AMMONIA
U.S. Gulf/Tampa: No major market changes were reported last week, though some parties are at odds over second quarter Tampa business. While some players say they have rolled over prices from the first half at $350/mt DEL, others say they have not – and the jury is still out.
Eastern Cornbelt: Dealers reported few changes to spot fertilizer prices last week, but markets remained bullish due to tight supplies and expectations for heavy spring movement and a big increase in corn acreage. Sources were also talking about upcoming trade shows in the region, which include the Illinois Fertilizer and Chemical Association’s 2007 Meeting and Convention on Jan. 22-24 in Peoria, and the Mid America Ag Show and ACI Annual meeting on Feb. 6-7 in Indianapolis.
Anhydrous ammonia was unchanged at $390-$400/st FOB terminals east of the Mississippi River for cash or prepay tons. One regional supplier was offering forward contract ammonia for February at $395-$400/st FOB in the region last week.
Western Cornbelt: There was little new buying activity reported for fertilizers, and no field movement taking place in the region. Prices remained high, with prospects of heavy spring demand for a big corn and winter wheat crop. It is state trade show time in the region, and dealers were attending the Mo-Ag Winter Convention and Legislative Conference in Lake of the Ozarks, Mo., on Jan. 11-12. The Nebraska Agri-Business Exposition is scheduled for Jan. 16-18 in Omaha, Neb.
Anhydrous ammonia remained at $375-$395/st FOB regional terminals, with the low in Nebraska and the upper end in eastern Iowa. One supplier was offering forward contract ammonia for February at $380/st FOB in Nebraska, $385/st FOB in Iowa, and $395/st FOB in Missouri.
Southern Plains: Anhydrous ammonia was quoted at $330-$375/st FOB in the region, with the low FOB some regional production points and the upper end to dealers FOB pipeline terminals in Kansas. Delivered ammonia in Oklahoma and Texas was quoted at $360-$365/st.
Ammonia postings from Agrium moved on Jan. 1 to $335/st FOB Borger, Texas, $380/st FOB Mocane, Okla., $385/st FOB Conway, Kan., and $390/st FOB Clay Center. Agrium’s delivered ammonia postings in Oklahoma and Texas moved on Jan. 1 to $360/st north of Interstate 40 and $365/st south.
South Central: Anhydrous ammonia was reported at $370-$380/st FOB regional terminals.
Western U.S.: Agrium’s truck-DEL anhydrous ammonia postings were scheduled to firm on Jan. 15 to $435/st in Central California and $440/st in northern California. UAN-32 postings from the company were slated to firm on Jan. 19 to $233/st ($7.28/unit) FOB Sacramento, Calif., $250/st ($7.81/unit) truck-DEL in Central California, and $255/st ($7.97/unit) truck-DEL in Northern California. Agrium’s ammonium phosphate postings in California and Arizona, effective Jan. 12, included MAP at $335/st FOB warehouse or rail-DEL, and 16-20-0 at $255/st FOB warehouse or rail-DEL.
Black Sea: Despite much hype – mostly from producers – it now appears that Yuzhnyy ammonia is softening. Sources report the latest pricing idea from buyers and traders has dropped sub-$280/mt FOB. One Asian source had earlier commented that $280/mt FOB was for February material, but that if a buyer came to Yuzhnyy right now and asked for tons, the only way the material would be made available would be if the buyer were ready to pay $295-$300/mt FOB. The problem is that vessels are not available for prompt loadings, nor is the material.
Reports late last week showed that the near-$300/mt FOB price was more dreaming by producers than actual business.
Sources argued earlier last week that the reason for the big divide in pricing was because February marks the beginning of the seasonal slowdown, and the current line-up is full. Couple this traditional drop in price with warmer-than-expected weather in the United States and lower natural gas prices, and observers are seeing less demand from the United States. At the same time, European demand is off for the same reasons.
The big plus for the area producers is strong demand from OCP/Morocco as China’s demand for DAP – and thus OCP’s demand for more ammonia – grows. Another positive factor for the Yuzhnyy suppliers is the plant situation in the Middle East. With SAFCO 2 and 4 and QAFCO 3 down, material is tight from that region, forcing buyers to look to the Black Sea for their tons.
