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  • London

    Houston

    Washington

    New York

    Portland

    Calgary

    Santiago

    Bogota

    Rio de Janeiro

    Singapore

    Beijing

    Tokyo

    Sydney

    Dubai

    Moscow

    Astana

    Kiev

    Porto

    Johannesburg

    Riga

    Market Reporting

    Consulting

    Events

    Fertilizer Trends: A large product variety

    Mounir Halim

    GPCA, Dubai7th Sep 2016

  • Nitrogens struggle: Oversupply overshadowing nutrient demand with limited forward visibility

    Phosphates Resistance to price pressure but downtrend continued reflecting a general trend

    Indias fluctuation, Chinas shock absorber and Africa the next frontier

    Overview

    Copyright 2015 Argus Media Ltd. All rights reserved.

  • FMB

    Argus FMBDedicated global expertsLarge portfolioPrice assessments used globally

    Copyright 2015 Argus Media Ltd. All rights reserved.

  • Argus FMB Wide Coverage and widely used

    Copyright 2015 Argus Media Ltd. All rights reserved.

    RESOURCES INTERMEDIATES

    POTASH

    Gas

    Ammonia

    Integrated Urea Producers

    N-Fertilisers

    DAP/MAP/TSPMGA

    NPK

    Sulphur

    Rock

    Blenders / Distributors

    AGRI Supply

    RETAIL

    COOPSAGRI-INPUTS

    RETAIL NETWORK

    SINGLE COMPOUNDS

    Financial institutions / NGOs / Governments

    MIXED COMPOUNDS

    New weekly report

    Weekly publications: prices and market intelligence Monthly publications: forecast and market trends Annuals : long term strategic forecast

  • Indexation price assessments in contracts

    Copyright 2015 Argus Media Ltd. All rights reserved.

    Argus Brazil cfrUrea, MAP indexMOP NegoUS, Russian, Moroccan, and Saudi Origins

    Argus Nola fobN and P Index

    Argus AG fobUrea, DAP indexGlobal trade

    Argus Algeria, Egypt fobUrea indexEuropean Market*

    Argus fob MoroccoPhosphatesN&L America, Asia

    Argus Baltic fobUrea indexGlobal trade

    Argus fob YuzhnyUrea indexGlobal trade

    Argus fob TampaDAP index

  • FMB

    U R E A lower fluctuations, lack of visibility and increased riskFloor price and VolatilityCapacity and Forecast

    Copyright 2015 Argus Media Ltd. All rights reserved.

  • Ammonia Cost Curve flat-lining in the short-term

    Copyright 2015 Argus Media Ltd. All rights reserved.

    Source: Argus FMB Ammonia Cost & Margin Service

    Notes: Tonnage refers to merchant ammonia supply potential

  • Nitrogen Over supply a dominant theme in 2016 overshadowing nutrient demand

    Copyright 2015 Argus Media Ltd. All rights reserved.

    Plants returning from turnaround increasing availability

    More than 13mn t exports in 2015. 30% less in 2016

    Capacity to export but setting a floor price

    Healthy demand market rebound

    new capacities

    Increasing product availability

    Urea prices bottomed out after India Tender at $180

    AG 2016 average price, $201, 80$/t (28pc) lower than in 2015

  • Oversupply, a dominating theme of urea market in 2016

    Near the end of a five year downtrend in prices

    Searching for a level at which old capacity will be closed

    Needing to find a new equilibrium to absorb US capacity

    Urea prices

    Copyright 2016 Argus Media Ltd. All rights

    reserved

    Lowest since 2004

    Supply/Demand fluctuations driven by price range $180-200

  • Nitrogen price 10+ year low

    Copyright 2015 Argus Media Ltd. All rights reserved.

    Lowest levels since 2004 new dynamic

    $180-$200 range. Demand Rebound vs. Delay Purchase

    Expect range to remain for months to come less volatility

    End of mini-Rally $180 $200:

    Plant outages and turnarounds

    Return of Egypt and FSU raising availability: Buyers not attracted by current prices

    .

    5 Year Range

    Olympic average

    2016 prices

  • China

    Copyright 2015 Argus Media Ltd. All rights reserved.

    Jan-Jul 2014 2015 2016

    Global 5.283 7.749 5.778

    India 1.592 3.03 1.617

    MS in India 30% 39% 28%

    In million t

    Prices bottomed at $180 soon after Indian tender in July

    Difficult price for Chinese and other supplier setting international floor price $180 fob china

    Chinese exports down 25pc (Jan-Jul). Expected to fall at 9mn tonnes for 2016: 4.7mn tonnes fall year one year

    Chinese shrinking exports to eventually be outweighed by new on-stream capacities

  • Gas

    Coalprojects

    Crops Curtail

    Economycurrency

    Fertilizer Floor Price Dynamics

    Copyright 2015 Argus Media Ltd. All rights reserved.

