AMMONIA
U.S. Gulf/Tampa: With soft Black Sea prices, sources say Tampa is under pressure to go down in July. The only question is how much. Sellers say while Yuzhnyy numbers have been down, they have touched bottom. In addition, freight is called pricey at $70-$75/mt. Regardless, expectations are for something lower than June’s $310/mt DEL. In the meantime, across the Gulf, there were reports that CF may have already achieved a sub-$310/mt DEL number from at least one supplier.
Eastern Cornbelt: Sidedress movement of ammonia and UAN was finished in the region. The ammonia market remained at $425-$440/st FOB, depending on location and time of delivery. One supplier was offering forward contract ammonia for July at $455-$465/st FOB regional terminals.
Western Cornbelt: The anhydrous ammonia market was transitioning from spot demand to fall prepay in the region. Cash market ammonia was quoted at $415-$420/st FOB regional terminals last week, with fall prepay generally quoted in the $420-$430/st FOB range. One supplier was referencing forward contract ammonia for July at $440/st FOB in Nebraska, $450/st FOB in Iowa, and $455/st FOB in Missouri.
Northern Plains: Dealers reported a little sidedress activity in the region last week, but movement on corn was finished in most areas, and rapid growth made applications impossible in other locations. Sources also reported some interest in fertilizer fill programs for fall.
The ammonia market was quoted as low as $405/st FOB in Minnesota for cash market tons, with fall prepay reportedly offered in the $415-$440/st FOB range, depending on location. North Dakota sources tagged the market at $445-$460/st DEL, depending on supplier and time of delivery. One regional supplier was offering forward contract ammonia for July at $440-$450/st FOB regional terminals.
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.
Eastern Canada: Corn sidedressing was just winding down in Ontario after what one dealer described as a hectic period of fertilizer movement in May and early June. One Ontario source said growers planted as much as 40 percent more corn than last year, and spring fertilizer volumes were up dramatically as a result. Soybean acreage was also up, while winter wheat acreage was down considerably from normal in the province. Dealers also reported some sidedress activity on specialty crops and alfalfa last week.
Sources quoted the dealer market for anhydrous ammonia at $550-$565/mt FOB in Ontario last week. Rail-delivered ammonia from Western Canada was pegged at the $595/mt mark to locations on Ontario and Quebec.
Western Canada: The anhydrous ammonia market was quoted at $666-$711/mt DEL in the region.
Black Sea: Even though the KIP has moved to $225/mt FOB, sources in Asia say the most likely bottom for the Yuzhnyy price will be $235/mt FOB. Generally speaking, the KIP is not lowered until some business is done at the proposed new price. This time, however, sources say the government is staying abreast of conventional thinking but ahead of actual business.
A couple of Asian observers noted that they could not identify any business at the $225/mt FOB level, but would be more than happy to see the market move to that level. Arguing that the price has only another couple of weeks at the current low levels, sources say several of the plants will be coming down for routine maintenance and the American stockpiles are dropping.
Demand from the States beginning some time late July or early August in combination with the rotating shutdowns should be enough to stem a perceived downward slide of prices and move the market back up, say Asian traders. For now, the price range for business concluded remains at $235-240/mt FOB.
Middle East: Producers claim they are sold out through July and into August. However, reports are circulating that at least one cargo was sold on a spot prompt basis by Qafco. Sources are hard pressed to come up with a figure for the deal. One Asian source noted the deal was most likely payback for an earlier swap deal under a long-term agreement.
Demand remains steady, but not so fierce that buyers are desperate for tons. On the other hand, producers are not in control of market pricing, nor are they concerned about overloaded storage facilities.
UREA
U.S. Gulf: Most sources last week were putting the granular prompt market between the $218-$222/st FOB range. Others were on the edges, with speculation that product may have sold a little lower earlier in the week, and that it might make it to $223/st FOB by week’s end. Sources reported more demand for urea from wheat country; however, they said that high water levels on the Arkansas River were causing delays getting new product upriver. Product in place in Inola/Catoosa was called around $345/st FOB.
Availability remained an issue, with sources saying there are not that many barges out there for those wanting product. There was also a rumor that one cargo due in mid-summer from the Middle East was cancelled due to production problems.
Some were still scratching their heads that prices would be higher, not lower, this time of year. Even so, some argued that UAN, DAP, and potash were hotter right now than urea.
One source surmised that some profit taking may come along as forward tons were sold pretty low going into the summer and then prompt prices bounced back up.
