supported, so producers are unwilling to adjust their price ideas and buyers are willing to wait for a correction so a definite stalemate is present.
Farmers in the UK and Europe are more concerned about harvesting and the likely quality of the crop so, until harvest is well underway, the market is likely to remain quiet. Traders feel it is too risky at present to take any positions so continue to watch from the side lines only.
Global activity in the AN market is slow as buyers are not ready to make purchases at current price levels. Producer offers have increased by $5-10 /tonne from last week in the Black Sea, and it is unlikely that new business will be concluded at these levels. In the UK, both imported and national demand remains slow as harvest progresses.
In Europe, there is speculation that producers are to increase prices because of fluctuations in the euro against the US$. However, any price increase is likely to be marginal as demand is down and higher prices could further impact on consumption.
The potash market remains lacklustre on a lack of clear market direction. Retailers in North America and Europe are buying on a hand-to-mouth basis on concern of being stuck with high priced stock. There are worries that global prices could decline if second half 2012 Chinese prices are settled below levels agreed for Q1/Q2.