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Importance of tenders in global fertilizer trade · 1 10/27/2016 Marina Simonova Fertecon, United...
Transcript of Importance of tenders in global fertilizer trade · 1 10/27/2016 Marina Simonova Fertecon, United...
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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
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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
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Wide geography of tender-participating countries
in fertilizers & raw materials (sulphur, acid, rock)
Based on available tender data for 2014-2016
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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)
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Tender activity & implications for international prices (UREA)
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$/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
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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
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'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
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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
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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
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-2,5 -2,0 -1,5 -1,0 -0,5 0,0
VietnamEcuadorBrazilSouth AfricaSenegalUzbekistanGeorgiaSaudi ArabiaSri LankaBoliviaIndonesiaMoroccoChinaMadagascarJordanPhilippinesNepalMexicoVenezuelaRussiaBangladeshIranThailandTunisiaCameroonIndiaIsraelCote d'IvoireTurkeyMyanmarNorth KoreaColombiaAlgeriaEthiopiaNigerKenyaEgyptMaliUkraineNigeriaCongo (DRC)LibyaSudanPakistanAfghanistanIraqSomalia
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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
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‘000 t Highlight denotes the
countries which procure urea on a tender basis,
but ranking is based on
total country imports
31%
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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
12 Fertecon | Agribusiness intelligence
Tender activity in the global sulphur & sul. acid markets
SULPHUR
Sulphur exports/sales tenders Sulphur imports tenders
Country Company Country Company
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
Based on available tender data for 2014-2016
SULPHURIC ACID
imports tenders
Country Company
India FACT (tender), PPL (enquiry)
Brazil Mosaic, Yara, Timac, Petrobras
Argentina Bunge
Turkey Eti Maden, Eti Soda
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Tender activity in the global nitrates & AS markets
NITRATES FERTILIZERS & AS
Exports/sales tenders Imports tenders
Country Company Country Company
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
Based on available tender data for 2014-2016 14 Fertecon | Agribusiness intelligence
Tender activity in the global ammonia market
AMMONIA
Exports/sales tenders Imports tenders
Country Company Country Company
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
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Based on available tender data for 2014-2016
tender 15-23 Kt
tender 15-23 Kt
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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
Based on available tender data for 2014-2016 16 Fertecon | Agribusiness intelligence
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
Based on available tender data for 2014-2016
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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)
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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
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x
x x
x
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x
x
Based on available tender data for 2014-2016
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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)
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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
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Informa
Christchurch Court
10-15 Newgate Street
London EC1A 7AZ
+44 (0)20 7017 5000
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
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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