Eastern Cornbelt: Granular urea remained at $350-$360/st FOB regional terminals, with few new sales to test the market.
Western Cornbelt: Granular urea was quoted at $350-$365/st FOB in the region, with few new sales to test the market. One Iowa source pegged the common dealer market last week at the $360/st FOB level on the Mississippi River. The Inola, Okla., urea market was quoted at the $345/st FOB level, with some interest reported in the wheat belt. Sources reported high water levels on the Arkansas River, however, which were causing problems for commercial barge movement at mid-month.
Northern Plains: Granular urea was pegged at $350-$360/st FOB the Twin Cities, with delivered urea quoted at $365-$370/st in North Dakota. Urea postings from Agrium moved on June 12 to $360/st FOB Shakopee, Minn., and North Dakota warehouse locations at Alton, Carrington, Colfax, Marion, and Scranton, and $365/st rail-DEL in Minnesota, Wisconsin, and the Dakotas. Those postings were up $15/st from Agrium’s June 4 list prices in the region.
Northeast: Granular urea was quoted at $365-$375/st FOB Baltimore, with delivered tons pegged at $390/st in Delaware and at the $400/st mark or higher in Pennsylvania, depending on location.
Eastern Canada: Granular urea pricing was down from last report at $440-$460/mt FOB in Ontario, depending on the terminal location. Rail-delivered urea was pegged at $475-$485/mt in Ontario and Quebec from Western Canada shipping points. Some regional suppliers were reportedly still referenced at season-ending levels of $540/mt FOB, but no new sales were reported at that level.
Western Canada: Urea pricing dropped to $475-$500/mt DEL in last week.
Black Sea: By any calculation, the price out of Yuzhnyy is softening. One source looked at deals done with Latin America and calculated the Yuzhnyy equivalent to $280/mt FOB. Then, he added in the latest business done into Turkey at an estimated $275/mt FOB and declared the range to be $275-$280/mt FOB. Others in the industry tend to agree with that range – at least as of the end of the week.
Sources in Asia note that traders are bidding at $270/mt FOB and not having the door slammed in their faces. Sellers are said to be willing to sign at $280/mt FOB and – if the client is right – just a shade under. Buyers, however, are wary of accepting a deal so readily offered by the producers.
The only real market for Yuzhnyy tons will be India, when it comes back into the market. By that time, said one trader, the market may have dropped another $5-$10/mt. He added that no one wants to be stuck with too many tons that might have to be sold at a loss once the Indians start buying.
The Yuzhnyy suppliers have a problem of being squeezed by serious competitors on all sides. To the west, the Baltic suppliers enjoy a freight advantage to Latin America and are able to secure most of the sales to that part of the world. To the east, the Middle East suppliers can offer cargo sizes more to the liking of Indian buyers who want to move tons into smaller port. And further east, Chinese tons, despite a 30 percent export duty, are competing favorably, especially in the western Indian ports.
With India most likely willing to load up on tons from the Middle East and China, the Yuzhnyy suppliers will have to face the possibility of being shut out of upcoming tenders.
Middle East: Producers may not be as comfortable as they claim when buyers come knocking. To hear the producers talk, one would think there are no available tons until sometime after July. That tone changed last week, however, when the CFC/Sri Lanka tender indicated that the price remained about $315/mt FOB. At the same time, the various winners – there were five lots of 12,000 mt each to be awarded – offered Qafco or Chinese material. The differences, said one source, will be which supplier had the lower price.
One trader noted that to ensure a deal on the books Qafco should lower its price to beat the Chinese product, but no one is sure if the producer is ready to do that.
Just as Chinese urea is causing problems for the Black Sea suppliers, tons from the Middle Kingdom to smaller but easily accessible markets such as Sri Lanka also cause grief for the Middle East suppliers.
Traders are bidding at $300/mt FOB, with producers willing to talk. Reportedly, at least one deal was done at that level, but sources could not confirm the deal.
The producers are offering at $310/mt FOB. One Asian trader said if there was ever an indication the producers are anxious to sell, it is their willingness to counter at $310/mt FOB after arguing for so long the market was really in the $320s/mt FOB. Sources now peg the market at $300-$315/mt FOB for prills and granular.
India: The global urea market continues to wait to see what IPL and MMTC are going to do. While anticipation is building for the two companies to call tenders, sources say the continued softening of prices in the Black Sea, China, and Middle East will only encourage the buyers to wait until the last possible moment before issuing the tenders.
