OUTLOOK FOR PHOSPHATES

Transcription

1 OUTLOOK FOR PHOSPHATES Michael Mew October 24

2 23/4 Major Factors Rising phosphate fertilizer demand in several key overseas markets Supply constrained by capacity limitations overseas and by recent hurricane activity in the U.S. Higher selling prices for phosphate products High freight costs Rising oil prices Higher U.S. gas prices supporting high international ammonia prices Rising Sulphur prices followed by a recent softening again

3 U.S. $ P.M.T. FOB TAMPA July WEEKLY U.S. DAP EXPORT PRICES 21/2 22/3 23/4 24/5 June

4 U.S. $ P.M.T. 7 WEEKLY U.S. DAP EXPORT MARGINS July 21/2 22/3 23/4 24/5

5 25 $ PER M.T. FOB TAMPA ANNUAL U.S. DAP PRICES / / / / /99 2/1 22/3 Q1

6 $ PER M.T. ANNUAL U.S. DAP CASH MARGINS BASIS: LOW COST PRODUCER 199/ / / / /99 2/1 22/3 Q1

7 $ per m.t. of DAP SULPHUR COST IN DAP U.S. has $11 Advantage U.S. Price Moroccan Price Morocco has $13 Adavantage

8 8 7 $ PER M.T. U.S. Morocco AMMONIA COSTS IN DAP

9 $ P.M.T. OF DAP STATE OF THE MARKET U.S. DAP PRICE MINUS RAW MATERIAL COSTS BASIS: Low Cost Producer

10 ' M.T. P2O5 4 PHOSPHATE FERTILIZER DEMAND

11 ' M.T. P2O PHOSPHATE FERTILIZER DEMAND High Analysis Low Analysis World minus FSU & C Eur (F)

12 2 15 NET PHOSPHATE DEMAND ADDITIONS Thousand m.t.p.a. P2O5 (F)

13 Thousand m.t. 18 PHOSPHATE PRODUCT TRADE

14 Thousand m.t. 18 DAP IMPORTS others Australia India China

15 PHOSPHORIC ACID PRODUCTION IN CHINA Thousand m.t. P2O (F)

16 6 Thousand m.t. NET DAP IMPORT TRADE INTO CHINA (F)

17 China: Future Questions What will be the main drivers of phosphate fertilizer demand in China in coming years? Will the economics of production and transportation to the demand centres in the northeast allow China to become selfsufficient in DAP? How do the economics of production and export stack up against U.S. supply economics to regional markets? Will the phosphate rock reserve base be of sufficient quantity/quality to support the phenomenal growth in the industry?

18 TONNES PER HECTARE Europe USA China INDIA TOTAL CEREAL YIELDS

19 3 DAP PRICE INDEX TO INDIAN FARMERS 1991 = Cost of DAP in Rupees Cost of DAP in Terms of Rice Paddy Value

20 INDIAN DAP SUBSIDIES Rupees per m.t. of DAP Rock/Acid Sectors DAP Imports

21 Thousand m.t. DAP SUPPLY TO INDIA Imports Production

22 7 6 5 Thousand m.t. LATIN AMERICA: DAP/MAP/TSP IMPORTS TSP MAP DAP (F)

23 35 Thousand m.t. LATIN AMERICA: MAP IMPORTS others Chile Argentina Brazil (F)

24 16 14 THOUSAND M.T. U.S. MAP PRODUCTION Production MAP SHARE OF MAP/DAP PERCENT SHARE

25 Thousand m.t. 7 6 U.S. DAP/MAP SHIPMENTS China Latin America (F)

26 ' M.T U.S. DOMESTIC DAP SHIPMENTS Fertilizer Year Basis Fall Spring (F) /94 94/95 95/96 96/97 97/98 98/99 99/ /1 1/2 2/3 3/4 4/5

27 Prodn: Bill. Bu U.S. CORN DATA October USDA forecast September USDA forecast Mill Acres Bu/Acre (F) Production Acreage Yield 93/94 94/95 95/96 96/97 97/98 98/99 99/ /1 1/2 2/3 3/4 4/5 4/

28 2 Thousand m.t CHANGES TO MAP/DAP IMPORT DEMAND (F)

29 Thousand m.t FSU MAP/DAP EXPORTS (F)

30 5 Thousand m.t NORTH AFRICAN MAP/DAP EXPORTS (F)

31 3 Thousand m.t MIDDLE EAST MAP/DAP EXPORTS 25 (F)

32 U.S. MAP/DAP EXPORTS AND MARKET SHARE ' M.T. PERCENT

33 U.S. MAP/DAP EXPORTS AND MARKET SHARE ' M.T. PERCENT

34 U.S. DAP/MAP CAPACITY USE FORECASTS MILLION M.T. / PERCENT (F) Effective Capacity Use* Calculated Capacity Use

35 Thank You!