KOLKATA: ICIS, the world's largest market information provider in the petrochemical, energy and fertilizer space has today released its latest monthly insight into the Indian fertiliser market. According to ICIS, demand for urea, ammonia, sulphur and potash from Indian buyers remains robust, although the phosphates market remains in a lull.

Indian companies continued to purchase urea in November from international markets such as Iran and China. Under the latest tender on 11th November, Indian Potash Ltd (IPL) bought over 600,000 tonnes of urea scheduled to be shipped by 22nd December.

There are mixed opinions as to when, or whether, India will return to the market again. There has been talk that Metals and Minerals Trading Corp (MMTC) may float another purchase tender in the near future, although no official announcement has been made.

India is also understood to be speeding up its investment proposals to Iran in the wake of the six-month Iranian nuclear deal with the US and six other nations along with the easing of sanctions. India has offered to partly fund the expansion of the Iranian port of Chabahar on the Gulf of Oman coast. A consortium of Indian fertilizer companies is also understood to have proposed an investment of around $1.2bn for the construction of a gas-based urea manufacturing plant at Chabahar. A delegation of Indian officials is expected to visit Tehran this month.

Reviewing the other markets, the strong flow of ammonia cargoes to India saw a combined 240,000 tonnes of contract and spot product loaded for buyers on the east and west coasts in November, roughly the same amount in October.Despite robust demand, prices remained relatively stable last month, with the latest contract cargo from the Arabian Gulf to Dahej and Sikka heard priced at $484/tonne CFR (cost &freight) and $480/tonne CFR, respectively.

The Indian phosphates market remained subdued in November, despite a fresh sale on a US DAP basis by US-based Mosaic to Chambal Fertilisers and Chemicals and its own network. New trade is seen as lacklustre until the end of 2013 due to ample stocks that are estimated at 1.2m tonnes.Stocks are expected to drop to a normal level of 800,000 tonnes ahead of the new season. Any new business is expected to be concluded for restocking purposes.

On the potash front, Indian imports picked up in November, as suppliers have resumed shipments to India after agreeing to give buyers discounts of over $50/tonne.Prices fell to around $375/tonne CFR from the $427/tonne CFR agreed earlier for the current fiscal year.

On a monthly basis, Russian producer Uralkali's muriate of potash (MOP) shipments to India in November are understood to be at 90,000-95,000 tonnes for November, while Canada's Canpotex shipped 115,000 tonnes of MOP. Other suppliers such as Israel Chemicals Ltd (ICL), Arab Potash Co ( APC) and K+S Potash Canada also shipped contract cargoes to India during the month.

MOP imports nearly doubled to 322,010 tonnes in October from 166,580 tonnes a month ago, according to the Fertilizer Association of India (FAI). The increase came after shipments came to a near halt in August and September, following the Belarusian Potash Co (BPC) split. Sales for direct applications were, however, down by 27.5% in October, compared with 193,000 tonnes in the previous month.

Indian sulphur prices climbed through November to reflect the international upward trend. Indian producer Fertilizers and Chemicals Travancore (FACT) awardeda tender to Midgulf International at around $110/tonne CFR, but Coromandel International then purchased 25,000 tonnes from Swiss Singapore for December delivery at $127-128/tonne CFR.

Further tenders are closing in early December and expectations are that prices will increase in subsequent trade as Middle Eastern producers have increased their FOB levels for December cargoes. India-based Paradeep Phosphates Ltd (PPL) was closing a tender for 35,000 tonnes of sulphur on 3 December, while FACT was due to close a tender on 5 December for 15,000-25,000 tonnes.

Source : economictimes.indiatimes.com