Weak Diammonium Phosphate (DAP) Prices Loom Large over the Global Market in Dec 2022

In the wake of unfavourable trading fundamentals and muted demand, the price of Diammonium Phosphate (DAP) continues to exhibit a bearish price trend on a global scale. Despite increased electricity and energy expenses, lacklustre demand, and minimal profit margin, continue to pressure the price of DAP in the German market.

The large premium in DAP prices between Brazil and India has dramatically narrowed over the past week. Due to the impact of the low producer's price index and low quotations by the domestic producers, the CIF price of DAP India dropped to 765 USD/MT.

There is a sufficient supply of DAP in Saudi Arabia as multiple shipments of product, comprising 40,000 tonnes to Brazil and 30,000 tonnes to Australia, will be transported in December, ensuring global supplies remain at a break-even level. DAP prices for spot Ex-Riyadh were assessed at USD 770/MT. Similarly, Chinese Di Ammonium Phosphate decreased once more, and the FOB price declined by 4% roughly on a week-on-week basis.

The DAP price continued to decline in the west of Suez, and some importers' ideal price was considerably lower while traders continue to struggle for upper hand in negotiations. The price is currently reasonably stable, and importers' buying interest is growing, but it is anticipated that the price will decrease from December to January next year.

This week saw the sale of about 40,000 tonnes of Russian goods, pushing the price range to USD 855/MT CFR. The number of queries about the import volume for the following year has risen, boosting suppliers' confidence. DAP prices declined by 2% in the first week of December FOB Nora Port in the United States, characterized by weakness in phosphate markets due to continued struggling demand in the post-harvest period

As per ChemAnalyst, while the price of DAP is falling in the east, it stays stable in the US and Brazil Once the demand is met, producers compete for the procurement need. However, product prices in South Asia are expected to keep declining. The DAP price in Brazil appears to have peaked due to importers still making some purchases at the steady barter price.