AMMONIA
U.S. Gulf/Tampa: The Tampa and NOLA markets were reported to be quiet last week. One player has done $360/mt DEL for the entire month of February, and that number may be the odds-on favorite to continue throughout second half February. In the meantime, the gas curtailment in Trinidad continues to have little impact on nitrogen production.
Eastern Cornbelt: Anhydrous ammonia pricing had reportedly firmed significantly to $415-$430/st FOB in the region, with postings from several suppliers moving to the $335/st FOB level or higher last week. Agrium’s ammonia postings in the region moved up significantly on Feb. 6, to $445/st FOB Cincinnati/Finney, Ohio, and $435/st FOB Illinois shipping points at E. Dubuque, Niota, Meredosia, and Marseilles.
Western Cornbelt: The ammonia market was also moving up on the strength of higher postings. Sources tagged the market at $405-$415/st FOB regional terminals for cash or prepay, with the upper end reflecting dealer reference pricing FOB Palmyra, Mo., and several other terminal locations. The low was reported in Nebraska and at some Iowa terminals, with one source saying that new quotes to potential buyers were now often accompanied by the caveat that the price was “subject to confirmation.”
Agrium’s postings for anhydrous ammonia firmed significantly on Feb. 6, to $430/st FOB E. Dubuque/West, Iowa; $425/st FOB Early, Iowa, Garner, Iowa, Whiting, Iowa, Greenwood, Neb., Hoag, Neb., and Mankato, Minn.; $420/st FOB Clay Center, Kan.; $415/st FOB Conway, Kan.; $410/st FOB Mocane, Okla.; and $400/st FOB Borger, Texas. Delivered postings in Texas and Oklahoma from the Borger plant location moved on that date to $425/st north of Interstate 40 and $430/st south.
Agrium’s ammonia postings in the Leal, Velva, Grand Forks, and Beulah sales area in North Dakota moved up on Feb. 6 to $437/st FOB and $455/st DEL.
California: Anhydrous ammonia remained at $430-$435/st DEL in the state.
Pacific Northwest: Ammonia pricing had firmed considerably from last report. The market was quoted at $440-$460/st in Montana, with the upper end reflecting new list pricing. Delivered ammonia in the rest of the region was pegged at the $475/st mark before discounts, and one supplier was listed firmly at the $420/st mark FOB Washington terminals for the net price to dealers.
On Feb. 2, Agrium’s reference price for anhydrous ammonia increased to $460/st truck-DEL in Montana and northern Wyoming, and $475-$495/st DEL in Idaho, Oregon, and Washington, with the upper end in northern Idaho and Washington and Oregon east of the Cascades. Aqua ammonia postings from the company firmed on that date to $124/st FOB Central Ferry and Finley, Wash.
Western Canada: The anhydrous ammonia market was quoted at $711-$756/mt DEL in the region, with the upper end reflecting new dealer list pricing that went into effect in late January. Another round of increases was slated for Feb. 9, however, with reference levels expected to firm to as high as $773/mt DEL.
Black Sea: Asian sources report the market is holding even. Strong demand is expected to push the price well into the upper $280s/mt FOB. As of last week, however, the price remained in the low-to-mid $280s/mt FOB.
Besides strong demand prospects from American and European buyers, sources in Asia say interest from Korea and Taiwan is helping fuel the price increase.
Long gone are any tons in the $270s/mt FOB. Deals cut last week for February loadings were at $280-$282/mt FOB. The $285/mt FOB is reportedly the new mark, and should be achieved this week.
March business is expected to be even stronger.
Middle East: Transammonia reportedly has completed another deal that puts the market firmly at $330/mt FOB. The deal, reportedly from Fertil for IFFCO/India, was pegged at $330/mt FOB. Asian sources say opening offers are now coming at $335/mt FOB.
With demand from Asia and India so strong, sources say there is little to stop the producers from getting their wish.
Asian sources say Trammo has been going around the region getting as many tons as it can from whoever will sell because of a shutdown by an Iranian plant.
Even with all the Sabic facilities operating, sources say the region’s supply is tight. Reportedly, Sabic is using all the output from its Safco IV facility to pay back Mitsui the tons it borrowed during the past few months in swap deals. One Asian source noted it would not be until late April or early May before all the swapped tons are paid back.
