A rise in fertilizer inventory levels indicates that the fertilizer supply is outpacing the fertilizer demand.
MAP (monoammonium phosphate) is the second-most used phosphate fertilizer after DAP (diammonium phosphate).
Ammonia is used to make phosphate fertilizers such as DAP (diammonium phosphate) and MAP (monoammonium phosphate).
Coal prices, like natural gas prices, have hit a low point due to the low demand and excess supply imbalance.
Natural gas is the key raw material for the production of nitrogen fertilizers such as ammonia and urea.
As most global ammonia production is upgraded to urea, ammonia prices may affect urea prices.
In the week ended May 20, 2016, the US domestic market (XLB) saw mixed price movements for ammonia.
Because fertilizer prices are the biggest factor impacting the performance of fertilizer companies, investors must track fertilizer prices regularly.
For the week ended April 29, 2016, MOP (muriate of potash) prices stood at $277 per metric ton, which remained unchanged over the previous week.
It takes between 1.6 metric tons and 1.7 metric tons of phosphate rock to produce a single metric ton of DAP, according to Mosaic.
The phosphate inventory on April 29, 2016, remained unchanged at 806,000 short tons, or 731,000 metric tons—higher than the previous year’s level of 689,000 short tons, or 625,000 metric tons. This would be 19% higher YoY (year-over-year).
Despite MAP’s price fall over the past one-year period, it seems to be recovering and staying above the low of $329 per metric ton that we saw in the second half of February 2016.
For the week ended April 29, 2016, the average price of DAP in the US Cornbelt remained unchanged at $353 per metric ton, or $390 per short ton, from the previous week.
Coal prices, like natural gas prices, have hit a low point due to low demand and excess supply imbalance. Recently, natural gas prices have ticked up while coal prices are mostly unchanged.
Natural gas is the key raw material for the production of nitrogen fertilizers such as ammonia. Due to the abundant availability of natural gas, the nitrogen fertilizer industry is fragmented among several producers.
Most of the global ammonia production is upgraded to urea. Urea prices have rebounded from their lows at the beginning of 2016, especially in the US Cornbelt region, implying that demand has picked up.
In the week ended April 29, 2016, the US domestic market (XLB) saw mixed price movement for ammonia.
Fertilizer prices constitute the biggest factor impacting the performance of fertilizer companies. In this series, we’ll see how the prices of NPK and raw materials changed in the week ended April 29, 2016.
Steel scrap prices have risen sharply this year. This has made using alternate raw materials more economical for steel companies.
Although Chinese steel demand indicators have shown a sharp turnaround in 2016, many analysts see the big surge in Chinese steel prices as being unsustainable.