Sources said the Kiev Indicative Price dropped from $540/mt March 31 to $480/mt FOB. Players are awaiting new business to further test the market.
Middle East: Sources report the balance remains tight. One Asian trader commented things could be worse.
India apparently has not booked as much ammonia as it did last year at the same time. The reduction in Indian demand is a benefit to the other buyers who look to the Middle East for much of their ammonia. In some cases, material from this area is being used to supplement orders tied to purchases from Indonesia and Malaysia.
Shipments for India were heading out of the Arab Gulf last week, but sources say little new business was concluded.
Prices in the area remain stable in the $520s/mt FOB.
Asia: Japan is tight on material. Japanese producers are taking a series of turnarounds that are expected to last into mid-May. Sources say some of the tightness in the Japanese market is in place because some producers had to shut down before they could build up reserves to cover the turnaround period. Some buyers that normally use only domestic material are now being sold imported ammonia.
The shortness of domestic ammonia, combined with imported material, is causing the Japanese price to go up.
Sources report KPI and KPA remain oversubscribed. Both have been looking to Kaltim for help in covering some of their contracts.
UREA
U.S.Gulf: Most players put the granular urea market within the $357-$365/st FOB range last week. Some claimed the sub-$360/st FOB numbers came about due to poor movement in the U.S., but said prices have not fallen too far and may have rebounded due to higher price ideas in the international market.
The current price environment is generally being blamed on a long spate of persistent wet weather that has kept farmers out of their fields.
Most sellers continue to remain somewhat bullish, saying when fields actually start drying out, product will be quickly pulled from warehouses and they will need to be replenished.
The prill market is harder to gauge due to arguments over quality issues. While some argue that product can be had in the $340s/st FOB, others say that premium product has been sold as high as $368/st FOB. Most put prices somewhere in the middle.
Eastern Cornbelt: Granular urea pricing was down slightly at $410-$430/st FOB in the region. The low was reported out of spot Illinois River locations. One source quoted the dealer market FOB Cincinnati, Ohio, at the $413/st level in early April.
Western Cornbelt: Granular urea pricing remained in a broad range at $410-$430/st FOB, with the low on a spot basis in Missouri and Iowa and the higher numbers reflecting dealer reference pricing at some locations.
Northern Plains: Granular urea was quoted at $415-$420/st FOB the Twin Cities, and up to $470/st truck-DEL in North Dakota. Reference prices for forward contract tons for May included $418/st FOB Pine Bend, Minn., and $470/st DEL in North Dakota and northern Minnesota.
Great Lakes: Granular urea was pegged at $430-$450/st DEL in the region, with the low in Wisconsin. Michigan sources reported dealer reference prices still as high as $485/st FOB warehouses, but no new sales were confirmed at those numbers.
Northeast: Granular urea was down slightly from last report at $435-$442/st FOB, with the upper end reflecting dealer reference pricing FOB Philadelphia, Pa.
India: The world is waiting to see what STC will do with its tender. It closes April 7 and calls for shipments from April 2008 through March 2009.
The long-term nature of the tender means buyer and seller will work from a formula basis for each cargo. One source noted that given the volatility of the urea market, not many traders will be eager to commit to such a long-term deal.
Reportedly, the STC people were out and about looking for some contracts before the tender was issued, but were rebuffed. With the tender now in play, the entire industry is waiting to see what prices are offered – and then what prices are finally negotiated.
One observer noted that because STC wants to deal with a year-long contract, negotiations may take longer than the recent MMTC tender.
Once the STC business is concluded, sources say IPL will most likely step up with a tender.
Rumors are circulating that IPL agents have been prowling the Middle East and China looking for pre-tender deals.
Sources say the agents have been unable to secure anything as of press time.
Reportedly, India will want to import close to 6 million mt this year. The tenders of January and March only get the buyers to about 1.1 million mt.
To meet the demand for urea, sources say Indian buyers will have to import about 500,000 mt each month. This amount, one trader added, is workable as long as no delays occur at the Indian ports.