In addition, players who like to tie the Black Sea price to the Middle East price argue that the jump in prices from the Arab Gulf justifies the higher Black Sea price. While others accept that strong demand is keeping the Middle East price up, the main reason for the spike in prices, they say, is more related to the shutdowns.
Asian sources are hard pressed to nail down an exact price. Current cargoes are just below $280/mt FOB. At the same time, producers are unwilling to talk to anyone except in the $290s/mt FOB. One observer noted that everything is in a state of flux at this time, but the apparent trend is downward in pricing.
One source noted that even though the $290/mt FOB price is the starting point for the producers, no buyer is willing to commit at this level just yet.
Middle East: Shutdowns in SAFCO 2 and 4, along with a stoppage at QAFCO 3, have put a strain on supplies in the area. Sources report producers are now asking $320-$330/mt FOB for material. Asian sources say, however, that this price is high, but not out of the realm of possibility.
One trader noted that with the production problems taking place and strong demand from India and Asia, producers are well within their rights to demand $320/mt FOB and up.
The lack of spot sales in the region makes nailing down an exact price difficult, say sources. Adding to the problem of figuring out where the market stands, sources say tons that should have been loaded from the region are now being sourced elsewhere because of production problems.
The SAFCO 2 plant went down for an unspecified reason. Sources were hoping to see production restarted by this week. The SAFCO 4 plant continues to have “teething problems.” Even representatives of the company are said to be getting frustrated with the on-again, off-again routine of the plant.
The QAFCO shutdown is for “unscheduled maintenance,” say sources.
Because of the shortage of material, producers are unwilling to talk to anyone who does not at least agree to begin at the $320/mt FOB level. Observers say this amount does not look at spot tons, because there are no extra cargoes available for the next few weeks. The pricing ideas everyone is now working with are for February and March tonnage.
For now, the best bet on pricing covers the wide range of what is known – somewhere in the $280s/mt FOB – and what is speculated – somewhere in the $320s/mt FOB.
UREA
U.S. Gulf: Early in the week prices appeared to ease off a bit, with business last week put between $303-$310/st FOB. Sellers were not concerned and said the lower numbers could not be repeated later in the week. While new Sabic product had recently arrived, sources noted that problems with SAFCO 2 and 4 would undoubtedly delay later Sabic vessels. In addition, several pointed to mechanical problems with a vessel bringing in product for Agriliance as another delay. Sellers maintained that buyers are simply waiting until they see product start to move, which could start occurring soon in the Oklahoma market. Once they need to replenish inventories, sellers expect them to be back in the market.
Eastern Cornbelt: Granular urea was steady at $335-$345/st FOB regional terminals, with postings as high as $355/st FOB or rail-DEL in the region.
Western Cornbelt: Granular urea was quoted at $335-$345/st FOB in the region, with the low out of spot Mississippi River locations and the upper number out of Missouri River shipping points to dealers. The market FOB Palmyra, Mo., was tagged at the $340/st level to dealers.
Southern Plains: Several sources reported a little fieldwork taking place last week, including some topdressing activity on what was generally described as an excellent-looking winter wheat crop. One source also said he expects corn planting to be underway by March 20 in his area, weather permitting.
Granular urea was quoted at $330-$335/st FOB in Oklahoma, with forward pricing for February listed from one supplier at the $345/st mark FOB Inola, Okla. Dealer reference pricing FOB St. Joseph, Mo., was also pegged at the $345/st FOB mark last week.
South Central: Granular urea was generally quoted at $330-$340/st FOB regional terminals last week, up significantly from last report, with the low end to national accounts. Most dealer quotes were reported at the $335/st FOB mark or higher in the region. Several sources said movement on wheat will begin in early February, weather permitting.
Southeast: Granular urea was quoted at $330-$340/st FOB most port terminals in the region, with the upper end reflecting the list price FOB Savannah, Ga. One North Carolina source said grass topdressing would be underway as soon as weather conditions allow it.
India: Apparently, some Indian buyers were out and about last week looking at and pricing urea in the Middle East. One trader noted the most likely reason was that IPL needed some tons for an NPK buyer. Others, however, are convinced the buying teams were scouting out prices in anticipation of a tender. In addition, the Secretaries Commission is scheduled to meet this week to begin discussions on urea subsidies. Sources speculate the inquiries for urea could also have been in preparation for these talks.
