AMMONIA
U.S. Gulf/Tampa: Major players were reported to have agreed to a price of $305/mt DEL for Tampa for October, up from earlier trades of $297-$303/mt DEL. In the meantime, there was talk of higher NOLA barge price expectations, but no word on a new trade beyond the last done of $275/st FOB.
Eastern Cornbelt: Ammonia pricing continued to firm. Spot market values were quoted in a broad range at $485-$505/st FOB regional terminals, with the low out of spot Illinois River locations and the higher numbers in Indiana and Ohio. Spring prepay was reportedly being offered in the $505-$515/st FOB range in the region, although some offers were already off the table. Forward contract ammonia for November through December was available from one supplier at $500-$510/st FOB in the region last week.
Western Cornbelt: Sources continued to report firming ammonia prices, with several saying they expect heavy fall usage if weather conditions favor it. On the spot market, ammonia pricing was pegged at $480-$490/st FOB regional terminals, with talk of additional increases in the near term. At the retail level, one Iowa source reported pricing in the $505-$515/st range, with a likely move to the mid-$500s/st by mid-October.
Nebraska sources continued to report a wide gap between pipeline terminal values and delivered pricing from production points in Oklahoma and Kansas, with the latter still coming in as low as $445/st last week. One source said he expected a $20/st increase on that delivered price in October, however.
Sources also talked about spring prepay programs for ammonia, this being the earliest most of them have ever seen prepay offered and booked for the spring season. Most placed the common prepay figure in the low-$500s/st FOB, with $510-$515/st to the dealer mentioned most often. One supplier last week was offering forward contract ammonia for November through December at $485/st FOB in Nebraska, $495/st FOB in Iowa, and $500/st FOB in Missouri.
California: Anhydrous ammonia pricing remained at $435/st truck-DEL and $450/st rail-DEL in the state.
Pacific Northwest: Sources said tight ammonia supplies sparked an upswing in price last week, reportedly to as high as $475-$500/st DEL in the region, depending on location. One supplier was offering forward contract ammonia for November through December at $470/st FOB warehouse locations in Washington.
Agrium’s anhydrous ammonia postings moved on Sept. 18 to $455/st rail-DEL and $475/st truck-DEL in Oregon and Washington east of the Cascades, and in Idaho north of and including Idaho County. Agrium’s truck-DEL postings in Montana and northern Wyoming moved on that date to $490/st, with maximum outbound freight of $35/st.
Aqua ammonia postings from Agrium firmed on Sept. 18 as well, with truck pricing moving on that date to $119/st FOB Central Ferry and Finley, Wash. On a forward contract basis for November through December, aqua ammonia was referenced at $121/st FOB other terminal locations in Washington.
Western Canada: Anhydrous ammonia continued to be quoted at $648-$684/mt DEL in the region, but the market is slated to firm to $684-$729/mt DEL Oct. 1.
Black Sea: Strong demand and local turnarounds are keeping upward pressure on prices. Sources in Asia report that $285/mt FOB was done, and many elsewhere agree that is a hard figure. Rumors are rife that $290/mt FOB was also reached. One source says it is a firm and done deal, but others in Asia are hard pressed to point to a particular piece of business to confirm that level. Even without proof, many in Asia are willing to admit $290/mt FOB was most likely done.
With $285-$290/mt FOB in the “been there, done that” category, sources say the new target of producers is closer to $295-$300/mt FOB.
Conventional wisdom says the opening weeks of October could easily show prices near or just above $300/mt FOB.
Prices are expected to come off as November approaches. Sources say the turnarounds will end by the middle of November. At the same time, said one observer, the strong urea price is prompting some of the companies to shift as much production to urea as possible.
Middle East: The latest tender from FACT/India shows producers are finally able to get prices up. Sabic led the way with the most aggressive price of $280/mt CFR. Qafco was more modest at $271-$273/mt CFR.
Once freight is backed off, sources peg the tender range at $230-$240/mt FOB. Sources said FACT would most likely take the Qafco offer. If it does, that would place the market at $230-$235/mt FOB.
