AMMONIA
U.S. Gulf/Tampa: Tampa ammonia continues to be locked up for June at the $310/mt DEL mark, with sources saying that the Black Sea remains weak. In the meantime, across the Gulf, Mosaic was reported to have sold a barge to a trader at $285/st FOB.
Eastern Cornbelt: Anhydrous ammonia pricing continued to slide last week. The low end of the spot market was quoted at $420/st FOB Illinois terminals, with the upper end of the regional range at $430/st FOB. One supplier reportedly came out with a fill program in the $410-$420/st FOB range in the Midwest, and another was offering forward contract ammonia for July in the $430-$440/st FOB range out of regional terminals.
Western Cornbelt: Sources continued to report ammonia and UAN movement for corn sidedressing where weather and field conditions allowed it. Spot ammonia pricing remained in the $400-$420/st FOB range in the region, with reports of summer fill being offered at the $410/st FOB mark in Nebraska and Iowa. Forward contract ammonia was available for July from one supplier at $420/st FOB in Nebraska, $425/st FOB in Iowa, and $430/st FOB Palmyra, Mo. Agrium’s ammonia postings in the Leal, Velva, Grand Forks, and Beulah sales area in North Dakota moved on June 4 to $440/st FOB and $460/st DEL.
Southern Plains: The low end of the ammonia market was quoted at $360-$365/st FOB production points in Oklahoma and Texas, with delivered ammonia at $380-$400/st in the region. Pricing out of pipeline terminals in Kansas was tagged in the $390-$400/st FOB range.
South Central: Movement of anhydrous ammonia was about over in the region, but several sources said activity continued later than usual due to the tightness of UAN. The dealer market for ammonia was quoted at $405-$410/st FOB Memphis, with Blytheville pegged roughly $10/st higher.
Black Sea: While some old business was pegged at $242/mt FOB in late May, by the end of last week sources say the market was firmly under $240/mt FOB. Demand remains soft outside Asia, thus offering no incentive for buyers to pay higher prices. At the same time, Asian demand is steady and balanced. Sources say most of the needs for that part of the world are being handled by more local resources.
Only India remains poised to take additional tons. Reportedly, some Indian buyers are ready to step up and make purchases outside their long-term deals with Middle East suppliers, but only if the price is right.
The right price from Yuzhnyy, said one source, is still to be found.
The price has been steadily sliding. One Asian source noted that softer prices should be expected into July. While the decline has been slow in the past few weeks, one observer went so far as to predict a basement price of $210/mt FOB.
One observer noted that the price would have dropped faster if turnarounds were not instituted. Come the fall buying season – expected to start late July or early August – the price should rebound, say Asian sources. For now, the price is pegged at $235-$240/mt FOB.
Middle East: Sources report the producers’ tanks are filling rapidly. The desire to keep the tank levels low is combined with softening prices in the Black Sea to put pressure on prices. For now, however, sources say there is no spot business to nail down exactly what is going on with prices.
The conclusion of the Indian phos acid deal has yet to provide the much anticipated boost in ammonia purchases. Sources report logistical problems are keeping the phos acid shipments from starting in earnest. Producers annually look to the additional Indian business at this time of year to provide a solid floor for prices and to fill order books. The presence of more tons in the tanks than anticipated indicate India has yet to step up to the plate.
For now, producers are holding to their pricing ideas. One Asian source noted that without any spot business it is difficult to argue with the suppliers.
Still, he added, the slide in the Yuzhnyy price and the absence of new and large orders should mean the price is dropping.
The tons that are contracted out of the region head for eastern Asia as well as India. Sources say only additional Indian business will move the price. Asian buyers are said to be comfortable with supplies from a variety of sources, so they do not have to approach the producers for extra tons.
The best guess on pricing remains at $270-$275/mt FOB.
Asia: Ammonia from Indonesia is mostly from the joint venture facilities KPI and KPA. Sources say exports from the state-owned Kaltim are virtually non-existent because Kaltim is focusing on urea production. The KPI and KPA plants continue to run smoothly. Sources say neither company is planning any maintenance shutdowns any time soon.
Taiwanese and Korean buying remains steady. Most of the tons bought in both areas are under contract. Because demand is not expected to increase, sources say additional spot tons are not expected to be called for.