There are more rumblings out of India that buyers may shift to a monthly or quarterly buying plan. The idea, said one Asian trader, is to spread out the buying to avoid spikes in the prices. He added that if IPL or MMTC were to call tenders now, the already high Middle East price would skyrocket and the softening Black Sea price would suddenly find legs.
For now, Indian buyers are in a box. Farmers and their political allies are complaining there is not enough urea for the current season. At the same time, IPL and MMTC have been asking their suppliers to slow down their loading schedules because of congestion at Indian ports.
It seems, said one observer, that the urea can get to the harbors with no problem. The difficulty lies in getting the material from ship to pier warehouse to inland buyer. All along the supply train, each member claims the problem is somebody else’s.
The importers say – correctly – that they did what they were asked to do: buy more urea. The port operators say they are doing what they can to unload the ships, but with so many ships coming in with fertilizer and grain, the teams are getting overwhelmed. The inland shippers say they would move more material if it came in properly and if they had enough railcars or trucks. Each claims the problem is elsewhere.
Opposition parties are using the local shortages of urea to undermine the government, say industry watchers. They add it is ironic that this shortage is occurring, because IPL and MMTC bought more than enough for the current season.
More material will be needed soon, and so the apparent Indian buyer window-shopping excursion is being taken seriously as a harbinger of spring buying.
Reportedly, the Middle East suppliers, India’s main source, quoted $285-$290/mt FOB for prills or granular. According to one source, the Indian buyers did not reject those numbers out of hand.
Middle East: The producers are now calling the market in the upper $280s/mt FOB, but after a little prodding admit that this is just their pricing idea and that no business has been done at that level. They add, however, that when $285-$290/mt FOB was floated with potential Indian buyers, there were no objections raised.
For now, the Middle East suppliers are sold out. Almost every one of the major suppliers still has at least one large consignment for India from 2006 tenders. The delay in shipping is at the request of the Indians because of offloading port congestion. Some deals were made to sell some of the delayed tons to spot or contracted buyers, with the understanding that later production will cover the cargoes when India is ready for them.
Attempts to recapture material in the $270s/mt FOB are long gone, say sources, but even bids in the $280s/mt FOB for January or February material are going unanswered. The indicated price, say sources, is just that for now – it is merely what the producers are hoping to get. Chances are, said one source, $285/mt FOB will be the lowest price offered when India calls a tender.
When the producers floated their price to the Indians who came calling last week, sources say the $285-$290/mt FOB was for prills or granular. Because India has now moved to a price buyer instead of strictly a prilled buyer, the Middle East suppliers are now using one flavor of urea to boost another. At the same time, however, the buyers are looking to force prices down with the same strategy.
On the producers’ side remains a strong U.S. market. Sources report that in any discussion with a producer, the market in New Orleans comes up repeatedly. The vessels dedicated to moving granular tons from the region to the States back up the producers’ claims. However, as one trader noted, the American buying season is ending soon, and that will leave a potentially large amount of material homeless.
Unless India steps in.
ASSC/Iran closed its tender last week. Reportedly, no Arab Gulf supplier backed any of the offers. Sources say the lack of support was strictly because the producers are oversold for the next two months.
Offers made in the tender show a Black Sea netback in the mid-$250s/mt FOB.
Black Sea: Sources report the price in the Black Sea is holding in the upper $250s/mt FOB. A few reports of prices being paid beyond $260/mt FOB have surfaced, but no one was able to put a buyer and that price together firmly.
Freight rates out of Yuzhnyy and Baltic ports are high enough that the price of the material does not have much room to move in the current market.
If India comes back in soon, said one trader, expect to see the price move up for the tender. Another trader noted, however, that after each Indian tender last year the price from Yuzhnyy crashed.
For now, with the price hovering in the $250s/mt FOB, sources say even if the crash does occur, there is little likelihood the price will go to $200/mt FOB or lower. One trader noted that the days of $200/mt FOB and lower urea are gone for the near future.
Demand is expected to pick up in Latin America in the next couple of weeks along with the Iranian and Turkish buying, and sources say the price could find a weak floor. Once India comes back in, observers expect to see a firmer floor – and even an increase.