To attempt to bring in more than 500,000 mt each month could strain the resources at some of the unloading facilities.
One source noted that even now problems with inland transportation are hindering the smooth transfer of current urea stockpiles from the ports to the distribution centers.
Indian buyers also face political issues.
The buyers have made it clear in discussions with suppliers that India will not buy at just any price. The buying agents want more flexibility from the suppliers.
Much of this pressure for lower prices – while natural for any buyer – is coming from the government.
Each increase in the price of imported urea creates greater losses in the Indian treasury. The government guarantees a low price to the farmers. That means that the difference between the cost of buying the urea and what the farmers pay must be made up with public funds.
In recent years, the rapid increase in imported urea has meant the Indian government has gone deeper in debt.
Still, said one source, if MMTC and IPL can hold off with their next round of buying for a few weeks, prices might come off.
No one is expecting to see drastically lower prices, but any reduction from the current levels would be appreciated by the government paymasters.
The reduction in price could come as more Chinese material becomes available with the end of the major Chinese domestic season in late May or early June.
Purchases booked later this month would fit with the expected excess of material from China, as production will continue even if domestic demand is down.
Black Sea: Sources report the price is holding in the $390s/mt FOB. Reports of deals below $390/mt FOB were dismissed by some sources as a rumor or wishful thinking. At the same time, reports of sales above $400/mt FOB are dismissed as propaganda from the producers.
Evidence of a softening in the Black Sea can be seen from weaker prices in the Baltic. Reports of material in the upper $370s/mt FOB puts estimates for Yuzhnyy at or below $390/mt FOB.
Additional weakness is expected in the next week or so, but many are expecting to see prices move up again after April 15.
Besides the potential of additional Indian buying after the STC deals are closed, sources say Latin American and European buyers will begin knocking on the producers’ doors looking for cargoes.
Middle East: Producers are claiming that any request for May tons has to start at $420/mt FOB and go up from there. Traders, however, say nothing has been done at that level. For now, they say, the price is closer to $410/mt FOB only because there have been no deals consummated to test the market in a while. Others argue the price is slightly below $400/mt FOB.
Asian sources see little reason for the Middle East suppliers to get higher prices just now. Reportedly, there are some extra tons available for the second half of April and well into May. At the same time, U.S. buying is slacking off.
If the producers hold to their $420/mt FOB price, their offers into India will be higher than the buyers are willing to go, said one observer.
The industry will be watching the STC tender results and subsequent negotiations to see how serious buyers and sellers are about what they are willing to accept.
According to Bangladesh media reports, government officials have been talking with the governments in Saudi Arabia and Qatar to secure long-term favorable urea deals similar to the one struck between Saudi Arabia and Pakistan.
If Bangladesh is able to make the deal, said one observer, more Middle East material will be committed to contracts instead of tenders or spot deals. It will also provide the producers with stronger arguments for higher prices to anyone else who comes knocking.
Until the results of the STC tender are known, traders are reluctant to accept the producers’ pricing idea of $420/mt FOB and peg the market at a stable $395-$410/mt FOB.
China: Chinese urea disappeared from the international market. Sources say local demand has been so strong that producers have withdrawn from offering tons for export. The strength of the local market was seen when producers raised their prices to $420-$430/mt FOB. For the first time in one trader’s memory, the Chinese material is now the most expensive product on the market. The surge in price is expected to ease by the end of the month as the domestic application season slows down.
By late April and early May, prices for June shipments are expected to drop to $400/mt FOB or below, according to sources.
Indonesia: Asian traders are looking for Kaltim and the other state-owned plants to begin offering tons for export by late May. The offerings may not dramatically affect the global market, said one source, but they could offer some competition to smaller buyers in the region who want to avoid high Middle East prices or high freight rates from China.
NITROGEN SOLUTIONS
U.S. Gulf: Most players continue to focus on price ideas of around $300/st FOB, saying that if you could actually find a ready buyer that prices would likely fall below that mark. Full inventories continue to be reported as the major issue, with only actual movement to the field allowing for any relief.