With Asian and Indian buyers aggressively looking for material and the region’s producers still trying to build up inventory after a series of crippling shutdowns, sources say the price should continue to edge upward.
For now, sources peg the market at $325-$330/mt FOB, with a very real possibility that by next week $330/mt FOB will be a dream.
Asia: Demand remains strong out of Taiwan and South Korea as industrial buyers bring their plants up from turnarounds.
While the major buyers are taking their basic needs under long-term contracts, sources say they are also hoping to secure additional tons – also on a formula basis.
The unexpected shutdown due to storm damage of a producer in Japan is forcing a buyer to look offshore for a while. Sources report a series of small cargoes – less than 1,000 mt each – will be imported from South Korea. The size of the shipments is more a nod to the limited ammonia receiving facilities than to the actual need for ammonia.
One source familiar with the situation said the producer has not released any information as to when the plant will be back up.
UREA
U.S. Gulf: Phosphates took center stage early last week, pushing urea barges off to the side. By Thursday, however, urea was again back in vogue and trending higher. Reports were that prompt barges began the week in the low $320s and moved up to $328-$330/st FOB by the end of the week. Quotes for March were $335/st FOB.
Imported prills were reported still trailing granular by a large margin, with the last done reported around the $290-$295/st FOB range, and product now quoted at $300/st FOB.
Eastern Cornbelt: Granular urea was pegged at $355-$365/st FOB, also up from the prior week. Reference levels were as high as $370/st FOB and $375/st DEL in the region.
Western Cornbelt: Most sources tagged the regional urea market at $350-$360/st FOB terminals, up slightly from last report, with delivered urea quoted at $373/st in Nebraska from Oklahoma shipping points. Reference prices were in the $363-$365/st range FOB Minneapolis, Minn. Sources said the Inola, Okla., urea market had firmed to $345-$350/st FOB.
California: Granular urea in California was tagged at a firm $340/st FOB and $355-$365/st DEL last week, with several sources speculating that another round of price hikes was on the way.
Pacific Northwest: Granular urea was quoted in a broad range at $340-$380/st in the region, with the low reported for spot tons sourced from Portland, Ore., and the high reflecting new list prices from producers. A Montana source tagged the current market there in the $360-$365/st DEL range, based on new reference levels.
Effective Jan. 29, Agrium’s granular urea postings increased $15/st to $375/st FOB Glade, Wash., Kennewick, Wash., Warden, Wash., and Wilson, Wash.; $362-$367/st DEL in Montana and Wyoming, depending on location; $380/st DEL in southern Idaho and Oregon’s Malheur County, and from the company’s warehouse and plant locations in Alberta and Oregon to points in Washington, northern Nevada, northern Idaho, and Oregon excluding Malheur County; $385/st DEL in northern and central Utah; and $390/st DEL in southern Utah.
Western Canada: Granular urea pricing was up from last report, with the regional market quoted at $480-$505/mt DEL. Another $10/mt increase was scheduled for late in the week.
Black Sea: If the big buyers in India and Pakistan hoped that waiting until March to call their tenders would force the price down, they got a shock last week on the heels of the ASSC/Iran tender. Sources report that Keytrade sold ASSC material at netback of $290-$295/mt FOB.
Other trading houses reportedly continued the run on material. Sources now report that few tons for February and March are outside the hands of traders.
The run-up in prices in Yuzhnyy kept Asian traders reeling. Many traders around the globe had initially viewed the run-up in prices that started a month ago as a blip that would ease off once mid-February rolled around. Now with the first ASSC tender done, another expected this week, and India and Pakistan still to enter, sources are still looking for any signal the price might see a downturn soon.
Sources say Pakistan will need 400-500,000 mt – at a minimum – April through June. At the same time, India will most likely call for 1 million mt for 400-450,000 mt each month for the rest of the year. Then tack on other business to the Philippines and other buyers and, say sources, demand will put real pressure on supply.
For now, the price is pegged at $295-$305/mt FOB. One Asian trader noted that because so many tons for February and March are now in the hands of traders, the price should continue to rise.
Following the last round of Indian tenders in 2006, sources say many of the traders took a financial bath. This time around, they say, the red ink of the last quarter 2006 should be replaced by strong sales in the first and second quarters of 2007.
