BultiesBrothers schreef op 20 september 2020 12:58:
www.fitchratings.com/research/corpora...Fitch Ratings Updates Global Fertiliser Price Assumptions
Tue 08 Sep, 2020 - 05:26 ET
Fitch Ratings-London-08 September 2020: Fitch Ratings has revised its fertiliser price assumptions on changed macroeconomic conditions and evolving supply and demand dynamics.
We have lowered ammonia price assumptions for 2020 to reflect year-to-date (ytd) performance due to weak industrial demand and record low prices for gas, which is a feedstock for ammonia. The ammonia market is oversupplied by regions rich in gas, such as the CIS and Middle East, despite increased fertilizer demand from the US due to improved weather conditions and larger crop acreage. We have reduced our medium- and long-term price assumptions by USD20/tonne to reflect Fitch's lower gas price assumptions in Europe. This translates into lower breakeven prices even for high-cost non-integrated ammonia producers operating in regions that lack internal gas supply. We consider current market gas prices and ammonia oversupply to be unsustainable and expect a gradual rebound in ammonia prices in the next three-to-four years.
We have kept the 2020 and long-term urea price assumptions unchanged but smoothed the increase in the medium term. We expect the recent rally in spot prices due to oversupply to be short-lived. We expect prices for anthracite and bituminous coal, main feedstocks for most high-cost Chinese urea producers and exporters, to continue to define a price floor for urea. We expect that a number of urea capacity additions in Nigeria, the CIS, Brunei or India in 2021-2022 to be partly offset by capacity closures in China. New projects could also face delays, as has already happened in some cases.
We have revised our short-term phosphate rock price assumptions to reflect the ytd dynamics. Our flat price assumptions after 2020 reflect our view of a limited price upside potential as capacity utilisation remains low, while Egyptian producers are bringing new capacity onstream. However, we do not expect any material reduction in prices. We expect Moroccan OCP, a leading global phosphate rock exporter, to manage its exports in line with demand for phosphate rock.
We have increased our 2020 price assumption for DAP on tight supply due to lower-than-expected production in Saudi Arabia and China and strong demand from India and Brazil. Spot prices were further boosted by the US International Trade Commission countervailing duty investigations on imports of phosphate fertilisers from Morocco and Russia. We would view the imposition of duties as a potential upside for prices. We have increased the 2021 price assumption due to delays in new phosphate facility openings by OCP, Yara and Pupuk Kaltim and continued disciplined supply by the largest Chinese producers. We have kept the long-term price assumptions unchanged as we expect demand to absorb new supplies in the long term, and feedstock prices to rise.
We have slightly increased our 2020 potash price assumptions to reflect ytd performance. Supply contracts between main global potash producers and consumers in China and India reset price floors at USD220/tonne and USD230/tonne, respectively. Brazilian potash imports have been exceptionally high in 2020 and spurred Brazilian spot prices to turnaround in May 2020 after a 15-month price fall. We view potash as a nutrient with the highest growth potential. The market's supply discipline is well tested, while production is concentrated, which mitigates risks of significant price declines. However, new additional capacities in the CIS and currently idled high-cost capacities in Canada limit any material price upside. Still, potential export disruptions at Belaruskali, the largest potash producer, due to strikes could increase spot prices.