AMMONIA
U.S. Gulf/Tampa: No changes were reported to the Tampa import and NOLA barge markets last week.
Correction: The correct U.S. Gulf NOLA price for the issue dated Dec. 1, 2008, was $250/st FOB. While the pdf file for the issue correctly labeled the price, a separate pdf file that contained only the price scan contained an older price.
Eastern Cornbelt: Anhydrous ammonia pricing remained in the $450-$575/st FOB range, with the low for cash tons in Illinois and the upper end on a spot basis in Ohio. Sources continued to report prepay ammonia offers in Illinois at the $550/st FOB mark.
Western Cornbelt: Anhydrous ammonia continued to be quoted in a broad range at $400-$550/st FOB, with the low for prompt tons and the upper end for limited prepay offers in the region.
Southern Plains: The anhydrous ammonia market was tagged at $315-$360/st FOB regional terminals to the dealer for prompt tons, with the low out of production points and the upper end FOB pipeline terminals. There were reports of spring prepay still on the table in the $350-$450/st FOB range in the region last week. There were also reports of preplant ammonia going down on corn ground in some sections of the region.
South Central: Anhydrous ammonia was tagged at $475-$500/st FOB regional terminals to the dealer, with the low reported at Memphis for either prompt or prepay tons.
Black Sea: Sources in Asia report there is not a lot of ammonia available from Yuzhnyy, and what is available is being diverted to the domestic market. Sources peg the market at $200/mt FOB, with producers saying any serious bid needs to be at $220/mt FOB.
Unfortunately for the producers, no one can even point to new business at $200/mt FOB. Asian sources say a deal can be done at $200/mt FOB, but finding a buyer would be very difficult.
Sources say with all the plants back up and running, a drop in prices is a real possibility. For now, the plants are reportedly operating at a reduced capacity. One Asian source said the production is enough to satisfy domestic needs and international contracts. He added there is little need to produce more than that minimal amount because the global market is so soft.
Middle East: Koch secured a cargo of 25,000 mt from Qafco at $200/mt FOB. Sources think the tons will be headed to Europe. Mideast sources say that deal set a new floor for spot deals in the area, and Asian sources back up this view. One trader noted that the producers are producing enough to cover their contracts to the Americas and Asia and not much more.
By running at a reduced level, sources say the producers can keep supplies low so that when a spot deal comes along, such as the Koch-Qafco deal, the producers can ask a higher price.
The tactic, however, does not seem to deter buyers from positioning themselves to snap up a deal when one occurs.
One producer noted that at least three vessels under charter to some Asian trading houses are hovering in the Gulf waiting for a buyer and seller to appear. Once a producer’s storage capacity is topped off, said the source, the traders will step in with a low bid to “help” the producer ease its storage pressures.
Producers may be feeling more pressure, said one trader.
Indian buyers had been picking up a steady supply of ammonia for DAP production. The purchases are less than last year, but still steady enough to keep producers from falling into depression. Now, say sources, some of that may ease off. Reports are circulating that India is increasing its DAP imports. The increase could cut into ammonia demand.
The Koch deal pretty much ensures bids below $200/mt FOB will be rebuffed at least for the next week or so. A lot will depend on a global recovery.
For now, the price is just a plain flat $200/mt FOB. Buyers are hesitant to offer more, and producers are unwilling to accept less.
Asia: Sources report that TFC in Taiwan is taking ammonia at a rate of about 80-90 percent of last year’s purchases. While that might sound like good news, industrial buyers CPDC and Formosa Plastic are buying at rates closer to half of last year.
For TFC, the reduction in CPDC buying means less concern about when the shipments arrive.
TFC shares a storage facility in southern Taiwan with CPDC. During normal years, the two companies have to carefully schedule their deliveries because of the limited storage capacity. With CPDC taking so few tons, TFC can buy when it wants to without fear of having a vessel sit at anchorage until a storage tank becomes available.
