AMMONIA
U.S. Gulf/Tampa: The imports ammonia market remained quiet last week. The last Tampa business was reported at $585/mt DEL, with $590/mt DEL at other Gulf ports.
Trinidad: All major ammonia producers were reported to have suffered through gas curtailments from July 1-6. PotashCorp lost some 12,000 st.
In other news, PotashCorp’s #4 ammonia plant came back up June 22. It went down May 2 for extended maintenance.
Eastern Cornbelt: Spot ammonia prices were firming as deals on remaining spring prepay tons were cleaned up in late June and early July. Sources tagged the cash ammonia market last week at $1,000-$1,020/st FOB regional terminals, with the low in Illinois and the upper numbers in Ohio.
Ammonia postings were at considerably higher levels. CF’s reference prices for orders placed and shipped from July 3 through July 11 included $1,130/st FOB Mt. Vernon, Ind.; $1,135/st FOB Terra Haute, Ind., and Illinois terminals at Albany, Cowden, Kingston Mines, Peru, and Seneca; and $1,140/st FOB Frankfort, Ind., and Huntington, Ind.
Agrium’s July 7 ammonia postings included $1,010/st FOB Illinois terminals at E. Duqubue, Niota, Meredosia, and Marseilles, and $1,025/st FOB North Bend/Finney, Ohio.
Western Cornbelt: Cash market ammonia continued to firm, with most sources tagging the market at $950-$1,000/st FOB regional terminals. The dealer market FOB Hoag, Neb., was quoted at the $980/st mark last week. Dealer-to-dealer sales at the $800/st mark or lower were taking place in late June for extra spring prepay tons that had to be pulled by the end of the month, but those deals were reportedly over last week.
Posted prices for ammonia continued to move up. For orders placed and shipped from July 3 through July 11, CF was referenced at $1,120/st FOB Aurora and Fremont, Neb.; $1,125/st FOB Garner and Spencer, Iowa, and Pine Bend and Glenwood, Minn.; $1,130/st FOB Palmyra, Mo.; and $1,145/st FOB Grand Forks and Velva, N.D. Effective July 10, Agrium reposted ammonia at $1,244/st FOB and $1,264/st DEL in the Leal, Velva, Grand Forks, and Beulah sales area in North Dakota, up $63/st from the company’s July 4 reference levels.
Agrium’s July 7 ammonia postings included $940/st FOB Borger, Texas; $960/st FOB Mocane, Okla.; $965/st FOB Conway, Kan.; $970/st FOB Clay Center, Kan.; $995/st FOB Hoag; and $1,000/st FOB Mankato, Minn., Greenwood, Neb., and Iowa terminals at Early, Garner, and Whiting.
California: The ammonia market was unchanged at $600-$700/st DEL in the state, with the low reflecting Calamco’s truck-DEL price and the upper level reflecting Agrium reference levels. Calamco’s rail-delivered price for anhydrous ammonia was steady at $630/st, and its aqua ammonia posted price was $160/st FOB in California.
Pacific Northwest: Ammonia pricing continued to ratchet up. Sources quoted the market in a broad range at $1,100-$1,200/st DEL in the region last week, and CF was referencing cash market ammonia at the $1,145/st level FOB Ritzville, Wash., for orders placed and shipped by July 11.
Agrium raised its anhydrous ammonia postings on July 4, with reference levels firming to $1,246/st rail-DEL in Oregon, Washington, Idaho, and Utah; $1,266/st truck-DEL in northern Idaho and in Oregon and Washington east of the Cascades; and $1,271/st truck-DEL in Montana and northern Wyoming. Those levels reflected a $63/st increase from Agrium’s July 1 ammonia postings in the region.
Agrium released another anhydrous ammonia pricing increase on July 10, with postings moving up an additional $62/st to $1,308/st rail-DEL in Oregon, Washington, Idaho, and Utah; $1,328/st truck-DEL in northern Idaho and in Oregon and Washington east of the Cascades; and $1,333/st truck-DEL in Montana and northern Wyoming.
Agrium also announced another aqua ammonia pricing increase on July 10. Postings moved on that date to $332/st FOB Central Ferry and Finley, Wash., reflecting a $15/st increase from the company’s July 4 reference levels and a $31/st hike from Agrium’s July 1 aqua ammonia postings in the region.
Western Canada: Sources tagged the anhydrous ammonia market at $1,379-$1,424/mt DEL in the Western Canada region, up $125/mt from last report.