Asian sources last week were saying the tenders could be called as early as this week or as late as two to three weeks away. Oddly enough, this is the same thing industry observers said at the IFA gathering in Turkey last month. Estimates for how many tons will be called for are now hovering around 500,000 mt.
One player said last week that India is quietly making inquiries with individual sellers, perhaps as a prelude to a tender.
By late in the week came word that MMTC had contracted about 400,000 mt of additional urea ex open origin around USD$322-$326/mt CFR India. The deals are expected to be formalized next week under a yet-to-be announced MMTC tender.
Indonesia: Indonesian state-owned facilities keep selling. Sources report that PUSRI will most likely be calling a selling tender this week. This event is on the heels of the PIM tender. Kaltim is also expected to be offering tons shortly.
The softness of the global market is not deterring the producers from offering their tons to local traders, who in turn will cut deals with international trading houses for offshore sales.
The PIM tender came in under the $290/mt FOB the company had hoped for. The range for the PUSRI tender is expected to take the export price below $280/mt FOB.
Sri Lanka: The Ceylon Fertilizer Corp. closed its tender earlier last week for 60,000 mt of prilled material to be delivered in five equal lots. Urea was offered from the CIS, China, Indonesia, and the Middle East. For many in the industry the large number of offers to a normally sleepy tender indicated how quiet the market has become and how desperate some suppliers are to sell. Results of the tender follow:
| Lot and position | Offering Company | Quantity MT | Grade | Origin | US$/mt FOB | US$/mt CFR sight | US$/mt CFR 180 days |
| 1st lot | |||||||
| Helm | 12,000 | Prilled | Qatar/China | 315.00 | 349.00 | 360.90 | |
| Toepfer | 12,000 | Prill/Gran | Qatar/China | 354.64 | 366.54 | ||
| Keytrade | 12,000 | Prilled | China | 357.56 | 369.18 | ||
| ETA | 12,000 | Prilled | Middle East-China-Indonesia | 360.72 | 369.97 | ||
| Transammonia | 12,000 | Prilled | KSA/Open | 370.50 | |||
| Ameropa | 12,000 | Prilled | CIS | 373.47 | 387.33 | ||
| Midgulf | 12,000 | Prilled | 382.00 | 398.00 | |||
| 2nd lot | |||||||
| Toepfer | 12,000 | Prill/Gran | Qatar/China | 354.14 | 366.04 | ||
| ETA | 12,000 | Prilled | Middle East-China-Indonesia | 359.72 | 368.97 | ||
| Transammonia | 12,000 | Prilled | KSA/Open | 370.50 | |||
| Swiss Singapore | 12,000 | Prilled | China | 325.00 | 370.25 | 383.25 | |
| Conagra | 12,000 | Prilled | Qatar | 325.75 | 370.75 | 385.58 | |
| Ameropa | 12,000 | Prilled | CIS | 373.47 | 387.33 | ||
| Midgulf | 12,000 | Prilled | AG/CHINA/CIS | 382.00 | 398.00 | ||
| 3rd lot | Toepfer | 12,000 | Prill/Gran | Qatar/China | 365.04 | ||
| Keytrade | 12,000 | Prilled | China | 357.56 | 369.18 | ||
| ETA | 12,000 | Prilled | Middle East-China-Indonesia | 361.02 | 370.27 | ||
| Transammonia | 12,000 | Prilled | KSA/Open | 375.50 | |||
| Midgulf | 12,000 | Prilled | CIS | 400.00 | 416.00 | ||
| 4th lot | |||||||
| Toepfer | 12,000 | Prilled | Qatar/China | 352.64 | 364.54 | ||
| ETA | 12,000 | Prilled | Middle East-China-Indonesia | 359.62 | 368.87 | ||
| Transammonia | 12,000 | Prilled | KSA/Open | 375.50 | |||
| Swiss Singapore | 12,000 | Prilled | China | 325.00 | 370.25 | 383.25 | |
| Midgulf | 12,000 | Prilled | CIS/AG/CHINA | 416.00 | 432.00 | ||
| 5th lot | |||||||
| Toepfer | 12,000 | Prilled | Qatar/China | 349.74 | 361.54 | ||
| ETA | 12,000 | Prilled | Middle East-China-Indonesia | 361.62 | 370.77 | ||
| Transammonia | 12,000 | Prilled | KSA/Open | 375.50 | |||
| Midgulf | 12,000 | Prilled | KSA/Open | 416.00 | 432.00 |
Closing late last week was the CCF tender for similar tonnage. Results from that tender were not available at press time.