India: Expectations were high that Indian buyers would step up purchases following the conclusion of the phos acid talks. However, say Indian and Arab Gulf sources, those purchases have yet to materialize. Observers note that the acid has yet to arrive in sufficient quantities to justify the ammonia purchases. Blame for the delay is varied. The bottom line seems to be that getting the necessary vessels chartered and into the ports is the main sticking point. Indian companies are expecting to see the acid begin shipping soon.
UREA
U.S. Gulf: Granular prices spanned a broad range last week as the week progressed and buyers went searching for a limited quantity of available barges. There were reports that $304-$305/st FOB was done early in the week; however, prices soon moved into the $308-$312/st FOB range, and by week’s end players were claiming $315-$317/st FOB had been achieved. Woe to the buyers that could have bought at $298-$300/st FOB.
Several players said demand was there from rice country, while imported urea, due to higher international prices, was elsewhere. This left those still with barges in the catbird seat.
Eastern Cornbelt: Granular urea remained at $350-$360/st FOB, with no new business to test that market. The low end was reported out of Ohio and Illinois river locations on a spot basis.
Western Cornbelt: Little movement was reported to test the urea market last week. Granular urea was commonly quoted at $345-$360/st FOB in the region, although there remained reports of spot sales as low as $335-$340/st FOB some river locations. Urea postings from Agrium, effective June 4, included $345/st FOB Shakopee, Minn., and North Dakota warehouse locations at Alton, Carrington, Colfax, Marion, and Scranton; and $350/st rail-DEL in Minnesota, Wisconsin, and the Dakotas.
Southern Plains: Granular urea was commonly quoted at $340-$345/st FOB Inola and Enid, Okla. Some said the market at the port may have dropped to as low as $330-$335/st FOB in recent weeks for spot business, but most were touting the $340/st FOB level last week as the common dealer level.
South Central: Granular urea was quoted at $345-$355/st FOB regional terminals last week, with the low FOB Vicksburg, Miss., to the dealer. The market FOB Memphis, Tenn., and Arkansas shipping points was generally quoted in the $350-$355/st range.
Southeast: Granular urea pricing out of port terminals was down from last report. The dealer market was quoted at $350/st FOB Brunswick, Ga., $355/st FOB Norfolk, Va., $360/st FOB Wilmington, N.C., and $360-$365/st FOB Savannah, Ga.
Western U.S.: Agrium reposted granular urea on June 4. New prices in the Western U.S. included $370/st FOB Washington warehouse locations at Glade, Kennewick, Warden, and Wilson; $345-$360/st DEL in Montana and Wyoming, depending on location; $375/st DEL in Washington, Oregon, Idaho, and northern Nevada from plant locations in Alberta and warehouse sites in Oregon; $385/st DEL in northern and Central Utah; and $390/st DEL in southern Utah.
Black Sea: Despite having comfortable orders lined up, sources say the price in Yuzhnyy could soon be under pressure. For now, deals are pegged at $300-$305/mt FOB. Earlier sub-$300/mt FOB material vanished as traders took positions in anticipation of Indian buyers coming back to the market.
Expectations were high last week that a new Indian tender would be called. As Green Markets went to press, the expectation is now that the tender could be called in another week or so.
The longer India remains out, said one Asian trader, the more likely it will be that the slight up-tick in price will be countered by a drop. Observers have regularly pointed out that if the price hits $285/mt FOB, Indian buyers will call for more tons. Few seem to think that the price will fall that low before the Indians will need to buy again, but they are convinced the price will drop once all the short positions are covered.
Besides the lack of new orders, sources say exceptionally soft prices from Baltic ports are putting pressure on Yuzhnyy.
There is usually a $5-$10/mt difference between the Baltic and Black Sea prices. The past few weeks, however, have seen a $15-$20/mt difference.
The Baltic tons are expected to go to Latin America, but so far those buyers have not made purchases at levels anticipated by the industry. One trader noted that the longer those buyers stay out, the softer the Baltic price will be – and the more intense the pressure on Yuzhnyy to lower its price.
Once India comes back in, sources say orders from Yuzhnyy could amount to about 250,000 mt. While this by itself is not a significant number, the purchases could help provide a floor on pricing and prompt buyers from other parts of the world to step up before the price moves out of their comfort zone.