Middle East: Riding the rising tide of prices in Yuzhnyy, the Middle East price has also jumped. Sources report Sabic concluded business with ASSC/Iran at $310/mt FOB for prills. Even if the usual $5/mt is discounted from the Iranian price, sources point to a $10-$15/mt jump in just one week. This deal comes on the heels of Sri Lankan buyers accepting material at the $290/mt FOB level.
One Asian trader noted that the buyers in Iran and Sri Lanka represent subsidized markets. Buyers who have to look at making local sales without government assistance are trying to resist the price increases, but are failing in their efforts.
With Pakistan and India – two more subsidized markets – poised to re-enter the market, producers see little incentive to lower prices.
The only mitigating situation is India’s willingness to take prills or granular, said one observer. Even with that willingness to let the two flavors compete against each other, sources say the Indians will have to face much higher prices than they expected even three weeks ago.
Producers expect to take the bulk of the Pakistan and Indian business. Sources estimate that Pakistan will need to take about 200,000 mt a month April through June. Add to that Indian demand of about 400,000 mt a month for the rest of the year.
Some in the industry suggested producers might be willing to be aggressive in their pricing ideas to secure most of the awards for these shipments. To do so, they argued, would ensure a steady flow of tons and a full order book. Others were more skeptical that the producers would allow themselves to be captured to just these two markets – plus the United States for granular. The producers, these observers noted, might prefer to have a healthy share of the contracts, but leave enough tons on the side to handle spot deals that would pop up around the globe.
For now, say sources, supply is tight as shipments covering previous tenders and the annual American demand get covered.
Egyptian producers are now also suggesting new pricing levels of $310-$320/mt FOB. If they succeed, sources say that will only mean increased prices out of the Arab Gulf.
For now, granular urea remains slightly more dear than prills. Sources peg the prilled market at $295-$305/mt FOB and granular at $300-$305/mt FOB, but these prices are expected to be surpassed quickly.
India: Sources report IPL is letting traders and urea producers know that it is working to solve the port congestion problem that continues to plague urea deliveries. Reportedly, some ports will be dedicated to urea deliveries and others to grain.
For the past several months, grain vessels have taken priority over urea ships. The result has been a number of vessels sitting at anchor or loadings in the Middle East being delayed.
All told, sources expect Indian buyers to take 400-450,000 mt of urea each month for the rest of the year. The big question for traders and producers is how the buyers will handle the purchases.
The smart money is now on IPL and MMTC booking steady monthly shipments for the whole year in the next month or so. The arrangement for regular shipments should take the “shock factor” out of the Indian purchases, said one trader. Another called it the “surprise factor,” but they both meant the same thing – no violent price shifts.
One observer noted that if India were to come in for one set of cargoes next month but not take enough to cover the whole annual requirement, traders and producers would anxiously await the next tender – as they did last year. By booking the whole year in advance, said a trader, everyone can end up with a more smoothly operating shipping and delivery schedule.
But, as one trader noted, that is what the “smart money” is saying. Too often, he noted, buyers and sellers don’t always do what is “smart.”
The problems of getting urea to the fields remain a political hot potato.
Local area media report the opposition party in the Bhopal region is demanding an investigation into the government’s failure to deliver urea as promised to the area.
The subsidies for urea also remain a problem. Media reports say the government now expects to pay about US$6.82 billion (Rs 30,000 crore) in subsidies to urea manufacturers and importers during the fiscal year to start March 1. This amount compares to the US$7.7 billion already paid for the current year and the approximately US$1 billion still owed by the government in subsidies.
Vietnam: Reportedly, Phu My was dangling some Chinese material for export last week. When firm bids were placed, the manufacturer backed off. Sources say the tons came from cross-border trade rather than material shipped late last year before the export duty was doubled.
Asian sources say to publicly sell the tons could prove embarrassing to Phu My. Reports continue to circulate that fertilizer smuggling across the Vietnam-China border is increasing. China is actively trying to plug the holes, but the lure of offshore sales at a higher rate than what can be earned in domestic sales remains attractive.
China: Beijing wants urea manufacturers to focus on the domestic market. Sources say this is not a major problem for many producers, but there are repeated reports of material being smuggled into Vietnam.
