Phosphate players ponder Chinese VAT, devaluation

摘要

Activity in the phosphates markets is limited this week as players contemplate the impacts of the new Chinese VAT on fertilizer sales and devaluation of the RMB this week. Markets are reacting to news that the Chinese government will re-introduce VAT on fertilizers in the domestic market and on exports, levied at 13% from September 1. CRU estimates suggest a higher cost burden from the new tax for most of the DAP/MAP producers at around $10-15/mt but even higher costs are likely to hit integrated producers that cannot offset the new VAT against their input costs.