Pakistan: Local media report the government has not only slapped a ban on exports, but has also halted the import program with Saudi Arabia. The special deal with the Saudis came as part of a development assistance package that was to bring in about 500,000 mt this semester.
The absence of TCP in the buying cycle earlier this year was credited with the general softness of the market, say sources.
Now the Pakistani government is saying demand for the upcoming Rabi season will be about 2.2 million mt. Local inventories are pegged at 3 million mt from domestic and international sources. A government minister said the money earmarked for urea imports could be better spent elsewhere in development assistance.
Even with a projected surplus of 800,000 mt, the government is still unwilling to allow for exports of urea.
A government spokesman said the export of wheat and then a subsequent shortage scared policy makers, and so a blanket ban was placed on critical commodities. He added the government will review the policy as urea demand, production, and import numbers change.
NITROGEN SOLUTIONS
U.S. Gulf: Barges were reported to be trading within the $238-$240/st FOB ($7.44-$7.50/unit) range last week.
Eastern Cornbelt: While there continued to be reports of UAN fill tons being offered on a spot basis for as low as $8.50/unit FOB river locations for small tonnage blocks, most sources pegged the forward market last week in the $8.56-$9.00/unit range FOB regional terminals.
Western Cornbelt: Dealers reported a seasonal lull in fertilizer activity, although several sources said they were still seeing spot loads of UAN moving for corn sidedressing last week.
Solutions inventories were very tight, if not completely tapped out, for spot market demand in the region. Sources quoted the cash market to dealers at $295-$300/st ($9.22-$9.38/unit) FOB terminals on the upper end for new sales. There also continued to be reports of limited blocks of fill UAN being offered for as low as $8.50/unit FOB river terminals, but sources said the operative word was “limited.” It was rumored that some buyers earlier were pulling fill tons to meet current sidedress demand, but one source said suppliers had either changed delivery terms or withdrew fill offers as a result.
Northern Plains: UAN was still trickling out for sidedress in the region last week. Sources reported very tight inventories, with most of the available tonnage reportedly booked earlier under spring prepay programs. Cash market tons, where available, continued to be quoted in the $9.00-$9.40/unit FOB range in the region last week, with delivered UAN-28 pegged at the $275/st ($9.82/unit) mark in North Dakota.
Northeast: The UAN-30 market was quoted at $245-$251/st ($8.17-$8.37/unit) FOB Baltimore, Md., with the upper reflecting new reference levels. Pricing FOB Seaford, Del., was pegged at the $256.50/st ($8.55/unit) mark for UAN-30 and $273.60/st ($8.55/unit) level for UAN-32. Pennsylvania sources reported delivered UAN-30 at the $268/st ($8.93/unit) level, and UAN-32 out of terminals in upstate New York remained at $295-$300/st ($9.22-$9.38/unit) FOB for spot tons.
The UAN vessel market was quoted in the mid- to high$260s/mt C&F for late July loading dates and August delivery.
Eastern Canada: The UAN-28 market was pegged at $318-$325/mt ($11.36-$11.61/unit) FOB in the region, up slightly from last report and in tight supply.
Western Canada: UAN-28 was quoted at $295-$311/mt ($10.54-$11.11/unit) DEL.
Australia: The vessel Alexandra C sank off the coast of Yemen this past week. It was reportedly enroute from Yuzhnyy to Australia with a cargo of 10,000 mt of UAN for Keytrade. All 19 crew members were rescued by the vessel Fairchem Steed.
AMMONIUM NITRATE
U.S. Gulf: Players have been indicating prices of $260-$270/st FOB for barges, though others say that in reality there are no barges available, which is pretty much in line with demand. Several sources last week indicated price ideas for September at $250-$260/st FOB. By that time, they say there may be both availability and demand.
Western Cornbelt: Ammonium nitrate inventories were reportedly tapped out in the region, so no current prices were available last week. “I don’t know of any product in the system right now,” said one source.
Eastern Canada: Ammonium nitrate was pegged at $355-$368/mt FOB, with the low in Ontario and the upper end in Quebec. Some locations were still referenced as high as $400/mt FOB to reflect in-season pricing, but no sales were reported at that level.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate remained at $230-$240/st FOB, and in tight supply. It was not clear if orders could be placed for fill ammonium sulfate at published levels reportedly as low as $200-$205/st FOB regional warehouses.
