AMMONIA
U.S. Gulf: Second half April has officially settled at the $360/mt DEL mark as more players agreed to that price.
In the meantime, across the Gulf at NOLA, players are arguing over a two-tiered market. While some cite recent business at $330/st FOB with pressure on the market to go lower, others see higher prices. They say newer business has occurred at the $363/st FOB mark. No one disputes the lower numbers, but some sellers say they are an anomaly that does not reflect the entire market. Due to limited equipment, the key to the current barge market appears to be having the right barge in the right place at the right time.
Eastern Cornbelt: Fieldwork delays persisted in the region in early April due to wet field conditions. The delays in preplant ammonia applications sparked some spot weakness in that market. Ammonia continued to be reported at $465/st to the dealer FOB Illinois terminals, and movement out of some locations had slowed to just three or four trucks per day last week.
Western Cornbelt: The ammonia market appeared to be slipping a bit as the window narrows for preplant applications. Iowa sources quoted the spot market last week at $460/st FOB on the upper end, down $10/st from previous levels. In Nebraska, the ammonia market was pegged as low as $425-$430/st FOB terminals to the dealer.
Southern Plains: Anhydrous ammonia was quoted at $410-$420/st FOB regional production points on the low end, with pipeline terminal pricing reported at $430/st FOB in Kansas. Regional dealers were catching their breath last week after a busy March fertilizer run, which included brisk wheat topdress activity and heavy preplant applications on corn ground.
South Central: Anhydrous ammonia was quoted at $420-$425/st FOB regional terminals to the dealer. Many sections of the region were capping a brisk run that began in early March, but a weather change was on the way, with much colder temperatures in store for the weekend.
UREA
U.S. Gulf: Prompt granular barges last week were taking a breather ?Çô a little stronger, but not much. They were called in the $360-$364/st FOB range, with most putting new business toward the high end. Barges already moving out of NOLA were a few dollars higher. Sellers still see room for price increases as wet weather starts to wane in the Cornbelt and farmers are able to get in the field to plant that 90.45 million acres of corn per the recent USDA report. However, that assumes that those farmers can actually find fertilizer. Many players are still betting that the market will be short, citing heavy demand in the South for fertilizer in general. They predict that strong Cornbelt demand could push prices higher.
Eastern Cornbelt: Granular urea was $395-$405/st FOB regional terminals, with the low reported out of spot Illinois River locations last week.
Western Cornbelt: Granular urea was tagged at $395-$405/st FOB in the region. The dealer market in Iowa was quoted in the $400-$405/st FOB range, while other spot quotes included $395/st FOB Kansas City, Palmyra, and St. Louis, Mo., and $405/st FOB St. Joseph, Mo. A Nebraska source reported delivered urea at the $445/st level from Oklahoma shipping points.
Agrium’s urea postings moved on April 5 to $415/st FOB Shakopee, Minn., and North Dakota warehouses at Alton, Carrington, Colfax, Marion, and Scranton. Rail-delivered urea postings from the company moved on that date to $420/st in Minnesota, the Dakotas, and Wisconsin.
Southern Plains: Granular urea was quoted at $390-$395/st FOB Catoosa and Inola, Okla., with several sources noting that topdress supplies were stretched but never completely depleted during the heaviest March run. Sources said there was some jockeying for fertilizer tons during the heaviest March run, but the number of actual outages was fewer than expected.
South Central: Granular urea pricing ranged from $385-$400/st FOB regional terminals, with the low FOB Vicksburg, Miss., and the higher numbers reported in Kentucky. Spot pricing to the dealer included $390/st FOB Caruthersville, Mo., and $395/st FOB Memphis, Tenn., last week.
Southeast: Granular urea was tagged firmly at the $400/st mark FOB port terminals for available tons. Sources said product was out at Savannah, and supplies were thin if not out at Brunswick. The Baltimore market was reportedly firm at the $410/st FOB mark to the dealer last week.
Pacific Northwest: Agrium reposted granular urea on April 5 at $412-$417/st DEL in Montana and Wyoming, depending on location; $425/st FOB Washington warehouse locations at Glade, Kennewick, Warden, and Wilson; $430/st DEL in Washington, Oregon, Idaho, and northern Nevada; $435/st DEL in northern and central Utah; and $440/st DEL in southern Utah.