Eastern Cornbelt: UAN was steady at $11.25-$11.65/unit FOB most regional terminals to the dealer, with dealer reference levels quoted as high as $12.05/unit FOB out of inland tanks in Ohio. The dealer market FOB Cincinnati was pegged at the $11.55/unit FOB level last week.
Western Cornbelt: The UAN-32 market was steady at $360-$365/st ($11.25-$11.41/unit) FOB regional terminals to the dealer.
Northern Plains: UAN pricing in Minnesota was reportedly holding at the $11.70/unit FOB mark for spot or prepay tons. In central North Dakota, UAN-28 was quoted at $350-$355/st ($12.50-$12.68/unit) DEL.
Great Lakes: The UAN market was quoted at $12.03-$12.20/unit FOB in the region, with the upper end to dealers FOB Webberville, Mich. Southern Wisconsin sources tagged rail-DEL UAN-32 at the $385/st ($12.03/unit) mark in early April.
Northeast: Fertilizer dealers in the region were just waiting for the spring planting season to slip into high gear. The fieldwork delays have resulted in some lower spot prices for nitrogens, but the market softness was described as a “containment issue,” and is not expected to continue once movement begins in earnest.
The UAN-30 market was quoted at $318-$320/st ($10.60-$10.66/unit) FOB Baltimore, Md., and Philadelphia, with reference prices steady at the $325/st ($10.83/unit) FOB level. Out of terminals in upstate New York, the UAN-32 market was referenced at $395/st ($12.33/unit) FOB before discounts. As for replacement costs, sources tagged the current vessel market in the $333-$335/mt C&F range.
AMMONIUM NITRATE
Western Cornbelt: Ammonium nitrate remained at $385-$395/st FOB.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate pricing was firm at $300-$307/st FOB regional terminals to the dealer.
Western Cornbelt: Granular ammonium sulfate was tagged at $300-$305/st FOB in the region.
Northern Plains: Granular ammonium sulfate was tagged at $300-$310/st FOB the Twin Cities, and $325/st DEL in North Dakota.
Great Lakes: Granular ammonium sulfate was up from last report at $307-$315/st FOB in the region, with mid-grade sulfate reported at $295/st FOB in central Wisconsin.
Northeast: Granular ammonium sulfate was tagged at $320-$322/st FOB Philadelphia, with rail-DEL sulfate quoted at $325-$330/st level in the region.
PHOSPHATES
Central Florida: Although new orders for prompt phosphate shipments were few last week, phosphate producers had a large book of previous future orders to fill and remained busy. With the sulfur shortage helping to create some curtailment of phosphate production, coupled with a strong book of export business, inventories remained low.
Negotiations for new second-quarter sulfur pricing began last week, and sources said sulfur producers had made initial offers above $200/lt. That would more than wipe out the small reduction phosphate companies received for ammonia.
Meanwhile, the world market continues to push up domestic prices. Last week export sales were made as high as $1,200/mt FOB, and producers were pushing up the Central Florida price to keep pace.
Weather in the Northeast has improved – which means dried out – a bit in some places, and warehouse sales began to see some action. Other areas remained too wet and field work had yet to begin. The situation was similar in the Midwest sections served by rail.
Last week sales were made by both traders and producers at the price producers were posting at that time, $950/st FOB, which set the Central Florida DAP price range last week. Mosaic and CF were both posting offers of $1,000/st FOB for DAP, and CF wanted an additional $40/st FOB, $1,040/st FOB, for its MAP. Mosaic’s MAP price was $1,000/st FOB. PotashCorp’s Central Florida reference price was still $950/st FOB late last week, but it was under review. Discounts for national accounts were no longer available. MAP supplies continued to be scarce. In Texas, Agrifos’s truck price was $950/st FOB for trucks and $940-$950/st FOB for rail shipments.
