AMMONIA
U.S. Gulf/Tampa: Yara and PotashCorp both concluded business with major customers last week at $340/mt DEL for the entire month of May. In the past Yara has signed on for a full-month, but this time around PotashCorp has as well. Weaker international prices may have had something to do with the decision, as in another two weeks buyers may have been looking for yet another price drop. So better to take one drop for a whole month than to stair step it down again in a few weeks.
In the meantime, on the NOLA market, there was a report of another barge sale, not at the $308/st FOB posted last week attributed to Mosaic, but at $320/st FOB done by another supplier.
Eastern Cornbelt: Rain that started late Tuesday night ended a four- or five-day planting streak in Illinois and Indiana, and the precipitation was plentiful. The moisture stalled what had been brisk ammonia movement in the region. Sources continued to tag the dealer market at $460-$465/st FOB in Illinois, with the upper end at $470/st FOB in Indiana. One regional supplier was offering forward contract ammonia for May at $470-$480/st FOB in the region.
Western Cornbelt: Heavy rains were reported in the region last week, once again forcing fieldwork delays in all three states. Several sources reported brisk ammonia movement prior to last week’s precipitation, however. A warmer, drier weekend forecast raised hopes that fieldwork could resume by the first of May in many areas, and several sources said they were using the downtime last week to recharge inventories.
The ammonia market covered a wide range, depending on the availability of alternatives such as urea and UAN. Sources quoted the dealer market for ammonia last week at $425-$435/st FOB in Nebraska and western Iowa on the low end, with the upper end of the range tagged at $460/st FOB in eastern Iowa. One supplier was offering forward contract ammonia for May at $455-$460/st FOB in Nebraska and Iowa, and $470/st FOB Palmyra, Mo.
Southern Plains: Anhydrous ammonia pricing had reportedly backed off slightly, to $400-$410/st FOB regional production points, with dealer pricing out of pipeline terminals pegged at $425-$430/st FOB.
Several Kansas sources talked about the extensive damage to winter wheat from a hard freeze in early April. While western Kansas sustained little damage, the heaviest frost damage appears to be in a band from north-central to south-central Kansas, with particularly severe frost damage north and east of Wichita. One source said up to 150,000 acres of wheat sustained damages ranging from 30-80 percent in his trade area. Across much of central Kansas, preliminary estimates are putting losses as high as 100 million bushels, which represents a $500 million loss in revenue with wheat prices near $5 a bushel. The Kansas Association of Wheat Growers thinks losses could go even higher.
South Central: Sources reported good preplant movement of anhydrous ammonia earlier in the season. The ammonia market was tagged at $420-$425/st to the dealer FOB Memphis, $430-$435/st FOB Blytheville, Ark., and roughly $440-$445/st FOB Henderson, Ky.
Black Sea: Weakened U.S. demand for direct application ammonia is helping build inventories in Yuzhnyy. Asian sources are mixed on the latest pricing ideas. One trader points to pricing ideas for May that push the price to $250/mt FOB. Another notes that Keytrade reportedly concluded a deal at $266/mt FOB for 10,000 mt.
Many in the industry are freely discussing $250-$260/mt FOB, with a real possibility of the price going softer. Holding back on the sub-$260/mt FOB price are reports that the official KIP level remains at $260/mt FOB.
A boost in the price, said one major Asian trader, is more likely only if the inventory is reduced. He said the best way to accomplish that would be for the producers to take turnarounds.
As Green Markets went to press, the drumbeat for some producers to shut down for maintenance was getting louder, said one Asian source.
To accommodate the widespread views of the market at this time, the market range might be best described as $255-$265/mt FOB.
Middle East: Supplies are building, but nailing down new prices is once again difficult. A deal for India a couple of weeks ago identified a new price level significantly below $300/mt FOB. Now, say sources, private discussions are reportedly hovering just below the $300 level.
Demand from India is still strong. Sources say the lack of phos acid contracts had kept DAP buyers looking to the Middle East for ammonia. This demand is expected to last for the next month or so. Chances are, said one source, that phos acid deals might be concluded at the IFA meeting in Turkey at the earliest, or by early June at the latest.