Western Cornbelt: Ammonium sulfate remained very tight and strictly allocated. Although summer fill levels were theoretically out at lower numbers, sources continued to report the occasional spot sale of granular sulfate as high as $240/st FOB to dealers in the region last week.
Northern Plains: Granular ammonium sulfate was $200-$205/st FOB and $205-$215/st DEL in the region, depending on location and supplier.
Northeast: Granular ammonium sulfate was quoted at $200-$215/st FOB in the region, based on new pricing effective June 18. No updated delivered prices were reported last week.
Eastern Canada: Granular ammonium sulfate was tagged at $275-$285/mt FOB in Ontario, with rail-delivered granular sulfate quoted at the $295/mt mark in Ontario and Quebec from Western Canada. Some suppliers were reportedly still referencing granular sulfate as high as $320/mt FOB last week, reflecting in-season pricing for the spring planting run.
Western Canada: Granular ammonium sulfate was pegged at the $295-$300/mt DEL mark in the region, also down from last report.
PHOSPHATES
Central Florida: Although Mosaic pretty well filled its order book during the recent summer fill program, it was able to make a few news sales last week at its new price of $385/st FOB, but that was for delivery in October. Meanwhile, CF, which was believed to still have some inventory available, raised its price from $372/st FOB to $375/st FOB for deliveries in July and August.
Phosphate “producers are comfortable,” a source said, echoing others in the industry, “so they have no reason to lower prices.”
New sales at this time of year would make little sense to buyers, unless they unexpectedly ran low and need it to boost up inventories in their bins. Most who had a need for June made their move during Mosaic’s fill program or CF’s forward pricing plan in April and May.
Last week Central Florida was at a competitive disadvantage when compared to the export market, where an st of DAP sells for the equivalent of $392/st FOB, so domestic prices were unlikely to come down.
With a lack of new prompt sales, the Central Florida DAP price range remained at $370-$372/st FOB. Discounts are not included in the range. Mosaic’s list price was $385/st FOB for DAP and $4/st FOB less for MAP. PotashCorp’s Central Florida reference price increased from $370/st FOB to $385/st FOB. CF’s price was said to be up from $372/st FOB for both DAP and MAP to $375/st FOB. In Texas, Agrifos’ price was $410-$415/st FOB for truck sales and $410/st FOB for railcars. Agrifos has sold out well into September.
U.S. Gulf: Uncommitted floating phosphate barges on the river system were in short supply last week, but so was demand. Most buyers took advantage of the summer fill program offered by Mosaic, or the future pricing plan offered by CF. Despite a lack of prompt sales, indications were that the price hike from Mosaic was taking hold and pushing the price of loadings for July and August up. Sales for July were made by traders at $395/st FOB last week, and Mosaic made sales for October at $405/st FOB. Buyers were placed in the position of making a purchase at about $395/st FOB and using their credit line, or waiting until September or October and paying $405/st FOB, so it will be a matter of doing the math.
Terminal sales were still the best deal last week, even though prices were increasing from about $415/st FOB to $420/st FOB. However, many warehouse operators were reluctant to deplete their bins, when they know they will have to pay higher replacement costs when the fall season starts.
The Cornbelt, which was a major question mark a month ago, was said to be more active than most of the country in terms of warehouse sales.
Wheat farmers in Oklahoma and northern Texas were suffering last week. Heavy rains during the past couple of weeks prevented them from harvesting their damp crops and mold was a problem for the wheat, which was already a shaky proposition. Many saw the combines they will need for the job move north to serve other crops in the Midwest, which will make their situation even more difficult.
Last week, CF moved its forward price for loading in July and August from $392/st FOB to $395/st FOB. However, despite the slightly higher asking prices last week, the NOLA DAP barge price range was unchanged at $390-$392/st FOB.
Eastern Cornbelt: DAP and MAP were quoted at $420-$430/st FOB regional warehouses for fill tons. One supplier was offering forward contract DAP for July at $428/st FOB Peoria, Ill., and $431/st FOB Cincinnati, Ohio. 10-34-0 remained at $335-$350/st FOB in the region.