While this amount is not as high as producers would like, it does represent a $10/mt increase from the last bit of confirmed business.
Agrium helped the area producers achieve their goal of a higher price by announcing its Kenai plant would be shutting down for good. The tons that regularly went to Namhae/South Korea from the plant will have to be made up from some place else. Sources say the producers in Indonesia and Malaysia will not be able to cover the tonnage and Yuzhnyy material would be too expensive. That leaves the Middle East.
One producer noted that while the opportunity exists, he was not too sure that the extra tons would be available when Namhae needs them. Most of the area producers sell their material on a long-term contract basis, with prices set by a formula. Many claim to be in good shape for the rest of the year.
The apparent shift in favor of a firmer ammonia market is also evident, said one trader, in the way the formula contracts are calculated. Buyers and sellers are now agreeing to set the formula at the average of the mean price instead of the average of the low end of the price range. A trader said this would represent an effective price increase to the buyers.
Most of the cargoes coming out of the Middle East are still slated for buyers to the south and east of the Arab Gulf. The one exception seems to be the recent set of purchases out of Iran destined for Europe.
One observer noted that because the Europeans depend more on spot purchases than do the Asians, buying from Iran makes more sense.
Iranian output is not as stable as that from other Arab Gulf producers, one trader said. Because of this spotty record, he added, the Europeans take what they can get from wherever the best deal surfaces.
India: FACT closed a tender Sept. 24 for two cargoes of 7,500 mt each. Only three companies offered in the tender. Each company offered the full amount.
Sabic’s price was $280/mt CFR, Transammonia came in at $275/mt CFR, and Qafco offered two cargoes at $271-$273/mt CFR. Sources expect FACT to take the Qafco offer.
Even though the seasonal take of ammonia is down this year compared to previous years, sources say the overall purchases by Indian buyers will surpass last year.
Indian buyers took about 1.7 million mt of imported ammonia for all of 2006. That same level of imports was recorded through August of this year. With four more months yet to report, sources say they would be surprised if India did not take at least 2 million mt by year’s end.
The number could have been significantly higher if the DAP producers could get past the issue of securing more phosphate rock.
Because of the scarcity of quality rock at a decent price – at least a decent price for buyers – IFFCO’s production alone is said to be down 50 percent.
Southeast Asia: Mitsubishi bought 15,000 mt from MITCO/Malaysia. Sources, who peg the buying price at $240-$245/mt FOB, speculate that the tons were originally destined for IFFCO/India. Because of the reduced need for ammonia by major Indian buyers, observers speculated MITCO quickly had to find another buyer for the tons.
Mitsubishi stepped up to take the material, say sources, because it will need the ammonia to cover tons that will be lost once its plant in Indonesia goes down for routine maintenance.
The Indonesian joint venture plants – KPI and KPA – will be taking turnarounds during October and November. Sources say the shutdowns will be consecutive, with each plant slated to be down for three to four weeks.
Ammonia for Asian buyers from Australia will be reduced next year.
Sources predict demand in Australia will increase. That means, said one trader, imports will increase – as will the diversion of tons from the Burrup facility from export to the domestic market.
This source estimated that instead of exporting 600,000 mt, as it is slated to do this year, the Burrup operation will send only 550,000 mt offshore next year.
UREA
U.S. Gulf: Granular barge prices surged last week with higher numbers reported as the week progressed. Players called the low for the week $340/st FOB, though there was some speculation that the high $330s/st FOB may have been achieved by early birds. By the end of the week, most reported that granular had traded within the $345-$350/st FOB range, with others saying $354-$358/st FOB was being offered and/or concluded for October.
The last done prills were still called $348/st FOB, though new quotes are now $360/st FOB.
Several players reported that there has been a lot of buying in the past few weeks as large players seek to replenish upriver warehouses before the river closes. Higher forward prices have prompted some to buy now rather face even higher prices closer to the season. On top of this, product in NOLA is reported to be limited, with major importers only bringing in their regular cargoes. With international prices increasing, sources say any spare cargoes are not likely to come to the U.S. market unless NOLA moves up.
