After the price spurt on the fertilizer market in mid-November, prices continued to rise. For the time being, trading parties see no reason to assume that the market will soon decline or stabilize.
The cause of the upward market movement lies in China. Since Trump decided that the environment is no longer an issue, brown coal is back in the picture and energy shares have risen. Higher energy prices also in China. The environment is a greater concern and the cleaner product natural gas is also in the spotlight. However, both are becoming scarce, causing prices to rise.
Furthermore, due to environmental problems, China has closed factories with too many emissions and these will no longer open. From an exporting country, China is now an importer. A big change. The lower urea production is also not being absorbed, because factories under construction elsewhere (including in the United States, Turkey and Nigeria) are not yet operational. There is talk of a large tender for urea from India. Now that China cannot supply, this is driving up prices.
The price increase in urea is spilling over to the lime ammon market. An increase of 20 to 30 dollars per tonne is a reason for increasing the KAS price. For the farmer's price, this means that both fertilizers have been increased by 2 to 3 euros per 100 kg over the past three weeks. The range available from fertilizer suppliers is wide: from 18,50 to 21 euros per 100 kg. Depending on whether it concerns old stock or whether it has already been purchased at the higher price. The latest increase among producers was this week in France, leading to a KAS price of 230 euros per tonne CIF.
Phosphate prices are rising slightly by 5 to 15 dollars per tonne. The European market is cautious about purchasing phosphate, because it is not allowed to be used much in the EU, but demand is picking up in the spring. The same picture with potash: stable to very slightly increasing.
The coverage ratio in the Netherlands is normally around 60 percent during this period, but that could be 10 percent higher this year. At the market's low point in quarter four of 2016, there are buyers who purchased more than last year.
None of the sources see reason for a reduction in the market, rather the reverse. According to an insider, the last price increase has not yet occurred. Spring begins in Southern Europe; the prices there are also higher. The expectation is that this can also happen here, but the question is when spring will really start.