Pakistan: TCP is expected to call its tender in early March. Sources estimate the company will need to import about 200,000 mt each month for April through June. One trader noted that figure is a compromise. The bulls say the number will be closer to 350,000 mt a month, while the bears say 150,000 mt is the more likely number. No matter how much is needed, however, sources are confident that a tender will be called by the first half of March.
Bangladesh: Local media reports numerous cases of urea being smuggled out of the country to neighboring Myanmar. Traders in the region confirm the ongoing problem. Sources say the government is tackling the problem on two fronts, both arresting the smugglers and taking steps to tighten border security. In addition to the smuggling, the government is cracking down on vendors pushing off outdated fertilizer. A raid early last week netted a large quantity of products described as adulterated fertilizers and pesticides or material past their effective dates.
NITROGEN SOLUTIONS
U.S. Gulf: The most recent business was reported last week at $208-$210/st FOB ($6.50-$6.56/unit), though there was some speculation that lower numbers may have been available earlier in the week. Sellers were reportedly quoting $212-$215/st FOB for the next round of business.
Eastern Cornbelt: UAN-28 was pegged at $200-$210/st ($7.14-$7.50/unit) FOB regional terminals, with reference levels reported at the $220/st ($7.86/unit) FOB level at some inland shipping points.
Western Cornbelt: UAN pricing also continued to firm. The UAN-32 market was quoted at $228-$240/st ($7.13-$7.50/unit) FOB terminals for cash or prepay, with the low reported in Nebraska. A Missouri source pegged the dealer price at the $230/st ($7.18/unit) FOB level out of river locations last week. Reference prices were as high as $7.73-$7.81/unit FOB in the region.
California: UAN-32 pricing had firmed to $230-$240/st ($7.19-$7.50/unit) FOB, with delivered solutions tons quoted at $255-$265/st ($7.97-$8.28/unit) in the state. One supplier was reportedly scheduled to move to the $245/st ($7.66/unit) FOB level at mid-month.
Pacific Northwest: UAN-32 was quoted in a broad range at $235-$265/st ($7.34-$8.28/unit) DEL in the region last week, with the low quoted from western producers and the upper end for railed tons from Midwestern shipping points.
Western Canada: UAN-28 was pegged at $301-$317/mt ($10.75-$11.32/unit) DEL. After Feb. 9, sources said the regional range would likely firm to $308-$323/mt ($11.00-$11.54/unit) DEL.
AMMONIUM NITRATE
U.S. Gulf: The most recent barge sales continue to be reported within the $245-$248/st FOB range, with not much new activity last week. There were reports of forward business (March-April) selling at lower numbers, though reports were that this was lower grade imports.
Western Cornbelt: Ammonium nitrate was up as well at $280-$285/st FOB in the region, with delivered nitrate quoted at $288/st in Nebraska from Arkansas River shipping points. Effective Feb. 3, Terra’s ammonium nitrate postings moved up to $275/st FOB Yazoo City, Miss., and $285/st FOB McComb, Miss.
California: No market was reported for ammonium nitrate in the region. CAN-17 remained at $210/st FOB to dealers, with reports of a $10/st increase slated for mid-February.
Pacific Northwest: Ammonium nitrate was pegged at $310-$320/st DEL in the region, up approximately $10/st from last report. No change was reported to the CAN-17 market.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was tagged at $180-$190/st FOB in the region, up significantly from last report.
Western Cornbelt: Granular ammonium sulfate was quoted at $185-$190/st FOB and in tight supply, with another near-term increase likely. Agrium’s rail-DEL ammonium sulfate postings, effective Feb. 2, included $195/st in Nebraska, Minnesota, Wisconsin, and the Dakotas.
California: Ammonium sulfate was quoted at $170-$180/st FOB, with delivered sulfate tagged at $175-$190/st, depending on grade and location.
Pacific Northwest: Granular ammonium sulfate was also on the rise at $185-$190/st FOB and $190-$195/st DEL in the region, up roughly $20/st from last report. Agrium’s ammonium sulfate postings also firmed on Feb. 2 to $190/st FOB warehouse and $195/st DEL in Washington, Idaho, Oregon, Montana, and Wyoming.