Some traders are reporting difficulty lining up vessels for Yuzhnyy, but say it is not an insurmountable problem.
Middle East: Producers and traders offering Arab Gulf tons are complaining that IPL and MMTC are not drawing their contracted tons as quickly as expected. Asian sources report some difficulty lining up vessels at a rate and time that will satisfy the producers and buyers.
Others say the problem is nothing to get too worked up about. The tons will move and India will take them all in a manner that best suits India. One trader noted that IPL and MMTC came under heavy criticism last year when the ports were overloaded with urea vessels waiting to unload at a time when the inland supplies were practically gone. The companies are reportedly not anxious to face a second trip to the woodshed over the same issue.
Sources say the Sabic offer in the BCIC/Bangladesh tender shows the comfortable position the area producers seem to be in. Sabic’s offering price was $315/mt FOB.
Still, sources say there are reports that $310/mt FOB has been seriously considered by another producer. No one could point to any business done at that level, but a consensus is growing that the current market in the area is now at $310-$315/mt FOB for both prilled and granular urea.
Reports that the U.S. might soon be stepping in again have bolstered the bulls in this market.
Cyclone Gonu brushed up against Oman and then scooted across the entrance of the Arab Gulf to Iran. Sources say the storm might delay urea loadings, but should not otherwise affect the industry.
Oman ships one to two cargoes a month to India.
India: Okay, so it wasn’t as soon as the conventional wisdom said. Sources say reports that IPL or MMTC – most likely IPL – would step up and issue a tender last week provided a certain amount of buzz that was not warranted. One trader said the reports were being strongly pushed by another trading house to take advantage of some positions that the house held on Black Sea material.
Everyone in the industry agrees that IPL and MMTC will be coming back for fall purchases soon. There are reports that IPL may even be out on the prowl for some early July shipments to plug some holes in its tender purchases. Sources maintain the tender could be called as early as this week or as late as mid-July.
The best guess now is that once IPL issues its tender, it will want to buy at least 800,000 mt. Sources figure the tonnage will be split, with 300,000 mt going to the Middle East suppliers, Yuzhnyy taking about 250,000 mt, and the rest going to China.
Already a large number of cargoes from China are being loaded to cover tons from the IPL and MMTC tenders. The orders are based on the “Open Source” offers that were accepted.
China: Sources report Chinese material remains stable in the low $290s/mt FOB bagged. Despite the 30 percent export duty, which was designed to make Chinese urea too expensive for export, that product remains competitive in the world. Just about every trading house is loading cargo to cover sales to India and Bangladesh. Sources say lining up the necessary vessels still requires some fancy footwork, but the problems of just a month ago to get any vessel seem to be slowly evaporating.
Bangladesh: BCIC closed its tender for 50,000 mt of prilled urea June 6.
Offers follow:
| Offering Company | Origin | Quantity Offered | US$/mt FOB | US$/mt CFR | Remarks | |
| Liven | China | 12,500 12,500 |
309.75 310.75 |
362.00 363.00 |
Bagged | |
| Helm | China | 12,500 12,500 |
326.25 326.25 |
371.25 371.25 |
Bagged | |
| Bulk Trade | China | 25,000 | 308.90 | 373.90 | Bagged | |
| Or | ||||||
| Saudi Arabia | Bulk Cargo | 315.00 | 393.74 | Bulk |
Just how soon BCIC will award the tender and then actually take delivery is anyone’s guess, said one trader. Sources say Bangladesh desperately needs urea, but has not taken delivery of any tons in the past several tenders.
Indonesia: Kaltim closed its tender for 20,000 mt. The winning bid was for $303.25/mt FOB bulk. That price represents an increase of about $3/mt over the last selling tender. Sources expect to see the material offered to Thailand. The favorable shipping rates match nicely with the selling price to bring in a cargo below the last done business into Thailand by $3-$4/mt.
One trader noted that if a seller can get the same price, the profit would be worth the effort. Even if the seller had to shave a dollar or so off the price, it would still be a good deal for everyone.
PIM closes a selling tender June 14. Sources in the area expect to see a slight up-tick in the price.