    FLOOR PRICE

    floor

    floor

    floor

    floor

    2015- 2016Low to date

    floor Tightening of spread

    FACTORS INFLUENCING FERTILIZER FLOOR PRICE

  • Urea Price Volatility tightening

    Copyright 2015 Argus Media Ltd. All rights reserved.

    Urea Middle East: Jan Aug 2015

    Standard Deviation: 0.0272

    $/t fob

    Source: Argus FMB

    $

    Urea price, right axis

    Week to week price delta, left axis

  • Urea Price Volatility tightening

    Copyright 2015 Argus Media Ltd. All rights reserved.

    Urea Middle East: Jan - Aug 2016

    Standard Deviation: 0.0250

    $/t fob

    Source: Argus FMB

    $

    Urea price, right axis

    Week to week price delta, left axis

  • Before the end of 2016, new plants:

    in Malaysia (1.2m tonnes/year)

    Iran (1.1m tonnes/year

    US (1.2m tonnes/year

    Joining Algerias 1.2m tonnes/year and Nigerias 1.4m tonnes/year

    Need to find a new equilibrium to absorb new capacities

    New capacities

    Copyright 2015 Argus Media Ltd. All rights reserved.

  • Traded market 48mn tonnes2015-16

    Traded market to shrink 2017 due to US

    Supply to rise approx 3mn tonnes from 2017

    Oversupply worsens

    Short-term oversupply shrinking seaborne trade

    World urea trade - m tonnes

    2016 2017

    Total 48 46-47

    Middle East 18 19

    China 13 13

    FSU 8.5 8.5

    Africa 6 7

    SE Asia 1.6 2.6

    W Europe 1.5 1.5

    Caribbean 1.2 1.2

    Others 2 2

    Available 51.8 54.8

    Copyright 2016 Argus Media Ltd.

  • FMB

    Phosphatesregional focus new capacities startingstable to soft outlook

    Copyright 2015 Argus Media Ltd. All rights reserved.

  • Phosphates resistance but downtrend continues

    Copyright 2015 Argus Media Ltd. All rights reserved.

    Recovery in L America through traders

    NP/NPK strong line-up

    Brazil importing more this year but not the same levels as 2013s

    Strong supply of 11-44 China limits upside

    Source: Argus FMB

    China restricting output

    Focus on regional markets

    Supply side consolidation

    New capacity plateauing

    US domestic trades at discounted world prices

    Switch to MES and regional focus

    New capacities

    NPK diversification

    Africa Strategy

    East: weak/flat marketWest: stable DAP/MAP market

    India expected to reach 5.5mn t DAP imports

    Demand insufficient to mop up Saudi, Chinese and Australian DAP

  • Phosphates prices holding but much lower levels

    Copyright 2015 Argus Media Ltd. All rights reserved.

    China is holding fob DAP levels by restricting output

    But Indian/Pakistan demand insufficient to mop up Saudi, Chinese and Australian material

    Indian buying continues but will be less than last year at about 5.5mn t DAP imports

    MAP price in Brazil is also limited by fundamental oversupply especially from China (11-44)

    Overall outlook is for marginally weaker prices in the east through rest of 3Q and into 4Q

    Brazil will import more than last year but still less than the high points of 2013 (which were around 3mn t)Phase 1 Phase 2 Phase 3

    DAPPRICE CYCLE

    DAP vs.SulphurCHINA

    5 Year Range

    2016 prices

    DAP normalisedSulphur normalised

  • Brazilian prices will be steady basis lack of 11-52 available especially in trader hands

    More capacity already on line in Morocco (2nd plant of 4)

    Prices will erode as seasonal demand dies down in India and Pakistan

    Subsidy for DAP unlikely to rise in India hence any drastic increase in imports unlikely

    Ethiopian tender will boost exports for OCP and PhosAgro but no relief for DAP

    Phosphates: next 3-6 months

    Copyright 2015 Argus Media Ltd. All rights reserved.

  • FMB

    NPKs and Africa

    Copyright 2015 Argus Media Ltd. All rights reserved.

  • Global NPK trade

    Copyright 2016 Argus Media Ltd. All rights reserved.

    Latin AmericaBrazil :main gateway for imports taking almost 500,000t

    AfricaCurrent market in excess of 2 mn tRussian Moroccan originOCP Africa ambition

    RussiaAccounts for around 28pc of global exports

    ChinaAlmost 1.5mn t of imports dominated by Russia and NorwayTax potential game changer

    Southeast AsiaThailand accounts for around 45pc of this 2mn t market

    West EuropeAccounts for around 47pc of global exports, most of which come from Belgium, Norway and Finland

    Norway/FinlandLargest exporting producer

    Global footprint

    http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjsx42Y2d7MAhWEC8AKHaMFAswQjRwIBw&url=http://www.ocpgroup.ma/&psig=AFQjCNESTz4OOdCwm88MPHj1s-Ddva9BsQ&ust=1463491480730125

  • Copyright 2015 Argus Media Ltd. All rights reserved.

    Ethiopia

    400kt

    19-38-0+7S

    Tenders

    Nigeria

    350kt

    15-15-15