AMMONIA
U.S. Gulf/Tampa: Speculation last week was that the next round of Tampa imports will see low prices. However, nothing new and firm was reported last week, leaving the price point at $318/mt DEL for Tampa and $285/st FOB for NOLA.
February imports into the U.S. were off 44 percent, according to the U.S. Department of Commerce, to 375,303 st from the year-ago 672,146 st. July-February imports are down 23 percent, to 4.4 million st from 5.7 million st.
Eastern Cornbelt: Ammonia pricing continued to be quoted in the $435-$470/st FOB range in the region for spot tons to the dealer, with the lower end out of Illinois River terminals.
Parts of the region saw brisk field activities last week, but planting was still spotty and very limited. While steady preplant ammonia movement was reported in northern Illinois, southern and central locations in the state continued to battle frequent showers, which slowed fieldwork. Some sources said growers in particularly wet areas were starting to talk of UAN as an alternative to ammonia in the coming weeks.
Western Cornbelt: The ammonia spot market remained in the $375-$410/st FOB range out of regional terminals, with postings reportedly as high as $440/st FOB at some locations. Delivered ammonia in the region was reported in the $400-$440/st range from southern production points.
Wet conditions continued to slow planting in many parts of the region last week, but there were pockets of activity. One source said his trade area had seen fairly steady movement of preplant ammonia, but usage has still not been up to the standards of previous years. “Overall the general attitude is good,” he said. “You’ll hear rumblings of things being late, but overall it’s at a healthy pace right now.”
That was not the attitude conveyed by all, however. “There is lots of disappointment in sales right now,” said another source at midweek. “Guys aren’t moving stuff. We’ve got a lot of stuff to ship on prepay, and we’re just not seeing the movement.”
California: Anhydrous ammonia pricing was unchanged from last report at $495-$540/st DEL in the state, with the low for trucked tons and the high for rail. Aqua ammonia remained at posted levels of $135/st FOB in California. While movement of dry blends for rice was still a week away in some parts of the Central Valley, ammonia movement was already underway in more northerly locations.
Pacific Northwest: The anhydrous ammonia market remained at $425-$465/st DEL in the Pacific Northwest, with the low for railed tons and the upper end for the truck-delivered product. Out of terminals in eastern Washington, the dealer market was pegged at $425/st FOB. Although some locations saw good-enough weather to allow field activities early in the week, many areas were getting a taste of winter as the week advanced. Heavy snow was reported in parts of Montana and Idaho, while freezing temperatures were expected in sections of Washington and Oregon from the same storm.
Western Canada: Anhydrous ammonia was steady at $844-$889/mt DEL in Western Canada. Cool temperatures, combined with wetter-than-normal weather, have caused some concern about seeding delays in Western Canada. Some analysts last week said many areas were at least a week behind schedule.
Black Sea: Asian sources report the market remains quiet in the area. A large number of plants remain closed because the netback price is below production costs.
Reportedly, people are waiting to see what happens in the U.S. Even with demand strong in East Asia, sources say product from Yuzhnyy and other Black Sea facilities cannot go there because buyers are putting up a firm stand against the kind of price increase that would allow Black Sea product to enter the area. At the same time, European demand is not strong enough to move up prices. In the end, say sources, any serious movement in the Black Sea price will have to come from the U.S. For now, prices have stagnated in the $270s/mt FOB.
Middle East: Producers continue to tell anyone who will listen that they are comfortable. Asian sources tend to agree with the producers, but only because of the steady business based on contracts with India and other buyers east of the Suez.
One Asian trader noted that business west of the Suez is so weak that the Arab Gulf producers should be thankful for the strong markets in India and East Asia.
Producers claim the new going price is $300/mt FOB, but that has been their position for almost a month now. Sources report the real market is still at least $25/mt away from the asking price.
The last bit of business reported out of the area that affected the price was a few weeks ago. That deal was a contract cargo to India. At that time, the estimated netback put the price in the low $270s/mt FOB. And, say sources, that is where it remains.
Asia: Sources say major buyers are now looking for June cargoes. Queries from Taiwan and South Korea for more deliveries into June were heartening to traders and producers.