U.S. Gulf: The situation on the river system was confused last week. In some cases, barges were selling for as little as $895/st FOB, while others were moving well at $910/st FOB. However, it appeared the lower-priced deals involved barges originally destined for the Arkansas River, which remained closed due to the fast rate of the current. In Oklahoma, the Army Corps of Engineers was releasing water from dams at lakes to prevent flooding, and rain was still coming down heavily last week. One trader said the cheap barges he bought were ordered by a third party much earlier and the original buyer was still making a handsome profit even at the lower price.
Overall, business on the rivers remained slow due to the continued problems of heavy rain to the south and snow in the north, so few farmers had been able to begin working their fields. By this time of year, most crops would have already been planted in the southern regions, and field work should be underway in the northern areas. For some crops, like wheat, that could be a problem, but corn can be planted as late as June. Still, the schedule will be tighter this year.
Warehouse prices tended to reflect the weather. On the Arkansas River, where rain was still a problem, the price range was $920-$935/st FOB. The operators attempting to move product had lowered their price $5/st FOB from $925/st FOB, while the operators not attempting to lure customers were keeping their prices noncompetitive. In the upper Mississippi and Illinois rivers, the range was $950-$960/st FOB.
To a small extent, phosphate producers were actually buying barges last week – which they plan to sell on the river, so they can use their new production for export sales.
NOLA DAP barge sales last week were in the $895-$910/st FOB range, but asking prices from traders were running as high as $915/st FOB. Mosaic’s asking price for both DAP and MAP was $1,020/st FOB, while CF was seeking $1,020/st FOB for DAP and $1,060/st FOB for MAP. When the weather dries, expect prices to surge upward and quickly, say sources.
Eastern Cornbelt: Phosphate pricing continued to climb on the strength of firming replacement costs. DAP was generally quoted at $950-$960/st FOB regional warehouses on the low end, with MAP reported at the $975/st FOB level in the region. Dealer warehouse postings were as high as $1,000-$1,018/st FOB, although no actual sales were confirmed at those higher numbers.
10-34-0 remained in very tight supply, but sources did report some spot pricing in the $750-$800/st FOB range in early April.
Western Cornbelt: Phosphate pricing continued to firm. Sources quoted the DAP market in the $930-$975/st FOB range, with several suppliers now referenced firmly at the top end of that range. MAP was quoted in roughly the same range. Spot pricing out of Clinton, Iowa, was pegged at the $960/st FOB mark for DAP and $975/st FOB for MAP last week.
10-34-0 continued to be quoted in the $750-$800/st FOB range for very limited tons.
Northern Plains: Phosphate pricing was quoted in the $1,000-$1,040/st FOB range in Minnesota, with the low for DAP and the higher number for MAP. There were also reports of MAP referenced as high as $1,070/st FOB warehouse locations in North Dakota. Rail-delivered MAP in North Dakota was reported at the $1,050/st mark last week for confirmed business. One regional supplier was referencing forward contract phosphate tons for May FOB Pine Bend at $1,060/st for DAP and $1,100 for MAP.
As in other parts of the country, sources talked of retail pricing in the region at significantly lower numbers on a spot basis, with one North Dakota dealer reporting DAP pricing to the farmer in the low-$700s/st in his trade area in early April. Those numbers were coming from dealers who took a position earlier at much lower replacement values, however, and in no way reflect current replacement costs.
10-34-0 was quoted as high as $825/st FOB in Minnesota for the little bit of product available on the spot market. In North Dakota, sources pegged the 10-34-0 market at $750-$760/st DEL for limited tons, with the low for spot and the high end for prepay tons.
Agrium’s reference prices for rail-DEL phosphoric acid in the region firmed on April 1 to $1,160/st rail-DEL for either super phosphoric acid or merchant grade acid.
Great Lakes: DAP and MAP pricing was up dramatically from last report. Sources tagged the market in Michigan at $1,018-$1,040/st FOB for both products, while a Wisconsin source reported delivered DAP in the $1,000-$1,020/st range for replacement tons. No current prices were reported for TSP. 10-34-0 was quoted in a broad range at $750-$810/st FOB for strictly allocated spot tons.
