BultiesBrothers schreef op 9 december 2022 00:23:
Fertilizers prices to remain high, urea to fall on expansions – Fitch
Jonathan Lopez
06-Dec-2022
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MADRID (ICIS)–Most fertilizers prices are to remain high by historical standards but urea values will end 2022 lower than previously expected on the back of capacity expansions, US credit rating agency Fitch said on Tuesday.
Fitch now expects urea prices to average $630/tonne in 2022.
ICIS’ latest urea price assessments also showed declining prices on the back of poor demand.
“Our reduced 2022 assumption for urea reflects lower year-to-date prices, which we do not expect to recover for the rest of the year,” said Fitch.
“We have kept all other assumptions unchanged as we maintain our view that new capacity additions will offset lost exports from China and supply disruptions due to the Russia-Ukraine war.”
According to Fitch estimates, 3.8m tonnes/year of new urea production capacity will be added globally, excluding China, in 2022.
In 2023, a further 3.2m tonnes/year will come on stream, and 2.2m tonnes/year will follow suit in 2024, said Fitch.
LOWER, BUT STILL HIGH
The credit rating agency said it still expects most fertilizer prices to fall in 2023, although they are set to remain above mid-cycle levels on the back of high crop price, gas input costs and “still restricted, although improving, supply”.
Ammonia prices will ease next year on the back of easing supply constraints as new capacity in the Middle East comes on stream, falling feedstock gas prices, and the restart of some European plants turned idled when gas prices were at highs.
Fitch added ammonia demand is set to be supported by improving affordability and strong crop prices.
It kept its assumptions for diammonium phosphate (DAP) prices unchanged, although they are set to be lower than in 2022.
Fitch said it expects DAP exports out of China to rise in the coming two years but stabilised in 2024 at 2m tonnes lower levels than the average for the 2016-2021 period.
“Phosphate demand will partially recover in 2023, returning to the 2021 levels by 2024 as application rates will rise into the next year. European demand is affected by a regional price premium,” said Fitch.
“Our assumptions for phosphate rock continue to reflect limited export volumes from Morocco, but other producers, such as Jordan, Syria, Tunisia and South Africa are gradually increasing their market shares.”
The agency said it expects about 7m tonnes/year of new capacity to come on stream in 2023, most in Russia, Egypt, China, and the US.
Its price assumptions for potash in 2023 also remain unchanged although, once again, they are expected to be sharply lower than in 2022.
It said it expects Canadian producer to ramp up idle capacities in coming months, while Russian exports should also help balance the market.
“[Potash] Price declines in the medium term will be driven by continued improvements in supply availability. Demand will be constrained by farmers prioritising nitrogen and phosphate applications over potassium,” said Fitch.
“This will put pressure on potash prices over the next two years.”
Fitch fertilizers prices forecast
2022 2023 2024 2025 2026 Long-term
In $/tonne Old forecast New forecast Old New Old New Old New Old New Old New
Ammonia (FOB Middle East) 1,000 1,000 750 750 450 450 300 300 280 280 280 280
Urea (FOB Middle East, granular) 650 630 500 500 350 350 270 270 260 260 260 260Phosphate rock (FOB Morocco) 270 270 160 160 90 90 90 90 90 90 90 90
DAP (FOB US Gulf Export) 900 900 550 550 380 380 360 360 360 360 360 360
Potash (FOB Vancouver) 600 600 460 460 350 350 230 230 230 230 230 230