Sri Lanka: Two tenders for about 12,000 mt each are expected to be called this week. All told, the two buying companies will each end up taking five cargoes of 12,000 mt this season. While never a price mover, Sri Lankan deals often offer a window on pricing ideas as the Indian tenders approach.
NITROGEN SOLUTIONS
U.S. Gulf: UAN prompt barges were hard to gauge, as folks said most attention is now on the forward or fill market into September. Depending on time frame, sources were putting those barges within the $218-$230/st FOB range. There were multiple reports that CF is sold out of barges and railcars until November; however, the company would not confirm that report.
Sellers were optimistic, saying that the corn crop next year is obviously going to be strong, with estimates of 90-100 million acres being bandied about. With those sorts of expectations, they say there is every reason to believe buyers will be buying product and there is no need for price to fall. As a result, they say it is no wonder that CF quickly started raising its forward prices. PotashCorp’s Bill Doyle told analysts he is expecting a big fall, and obviously he is not the only one.
Eastern Cornbelt: UAN inventories continued to be described as tight, with steady sidedress demand in parts of the region last week. The UAN-32 market remained at $290-$305/st ($9.06-$9.53/unit) FOB regional terminals for spot tons. On a forward contract basis, one regional supplier was reportedly offering limited UAN-32 tons for July at $255-$266/st ($7.97-$8.31/unit) FOB in the region.
Western Cornbelt: The UAN-32 pricing was reported in a very broad range last week, and tonnage was described as limited. Nebraska sources tagged the bottom of the market as low as $275-$285/st ($8.59-$8.91/unit) FOB river terminals on a spot basis, while the upper end of the regional range continued to be quoted at $300-$305/st ($9.38-$9.53/unit) FOB.
Southern Plains: Dealers reported some movement of UAN on milo ground last week where weather conditions allowed it. The UAN-32 market continued to be quoted at $280-$285/st ($8.75-$8.91/unit) FOB Oklahoma terminals on the low end, with the upper end of the regional range pegged at $295-$305/st ($9.22-$9.53/unit) FOB based on dealer reference levels at some regional shipping points.
South Central: UAN-32 remained in tight supply, with the market pegged at $280-$295/st ($8.75-$9.22/unit) FOB regional terminals.
Southeast: UAN-30 was pegged at $233-$237/st ($7.77-$7.90/unit) FOB Norfolk, and roughly $238-$240/st ($7.93-$8.00/unit) FOB Wilmington. Vessels tons were quoted in a broad range of $250-$260/mt C&F, with the upper number reportedly for material booked out for late June.
AMMONIUM NITRATE
U.S. Gulf: The barge market, if there is one, appears to be at a stalemate. The last done barge business was reported within the $270-$272/st FOB range. Sellers are quoting $280-$290/st FOB for the next sale, though demand will have to pick up to test the market.
Western Cornbelt: Ammonium nitrate pricing was steady at $320-$325/st FOB in the region, where available. Delivered nitrate was quoted at $334/st in Nebraska from Oklahoma shipping points.
Southern Plains: Ammonium nitrate remained at $310-$315/st FOB Catoosa, Okla., with low inventories reported.
South Central: Ammonium nitrate remained at $305-$315/st FOB terminals to the dealer.
Southeast: Delivered ammonium nitrate was quoted at $330-$350/st in the region, depending on location and supplier.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate remained in tight supply at $230-$240/st FOB in the region last week.
Western Cornbelt: Granular ammonium sulfate remained at $230-$240/st FOB in the region, and in tight supply.
Southern Plains: Granular ammonium sulfate was steady at $200-$230/st FOB in Texas, with the low FOB Freeport and the upper end at Plainview.
South Central: Granular ammonium sulfate pricing was up again from last report, with most sources quoting the dealer market last week at $235-$240/st FOB in the region. Ammonium sulfate supply was said to be loosening up, but sources still talked of tight inventories in early June.
Southeast: Granular ammonium sulfate remained at $205-$210/st FOB, with the low at Hopewell, Va., and the upper end FOB Augusta, Ga. On a delivered basis, granular sulfate was pegged at $215-$235/st in the region, depending on location and supplier. Sources said new prices from Honeywell were on the books for June 18, with reference pricing dropping at that time to $200-$205/st FOB warehouses and $200-$210/st rail-DEL for granular sulfate, depending on location. Postings for mid-grade ammonium sulfate were said to be about $15/st lower than granular.