Northeast: Phosphate pricing covered an extraordinarily wide range in the region, due to rapidly firming replacement costs and the presence of lower priced fill tons contracted earlier that were being bartered between dealers. Sources confirmed current DAP and MAP prices ranging from a low of $892/st FOB to as high as $1,017/st FOB regional warehouses to the dealer.
The upper end of that range, quoted for DAP out of a Pennsylvania terminal location, more accurately reflects current replacement costs. The lower number, also reported out of a Pennsylvania shipping point to the dealer, represented what one source described as an “underground market” for dealer-to-dealer trades.
10-34-0 was quoted firmly at the $650/st FOB mark out of tanks in upstate New York, and remained in very tight supply. Sources elsewhere in the region tagged the upper end of the regional market at the $700/st FOB mark for very limited tons.
U.S. Export: Phosphate prices on the world market continued their upward march last week. A deal concluded by OCP last week of a new quarterly price for phosphoric acid to India at $1,985/mt just tossed gasoline on the flames. Not only was the price really high, but it was for only a quarter, not an annual deal, which was the norm. Norms no longer exist in the phosphate markets.
PhosChem did its share to boost prices last week with sales of 30,000 mt of phosphates into Brazil at prices ranging between $1,190/mt FOB and $1,200/mt FOB.
India issued a tender, which was due April 7, for an undisclosed amount of DAP. The current slowdown in domestic U.S. sales could make it possible for PhosChem to redirect some of the excess of its members to that tender. Brazil continued to be a promising market last week – and will continue to be.
In Argentina, where farmers were on strike protesting high export tariffs on soybeans imposed by recently elected President Cristina Fernandez de Kirchner, a 30-day truce was declared and farm goods began flowing as the blockades erected by farmers were taken down. The farmers were concerned the massive food shortages would turn public opinion against them. As a result, phosphate sales were expected to take a jump.
Based on actual sales last week, the export DAP price range was $1,190-$1,200/mt FOB.
India: There were several reports last week that Morocco’s OCP has concluded a new price of $1,985 mt CFR for phos acid for the first quarter with three major buyers. This compares to last year’s contract of $566.25/mt. Earlier this quarter, sources had reported a tentative price of $1,595/mt by one buyer.
POTASH
Eastern Cornbelt: Potash pricing was quoted as high as $595-$600/st FOB regional warehouses for brokered tons, with the low end of the range at the $550/st FOB level. Agrium announced new 60 percent red premium potash postings for the July 1 forward shipping period, including $627/st FOB Danville, Ill., Rock Island, Ill., Garrett, Ind., Seymour, Ind., and Toledo, Ohio. Rail-delivered postings for that period include $622/st in Illinois, Indiana, and Ohio.
Western Cornbelt: Potash was pegged at $550-$600/st FOB in the region for limited tons from resellers or brokers, which was up slightly from last report. The dealer market out of most Iowa warehouses was reported in the $575-$600/st FOB range to the dealer.
Agrium announced new 60 percent red premium potash postings for the July 1 forward shipping period, including $626/st FOB Dubuque, Iowa, and Kansas City, Mo., and $621/st rail-DEL in Iowa, Missouri, and Nebraska.
Northern Plains: Dealers quoted the spot market for potash as high as $625/st FOB the Twin Cities for brokered or reseller tons in early April. A North Dakota source quoted the delivered price for May at the $550/st mark from Saskatchewan, provided tons could be had from producers.
Agrium issued new potash prices for the July 1 forward shipping period. Postings for 60 percent red premium potash include $623/st FOB Shakopee, Minn., $616/st rail-DEL in northern Minnesota and North Dakota, and $618/st rail-DEL in southern Minnesota and South Dakota. The company’s potash postings FOB Vade, Saskatchewan, include $585/st for standard grade and $590/st for red premium for the July 1 forward shipping period.