Mitsui is said to be considering taking its Indonesian plant down. The jv unit came back up last month after routine maintenance. The company had hoped prices would rebound sufficiently by February to warrant the restart of the plant, said one source. Prices, however, have not cooperated with the Mitsui planners.
Mitsubishi now looks as if it will keep its Indonesian plant down longer.
The facility went down for routine maintenance last month, and will remain shut down into February. Conventional wisdom said the plant would most likely open the second week of February. Now, however, it looks as if the plant will stay down for the rest of this month.
South Korean purchases are taking place, but at a drastically reduced rate. Sources say the main buyer has been Namhae, which is looking for tons for its fertilizer operations. The other major buyer, SFC, supplies ammonia to industrial users.
Sources report the Burrup facility in Australia is back up and running, purportedly at 70 percent of capacity. The material flowing from the plant is being used in the domestic market.
One trader said this would be a very bad time for the company to try to re-enter the international market.
UREA
U.S. Gulf: Granular barges have dipped but have started back up, according to major players last week. Sources said prompt barges dropped as low as $294-$296/st FOB, but had climbed back up to $298-$300/st FOB later in the week. Sellers moved their expectations up to the low $300s/st FOB, with one predicting it would be achieved by the end of the week.
Sources say the recent spate of buying has begun depleting NOLA inventories, citing the outage at Koch’s Enid plant as one factor. The outage has put pressure on supplies at Inola and Catoosa. There has been no official word from Koch on the status of the plant, which has been in the midst of an upgrade. Sellers also continue to predict that U.S. imports this season will be down.
Eastern Cornbelt: Granular urea was pegged at $355-$365/st FOB in the region.
Western Cornbelt: The granular urea market was generally quoted in the $350-$375/st FOB range in the region, although sources said no sales were taking place at the higher numbers.
Southern Plains: Sources tagged the Catoosa/Inola urea market at $350-$360/st FOB. Koch’s Enid, Okla., urea plant remained down last week, with industry sources talking of a possible startup sometime in March. Several sources said demand has eased since winter weather moved into the region in late January.
Fertilizer activity was described as pretty quiet, with movement limited by icy weather that moved into the region in mid- to late-January. Sources said movement for wheat topdressing has slowed as early applications tapered off and some growers wait for moisture and/or March before resuming fieldwork.
South Central: Sources tagged the granular urea market at $340-$350/st FOB regional terminals to the dealer for prompt tons.
Southeast: The granular urea market was pegged at $345-$350/st FOB port terminals for prompt tons, with sources describing market activity as quiet.
Pakistan: The head of TCP spent last week telling Pakistan media that TCP was buying 150,000 mt of urea based on the previously scrapped tender. The only problem, say Asian traders, is that TCP has only closed a deal for 30-35,000 mt with Transammonia.
One trader said at least the TCP brass was closer on the price. The announced amount was $285/mt CFR. The actual price is said to be $284.90/mt CFR.
According to the media reports, TCP is buying its urea from Singapore. Traders in Asia were surprised to learn of the newly discovered urea production capacity in Singapore. One trader noted that even the confirmed deal with Trammo does not involve Singapore. Transammonia has its regional office in Hong Kong.
With most in the industry dismissing the comments of the TCP leadership, many say another tender should be called by TCP shortly.
If and when the tender is called, sources say, TCP is not under pressure to buy based on the current needs and stockpiles in the country. Political pressure, they say, may lead TCP to buy more tons to soothe farmers’ concerns of a urea shortage.
Anything TCP buys now, say sources, will be used to build up reserves for the next season. Because of this, sources add that TCP could walk away from any first quarter tender unless the price is closer to their liking.
India: Rumors continue to circulate that the Department of Fertilizer is ready to authorize another tender. Just as in Pakistan, sources say India is at the stage where it does not need to buy urea immediately. Reportedly, stockpiles are sufficiently full to get farmers through the current application season.
Political pressure to prevent temporary spot shortages, however, may push the central government to authorize another tender.