PHOSPHATE
Central Florida: Mosaic was still making prompt sales of DAP at $365/st FOB last week, but beginning Monday will begin charging its new price of $375/st FOB. The $10/st FOB bump came after buyers in the domestic market began placing more orders following the announcement a week earlier that India had signed a contract with PhosChem to take 1.1 million mt at $414/mt FOB. Those deliveries to India will continue through the end of November, and PhosChem has a great deal of flexibility on when deliveries will be made. That will also make it easier for its members to meet domestic demand. The news sent shock waves through the domestic fertilizer industry and put the focus on the low inventories that will result from the deliveries to India. In addition, Mosaic will conduct turnarounds on one unit each at New Wales and Faustina, which will take a total of about 80,000 st out of production. Lower inventories translate into higher prices on both the domestic and export markets.
In addition, CF increased its asking price to $372/st FOB for loadings from July 1 through the end of September.
Although a weak tropical storm recently drenched much of Florida, the drought in the Sunshine state continued. However, the heavy rain – as much as six inches in some areas – did help to douse some of the hundreds of wildfires that had been burning across the state. The major blaze that had burned for weeks on the Florida-Georgia borders was not extinguished, but the rain did aid firefighters’ efforts to control flames. The wet weather also helped to put out some of the fires that had been burning on Lake Ockeechobee, where the water level was obviously far below normal as a result of the drought.
With the bulls running on the phosphate market, observers said they believed the market would climb as much as another $15/st FOB by the time the Southwest Conference begins, which could bring the Central Florida market up to around $380/st FOB.
The Central Florida DAP price range was unchanged at $365-$370/st FOB, but will likely go up this week. Discounts are not included in the range. Mosaic’s list price was $365/st FOB for DAP and $4/st FOB less for MAP, but increasing $10/st FOB on Monday. PotashCorp’s Central Florida reference price was unchanged at $370/st FOB. In Texas, Agrifos’ price was $410/st FOB for truck sales and $405/st FOB for railcars. Agrifos’ planned production through August was nearly sold out last week.
U.S. Gulf: The NOLA DAP barge market woke up last week, took its vitamins, and took a step up. As the summer fill program offered by Mosaic came to a close, a new bottom was established – just as Mosaic was announcing a price increase beginning Monday and CF was asking higher prices for its forward-pricing plan for July through September. A source said he believed NOLA DAP prices will rise to about $400/st FOB by the time the Southwest Conference convenes. Some others were less bullish, but agreed the price was likely to increase.
Most noted the recent deal for 1.1 million tons between PhosChem and India as the motivation for buyers to step forward and take a position. Those deliveries continue through the end of November, but PhosChem has flexibility on when the deliveries will be made. Many had been holding out in hopes the market would begin to slide backwards in the summer, which it has on a historic basis. Now, however, history means little in terms of phosphate pricing, because much has changed in the industry during the past year. Mosaic closed its Green Bay processing plant in Central Florida, and a sulfur shortage has resulted in slightly reduced production in the industry. Meanwhile, Mississippi Phosphate has been dedicating more of its production to the export market, which pays more and eliminates the additional cost of moving product from Pascagoula to New Orleans – about $10/st FOB. Transammonia, which has a contract with Miss Phos, has pushed up export sales.
Generally, the weather has been kinder to farmers in the Midwest and Texas so far this season – more rain and warm temperatures, and that has resulted in greater than normal sales from warehouses. The warehouse DAP price was between $410 – $420/st FOB. Last week both traders and dealers were in the market to purchase fill for their warehouses. Many had been sitting on the sidelines hoping for a price reduction, but when the India deal was signed, prices started going up again.
Mosaic’s summer fill program, which carried the most recent price of $385/st FOB, came to an end, and that appeared to have put a solid bottom on the NOLA DAP barge market. Mosaic bumped its price June 11 by $10/st FOB, to $395/st FOB. CF hiked its forward price to $392/st FOB for July, $395/st FOB for August, and $402/st FOB for September.
