AMMONIA
U.S. Gulf/Tampa: No changes in the Tampa prices last week, but higher prices elsewhere in the world could be reflected in upcoming negotiations. According to the fertilizer trade data reported by the U.S. Department of Commerce, the U.S. imported 23 mt of anhydrous ammonia from Russia through the port of Savannah in February at a price of $11,657,662, which would work out to $506,855/mt. The Fertilizer Industry contacted USDOC, and the tonnage was adjusted to 23,107 mt.
Eastern Cornbelt: The ammonia market in Illinois had reportedly dropped slightly to the $440/st FOB level for spot tons from Illinois River shipping points. Forward contract ammonia for April through June was referenced as high as $550-$560/st FOB regional terminals.
Western Cornbelt: The anhydrous ammonia market continued to be quoted at $400-$440/st FOB most regional terminals. A Nebraska source reported the spot market in his area at the $420/st FOB level for the most recent business. One supplier was also offering forward contract ammonia for April through June at the $420/st FOB mark in Nebraska, along with $455/st FOB in Missouri and up to $535/st FOB Iowa shipping points.
Southern Plains: The anhydrous ammonia market was tagged at $305-$340/st FOB regional production points for prompt tons. Out of pipeline terminals in Kansas, the dealer market was pegged at $350-$360/st FOB.
South Central: Anhydrous ammonia was tagged at $430-$450/st FOB regional terminals to the dealer, with the low reported at Memphis, Tenn.
Black Sea: Prices keep edging up. Sources now report that bids were laid on the table at $275/mt FOB. Producers are still reportedly asking $300/mt FOB. Demand in Europe, the Western Hemisphere, and Asia, combined with limited supply, is moving the price up.
Producers are anxious to get the price past $320/mt FOB, the break-even price, according to Asian sources. Transammonia was able to pick up a deal on a cargo of 15,000 mt from OPZ as reported earlier. At that time the price was pegged at $250/mt FOB. Now, say sources, that price is long gone.
While the $275/mt FOB bid is being talked about, sources could not point to any actual business at that level. Asian sources say the old Trammo business is clearly the bottom of the market and $275/mt FOB is the upper end.
One trader noted the $250/mt FOB price was not doable last week. Once the $275/mt FOB bid was made, producers moved straight to $300/mt.
As last week came to an end, sellers were rejecting $275/mt FOB and buyers were rejecting $300/mt FOB. But the firm bid remains a matter of record, and at a level buyers will accept.
Middle East: Contract prices into India keep edging up. Another deal was concluded last week at $284/mt CFR, which has an estimated netback of $260-$265/mt FOB.
Producers argue that freight is only $20/mt. They conclude then that any material in the low $260s/mt FOB is no longer a viable option for a sale. Some traders, however, argue freight and handling could be as much as $25/mt, taking the price back to $260/mt FOB.
Even with the haggling over the real freight rate, sources say it is now impossible to get material in the low $260s/mt FOB. Producers still argue the “right” price should be $300/mt FOB. They contend the limited production going on in the area, along with strong demand from Southeast Asia and India, is keeping the price on a steady upward trajectory.
Despite all the talk of tight supplies and overheated demand, Asian sources peg the Middle East market at $265-$270/mt FOB.
Asia: Buyers continue to make inquiries to traders and producers. Sources say Korean and Taiwanese buyers are being especially aggressive in making their requests for tons.
Most of the inquiries are coming from industrial buyers. As the global economy slowed, many industries did not buy their usual replacement tons until the last minute. And that last minute is now.
Sources say the buying currently only looks like buyers replacing what was used during the past two months or so. Ordinarily, many of these buyers would be taking cargoes every two to three weeks instead of waiting six to eight weeks to make a purchase. Now that buying is taking place, end users are calling any trader who might be able to get the ammonia they need.
The Mitsui and Mitsubishi Indonesian plants are running at 100 percent capacity, with just about every ounce accounted for in sales through April.
There are reports that Chinese buyers have begun to make inquiries for cargoes. Sources say Beijing is encouraging imports so Chinese industries could conserve the natural gas and coal used for domestic ammonia production.