Helping soften the price is the appearance of the Ghadir plant in Iran. The facility came on line earlier this month with an annual capacity of 600,000 mt. The first shipment from the facility of 15-20,000 mt is expected to take place in early May. A similar cargo will be loaded the end of May. Sources report major traders are looking to secure the tonnage from the plant.
Asia: The supply for Southeast Asia is no longer as tight as it was earlier this year. Additional tons from the Middle East, the reopening of the Agrium Alaska facility, and the steady operation of facilities in Indonesia and Malaysia have eased the pressure on buyers. One observer noted that while the supply pressure has relaxed a bit, it does not mean there is a large surplus of material for the region.
A benefit for ammonia buyers has been a somewhat reduced demand for urea from Indonesia by Asian buyers because of weather conditions. With less demand for urea, sources say some of the Indonesian producers can export their excess ammonia. This benefit is not expected to last long, however.
UREA
U.S. Gulf: Granular barge prices continued to erode last week, with most players putting the price within the $350-$355/st FOB range. Some sellers still argue that it is too early to cut prices as they predict that northern demand is still to take off for urea. Another argued that predictions of higher corn acreage and lower urea availability do not warrant a price decrease.
More import prill cargoes have reportedly put pressure on that product. Prices last week were pegged between $312-$315/st FOB.
Eastern Cornbelt: Granular urea remained at $390-$400/st FOB regional terminals, with reference pricing quoted as high as $420/st FOB in Ohio to the dealer.
Western Cornbelt: Granular urea was down from last report at $385-$395/st FOB in the region, with the low reported at St. Louis, Mo. Delivered Iowa was tagged at $395-$400/st in Iowa. One source noted that movement has yet to run hard in northern Iowa, Wisconsin, and the Dakotas, leaving the potential for spot outages when fieldwork finally breaks loose in earnest.
Southern Plains: Granular urea pricing was quoted at $380-$385/st FOB Enid and Inola, Okla., after a downward pricing adjustment at mid-month, with several sources describing supplies as plentiful.
South Central: The first fertilizer application on rice was set to begin in early May. Reductions in rice acreage varied across the region; one Arkansas source estimated a 15 percent reduction in his market area, while acreage cutbacks in Mississippi were estimated at 25-30 percent. One source noted, however, that fertilizer volumes lost to rice topdressing will probably be made up in greater corn sidedressing business.
Granular urea pricing had dropped slightly to $380-$390/st FOB to the dealer, with the low in Vicksburg, Miss., and the high in Memphis, Tenn. Arkansas sources tagged the market at $385-$390/st FOB last week. Sales to resellers or national accounts were pegged as low as $275/st FOB Vicksburg and Caruthersville, Mo.
Southeast: Granular urea pricing had dropped slightly to $390-$400/st FOB port terminals, with outages reported at Savannah, Ga.
India: The big news last week was the closing of the IPL tender and the booking of 750,000 mt of material from that tender and from previous deals. Sources say IPL was highly disciplined in its buying. The company had a target price in mind and was willing to adjust its goals slightly to accommodate the best deals. As a result, sources say the Middle East and Chinese producers came out ahead, while CIS companies or traders with CIS material may be left out in the cold.
Prior to the tender, IPL bought tons from the Middle East at price levels pegged at $301-$303/mt FOB. The tender showed business concluded at $309-$310/mt FOB from the same suppliers.
One of the factors that limited the amount of CIS material that might have been considered was a decision by IPL not to accept tons in Mundra, the only port that can handle panamax vessels.
For months industry observers had been saying Indian buyers should look to buy many smaller cargoes and allow those shipments to go straight to smaller ports. By spreading out the delivery ports, sources said the importers would be able to get the urea more quickly to the inland locations that need the product.
It appears as if the Indians were listening.
The buyer also benefited from being willing to take granular or prills. This is the second year that Indian buyers have looked at the price and not the style of urea to their financial benefit.