Bangladesh: Strikes at Chittagong continue to plague importers. At the same time, BCIC has yet to award for all the tons it needs.
Sources say of the 450,000 mt awarded during the last semester of 2006, only 28,000 mt was delivered. It seems some of the companies that won BCIC awards did not make offers that properly reflected the market conditions at the time. Many had to back out of the deals because they could not get product for the amount awarded.
Industry observers are clear that Bangladesh needs material. The problem, said one trader, is the BCIC procedures. A rival organization, BCAC, has been able to import potash and phosphates with fewer bureaucratic missteps, said one trader.
Pakistan: The country is likely to face a shortage of urea in coming months due to closure of two fertilizer units, according to local reports. The gas utility – Sui Northern Gas Pipeline (SNGPL) – on Jan. 8 ordered two plants located in Multan and Sheikhupura in Punjab Province to shut down their operations to save 100 mmcf of gas, in order to partially bridge the ever-widening gap of 300 mmcf between supply and demand in upcountry areas owing to extremely cold weather. “We have told Pak-Arab Fertilizers in Multan and Dawood Hercules in Sheikhupura to close down their plants, and they have already reduced their consumption by 50 percent,” said a senior SNGPL official. “By Tuesday (Jan. 9), both the plants will be closed down completely.”
The gas supply to the fertilizer companies has been cut off in light of a decision taken by the Economic Coordination Council (ECC) last year. The ECC had decided that the plants would be closed down for their annual general maintenance operations during winter, when the demand and consumption for the fuel reaches its peak. The decision was made in order to provide relief to the export-oriented industries, which have to shut down their production because of suspension of gas supply for days every year. The SNGPL official said the company would immediately reinstate supply to the general industry as soon as the cold wave recedes and demand for gas reduces in the next few days to come.
Even before the shutdown, Pakistan urea manufacturers increased urea prices effective Jan. 1. They increased selling prices by Rs10 per bag. Engro CEO Asad Umar said the increase had been made to partly cushion the inflationary pressures.
Vietnam: Buyers looking to import have to keep adjusting their pricing expectations higher and higher. Just last month buyers had rejected $260/mt CFR bagged as too high, but now the most likely supplier to Vietnam – China – has its price at $280/mt FOB bagged. Even if importers can negotiate a deal that is acceptable to farmers and producers, sources say the main domestic producer will lower its price to such a level that no one will take the imported tons. This tactic of lowering the price of domestically produced urea to ensure no imported tons are economically viable is an old story in Vietnam, and it looks as if it will be repeated in 2007.
NITROGEN SOLUTIONS
Eastern Cornbelt: UAN-32 was pegged at $212-$222/st ($6.63-$6.94/unit) FOB regional terminals. One source reported reference pricing out of Ohio River terminals last week in the $220-$225/st ($6.88-$7.03/unit) FOB range to the dealer.
Western Cornbelt: UAN was tagged at $6.56-$6.88/unit FOB regional terminals last week.
Southern Plains: UAN was quoted at $6.25-$6.43/unit FOB in Oklahoma and Texas, with most dealer quotes reported at the upper end of that range. Kansas sources tagged the common dealer market at the $6.56/unit FOB mark last week.
South Central: UAN-32 was generally quoted at $198-$205/st ($6.19-$6.41/unit) FOB terminals in the region, with reference prices reported as high as $220/st ($6.88/unit) to the dealer in Kentucky. One supplier was offering forward contract UAN-32 at $222.60/st ($6.96/unit) FOB Louisville, Ky., for February.
Southeast: High prices were reported for UAN-30, with most sources tagging the market at $180-$185/st ($6.00-$6.17/unit) FOB Norfolk, Va., and Wilmington, N.C. The terminal price is expected to firm on the strength of new vessel pricing, however; sources quoted the vessel market early in the week at $215/mt C&F, with $225/mt reportedly on the table for the next round of business.
AMMONIUM NITRATE
Western Cornbelt: Ammonium nitrate was up from last report at $260-$270/st FOB in the region. The market FOB St. Joseph, Mo., was tagged at the $263/st level last week.
Southern Plains: Ammonium nitrate was quoted at $262-$265/st FOB the port of Catoosa, Okla.