Western Canada: Ammonium sulfate was also starting to see firming prices amid talk of the potential for tight spring supplies. Granular sulfate was quoted at $292-$297/mt DEL in the region, with an increase to $302-$307/mt DEL scheduled for Feb. 9.
PHOSPHATE
Central Florida: If buyers can find it, the cheapest place to buy phosphates, DAP or MAP, was Central Florida last week, where prices only rose a mere $20/st FOB – a real bargain. The biggest anchor on the Florida market has been availability, because inventories amount to not much more than floor sweepings. Even if producers were able to jack up their supplies, there were not enough railcars to move the product to customers. One trader who sells out of Central Florida made a sale last week into Ohio at a delivered price that would be a bargain on the river system, where prices were running $40/st FOB higher than Central Florida.
The supply situation in Central Florida was so tight last week that producers were having trouble selling truckloads of phosphates, even for the local market. Normally, trucks are the easiest to obtain.
Last Monday, PotashCorp announced it was raising its Central Florida referenced price from $260/st FOB to $270/st FOB that day, and will increase the price another $10/st FOB to $280/st FOB today (Monday, Feb. 12). Sources said PotashCorp was likely to kick up its price even higher very soon.
CF issued a reference price of $265/st FOB for February, but had nothing to sell for that month. The price the company was asking for March was $280/st FOB and $285/st FOB for April, but buyers would be lucky if they can score, considering how low inventories were.
Mosaic was asking $270/st FOB for prompt sales, but had nothing to sell on a prompt basis. Rather than accepting such a paltry price, the company was strongly considering doing some across-the-Gulf shipments to take advantage of the higher price on the river.
Another factor cutting into domestic supplies has been sales on the export market, where prices were also at record levels. However, some in the industry were wondering why PhosChem was selling on the export market at prices below what can be realized on the river. The only realistic explanation would be the existing contracts, such as the one with the Chinese co-op, are based on the export price index.
As farmers plan to turn more acres into corn production, the amount of soybeans that will be planted has fallen. As a result, the price for soybeans has been rising quickly and was nearing $7.50/bushel last week. Corn, due to the demand for ethanol, was also high and going higher. Therefore, farmers don’t seem to care how much they pay for fertilizers, as long as that results in greater yields and more money in their pockets. Still, the high price of fertilizers, especially phosphates and urea, has been slow to be reflected at the dealer level – at least until this week. If farmers start to balk at the price, phosphates and other fertilizers could be affected. So far, that has not happened.
Railcar sales of DAP were made at $265/st FOB, and early in the week railcars of DAP were sold at $269/st FOB plus change. The Central Florida price range for the week – and another new Green Markets record – was $265-$269/st FOB, up from the previous week’s record index price of $245-$255/st FOB. Prices were likely to go higher this week, as long as new sales are made. PotashCorp’s Central Florida reference price increased to $270/st FOB, but will go to $280/st FOB this week. In Texas, Agrifos’ truck prices for DAP or MAP were $275-$280/st FOB. That company also matches the rail prices of other producers, but rail supplies were sold out through March.
U.S. Gulf: The second stage of the rocket carrying the Gulf’s river NOLA DAP barge market fired last week, and phosphate prices soared into the outer atmosphere. Last week, few doubted the price of NOLA DAP barges would hit $300/st FOB at some point this season, but by the end of last week that was a bargain. On the low end of the Green Markets index, the price jumped another $29/st FOB and showed no signs of slowing down. The price was going up so fast last week that some traders pulled their barges out of the market and planned to wait until the TFI meeting in Dallas Feb. 12-14, with the expectation they could get even more.
For traders who bought at fixed prices a month or more ago, profits of $50/st FOB were easily achievable by the time they actually took delivery. Most of the sales for prompt delivery made last week were by traders who had a lot to gain. Only a few said they planned to keep what they bought for their own warehouse operations.
Meanwhile, warehouse operators were struggling to keep up with barge prices. In some cases last week, it was far cheaper to buy tons in place at warehouses than buying barges. At one operation at Inola, the owner increased the price of DAP to $300/st FOB last Monday from $280/st FOB two weeks earlier, then $305/st FOB last Wednesday and $310/st FOB last Thursday – and will set the price at $315/st FOB this Monday. Another operator at Inola was increasing the price of DAP from $315/st FOB to $330/st FOB, and MAP was set at $335/st FOB. However, the last referenced warehouse operator said, “We are trying to price ourselves out of the market,” at least until after the TFI meeting this week. Still, another set DAP prices for their Midwestern warehouses last week at $315-$330/st FOB, but added that warehouse prices will have to be adjusted to reflect the high-priced barge market within the next 60 to 90 days.