The tender closed Monday, April 23. Initial offers are as follows:
| Supplier | Qty (MT) | Origin | Shipment | FOB US$/MT | CFR US$/MT |
| Helm | 50 – 55000 | CIS/China/Egypt | May/June | 348.00 Mundra | |
| 40 – 45000 | 361.00 Kandla | ||||
| 30 – 35000 | 366.00 Vizag | ||||
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| Transammonia | 35 – 40000 | Open | May/June | 323.50 Kandla | |
| 18 – 20000 | 348.50 Vizag/Tuticorin | ||||
| 25 – 35000 | 348.50 Vizag | ||||
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| Toepfer | 20,000 | 303.25 | |||
| 20,000 | Bang. | 303.25 | |||
| 20,000 | 315.00 | ||||
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| 80-90,000 (split in two lots) |
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| a. 50,000 | a. 344.50 Mundra | ||||
| b. 48,000 | b. 347.00 Kandla | ||||
| c. 35 -40,000 | c. 356.00 Kandla | ||||
| d. 25-30,000 | CIS / China | d. 344.00 Tuticorin | |||
| e. 25-30,000 | e. 350.00 Pipavav | ||||
| f. 35-40,000 | f. 344.00 Vizag | ||||
| g. 20,000 | g. 344.50 Haldia | ||||
| h. 25-30000 | h. 347.00 Chennai | ||||
| i. 30-35000 | i. 347.00 Kakinada | ||||
| j. 25-30000 | j. 350.00 Paradeep | ||||
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| Keytrade (60,000 mt maximum) |
50–55,000 | CIS/China/Egypt | May 15th June | 306 Yuzhnyy for 35,000 mt (May) | 349.25 Mundra |
| 40-45,000 | 360.25 Kandla | ||||
| 40-45,000 | 360.25 Paradeep | ||||
| 30-35,000 | 358.25 Kandla | ||||
| 30-35,000 | 364.25 Paradeep/Vizag | ||||
| 25,000 | 360.25 | ||||
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| Swiss Singapore | 50,000 | China CIS | May/June | 297.00 | 337 Vizag |
| 299.93 | 338.93 Mundra | ||||
| 339.93 Mundra | |||||
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Inter Agro | 30,000 | Romania | May/June | 321.00 |
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| Stirol | 35,000 | Ukraine | 355.00 Kandla | ||
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| Dawood HCL, Pakistan | 30-40,000 Bagged |
Pakistan | June/July | 348.50 FOR Wagah/Attari | |
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| EFC | 25,000 firm | Egypt | June/July | 318.00 | |
| 25000 (opt.) | |||||
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| PIC Kuwait | 25,000 firm | Kuwait | May/June | 311.00 | |
| 25,000 (opt) | |||||
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| Fertil | 25,000 firm | UAE | May/June | 310.00 | |
| 25,000 (opt) | |||||
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| Qafco | 50,000 | Qatar | May/June | 310.00 | |
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| Sabic | 2X25,000 | Saudi | May/June | 310.00 | |
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| Ameropa | 25-40,000 firm | China | May/June | 354.90 ECI | |
| 25-40,000 (opt) | |||||
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| ETA | 25-30,000 | China | May | 349.00 ECI | |
The winning offers known by press time are as follows:
| Offering Company | Source | Quantity | FOB US$/mt | CFR US$/mt |
| QAFCO | Qatar | 25,000 | 302.00 | |
| 50,000 | 310.00 | |||
| SABIC | Saudi Arabia | 25,000 | 301.00 | |
| 25,000 | 309.00 | |||
| Fertil | UAE | 25,000 | 302.00 | |
| 25,000 | 310.00 | |||
| PIC | Kuwait | 75,000 | 302.00 | |
| 25,000 | 310.00 | |||
| Dawood | Pakistan | 40,000 (By rail) | 348 bagged | |
| EFC | Egypt | 50,000 | 305.00 | |
| Swiss Singapore | China/CIS | 50,000 | 337.50 | |
| Transammonia | Open | 2×35-40,000 | ||
| China | 80-90,000 | 336-337.00 | ||
| Toepfer | Bangladesh | 40,000 | 302.00 | |
| 20,000 | 310.00 | |||
| CIS/China | 45,000 | 340.00 | ||
| CIS/China | 45,000 | 337.00 | ||
| ETA | China | 25,000 | 340 |
The material from Pakistan raised a few eyebrows. The material is to be delivered over the much-troubled India-Pakistan border. The only problem, say sources, is that Dawood did not have permission from the government to export the urea at the time of the tender.