Last Monday a NOLA DAP barge was purchased for $382/st FOB, but prices began to rise almost immediately, moved to $385/st FOB, and continued climbing. Most of the sales were done about $387/st FOB, but rose to as high as $390/st FOB late in the week.
The NOLA DAP barge price last week widened from $382-$385/st FOB the previous week to $382-$390/st FOB. However, the lower prices had vanished by late last week, and buyers should expect to pay a minimum of $387-$390/st FOB this week, say sources.
Eastern Cornbelt: Sources quoted DAP and MAP generally in the $410-$425/st FOB range out of river locations in the region, with reference prices still reported as high as $430-$435/st FOB inland warehouses. Sources reported some fill commitments taking place, as those who had been waiting it out decided to take the plunge in the wake of last week’s contract announcement between PhosChem and India. One supplier was reportedly offering forward contract DAP for July at $420/st FOB Peoria, Ill., and $423/st FOB Cincinnati.
No current prices were reported for TSP in the region. 10-34-0 was steady at $335-$350/st FOB, but sources reported few new sales to test that market.
Western Cornbelt: DAP remained at $410-$420/st FOB river warehouses in the region, with several sources claiming the $415/st FOB level as the common dealer price last week. MAP was the same as DAP, where available. No current prices were reported for TSP in the region. 10-34-0 remained at $335-$350/st FOB in the region, with little new movement reported.
Southern Plains: DAP was quoted generally at $410-$415/st FOB Catoosa, but sources also talked of spot business as low as $407/st FOB the port in recent weeks. Still lower prices were reported on a delivered basis, with some talking of numbers in the low-$400s/st DEL last week as inventories are balanced.
10-34-0 remained in a very broad range, although movement was nil. Kansas sources tagged the upper end of the market at $305-$330/st FOB, while pricing in the Texas panhandle continued to be quoted as low as $285/st FOB. Effective June 1, phosphoric acid pricing from Agrium firmed to $690/st for SPA and $680/st for MGA rail-DEL in Colorado, Kansas, Oklahoma, New Mexico, and Texas. A $5/st increase for both products is slated for August and again in September.
South Central: DAP out of regional warehouses was pegged in the $410-$425/st FOB, with the low FOB Memphis and Caruthersville, Mo. Dealer pricing for DAP and MAP FOB Vicksburg was pegged at the $415/st mark, with $5/st discounts to national accounts. TSP was quoted at $380-$385/st FOB regional warehouses, where available.
U.S. Export: Offshore demand was increasing last week and was competing with demand in the domestic markets. PhosChem made sales of 25,000 mt of DAP into Peru and another 6,000 mt of DAP and MAP into Central America. The price on both of those deals was $430/mt FOB. In addition, Transammonia sold 10,000 mt of DAP, which was produced by Miss Phos, into Central America at $428/mt FOB. The competing demand between the export and the domestic markets will force prices up on both fronts.
Argentina was said to be ready to hit the market for phosphates and was willing to pay up to $485/mt DEL, which was up from the $470-$480/mt DEL it recently paid. That delivered price would result in an FOB price of about $435/mt, after deducting for ocean freight. India, too, was said to need additional supplies after recently agreeing to buy 1.1 million mt from PhosChem at $414/mt FOB. Turkey was said to have purchased 50,000 mt at $420/mt FOB from Tunisia. Brazil will soon be looking for volumes of MAP, and Europe will likely be in the market in the fall.
The export DAP price range increased last week from the previous week’s $414-$428/mt FOB to $428-$430/mt FOB. Indications were that prices on the export market will continue to rise.
Pakistan: Fauji Fertilizer has issued a tender to import 30,000-40,000 mt of DAP in bulk to Karachi/Port Qasim on a C&F basis for shipment in July. Offers were to be submitted on June 5 and remain valid until June 8.
India: FACT has contracted 300,000-350,000 mt of phosphate rock from Morocco at a price that is reportedly US$68-$70/mt FOB bulk for shipment June 2007 to April 2008 in lots of 45-50,000 mt. FACT will fix vessels.
