U.S. Gulf: Potash barge prices continued to firm. The last done business was now called $367-$368/st FOB, with new seller offers at $375/st FOB. Sources reported virtual panic at some inland locations, where buyers were afraid they would not be able to source potash in the near term.
Many said the higher price ideas were demand driven, and not due to higher producer postings. Some said major producers are behind on deliveries. In addition, Agrium has its Vanscoy mine down for unexpected repairs and a planned tie-in for its major upgrade (GM Aug. 4, p. 11). As a result, the company expects the total outage to take 3-4 weeks longer than the originally planned 14-week turnaround.
In the second half, Agrium expects gross profit from potash to be a negative $40 million, and it expects to have to purchase a significant amount of potash in the second half. Purchases will drop off in the first quarter as it adds new capacity. It is targeting full-year 2015 production of 2.1 million mt, and once that is achieved it does not expect any purchases.
Correction: The potash barge price for the Aug. 4 issue p. 5 Price Scan should have read $362-$367/st to reflect what was reported in the text.
Eastern Cornbelt: Potash pricing from producers was firm at $390-$400/st FOB regional warehouses in the Eastern Cornbelt, depending on grade and location, with inventories described as thin. As the week progressed, however, there were reports of some suppliers moving to the $410/st FOB level for red and $417/st FOB for white granular tons.
Western Cornbelt: Sources continued to report low inventories for potash, urea, and other products. “Logistics are still slowing things up,” said one contact. “A month ago it was high water. Now we’re fighting low water, plus slow rail service.”
Low potash inventories were of particular concern, with reports of firming prices at inland warehouses as concerns grow that replacement tons will simply not be positioned in time for fall demand. “We have seen significant uptake in orders this week,” said one source. “So demand has picked up, and with that prices seem to be moving up.”
While warehouse postings from potash producers remained at $390/st FOB for red and $397/st FOB for white granular, some secondary suppliers in the region moved their dealer prices up to $410/st FOB for red and $417/st FOB for white as the week progressed.
“Producers have zero to sell at any price, so basically are not taking any new orders,” said one regional contact. “Word is that they will be at least 30 days behind, and probably more like 45-60 days behind trying to deliver summer fill. That puts them still delivering summer fill in November.”
The SOP Magnesia market was tagged at $465/st FOB in Iowa in early August.
Northern Plains: Potash pricing FOB Saskatchewan mines remained at $345/st for standard, $350/st for granular, and $357/st for soluble sales to U.S. customers, with delivered pricing in the North Dakota market pegged in the $390-$400/st range.
Sources quoted the granular potash market also at the $390-$400/st FOB level out of regional warehouses in August. Some suppliers, however, were reportedly talking of a price hike for October and November shipments, with warehouse prices moving to the $410/st FOB level for red and $417/st FOB for white granular.
The SOP Magnesia market was quoted at the $465/st level FOB Winona, Minn.
Great Lakes: The potash market was quoted at $390-$400/st FOB warehouses in the Great Lakes region depending on grade and location, with inventories described as thin. Wisconsin sources said pricing for October/November shipments was up