Others say that high wheat prices will mean plenty of use in wheat country, and also predict that more Canadian product may stay north of the border for wheat demand there. In the meantime, while Saskferco is at full production now, the company had a turnaround in June that would have taken away some production from the market.
Correction: Last week’s granular and prill prices were correctly reported on page 4 of the Price Scan at $335-$343/st FOB and $348/st FOB, respectively; however, they were reversed in the box on page 1.
Eastern Cornbelt: Granular urea was quoted in the $370-$380/st FOB range to dealers, with few sales to test the market.
Western Cornbelt: Granular urea pricing was up, with sources quoting a broad range of $370-$390/st FOB in the region last week. One Nebraska source also quoted the $390/st level on a delivered basis from Oklahoma.
California: Granular urea was steady at $380-$400/st FOB and $390-$410/st DEL.
Pacific Northwest: Granular urea was quoted at $405-$415/st DEL in the region, with reports of another increase likely in the near term. The Montana urea market was pegged at $395-$405/st DEL. One supplier was referencing forward contract urea for November at $405-$410/st DEL in Montana, $425/st DEL in Washington, Oregon, and Idaho, and $425-$435/st DEL in Utah.
Western Canada: Granular urea pricing was steady at $460-$485/mt DEL last week, with reports of some supply issues from manufacturers. Urea pricing is scheduled to firm to $475-$500/mt DEL on Oct. 1.
Black Sea: Prices are brushing up against the record highs of earlier this year. Sources now peg the market at the near-historic level of $320-$325/mt FOB, with general consensus that $322/mt FOB was done.
Some sources say the run-up in prices is because of expectations that Indian buyers will be stepping in soon to buy. Others counter, however, that at these levels neither IPL nor MMTC will agree to any Black Sea tons.
The naysayers add that with the Yuzhnyy price heading higher, Middle East and Asian suppliers have no reason to show restraint in their pricing ideas. Producers around the world are looking to tack on a few more dollars anytime anyone comes knocking with a price inquiry.
In the past, as an Indian tender approaches, the price increases in Yuzhnyy – only to crash once the tender is held and awards issued.
Sources say one other mitigating factor is the increased demand from Latin America. While purchases from Brazil and Mexico can help confirm a market level, said one observer, buying from that part of the world rarely sets a market trend.
Middle East: Even though no new public business was recorded to indicate a new price level, sources report that producers are now claiming only bids of $330/mt FOB will get a conversation going.
The last business everyone could agree on were the pretender tons secured by IPL in early September. Those deals set a new price range of $310-$315/mt FOB. Now, say sources, any new deals would have to be pegged at $325-$330/mt FOB.
Without any new business, however, traders are dropping the $330/mt FOB price from their consideration. They are looking at a $315-$325/mt FOB market. Even a few representatives of producers found it difficult to disagree with that price range.
One trader said producers should be happy with the market agreeing on this new price range. He said the only thing anyone had to go on was the previous $310-$315/mt FOB potential sales to India. Now, he added, at least producers can show some growth in the price.
The industry is still waiting to see what IPL will do. About 1 million additional tons will need to be purchased for delivery this year. As the industry enters the last quarter, the time for that final round of purchases is fast approaching.
Middle East suppliers are especially anxious for the tender to be called, because, say sources, securing the upcoming IPL and possibly subsequent MMTC tenders, they will not have to worry about not having full order books through December.
Sources report IPL has already secured 300-500,000 mt in pre-tender deals from Middle East suppliers. All that is needed is the tender to sanctify the prices.
India: As of press time IPL had not called a tender. The industry is waiting for this tender to confirm the prices of the pre-tender deals done in early September, and to see what levels the market has really moved to.
Reportedly, IPL buyers began a second round of talks with producers around the globe to secure tons at less than current market rates. Sources say some producers politely but firmly showed the buyers the door once the proposed bids were mentioned. Others were willing to talk.
As of last week, however, no new breakthroughs were reported in additional but cheaper tons.
Likewise, nothing was being revealed from the halls of government and industry in India as to when a tender will be called.
