Profercy World Nitrogen Index
Profercy's Nitrogen Index utilizes key global nitrogen fertilizer prices to derive a value for nitrogen as a crop nutrient. The Index provides a useful and straightforward tool to gauge the overall health of the World market for nitrogen fertilizers.
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Week 22 – Nitrogen Index reaches 13-week low as demand remains lacklustre
The Profercy World Nitrogen Index fell 14.79 points to 271.59, the lowest since 5 March. While, this is still nearly 51 points above late-February levels seen prior to the Middle East conflict, it is down some 121 points from mid-April.
Business has been thin for several weeks. While this time of the year typically marks a seasonal lull in demand, buyers have increasingly held off purchases in the hopes of lower prices.
Even with the Strait of Hormuz still effectively closed, China’s return to the export market is expected to result in fierce competition among suppliers in the upcoming 8 June Indian inquiry for up to 1.7m. tonnes for shipment through to 20 July.
However, China’s role in the tender is uncertain given that current minimum price floors are some $80pt and $150pt above prevailing values in Oman and the Baltic, respectively.
Prices into the upcoming Indian inquiry are expected to be far lower than in the 15 April Indian Potash Limited (IPL) tender given that few other buyers are competing for tonnes.
Many suppliers are targeting Brazil, with multiple cargoes lined up from Algeria and elsewhere, with demand there expected to emerge for Safrinha. However, importers see no need to rush, despite deliveries to date falling well short of prior years.
This has seen offer levels decline by the day.
Australian demand has cooled, while Europe and the USA are in the offseason. Importers in Europe are targeting below the mid-$500s pt fob Egypt equivalent for summer volumes, though producer price targets still remain above $600pt fob.
Nola values have been soft for some time now and had already reached pre-Middle East conflict levels last week, opening up re-export opportunities. Indeed, quotes midweek reflected in the low-$500s pt fob metric equivalent for export, leaving US tonnes some of the most competitively priced product on offer.
The market is now looking to the 8 June Indian tender to provide price direction for buyers and suppliers alike.
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