US Diammonium phosphate (DAP) Pricing Continues to Break Records, Trend to Stay Firm till the Year End

Diammonium phosphate (DAP) prices in the US markets are on a bullish run taking cues from high raw material Ammonia and tight Phosphate rock inventories. DEL Illinois DAP prices have been settled around $780 per MT in this week.

The prices are on an increasing trend after seasonal hurricanes led to production outages in the US during Q3, which further tightened the market supply, although the market is expecting complete recovery in capacities by early 2022. The price increase is also because of high prices for the natural gas used to produce Ammonia, its key feedstock. For phosphate rock also, the prices are currently at their historic peaks, maintaining an overall upward push on the DAP prices.

As per market players, the DAP price would end the year up by about 60% from the start of this year at around $780-790/tonne levels. Key fertilizer producing companies have reported higher than expected sales volumes driven by favourable demand due to strong fertilizer application season in the US.

Soaring fertilizer prices have continued to affect the operating costs of the US corn farmers which could jump by as much as 40% next year if the raw material surges continue. There are looming fears that the high price situation could also force several U.S. farmers next year to switch to less fertilizer-intensive crops to preserve their margins.

As per ChemAnalyst, US DAP prices are expected to remain on a higher note till Q1 2022. The upward price assumption is largely due to higher feedstock prices and strong export demand as China, the largest DAP producer, has suspended any exports until June 2022, causing it key importers to look for alternate sources.