Estimates of how many tons will still need to be purchased this year range from 1 million to 1.4 million mt.
Similarly, the number of tons reportedly secured in pretender talks range from 300-500,000 mt.
Indonesia: The higher prices of urea in the Middle East and Yuzhnyy have caught on in Indonesia. Kaltim settled on the sale of one cargo of granular urea to a local trader at $316/mt FOB. This cargo was then reportedly sold to Liven for a buyer in the Philippines.
A second tender for prills closed Sept. 24 by Pusri for three cargoes of 10,000 mt each. Two local traders took the prize at $311/mt FOB.
One cargo reportedly went to Liven, and the other two to a Malaysian buyer.
All told, sources say these prices represent new highs for Indonesian sales.
China: Port congestion remains the topic of discussion. Securing a vessel for a urea pick-up in a Chinese port is the hardest part of the process in exporting Chinese urea.
No one wants to load until after Oct. 1, when the export duty drops from 30 percent to 15 percent.
Once that date is passed, sources say there is so much urea at the ports already – with plenty more ready to be railed in – that few are confident all the tons can be loaded in a timely manner.
The fact that the ports also have other items for loading, such as steel and electronics, means that ship owners can be more particular about what their vessels are used for.
One trader noted that at present it is easier to get in, take on a load of iron or processed steel, and get out than it is to secure a berthing position for urea.
Most observers in the area have confidence the backlog will get cleared before the year runs out. One trader was optimistic that loadings would return to a normal pace by Nov. 1.
Vietnam: Reportedly, border trade is up. Trucks and barges are moving tons from China into Vietnam on a steady basis.
The Vietnamese government is claiming more tons will be needed before the end of the year. Area observers, however, note that the existing border trade does not lend itself to accurate accounting of how many tons are coming in.
In addition to urea for direct application, sources say more urea is also needed for the NPK blenders.
Pakistan: According to the Fertilizer Review Report of the National Fertilizer Development Centre (NFDC) released Sept. 27, Pakistan would import 150,000 mt of urea to meet urea shortages in Rabi season 2007-08 (Oct-March). NFDC has estimated that country would require 2.4 million mt of urea during the next Rabi season. The local production would be comfortable up to November 2007, but additional import of urea would be needed afterward to guard against any shortages during the second applications of urea on wheat crops.
Bangladesh: The government plans to import 400,000 mt of urea from three Mideast countries to bridge the demand and supply gap, which has cropped up due to the closure of the Ghorashal Urea Fertilizer Factory for more than a month. Bangladesh envoys posted to Saudi Arabia, United Arab Emirates, and Qatar are to line up imports of urea. The ministry has decided to import 200,000 mt of urea from Sabic, and 100,000 mt each from Abu Dhabi’s government-run Ruwais Fertilizer Industries (Fertil) and the Qatar Fertilizer Co.
NITROGEN SOLUTIONS
Eastern Cornbelt: UAN-32 was steady at $300-$310/st ($9.38-$9.69/unit) FOB regional terminals, with the lower numbers out of spot river locations. An Indiana source quoted reference pricing for UAN-28 as high as $278.20/st ($9.94/unit) FOB, but no actual sales were confirmed at that level. On a forward contract basis for November through January, terminal prices from one supplier ranged from $9.61-$9.91/unit FOB in the region last week.
Western Cornbelt: UAN-32 remained in a broad range at $295-$310/st ($9.22-$9.69/unit) FOB regional terminals, with most sources pegging the common dealer level at $300-$305/st ($9.38-$9.53/unit) FOB last week. One source said a wet fall that limits ammonia movement could make for some interesting spring UAN demand.
California: The UAN-32 market was quoted at $300-$310/st ($9.38-$9.69/unit) FOB, with delivered UAN-32 at $320-$330/st ($10.00-$10.31/unit).
Pacific Northwest: UAN-32 was steady at $310-$315/st ($9.69-$9.84/unit) DEL in the region, depending on location.