Black Sea: Sources report vessels are lying at anchor waiting for material to be delivered to the port at Yuzhnyy. The lack of ammonia to the port, sources say, is because some plants are still on turnaround and at least one facility experienced an unexpected shutdown.
Sales from Yuzhnyy hit $550/mt FOB last week. Producers are now said to be eyeing $600/mt FOB, and sources in Asia say that target should not be difficult to hit. The new business reflects a rising of the floor in the price range industry observers have put on the market.
Helping move the price up in Yuzhnyy is an ever-rising price for ammonia from the Middle East. Late last week a deal at $650/mt FOB will almost ensure Black Sea material will surpass $600/mt FOB soon.
For now, sources peg the market at $550-$560/mt FOB, but caution that those numbers could change over the weekend.
Middle East: What a ride. Two weeks ago Yara sold a cargo from PIC to SFC/South Korea at $645/mt CFR. Late last week Mitsui bought 15,000 mt from Qafco for $650/mt FOB.
Sources say the area producers maintain they have no tons to spare. One observer noted, however, that when the price is right – for the producers – they always seem to find the extra tons.
Cynicism aside, one trader noted that the loss of ammonia production in Australia has caused a ripple effect throughout Asia. With the Australian tons out of the market for an undetermined time, sources say Asian buyers are scrambling to secure whatever tons are available. And they seem to be willing to pay whatever the producers are asking.
The Mitsui/Qafco tons are reportedly heading for an Asian buyer – just like the Yara/PIC tons a week earlier.
Producers are clearly eyeing the $700/mt FOB mark for their product. For now, however, that mark is a bit further down the road.
Pegging the market to occasional spot tons is not a fair method of determining the area’s market price, said one trader. The bulk of the business from the region is done under contract.
Indian buyers, for example, are not paying anywhere near the Yara or Mitsui prices for their product. They are not getting cheap ammonia, one trader stressed, but they are also not paying top dollar.
Sources say Indian off-take is slowing down. Reportedly, the quarterly phos acid talks have not gone well. The result is a softening of demand. Some Indian buyers continue to take their contracted tons, but there are no requests for additional quantities.
As the week closed, observers put the Middle East market at $640-$650/mt FOB with plenty of room to grow.
India: The phosphate producers are in talks with phos acid producers and seem to be getting nowhere, said one source. The producers are asking for an increase beyond previous expectations, and the buyers are digging in their heels. Without the acid, the DAP producers have little need for more ammonia. Sources say buyers are taking the minimum required under their contracts – but no more.
Indonesia: State-run companies see more profit in urea than ammonia. Production – where possible – has shifted from ammonia to urea. Sources say this shift is causing some problems for Mitsubishi and Mitsui.
The two Japanese powerhouses have used excess ammonia from the state-owned companies to fill out contracts written with their joint ventures, KPA and KPI. In some cases the joint venture firms used purchases from Kaltim to top off cargoes or provide buyers with additional ammonia.
Now, however, there is little-to-no ammonia available for export from the state-owned entities. The Japanese companies have been working overtime to ensure their customers are provided at least the minimum quantity required under the contracts.
One trader said each day represents a new challenge to meet that commitment.
Australia: The explosion at the natural gas facility in northern Australia that caused the closing of the Burrup ammonia facility continues to have repercussions throughout Asia. Customers of the plant are looking frantically across Asia for other sources of ammonia. The options are few, and in each case the price is high.
Sources do not expect to see any possibility of softening in the Asian market until the Burrup facility is back online.
Asia: Demand throughout the region remains strong. The fact that South Korea paid $645/mt CFR two weeks ago was evidence that demand is still outstripping supply.
With the Australian Burrup plant down, Indonesian supplies showed a slight downturn as some plants focus on urea production. With Malaysian producers working at near full capacity, there is no place for buyers to turn except the highly-charged Middle East market.
UREA
U.S. Gulf: NOLA granular barge prices shot up again last week, with a broad range reported. Sources credited much higher prices in the international market as the main impetus for the NOLA spike. With India and other international buyers still hungry for urea, U.S. NOLA prices again appeared cheap. As a result, most sources said barges started the week around $740/st FOB and were trading as high as $765-$770/st FOB by late Thursday for prompt. There was some suggestion that sub-$740/st FOB could have been had earlier in the week, but most said that was wishful thinking.