Sources say the tendering company might be able to scrap the tender if the price is not to the liking of the treasury and buyer. The protection of the national treasury and attempts to provide urea to the farmers at the lowest possible price would give any of the importing companies – and the government – sufficient political cover against local politicians who want more urea sent into local warehouses at any cost.
Middle East: Producers continue to have enough vessels lined up to take away contracted tons to make them happy for another week. Contracted tons to Europe, the United States, and Asia allow producers to openly declare they are sold out for February.
Sources are not sure what will happen if a person shows up with a firm bid. Producers and traders agree that the right amount at the right time might be enough to persuade a producer to delay a contracted cargo in favor of a spot deal.
But the price really has to be the right one.
Sources say $300/mt FOB is needed to get into the door. To get a place at the table, $310/mt FOB is necessary.
The problem is that producers are not willing to talk to anyone about prices unless that person is showing up with a firm bid. Traders are reluctant to show up with firm bids at this point because they are afraid of getting trapped into a purchase of high-priced material in an unstable market.
There is some support to the idea of higher prices in the area. Sources report that Thai buyers are willing to entertain offers of $320-$340/mt CFR. With freight at almost giveaway prices, those Thai prices represent $300/mt FOB in the Middle East.
Egypt continues to increase its pricing ideas as well.
The double shot of the Arab Gulf and Egypt holding firm on higher prices means, to some traders, that higher-priced deals are a sure bet.
Black Sea: Prices are tightening and softening at the same time. The range of prices is down to $5/mt between the high and low – but the high has slipped to $280/mt FOB. And even at that, sources say it is unlikely anything was done at $280/mt FOB.
One Asian source noted that rumors are circulating that $275/mt FOB was done.
Some small ton business was done to buyers in Turkey. Traders say the price was in the upper $270s/mt FOB, but not representative of the typical larger deals that tend to move the market.
The softness of the global market has producers cutting back to either one line or shutting down altogether.
NITROGEN SOLUTIONS
U.S. Gulf: Barge prices continue to be reported in the $215-$225/st FOB ($6.72-$7.03/unit) range.
Eastern Cornbelt: UAN-32 pricing to the dealer was steady at $275-$285/st ($8.58-$8.91/unit) FOB regional terminals for cash or prepay offers.
Western Cornbelt: The UAN-32 market was quoted at $275-$290/st ($8.59-$9.06/unit) FOB regional terminals to the dealer. Sources reported no prompt business due to full inventories, so most of the pricing quotes were reported for spring prepay tons.
Southern Plains: The UAN-32 market remained at $240-$260/st ($7.50-$8.13/unit) FOB regional terminals, with several sources touting the upper end of that range as the more common pricing quote for prompt tons from both manufacturers and resellers.
South Central: UAN-32 was quoted at $260-$270/st ($8.13-$8.44) FOB regional terminals from prompt tons to the dealer, reflecting a slight drop from last report, although there was little new business to test the market. UAN prepay was quoted at $285-$290/st ($8.91-$9.06/unit) for spring.
Southeast: The UAN-30 market remained at $255-$260/st ($8.50-$8.67/unit) FOB most terminals on the East Coast, although there were reports of spot solutions tons out of Wilmington, N.C., being delivered for as low as $235/st ($7.83/unit), which sources said netted back to roughly $220/st ($7.33/unit) FOB. Actual sales at those lower numbers were not confirmed last week, however.
AMMONIUM NITRATE
U.S. Gulf: Barges continue to be reported in the $230-$250/st FOB range.
Western Cornbelt: The ammonium nitrate market was pegged at $250-$300/st FOB in the region.
Southern Plains: Ammonium nitrate was pegged at $265-$270/st FOB Catoosa, down slightly from last report.
South Central: Ammonium nitrate market was pegged at $275-$280/st FOB terminals in the region.