No one was willing to say the market had fully rebounded. People seem to be taking everything just a few weeks at a time. One trader noted that the tons being requested still look as if the buyers are just buying enough to ensure the storage tanks don’t end up dry. No one seems to be buying extra material for reserves.
UREA
U.S. Gulf: Business has been slow enough for some sellers to cut prices, according to industry players last week. As a result, new trades were reported over a broad range at $267.50-$279/st FOB. The higher prices were recorded earlier in the week, with buyers hammering the market as the week progressed. Buyers were aggressively bidding $265/st FOB toward the end of the week.
Some players said the price drop was too bad, as the weather is improving and demand should speed up quickly. They predicted prices may soon rebound as a result.
Urea imports were off 23 percent in February, to 589,923 st from the year-ago 767,576 st. July-February imports were off 20 percent, to 4 million st from 5 million st.
Eastern Cornbelt: Granular urea was pegged at $325-$345/st FOB in the region, down slightly from last report, with the low reported in Illinois and the upper end in the Indiana and Ohio market.
Western Cornbelt: The granular urea market continued to inch downward, with sources quoting the dealer price last week at $315-$330/st FOB regional terminals. One Iowa source pegged the market at the $320/st FOB level in his location.
California: Granular urea was steady at $425-$450/st FOB in California, with delivered urea pegged at the $450/st level.
Pacific Northwest: Granular urea was unchanged at $395-$440/st DEL in the region, depending on location.
Western Canada: Granular urea was pegged at $575-$600/mt DEL in Western Canada.
Bangladesh: With no other activity in the market until the TCP/Pakistan tender closes this week, all eyes were on the BCIC tender for 100,000 mt each of prills and granular urea. The tender closed April 15.
The tender results offered the first new look at what Middle East producers are willing to accept. The results are not good for producers. The tender called for bagged urea on an FOB and CFR basis. The following granular offers are slated for delivery to the port of Mongla.
| SUPPLIER | ORIGIN | QTY MT | US$/mt FOB | US$/mt CFR |
| DESH Trading | China – Egypt – Iran – Oman – Malaysia | 50,000 | 291.22 | 323.22 |
| Bulk Trade | China – Egypt – Oman | 12,500 | 291.85 | 323.35 |
| Hydrocarbon | China – Egypt – Iran – Oman – Malaysia | 50,000 | 290.77 | 323.47 |
| Liven | China – Malaysia | 25,000 | 287.87 | 323.87 |
| Gavilon | Egypt | 25,000 | 298.60 | 336.60 |
| Helm | Iran | 25,000 | 322.95 | 337.95 |
| Wilson International | China – Malaysia – Turkey – Ukraine – Egypt | 25,000 | 310.00 | 339.00 |
| Toepfer | Egypt | 25,000 | 322.45 | 365.75 |
| Ameropa | China – Egypt | 12,500 | 320.50 | 371.00 |
The following prilled offers are for delivery to Chittagong.
| SUPPLIER | ORIGIN | QTY MT | US$/mt FOB | US$/mt CFR |
| Agora | China | 25,000 | 261.42 | 296.92 |
| Bulk Trade | Saudi Arabia | 25,000 | 285.00 | 313.65 |
| DESH Trading | China – Indonesia – Russia – Ukraine | 50,000 | 280.00 | 314.30 |
| Hydrocarbon | China – Indonesia – Russia – Ukraine | 50,000 | 279.35 | 314.35 |
| Liven | China – Indonesia | 50,000 | 285.87 | 316.87 |
| Blue DWBAJ | Russia | 25,000 | 297.00 | 317.50 |
| Wilson International | China – Indonesia – Turkey – Ukraine | 25,000 | 291.87 | 317.87 |
| Gavilon | UAE | 37,500 | 297.89 | 328.89 |
| Toepfer | Qatar | 37,500 | 301.95 | 332.25 |
| Ameropa | China – Indonesia – Russia | 12,500 | 308.93 | 349.43 |
Sources say Bangladesh needs the tons. The only delay may come from making sure paperwork is processed quickly enough by the government agencies involved.
