In January, reference fertilizers prices are: for urea $265–275/t FOB; for ammonia $262–275/t FOB; for ammonium nitrate $220–230/t FOB in bulk.
In the first half of February, reference fertilizers prices will be: for urea $255–275/t FOB, for ammonia — $270–285/t FOB, for ammonium nitrate — $235–240/t FOB in bulk.
Collegium of Ministry of Industrial Policy regarding domestic market of mineral fertilizers took place on January 26, 2010. Representatives of Ministry of Agrarian Policy, Ministry of Industrial Policy, Union of Chemists, fertilizers manufacturers, Association of agricultural manufacturers, other companies including Derzhzovnishinform were among the board.
Preliminary proposed scheme regarding minimal quotas for fertilizers supply to domestic market with maximum price restriction was received without enthusiasm; however, it finally got general approval.
Maximum prices will be the following: ammonium nitrate — UAH2,200/t (quota for the first half of the year — 1,080,000 t), urea — UAH2,600/t (quota — 180,000 t), ammophos — UAH3,900/t, NPK — UAH3,300/t. Besides, superphosphate and other fertilizers will be included into Memorandum which is planned to be signed between branch associations.
At the same time, Ministry of Economy of Ukraine creates working group to discuss mineral fertilizers prices for 2010. Representatives of all allied ministries and authorities will be included into this group.
Agricultural manufacturers — not taking into account ammonium nitrate price increase in world market — decreased their activity expecting inflow of Russian commodity (ammonium nitrate) to the domestic market. Manufacturers complain not only about low rates of sales but also about inability to follow transport instructions. Traders can’t boast active sales. Realization is typical only for the early December.
Ukrainian plants try to utilize production capacities fully. Now utilization of production is 90%. Ammonium nitrate production is halted in Gorlovka because of problems with start of ammonia production cycle.
According to our estimations, agrarians and traders have already bought 620,000–650,000 t of ammonium nitrate out of 1,100,000–1,200,000 t needed for spring (taking into account 200,000 t under fertilized in autumn). It means that the main demand peak will be in March. Agrarians will have to buy remaining 450,000–500,000 t untill the mid April at high prices. No less than UAH1bn will be needed for ammonium nitrate purchase only. We think that this amount will be hardly received from agricultural products realization in March-April. Probability that a part of ammonium nitrate will not be fertilized in spring again is rather high.
The reasons for delayed demand are:
- election;
- absence of subsidize and financing of agricultural sector (UAH300m remained in the budget project);
- overpriced products by plans in January;
- untimely cancellation of anti-dumping restrictions on Russian commodity influenced on purchase suspension from plants in January;
- absence of planned program of fertilizers buy-out.
Now government’s decree regarding ammonium nitrate realization through exchange which was bought by Agrarian Fund earlier is preparing now. Exchange trade could solve a lot of questions and revive fertilizers market in case of problem is raised at high level.
There is traders’ revival in complex fertilizers market, but limited commodity sources don’t allow traders to turn their interests from ammonium nitrate to NPK. However, NPK price is increasing. In Western and Central Ukraine, NPK is offered at UAH3,300–3,350/t in bags, In Eastern Ukraine — at UAH3,250/t in bags. Prices will increase to UAH3,400–3,500/t in February.
Ammophos price increases more quickly. Offer prices at the level of UAH4,000–4,100/t in bags have become normal. Against the background of ammophos price growth mixed fertilizers manufacturers can’t rely on possibility to use cheap potassium for production of mineral fertilizers which have very competitive prices in comparison with NPK for spring. Gomel plant of mineral fertilizers won’t be able to export NPK in February and March because of programs of deliveries to domestic market.
Ukrainian ammonium sulfate is bought by agrarians at UAH1,400–1,450/t in bags in Western and Central regions. Sulfate in bulk offered by Cherkassy Azot at UAH1,140/t has not been produced yet. Start of caprolactam production line is planned. Imported commodity dominates in the market.
BKK company sells potassium chloride at ˆ235–250/t DAF depending on quality and consignment size. The price could increase. Potassium chloride price is starting to surge in Europe and Latin America. Price growth in Asia will lead to price increase in Ukraine because Asia is strategic market for Potassium company. According to preliminary estimations, prices of potassium chloride will be stable for February-March deliveries.
Domestic prices for fertilizers in Ukraine, UAH/t in bags
Commodity
#$
28.01.2010
21.01.2010
December
2009
November
2009
December
2008
min
max
min
max
NPK (15:15:15)
#
3,100
3,200
3,000
3,100
2,950
2,950
3,300
NPK (16:16:16)
#
3,300
3,400
3,100
3,400
3,150
3,250
3,550
NPK (8:24:24)
#
3,900
4,200
3,500
4,000
-
-
4,250
Diammophoska
(10–26–26)
3,990
4,200
4,000
4,500
4,000
3,800
4,600
Superphosphate 8:32
-
2,900
-
2,900
2,900
2,900
-
Potassium sulfate
8,000
9,000
8,000
9,000
9,000
9,000
6,100
Potassium chloride
4,500
4,900
4,500
4,900
4,600
3,950
4,100
Urea
2,560*
2,700
2,560*
2,700
2,500
2,600
1,800
Monoammonium phosphate
3,950
4,200
3,900
4,000
3,300
3,600
5,400
Ammonium sulfate in bulk (gray/white)
980/ 1,350
1,100/ 1,450
950/ 1,140
1,100/ 1,300
850/1,080
850/
1,150
Ammonium nitrate (importers/ factory prices)
#
2,200/ 2,220
2,300/ 2,301
2,200/ 2,220
2,300/ 2,301
2,100
1,850
1,300
Potassium nitrate
9,040
9,100
9,000
9,600
9,600
9,600
8,700
UAN
#
2,000
2,060
2,000
2,060
1,950
1,683
1,800
* — in bulk
Prices for export fertilizers (FOB — Yuzhnyy), $/t
Commodity
#$
28.01.2010
21.01.2010
December
2009
November
2009
December
2008
min
max
min
max
Urea in bulk
#
290
300
270
275
260
242
225
Ammonium nitrate in bulk
#
245
255
240
250
205
160
140
Ammonia in bulk
#
390
300
285
295
265
292
125
Prices for import fertilizers (FOB — Ukrainian boarder), $/t