Southeast: Ammonium nitrate pricing remained as low as $340/st rail-DEL in the Carolinas, while Tampa nitrate pricing continued to be quoted in the mid- to upper-$400s/st FOB.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was tagged at $165-$175/st FOB in the region, up slightly from last report following a $15/st price increase from Honeywell on Feb. 2.
Western Cornbelt: Granular ammonium sulfate pricing was reported at $165-$175/st FOB to the dealer last week.
Southern Plains: The granular ammonium sulfate market was steady at $200-$250/st FOB Texas shipping points, with the low FOB Freeport and the upper end FOB Plainview.
South Central: The ammonium sulfate market was steady at $200-$225/st FOB in the region.
Southeast: Granular ammonium sulfate was reported at $155-$165/st FOB, up slightly from last report. Honeywell reportedly raised its postings $15/st on Feb. 2, while DSM was slated to do the same on Feb. 9. As a result, DSM’s new ammonium sulfate postings will include granular at $155/st FOB Augusta, Ga., and $194/st DEL in Florida, with standard grade sulfate moving to $135/st FOB Augusta and $173/st DEL in Florida.
PHOSPHATES
Central Florida: A topic of discussion at the TFI conference last week in San Diego was the standoff between dealers and farmers on the amount of fertilizers they will use for the spring. Growers have not told dealers how much of what products they will want, so dealers have not been telling their suppliers what they will need. Some were estimating applications of phosphate could drop to rates of between 15-20 percent, which would not be good news for the industry. Fall fell by the wayside in terms of sales last year, and a dismal spring could be in store. It does not necessarily hold true that a decline in volume in one season will be made up in the next season or the next year. Farmers can mine the fertilizers they already have in their soil, because most have been using more than adequate amounts for about five years. Potash, which has remained unrealistically high, may be the most affected. Of course, the other side of the argument is that farmers may not want to take the chance that this will impact their harvest.
Phosphate processing plants in Florida continued to be either curtailed or shut down, and it would make little sense to get back into full production when there was little prospect of higher sales.
Sales were slower last week, primarily due to the unusually cold weather in the eastern U.S. Freezing temperatures reached deep into Florida last week and threatened some crops. Mid-week temperatures in Florida were colder than in many parts of the Midwest.
The Central Florida DAP price range remained at $305-$315/st FOB, based on recent sales. CF was said to be asking $310/st FOB for DAP and $330/st FOB for MAP. PCS Sales, which had been holding at $1,070/st FOB, withdrew its published price because its plants were no longer in operation. Mosaic had no posted price for Central Florida, but was said to be selling for as low as $305-$310/st FOB. The lowest prices were for big buyers, while dealers could expect to pay as much as $50-$60/st FOB more. The price from Agrifos was $350/st FOB for trucks $340/st FOB for rail shipments.
U.S. Gulf: Early last week, ice, followed by a snowstorm, ploughed through the U.S. – and that did not help phosphate sales, which have been slow to take off this year. By late in the week temperatures warmed in the Midwest, but serious cold clung to the eastern part of the country.
Rain was possible in Texas and Oklahoma on the weekend, and that would be welcome news to the drought-stricken area. However, Oklahoma, which tends to start earlier than the rest of the country, was humming along in terms of phosphate and urea business. Still, predictions were that sales would be down for the spring season.
A trader said that he was told by a grower in Indiana that he planned to reduce phosphate application somewhat and sharply cut back on use of potash for the spring season. The reasoning was that a reserve had been built up through heavy applications during the previous several years, and the grower believed yields would not be seriously affected. If yields do go down, crop prices may rise and farmers would be in a better position to buy fertilizer next year.
Warehouse prices were holding up in the river system, and barge prices allowed for reasonable profit margins. On the Arkansas River, warehouse prices for DAP were running $360-$365/st FOB and $10/st-$25/st FOB higher in upper areas of the Mississippi River.
Prompt NOLA DAP barge prices were running from a low of $310/st FOB to $315/st FOB last week, which set the NOLA DAP barge price range down at the high end from $320/st FOB the previous week. MAP barges were done at $330/st FOB and triple sold at $295/st FOB.
