India stirs, Brazil long

摘要

The phosphates market is fragmented as we head into March – weak in Brazil, steady in the US and moving up in India. Trader length on Russian and Saudi MAP (perhaps 100,000t combined) is the main problem overhanging the Brazilian market for February. In this scenario, with Brazil still in holiday mode, offering into a vacuum of demand runs the risk of pushing prices down further. Most expect Brazil to stay out for another 2-3 weeks but then demand should snap back due to the comparative lack of phosphates booked in the frst quarter. In the meantime, cfr values here are weak. One trade in Brazil this week was reported around the very low-$490s/t cfr. Producers report to be comfortable and are offering at levels $10-15/t higher than traders in Latin Amer- ica while US and Moroccan offers appear to be absent from the market. Hence the market will be defned basis at what level traders decide to liquidate their positions. Prices are under pressure short term and may well head lower. Buyers are not expected to rush back to the market after Carnival and remain in a wait-and-see mode with a particular interest in how the Chinese will behave once the Lunar New Year holidays are over. But most agree that Brazil and Argentina will need to buy come March/April time. Until then, a bear- ish sentiment remains in the region.