Great Lakes: Potash was pegged at $550-$595/st FOB in the region for reseller tons, with the upper end also quoted for truck-DEL potash in central Wisconsin. Agrium reposted potash prices for the July 1 forward shipping period. The company’s 60 percent red premium potash postings will move to $627/st FOB Saginaw, Mich., $618/st rail-DEL in Wisconsin, and $622/st rail-DEL in Michigan.
Northeast: Potash pricing covered a wide range in the region last week. One dealer said he booked tons earlier at the $500/st DEL level for April shipments, while another source reported brokered tons priced as high as $625-$650/st FOB warehouses to the dealer. Agrium announced on April 2 that its 60 percent red premium potash postings would firm to $647/st FOB Lewistown, Pa., and $642/st rail-DEL in the Northeast region for the July 1 forward shipping period. Agrium’s rail-DEL postings in Alabama, Georgia, Florida, and the Carolinas will firm to $652/st for that shipping period.
Pacific Northwest: Agrium’s red premium potash postings for the July 1 forward shipping period included $636/st rail-DEL and $641/st FOB in southern Idaho, Utah, and Oregon’s Malheur County; $641/st rail-DEL and $646/st FOB in Washington, the Idaho panhandle, and Oregon excluding Malheur County and the Willamette Valley; and $646/st rail-DEL and $651/st FOB in Oregon’s Willamette Valley.
China: Sellers are talking $625/mt DEL to the Chinese; the same price product has been sold to India. No discount for the big buyer. Sellers say with each passing week, product that would have gone to China is being allotted to someone else.
India: Local sources say that recent deals by Canpotex and BPC amount to total imports of 2.075 million mt at $625/mt CFR including 180 days credit. They say to expect volumes to increase as other Indian buyers and suppliers come forward.
Southeast Asia: Effective June 1, Canpotex has raised its price in the region by some $200/mt, to $725/mt CFR for standard grade and $210/mt for granular to $750/mt CFR.
South America: Canpotex has raised its granular price to $750/mt CFR to Brazil and the rest of the region, effective June 1.
Sulfate of Potash: Great Salt Lake Minerals Corp. (GSL), a subsidiary of Compass Minerals, said March 30 that it will increase the price of its sulfate of potash (SOP) specialty fertilizer products by an average of $72/st effective with all shipments April 14, 2008, or as allowed by existing contracts.
“This price increase will help support our announced plans for a multi-phased expansion of our SOP production capacity at the Great Salt Lake in Utah, allowing us to better meet the long-term needs of the growers who rely upon our specialty fertilizer products,” said Ronald Bryan, GSL vice president and general manager.
With this latest increase, the company has also introduced a simplified SOP price list, which is posted on the GSL website at www.gslminerals.com. The list price for standard, nongranulated SOP will be $658 per st at the company’s Ogden, Utah, solar evaporation plant, while granular SOP will be $670 per st. These new prices will apply on April 14 to all new customers and spot transactions, and will be progressively implemented throughout 2008 as current contracts expire.
SULFUR
Tampa: Negotiations between sulfur producers and phosphate companies for second-quarter contract prices began last week, and the opening offers by sulfur interests were all above $200/lt up from the previous quarter. A source said at least one of the bids was for a $300/lt bump. When the dust settles, U. S. phosphate producers could be paying close to the world price for the precious byproduct of oil and gas refining. The big questions last week were what the reaction of the phosphate people will be and how long will it take to come to a disagreement – or maybe even an agreement at some point.
As a result of the high prices for barrels of oil, some refineries that do not own their own wells were said to be curtailing production. That will not help the sulfur shortage or the price of gasoline and diesel fuel. The high cost of fuel sparked a sporadic strike by independent truckers last week, who were paying an average of over $4/gallon. In addition, fuel surcharges were continuing to rise, and a source said fuel, rather than the cost of the driver, was now the largest expense for shipping. Also, Valero’s Delaware City refinery was undergoing a turnaround – just another crimp in the supply.
West Coast: Contracts for supplies to sulfur prill operations on the West Coast will not likely begin until late April, most likely after the Tampa price has settled.
