Importance of tenders in global fertilizer trade · 1 10/27/2016 Marina Simonova Fertecon, United Kingdom Importance of tenders in global fertilizer trade 2 Fertecon | Agribusiness

1

10/27/2016

Marina Simonova Fertecon, United Kingdom

Importance of tenders

in global fertilizer trade

2 Fertecon | Agribusiness intelligence

Contents

‣ Why tenders?

‣ World fertilizer tender map

‣ Market implications

‣ Geopolitics & risks

‣ Tenders by commodity

‣ India

‣ Conclusions

2

10/27/2016


Getting the best price & mitigating market risks

• Best price • Diversity of supply • Testing supply availability • Know your supplier

• Best price • Identifying market balance • Transparency • Know your customer

Often establishing forward price direction

Buyer Seller

Tender

Price

Transparency


Wide geography of tender-participating countries

in fertilizers & raw materials (sulphur, acid, rock)

Based on available tender data for 2014-2016

3

10/27/2016


Profile of the companies issuing tenders – state-owned enterprises and government authorities play an important role

Bangladesh

BCIC (fully owned by

government) BADC

Sri Lanka

Ministry of Agriculture

India

Government-authorized companies

Sudan

Ministry of Agriculture

Belarus Russia Pakistan Nepal

Grodno Azot part of state-

owned Belneftekhim

Gazprom TCP

(administered by Ministry of Commerce)

AICL (state-owned Agricultural

Inputs Company)


Tender activity & implications for international prices (UREA)

150

170

190

210

230

250

270

290

310

330

350

01-j

anv.

-15

22-j

anv.

-15

12-f

évr.

-15

05-m

ars-

15

26-m

ars-

15

16-a

vr.-

15

07-m

ai-1

5

28-m

ai-1

5

18-j

uin

-15

09-j

uil.

-15

30-j

uil.

-15

20-a

oû

t-15

10-s

ept.

-15

01-o

ct.-

15

22-o

ct.-

15

12-n

ov.

-15

03-d

éc.-

15

24-d

éc.-

15

14-j

anv.

-16

04-f

évr.

-16

25-f

évr.

-16

17-m

ars-

16

07-a

vr.-

16

28-a

vr.-

16

19-m

ai-1

6

09-j

uin

-16

30-j

uin

-16

21-j

uil.

-16

11-a

oû

t-16

01-s

ept.

-16

22-s

ept.

-16

13-o

ct.-

16

$/t

fob China prill fob ME, excl. US market

1st tender closed 10 Apr by STC 510,000 t awarded

2nd tender closed 9 May by IPL 770,500 t awarded

3rd tender closed 19 Jun by STC 850,000 t awarded

4th ender closed 30 July by MMTC 965,000 t awarded

5th tender closed 11 Sep by IPL 784,000 t awarded

6th ender closed 9 Oct by MMTC 405,000 t awarded

7th tender closed 30 Oct by STC 761,000 t awarded

8th tender closed 28 Nov by IPL 1.3 mln t awarded

Prices started to weaken, but large Indian tender provided some support

Indian urea tenders

4

10/27/2016


Tender activity & implications for traded volumes (UREA)

1st tender closed 10 Apr by STC 510,000 t awarded

2nd tender closed 9 May by IPL 770,500 t awarded

3rd tender closed 19 Jun by STC 850,000 t awarded

4th ender closed 30 July by MMTC 965,000 t awarded

5th tender closed 11 Sep by IPL 784,000 t awarded

6th ender closed 9 Oct by MMTC 405,000 t awarded

7th tender closed 30 Oct by STC 761,000 t awarded

0

200

400

600

800

1000

1200

1400

1600

1800

2000

jan

v.-1

5

févr

.-1

5

mar

s-1

5

avr.

-15

mai

-15

juin

-15

juil.

-15

aoû

t-1

5

sep

t.-1

5

oct

.-1

5

no

v.-1

5

dé

c.-1

5

jan

v.-1

6

févr

.-1

6

mar

s-1

6

avr.

-16

mai

-16

juin

-16

juil.

