ANALYST’S CORNER North American feed phosphate prices fall more slowly than other regions

North America monocalcium feed phosphate (MCP) March delivery prices moved down about 10-13% below Q4 2022 prices for some buyers, depending on contract terms and supplier, but remain above prices in other regions.

The average Q1 price in the US Midwest as of mid-March was $915/short ton, 13% lower than the average Q4 contract price of $1,060/short ton.

As of end-March, a price decrease announcement of $50/short ton for Q2 business in North America emerged, but contracts were not yet settled.

One supplier said it expected contracts to take until mid-April to settle and anticipated prices to fall further during the month.

North American buyers began reporting lower prices in March, but prices had held steady in January and February, while European price indications have fallen much more quickly since Q4.

However, European prices moved up faster than US prices did during 2022. MCP prices increased rapidly in Europe after the Russia-Ukraine conflict began in February 2022. The quarterly contract peaked at just over €1,700/tonne in Q2 2022 and stayed at high levels for most of the year before plummeting in the fourth quarter.

European contracts continued to fall as the new year began. The average Q1 contract price to begin 2023 was €800/tonne ($857/tonne), 32% below the average Q4 price.

In Brazil, contract prices for dicalcium phosphate (DCP) were around BRL 3.60/kg for March deliveries. This equates to around $0.68/kg or $618/tonne.

DCP is 18.5% phosphorus, while MCP is 22% or higher phosphorus content.

In mid-March, one North American seller said its Q1 prices had held steady from Q4, while Q2 prices had not been announced yet. There are two feed phosphate manufacturers in North America, and various resellers and importers.

Many North American market participants were at the Purchasing and Ingredient Supplier Conference (PISC) in Orlando in early March to discuss trends and the demand outlook. According to sources, offer prices and deals were rarely discussed.

Still, feed phosphate cost and supply in North America was a key topic of conversation in many of the meetings at PISC.

It is now just over a year since the RussiaUkraine conflict began. Over the previous few years, Russia had become a significant feed phosphate supplier, and so when the war began, it caused a major disruption to the phosphate market.

Buyers said they continued to receive EuroChem’s defluorinated feed phosphate (DFP), which is produced in Russia, during 2022 and so far into 2023 as well, but had been very concerned initially that they would not be able to secure sufficient supply for production.

However, even with tariffs, phosphate imports have continued to be offered and arrive at North American ports.

Both Chinese and Russian-origin feed phosphates carry tariffs of up to 25% in the US. Russian-origin feed phosphate carries a 35% tariff in Canada.

In the latest trade data from the US Department of Commerce, Q1 feed phosphate imports were seen coming in from China, Spain, Germany, Turkey, and Russia.

Chinese-origin MCP was last offered for $630-660/tonne FOB.

There was a slight decrease in feed phosphate demand in North America in 2022 due to bird flu and swine disease; however, the drop in demand was not as severe as in other regions, global buyers have explained.

Barring any unforeseen geopolitical events, North American demand is expected to remain steady in 2023, according to buyers interviewed by Feedinfo.

An integrator in the swine industry said it is planning on purchasing more feed ingredient volumes in 2023 compared to the previous year. The swine sector purchased less material last year due to swine disease impacting its herd.

A poultry producer said it is planning on purchasing steady-to-higher volumes of all feed ingredients in 2023 compared to 2022, despite bird flu still being prevalent.

“Bird flu does continue to be an issue and some culling is happening, but we are working hard to get them hatched and raised,” the poultry producer said.

By Heather McGuire Doyle, senior analyst