Vancouver: A 300,000 ton block of sulfur in a remote area of Alberta was apparently sold recently, but the price and the name of the successful bidder was not available last week. Negotiations between sulfur producers and the Brazilians were still underway last week, with prices between $500/mt FOB and $600/mt FOB being discussed.
Toronto: Chemtrade Logistics Inc. has renewed its agreement with Vale Inco Ltd. for the marketing of all sulfur byproducts produced by the Vale Inco smelter in Sudbury, Ont. The new 10-year contract, which contains similar terms to the existing agreements between the parties, is effective as of Jan. 1, 2008. This continues the exclusive relationship between Chemtrade, including its predecessors and Vale Inco, for the marketing of these byproducts, which has been in place for more than 75 years.
“The capture of sulfur dioxide gases and conversion into sulfuric acid and liquid SO(2) is key to Vale Inco’s continued environmental stewardship at our Sudbury operations,” said Fred Stanford, president of Vale Inco’s Ontario operations. “Our relationship with Chemtrade provides us with continuing certainty of removal services and an opportunity for enhanced value from our by-products.”
Vale Inco is a wholly-owned subsidiary of Companhia Vale do Rio Doce.
MARKET NOTES
Europe: The European Union says it will continue to monitor fertilizer imports despite the EU’s March 17 decision to officially terminate the antidumping measures applicable to imports originating in Belarus, Croatia, Libya, and Ukraine. This is due to the significant gas cost concerns relating to the four countries.
In addition, the European Fertilizer Manufacturers Association (EFMA) and its members have developed their own in-house statistical and market intelligence infrastructure in order to respond quickly to any renewal of injurious dumping. This was, in part, a response to the earlier EU decision in July 2007 to start a monitoring system to cover imports from Russia.
“The EFMA system together with the European Commission’s monitoring will serve to facilitate quick corrections of any new dumping campaigns” says Esa Härmälä, EFMA director general. “We regret that the commission did not continue the existing measures despite recognition of the dangerous gas distortions in the exporter countries. But we are ready to immediately correct any problems.”
India: Morocco will significantly enhance the supply of phosphate rock and phosphoric acid to India required for the manufacture of DAP and other complex fertilizers, according to Morocco’s OCP, as was said in the recent meeting between the Moroccan Prime Minister, Mr. Abbas El Fassi, with Mr. Ram Vilas Paswan, Minister of Chemicals, Fertilizers and Steel at Rabat. In the hour-long meeting with the Moroccan Prime Minister, several issues – including investment in Morocco by Indian companies in chemicals, fertilizers, steel, and automobiles, and cooperation in the field of mineral and oil exploration – were discussed.
Later, the delegation held a meeting with Mr. Mostafa Terrab, President and CEO of OCP, at Casablanca. Terrab assured that OCP would make all possible efforts to ship enhanced quantities of these raw materials/intermediates required for phosphatic fertilizers with distinct and considerable price advantage to India at the prevailing international price. India imports nearly 1.1 million mt of phosphate rock from Morocco, which is 22 percent of India’s total import of phos rock. About 1.2 million mt of phosphoric acid is imported by India from Morocco, which is about 50 percent of India’s total import. The possibilities of long-term measures, such as joint ventures in Morocco, were also discussed. OCP offered two plots for Indian entities at Jorf Lasfer for setting up a phosphoric acid unit. India was also requested to participate in improving the mining of rock so as to increase its availability. OCP welcomed the participation of NMDC in this effort.
Earlier, in his meeting with Moroccan Minister of Energy, Mines, Water and Environment Ms. Amina Benkhadra at Rabat, Mr. Paswan extended the offer of providing services of National Mineral Development Corp. (NMDC), a PSU under the Ministry of Steel, for the exploration of various minerals in Morocco. Morocco is reported to have reserves of gold lead, zinc, iron, silver, and copper. It was decided that a joint committee comprising representatives of ONHYM, the Moroccan entity in the mineral sector, and representatives of NMDC would work out the modalities and develop an action plan.
