The market for UK-produced nitrogen has settled down after the initial flurry, with some 1m tonnes, or half of the seasonal requirement, now ordered, writes our commentator Roger Chesher.
For the next four months manufacturers will be concentrating on order fulfilment until an expected further flurry of purchasing before Christmas.
Prices have crept up again since last month. Urea buyers have, however, had the opportunity to grab tonnage at a lower price as the commodity fell from its ballistic cost of $550 FOB Egypt (£420/t on farm) to $460 a week or so ago, settling now at $495 (£385/t) FOB as demand once more builds.
Some importers have capitalised on this more bearish market. For example Gleadell has brought in a couple of shiploads totalling 20,000t, thus easing the burden a little for their customers.
However, Gleadell’s trader Calum Findlay does not expect this to last, pointing out that Brazil, India and Pakistan have still all to return to the market with substantial tonnages to secure.
Imported ammonium nitrate is creeping upward toward the domestic price, and imported sulphur grades are harder to source, said Mr Findlay. Thus nitrogen prices should be steady, if not creeping upward, until Christmas.
GrowHow’s marketing manager Ken Bowler reports steady business in the grass market, no doubt reflecting the arrival of rain. The spot price for both Swardsman (25.5.5) and 126.96.36.199 is £335/t but farmers should add £10/t for a September delivery.
Duties on potash from Russia and Belarus have been dropped, potentially freeing up supplies.
Reports in the trade indicate that J&H Bunn has successfully met its objectives with the first tonnages of KaN. It will be interesting to hear performance reports from farmers using this urease-inhibitor coated urea for the first time.