As Green Markets went to press permission has not yet been granted.
Sources say a few more deals may be struck, but only on terms favorable to IPL. One Asian trader noted that all the companies that helped run up the price in Yuzhnyy might have to adjust their pricing ideas if they want to sell any of those tons to India.
The Indian government was most likely on IPL’s back as well.
Subsidies for urea are an ever-growing part of the national budget. Last year the government was deeply in arrears to the urea producers and some importers. This year the government doubled the amount set aside for subsidies compared to last year, but according to local media reports, that may not be enough if the international price continues to climb.
No new major business is expected for a while.
Sources say MMTC will have to come in later, but few are expecting to see the state company step in until June for July and August shipments.
One trader noted there is a remote possibility the MMTC operatives will use the IFA conference on May 21-24 to take price soundings from the industry.
For a few traders, the results of the IPL tender were not surprising. The Middle East producers dominated the offers. Chinese tons were offered at competitive rates and, as happened following previous recent Indian tenders, the Black Sea price faces the threat of a price drop.
Black Sea: After an increase in prices from $269/mt FOB to $300/mt FOB in anticipation of the IPL/India tender and demand from Latin America, it now looks as if the price is on its way back down.
Sources point out that IPL depended heavily on Middle East and Chinese tons rather than the suddenly more expensive Black Sea material.
Traders are now saying that in the run-up to the IPL tender the price went past what the Indians were willing to pay. Whereas producers would have ignored anyone bidding below $300/mt FOB just before the tender, sources now say bidders are being welcomed at $285/mt FOB.
The problem is that no one wants to pay $285/mt FOB anymore.
Reportedly, some quiet offers have gone out at $290/mt FOB – with no takers. Others say the producers are holding firm at $300/mt FOB.
The argument for the higher price, they say, is the continued demand from Latin America.
Unfortunately for the producers, said one source, the Latin American buyers are comfortable enough that they can sit back and wait a while. Some buyers reportedly pulled back as the price moved up prior to the IPL tender. Others did step in and buy material just as the price started moving up.
Observers report that about half of the first part of May allotments are still unsold. Many in the industry expect to see the price continue to slide. As Green Markets went to press, one trader commented, “After all that activity the producers are back where they started a week ago, but with no buyers.”
Middle East: If Yuzhnyy was the big loser in the IPL/India tender, then the Middle East suppliers were the big winners. Besides selling about 300,000 mt to India prior to the tender at $301-$303/mt FOB, nearly an equal amount was sold under the tender at higher numbers. Sources say the IPL purchases will help ease a lot of the growing inventory overhang the producers reportedly had going into this quarter. The Indian business should get the producers comfortably past the current slow season.
Prills and granular continue to run at parity. Based on the Indian tender, the price in the area is now at $301-$310/mt FOB for both.
Bangladesh: Local media reports a government advisory committee decided the country should purchase 50,000 mt of urea as soon as possible in anticipation of the upcoming application season. Sources say, however, that BCIC is still sitting on the results of two previous tenders without making an award.
Many in the industry have given up trying to figure out the hows and whys of the BCIC buying procedure. Everyone does agree the country will need material.
The KAFCO facility began its export season for the year with a bang. The company offered 60,000 mt through Toepfer in the IPL/India tender. The offer was accepted.
Production went down again at the Zia urea plant at Ashuganj on April 23 – the third time in the last 20 days. This time it was due to a leak at the ammonia plant. Urea production at the facility has been offline 76 days since July 2006.
Indonesia: Apparently the government continues to support
the idea of more exports. Sources say the most recent
domestic season was lackluster, and – combined with a
strong international market – gave the government and the
state-owned industries an opportunity to export.
The companies are able to meet production schedules because the hard currency earned in the exports provides enough money to pay the national gas company for the necessary feedstock.
The state-owned urea plants had been plagued with natural gas shortages for almost two years as talks between the gas extractors and the national gas company fought over the price of the gas. The subsequent higher prices were passed on to the urea and ammonia plants, who in turn contested the charges.
Based on the last selling tender, sources continue to put the market at $295-$300/mt FOB.