The move to import also helps industrial buyers. Chinese ammonia is priced higher than the international market because of the rising domestic price of inputs.
Western Europe: Sources report the increases in prices out of Yuzhnyy are beginning to have an impact on European prices. Prices of $320/mt C&F, which represented the high end earlier this month, now appear to be on the low end of the market. Best bets at this time place the market in Northwest Europe at $310-$335/mt C&F.
UREA
U.S. Gulf: Wet weather and other unfavorable conditions continued to delay the beginning of the spring season last week, and urea sales were among the victims. With the lack of sales, prices began to soften – but not significantly. Sources tagged the barge market in the $290-$295/st FOB range again last week.
Koch was said to have raised its price to $300/st FOB, possibly as a result of production problems. Prices may rise near the end of the month when product begins to move from terminals, sources said. In Iowa, farmers may consider switching from ammonia to urea because of standing water in cornfields. Corn prices were holding up well in comparison to soybeans last week, which will help the sale of urea and DAP.
Eastern Cornbelt: Granular urea was quoted at $335-$350/st FOB, reflecting a drop from last report. The low was reported in Illinois on a spot basis, while the upper numbers reflected the dealer market in Ohio and Indiana.
Western Cornbelt: The granular urea market was showing some weakness in the region last week. Sources pegged the dealer market at $330-$345/st FOB in the region, down some $20/st from recent levels. One supplier in Iowa reported a $335/st FOB dealer price at midweek.
Southern Plains: One source described urea movement as “solid” in recent weeks. The dealer price for granular urea was quoted at $320-$325/st FOB the Tulsa market, which was down from last report. Sources said Koch’s Enid, Okla., urea plant was back up after some additional downtime during the previous week (GM March 16, p. 2), but as of press time the plant’s operational status was unconfirmed.
South Central: Urea was moving in some areas where corn planting was underway last week. The granular urea market was pegged at $325-$335/st FOB regional terminals to the dealer, down $10/st from last report.
In other locations, however, sources said fertilizer movement has been uncharacteristically slow. “We’re just not doing anything,” said one Arkansas source. “We’re bad late, and I’m nervous.” He said money is tight and that is certainly a contributing factor, but growers are also being much more cautious. “People on all products are just waiting until the very last minute,” he said. “They normally wouldn’t do the things they’re doing.”
Southeast: Granular urea was pegged at $330-$340/st FOB port terminals to the dealer, also down from last report.
Pakistan: The industry is still waiting for TCP to make a decision based on the last tender. Template had the lowest offer of 25,000 mt at $298/mt CFR. No other firm was willing to match that price.
And yet, by the end of last week – long past the validity date – TCP had not made an award. Sources say TCP could easily wait for a more opportune time to buy. Global prices are softening, and the need for tons in Pakistan is not as desperate as it was a few months ago.
Political pressure to build reserves is now being tempered by the belief of some that if the global market price falls, the country would be better off buying more tons at a lower price.
The bottom line is that TCP can afford to wait a few more weeks – maybe even a couple of months – before making new purchases. If India also waits well into late April or early May, sources say the lack of business from these two major buyers could force the price down once again.
India: Most watchers in Asia are now convinced nothing will come from India until the new fiscal year starts April 1. And just two weeks after that, balloting begins in a national election.
The delay until the new fiscal year begins was pragmatic, said one trader. Any tender called in March would have an impact into April and May. The buyers needed to know how much money they would have to make their deals.
Sources report Indian urea stockpiles are sufficiently large that no area should experience any shortages. But in the middle of a political campaign the definition of “sufficient stockpiles” depends on whether a person is for or against the current government. Opposition leaders have been denouncing shortages of urea in key electoral districts for the past few months. The government counters that existing stockpiles, along with purchases made at the end of 2008, provide more than enough urea for the farmers.
Industry sources say the first tender to start strengthening the reserve stockpiles might come as early as the second week of April. Conventional wisdom says the first tender will not be called until the balloting is done at the end of the month.
Black Sea: With no one buying, producers are hard pressed to hold onto the gains they made in late February and earlier this month.