“At this point, farmers don’t care (what the price of fertilizer is),” one source said, “but at some point they will. In my experience, when that happens, phosphates are impacted the most.”
Another noted that the rapid rise in phosphate prices was the result of buyers pushing it up, not the sellers. That was the reverse of the urea market, he said, where producers were responsible for the higher prices.
A trader commented that every time he made a sale he felt he had made a mistake, because the price was higher on the next sale. Forward sales were a tough call for sellers last week because of the skyrocketing prices. Sales for March were made as low as $308/st FOB early last week but had climbed to $315/st FOB later in the week, and prices of $320/st FOB were being offered. One prediction held that the price of DAP might rise to as much as $350/st FOB before the end of the season.
Mosaic, which had little to sell on the river last week, was considering making across-the-Gulf shipments to take advantage of the higher-priced barge market. CF was said to be sold out of DAP through March and MAP through April. CF’s asking price for both products was $305/st FOB for March and $310/st FOB for April.
The B&N railroad was said to be increasing freight rates out of Pasadena by 15 percent on March 1, which will further push up the delivered price.
The Gulf’s NOLA DAP barge price range last week increased to $303-$310/st FOB from the previous week’s range of $274-$275/st FOB. Prices this week were likely to go even higher.
Eastern Cornbelt: The DAP and MAP warehouse markets took a big increase last week on the strength of historically high barge pricing at the U.S. Gulf and for railcars out of Central Florida. Tight supplies and high demand were fueling the rise, as sources continued to talk of heavy spring usage and a big increase in corn acreage.
Sources said DAP was available early in the week in the low-$300/st FOB range out of river locations in Illinois, but a source at midweek quoted the dealer price firmly at the $325/st FOB mark at Albany, with MAP at $330/st FOB to the dealer. No current pricing was reported for TSP in the region. 10-34-0 was quoted at $285-$295/st FOB, also up from last report.
Western Cornbelt: An upward price swing of at least $30/st in the warehouse market for phosphates had numerous sources in a “state of shock” last week. “The markets have gone crazy,” commented one source. “No one was a believer, but they’ve gotten $30 on this thing before any one had time to react.”
The result, according to most sources, was that warehouse pricing for DAP was now solidly in the $315-$325/st FOB range in the region, with list prices quoted as high as $333-$338/st FOB at some locations. DAP at Dubuque, Iowa, was quoted firmly at the $325/st FOB mark as of Feb. 5. One Missouri source said another $5-$10/st increase could very well be on the books by the following week.
MAP pricing was even higher, with the dealer level quoted at $320-$330/st FOB in the region and in particularly tight supply last week. No market was reported for TSP.
California: MAP pricing was up significantly from last report, with the low end of the market quoted at $340/st net FOB warehouses or rail-DEL in the state. DAP was roughly $5-$7/st higher than MAP, and 10-34-0 was pegged at $259-$265/st FOB last week. 16-20-0 was quoted at $250-$260/st FOB or rail-DEL last week.
Agrium’s ammonium phosphate postings in California and Arizona, effective Feb. 2, included MAP at $355/st FOB warehouse or rail-DEL, and 16-20-0 at $265/st FOB warehouse or rail-DEL. Those levels were up $10/st from the company’s Jan. 25 reference prices.
Super-phosphoric acid was tagged at $5.65-$5.75/unit DEL or FOB in the state, with ortho-phosphoric acid quoted at $5.65/unit with no discounts. Agrium’s February postings for phosphoric acid include rail-DEL super-phosphoric acid at $575/st and merchant grade at $565/st in California, Arizona, Nevada, and Utah. Those postings were slated to firm again to $580/st for super-phosphoric acid and $570/st for merchant grade from March through May.