The offers from the Middle East confirmed the view of many in the industry that urea was well below the $300/mt FOB the producers were claiming as the basement.
Middle East: Offers from producers through traders to BCIC/Bangladesh offered the first public glimpse at where the real prices for prills and granular urea sit. Offers to BCIC were for bagged material. Industry observers usually discount $10/mt to cover the bags and bagging cost. Once that is done, the BCIC numbers reflect a price of $275-$285/mt FOB for prills and $280-$290/mt FOB for granular.
Producers have been arguing the last offer to Pakistan – $300/mt FOB – was the lowest price that would be considered for any spot tons. Sources in Asia, however, said the stockpiles were growing in the area, with few real opportunities for sales.
Producers were extending turnarounds and reducing output to prevent their warehouses from being filled to the roof. At the same time, say sources, producers are engaging in warehouse-to-warehouse trades to give the impression of movement.
Sources say producers will have an opportunity this week to reduce their inventories and possibly move the price up when the TCP/Pakistan tender closes.
One Asian trader said the producers appear to be shifting their emphasis on how to deal with the market. Once, he said, the producers tried to move the price up dramatically with minimal offers. Now, the producers seem to be more anxious to move stock. In some cases this means offering lower prices in the tenders.
If a low offer for a large order is accepted, sources say a producer can then offer at higher prices to any spot buyer, with the argument that the tender award took all the available tons.
One observer noted that this was a reasonable practice before the bottom fell out of the market. Now, say sources, increased production capacity, combined with a global economic slowdown, has nullified that strategy.
Sources add, however, they expect to see the Middle East producers be very aggressive in the TCP tender. Pakistan is a market they want to protect as their own. In previous years, producers have shown a willingness to sacrifice price for market share, especially in Pakistan.
One Asian trader said the BCIC tender might be one of the last tenders that reflects a higher price for granular material out of the area. The new plant in Oman has come online, and its annual output of 1.4 million mt will provide buyers plenty of available material.
Indonesia: PIM closed a selling tender April 15. Originally, the state-owned producer was going to offer six lots of 4,000 mt each. In the end, the company sold 53,000 mt. Bids in the tender follow.
| Company | Quantity (mt) | US$/mt FOB | Shipment |
| Toepfer | 15,000 | 258 | End Apr. |
| Ameropa | 6,000 | 266 | |
| 6,000 | 264 | ||
| 6,000 | 262 | ||
| 6,000 | 260 | ||
| Swiss Singapore | 2×6,000 | 263 | Last half April |
| Liven | 6,000 | 265 | First week May |
| Limardi | 6,000 | 270 | First week May |
| Indevco | 6,000 | 272 | Second week May |
| Unitrada | 10-12,000 | 275 | End April-Early May |
| Universal Harvest | 6,000 | 278 | Third week April |
| Profeta | 6,000 | 279 | First half May |
| DIVA | 6,000 | 282 | First half May |
| BBSC | 10,000 | 283 | End Apr – Early May |
| Youngwoo | 2×6,000 | 284 | End April-Early May |
Awards were issued to the following companies at $284/mt FOB.
| Company | Quantity (mt) |
| Youngwoo | 3×6,000 |
| BBSC | 10,000 | Diva | 6,000 |
| Swiss Singapore | 9,000 |
Sources said material could just as easily go to buyers for agricultural or industrial use. Indonesian material has always been able to draw a premium because of its quality and convenience to major Southeast Asian markets.
Black Sea: Most traders in Asia were describing the market last week with just one phrase: “Nothing happening.”
But as Friday approached, reports of deals done in the $240s/mt FOB circulated. With the close of business in Asia on Friday, people were pretty well convinced the market moved into the low $240s/mt FOB, with some thinking $235/mt FOB was likely Monday morning.
Sources expected the drop in prices, but many thought it would come after the TCP/Pakistan tender this week.
Nominations for vessels are down compared to last year at the same time.
Middle East prices are softening. Observers fully expected to see the Yuzhnyy price drop as well. The reduction in price at this time could mean more Black Sea material will be offered in the upcoming TCP tender.
Even once the TCP tender is done, however, and even if Black Sea material dominates the offers, sources say the awards will not be enough to turn the market around.