As with DAP, sources speculated that some of the buying was by traders who simply wanted something to trade at the upcoming Southwestern meeting. Most sources said they thought urea would be the “hot” commodity at the meeting and the one to watch. One volunteered that UAN and ammonium nitrate were undervalued and might also gain more attention.
Sources said there were very few barges in NOLA, as it has been depleted by rice season and exports. They say it will be another month or so before the regular imports begin again by major importers such as Sabic. Sources said replacement costs for NOLA tons are now nearing the $800/st FOB mark.
In the meantime, little new was heard on prills. However, the last done business was called $690/st FOB.
Eastern Cornbelt: Granular urea was pegged at $760-$795/st FOB, up again from the prior week. One source tagged the dealer market in his area firmly at the $785/st FOB level last week, and postings were even higher. Agrium’s urea postings firmed on July 9 to $795/st FOB Mt. Vernon, Marseilles, Ill., and Cincinnati/Finney, Ohio; $805/st FOB E. Liverpool, Ohio; and $815/st FOB Saginaw, Mich. CF was reportedly at $795/st FOB Peoria, Ill., and $798/st FOB Cincinnati for July, $10/st higher for August, $40/st higher for September, and $50/st higher at both terminals for the October through December shipping period.
Western Cornbelt: Regional sources continued to report firming urea prices. Most pegged the granular urea market at $760-$775/st FOB regional terminals to the dealer last week, but higher postings were circulating. CF’s St. Louis reference levels included $795/st FOB, moving to $805/st for August shipments, $835/st FOB in September, and $845/st FOB for October through December.
Agrium’s urea postings firmed on July 9 to $805/st FOB Marion, S.D. On July 10, the company’s urea postings at its North Dakota terminals at Alton, Colfax, Carrington, Marion, and Scranton firmed to the $805/st FOB level as well, and to $810/st rail-DEL in Minnesota, Wisconsin, and the Dakotas. Those levels were up $35/st from the company’s July 4 postings, and $70/st higher than July 1 reference levels.
Effective July 12, Koch will raise its granular urea posting FOB Enid, Okla., to $785/st.
California: The granular urea market was quoted at $785-$795/st FOB and $810-$820/st DEL in the state, up roughly $60/st from last report.
Agrium has reposted urea no less than three times since the first of July. On July 1, the company’s reference levels included $755/st FOB West Sacramento, $780/st truck-DEL in central California, and $785/st truck-DEL in northern California. The company followed that increase with a $35/st hike on July 4, bringing postings to $790/st FOB West Sacramento, $815/st truck-DEL in central California, and $820/st truck-DEL in northern California. Agrium announced yet another urea pricing increase last week, with postings moving on July 10 to $825/st FOB West Sacramento, $850/st truck-DEL in central California, and $855/st truck-DEL in northern California.
Pacific Northwest: Granular urea was quoted at $770-$800/st DEL in the region, up some $60-$70/st from last report, with the low end reported in Montana.
Agrium on July 10 issued its third price increase since the first of the month. Agrium’s July 1 granular urea postings included $735-$750/st DEL in Montana and Wyoming, depending on location; $760/st FOB Washington warehouses at Glade, Kennewick, Warden, and Wilson; $765/st DEL in Washington, Oregon, Idaho, and northern Nevada; $775/st DEL in northern and central Utah; and $780/st DEL in southern Utah.
Agrium raised those levels $35/st on July 4, and followed that increase with another on July 10. Agrium’s July 10 postings include $805-$820/st DEL in Montana and Wyoming; $830/st FOB Washington warehouses at Glade, Kennewick, Warden, and Wilson; $835/st DEL in Washington, Oregon, Idaho, and northern Nevada; $845/st DEL in northern and central Utah; and $850/st DEL in southern Utah.
Western Canada: Granular urea was quoted at $870-$895/mt DEL in the region, reflecting a $70/mt increase from June pricing levels.
Southeast: Agrium’s urea postings firmed on July 9 to $810/st FOB Bainbridge, Ga.
Trinidad: PotashCorp’s urea plant went down July 4 for 26 days of planned maintenance.
India: Some purchases have been made to ensure supplies to farmers do not get dangerously low. But the purchases are not enough to satisfy those same farmers for too long.
Sources report that Transammonia, Keytrade, and Helm have sold a total of 220-230,000 mt to IPL. Unconfirmed reports say Ameropa also provided some of the tons.