-16

aoû

t-1

6

'000 t

8th tender closed 28 Nov by IPL 1.3 mln t awarded

Urea exports from China

Other origins

2%

from ME 38%

from China 60%

Urea imports in India by origin (2015)

9.9 mln t

Indian urea tenders


More tender-participating countries from the higher risk ranking

Political stability index (-2.5 weak; 2.5 strong), 2014, source The World Bank

Negative / weak Positive / strong

1,0 1,0

0,8

0,8

0,6

0,5

0,4 0,3

0,2 0,1 0,1

0,1 0,1

0,0 0,5 1,0 1,5

New ZealandAustriaFinland

SwitzerlandSingapore

CanadaNorway

AustraliaSweden

NetherlandsJapan

UruguayQatar

DenmarkGermany

PolandUAE

TaiwanSloveniaPortugal

LithuaniaBelgiumHungary

OmanCosta Rica

USANamibia

LatviaItaly

ChileUK

FranceMalaysia

SpainTrinidadZambiaGabon

South KoreaKuwaitBelarus

BulgariaRomania

ArgentinaTurkmenistan

KazakhstanBenin

Greece0,0 0,0 0,0

-0,1 -0,1

-0,2 -0,3

-0,4 -0,4

-0,6

-0,7 -0,8

-0,8 -0,8

-0,9 -0,9

-0,9 -1,0

-1,0 -1,1

-1,2 -1,2

-1,3 -1,6

-1,7

-2,3

-2,4

-2,5 -2,0 -1,5 -1,0 -0,5 0,0

VietnamEcuadorBrazilSouth AfricaSenegalUzbekistanGeorgiaSaudi ArabiaSri LankaBoliviaIndonesiaMoroccoChinaMadagascarJordanPhilippinesNepalMexicoVenezuelaRussiaBangladeshIranThailandTunisiaCameroonIndiaIsraelCote d'IvoireTurkeyMyanmarNorth KoreaColombiaAlgeriaEthiopiaNigerKenyaEgyptMaliUkraineNigeriaCongo (DRC)LibyaSudanPakistanAfghanistanIraqSomalia

5

10/27/2016


Tender activity in the global urea market

UREA

Urea exports tenders Urea imports tenders

Country Company Country Company

Belarus Grodno Azot India MMTC, STC, IPL, MFL, CFL

Egypt Mopco,

Helwan, Abu Qir Turkey

Igsas, Kastamonu, Gubretas, Gentas, Polisan,

AGT, Toros, Camsan

Algeria AOA Sri Lanka

MOA, CIC, Agstar, Haleys, Baurs

Russia Salavat Pakistan TCP

Indonesia Kaltim Bangladesh BCIC

Taiwan TFC

Ethiopia EABC/AISE

Nepal AIC, STC

Central America Incofe, Isaosa, Tepeyac

South Korea Pungnong, Farm Hannong

(ex-Dongbu), Chobi, KG

Malaysia Nafas (DAP - 2014)

Cote d'Ivoire Aprocot

A mix of government-owned and private companies;

Largest tenders in volume are held by Indian companies;

Buying/importing tender volume is much bigger compared to volumes of sales tenders

Often total offered volume is by far bigger than the tendered award/requirement;

Some new urea projects may prefer off-take agreements, rather than tenders

Based on available tender data for 2014-2016 10 Fertecon | Agribusiness intelligence

Tenders in the global urea market – ranking of importers

Global urea trade 49.4 mln t in 2015

9 928

1 382 1 139 707 696 489 408 405 162 90 69

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

10 000

Ind

ia

Un

ited

Sta

tes

Bra

zil

Thai

lan

d

Au

stra

lia

Mex

ico

Turk

ey

Fran

ce

Ban

glad

esh

UK

Ital

y

Ph

ilip

pin

es

Can

ada

Spai

n

Ger

man

y

Vie

tnam

Pak

ista

n

Sou

th K

ore

a

Co

lom

bia

Sou

th A

fric

a

Ch

ile

New

Zea

lan

d

Sri L

anka

Eth

iop

ia

Mal

aysi

a

Taiw

an

Nep

al

Co

te d

'Ivo

ire

‘000 t Highlight denotes the

countries which procure urea on a tender basis,

but ranking is based on

total country imports

31%

6

10/27/2016


Example of an Indian urea tender (volume & awards)

IPL, 28 November 2015 for shipment by 6 January 2016 Supplier firm Optional $/t cfr Port Dreymoor 130

65 65

254.40 255.50 256.90

Gangavaram Mundra NMPT

Transmart 30 255.70 Mundra PIC/Kuwait 35 256.50 Mundra Fertisul 66 66 256.80 KPT, KKR, GGV, Kak Amber 130