Western Canada: The UAN-28 market was pegged at $292-$308/mt ($10.43-$11.00/unit) DEL in the region in late September. UAN-28 pricing will firm to $301-$317/mt ($10.75-$11.32/unit) DEL on Oct. 1.
AMMONIUM NITRATE
Western Cornbelt: Ammonium nitrate remained at $320-$325/st FOB in the region, with the low FOB St. Joseph, Mo.
Pacific Northwest: Ammonium nitrate pricing was up dramatically from last report, reportedly due to much higher railroad freight rates. The market was quoted at $395-$405/st DEL in the region last week.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was unchanged at $220-$240/st FOB. Steel mill grade sulfate was pegged at the $200/st mark FOB Burns Harbor, Ind.
Western Cornbelt: Granular ammonium sulfate remained at $220-$230/st FOB in the region.
California: Granular ammonium sulfate was steady at $210-$230/st FOB, depending on location, with tight inventories at some shipping points.
Pacific Northwest: Granular ammonium sulfate was reported at $225-$235/st DEL, with the upper end reflecting new reference pricing. Agrium’s postings moved on Sept. 22 to $235/st DEL and $230/st FOB in the region.
Western Canada: Granular ammonium sulfate pricing was unchanged at $305-$310/mt DEL in the region.
PHOSPHATES
Central Florida: The Central Florida phosphate market, especially for DAP, continued to be the busiest of the major markets last week. While no new prompt sales were made, forward sales well into next year were conducted at a rapid pace. Last week, Mosaic was sold out through mid-November. None of the new business was done at the new price set by both Mosaic and CF, but buyers have every reason to believe the future price will be as high or higher. The ongoing sulfur shortage will mean less production and lower inventories, and that normally results in higher prices. Mosaic has moved up the turnaround of its Bartow processing plant to September from October to help ease the sulfur problem.
A trader said it appeared the new list price of $390/st FOB will take hold, as dealers were expressing more interest. Both producers and traders said business at warehouses was definitely on the upswing.
Farmers in the northeastern part of the country were either just starting or about to start planting wheat, and that will put a drain on phosphate supplies. Once the existing phosphates in dealers’ bins begins to dwindle sufficiently, reordering will take place. So far, there has been little or no resistance to the higher prices this season, and that situation will continue as long as crop prices remain high. However, if prices for wheat and corn take a dive, buying could follow. So far, that has not been a problem.
North African producers were considering sharp increases in their rock prices, which could cut into profits for U.S. producers who buy from them, especially Agrifos and Miss Phos. The increase in rock prices could be in excess of $100/mt, but nothing had been finalized as of late last week.
The Central Florida DAP price range remained a flat $385/st FOB, but that will likely change this week. Mosaic’s posted price was $390/st FOB for DAP and $386/st FOB for MAP. CF’s prices increased to match Mosaic’s at $390/st FOB for DAP and MAP, and PotashCorp’s Central Florida reference price was still $385/st FOB. In Texas, Agrifos’ truck price was $430/st FOB, and $410/st FOB for railcars, but it was sold out through the end of September for rail-delivered phosphates.
U.S. Gulf: Last week, NOLA DAP barge sales were stagnant and prices remained soft. Most offers last week were at $397-$398/st FOB but no sales were made, so the price range will not be affected. Several sources said they had heard of a NOLA DAP barge, which was carrying product from Miss Phos, that was available at the very low price of $395/st FOB, but that could not be confirmed, and several buyers said they had been looking to take advantage of it. One said he had had it offered to him, but did not make the buy because his company already had an excess of product.
Sources said barges were piling up on the river system, but most said they were confident that situation would soon change once reordering for warehouses begins, possibly this week or next.
Along the Arkansas River, farmers were still holding off planting their wheat crops in order to avoid a repeat of the freeze last year that killed off the plants. By waiting, the plants will be shorter and not as likely to suffer damage when the freeze comes. With the possible exception of the upriver areas, the fall season was likely to continue at least until the beginning of November, and that will most probably be tons for fill.