The word is that Trammo sold at $778/mt CFR, and Keytrade and Helm sold at $730/mt CFR.
If those prices are accurate – and many in the industry seem to think they are – sources say IPL got a good, but not great, deal. The best guess is that the tons are all coming from Yuzhnyy, which moved into the $730s/mt FOB last week.
India will need another 1.2-1.3 million mt by March 2009, say sources. On top of the additional tons needed, IPL will still have to call a tender to validate the numbers offered by the trading houses.
Once a tender is called, said area observers, the price for all other deals will skyrocket.
One source said the Indians may be trying to sit out this quarter before calling a tender in the hopes that China will lower its export duty to anything less than the current 135 percent. If such a move happens, say sources, Chinese material into India could become competitive once again and provide a cushion to the cash-strapped Indian government.
The other main buyers in India – MMTC and STC – are also sitting on the sidelines waiting to see what happens with IPL.
Sources say Indian buyers are reluctant to look at Middle East tons because the price is already too high for consideration.
Black Sea: Producers are now pushing for $750/mt FOB, and buyers are running out of reasons why that price is too high.
Following reports of sales to India, prices jumped to $738/mt FOB. Sources say Transammonia paid the new high price.
Supplies remain tight for global buyers, and producers are more than willing to take advantage of the situation.
On the down side for FSU producers are reports that Latin American buyers are not taking any tons beyond their occasional requirements.
For now, prices are pegged at $730-$740/mt FOB – with producers holding out for $750/mt FOB.
Industry observers say the $750/mt FOB mark should not be difficult to hit if any of the Indian buyers call a tender. With Chinese tons too expensive to be competitive and the Middle East now nearing $800/mt FOB for prills, panamax purchases from Yuzhnyy are quickly becoming the only source for large-scale buyers.
Middle East: The granular market remains unusually tight. Sources say prices have moved into the $800s/mt FOB on the strength of demand from the area.
Sales are continuing to the U.S., and Asian buyers seem more willing – or able – to pay for granular that can be used for NPK production.
The week closed with Sabic reporting a sale of 30,000 mt at $800/mt FOB.
Sources peg the granular market at $790-$810/mt FOB.
Prills are also strong, but coming in at a $15-$20/mt discount. Sources peg the prilled market at $780-$790/mt FOB.
Producers apparently have no desire to reduce their prices to snare a portion of the Indian business. Sources say the area is too tightly balanced.
With Yuzhnyy export and Chinese domestic prices climbing, producers have little reason to think prices will soften any time soon.
China: A new rumor has emerged about the export duty, and buyers will not like it. Sources report that a third option to the standard “keep the tariff the same” and “lower the tariff” arguments has appeared. Asian sources are now reporting rumors that the central government in Beijing may be considering raising the tariff in the fourth quarter.
The current tariff of 135 percent was imposed earlier this year to discourage exports at a time when Chinese farmers were entering their peak application season. The imposition of the tariff took Chinese urea out of the international market and immediately boosted global prices.
Even with Yuzhnyy and the Middle East at record high prices, any Chinese urea being offered for export is starting out at $850/mt FOB from the port.
Part of the government’s concern about urea has now shifted from the export magnet to the Olympics.
The northern application season is now complete, and the south is nearly finished as well. Normally at this point production would be permitted to continue to allow the domestic pipeline to be replenished and then offer the rest for export.
The earthquake in Sichuan province shut down a number of key producers because of a lack of raw materials.
The current floods in the south are taking out transportation facilities, but so far have not directly affected any plants.
And then there is the promise from the central government to the International Olympic Committee that the pollution levels in the Olympic venue cities would be reduced to healthy levels.
With less than a month to go, the PRC government is taking the dramatic steps of ordering factories around Olympic cities to start shutting down this week. Construction projects have also been ordered stopped, and the government has banned the importation of materials that could cause airborne pollutants, such as dry sulfur.
The shutdowns are expected to cut into the urea replenishment plans of regional urea distribution centers.
To ensure farmers start the next application season with plenty of urea – and more importantly for the political leadership, that farmers perceive a surplus of urea – sources now report that the 135 percent export tariff may not only be extended to cover the rest of the year, but may be increased.
One trader said until reports of discussion about an increase in the tariff, the idea of an extension was the most pessimistic option being discussed. Now, he says, he has found a new level of pessimism.