Eastern Cornbelt: DAP pricing to the dealer was reported at $360-$425/st FOB, with the low out of river terminals and the upper end out of inland warehouses to the dealer. MAP was $10/st higher than DAP out of most locations. 10-34-0 remained in a broad range at $650-$900/st FOB.
Western Cornbelt: Out of regional warehouses, the DAP market was quoted at $355-$400/st FOB to the dealer, with MAP $10/st higher. There were reports of some suppliers referencing DAP as high as $440/st FOB for spot tons to the dealer, but no sales were confirmed at those higher numbers.
The 10-34-0 market was pegged at $600-$675/st FOB in the region, with the low in Nebraska and the upper end in Iowa. One source said there will not be enough 10-34-0 supply to meet demand this spring due to phosphate production curtailments, so spot outages are likely.
Southern Plains: Sources continued to report relatively low interest from growers in prepaying phosphate products for spring, and even less enthusiasm for potash. The DAP market remained at $350-$365/st FOB Catoosa to the dealer, with MAP quoted in the $375-$400/st FOB range. 10-34-0 in the region was pegged in a very broad range at $590-$750/st FOB last week.
South Central: The DAP market was quoted at $350-$370/st FOB regional warehouses to the dealer, with MAP at a $10/st premium. TSP was pegged at $325-$345/st FOB the warehouse.
U.S. Export: In India, IFFCO and IPL announced a deal with Agro/Ameropa for the initial purchase of 1.2 million mt of DAP at prices published two months earlier than delivery. The contract covers a one-year period, at which time it will be reviewed. That was the same deal rumored in late January and could not be confirmed.
In addition, PhosChem made a sale of 6,000 mt into South America at $360/mt FOB.
Based on the recent sales, the export DAP price range increased from a flat $358/mt FOB previously to another flat $360/mt FOB last week. Exports should increase during the next few months.
POTASH
Eastern Cornbelt: Potash was quoted at $720-$800/st FOB regional warehouses, depending on grade and location. One Illinois source pegged the common dealer range in the $740-$780/st FOB range last week, but said there was no business to test the market.
Western Cornbelt: Sources continued to quote potash out of regional warehouses in the $700-$750/st FOB range to the dealer, depending on grade and location. Producer postings were quoted at the $815/st FOB mark or higher, but interest remained very low.
Southern Plains: The potash market was pegged at $715-$740/st FOB regional warehouses. Reference prices FOB Carlsbad, N.M., remained at $794-$800/st, depending on grade.
South Central: Potash was pegged at $750-$775/st FOB regional warehouses to the dealer. Sources said producers are sticking firm to $800/st FOB or more. “All of us are sitting there waiting to see if we can push our inventory,” said one source, who speculated the spring usage in his trade area will be down by at least 50 percent.
Southeast: Sources pegged the potash market at $810-$850/st DEL in the region, with the upper end quoted by a Carolina source for delivered granular tons.
SULFUR
Tampa: The mood of the sulfur industry at TFI’s conference at San Diego was a bit on the gloomy side last week, as the Tampa molten price settled at $0.00/lt for the first quarter. The optimists thought the down time would continue for only another couple of months, but there was little positive on the horizon to base that upon. The phosphate industry, which consumes about 75 percent of domestic sulfur production, has remained in a basic stalemate in terms of sales, and the outlook for the spring season was far from bright. Sulfur continued to back-up, and the industry was struggling for creative ways to get rid of it.
Where possible, sulfur was being dumped into landfills. That practice was increasing in Canada, where rules governing disposal into Class 2 landfills were changed to allow dumping of liquid as well as dry sulfur.
Otherwise, excess sulfur was going to Galveston for blocking and Beaumont for prilling at Martin’s plants, or to vessels used only for storage. One source said a landfill in Georgia had been opened for sulfur disposal.
Another possibility was for oil companies to begin refining more sweet crude than heavy, which would reduce the amount of sulfur extracted.