NITROGEN SOLUTIONS
U.S. Gulf: UAN barges last week were hard to find. One source said that when dealers turn from ammonia to UAN, they will not find UAN and will opt for urea – assuming they can find that nearby as well.
Eastern Cornbelt: UAN-32 was quoted at $285-$295/st ($8.91-$9.22/unit) FOB most river terminals to dealers, with reference pricing for UAN-28 as high as $262/st ($9.36/unit) FOB inland locations in Ohio. Solutions remained in very tight supply. Forward contract tons were being offered for May from one supplier at $293-$297.80/st ($9.16-$9.31/unit) FOB regional terminals.
Western Cornbelt: UAN-32 was quoted in a broad range at $285-$300/st ($8.91-$9.38/unit) FOB in the region, with reference prices as high as $305/st ($9.53/unit) FOB to the dealer. Solutions inventories remained in tight supply.
Southern Plains: UAN inventories, on the other hand, were in tight supply. While some maintained the brokered tons could still be had as low as $265/st ($8.28/unit) FOB in the region last week, others quoted the terminal market firmly at the $285/st ($8.91/unit) FOB level. One source quoted a reference price for UAN-28 as high as $260/st ($9.28/unit) FOB to the dealer last week.
South Central: The UAN-32 market was quoted at $275-$285/st ($8.59-$8.91/unit) FOB regional terminals for available tons, but inventories remained very tight. Several sources said the market would likely firm to $289-$290/st ($8.91-$9.06/unit) FOB for the next round of business, given current replacement costs.
Southeast: UAN-30 pricing had reportedly firmed to $235-$240/st ($7.83-$8.00/unit) FOB Norfolk, Va., and Wilmington, N.C., to the dealer. The vessel market was quoted at $168-$170/mt C&F in late April.
AMMONIUM NITRATE
U.S. Gulf: Like UAN barges, AN was hard to find. The last done business was still called in the $265-$270/st FOB range.
Western Cornbelt: Ammonium nitrate was tagged at $315-$325/st FOB in the region. There were reports of some cheaper tons out of St. Louis, but sales as low as $285-$295/st FOB in that market could not be confirmed.
Southern Plains: Ammonium nitrate was up as well at $305-$315/st FOB Inola and Catoosa, Okla., with some suppliers reportedly eying the $320/st FOB mark for the next round of sales.
South Central: Ammonium nitrate pricing was up as well at $300-$310/st FOB in the region, with most dealer quotes at the $305/st FOB mark or higher. The market FOB Alexandria, La., was quoted firmly at the $310/st mark last week. Effective April 23, Terra raised its ammonium nitrate prices to $305/st FOB Yazoo City, Miss., and $325/st FOB McComb, Miss.
Southeast: Ammonium nitrate was quoted firmly at $300/st FOB Wilmington, with no updates available for delivered pricing in the region.
AMMONIUM SULFATE
Eastern Cornbelt: Ammonium sulfate pricing was firm at $225-$240/st FOB in the region for the last sales, but availability was the larger question.
Western Cornbelt: Granular ammonium sulfate remained extremely tight at $225-$240/st FOB in the region, but several sources said new tons were simply unavailable last week.
Southern Plains: Ammonium sulfate remained in very tight supply. The granular market was quoted higher at $200-$230/st FOB in Texas, with the low at Freeport and the upper end FOB Plainview. Other postings at Plainview included coarse sulfate at $220/st and standard at $205/st FOB.
Ammonium sulfate postings from American Plant Food Corp. as of April 9 included $200/st for granular and $185/st for coarse FOB Freeport. Other April 9 postings included 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.
South Central: Granular ammonium sulfate was in very tight supply in the region. The market was quoted in a broad range at $215-$230/st FOB to the dealer, with the low at Vicksburg and the upper end reported in Arkansas and FOB Memphis.
Southeast: Ammonium sulfate supplies remained very tight. Product was on allocation out of Augusta, Ga., with no decision yet on whether that status will be lifted in May. Granular ammonium sulfate was pegged at $202-$205/st FOB Hopewell, Va., and $210/st FOB Augusta, but sources said no new orders were being taken at Hopewell due to supply issues. Delivered granular sulfate was posted at $235/st in Florida from DSM Chemical.