Western Cornbelt: DAP and MAP were quoted at $420-$430/st FOB regional warehouses, but interest was reportedly minimal. While one source said spot sales could be had earlier in the month at the $415/st FOB level, most said the market had firmed slightly in recent weeks. The Inola market was pegged at $420/st FOB for DAP and $415/st FOB for MAP last week.
10-34-0 was quoted at $325-$350/st FOB, with the upper end reportedly reflecting updated acid and ammonia costs.
Northern Plains: DAP and MAP were quoted at $415-$420/st FOB regional warehouses, with forward contract tons pegged as high as $431-$434/st FOB for July from one supplier. North Dakota sources tagged rail-DEL phosphate fill tons in a wide range at $425-$452/st last week, depending on supplier and time of delivery.
10-34-0 was quoted at $315-$325/st FOB for the last done business, with delivered product remaining at the $375/st mark in North Dakota.
Northeast: DAP and MAP were tagged at $417-$422/st FOB Philadelphia, Pa., and E. Liverpool, Ohio. 10-34-0 remained at $285-$305/st FOB in the region, with little movement reported to test the market.
Eastern Canada: Phosphate pricing was down slightly from last report, although product remained in tight supply. MAP was quoted at $540/mt FOB Ontario warehouses, with DAP reported in the $540-$570/mt FOB range. TSP was also pegged at $535-$540/mt FOB, where available, but sources reported few new sales to test that market.
Western U.S.: Simplot issued new dry phosphate postings for the Western U.S., effective June 18. Adjusted levels for 18-46-0 DAP include $447/st DEL in Montana, Wyoming, Idaho, Utah, and the West Slope of Colorado; $452/st DEL in Nevada; $452-$457/st DEL in Washington, Oregon, and the Idaho panhandle; and $457/st rail-DEL in California and Arizona. Warehouse postings for DAP in California moved on that date to $457/st FOB French Camp and Richvale, and $462/st FOB El Centro.
Simplot’s 11-52-0 MAP postings moved on June 18 to $440/st DEL in Montana, Wyoming, Idaho, Utah, and Colorado’s West Slope; $445/st DEL in Nevada; $445-$450/st DEL in Washington, Oregon, and the Idaho panhandle; and $450/st rail-DEL in California and Arizona. Warehouse postings for MAP in California moved to $450/st FOB French Camp, Helm, Edison, Richvale, and Dixon, and $455/st FOB El Centro.
Simplot’s postings for 11-52-0 SSP (Simplot Stabilized Phosphate with Avail®) moved on June 18 to $512/st DEL in Montana, Wyoming, Idaho, Utah, and Colorado’s West Slope; $517/st DEL in Nevada; $522/st DEL in Washington, Oregon, the Idaho panhandle, California, and Arizona; $522/st FOB French Camp, Calif.; and $527/st FOB El Centro, Calif.
Simplot’s 16-20-0 postings in the Western U.S. moved on June 18 to $295/st FOB Hopmere, Ore.; $300/st DEL in Montana, Wyoming, Idaho, Utah, Nevada, and Colorado’s West Slope; $300/st FOB California warehouses at Richvale, Dixon, and Lathrop; $300-$305/st DEL in Washington, Oregon, and the Idaho panhandle; and $320/st FOB El Centro.
Simplot’s 0-45-0 postings moved on June 18 to $370/st FOB Pocatello, Idaho; $385/st FOB Hedges; $415/st FOB French Camp and DEL in California and Arizona; and $420/st FOB El Centro.
Western Canada: MAP in Western Canada was quoted at $530-$565/mt DEL last week.
U.S. Export: Phoschem made a small sale of 6,000 mt into Central America last week at a new record price of $440/mt FOB as the export market continued to build steam. The next sale will likely be at a higher price.
The DAP export price range last week rose to $437-$440/mt FOB, up from $432-$437/mt FOB the previous week.
The Fertilizer Institute issued its report for phosphate exports during May, and overall, Brazil was the strongest buyer of North American phosphate exports. In May, Brazil took 85,876 mt, with neighbor Argentina second at 53,244 mt, and Mexico third at 30,781 mt. Total DAP exports for May amounted to 305,282 mt, a decline of 50.1 percent compared to May of last year. For the calendar-year-to-date, China has been the biggest customer with purchases of 291,695 mt from deliveries made earlier in the year. Mexico was second at 229,711 mt, followed by Brazil at 194,606 mt. Total sales so far this calendar year amounted to 1,544,592 mt, a decrease of 32.5 percent.
