An influx of MOP imports to Nola in early-2021 should replenish depleted US inventories, lessening supply-driven price support that characterized the fall.
An estimated 180,000 t of offshore MOP arriving at Nola in January should begin to alleviate domestic supply strain early next year, reducing buyer urgency and pressuring premiums for near-term availability.
Reduced imports to Nola at the beginning of the fertilizer year (July-June) were a key driver of recent price appreciation, but Argus estimates 70,000 t of MOP that arrived in December closed the tonnage gap to the prior year. Nola-bound imports should exceed the fertilizer year prior by 11pc at about 761,000 t by the end of January. Rising prices and unseasonably favorable weather have in the meantime prompted some growers to buy and apply MOP typically reserved for spring use — a trend that, if widespread, could weigh on forward sales volumes.
Recent price appreciation at the US Gulf coast has also spawned an atypical concern for domestic sellers: the potential for an influx of traditionally Latin America-bound tons to Nola, now priced at a rare premium to Brazil. Thin in-season availability and scattered supply outages fueled a nearly 22pc price increase at Nola in the fourth quarter, placing the US Gulf at about a $26/t premium to Brazil on a cfr-equivalent basis as of 23 December.
But a price slide at Nola or inland remains unlikely in the near-term with domestic producers said to be sold out through the first quarter and a large portion of incoming import tons already committed. Market sentiment remains bullish headed into the new year, with retailer inventories estimated nearly empty across key agricultural regions after demand this fall widely exceeded industry expectations.
Domestic producers Nutrien and Mosaic on 9 December raised prices for new US orders by $40/st, with shipment not guaranteed until spring. While market participants have speculated on the viability of $295/st fob Nola barges and upward of $325/st fot Corn Belt prices by April, first-quarter 2021 trades continue to trend higher as supply tightness persists. Barges for January have thus far traded up to $250/st fob Nola, and offered as high as $255/st fob Nola.
Upward price momentum could linger longer in the Corn Belt as empty warehouses will need to await re-supply from Nola, which could take up to a month from the arrival of cargoes at the port.