NITROGEN SOLUTIONS
U.S. Gulf: Barge prices were reported to be firmly within the high $250s/st FOB. Players honed in on a range of $254-$257/st FOB ($7.94-$8.03/unit) as being achieved. There were concerns, though not confirmed, of minor hiccups at various plants in the Midwest.
Eastern Cornbelt: UAN-32 was quoted at $275-$290/st ($8.59-$9.06/unit) FOB in the region, with the upper end reflecting dealer list prices at some locations. One Illinois source confirmed recent spot sales at the $9.00/unit FOB mark, while quotes out of some Ohio River locations were at the $280/st ($8.75/unit) FOB mark in early April.
Western Cornbelt: UAN-32 was quoted at $270-$285/st ($8.44-$8.91/unit) FOB terminals, with the low FOB Bigelow, Mo. A Nebraska dealer pegged the common price last week at the $280/st ($8.75/unit) FOB level, while dealer pricing in Iowa was reported at the $8.80/unit FOB mark or higher for confirmed sales.
Southern Plains: UAN-32 was reported in a broad range at $260-$285/st ($8.13-$8.91/unit) FOB in the region last week, with most sources touting the upper numbers as the week advanced. Several sources were certain the low end was still available out of spot Oklahoma shipping points early in the week, but others were skeptical. Sources said reference pricing from one supplier had firmed $20/st to $290/st ($9.06/unit) FOB Enid, Okla., and $300/st ($9.38/unit) FOB Dodge City, Kan.
South Central: UAN-32 was quoted at $270-$280/st ($8.44-$8.75/unit) FOB most regional terminals, with dealer reference levels at the $285/st ($8.91/unit) FOB level at some locations. Sources reported tight solutions inventories and firming prices.
Southeast: Fertilizer sources continued to report tight inventories, product allocations, and firm prices. The UAN-30 market was quoted at $230-$235/st ($7.67-$7.83/unit) FOB Wilmington, N.C., and Norfolk, Va., while Savannah, Ga., pricing was pegged at the $240/st ($8.00/unit) FOB mark or higher. UAN-30 at Baltimore, Md., had reportedly firmed to the $240-$245/st ($8.00-$8.17/unit) FOB range last week.
Sources said UAN tons are available in the region, but suppliers are playing it “close to the vest,” with some concern about supply going forward into late April and May. The vessel UAN market had reportedly firmed to the $270/mt C&F mark or higher.
Pacific Northwest: Agrium’s April 5 UAN-32 postings included $305/st ($9.53/unit) DEL in Washington, Oregon excluding Malheur County, and northern Idaho, and $335/st ($10.47/unit) DEL in Montana and northern Wyoming. Agrium reposted UAN-28 on April 5 at $293/st ($10.46/unit) DEL in Montana and northern Wyoming.
AMMONIUM NITRATE
U.S. Gulf: Supplies were reported to be tight, with the last sold barge at $265/st FOB. Some said this was the last barge available in the near term, but that some vessels are on the way. Sources said demand has been better than expected, but that some players simply do not want to get stuck with any excess nitrate in storage; they would rather risk being short than being too long.
Western Cornbelt: Ammonium nitrate was up from last report, with the upper end of the range quoted in Iowa at $325/st FOB to the dealer for confirmed sales.
Southern Plains: Ammonium nitrate pricing was also up from last report, with the market quoted at $295-$305/st FOB Catoosa. Several sources said most dealer quotes at the port were at the $300/st FOB mark or higher by last week, however.
South Central: Ammonium nitrate was quoted at $285-$300/st FOB in the region, with the low FOB Greenville, Miss., and the upper end FOB Blytheville, Ark. Nitrate was also in tight supply. Effective March 26, reference pricing for ammonium nitrate from Terra moved to $295/st FOB Yazoo City, Miss.
Southeast: Ammonium nitrate pricing was on the move in the region, with the market quoted at $300/st FOB Wilmington or Tampa, Fla., and $315/st rail-DEL to points in the Carolinas.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate pricing had firmed to $215-$225/st FOB in the region on the basis of very tight inventories and strict product allocation.
Western Cornbelt: Granular ammonium sulfate remained in extremely tight supply, and the price for available tons was moving up. Sources last week quoted the market at $215-$225/st FOB in the region, with confirmed sales in Iowa at the top end of that range.