According to OCP, India imports nearly 5 million mt of phosphate rock, 2.5 million mt of phosphoric acid, and 3 million mt of DAP annually. India produces 17.7 percent of the global production of DAP, imports 23.6 percent of global trade of DAP, and consumes 28.1 percent of the global consumption of DAP. India does not have any indigenous production of MAP or TSP and imports around 4 percent of the global trade of MAP, corresponding to 1.3 percent of global consumption. India imports 17.9 percent of the global trade of phos rock, as the indigenous production is extremely limited. India’s indigenous production of phosphoric acid
corresponds to 4.1 percent of global production, and it imports a significant 54.4 percent of phosphoric acid of global trade. India’s consumption of phosphoric acid constitutes 11.7 percent of global consumption.
Current production of phos rock by Morocco is about 29 million mt/y, of which nearly 45-50 percent is exported. The Indian fertilizer company Paradeep Phosphate Ltd. (PPL) has a long-term supply arrangement of phos rock from Morocco, and Zuari Industries Ltd. (ZIL) and Tata Chemicals Ltd (TCL) have off-take arrangements for phosphoric acid from IMACID, a joint venture between OCP and ZIL and TCL, India. OCP also has equity stake in the PPL, India.
India: Even as policymakers are busy giving final touches to the natural gas utilization policy, the government is planning to provide a subsidy of about Rs 30bn to urea manufacturers for switching from fuel oil (FO), low sulfur heavy stock (LSHS), or naphtha to natural gas. The conversion would help companies reduce their operation costs. It is proposed that they should be allowed to retain the entire saving for the first three years of production after converting their plants to natural gas. A Cabinet note in this regard has already been circulated by the Department of Fertilizers. “Initially, the government had decided to provide the capital for the conversion of the plants but as the cost of conversion is substantially high, it was decided that the units would finance the project through bank loans and the government would provide them subsidy to compensate their conversion cost,” said an official. The move is significant in the light of RIL’s KG basin gas coming into production in the second quarter of 2008-09.
KG gas is expected to double the availability of natural gas in the country. The total cost of conversion of the units has been estimated at about Rs 26bn. As the subsidy scheme would be spread over a period of three years and would also take into account the interest for the period, the actual subsidy burden would be much higher, sources said. Under the New Pricing Scheme (NPS) stage-III, all non-gas based urea plants are required to be converted into gas based units before March 2010. DOF was initially considering a capital subsidy to these plants; however, it has now suggested a conversion subsidy.
There are four FO/LSHS units in the country. Three of the units belong to National Fertilizers (NFL), while the fourth belongs to Gujarat Narmada Valley Fertilizers Co. Ltd. (GNVFC). All the units have completed the technical and commercial feasibility for the conversion projects. They also have the in-principle approval of the government for carrying out the exercise. The project is, however, getting delayed due to uncertainty over the type of subsidy. DOF has now proposed the scheme to reduce immediate financial implication to the government.
Bangladesh: The country plans two new urea plants with the total production capacity of one million tons per year to meet growing demand. Special Assistant to Chief Adviser for Industry Mahbub Zamil told media: “The government plans to set up the new urea plants and a feasibility study is going on in this regard. One of these will be set up at the country’s northern region and the other in Fenchuganj of Sylhet.” He expressed hope that it will reduce the present urea deficit from 1.3 million mt to 300,000 mt/y, as locally the country would be able to meet the demand to a large extent. He added, “The present caretaker government is hoping to inaugurate the construction works on these fertilizer factories as it has taken all-out preparations regarding this, and some international financing organizations including China Exim Bank and Czech Republic, have already shown keen interest to finance in this regard to help the Bangladesh government procure the equipment needed to set up the fertilizer factories.”
Bangladesh statistics show total urea demand for fiscal 2007-2008 to be 2.818 million mt, while the government-owned Bangladesh Chemical Industries Corp. has the capacity of 1.5 million mt, a deficit of 1.3 million mt. The rest of the deficit is expected to be met by Karnafhuli Fertilizer Co. and imports.