65 65

256.90 258.90 259.90

KAK, KPT, GGV, KKR Mundra NMPT

Continental 65 65 257.00 KPT, KKR,GGV, KAK Mundra, Kandla

CHS 100 257.00 258.00 260.00

K’napatnam Mundra

Samsung 60 60

257.50 258.50

KPT, GGV, KKR Mundra

Transagri 40 50

258.30 263.00

Mundra Haz

Global 60 30 60 40

258.30 259.50 260.50 262.20

Mundra Kandla Gangavaram Tuticorin

Koch 40 258.50 Mundra Ameropa 62

62 257.10

259.00 Gangavaram Mundra

Comzest 30 30 30

259.50 260.20 263.00

Mundra Kandla Pipavav

Fertrade 63 257.70 K’napatnam Transglobe 65

65 257.80

261.00 KKR Mundra

Supplier firm Optional $/t cfr Port Rare Earth 65

63 257.90

261.30 K’napatnam Mundra

Bary Chem 120 258.00 260.00

K’napatnam, Gangavaram, KKR Mundra

Allied Harvest 65 258.50 259.50 259.80

K’napatnam, KKR Mundra Pipavav

Agri Commodities

62.5 259.40 260.00

K’napatnam Mundra

Aries 63 63 63

259.40 259.70 259.60

KPT, GGV, KKR, VIZ, KAK Mundra Rozy

Swiss Singapore

60 45 60 60 60

259.50 260.90 260.20 259.50 259.50

GGV, KKR, KPT Vizag Paradeep Kakinada Mundra

Keytrade 36 50 259.50 Mundra

MTPL 60 60 63 60

60 259.90 262.00 259.70

Daewoo 60 260.90 KPT,GGV,KKR,VIZ,KAK

Valency 60 260.00 Gangavaram, Mundra

YUC 60 262.50 K’napatnam

Helm 60 60

262.40 266.40

K’napatnam Mundra

Dragon 60 264.10 264.70

KKR, K’napatnam Mundra, Kandla

Total offered 3.3 million tonnes Awarded 1.3 million tonnes


Tender activity in the global sulphur & sul. acid markets

SULPHUR

Sulphur exports/sales tenders Sulphur imports tenders


Russia Gazprom France Adisseo

Iran IGCC, Raintrade,

Kharg Petrochemical India

CIL, RCF, PPL, FACT, MMTC, IJCC, Andhra Sugar

Taiwan Formosa Brazil Anglo American, Vale

Qatar Tasweeq Vietnam Dinh Vu, Lafchemco,

Duc Giang (2014 – scrapped)

Libya NOC Jordan JPMC, Jifco, IJCC

Kuwait KPC Bangladesh BCIC

Saudi Arabia Yasref New Caledonia Vale

India Reliance Morocco OCP (not any more)

Lithuania Orlen/Mazeikiu Nafta Senegal ICS

Romania Rompetrol, Petrotel Uruguay Isusa

Argentina Meranol

Congo Metorex

Indonesia PT Gresik (in 2014)

Namibia Skorpion Zinc

Chile Noracid

Turkey Toros

Mix of spot & contract/annual (e.g. Gazprom, Adisseo) tenders;

Regular (monthly) and ad hoc tenders; Some companies moved away from

spot tenders to annual contracts recently (e.g. OCP, Gresik, ICS)

Some countries, e.g. Iran, almost entirely sells on a tender basis


SULPHURIC ACID

imports tenders

Country Company

India FACT (tender), PPL (enquiry)

Brazil Mosaic, Yara, Timac, Petrobras

Argentina Bunge

Turkey Eti Maden, Eti Soda

7

10/27/2016


Tender activity in the global nitrates & AS markets

NITRATES FERTILIZERS & AS

Exports/sales tenders Imports tenders


Egypt Abu Qir Turkey Toros, Gubretas

Belarus Grodno Azot India MFL

Argentina Bunge

Indonesia Petrokimia Gresik

(in 2015)

Nitrates represented largely by UAN

Some tenders are often scrapped

Overall volumes are not significant


Tender activity in the global ammonia market

AMMONIA

Exports/sales tenders Imports tenders


Egypt Abu Qir India FACT &

recently PPL

Indonesia Kaltim Indonesia CJ

Algeria Fertial, Sorfert Vietnam Dinh Vu

China BASF

Turkey Petkim

Limited tenders in international ammonia trade;

Smaller volumes tendered mainly; Increased tender activity from India lately

(typical FACT + PPL recently) Often tenders with reserve price

150

200

250

300

350

400

07

-ju

il.

14

-ju

il.

21

-ju

il.

28

-ju

il.

04

-…

11

-…

18

-…

25

-…

01

-…

08

-…

15

-…

22

-…

29

-…

06

-oct

.