South Central: Ammonium nitrate was tagged at $250-$260/st FOB in the region, with nitrate barges reported at $225-$230/st FOB the Gulf.
Southeast: Ammonium nitrate was also up from last report, with the current market pegged at $260/st FOB Tampa, Fla., $270/st FOB Wilmington, and $275/st rail-DEL in the Carolinas.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was quoted at $165-$170/st FOB in the region.
Western Cornbelt: Regional sources quoted the granular ammonium sulfate market at $165-$170/st FOB last week, up slightly from last report.
Southern Plains: Granular ammonium sulfate was up $10/st from last report, with the market tagged at $160/st FOB Freeport, Texas, and $190/st FOB Plainview, Texas. Other sulfate postings at Plainview as of Dec. 18 included coarse at $185/st and standard at $175/st FOB.
South Central: Granular ammonium sulfate was quoted at $175-$190/st FOB in the region, up slightly from last report, with the low in Arkansas and the upper end reflecting dealer reference pricing FOB Vicksburg, Miss. The dealer market FOB Memphis was quoted at the $185/st mark last week.
Southeast: Granular ammonium sulfate was quoted at $155-$157/st FOB Hopewell, Va., and Augusta, Ga. Delivered sulfate was $175-$185/st in the region, depending on grade and location, with the upper end reported for delivered granular sulfate in Florida.
PHOSPHATES
Central Florida: Those looking for a quick fix of phosphate from Central Florida will not only need more money this week, but a lot of luck. PotashCorp was booked up late last week through January for DAP and through February for MAP. CF was said to be sold out of DAP through January and MAP until the first week of February, but was said to have small amounts of DAP available for truck delivery. Mosaic may be the best bet to find something for prompt delivery, and that’s where the luck will come in. Mosaic has been attempting to make some prompt sales, which means it will be loaded before the end of the month in order to have an impact on the market index. In order to supply the NOLA DAP barge market, Mosaic has also been doing trans-Gulf shipments, which has diminished its inventories at Tampa. Even if a large amount of phosphates became available, customers would still not be able to get large quantities any time soon. The additional kink in the system is that so much product has already been ordered there were not enough railcars to meet the demand.
“I’m bullish on phosphates,” was repeated so often during last week’s interviews for the market report it began to sound like a political “talking point,” but that wasn’t the case. It was true. Corn, corn, corn. It’s all about corn – how millions more acres will be planted this year, and how yields will be significantly greater than last year now that the carrot of ethanol has been dangled in front of farmers and futures buyers, who have driven up the price per bushel. Whatever, it is working. Sometime during the next few weeks, it is likely the record for the highest price ever posted for Green Markets’ DAP index, which began on Jan. 3, 1977 at $110/st FOB for Central Florida, will be matched or broken. That price was $240/st FOB in the Oct. 10, 2005 issue. The high price in the range last week reached $236/st FOB.
Another factor driving the higher prices for fertilizers, including phosphate, has been the weather – and the winter that never was. That has been the case for the eastern half of the country. Areas of the Northeast have had temperatures in the 70s in January, and farming and golf courses were both benefiting. El Nino and global warming were cited as causes of the unusually warm weather, but whether that weather will continue through winter was only a guess.
Last week prices for Central Florida phosphates continued to rise, and discounts were no longer available. MAP was still exceptionally difficult to find, and that situation will not change for at least a month. The Central Florida DAP range last week increased from $231-$232/st FOB the previous week to $233-$236/st FOB. PotashCorp’s Central Florida reference price was $250/st FOB. In Texas, Agrifos’ truck prices for DAP or MAP were $250/st FOB to $265/st FOB for either. That company also matches the rail prices of other producers, but rail supplies were sold out into February.
U.S. Gulf: If any doubters about the bullish condition of the phosphate market remain, consider this: the high price paid last week for a NOLA DAP barge matched the highest price ever posted for Green Markets’ Gulf market in the past 30 years. The price index for the river system began on June 27, 1977, at $135/st FOB, and hit a high of $250/st FOB in the weeks of Sept. 19 and again on Sept. 26, 2005 – and then again last week. In a sense, the record was broken, because in those two weeks in 2005 the low price in the range was $242/st FOB, while the low price last week was $248/st FOB, but we’ll wait until the top price goes at least $1/st FOB higher before making it official. Future sales for February were running around $253/st FOB last week, which matched the price Mosaic will be seeking for its barges this week.