PHOSPHATE
Central Florida: Mosaic’s summer fill program – and apparently CF’s – was doing well last week, as buyers sought to lock in prices rather than pay the Green Markets’ index price at the time of loading. Mosaic has already sold more under its fill program than it did during the entire June through August time frame last year. However, prompt sales have been scarce, mostly because inventories in Central Florida have been deeply depleted. Both of the major phosphate producers have increased their Central Florida price for the fill programs by $5/st FOB, to $365/st FOB from $360/st FOB, an indication order books were becoming filled.
The fill program has put a floor on Central Florida DAP prices, and that would have a chilling effect on prompt sales – if prompt sales were even possible. Many traders said last week they were unable to make prompt purchases from Central Florida, but those who did put the price at between $380-$390/st FOB.
For those doing business in the Northeast and the northern areas of the Cornbelt, it will be a tough season. Wet weather has persisted and kept farmers from their fields and away from warehouses. For some traders and dealers that will mean a very short selling season and fewer sales. Still, temperatures were on the rise, even though rain has replaced ice and snow in most areas.
Sales were strongest in the Southeast and portions of the southern Midwest last week, but much of the business was in truckloads. However, in general it was a quiet week.
The Central Florida DAP price index last week was $380-$390/st FOB. PotashCorp’s Central Florida reference price remained at $380/st FOB. In Texas, Agrifos was earning $430/st FOB for truck loads.
U.S. Gulf: The NOLA DAP barge market continued to slow last week as wet weather dragged on in the upper Mississippi and Cornbelt. Barges already under tow were selling, but those with load dates only were not. Part of the problem was that in anticipation of the season opening in the northern reaches of the country traders moved barges in position to take advantage of the expect boom. Because of the weather, however, that has not happened, and barges were building up; that had the effect of suppressing prices, which had been surging for the past few months.
One trader said that if the barges he had in position did not sell, the product would simply be run through the company’s warehouses.
Another factor on the somewhat lower barge prices cited by several would-be buyers was the summer fill program offered by Mosaic and the forward-sales program by CF. Buyers who need phosphates in place by this summer appeared to be holding off on prompt buys, because it cost less to place a fill order than to buy a prompt barge – between $15/st FOB and $20/st FOB. “If I can wait until mid-May, I can wait until June,” said one.
Meanwhile, CF increased its forward-sales price from $385/st FOB for DAP barges to $390/st FOB. Late last week Mosaic was still at $385/st FOB for the summer fill program, June through August, but was planning to hike its price – most likely on Monday. The amount had not been determined, but will likely match CF’s.
Some of the large fertilizer operations were having doubts that the price offered under Mosaic’s fill program will hold once summer arrives, and were abstaining from joining. One said they believed the price would settle closer to $350/st FOB, but that may not happen if inventories remain low. Mosaic had already sold more under its fill program than it did for the June through August period last year. In addition, the export season will soon be underway, and that will continue to put a strain on inventories. Also, less phosphates were being produced this year than last, as a result of the closing of Mosaic’s Green Bay plant.
Warehouse prices were running between $425/st FOB on the Arkansas to $435/st FOB on the upper Mississippi and Illinois rivers.
The NOLA DAP barge price range last week declined from $400-$405/st FOB the previous week to $398-$403/st FOB. Whether that trend continues will depend on weather conditions.
Eastern Cornbelt: DAP and MAP remained at $425-$440/st FOB, with the low out of spot river locations and the high out of inland warehouses. An Indiana source tagged the dealer market for DAP at $438/st FOB, while forward contract DAP for May from one supplier was referenced at $431/st FOB Cincinnati. 10-34-0 remained in tight supply, with the market quoted at $330-$350/st FOB in the region.
Western Cornbelt: DAP and MAP remained at $425-$435/st FOB regional warehouses, depending on location. The river terminal market in Iowa was generally quoted at the $430/st FOB mark last week, while forward contract DAP for May was available from one regional source at $428/st FOB St. Louis.