Southern Plains: Ammonium sulfate pricing was up from last report, and supplies were described as tight. Pricing FOB Freeport, Texas, was reported at $190/st for granular and $180/st for coarse, but postings were slated to move on April 9 to $200/st for granular and $185/st for coarse. Other April 9 ammonium sulfate postings from American Plant Food include granular at $210/st FOB Galena Park, Texas, $220/st FOB Mermentau, La., and $230/st FOB Littlefield, Texas; coarse at $195/st FOB Galena Park and $215/st FOB Littlefield; standard at $175/st FOB Freeport and $205/st FOB Littlefield; and N-Pac Compacted at $215/st FOB Galena Park.
Ammonium sulfate pricing FOB Plainview, Texas, firmed on April 1 to $220/st for granular, $210/st for coarse, and $200/st for standard.
South Central: Granular ammonium sulfate pricing covered a wide range, with very tight supplies reported across the region. Sources reported spot prices ranging from $205-$210/st FOB on the low end up to $225/st FOB on top, with reports of allocations and some suppliers not accepting new orders. The dealer market FOB Vicksburg was reported firmly at the $215/st level last week. Those levels were up considerably from last report.
Southeast: Ammonium sulfate was on strict allocation for the month of April, with demand described by one supplier as “huge.” The Hopewell, Va., price for granular sulfate was reportedly in the $200-$205/st FOB range, although no new orders were being accepted. DSM Chemicals was still technically referenced at $192/st FOB Augusta, Ga., and $215/st DEL in Florida, but product was allocated and postings were scheduled to move on April 9 to $210/st FOB Augusta and $235/st DEL in Florida.
PHOSPHATE
Central Florida: In the Northeast the weather remained wet and cold, while the Southeast was feeling the effects of a lack of rain. In both cases, that meant less use of fertilizers, including phosphates. Much of Florida, which was having its third lowest amount of rainfall on record, was suffering under severe drought.
The current high price of phosphates was forcing some farmers, especially cotton and rice producers, to cut back on application rates. Areas where corn yields were generally 150 bushels or less per acre were also finding the cost of phosphate and nitrogens too expensive to make a profit. Some sources were skeptical of the USDA’s latest plant intentions report of 90.45 million acres of corn, saying if less fertilizer is applied, yields will be lower on a per acre basis. However, one source noted that his company had been tracking seed sales, and said the USDA’s estimate did not come as a surprise.
Fill programs being offered by phosphate producers were said to be having a tepid response. Although the fill price was well below the current spot market price, many buyers were reluctant to take action. In part, that was because of the high price for that time of year compared to a more normal time and the cost of borrowing the money to buy the fill, which wouldn’t be sold for several months. Still, producers said some deals were being done, and interest in the program was relatively high.
New sales of phosphate out of Central Florida were relatively rare last week, and the DAP price index was unchanged at a flat $370/st FOB with no discounts available. The primary reason was a lack of inventory. PotashCorp’s Central Florida DAP reference price was unchanged at $370/st FOB, and Agrifos was selling truck loads of DAP in Texas at $420/st FOB.
U.S. Gulf: With areas north of St. Louis still too wet and too cold to plant, the phosphate market has not really started to kick into gear in the region. That area is also the heart of the Cornbelt, which has been expected to be a major user of phosphate and nitrogen products. After a record run-up in price during the past few months, NOLA DAP barge prices tended to stabilize last week.
The price of phosphates at terminals last week was still below the cost of replacement, in general around $425/st FOB at the warehouse. With floating DAP barges running as high as $415/st FOB last week, it was more profitable to sell barges already under tow than to put the material through terminals.
Business on the river system last week was somewhat slower, but more barges – albeit high priced – were available. Most potential buyers expressed little interest in barges scheduled but not yet loaded and were concentrating on barges already on the water, which could reach the desired destinations in time. Naturally, the best buys were those not yet loaded in New Orleans, and the highest prices were paid for DAP barges on the water and nearest the destination of the buyers.
Fill programs offered by phosphate producers were not receiving an overwhelming response last week, although deals were made and interest was said to be high. Buyers said their biggest fears were that the price of phosphate would go down in July and August, and that the cost of borrowing the money to store the high-priced material was too high. Traders and dealers said they did not want to get left holding the bag if market conditions change. Inventories of phosphates remained extremely low, while the Cornbelt has yet to make its mark on the market. By summer, big international buyers, such as India and Brazil, will be hitting the market, so there could be little if any improvement in inventories, which means prices will remain high.