In the areas served by the Arkansas River, farmers were getting ready to put a top dressing on their replanted winter wheat crops – but that will be mostly nitrogens, like urea. Still, the market for DAP remained strong, as dealers struggle to refill bins they let run empty last year. Yeah, it’s the corn thing, all right – more acres, higher yields, and higher per bushel prices. It’s also about the weather. Areas that normally get very little moisture of any kind have been getting more than enough this winter, and temperatures were warmer. That means farmers can get an early start, and that could begin in the next week or two in some areas that don’t normally start for another couple of months.
Some claim that freight rates should be coming down sometime soon, because the price of a barrel of oil dropped into the mid-$50/barrel range last week and showed signs of increased weakness due to the glut of fuel oil for heating.
Phosphate supplies on the river remained tight, despite the restart of full production at Mosaic’s Donaldsonville’s processing plant, Faustina. Mosaic is so far behind demand and existing orders that most of the additional supplies were gone before they were produced. Mosaic has been selling at least a few barges each week on a prompt basis, having an impact on the market index. CF has little or nothing available for wholesale, because it has been busy loading vessels for export as PhosChem’s newest member. That has thrown its cross-Gulf shipments out of whack. Miss Phos was sold out through the end of January. Few barges were being traded last week, and those that were were commanding top dollar.
NOLA DAP barge prices for prompt delivery took a giant leap forward last week, from $240-$244/st FOB the previous week to $248-$250/st FOB. With Mosaic intending to push its prompt barge price up to $253/st FOB this week, the range will rise again and the record will fall.
Eastern Cornbelt: DAP and MAP were quoted at $265-$275/st FOB regional warehouses, with the low for cash tons out of spot river locations, and the upper end for prepay or forward contract tons. TSP remained at a nominal $240-$245/st FOB in the region, and 10-34-0 was pegged at $265-$275/st FOB.
Western Cornbelt: DAP and MAP remained at $265-$275/st FOB river terminals in the region, with the low for cash market tons and the upper end for prepay. Spot quotes for DAP last week included $267/st FOB St. Louis and Palmyra, and $270/st FOB Brunswick, Mo. TSP remained at $240-$245/st FOB, and 10-34-0 was tagged at $265-$275/st FOB in the region.
Southern Plains: DAP and MAP were both quoted firmly at the $265/st mark FOB Catoosa. One regional supplier was referencing forward contract tons at $275/st FOB Inola for February. 10-34-0 was $265-$275/st FOB, with the upper end to dealers FOB Hiawatha, Kan. There were reports of 10-34-0 available in Texas as low as $250/st FOB last week, but that was not confirmed.
Agrium’s phosphoric acid prices moved on Jan. 1 to $550/st for merchant grade and $560/st for superphosphoric acid in Colorado, Kansas, Oklahoma, New Mexico, and Texas. A $5/st increase is scheduled for both products in February and again in March.
South Central: DAP was commonly quoted at $260-$270/st FOB regional warehouses, with the upper end reported in Kentucky. MAP was reported at $260-$265/st FOB, with the low reported FOB Blytheville, Caruthersville and Vicksburg to the dealer. TSP was tagged at $232-$235/st FOB regional warehouses, where available.
U.S. Export: Yawning and stretching, the export market began to get back to business last week after the long holiday period. The sales volume was modest – only 7,000 mt to Central America – but at a higher price of $260/mt FOB. There was also a rumor of a sale to Pakistan, but the trader, the price, and the quantity were not available. Still, Pakistan, Brazil, Argentina, and Uruguay were said to be making inquiries to PhosChem and others. Pakistan was probably the biggest surprise, because it normally does not buy at this time of year. China will make its mark in January and February, when three panamax vessels each month will be loaded. With the heavy demand from the U.S. domestic market and low inventories, PhosChem plans to push for higher prices from export buyers in its next sale – and it will probably be successful.
With the sale into Central America last week, the export DAP price range moved to $260/mt FOB from the previous week’s $255/mt FOB. Expect prices to continue to rise.