10-34-0, where available, was quoted at $330-$335/st FOB in Nebraska, $335/st in central Iowa, and up to $350/st FOB in southeastern Iowa. Effective June 1, phosphoric acid pricing from Simplot will move to $6.90/unit for SPA and MGA on a rail-DEL basis in Iowa, Nebraska, Minnesota, the Dakotas, eastern Wyoming, Colorado, Kansas, Oklahoma, New Mexico, and Texas. A nickel/unit increase is slated for August and again in September.
Southern Plains: DAP was quoted at $425-$420/st FOB Catoosa, with MAP at $420-$425/st FOB. One source said DAP remained relatively tight, while MAP supplies have loosened up somewhat. Several sources expressed hesitation about committing to summer fill. “We’re looking at fall application, so we’ve got time,” said one.
10-34-0 pricing continued to cover a wide range in the region. The dealer market in Kansas was tagged at $305-$315/st FOB, with some quoting reference prices as high as $325-$330/st FOB last week. The low end of the range remained at the $285/st FOB level in the Texas panhandle.
South Central: Sources reported some phosphate outages during the heaviest run in late March and early April. Out of the warehouse system, DAP remained at $425-$435/st FOB to the dealer, with MAP in roughly the same range but in tighter supply. TSP was pegged at $380-$385/st FOB the warehouse, where available.
Western U.S.: Effective June 1, phosphoric acid pricing from Simplot will move to $7.00/unit for SPA and MGA on a rail-DEL basis in California, Arizona, Idaho, Montana, Nevada, Oregon, Utah, Washington, and Wyoming. A nickel/unit increase is slated for August and again in September. “The 2006/2007 fertilizer year is seeing tremendous price appreciation for dry phosphate products,” Simplot said in an April 13 letter. “Liquid phosphate pricing continues to be in line with our November 2006 price schedule posted prior to tightening supply/demand balances for phosphates.”
U.S. Export: Last week India settled its phosphoric acids contracts at $566.25/mt, which was an increase of $105/mt over last year’s price. While that will give that country material to produce DAP, it will still need additional supplies and may move into the market earlier than last year. India has already begun making price inquiries, as has Pakistan. China, which has greatly increased its own phosphate production, looks less promising this year.
PhosChem made no new sales last week, but a source said between 10,000 mt and 15,000 mt was sold by Miss Phos to Transammonia for resale to a third party, for ultimate sale in Central America. The price was not available.
TFI issued its phosphate export report for March, which showed less DAP and more MAP was sold that month and so far this calendar year. Mexico was the biggest buyer of U.S. DAP in March with purchases of 71,289 mt, followed by China at 63,052 mt, and Australia at 38,053 mt. Total DAP exports for the month were 272,544 mt.
For the calendar-year-to-date, China has bought the most, 291,695 mt; Mexico was next at 114,113 mt, and Brazil was the third major buyer at 95,640 mt. Total exports for the calendar-year-to-date were 932,730 mt, a decrease over the same period last year of 14.8 percent.
Canada was the best customer of MAP for the month at 82,567 mt, Australia was second at 62,331 mt, and Brazil was third at 18,189 mt. Total MAP exports for March were 218,013 mt, which was an increase of 5.8 percent over the previous year in March.
For the calendar-year-to-date, Canada led the way in MAP buys at 205,234 mt, followed by Australia at 159,891 mt; Colombia was third at 42,608 mt. Total MAP sales for the calendar-year-to-date amounted to 560,697 mt, a 3 percent increase.
With no new sales, the export DAP price range was unchanged last week at $433-$435/mt FOB.
India: Indian negotiators have settled for a phosphoric acid increase of US$105.00/mt, which puts prices at $566.25/mt CFR India. Sellers had been seeking a $130/mt increase. If this price is approved and accepted by the government, sources say to expect India to take about 1.8 million mt of P205 during the year 2007-2008.
POTASH
Eastern Cornbelt: Potash remained at $218-$225/st FOB regional warehouses, depending on grade and location, with the upper end quoted for new orders of granular potash in Ohio.
Western Cornbelt: Potash was quoted at $215-$222/st FOB regional warehouses, depending on grade and location. One source noted, however, that the April weather delays will result in cutbacks to potash and phosphate usage in his trade area.