Indonesia: PIM closes a selling tender for 40,000 mt Monday. Who will buy the tonnage and for how much are the questions being asked across Asia. The sale will be part of 100-200,000 mt the Indonesian state-owned industries plan to offer for export this year. Sources say the Indonesian tons could go to industrial buyers – who are usually more willing to pay a few extra dollars for their purchases – or they could go to desperate agricultural buyers. Depending on how the bidding goes, said one source, the tons could be picked up with India in mind.
Pakistan: Sources say Pakistan still needs 300,000 mt this year. Rumors of a pending tender have been circulating for about a month. Last week sources said TCP continues to crunch the numbers trying to figure out how to pay for a tender, while diplomatic efforts continue to get Saudi Arabia to agree to another aid package similar to the one that guaranteed urea supplies last year.
Government officials have been in negotiations with Saudi Arabian authorities for reviving another credit facility of $125 million for import of urea.
Bangladesh: BCIC will close a tender July 15 for 100,000 mt each of prilled and granular urea. The state-buying company reportedly has awarded contracts totaling 150,000 mt from its last tender. Sources say they will wait and see how soon letters of credit get cleared before they examine the deals too closely. BCIC has a track record of awarding tenders and then delaying issuance of the LCs until the validity dates of the offers expire or until the market price has moved beyond the initial offers, making any deal untenable for the trader.
Jamuna Fertilizer Factory’s (JFF) Jamalpur urea plant will remain suspended for about two weeks for repairs. Experts arrived at the plant July 10 to supervise the repair.
NITROGEN SOLUTIONS
U.S. Gulf: UAN barges appeared to be firming last week, with most sources saying the last done deal was at $450/st FOB ($14.06/unit FOB). Sellers were reported to now be quoting much higher numbers at $470/st FOB.
Eastern Cornbelt: UAN was quoted at $14.00-$14.53/unit FOB terminals to the dealer. Sources tagged the UAN28 market FOB Cincinnati at $14.20-$14.46/unit FOB, depending on supplier, with postings at significantly higher numbers. For orders placed and shipped before July 11, CF was referenced at $15.10/unit FOB Cahokia, Ill.; $15.15/unit FOB Louisville, Ky., Kingston Mines, and Peru; $15.20/unit FOB Albany and Cincinnati; $15.35/unit FOB Terra Haute; and $15.55/unit FOB E. Liverpool.
Agrium announced new UAN postings, effective July 9, with reference levels moving on that date to $14.80/unit FOB Paducah, Ky.; $14.85/unit FOB Mt. Vernon; $14.95/unit FOB Marseilles and Meredosia, Ill.; $15.00/unit FOB Cincinnati/Finney; $15.05/unit FOB Newton, Ill.; and $15.15/unit FOB Danville, Ill.
Western Cornbelt: UAN was quoted at $14.00-$14.38/unit FOB regional terminals, with the upper end reflecting dealer pricing out of spot Missouri River locations. Postings were up considerably from those levels, however, with CF referenced at $15.40/unit FOB Pine Bend, Minn., for orders placed and shipped by July 11.
California: UAN-32 was quoted at $475-$500/st ($14.84-$15.63/unit) FOB and $500-$510/st ($15.63-$15.94/unit) DEL, up considerably from last report as new postings took effect in the region. Agrium’s UAN-32 postings firmed on July 10 to $488/st ($15.25/unit) FOB Sacramento, $510/st ($15.94/unit) truck-DEL in central California, and $515/st ($16.09/unit) truck-DEL in northern California.
Pacific Northwest: UAN-32 remained in a broad range at $435-$475/st ($13.59-$14.84/unit) DEL in the region, but higher postings were taking effect. Agrium raised its UAN-32 postings on July 10 to $500/st ($15.63/unit) DEL in Oregon excluding Malheur County, Washington, and northern Idaho; $505/st ($15.78/unit) rail-DEL and $510/st ($15.94/unit) truckDEL in southern Idaho and Oregon’s Malheur County; and $530/st ($16.56/unity) DEL in Montana and northern Wyoming. Agrium’s UAN-28 postings in Montana and northern Wyoming firmed on that date to $464/st ($16.57/unit) DEL.
Western Canada: The UAN-28 market was quoted at $542-$557/mt ($19.36-$19.89/unit) DEL in the region, up some $42-$43/mt from last report.