POTASH
Eastern Cornbelt: Potash was quoted at $203-$214/st FOB regional warehouses, with the low quoted out of spot Illinois River points for Russian potash. An Ohio source quoted the granular potash market at a firm $210/st FOB river warehouses in his trade area last week.
Agrium’s warehouse postings for 60 percent muriate of potash firmed on Jan. 11 to $214/st FOB Rock Island, Ill., and Mt. Vernon, Ind., $216/st FOB Danville, Ill., and $217/st FOB Garrett, Ind., Seymour, Ind., Toledo, Ohio, and Saginaw, Mich. The company’s rail-DEL postings for 60 percent “red premium” potash firmed on that date to $222/st in Illinois, Indiana, Ohio, and Michigan.
Western Cornbelt: Potash was quoted at $203-$214/st FOB regional warehouses last week, with the upper end reflecting new warehouse postings. Agrium’s 60 percent potash postings moved on Jan. 11 to $213/st FOB Shakopee, Minn., and $214/st FOB Dubuque, Iowa, and Kansas City, Mo. Agrium’s rail-DEL postings for 60 percent red premium potash firmed to $224/st in Iowa, Missouri, and Nebraska, $222/st in southern Minnesota and Wisconsin, and $220/st in northern Minnesota.
Southern Plains: Potash out of regional warehouses was quoted in the $205-$210/st FOB range last week. At the mine, postings were still said to be in the $192-$198/st range FOB Carlsbad, N.M., although some speculated that an increase was likely.
South Central: Potash was generally quoted at $198-$203/st FOB regional warehouses, depending on location, with reference pricing as high as $210/st FOB in Kentucky out of Ohio River terminals. One Arkansas source quoted replacement costs for barge-DEL potash in the upper-$180s/st for import tons.
Agrium’s rail-DEL postings for 60 percent red premium potash firmed on Jan. 11 to $230/st in Tennessee and Kentucky.
Southeast: Dry potash was firm at $217-$230/st DEL in the region, depending on grade and location. Agrium’s 60 percent potash postings moved on Jan. 11 to $228/st FOB Mulberry, Fla., and Lewistown, Pa. Rail-DEL postings for 60 percent “red premium” potash firmed on that date to $230/st in Alabama, Georgia, the Carolinas, Florida, and Virginia.
Northeast: Agrium’s rail-DEL postings for 60 percent “red premium” potash firmed on Jan. 11 to $230/st in W. Virginia, Delaware, Maryland, New Jersey, New York, and Pennsylvania, and $233/st in Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island, and Vermont.
Vancouver: Price negotiations between potash producers and China are now well underway. The idled Uralkali Berezneki plant in Russia will obviously come into play on the side of sellers. Already, reports were that a $50/mt increase is being sought from Brazil – $25/mt as of Feb. 1, and another $25/mt March 1.
SULFUR
Tampa: Before and shortly after negotiations began for first quarter sulfur prices, it appeared the parties would reach an agreement relatively early in the game. Everyone agreed there was more than enough sulfur to go around, and the world market was dismal. When PotashCorp asked for a reduction of only $6/lt, instead of the usual double digit drop it normally seeks, the belief of an early settlement seemed certain. Then, Mosaic tossed in the monkey wrench, asking for an $8/lt rollback. Just about that time, the world market began to stabilize – and maybe more up a bit. Refineries started taking turnarounds, and sulfur supplies seemed to be reaching a balance and moving in the other direction, at least for the short term. Last week sulfur producers were holding firm for a reduction of between $2 and $3/lt, and Mosaic was showing no signs of capitulating. As of last week, this round of negotiations will likely be protracted, possibly to the point that accounting departments in both industries may soon be burning their negotiators in effigy.
Meanwhile, more refineries were reducing their sulfur output as a result of turnarounds. Valero began turnarounds on two of its refineries, one at Port Arthur and the other at Wilmington near Long Beach.
Vancouver: A CN derailment has reduced the flow of sulfur to ports in Vancouver to a crawl, and supplies there were already low. The situation was not expected to improve for at least two weeks. New contract prices out of Vancouver should be available soon, but it was known that China agreed to slightly higher prices. However, Canadian oil producers were still losing money on sulfur sales due to high freight costs, both for rail and oceangoing.