The sulfur shortage has begun to affect production at Mosaic’s phosphate processing plants at Donaldsonville, which will reduce available inventories on the river system. That situation will probably continue for at least another few months. The continuing problems at Miss Phos will also have a negative effect on inventories.
The Army Corps of Engineers closed Lock 14 on the Arkansas at 12:01 a.m. on Sept. 24 while maintenance work was being conducted and will reopen at the same time on Sept. 29. The Corps has issued no information on the dredging north of Lock 17, but barges have continued moving through a narrow channel in single file, and no backup has resulted. Warehouses on the river were not experiencing shortages because of the delay in the planting of wheat.
The NOLA DAP barge price range last week remained unchanged at $397-$400/st FOB due to a lack of new sales. Prices will likely firm to the $400/st FOB range within the next couple of weeks, when supplies become depleted and restocking begins
Eastern Cornbelt: Several sources said they expect good plowdown movement of dries this fall, provided weather conditions are cooperative. DAP remained at $430-$438/st FOB in the region, with MAP at $430-$435/st FOB. Forward contract DAP for November through January was being offered from one supplier at $435/st FOB Peoria, Ill., and $438/st FOB Cincinnati.
10-34-0 was steady at $350-$360/st FOB in the region; one Indiana source pegged the market at $355/st FOB for delivery in September, $258/st FOB in October, and $361/st FOB in December.
Western Cornbelt: DAP and MAP were pegged at $430-$440/st FOB, with delivered MAP quoted at $440/st in Nebraska and up to $450/st in central Iowa. One supplier was offering forward contract DAP at $435/st FOB St. Louis, Mo., for the November to January shipping period. 10-34-0 remained at a firm $350-$365/st FOB in the region.
California: MAP was up slightly from last report at $460-$465/st FOB or DEL, with DAP $5-$7/st higher than MAP. 16-20-0 pricing was also up roughly $10/st, at $305-$312/st FOB warehouses. The 10-34-0 market was pegged at $319-$326/st FOB in the state.
Phosphoric acid prices remained at $7.10/unit DEL for merchant grade acid (MGA) and super phosphoric acid (SPA) the last full week of September, but a $0.15/unit increase was slated for Oct. 1. Agrium’s phosphoric acid prices for Nevada and California will move in October to $715/st rail-DEL for MGA and $725/st rail-DEL for SPA. Agrium’s postings for both products will increase by another $10/st in November, and again in December.
Pacific Northwest: MAP was up from last report at $455-$460/st FOB or DEL, with DAP $7/st higher. 10-34-0 was pegged at $320-$330/st FOB and in tight supply, with several sources talking of a posting hike to the $335/st FOB level Oct. 1. 16-20-0 pricing was up as well at $305-$310/st FOB warehouses, and $310-$315/st DEL in the region.
Super phosphoric acid (SPA) and merchant grade acid (MGA) was quoted at a firm $7.10/unit DEL in the region, with a $0.15/unit increase slated for both products Oct. 1. Agrium’s phosphoric acid prices in Washington, Oregon, Idaho, Montana, Wyoming, and Utah are slated to increase to $715/st rail-DEL for MGA and $725/st rail-DEL for SPA in October, followed by a $10/st increase in November and another $10/st increase in December.
Western Canada: MAP pricing remained at $540-$575/mt DEL.
U.S. Export: Late in the game, India was back in the market last week, when it issued a tender seeking 500,000 mt of DAP. PhosChem offered to fill a portion of that need – 100,000 mt. Most producing countries in the world were low on inventories, and it was likely the Indians will have to pay more than they have in other recent transactions.
Last week, PhosChem made sales totaling 50,000 mt into Mexico and Central America at prices that ranged between $430/mt FOB and $436/mt FOB. PhosChem’s next sale will be offered at $440/mt FOB.
In North Africa, Morocco was considering how much it will raise its price for phosphate rock. The price could go from $50-$60/mt FOB to somewhere between $100/mt FOB and $200/mt FOB. Since Mosaic stopped selling rock from its Central Florida mines several years ago, most of the 30 million mt of rock sold each year comes from North Africa. In the U. S., the biggest buyers of phosphate rock are Agrifos and Miss Phos. While the sharp increase would cut into their profits, it appeared doubtful it would prevent them from making the buys from North Africa due to the high prices for DAP and MAP.