Southeast: Agrium announced new UAN postings, effective July 9, with reference levels moving on that date to $14.70/unit FOB Bainbridge, $14.90/unit FOB Chesapeake, Va., $14.95/unit FOB Wilmington, N.C., and $15.05/unit FOB Baltimore, Md.
Agrium’s UAN S postings also firmed on July 9, with 24 percent solution moving to $382/st FOB Bainbridge, Wilmington, and Chesapeake; 25 percent moving to $396/st FOB Chesapeake; and 28 percent moving to $441/st FOB Bainbridge.
AMMONIUM NITRATE
U.S. Gulf: Higher barge prices for this product have finally caught on. Sources said imports are off and there is very little product to be found if you need it. As a result, most were calling the recent trades at $400-$420/st FOB.
Western Cornbelt: Ammonium nitrate pricing continued to climb, with sources quoting the dealer market at $455-$475/st FOB in the region last week.
California: No market was reported for ammonium nitrate in California. CAN-17 remained in a broad range at $310-$350/st FOB in the state.
Pacific Northwest: No current prices were reported for ammonium nitrate in the region. CAN-17 was quoted at a firm $330/st DEL. Effective July 10, Agrium’s CAN-17 postings firmed to $340/st FOB Kennewick, Wash. Agrium’s 20-0-0 ammonium nitrate solution postings also firmed on that date to $306/st FOB Kennewick.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was steady at $420-$435/st FOB in the region.
Effective July 14, Honeywell’s ammonium sulfate postings will increase to $475/st FOB or rail-DEL for granular, and $460/st FOB or rail-DEL for mid-grade.
Western Cornbelt: Granular ammonium sulfate remained in a broad range at $375-$435/st FOB, with the low reported out of spot Missouri River shipping points and the upper end reflecting new producer postings in the region. Sources said the low end of the range would move north of the $400/st mark in the near term, however. An Iowa source also reported ammonium thiosulfate pricing last week at the $345/st FOB level, up from the previous $300/st FOB.
Agrium’s July 11 granular ammonium sulfate postings included $440/st DEL in Minnesota, Wisconsin, and the Dakotas.
California: Ammonium sulfate was tagged at $330-$350/st FOB in the state.
Pacific Northwest: Granular ammonium sulfate was pegged at $400-$415/st DEL. Agrium’s granular ammonium sulfate postings firmed on July 1 to $415/st FOB the warehouse in Idaho, Washington, Oregon, Utah, and Nevada, and $420/st DEL in those states plus Montana and Wyoming. Those levels reflected a $20/st increase from Agrium’s June 2 postings in the region.
Agrium announced additional price increases for granular ammonium sulfate, effective July 11. Pricing on that date firmed another $20/st to $435/st FOB the warehouse in Idaho, Washington, Oregon, Utah, and Nevada, and $440/st DEL in those states plus Montana and Wyoming.
Western Canada: Granular ammonium sulfate pricing was on the rise, with the regional market reported at $500-$505/mt DEL from the prior range of $480-$485/mt DEL
PHOSPHATES
Central Florida: Producers said they were receiving an increase in inquiries for phosphates out of Central Florida, but prompt sales were slim last week. Forward sales were made during the period, and prices remained strong.
The Central Florida DAP price range last week continued unchanged from the previous week’s range of $1,025-$1,070/st FOB. PCS Sales’ Central Florida reference price increased on July 8 from $1,050/st FOB to $1,070/st FOB for DAP, an increase of $20/st FOB. Mosaic’s asking price was still $1,070/st FOB for DAP and $1,095/st FOB for MAP. In Texas, Agrifos’s price remained at $1,075/st FOB for trucks and $1,070/st FOB for rail shipments.
U.S. Gulf: With the Southwestern Fertilizer Conference this week, some buyers made barge purchases last week “just to have a couple in the pocket” to trade during the meeting. Although NOLA phosphate barge sales were made during the week, it appeared many were waiting to get a better picture at the conference before making a move.
Rather than put phosphate in bins now, traders said dealers were attempting to lock in prices for the fall but were finding few takers. The problem with taking forward sales, prepaid or not, was dealers expected the price to go down and wanted product priced below the current market, but traders see the market as headed upward during the period and don’t want to risk losing on the deals. “The price will be talked up” during the conference, a source said.
Mosaic made prompt sales of DAP by rail from Donaldsonville at $1,080/st FOB last week, and forward NOLA DAP barge sales at $1,100/st FOB.
