Phosphates market cautious over Hormuz deal

: Fertilizers
26/06/15

There has been no notable change in the transit of phosphate shipments in and out of the strait of Hormuz following Sunday's announcement from US president Donald Trump that an agreement with Iran was "now complete". Market reactions are mixed but edge towards caution.

Vessel traffic through the strait of Hormuz has not changed since the announcement on Sunday of a US-Iran peace deal, based on AIS tracking data. This suggests shipowners are waiting for the planned signing on 19 June and further details before attempting transits.

Saudi Arabian DAP/MAP cargoes in the Mideast Gulf remain stuck, according to latest Kpler vessel tracking data, with little sign of movement:

Banglar Joyjatra, carrying 38,000t of MAP for southern Africa, is stuck off the coast of the UAE.
Bahri Trader is on standby in the middle of the Gulf, off the coasts of Iran's Kish Island, Qatar and the UAE, carrying 71,000t of DAP for India.
BC Agility is waiting with 55,000t of MAP for Brazil off the coast of the UAE.
Global Unity has 61,000t of DAP for India. Last week it had been moving from Ras Al-Khair to the UAE coast but has not moved since.
Chang Chang Dong Hai is holding steady off the coast of the UAE with 55,000t of DAP/MAP.
Zagori is still anchored at Saudi Arabia's Dammam port with 50,000t of DAP for Australia.
Bahri Bulk is carrying 71,000t of DAP and is still waiting off the coast of Saudi Arabia.
Bahri Wafi is also anchored off the coast of Saudi Arabia with 72,000t of DAP.

Market remains prudent despite early optimism

Trader and importer reactions were mixed over news of the deal. Some are optimistic, citing an indicative $100/t drop in cfr levels for Saudi Arabian DAP to Pakistan. One trader with a MAP cargo stuck in the Gulf expects to be able to ship the cargo through the strait this week.

While raw materials costs are likely to remain elevated for global phosphates producers as sulphur supply will take months to normalise, Chinese domestic sulphur prices fell sharply today following news of the deal.

Other reactions were more careful. Several traders say that both ratification of the agreement on 19 June and more assurances are required. They add that buyers will remain cautious not to book any fresh cargoes because of the possibility that market prices may soon soften.

Demining operations will still take weeks to complete, and until then, inward traffic into the Gulf will remain difficult, lowering the prospect of loadings of fresh DAP/MAP vessels in the short term.

Freight market participants are also choosing to remain cautious about the announcement that a deal had been reached, preferring to seek clearer assurances on the safety of ships transiting through the strait first, they told Argus today.

Israel's military operations in southern Lebanon, the cessation of which is a condition to peace repeatedly iterated by Iran, remain a potential barrier to any deal. In an interview with Iranian state-linked Fars News, the maintenance of a traffic toll exercised by Iran and Oman over the strait was re-emphasised. This could complicate negotiations for a durable reopening of the waterway.

By Adrien Seewald

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26/06/15

Hormuz tanker traffic unchanged after US‑Iran deal

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US-Iran agreement to end hostilities 'complete'

26/06/14

US-Iran agreement to end hostilities 'complete'

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US urea exports to Canada rise to record in April

26/06/09

US urea exports to Canada rise to record in April

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Brazil's sulphur imports hit 21-year low in May

26/06/08

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