13

-oct

.

20

-oct

.

cfr India (weekly prices in Jul-Oct 2016) min max


tender 15-23 Kt

tender 15-23 Kt

8

10/27/2016


Import tenders in the global phosphates market

PHOSPHATE FERTILIZERS (DAP/MAP/COMPLEX NPKs/TSP/SSP)

Imports tenders

Country Company

India RCF, NFL,

Uttar Pradesh Co-op (tried in 2015)

Turkey Gubretas, Igsas, Panko

Indonesia Gresik, Kujang, Petrokimia

Sri Lanka SCAPC, CFC, MOA, Agstar

Nepal AICL

Ethiopia EABC/AISE

Venezuela IPSL

Malaysia NAFAS

Pakistan Fauji

Argentina Profertil

Latin America Incofe

Sudan MOA

Uruguay Isusa

Bangladesh MOA, BCIC (+phos.acid + rock))

Cameroon CNPC

Croatia Petrokimia

Algeria Asfertrade

Kenya MOA, NCPB

Iran ASSC

Mali CMDT

Uniquely to other nitrogen and sulphur products, major tender

activity in global phosphate fertilizer trade is represented on

the buying side only


Import tenders in the global potash market

Similar to phosphate market, major tender activity in global

potash fertilizer trade is represented on the buying

side only

POTASH FERTILIZERS (MOP, SOP)

imports tenders

Country Company

India MMTC, MFL, NFL, RCF

Bangladesh BADC

Indonesia Petrokimia Gresik, Sinar Mas

Iran ASSC

Malaysia FELDA

Mexico Tepeyac

Ecuador Fertisa

Nepal AICL

Sri Lanka MOA/SCAPC, CIC, Agstar


9

10/27/2016


India imports a full range of fertilizers on a tender basis

Urea DAP MOP Sulphur* (*sales & imports tenders)

Phos. acid

Phosphate rock

NPK

MAP

Ammonia

AS (ad hoc)


Indian companies involved in tender activity

Phosphate & complex

ferts

Phos. acid & phos. rock

Potash fertilizers

Sulphur Nitrogen

fertilizers & ammonia

Andhra Sugar CIL Deepak FACT GSFC Hindalco IJCC IPL MFL MMTC MRPL / Mangalore NFL PPL Punjab Markfed RCF Reliance (sales) STC UP Co-op

xxxx

xx

xxx

x

xx

xx

xx

xx

x

x

x

x

x x

x

xx

xx

x

x


10

10/27/2016


Conclusions: estimated share of tenders in global fertilizer trade

Based on available tender data for 2015

17% 15% 7% 6% 4% 2%

83% 85% 93% 94% 96% 98% 100%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Urea Sulphur UAN DAP/MAP MOP Ammonia AN

Tender Non-tender

≈ 18.0 million tonnes were traded

on a tender basis in 2015

(estimates)


Conclusions: observations

Often issuing tender party is represented by government

Import tenders tend to be larger in volumes compared to export tenders

Know your customer & know your supplier

Large number of trading companies taking part in the bidding process

Tenders often help determine forward price direction

India is the largest importing market with tenders

Volume offered in a tender may be bigger than the award/ requirement

The geography of tender participating countries is wide

11

10/27/2016

Informa

Christchurch Court

10-15 Newgate Street

London EC1A 7AZ

+44 (0)20 7017 5000

[email protected]

www.fertecon.com

www.agribusinessintelligence.com

T

E

W

Marina Simonova

Head of Ammonia

Tel: +44 207 551 9946

Mobile: +44 776 813 1069

E-mail: [email protected]

THANK YOU

Fertecon’s fertilizer tender service

is provided in weekly reports

and put together by a team of experienced analysts

and Fertecon’s representatives in India and Singapore

mailto:[email protected]

http://www.fertecon.com/

http://www.agribusinessintelligence.com/

mailto:[email protected]

12

10/27/2016

Kremena TENEV and Hayoung LEE IFC - International Finance Corporation (World Bank Group), USA

Marina SIMONOVA Fertecon, United Kingdom

Lian YAJIE BAIINFO, China

Fertilizer Project Financing and Trade Perspectives

FIRST SESSION

Session Chair: Brent HEIMANN, Arab Potash Company, Jordan

and Chairman of the IFA Technical & SHE Committee

Documents

Importance of tenders in global fertilizer trade · 1 10/27/2016 Marina Simonova Fertecon, United Kingdom Importance of tenders in global fertilizer trade 2 Fertecon | Agribusiness