Warehouse prices remained steady last week in the range of $1,075-$1,100/st FOB, and continued to trail replacement costs. However, much of the DAP in storage was purchased earlier and business tended to be slow.
DAP sales settled into a more narrow range than in the past month, with only a $4/st FOB spread between the top and bottom. MAP offers were made as low as $1,105/st FOB for a barge already on the water.
The price range last week barely moved from $1,070-$1,075/st FOB to $1,071-$1,075/st FOB. MAP barges were available at prices $25-$75/st FOB more than DAP. Mosaic’s asking price for NOLA DAP barges was $1,100/st FOB and $1,1125/st FOB for MAP. CF was seeking $1,070/st FOB for DAP and $1,145/st FOB for MAP for prompt deliveries, if available.
Eastern Cornbelt: The DAP market was tagged at $1,080-$1,120/st FOB in the region, with the upper end reflecting dealer pricing FOB Cincinnati. MAP was $1,107-$1,145/st FOB warehouses. The 10-34-0 market was pegged at $1,075-$1,100/st FOB, and remained in very tight supply.
Western Cornbelt: Few new sales were reported to test the phosphate markets. DAP was pegged at $1,075-$1,100 regional warehouses to the dealer, with MAP at $1,100-$1,145/st FOB. The 10-34-0 market was quoted at $1,070-$1,100/st FOB for very limited spot tons.
California: DAP and MAP were steady at $1,155-$1,160/st FOB or DEL in the state, and 16-20-0 remained at $615-$622/st FOB. 10-34-0 had reportedly strengthened to $910-$925/st FOB in California, up roughly $25/st from last report.
Following a July 1 increase, super phosphoric acid (SPA) and merchant grade acid (MGA) were quoted at $23.50/unit DEL in California, with Simplot’s reference price for MGA moving to $23.70/unit FOB Lathrop. Agrium’s July pricing levels included $2,350/st rail-DEL for both SPA and MGA, with a move to $2,400/st rail-DEL slated for August.
Pacific Northwest: DAP and MAP were steady at $1,145-$1,155/st DEL or FOB in the region. 16-20-0 remained at a firm $615-$620/st DEL. 10-34-0 had reportedly firmed to $945-$955/st FOB in the region, up $20/st from last month.
SPA and MGA were quoted at $23.50/unit DEL in the region, up 50 cents/unit from June pricing levels. Another 50 cents/unit increase is slated for August. Agrium’s July SPA and MGA postings include both products at $2,350/st rail-DEL, with August postings at $2,400/st rail-DEL in the continental U.S.
Western Canada: The MAP market remained at $1,335-$1,370/mt DEL in the region.
U.S. Export: PhosChem made no new export phosphate sales last week, but interest was expressed by India, Mexico, and Peru. In a twist, U.S. domestic prices were actually higher than the export market’s.
In Argentina, the farmers strike continued and appeared to be heating up. The country’s lower house passed the export tax hike sought by President Cristina Fernandez by a narrow 129-122 margin and leaders were demanding an end to the crisis, which was beginning to cause food shortages and slow the economy.
The export DAP price range remained unchanged at $1,160-$1,205 mt due to a lack of new sales.
India: Jordanian phosphate rock supplier JPMC has opted to renege against contracts to supply major Indian companies, effective July 1. The action was reportedly taken because the government of Jordan has abolished all subsidies on all petroleum products and floated prices in line with world oil prices. As a result, this has brought about an increase of more than 200 percent in the cost of mining, transportation, energy, and labor.
Indian companies have been caught in a tight corner by the JPMC move. Major Indian buyers of Jordanian rock such as RCF, GNFC, GSFC, GACL, Coromondel, IFFCO, Paradeep, and Tata Chemicals have all received notices from JPMC. New negotiations are reported to be underway between JPMC and buyers.
To add to buyer woes, sources also report that they are in another round of phos acid price negotiations as well.
POTASH
Eastern Cornbelt: Potash was quoted at $800-$875/st FOB regional warehouses last week, depending on grade and location. PCS Sales announced on July 8 that it will raise its North American potash postings across the board by $250/st FOB, effective Sept. 1 through Nov. 30. The company’s Saskatchewan mine prices for that period will move to $767/st FOB for standard, $780/st FOB for soluble, $772/st FOB for granular, and $780/st FOB for white granular.