POTASH
Eastern Cornbelt: Potash was firm at $226-$235/st FOB regional warehouses, depending on grade and location, with some sources talking of new warehouse postings as high as $240/st FOB in the region. Effective June 1, Saskatchewan mines postings from PCS Sales moved to $202/st FOB for standard, $207/st FOB for soluble and granular, and $212/st FOB for white granular. On Oct. 1, those postings are slated to increase $20/st.
Western Cornbelt: The regional potash market was quoted at $220-$235/st FOB last week, depending on grade and location, with the low quoted in Nebraska. One supplier was reportedly referenced at the $232/st FOB level for red granular potash in the region.
Southern Plains: Potash pricing was up from last report. Postings FOB Carlsbad, N.M., from Intrepid Potash firmed on June 1 to $208/st for 62 percent standard, $209/st for 60 percent granular, $211/st for 62 percent fine standard, and $214/st for 62 percent granular. Out of the regional warehouse system, sources tagged the potash market at $220-$230/st FOB last week, depending on grade and location.
South Central: Potash pricing continued to climb as well. Warehouse pricing in the region was quoted at $218-$230/st FOB, depending on grade and location, with most dealer quotes reportedly in the $220-$225/st FOB range for granular potash.
Southeast: Sources tagged the potash market at $245/st FOB Wilmington, with delivered potash now quoted at $240-$250/st in the region, depending on grade and location.
Mine shutdowns: Three of the major producers released normal maintenance/vacation shutdown plans last week.
Mosaic: Esterhazy’s shutdown plans are: K1 down June 25-July 15, and K2 down July 29-Aug. 12. Colonsay’s shutdown plans are for July 15-Aug. 5. Belle Plaine will take a partial outage from Sept. 10-18. Carlsbad has the following shutdowns scheduled: K-Mag: Sept. 10 -19 and MOP: Oct. 15 – 29.
PotashCorp: Allan – July 29-Aug. 25, Lanigan – July 1-28, Rocanville – June 29-July 18, Cory – July 1-28, New Brunswick – July 29-Aug. 18. Patience Lake is down from May 6 to Oct. 20 for its normal production cycle shutdown.
Agrium: The company’s Saskatchewan mine will be shut down for 2.5 weeks starting July 7.
India: The Belorussian Potash Co. has agreed to sell 1.2 million mt of potash to IPL at US$270/mt CFR India including 180 days credit for shipments from June 2007 through May 2008. The new price reflects an increase of $50/mt over the previous year.
SULFUR
Tampa: Sulfur producers were said to be preparing themselves for the next round of sulfur negotiations for the third quarter. Although the amount was uncertain, they will demand higher prices – possibly between $5/lt and $10/lt. The reason was fairly simple: world prices have soared recently and demand was increasing. The scenario of increasing demand and low supplies was likely to continue for the balance of this year, but should begin to level out during 2008. “The bubble will definitely deflate,” a source said. By 2009, sulfur supplies were expected to surpass demand and prices will likely head in reverse, and that situation will get worse as time goes on. So, it’s a case of get-it-while-you-can. Higher prices for later in 2007 will probably not create a major problem for domestic phosphate producers, who were enjoying the best market they have seen in the past 30 years. However, don’t look for them to immediately sign on to any increase, at least if history is any guide.
Sulfur inventories in Central Florida were improving last week and were reaching equilibrium, a situation that had confounded phosphate producers there. Still, sulfur producers were said to be increasing their deliveries to priller operations on the Gulf Coast, where the export prices were much more attractive. Martin Gas’s priller facility at Beaumont was getting ready to load a vessel for ICEC for sale into Brazil. That situation will probably keep domestic supplies in balance or slightly tight for the next several months.
Valero had hoped to have its Houston refinery converted to produce low-sulfur diesel fuel, which would have created about 200 lt/day from the previous 22 lt/day of sulfur. That was supposed to have happened a couple of weeks ago, but change is never easy. Last week the plant was producing no sulfur at all, and will not for another couple of weeks.
West Coast: Sulfur supplies to prillers on the West Coast were improving last week, especially for facilities at Stockton, but were not as plentiful near Los Angeles.
Vancouver: Sulfur suppliers in Vancouver were getting ready to negotiate contracts for the second half of the year, and prices were expected to increase to levels nearer the current spot market. China has been paying between $150-$160/mt for spot sulfur on a delivered basis.