One Asian trader said if a buyer made a firm bid of $250/mt FOB, he would get a signed deal in a flash. The only problem, this trader continued, is that there are no buyers at that level. No one has been able to confirm any deal at $250/mt FOB, but there has been talk of $255-$260/mt FOB being passed back and forth among traders.
The Template offer into the TCP/Pakistan tender of $298/mt CFR showed that at least one trading house puts the Yuzhnyy market closer to $240/mt FOB than $250/mt FOB. With TCP not issuing any awards yet, however, sources are hard pressed to show any real business at the lower levels.
Middle East: Even as the Black Sea softens, sources say the producers are holding their own on prices in the Arab Gulf. The steady price in the area is not due to strong demand, say sources, but rather to steady contracts and limited production.
Demand from the Western Hemisphere under contracts, along with limited production from SABIC, PIC, and QAFCO, is keeping producers from getting worried about building up any reserves.
As expected in the area, when asked, all producers claim they are sold out. They also – reluctantly – say the price has not shifted in the past week.
With the Yuzhnyy price slipping, one trader did note that either the Black Sea price would have to come up or the Middle East price would have to come down. And soon.
NITROGEN SOLUTIONS
U.S. Gulf: Prices for nitrogen solutions were relatively steady last week, as activity tended to fall with the delay of the spring season. The NOLA barge range was $190-$195/st FOB, or $5.94-$6.09/unit for 32 percent. Paper sales for the summer were running in the $170s/st FOB.
Eastern Cornbelt: Sources tagged the UAN-32 spot market at $250-$270/st ($7.81-$8.44/unit) FOB regional terminals to the dealer. Reference prices for forward contract tons for the April-May shipping period ranged from $8.65-$8.95/unit FOB in the region.
Western Cornbelt: UAN-32 remained at $250-$280/st ($7.81-$8.75/unit) FOB regional terminals to the dealer, with the low out of spot Mississippi River locations and the upper end reflecting reference levels out of Missouri River terminals.
Southern Plains: UAN-32 pricing was down from last report. The dealer market was reported at $225-$240/st ($7.03-$7.50/unit) FOB regional terminals, with most spot quotes falling in the $230-$235/st ($7.19-$7.34/unit) range.
South Central: UAN-32 was quoted at $245-$250/st ($7.66-$7.81) FOB regional terminals for prompt tons to the dealer, reflecting a slight drop from last report.
Southeast: Nitrogen solutions tons were moving out of regional tanks to field locations last week. Sources pegged the dealer market for UAN-30 at $225-$235/st ($7.50-$7.83/unit) FOB regional terminals, down from last report, with some describing recent activity as brisk out of those locations.
AMMONIUM NITRATE
U.S. Gulf: Nitrate sales were also slow last week, and prices were unchanged at $225-$230/st FOB.
Western Cornbelt: Ammonium nitrate was quoted at $270-$280/st FOB in the region, down slightly from last report
Southern Plains: Ammonium nitrate remained at $250-$260/st FOB Catoosa, Okla.
South Central: The ammonium nitrate market remained at $270-$280/st FOB regional terminals to the dealer. There were reports of lower-priced material out of the Blytheville, Ark., market, but no actual levels were confirmed, and some talked of quality issues.
Southeast: Sources quoted the Tampa ammonium nitrate market at $320-$350/st FOB, with the low end of that range also quoted FOB Savannah, Ga., to the dealer.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was reported at $225-$245/st FOB in the region, reflecting another increase from last report.
Western Cornbelt: Granular ammonium sulfate was up from last report at $235-$245/st FOB in the region. One Missouri source pegged the dealer market in his area at a firm $240/st FOB last week and in tight supply. Agrium announced another pricing increase for granular ammonium sulfate. Effective April 1, the posting will move to $255/st DEL in North Dakota, Minnesota, and Wisconsin, up $20/st from the March 1 reference level.
Southern Plains: The granular ammonium sulfate market was unchanged at $200-$250/st FOB Texas shipping points, with the low FOB Freeport and the upper end FOB Plainview.
South Central: Granular ammonium sulfate was quoted at $200-$225/st FOB in the region, with the low end reported out of the Memphis market. Some sources expressed concern about sulfate inventories for the upcoming rice application season in May.