Western Cornbelt: The potash market was reported at $800-$875/st FOB regional warehouses to the dealer, reflecting yet another increase from the prior week. The upper end reflected reference pricing from some suppliers, while several sources put the common dealer price at the $850/st FOB level in the region last week. PCS Sales’ new potash postings for the Sept. 1-Nov. 30 period include granular at $815/st FOB St. Louis.
California: Potash pricing remained at $614/st FOB for strictly allocated tons of 62 percent white product and fine grade potash, with delivered potash reported at $700-$770/st, depending on grade and supplier. One source said the next movement will take place in late fall on almonds.
Granular sulfate of potash (SOP) was reported at $895/st FOB in the state, with water soluble SOP at $955/st FOB for bulk and $1,015/st FOB for bags.
Sources tagged the California potassium nitrate market at $1,160/st FOB for bulk and $1,230/st FOB for bags.
Pacific Northwest: The potash market remained at $615-$651/st FOB in the region for strictly allocated tons for the current fill period. Delivered prices for allocated potash were said to be in the range of $636-$646/st in the region.
Effective Aug. 1, Intrepid Potash’s postings for 60 percent granular muriate of potash will move to $782/st FOB Carlsbad, N.M., and Moab, Utah, and $800/st FOB Wendover, Utah; 60 percent standard will move to $776/st FOB Carlsbad and Moab, and $794/st FOB Wendover; 62 percent standard will move to $794/st FOB Carlsbad; 62 percent fine standard will move to $797/st FOB Carlsbad; and 62 percent granular will move to $800/st FOB Carlsbad.
Western Canada: No current prices were reported for potash in the region.
Southeast: Effective July 10, Agrium’s 60 percent coarse potash postings firmed to $750/st FOB Bainbridge, Wilmington, and Tifton, Ga.
SULFUR
Tampa: Serious negotiations for new third-quarter sulfur prices were underway last week, but a wide gap separated the sulfur and phosphate industries. PotashCorp and Mosaic were said to be pushing for a bump of $125/lt over the previous quarter, and all but one of the oil companies was seeking an increase of $200/lt, with one willing to go as low as $180/lt up.
However, news out of the Mideast last week showed signs the bubble may be getting ready to burst on continually higher prices. A deal out of Bahrain was done about $100/mt FOB below the high price for the previous month, in the low $700/mt FOB range for high-quality product. Another deal was done at $735/mt FOB, but that was for significantly lower quality sulfur. Pressure on the world market was to some extent the result of China taking a hard line on price increases, partly as a result of lower demand
because its phosphate industry was seriously damaged in the recent earthquake. In addition, China has cut back on imported sulfur until after the Olympics.
Meanwhile, domestic sulfur supplies were catching up to demand and no major problems were reported with refineries. Sources said more heavy oil was being processed, which could account for some of the additional supplies.
West Coast: Contracts on the West Coast end a month later than for the phosphate industry, and negotiations there will begin around early August. Due to the lack of activity by China, the market has cooled in recent weeks.
Vancouver: Pacific Coast Terminals, one of the large sulfur docks at Vancouver, was shut down for a turnaround and maintenance last week and will remain closed until the beginning of August. That could take between 300,000 and 400,000 mt of supply out of the world market during July, and could help hold up world prices.
MARKET NOTES
Pakistan: In its recent biannual gas price revision through the Oil & Gas Regulatory Authority, the government raised fuel gas prices for fertilizer manufacturers by 31 percent, in line with other industries to an equivalent of US$4.84/mmBtu. Local research and brokerage house KASB Securities observed that the gas price increase will result in a urea production cost increase of about PRs.25/bag. KASB said Pakistani fert players Fauji and Engro will perform well, and that Pakistan fertilizer stocks are set to gain from rising commodity prices and supportive agri-reforms taken by the government.
Bangladesh: High-ranking government officials have been in recent meetings with their counterparts in Russia, Belarus, and Morocco in order to increase fertilizer imports from those countries. The country has estimated a requirement of 2.85 million mt of urea for 2008-09, which includes an import of 1.5 mt to 1.7 mt of urea.
Canada: The Methanex Kitimat, B.C., ammonia plant has been sold to International Octane Ltd., Dubai, according to the Northern Sentinel. Methanex had not returned calls at press time. The plant, idled since 2005, is expected to be dismantled and moved to the Mideast by the end of 2009. Methanex is also seeking a buyer for the methanol plant at the Kitimat site.