The Gulf NOLA DAP barge market was unchanged at $400-$415/st FOB, with the lowest prices for barges to be loaded at New Orleans. Prices were likely to begin moving up when the weather in the North becomes more favorable.
Eastern Cornbelt: DAP and MAP, also in tight supply, were quoted at $425-$440/st FOB regional warehouses, with the upper end reported in Ohio on a spot basis. No current prices were reported for TSP in the region, while 10-34-0 remained at $325/st FOB or higher, where available.
Western Cornbelt: DAP and MAP were pegged at $415-$435/st FOB regional warehouses, with the low in Nebraska on a spot basis. The upper end was quoted as the dealer reference price out of several Missouri locations, and supplies continued to be described as very tight. An Iowa source tagged the common dealer price for DAP in the $425-$430/st FOB range last week. No market was reported for TSP in the region.
10-34-0 was in short supply, and sources continued to talk of a month-long backlog on acid shipments. The market reflected a broad range, based on how recent the sale. A Nebraska source quoted pricing as low as $305/st FOB for the last confirmed sale, but that was old business. Iowa sources confirmed recent spot business for as high as $350/st FOB last week for very limited tonnage. A Missouri source speculated that spot 10-34-0 tons could be had at $315-$325/st FOB, but that was a guess.
Southern Plains: DAP and MAP were pegged at $425-$430/st FOB Catoosa, with reports of tight DAP supplies at the port. One source said MAP inventories had loosened up a bit since topdress demand tapered off.
10-34-0 was quoted in a broad range of $285-$315/st FOB, with the upper end to dealers FOB Wichita, Kan., and the low reported in the Texas panhandle. The dealer market FOB Salinas, Kan., was tagged firmly at the $305/st mark. Tight acid supplies were reportedly limiting new orders, and some claimed the higher prices were from suppliers bartering long prepay inventories.
South Central: Phosphate remained in very tight supply, and spot pricing was up significantly from last report. Sources pegged the terminal price for DAP and MAP at $425-$435/st FOB in the region, with TSP quoted as high as $380/st FOB the warehouse.
U.S Export: Prices on the export market were stable. PhosChem made a sale of 24,000 mt of DAP/MAP into Brazil at a delivered price of between $465-$470/mt, which resulted in an FOB price of about $436/mt. Those tons will be added to a vessel already scheduled for Brazil with 20,000 mt, for a total of 44,000 mt. PhosChem was also sending between 27,000 mt and 30,000 mt to Argentina at a delivered price of $472/mt; however, the freight rate was not available, so the FOB price could not be determined. Deliveries of those orders were scheduled for May.
Producers normally make their largest sales on the export market during the summer, which will help to keep inventories at very low levels. Worldwide, phosphate inventories remained low. The export DAP price range last week was unchanged at $435-$436/mt FOB.
India: OCP has reportedly proposed a new annual phos acid price of US$591/mt CFR India sight, an increase of $130/mt over the previous year’s level of $461/mt CFR India. OCP was said to have claimed that at current DAP prices the phos acid price should be $800/mt, but it was willing to bring it down to $591/mt. In addition, producers said that this price increase was also justified on the basis of present phos rock and sulfur prices.
OCP also mentioned that the phos acid suppliers have over the years incurred losses in view of the weak prices, and they could not sustain their operations by holding the prices at levels that were not remunerative. They added that with the surge in international phos acid demand, the additional capacity that will come in the next few years will be at a substantially higher capital cost.
They also made a point that over the last two years the other commodity prices, such as ammonia, potash, etc., have gone up substantially, while the phos acid prices had not increased in the same proportion. OCP advised that if no price agreement was reached, they would be willing to supply the acid for a period of one month up to April 30 on a provisional basis at the current price of $461/mt, to their joint venture partners only, and that if after one month the price issue was not resolved, the quantities supplied during the month of April and thereafter would be invoiced at $591/mt.
POTASH
Eastern Cornbelt: Potash remained at $212-$224/st FOB regional warehouses, with the upper end FOB Ohio locations. PCS Sales announced new potash prices on April 5 for a shipping date of June 1 forward. New postings FOB Saskatchewan mines include standard at $208/st, soluble and granular at $213/st, and white granular at $218/st. Those levels reflect a $20/st increase from previous postings at the mine, for all grades.