The only other major buyer still to come is India, and sources say no one should expect any tender calls or buying interest until the elections are over in late May.
For now, sources are pegging the market at $240-$245/mt FOB.
Pakistan: The TCP tender for 260,000 mt will close April 20. Sources say offers should show a significant weakness in the global market. Industry watchers are convinced that TCP will award from this tender. Sources say the country still needs urea right away. TCP is not known as a buyer that will take cargoes that cannot find ready buyers on the domestic front.
India: Balloting in the national elections started late last week and will last until May 16. Industry sources say there is little chance any of the major buyers will call a tender until after results are in. The absence of Indian buyers until late May is expected to keep the urea market in the doldrums.
NITROGEN SOLUTIONS
U.S. Gulf: Sources say there is a great deal of pressure on prices to go down in light of lower forward paper numbers.
February imports were off 64 percent, to 104,307 st from the year-ago 292,967 st. July-February imports were off 52 percent, to 1.15 million st versus the year-ago 2.4 million st.
Eastern Cornbelt: UAN pricing remained in a broad range at $7.20-$8.13/unit FOB in the region, with the low reported in Illinois. One Indiana source pegged the dealer market for UAN-32 in the $250-$260/st ($7.81-$8.13/unit) range last week for spot tons.
Western Cornbelt: UAN was steady at $7.00-$8.13/unit FOB regional terminals, with most dealer quotes reported in the $235-$256/st ($7.34-$8.00/unit) FOB range.
California: The UAN market remained in disarray, according to one source, due to Midwest railcars available at considerably lower levels than the truck market. The bottom of the range was reported in the low-$250s/st ($7.90/unit) for railed tons, while the truck-delivered market was pegged in a broad range at $280-$310/st ($8.75-$9.69/unit), with the upper end reflecting posted prices from some suppliers.
Pacific Northwest: Sources tagged the regional UAN-32 market at $255-$280/st ($7.97-$8.75/unit) DEL, with the low for railed tons from Midwest suppliers and the upper end for truck-delivered material.
Western Canada: UAN-28 pricing was quoted at $362-$378/mt ($12.93-$13.50/unit) DEL in the region last week.
AMMONIUM NITRATE
U.S. Gulf: The market remains quiet and under pressure. February imports were off 36 percent to 73,168 st, according to DOC, versus the year-ago 114,016 st. July-February imports were off 43 percent, to 462,210 st from the year-ago 805,032 st.
Western Cornbelt: Ammonium nitrate pricing remained at $270-$275/st FOB regional terminals to the dealer.
California: No market was reported for ammonium nitrate in the state. CAN-17 pricing, however, was unchanged at $255-$285/st FOB.
Pacific Northwest: Ammonium nitrate was steady at $353-$361/st DEL in the Pacific Northwest, with the upper end reported in Idaho. CAN-17 pricing remained at $250-$255/st FOB and $260-$265/st DEL in eastern Washington and northern Idaho.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was steady at $225-$245/st FOB in the region.
Western Cornbelt: Granular ammonium sulfate remained at $225-$245/st FOB to the dealer.
California: The ammonium sulfate market was tagged at $250-$290/st FOB, with the low FOB Sacramento and the upper end in desert locations in the state. The Lathrop market continued to be quoted at the $255/st FOB level in mid-April. One supplier was referencing fluid grade ammonium sulfate as of April 6 at $260-$265/st FOB California terminals, with regular grade at $275/st FOB.
Pacific Northwest: The granular ammonium sulfate market was quoted at $225-$230/st DEL in the region. Reference prices were as high as $250-$255/st DEL, but sources reported no business at that level. One supplier was also posting fluid grade ammonium sulfate at $190/st DEL in Washington, Oregon, Idaho, and Montana, and $185/st FOB warehouses in Oregon, Washington, and northern Idaho.
Western Canada: Granular ammonium sulfate was quoted at $380-$385/mt DEL in the region, up $10/mt from last report.
U.S. Imports: Imports were off 28 percent in February, to 34,218 st from the year-ago 47,439 st. July-February imports were off 18 percent, to 220,186 st from 268,029 st.