Southeast: Granular ammonium sulfate was quoted at $175-$180/st FOB terminals for allocated tons to the dealer. Granular ammonium sulfate postings from DSM remained at $175/st FOB Augusta, Ga., and $214/st DEL into Florida, with standard grade referenced at $149/st FOB Augusta and $178/st DEL in Florida.
Pacific Northwest: Agrium will raise its granular ammonium sulfate postings on April 1 to $250/st FOB warehouse locations in Washington, Idaho, Oregon, and Nevada, and $255/st DEL in those same states plus Montana and Wyoming. Those levels reflect a $20/st increase from Agrium’s March 1 postings in the region.
PHOSPHATES
Central Florida: Activity began to pick up in Georgia last week, but most of the Northeast and eastern Midwest was still too wet or cold to get back into the fields. In Florida, crops were well into the season, but a three-year drought was posing a serious threat of fire. Although many people were hoping for an early start to the spring season, most now believe the market will begin to kick off around the first of April.
CF Industries surprised a few people last week when it lowered its asking price for Central Florida DAP from $320/st to $315/st FOB to match Mosaic’s price. The move was apparently designed to drum up more business, but sources said it failed to generate much more interest.
Mosaic has apparently increased its phosphate production to around 75 percent of capacity, which was still below normal but far more than the 30 percent it was running at a month or so ago.
The Central Florida DAP price range was unchanged from the previous week’s $315-$320/st FOB range. PCS Sales had no published price. Mosaic’s price was $315/st FOB for DAP and $325/st FOB for MAP. CF was at $315/st FOB for DAP and $20/st FOB higher for MAP. The price from Agrifos remained at $350/st FOB for trucks and $345/st FOB for rail shipments.
U.S. Gulf: Producers and traders pulled back on the river system last week as unfavorable weather continued to stifle their markets and ambitions. Most sales activity was at the warehouse level, but even that was described as only decent.
Prices for NOLA DAP barges stalled early last week after CF Industries lowered its asking prices – $315/st FOB for DAP and $335/st FOB for MAP. Shortly afterwards, traders responded with even lower prices in some cases.
Corn prices for December were up again last week, as farmers were making final decisions on what crops to plant for the season. With a price of well over $4/bushel for corn, prospects would be bright for the phosphate industry if more than 86 million acres were planted – less so if it’s below 84 million. Farmers had not shared their plans with their local dealers as of late last week, so dealers were reluctant to make moves to fill their bins. However, most in the industry think activity will take a big jump somewhere around the beginning of April.
The impact of the national economy on the season was not clear last week, but the thinking tended toward the notion that things have hit bottom and the only place to go is up. With banks being given the resources by the new administration to loan more money, credit should become less of a problem.
Shortly after CF’s price drop, a few barges were sold as low as $310/st FOB. A little later in the week, the price was moving back upward to around $315/st FOB. Prices will likely remain slightly depressed until activity picks up, but no massive increases were on the horizon in the next couple of weeks.
The NOLA DAP barge range last week fell just a little, from $315-$318/st to $310-$315/st FOB. Mosaic has a $10/st FOB additional charge for MAP, while CF’s MAP was $20/st FOB higher than its DAP price.
Eastern Cornbelt: DAP pricing out of river warehouses continued to be quoted in the $355-$375/st FOB range in the region. MAP was $10/st higher than DAP. One regional supplier was referencing forward contract DAP for April through June at $375/st FOB Peoria, Ill., and Cincinnati.
10-34-0 pricing remained in a broad range at $650-$750/st FOB in the region, with the low in Illinois.
Western Cornbelt: DAP remained at $360-$370/st FOB most regional warehouses to the dealer, with the upper end reported at the $390/st FOB level out of some warehouse locations in western Missouri. MAP was pegged at $370-$400/st FOB to the dealer; a Nebraska source reported a $385/st DEL price to his location last week. One supplier was referencing forward contract DAP for April through June at the $370/st mark FOB St. Louis.
The 10-34-0 market remained in a broad range at $575-$680/st FOB in the region, with the upper end reported in Missouri.
Southern Plains: DAP pricing to the dealer was unchanged at $350-$360/st FOB Catoosa, with MAP pegged at $360-$370/st FOB the port and in fairly tight supply. 10-34-0 pricing continued to cover a wide range, from a low of $500-$525/st FOB in Texas to $565-$605/st FOB in the Kansas market.