Pacific Northwest: MAP was up significantly from last report, with the market quoted at $335-$340/st DEL in the region. DAP was $5-$7/st higher than MAP, and sources said another increase in phosphate pricing was likely in the near term. 10-34-0 was quoted at $265-$270/st FOB, with a $5/st increase slated for March. 16-20-0 was pegged at $245-$260/st FOB or DEL in the region.
Agrium’s Feb. 2 ammonium phosphate postings included MAP at $340/st DEL in Montana and Wyoming; $345/st DEL in southern Idaho, Utah, Nevada, and Oregon’s Malheur County; and $345/st FOB and $350/st DEL in Washington, northern Idaho, and Oregon excluding Malheur County. The company’s 16-20-0 postings moved on that date to $260/st DEL in Montana and Wyoming; $265/st DEL in Idaho, Oregon, Washington, Nevada, and Utah; and $260/st FOB in Washington, northern Idaho, and Oregon excluding Malheur County.
Delivered phosphoric acid was up slightly, to $5.65-$5.75/unit for super and $5.65/unit for ortho grade. Agrium’s February pricing for rail-DEL phosphoric acid pricing included super-phosphoric at $575/st and merchant grade at $565/st in Washington, Oregon, Idaho, Montana, and Wyoming. Those postings are slated to firm again to $580/st for super-phosphoric acid and $570/st for merchant grade from March through May.
Western Canada: While phosphates had played second fiddle to the strengthening nitrogen markets in recent months, that was changing quickly in the region last week. MAP was reported at $435-$470/mt DEL, up $10/mt from late January levels. As of Feb. 9, the market was slated to firm again to $455-$490/mt DEL in the region.
U.S.Export: Export prices for DAP continued their steady hike upward last week, but were still trailing the Gulf river market. Currently, the domestic price for phosphates was significantly higher than the export market’s. Some questioned why PhosChem would continue to make sales at prices that were below what they could earn at home, but the long-term contracts the group has with China and others probably explains the rationale. Those export contracts were based on published indexes, and the only way to get those prices up was to sell – at least some.
Last week, PhosChem made three separate export sales. The first was done at $292/mt FOB, the second at $300/mt FOB, and the most recent at $306/mt FOB. All of the sales were for DAP. The first was 5,000 mt into Central America; the second, of 13,000 mt, was made into either Central America or Ecuador; and the third was 6,000 mt into Mexico. The next sale will be for even more, and buyers should not expect to find any real deals for months.
“In order for the price to stop going up, farmers will have to stop buying,” said one source. “So far, that hasn’t happened.” As is the case in the U.S., the prices farmers were receiving for their crops were up sharply. As long as that is the case, prices will not go down.
The export DAP price range last week increased from $280-$285/mt FOB to $292-$306/mt FOB. However, the next buyer will probably have to pay at least $310/mt FOB or higher.
India: DAP imports for 2006 are put at 2.69 million mt. Of those, the U.S. supplied 66.08 percent, Russia 16.24 percent, Jordan 12.82 percent, and Australia 4.86 percent.
POTASH
Eastern Cornbelt: Potash remained at $208-$217/st FOB in the region, depending on location, with the lower numbers reported out of spot river terminals in Illinois and the upper out of inland locations in Ohio for red granular potash.
Agrium’s fuel surcharge rates, effective Feb. 7, moved to 17 percent in the Eastern Cornbelt, Northern Plains, and Great Lakes regions.
Western Cornbelt: Potash remained at $206-$215/st FOB in the region, depending on grade and warehouse location, with the low reported in Nebraska and the high in Missouri and Iowa.
Agrium’s Feb. 7 fuel surcharge rates included 17 percent in the Western Cornbelt and Southern Plains region, and 18 percent in Colorado.
California: Potash remained at $239-$245/st FOB in the state, depending on grade. Potassium nitrate pricing was unchanged at $485/st FOB for bulk and $540/st FOB for 50-pound bags.
Sulfate of potash (SOP) was steady at $343-$348/st FOB for granular and $331-$336/st FOB on standard/soluble, but increases were scheduled for March. On Feb. 5, Great Salt Lakes Minerals, a subsidiary of Compass Minerals, announced that it will increase prices on all SOP specialty fertilizer products by $10/st, effective March 1. The increase will apply to all U.S., Canadian, and international markets, and is being implemented to offset increased production and logistics costs, the company said.