PHOSPHATES
Central Florida: As the clock on planting time continued to tick down, and with wet and cold weather still blocking farmers from hitting their fields, the shakier the stability of phosphate pricing became last week. With the exception of Florida, where rain finally arrived to help ease a long-running drought, most of the country was simply too wet to work. Truckload sales into some spotty parts of the Deep South and some areas of Texas accounted for most of the sales activity. High rail rates have contributed to lower sales volumes out of Central Florida.
Faced with a shorter season, one trader last week began selling below the market level that has stood for a month or more, about $5/st FOB below the previous price range. Producers, such as Mosaic, however, were still shipping under contract terms.
Areas normally served by rail from Central Florida, from eastern Ohio, and the Northeast down to Virginia, were running out of time to order new product to meet the hoped-for demand. While planting for the most distant northern areas could wait until early June, most need to have their crops in the ground by early-to-mid May, which was a month or less away last week.
Although phosphate inventories fell a tiny amount in March – about 25,000 st, according TFI – the dismal spring season will probably lead to cuts in production relatively soon.
The Central Florida DAP price range fell last week from the previous week’s $315-$320/st FOB to $310-$320/st FOB. 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 $340/st FOB for rail shipments, but truck sales showed some improvement.
U.S. Gulf: The spring season was beginning to wane last week and traders were getting nervous, as dealers were hoping to see supplies they stocked earlier begin to deplete. So far, dealers have been disappointed, and that has caused traders to begin considering deals they would not have thought of a couple of weeks earlier. Late last week, the price of NOLA DAP barges on the Gulf river system fell – a lot.
“Almost everyone wants to see their bins empty at the end of the spring season,” a trader commented. He added that NOLA DAP barges were not in position to re-supply Corn Belt areas, so shortages of phosphates were probable.
Areas of Texas, Oklahoma, Missouri, and Kansas received rain, which most of them badly needed, and some fields were being fertilized – row crops, mostly. An increase in activity was found in Iowa and Nebraska. However, the big bucks are in corn, and the Corn Belt was still at the starting line, waiting for the whistle to blow. The shorter the season, the less fertilizer will be sold. A trader pointed out that in order to get maximum yields corn should be planted by the beginning of May, and a sharp drop-off occurs starting around the middle of the month. If the crop is not in the ground by the first of June many farmers will plant soybeans, which do not require massive applications of phosphate.
Normally, June and July is the time to refill bins in preparation for the fall season, but a source said he did not expect that to begin to occur until after the Southwest Conference, sometime in August or September.
Optimists pointed out that fall applications were down last year, and not as much as normal was going down in the spring, so farmers will have little choice but to buy and use more this coming fall. The negative side said the same reasoning was used to predict a healthy spring season.
Assuming the USDA’s prediction of 85 million acres of corn holds up (and it may not, if soybeans are substituted), and yields are down due to late planting, the already solid price of corn will improve. That will make farmers happy and more willing to spend for the following season.
Prices at warehouses were stabilizing between $345/st FOB and $350/st FOB last week.
Early last week, most offers to buy were as high as $300/st FOB, but as activity dragged, a deal was cut for a “handful” of NOLA DAP barges at $290/st FOB. Another buyer said he was attempting to purchase barges below that price.
The NOLA DAP barge price range last week dropped from $304-$308/st FOB the previous week to a flat $290/st FOB, and could drift even farther south this week. However, do not expect large price reductions to occur. Mosaic has a $10/st FOB additional charge for MAP, while CF’s MAP was $20/st FOB higher than its DAP price.
Correction: The DAP barge price for the Green Markets dated April 13 was $304-$308/st FOB as it appears on the Price Scan on Page 4 and in the text on Page 7. The U.S. Export price of $340-$350/mt was incorrectly placed in the box on the front page.
Eastern Cornbelt: DAP pricing continued to be quoted at $360-$375/st FOB regional warehouses to the dealer, with MAP $10/st higher. The Central Florida DAP price was quoted at $310-$320/st FOB last week, reflecting a slight drop from the previous week. DAP barges were tagged as low as $290/st FOB the U.S. Gulf.
