Quarterly Update on Global Diammonium Phosphate (DAP) Market
For the Quarter Ending March 2021
North America
DAP remained resilient from Q4 2020 across the region and globally during Q1 2021, hence the price acceleration continued, further affected by winter storm hit US gulf. This price acceleration was due to the shortage of upstream materials, like Nitrogen. Several Nitrogen producers shut their plant operations under extreme cold which eventually led to the shortage of feedstock Ammonia. Under these conditions prices of DAP skyrocketed across the region and reached USD 576.7/MT till March. This price hike was also supported by high local demand which eventually led to increased dependency for imports from Europe.
Asia
The Asian region saw moderate to low domestic demand for DAP, but high export demand from the US and Europe. Domestic demand for DAP in China remained moderate, but export demand was higher than anticipated, owing to a shortage of local material caused by lower availability of upstream natural gas, which effectively forced prices to rise in the region. Meanwhile in the Indian DAP market, domestic demand from the agriculture sector was low, hence the producers increased their exports to satisfy high demand coming from the US and Europe. Despite of stable demand from the Indian markets, retail prices of DAP showed a sudden increment of more than 50% during the quarter, buoyed by the global upsurge in rates.
Europe
Europe witnessed high demand for DAP from the agriculture sector due to the arrival of spring season. As the demand from domestic and international market was high, manufacturers were looking forward to increasing the prices of DAP in the coming months. Shortage of DAP in the US also forced European manufacturers to enhance their export volumes to enhance their margins and high premium on prices.
For the Quarter Ending December 2020
Asia
Asian Diammonium Phosphate market remained firm in Q4 2020 driven by its appreciable consumption from the fertilizer industry. In China, before November, domestic supply of phosphate fertilizers was deemed low, as various manufacturers were more inclined towards catering to the global demand under expectations of better netbacks. By November, DAP imports from USA considerably reduced that created a shortage of DAP and other phosphate fertilizers in various countries across the region. Besides, favourable weather conditions amidst rabi season provided a favourable push to DAP’s market sentiments in India.
North America
In early Q4 2020, tight supply of DAP and other phosphate salts in the region accelerated the prices of most agrochemicals. The tight supply was a repercussion of the lower production rate due to damage caused by a spate of hurricanes in October. Later in December 2020, the demand remained firm, but the supply marginally decreased, which again caused a rise in DAP prices. Although the month over month increment in the regional production rates gradually eased its prices by December end.
Europe
In Europe, the demand for DAP remained low, as only few countries participated in the spot buying activities while most of them stayed muted. Although the production of agrochemicals continued to be low due to movement restrictions amid rapid spread of COVID 19. In anticipation of good demand in spring season, several buyers asked for early contract purchases of DAP that increased the imports and its prices respectively by the end of Q4 2020.
