By Roger Chesher
WITH only the after-cut market running in any volume, the majors must be considering the new season starting in June and planning to maintain the recent price rises, which are essential for survival.
This week, Kemira has announced plans to close nitrate production capacity in Holland.
This move, together with those of Hydro and others, will reduce the excess supply of European nitrates to virtually nothing and give a better environment for profitability of the industry.
Merchants, however, are mindful of the current profitability of agriculture and farmers ability to pay for fertiliser.
They are anxious to keep prices down to ensure sales, especially before the new season, as there is doubt about how much of the current market is left.
Often, merchants are taking margins on fertiliser sales which are so low as to be virtually suicidal, and many in the industry are now forecasting a significant shake-out.
Imported Russian ammonium nitrate is selling in the east and south west in the low 90s. This gives a huge differential between domestic and imports of 22-24. The norm is nearer 10.
This is allowing blended NK to be sold cheaper into the after-cut market.
By maintaining a cash structure, producers are able to avoid a trust market developing – take delivery now, sort out price later.
It would seem likely that the cash market will continue to the end of the year.
Kemira UK ownership has still not been announced, but a venture between the French (GP) and a venture capitalist are rumored.
The softening of the Pound, while aiding cereal prices, will increase the cost of fertiliser raw materials.
- Kemira to close Rotterdam plant, FWi, 08 May, 2000
- Hydro spells out UK closure plan, FWi, 03 May, 2000
- Kemira names UK partner, FWi, 26 April, 2000
Immediate delivery N (SP5)
June delivery N pay cash
Imported urea (if available)
Imported AN (if available)
Liquid N, 37kg/100l or 29.6% N/t
Granular unavailable; prilled 105
£103-107/100,000 litres or £81-87/t
April, pay cash
After-cut NK cash
TSP (47% P2O5)
Muriate of Potash (60% K2O)
IRELAND CAN 0.23.24 0.16.36 Complex compounds
Republic of Ireland*
*Note in the Republic of Ireland nutrients are expressed as elements not oxides. Analyses will not be directly comparable with those used in the UK. *Prices in the Republic are IR£
*Note in the Republic of Ireland nutrients are expressed as elements not oxides. Analyses will not be directly comparable with those used in the UK.
*Prices in the Republic are IR£
Note All illustrated prices are based on 20-tonne loads for immediate payment. Prices for smaller loads and those with credit terms will vary considerably.
Source: Bridgewater Partnership