According to the most recent report by TFI, U.S. producers sold 25.9 percent less DAP this August compared to the previous year. No surprise, India was the biggest recipient at 414,087 mt, with Argentina a distant second at 32,987 mt, and Peru taking 19,928 mt. Total DAP exports for August were 521,368 mt. For the calendar-year-to-date, India was on top at 889,126 mt, China was second at 291,695 mt, and close behind was Mexico at 283,125 mt. Sales so far this year were 2,821,651 mt, a decrease over the same period last year of 30.1 percent.
For August, TFI reported Canada was the biggest buyer of MAP at 51,851 mt, with Argentina next at 31,566 mt, closely followed by Brazil with 31,157 mt. The total August sales of 146,045 mt was 47.7 percent less than in August 2006. For the year-to-date, the same three countries were the biggest MAP buyers. Canada received 475,008 mt, Argentina 198,593 mt, and Brazil was the third largest at 194,724 mt. Total MAP sales so far this year amounted to 1,403,339 mt, a decline of 9.4 percent over the same period in 2006.
The top of the price range for export DAP increased last week, while the bottom remained the same as the previous week. Last week the export DAP price range moved to $430-$436/mt FOB, compared to the previous week’s of $430-$433/st FOB.
Pakistan: Market sources estimate that Pakistan will import an additional 200,000 mt to 250,000 mt of DAP in Rabi season 2007-08 (Oct-March) to meet the shortfall due to the proposed closure of Pakistan’s only DAP plant – Fauji Fertilizer Bin Qasim Ltd. (FFBQL) – from the end of November 2007 to the end of March 2008 for revamping. It is estimated that about 250,000 mt of DAP would be available in the start of Rabi season as carryover stock.
According to the National Fertilizer Development Centre (NFDC), in the last Rabi season – 2006-07 – the country consumed about 1.082 million mt of DAP, compared to 690,000 mt in the previous year due to the government subsidy on phosphatic fertilizer. The country imported about 400,000 mt of DAP in Rabi 2006-07.
POTASH
Eastern Cornbelt: Potash was quoted at $274-$295/st FOB regional warehouses, depending on grade and location. As of Sept. 26, Agrium’s 60 percent red premium potash postings moved to $269/st rail-DEL in Illinois, Indiana, Ohio, Wisconsin, and Michigan; $274/st FOB Danville, Ill., Garrett, Ind., Seymour, Ind., Toledo, Ohio, Washington Court House, Ohio, and Saginaw, Mich.; and $285/st FOB Rock Island, Ill., Mt. Vernon, Ind., and E. Liverpool, Ohio. The company’s posting FOB Vade, Sask., moved on that date to $240/st.
Western Cornbelt: The potash market continued to firm, and at a brisk pace. Sources tagged the market in a broad range last week at $280-$300/st FOB regional warehouses, depending on grade and location, with reports of confirmed new sales at the top of that range.
As of Sept. 26, Agrium’s red premium potash postings moved to $267/st rail-DEL in northern Minnesota; $269/st rail-DEL in southern Minnesota; $271/st rail-DEL in Iowa, Missouri, and Nebraska; and $285/st FOB Dubuque, Iowa, Shakopee, Minn., and Kansas City, Mo.
California: Potash was quoted at a firm $270-$284/st FOB in the state, with the low for standard and the upper level reflecting reference pricing for granular potash. Sources continued to talk of very tight supply and strict allocations.
Potassium nitrate pricing remained at $500/st FOB for bulk and $560/st FOB for bags. Sulfate of potash (SOP) was quoted at $388-$398/st FOB, reflecting a $20/st increase from last report.
Pacific Northwest: The potash market was quoted in a broad range at $267-$288/st DEL in the region in late September, depending on grade and seller, with reports of some now referencing as high as $300/st DEL for new sales. Sources continued to report very tight inventories and strict, quarterly allocations.
