Phosphates: Argus launches daily phosphate pricing

Argus is moving its coverage of key phosphate markets to a daily basis with the launch of Argus Phosphates Daily.

The first report was published on 16 March and will initially be made available to subscribers of the Argus phosphates service.

"The move reflects accelerating trends in market activity across the phosphate trading space," senior vice president, fertilizers, Lauren Williamson said. "Increased assessment frequency will provide more robust pricing, both on a daily basis and in the calculation of price averages across a certain period that may be used in contract negotiation or formula price agreements."

The prices assessed are the most liquid and represent a substantial part of global trade in DAP and MAP. The prices to be published will comprise:

DAP fob China

DAP cfr India

MAP cfr Brazil

DAP barges fob Nola

MAP barges fob Nola

China is the world's largest DAP exporter, shipping nearly 6.5mn t in 2019, according to GTT data. It represents around 40pc of global exports, following rapid investment in capacity since the early 2000s in order to make China self-sufficient. The price feeds directly into the Indian DAP cfr price, the largest importer of DAP globally. In 2019, it took 5.7mn t of DAP, of which China accounted for just over 40pc.

Although there is increased seasonal trade between the two countries from April each year as the Indian domestic market ramps up and the Chinese domestic market winds down, these markets remain highly liquid throughout the year through spot trades, individually priced contract shipments against supply agreements and purchase tenders.

Similarly, Brazil is the world's premier importer of MAP, taking 3.9mn t in 2019 according to GTT, roughly a third of all trade. The market is the barometer of MAP prices west of Suez and impacts directly on MAP fob levels in supplying nations, including Morocco, the US, Russia, China and Saudi Arabia.

The US is one of the most mature and well-developed phosphate markets in the world. DAP and MAP prices in New Orleans are reference prices for the domestic market and are keenly examined by global producers looking to export phosphates to the US, as well as by US producers.

In 2019, the US imported 1.9mn t of MAP and 1.2mn t of DAP, and is a vital outlet for Russian and Moroccan suppliers in particular. There is also a relationship between US domestic and Brazilian cfr prices as exporters weigh the relative netbacks from each when deciding where to ship MAP west. Similarly, Brazilian importers frequently cite values in the US market in price negotiations.

source: Argus Media