Canada was the biggest buyer of MAP for the month and so far this calendar year. In May, Canada bought 96,997 mt, while Brazil took 83,907 mt and Argentina got 49,780 mt. Total MAP exports in May amounted to 284,069 mt, an increase of 28 percent over the same period last year. For the calendar-year-to-date, Canada has taken 368,842 mt of MAP, Australia 159,891 mt, and Brazil 134,285 mt. Total MAP export sales thus far in the calendar year were 1,820,654 mt, which was an increase of 11.7 percent.
India: The State of Punjab was reportedly planning to procure up to 350,000 mt of DAP through Markfed for 2007-2008. It was to come in lots of 75,000 mt in July, 125,000 mt in August, and the rest in September to ensure the availability of DAP for wheat and paddy. Punjab has also reportedly been in talks with national government to assure the supply of 2.5 million mt of urea for the kharif and rabi season.
Sri Lanka: The Ceylon Fertilizer Corp. closed a tender for 30,000 mt of TSP last week. Sources say the offers – all from China – show how China has moved into the international phosphate market. Results of the tender follow:
| Offering Company | Quantity MT | Source | US$/mt FOB | US$/mt CFR sight | US$/mt CFR 180 Days | 1st lot |
| ETA | 15,000 | CHINA | 397.97 | 407.97 | |
| Midgulf | 12,000 | CHINA | 372 | 392.00 | 408.00 |
| Swiss | |||||
| Singapore | 12,000 | CHINA | 384 | 429.75 | 444.75 |
| Toepfer | 12,000 | CHINA | 469.50 | 485.00 | |
| 2nd lot | |||||
| Midgulf | 12,000 | CHINA | 377 | 397.00 | 413.00 |
| ETA | 15,000 | CHINA | 408.87 | 418.87 | |
| Toepfer | 12,000 | CHINA | 469.50 | 485.00 | |
| 3rd lot | |||||
| Midgulf | 6,000 | CHINA | 388 | 408.00 | 424.00 |
POTASH
Eastern Cornbelt: The potash market FOB regional warehouses was pegged at $230-$235/st FOB, depending on grade and location, and product was strictly allocated for new sales. Effective June 19, Agrium’s rail-delivered red premium potash postings firmed to $249/st in Illinois, Indiana, Ohio, and Michigan. Mosaic is raising its domestic potash prices $20/st, effective Oct. 1, and has stopped taking orders in the domestic market through September.
Western Cornbelt: The regional potash market was quoted at $229-$235/st FOB last week, depending on grade and location. One Iowa source pegged the common dealer price for red granular potash firmly at the $235/st FOB level last week, but material was strictly allocated. Agrium’s rail-DEL red premium potash postings, effective June 19, include $251/st in Iowa, Missouri, and Nebraska.
Northern Plains: Potash was quoted at $202-$212/st FOB Saskatchewan mines, depending on grade. Out of the regional warehouse system, the potash market was pegged at $235-$245/st FOB, depending on grade, location, and time of delivery.
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.
Agrium released new potash postings, effective June 19 for rail-DEL red premium potash. New levels include $247/st in northern Minnesota and $249/st in southern Minnesota and Wisconsin.
Northeast: Potash pricing was up from last report at $233-$235/st FOB in the region, with delivered tons pegged at $240-$260/st, depending on grade and location. Sources described potash inventories as tight, with little open market tonnage available unless previously committed. Sources continued to report soluble potash as high as $280/st DEL to some locations in the region.
Effective June 19, Agrium’s postings for rail-delivered red premium potash firmed to $257/st in Delaware, Maryland, New Jersey, New York, Pennsylvania, Virginia, West Virginia, Florida, Alabama, Kentucky, Tennessee, Georgia, and the Carolinas; and $260/st in Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island, and Vermont.
Eastern Canada: Potash FOB New Brunswick mines was pegged at $275-$278/mt, depending on grade. Those levels, along with warehouse postings, reflected higher prices that went into effect June 1. Sources tagged the warehouse market at $290-$318/mt FOB in the region, depending on grade and location, with the upper end quoted in Ontario for white granular potash. Red granular potash was generally quoted at $313-$315/mt FOB in Ontario, with rail-delivered coarse potash from Western Canada tagged at the $321/mt mark in Ontario and Quebec.
Western Canada: Red premium potash had reportedly firmed to $270-$285/mt FOB regional plant sites or warehouses.