South Central: The DAP market was tagged at $340-$350/st FOB regional warehouses to the dealer, with MAP at a $10-$15/st premium. One source reported fairly brisk movement of DAP on corn ground in his location. TSP was quoted at $320-$325/st FOB to the dealer, with some spotty movement to the field reported for that product as well.
U.S. Export: TransAmmonia sold two handymax vessels – about 80,000 mt total – into India for delivery in April. The price was $405/mt CFR, which will equate to around $360/mt FOB at the time of shipping. Although freight rates have been on the upswing, transportation costs were expected to fall slightly in April. Last week, freight to the west coast of India was running about $48/mt and $53/mt to the east coast of that country. The cost for shipping to Brazil was a little below $25/mt.
PhosChem made no new sales last week, but was said to be negotiating with Brazil for a price that would netback to around $375/mt FOB.
The Fertilizer Institute issued its report for phosphate exports in February last week. Of course, India was still the top customer for DAP at 80,096 mt – but was not in triple digits, as it normally has been in recent months. Thailand was the second biggest buyer at 31,400 mt, with Canada not far behind at 29,471 mt. The total for the month was 260,063 mt, a decrease of 7.7 percent compared to February 2008. For the calendar-year-to-date, India received 223,891 mt, Canada 49,503 mt, and Vietnam 45,649 mt. Total exports so far this year were 471,484 mt, which was a reduction of 25.8 percent compared to the same period a year ago.
TFI said Australia was the leading importer of U.S. MAP at 57,034 mt, followed by Mexico at 27,488 mt and Canada at 13,874 mt. Total MAP exports in February amounted to 106,444 mt. MAP exports for the calendar-year-to-date through February were 152,310 mt, a decrease of 22.2 percent from 2008 at that time.
POTASH
Eastern Cornbelt: Sources pegged the potash market in the $680-$720/st FOB range in the region from brokers or resellers, with the low reported in Illinois on a spot basis. There were also reports of dealer-to-dealer trades of potash taking place at substantially lower numbers in Illinois and Indiana, with some even claiming as low as the upper-$500s/st, but transactions at that level were not confirmed.
Western Cornbelt: Potash out of regional warehouses was pegged at $680-$720/st FOB range to the dealer, depending on grade and location, with most sources quoting $700/st as a common dealer price from secondary sources. One source pegged the market in his trade area at $705/st FOB for red granular and $715/st FOB for white granular potash last week. Another said he had sourced some brokered granular potash for as low as $685/st DEL to his location at mid-month.
Southern Plains: Granular potash FOB Carlsbad, N.M., was reported in the $760s/st FOB, while potash out of regional warehouses locations was quoted at $690-$720/st FOB from secondary sources. Most sources put the warehouse potash market last week at the $700/st FOB level to the dealer, give or take.
South Central: Potash was pegged at $690-$720/st FOB regional warehouses to the dealer, with most sources quoting the low end of that range for spot tons from brokers or resellers. One source reported moving some potash to the field in recent weeks, but said volumes are not what they should be for this time of year. He said he expects total spring usage in his trade area to be 40-50 percent of normal “when it’s all said and done.”
Southeast: Sources tagged the potash market at $775/st FOB for trucked tons from blend plants, while rail-delivered tons continued to be referenced in the low-$800s/st from producers.
SULFUR
Tampa: A balance between supply and demand grew closer last week as phosphate producer Mosaic cranked up its production, which was running at around 75 percent of capacity. The greater demand has meant less sulfur was going to prillers on the Gulf coast. In addition, refineries were using more sweet-crude oil, which produced less sulfur for the market.
As panic attacks in the sulfur industry were being soothed, the market could be headed for a bit of stability – at least more than in the previous three months. Still in the distance, prices for second quarter contracts may call for payments of some kind from customers, who have had a free ride in the Tampa molten market since the first of the year.
Transportation was not a problem last week, either with rail or vessels. In April, the Mexicans’ sulfur transport vessel will be taken out of service for maintenance, but that should not create any real problems.