London, 1 October (Argus) — China"s SOP exports continue to dwarf levels, while MOP imports are up by nearly a third on the year, which will slow the pace of contract negotiations as the country reports a drop in MOP demand and ample supply.
China"s SOP exports have risen by nearly 5,000pc so far this year, as the impact of aremoval in export tariffsopens up the international market. It is displacing tonnages that other global producers have previously been awarded in countries including Iran, which received more than 100,000t from China. Myanmar (Burma), Mexico, South Africa, Chile, India and Peru all received more than 10,000t of SOP from China in January-August.
SOP exports in January-August reached 255,000t, up from just over 5,000t in the same period a year earlier.
MOP imports were at 6.8mn t in January-August, up by 31pc on the year. Most imports for the contract period rolled into as annual contracts were not signed until September , compared with July in . Imports from September-December were at 2.3mn t. Deliveries to China this year fell to their lowest in August, at 461,000t, as suppliers completed -19 annual contract obligations.
China usually buys tonnages on an annual basis, typically agreeing a contract price to supply 5mn-7mn t. But China appears to be in no rush to settle its annual contract this year, which expired in June.
Port stocks of MOP are at more than 3.2mn t — although technological innovations at buyer level have made procurement of MOP easier from ports than in previous years — and demand is slowing amid low NPK demand and as a result of African swine fever cutting the number of hogs in China requiring soybeans for food. China could comfortably delay contract talks until as a result of ample supply and falling demand.
Some of China"s leading MOP importers have suspended seaborne arrivals from September until new annual contracts are signed, mindful of the mounting port stocks and slow domestic consumption. The decision to halt imports by sea could be problematic for producers if they had expected contracts to be settled by now. But global suppliers are planning to ship 500,000-600,000t of MOP to China"s bonded warehouses in August-December, according to market participants.
Uralkali"s rail exports to China stopped in June, and have yet to restart. January-August rail export tonnages to China were at 510,000t, compared with 707,000t in the same period of .
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