Pacific Northwest: Effective June 19, Agrium’s postings for red premium potash firmed to $267/st rail-DEL and $262/st FOB in southern Idaho, Utah, and Oregon’s Malheur County; $272/st rail-DEL and $267/st FOB in Washington, the Idaho panhandle, and Oregon excluding Malheur County and the Willamette Valley; and $279/st rail-DEL and $274/st FOB in Oregon’s Willamette Valley.
Tel Aviv: ICL Fertilizers, a unit of Israel Chemicals Ltd., has signed new potash supply agreements with two major customers in India. The contracts represent an expansion of the purchase commitments previously made by these customers The agreements call for the purchase of approximately 1.1 million mt of potash (including options) from ICL Fertilizers during an eleven month period from July 2007 to May 2008. This compares with 900,000 mt purchased by these customers from ICL under previous contracts. The contracts were signed with a price increase of US$50/mt compared to the previous contracts. The value of the contracts is approximately US$300 million compared to approximately US$200 million in the previous contracts.
India: Sources report that India has so far agreed for 4.0 million mt of potash at an increase of US$50/mt over previous year for supplies beginning July, 2007-June, 2008:
- IPL – 750,000 mt from BPC; 800,000 mt from ICL; 400,000 mt from IPL; 350,000 mt from Capote; and 200,000mt from Kali und Sal.
- MMTC 500,000 mt from BPC.
- Sari – 300,000 mt from ICL and 200,000 mt from APC.
- Coriander Frets 250,000 mt from Canpotex.
- Tate Chemicals Ltd. 250,000 mt from Canpotex.
In addition, it is believed that APC has informally agreed to 400,000 mt with IPL, to be formalized in the next couple of weeks.
SULFUR
Tampa: With negotiators for big sulfur and big phosphate sitting in the shadows sharpening their daggers in preparation for the inevitable negotiations for third quarter sulfur contract pricing, speculation was alive and well. Phosphate producers were well aware the price will go up and were preparing for the price slap that will surely come. World prices have skyrocketed since the last round, and in Vancouver suppliers were planning to seek $100/mt FOB prices or better for the hungry market. A price that high will not likely be presented to phosphate producers, but the price tag will be stiff and difficult to swallow. No one in the sulfur industry was even thinking of anything less than double digit increases, and at least one of the big guys was said to be preparing to toss an offer of $25-$35/lt up from the current price. No doubt the phosphate industry will bristle at numbers in that range.
On the positive side, sulfur prices haven’t been the only thing going up. Phosphate has done extremely well during the first half of the year and especially during the second quarter, and profits above cost were running around $200/st, according to some estimates. As one source said, even if the U.S. phosphate industry gets slapped with a huge increase, they will still be paying less than their phosphate competitors in other countries. Regardless, negotiations will probably be extremely contentious this time around.
The sulfur industry already knows that its product will be worth less – perhaps far less – starting in 2008, and want to reap the benefits now. It may be their last chance to make serious money from the waste product from their refineries, which continue to provide record profits from gasoline sales at the pump.
Meanwhile, Valero’s Houston refinery, which was being switched to produce ultra-low-sulfur diesel fuel, was continuing to have problems, limiting its production of sulfur.
The hurricane season, which began June 1, was still the unknown factor. An active season could either create an extreme shortage of sulfur if the Gulf Coast is hit, or an abundance if phosphate facilities in Florida become victims.
Vancouver: Negotiations for second semester sulfur contracts were about to kick off last week, and predictions were that prices will rise to $100/mt or higher. With both the CN and CP railroads operating normally, sulfur inventories in Vancouver were rapidly returning to normal, and were expected to catch up to the amount of lost deliveries earlier in the year, when weather and rail strikes cut deeply into inventories.
Pakistan: Pak-Arab Refinery Ltd. (PARCO) has issued a tender for sale of 5,000 mt of sulfur between July-September 2007 from the Mid-Country Refinery at Mahmood Kot. The price is US$140/mt FOB (excluding general sales tax) exdelivery point at MCR in Punjab. Bidders must seek at least 250 mt. Bids are due June 26.
India: FACT has announced a tender for 45-54,000 mt of sulfur to be supplied in three lots of 15-18,000 mt for shipment during end-June, mid-July, and early-August. The price is to be offered both on FOB & CFR Cochin basis at sight/credit terms. The tender closed June 20.
MMTC issued a tender for 19,000 mt for July arrival at the Vizag port. The tender closed June 15.