Price reductions on after-cut fertiliser?

By Roger Chesher

AS fields remain wet, so fertiliser orders and pricing stagnate and manufacturers become resigned to the current totally unpredictable market.

At the same time, market forces provide a hint of a modest easing of prices in the forthcoming aftercut market.

Merchants currently have no enthusiasm for selling, concern for cash flow and credit over feed sales has led to little pro-activity in the fertiliser market, and farmers are not interested until point of usage.

We are not alone in Britain; the European market is no better, with fields lying wet in northern France and floods in central Spain.

What was an under-supplied nitrogen market is now becoming over-supplied as stocks rise.

Manufacturers deal with this in different ways.

Terra has turned down ammonia production, but has little incentive to export because of a downturn in ammonia prices.

Kemira has cut one nitric acid stream and is supplying both ammonia and finished product to other Kemira markets worldwide, including a recent export to Greece.

Hydro simply avoids importing material until it is needed.

Logic would say that in an over-supplied market the price would come down, but if there is any pressure to reduce nitrogen prices, this will not happen until material starts to move.

The most likely outcome being a more aggressive pricing structure in the aftercut market for NK products.

Logic would also dictate that if plants are to reduce or shut down production to avoid building stock, this should be done while gas is expensive, as now, rather than in the summer when gas is cheaper.

Bigger reductions of production could therefore well be a possibility sooner rather than later.

We wont see NK prices until after Easter but there is hope that they will be eased in comparison to current nitrogen prices and provide some respite to hard pressed grassland producers.

CURRENT PRICES

IRELAND