Agrium’s postings for 60 percent red premium potash moved on Sept. 26 to $262/st FOB and $267/st rail-DEL in southern Idaho, Utah, and Oregon’s Malheur County; $267/st FOB and $272/st rail-DEL in Washington, the Idaho panhandle, and Oregon excluding Malheur County and the Willamette Valley; and $274/st FOB and $279/st rail-DEL in Oregon’s Willamette Valley.
Eastern U.S.: Agrium’s Sept. 26 postings for 60 percent red premium potash include $277-$280/st rail-DEL in the Northeast region, depending on location, and $282/st FOB Lewistown, Pa. Red premium potash postings in the southeastern states firmed on Sept. 26 to $277/st rail-DEL in Florida, Alabama, Georgia, Kentucky, Tennessee, the Carolinas, and Virginia, and $282/st FOB Norfolk, Va., Lynchburg, Va., Chesapeake, Va., Americus, Ga., Bainbridge, Ga., and Tifton, Ga.
Western Canada: Sources continued to tag the potash market at $280-$295/mt FOB regional plant sites or warehouses last week, although the actual availability of product was uncertain due to strict quarterly allocations and very tight supply.
SULFUR
Tampa: Serious negotiations for fourth-quarter contract prices have not really begun, but some prices were being thrown out to test the waters. A source said phosphate producers were initially suggesting a single-digit increase, but the sulfur industry was far from willing to accept anything that low. Another source said that at the TFI World Conference at Boston the previous week the possible price seemed to go up about $5/lt a day, and by the end of the conference was about $20/lt higher for both the fourth quarter and the first quarter of next year. However, no real offers had been made by either side.
Apparently Tropical Storm Karen will not cause any waves for sulfur transportation, because it was forecasted to turn north into the burial ground of the Atlantic Ocean. Sulfur trucks in Tampa were said to be plentiful last week because the vessel the Sulfur Enterprise was still in dry dock. It was expected to return to service in early October.
Last week, virtually all of the refineries on the Gulf were operating normally and the supply side was said to be improving. Valero’s Port Arthur plant, which was knocked out of service by Hurricane Humberto, was operating almost normally last week.
In North Dakota, Gov. John Hoeven asked the Environmental Protection Agency for a 20-day waiver to bring high-sulfur Canadian oil into the state to help alleviate the gas shortage there. Supplies have been reduced as a result of fires, flooding, and demand.
West Coast: China was said to be “sitting on its hands” in negotiations for new contracts for the fourth quarter. Apparently, the country believes the $120/lt it has been paying for sulfur was high enough. However, the phosphate plant in Mexico, which was being brought back into service, might be able to fill the gap if the Chinese do not renew their contracts at higher levels.
Vancouver: Negotiations for new semester contract prices for Brazil and quarterly prices for China were underway week, as sulfur industry representatives were scheduled to visit those countries. The general belief was that contact prices for both countries will take a sharp jump up, but there was no word on the progress of the negotiations.
MARKET NOTES
Riyadh: Saudi Arabia’s largest phosphate project is moving on the fast track. Two companies, Saudi Arabian Mining Co. (Ma’aden) and Sabic, who have already signed a SR21 billion (US $5.6 billion) heads of agreement earlier
this year, have finalized a historic joint venture agreement in Riyadh to create the world’s largest fully integrated phosphates fertilizer production operation. Dr. Abdullah Dabbagh, president and CEO of Ma’aden, and Mohammed Al-Mady, vice chairman and CEO of Sabic, signed the agreement, under which Sabic will have a 30 percent equity share, with the 70 percent balance of ownership being retained by Ma’aden. The joint venture will mine phosphate reserves at Al-Jalamid, in northern Saudi Arabia, to produce phosphate fertilizers at a new purpose-built processing facility at Ras Az Zawr, located on the central east coast 90 kilometers north of Jubail. It said that after mining and initial processing at Al-Jalamid, 5 million mt/y of phosphate rock concentrate will be transported by the new Saudi Railway Project railroad to the phosphate complex at Ras Az Zawr to produce DAP.