Agrium’s Feb. 7 fuel surcharge rates included 21.5 percent in California and Nevada.
Pacific Northwest: Potash continued to be quoted at $235-$247/st FOB and $240-$252/st DEL in the region.
Fuel surcharge rates from Agrium, effective Feb. 7, included 20.5 percent in the Pacific Northwest, Utah, and Alaska.
Western Canada: The potash market remained at $250-$265/mt FOB plant sites or warehouses for red premium potash, unchanged from last report.
China: Canpotex, the offshore marketing company for Saskatchewan potash producers, and Sinofert Holdings Ltd., a leading fertilizer enterprise in the People’s Republic of China (PRC), announced Feb. 8 that it had reached an agreement on 2007 prices pursuant to the 2007- 2009 Memorandum of Understanding (MOU) that exists between the two companies. Canpotex ships primarily red standard grade potash, but also supplies certain amounts of white standard grade and granular product. This agreement sets the price for red standard grade potash at US$5/mt higher than the 2006 price. Volumes will again be based on 2007 market demand in China, as the MOU provides Canpotex with at least 30 percent market share for potash imported into China. This increase, combined with gains made in the 2006 and 2005 pricing agreements, raises the price of potash to China by a total of US$70/mt over the last three years.
The Canpotex agreement was preceded by a similar price agreement reached Feb. 4, 2007 between Belarusian Potash Co. (BKK) (the marketing agent for potash producers PA Belaruskali of Belarus and JSC Uralkali of Russia) and Chinese importers, establishing the base line for all sea-borne potash prices into China in 2007. The BKK deal was with Sinochem and CNAMPGC. BKK also reported that from February onward prices with Indonesia and Malaysia will go up $10/mt. BKK said prices to Brazil will go up $25/mt and another $25/mt in April.
PotashCorp is entitled to supply Canpotex with 55.8 percent of its potash. PotashCorp also owns 20 percent of Sinofert.
SULFUR
Tampa: Quiet was beginning to settle into the sulfur market last week after first quarter prices for contracts were settled. The market was said to be in balance last week. The phosphate industry was running at full bore, and some refineries were not. During the next quarter, when refineries should be operating a near capacity, more sulfur will be handled by prillers to handle the overload.
A source said the large drops in the price of sulfur during the past few quarters were unlikely to continue at the current rate. Instead, the prediction was that prices might fall only about another $5/lt for the balance of the year. However, the source noted there were still a lot of variables that could affect that outcome.
A fire at a Valero refinery at Texas City on Jan. 28 has cut sulfur production there from about 700 lt/day to only about 280 lt/day. The repairs were expected to take about three weeks. To help balance that out, a source said Simplot’s Rock Springs sulfur plant in Wyoming was temporarily out of commission, but was expected to return to service soon.
A rumor floating through the industry last week held that problems were developing with sulfur shipments from Venezuela, where the oil industry was being nationalized. That rumor could not be confirmed.
West Coast: With the contract price for Central Florida settled, sulfur suppliers on the West Coast agreed on their new first quarter prices last week at $3/lt down from the previous quarter for both northern and southern California.
Vancouver: Rail shipments of sulfur to the port were said to be only about half of what would normally be done as a result of heavy weather this winter, which has cut shipments approximately in half. Meanwhile, the sulfur industry on the Gulf Coast was wondering what impact the recent rollback in the contract price would have on rail shipments from Canada to Florida. If those railcars do not keep pace with their norm, sulfur producers on the Gulf Coast would benefit.
MARKET NOTES
India: Iffco has signed a memorandum of understanding with Jordanian Phosphate Mines Co. (JPMC) for setting up a state-of-art phosphoric acid plant in southern Jordan. In an attempt to expand its global presence and in order to meet its feedstock requirements, Iffco decided to go ahead with the proposed joint venture. The estimated cost of the project is likely to be around $350 million. Iffco will have a 52 percent stake in the new plant, while JPMC and its associates will hold 48 percent. The plant will have a capacity of 1,500 mt/d of phosphoric acid. Though nothing has yet been finalized, it is likely that the phos acid would be used by Iffco for its plants in India. The plant will help bridge the current demand supply gap that the company is facing in the phosphate market. Currently, India is importing 2.6 million mt of phos acid.