CIBC NotesEQUITY RESEARCH
April 16, 2023 Industry Update
Spring Fertilizer Rebound?
Key Points
There were some hopeful signs this past week that we could be seeing a
start of a rebound in fertilizer prices this spring (urea, DAP and potash prices
were higher in the U.S.).
• Spring Demand Lifts Urea Prices: Granular urea prices were up +11%
W/W in U.S. NOLA to $369/st, and +5% W/W in the U.S. Midwest to
$403/st, as buyers are becoming less cautious and are locking up spring
top-dress needs. But U.S. Midwest ammonia prices fell $10/st W/W to
$553/t despite the bullish urea market across the U.S.
• Potash – U.S. Price Ticks Up, Prices Flat To Soft Elsewhere: U.S.
prices moved higher in the Midwest (up +3% W/W to $501/st) and NOLA
(up +3% W/W to $455/st). Brazil prices declined $20/t W/W (-4% W/W)
to $430/t, but producers are reporting an increase in demand for May
loading cargoes from Brazilian distributors for the safrinha season.
• Sharp U.S. NOLA DAP Increase, But Brazil MAP Lower: U.S. NOLA
DAP spot prices rose $48/st W/W (+8% W/W) to $660/st on the back of
improved weather, lagging stocks and low imports. Elsewhere, prices
extended declines on reduced costs and high stocks. Brazil MAP spot
prices softened by $10/t W/W (-2% W/W) to $595/st.
Corn Prices Higher; Few Changes In April WASDE: May corn futures
closed ~23 cents higher W/W (+3.5% W/W) to $6.7/bu. Strong export sales,
a weaker USD and further cuts to Argentina crop estimates helped
sentiment, though upward revisions to Brazil crop estimates put a cap on
pricing. There were few changes in USDA’s April WASDE report; stock-to-
use ratios remain historically low. The next May 12 report will give first
numbers for the 2023/24 crop year.
Northeast Asian Caustic Price Rebound Continues: Northeast Asian
export prices (key pricing benchmark for CHE.UN) continued to trend upward
this week to $406/dmt fob (+$31/dmt W/W or +8% W/W). Spot export
availability is expected to shrink in the near term, especially in Q2/23
because of spring maintenance.
Methanol Spot Prices Continue To Trend Lower: China spot prices were
down ~2% W/W to $273/t as elevated supply from Iran and stagnant MTO
operations weigh on the market. European spot prices were down 4% W/W
to average $328/t, and U.S. spot prices were down ~1% W/W to average
$256/t, as the Atlantic Basin remains well supplied