Western Cornbelt: Potash remained at $208-$222/st FOB in the region, depending on grade and location, with the low end for imported tons on the river. A Missouri source tagged the common dealer range at $213-$218/st FOB for granular potash last week. The upper end reflected reference pricing to the dealer from North American producers, with higher postings in effect for the next round of sales from at least one supplier.
Southern Plains: Potash FOB Carlsbad, N.M., remained at $192-$198/st, depending on grade, with red granular quoted at $195/st FOB the mine. Warehouse pricing for potash was quoted at $210-$215/st FOB in the region, up slightly from last report. One Kansas source reported good potash movement, with spring rates rebounding this year after several years of declines.
Effective May 1, agricultural grade potash prices from Intrepid Potash FOB Carlsbad will move to $198/st for 62 percent standard, $201/st for 62 percent fine standard, $203/st for 60 percent granular, and $208/st for 62 percent granular. The company’s mine prices FOB Moab, Utah, will move on that date to $195/st for 60 percent standard and $203/st for 60 percent granular, while May 1 postings FOB Wendover, Utah, include $209/st for 60 percent standard and $217/st for 60 percent granular.
Intrepid’s May 1 postings for feed grade potassium chloride include white standard at $195/st FOB Moab, $198/st FOB Carlsbad, and $209/st FOB Wendover, and white fine at $201/st FOB Carlsbad.
South Central: Potash pricing was also up from last report, with the regional warehouse market quoted at $205-$215/st FOB, depending on location and product availability. Granular potash FOB Vicksburg was tagged at the $210/st mark to dealers, while Kentucky sources quoted reference prices as high as $220/st FOB to the dealer.
Southeast: Potash was generally quoted at $225-$230/st DEL in the region last week, although an increase of $20/st was reportedly on the books from one supplier for orders placed now and delivered from June 1 forward.
SULFUR
Tampa: Another sulfur supplier was reported to have jumped on the Mosaic bandwagon last week, settling second-quarter pricing at $5.50/lt above the previous quarter. This brought the total number of those who settled with Mosaic to three. Industry sources said they did not know how much more the holdouts were seeking, but assumed it was for more than the $0.50/lt that held up settlements for the first quarter.
Meanwhile, sulfur supplies both domestically and worldwide remained tight last week. That situation was expected to continue for a minimum of another month, or possibly well into the third quarter.
Vancouver: On the world market the biggest push on pricing was Vancouver, which was finally shipping reasonable amounts but cannot make up for lost deliveries. Especially nasty weather in Canada caused long delays in shipments from Alberta, and both spot prices and contract prices were moving up. One source noted that CN was having problems moving sulfur from Alberta, and it was possible there may be a move to ship more molten sulfur south into the U. S. as a result. Soon, refineries in Alberta will be going off line for turnarounds, which will make the world market even tighter.
In the long run sulfur will again become a surplus, as U. S. refineries come on line and Saudi Arabia produces the additional 600,000 lt from its new operation. In the U. S., refineries were believed to be running more sweet crude through their systems, which was helping to create sulfur shortages along the Gulf and the West Coast. Last week, lightning struck BP’s refinery in Houston, which caused a fire. The loss of sulfur production from the BP fire was not available.
MARKET NOTES
Saudi Arabia: The country signed contracts April 3 valued at SR7.1 billion (US$1.89 billion) with a Mitsui-led consortium to build a north-south railroad project covering a distance of about 1,765 km for the transport of phosphates, minerals, and passengers. The project is to take 42 months and will facilitate the huge Ma’aden phosphate project, as well as the country’s downstream oil and gas project and an aluminum smelter. The railroad will transport raw materials – bauxite and phosphate – to Ras Al-Zour. It is estimated that on completion the project will transport more than 4 million mt of commodities and two million passengers annually between cities located within the project site.
Pakistan: Engro Chemical Pakistan Ltd. (ECPL) will get a loan of Euro 120 million from a consortium of banks led by the National Bank of Pakistan and Habib Bank Ltd. One of the bank officials told Green Markets that Engro will use the loan to bridge the financing of setting up a new urea plant in central Sindh. In December the government allotted 100 million cubic feet of gas per day from the Qadirpur gas field in Sindh to Engro to set up a modern urea plant. The plant would be set up at an estimated cost of $1 billion, with a production capacity of 1.3 million mt/y and other fertilizer. It is estimated that Pakistan meets 25 percent of urea demand and 75 percent of phosphate demand via imports.