Great Lakes: Mosaic has opted to cease potash production at its Hersey, Mich., facility during 2007. It will continue salt production at the facility. Mosaic says the potash mine needs additional capital expenditures to enable it to mine additional potash at the location. Mosaic currently does not intend to make this investment at Hersey because it believes it is more economical to increase production capacities through additional capital investments at its Canadian mines.
Southern Plains: Out of regional warehouses, the potash market had reportedly firmed to $215/st FOB for granular muriate. Potash FOB Carlsbad, N.M., remained at $192-$198/st, depending on grade, but increases were on the books for May 1 and June 1.
Potash postings from Intrepid Potash FOB Carlsbad, N.M., will move on May 1 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. Potash postings at Moab, Utah, will move on that date to $195/st for 60 percent standard and $203/st for 60 percent granular, while postings at Wendover, Utah, will move to $209/st for 60 percent standard and $217/st for 60 percent granular. The company has another $6-$10/st increase slated for June 1, depending on grade.
Feed grade potassium chloride postings from Intrepid will also move up on May 1, with white standard pricing moving to $198/st FOB Carlsbad, $195/st FOB Moab, and $209/st FOB Wendover, and white fine feed grade moving to $201/st FOB Carlsbad. An $8-$10/st increase is scheduled for these products on June 1, depending on location.
South Central: Potash pricing continued to climb. Most sources tagged the regional warehouse market at $215-$225/st FOB, with the upper end to dealers FOB Vicksburg. Effective May 1, 60 percent red granular potash postings from Intrepid Potash will move to $238/st FOB McComb, Miss. As of April 9, Agrium’s 60 percent red premium potash postings moved to $237/st rail-DEL in Kentucky and Tennessee.
Southeast: Potash pricing was up, at $230-$240/st DEL in the region, depending on grade and location. As of April 9, Agrium’s 60 percent red premium potash postings moved to $237/st rail-DEL in Alabama, Georgia, Florida and the Carolinas. Agrium’s warehouse postings moved on that date to $235/st FOB Mulberry, Fla.
SULFUR
Tampa: Although the price for sulfur for Tampa was still not final last week, more contracts were being signed as negotiations with the holdouts continued. Many sulfur suppliers were sitting to the side waiting for the phosphate companies and major sulfur producers to reach a final agreement. “We’re not doing anything until we see this thing resolved,” said one.
At press time, came news that Mosaic had settled all of its contracts at a $5.50/lt increase.
Late last week, Valero’s Port Arthur refinery was still at about half production after an inspection revealed additional problems, which were expected to be resolved by the end of this week. The company’s Texas City refinery was in the process of returning to full production and was expected to be at normal levels by Tuesday (May 1).
West Coast: Normally, West Coast sulfur producers wait until the Tampa price has settled before finalizing their own contracts. However, with the month coming to a close and accountants getting edgy, contracts with the West Coast were settled at $20/lt above the previous quarter. While that was considerably greater than the $5.50/lt up the Tampa contracts have been doing, the sulfur shortage on the West Coast was much more severe than on the Gulf Coast. Companies that were paying others to take their sulfur were actually getting money in return for their product.
Vancouver: Last week spot prices for sulfur continued to be much higher than normal, but the CN railroad was running, so the supply situation was beginning to improve a little. The world sulfur market continued to be strong last week.
Pakistan: The Oil & Gas Development Co. issued a tender April 24 to sell 7,000 mt of sulfur in small lots at a minimum price of $129.73/mt. Bids are to be received through April 30.
MARKET NOTES
India: The India Meteorological Department has forecast a “near normal” monsoon for the country during June-September.
While the government still argues that there will be no shortage of fertilizer during the kharif season, sources report that it has a contingency plan to import product should demand start to take off. The plan is to import 2.3 million mt of urea, 1.75 million mt of DAP, and 1.8 million of MOP by the end of June.
The government appears resolved to invest Rs. 383.2 billion in setting up eight new urea plants and reviving an equal number of closed ones to reduce imports. However, sources doubt there is enough natural gas available to run the new plants and upgrades. The government has also fixed a deadline of 2008 to switch all fertilizer units over to natural gas from naphtha and fuel oil.