10-34-0 was quoted at $625-$750/st FOB in the region, with the low in Illinois and the upper end in Ohio.
Western Cornbelt: The DAP market was reported at $355-$370/st FOB regional warehouses to the dealer, with MAP $10-$15/st higher. 10-34-0 was quoted at $575-$675/st FOB in the region.
California: MAP and DAP were steady at $455-$460/st DEL or FOB warehouse locations in California. The 16-20-0 market was tagged at $310-$320/st FOB in the state, down slightly from last report, while 10-34-0 remained at $477-$487/st FOB in California.
Phosphoric acid remained at $11.00/unit DEL for both super phosphoric acid (SPA) and merchant grade acid (MGA), with Simplot also referencing MGA at $11.20/unit FOB California warehouse locations.
Pacific Northwest: MAP was unchanged at $445-$455/st FOB or DEL in the region, with DAP at $450-$460/st FOB or DEL. 16-20-0 was quoted at $300-$305/st DEL, and 10-34-0 remained at $470-$480/st FOB in the region. Phosphoric acid was reported at $11.00/unit DEL in the region for both SPA and MGA.
Western Canada: MAP was pegged at $665-$680/mt DEL in Western Canada, with reference levels as high as $790-$825/mt DEL to the dealer.
U.S.Export: Although India was rumored to have made buys from Russia and Tunisia, U.S. firms were not involved. However, Transammonia did make relatively small sales of 3,500 mt into Latin America last week for a price of $340/mt FOB, which was within the previous export price range. In general, export phosphate prices were becoming increasingly soft.
TFI issued its phosphate export report for March last week, which showed increased deliveries for the month, but sales for the calendar-year-to date are down compared to 2008.
Of course, India took the most DAP, 215,875 mt, but Australia received 114,978 mt, and Vietnam secured the third spot at 51,300 mt. Total DAP exports in March amounted to 457,854, an increase of 36.4 percent. For the calendar-year-to-date, India led the way with 439,766 mt, while Australia with 131,499 mt, and Vietnam with 96,946 mt, followed. DAP exports totaled 929,338 mt, but were down 4.3 percent from the previous year.
TFI said Australia was the biggest recipient of MAP in March with 96,491 mt, trailed by Brazil at 69,458 mt and Canada at 44,835 mt. Total MAP exports for March amounted to 230,500 mt, an increase of 10.2 percent. For the calendar-year-to-date, the order was similar. Australia led with 153,525 mt, Canada was second at 122,096 mt, and Brazil was the third biggest customer at 69,458 mt. The total through March was 383,810 mt, a decrease of 5.5 percent from the amount shipped in 2008 at that point.
The export DAP price range fell last week to a flat $340/mt FOB, down from the previous week’s $340-$350/mt FOB.
India: Buyers have now settled phos acid contracts with suppliers other than OCP at US$630/mt CFR India. The list includes: OCP, Morocco, 300,000 mt; Foskor, South Africa, 125,000 mt; ICS, Senegal, 100,000 mt; GCT, Tunisia, 80,000 mt; PhosChem, U.S., 50,000 mt; and IJCC, Jordan, 40,000 mt.
POTASH
Eastern Cornbelt: Potash was tagged at $680-$720/st FOB regional warehouses from brokers or resellers, with most sources putting the dealer market at the $700/st FOB level, give or take.
Western Cornbelt: Potash was pegged at $675-$710/st FOB warehouses to the dealer, depending on grade and location. One Iowa supplier reported moving limited tons at the $700/st FOB level last week, but another source said potash movement was “not enough to even have a discussion” about at mid-month.
California: Muriate of potash pricing remained at $849-$875/st FOB and $875-$900/st DEL in the region. Sulfate of potash was steady as well at $1,015-$1,055/st FOB for bulk tons, with the low for standard grade and the high for water soluble.
Potassium nitrate pricing was unchanged at $1,310-$1,380/st FOB in California, with the low for bulk and the upper end for bagged product.
Pacific Northwest: Potash pricing out of regional warehouses remained as high as $820-$860/st FOB, with little new business reported to test that market. On a delivered basis, however, Washington sources said 60 percent muriate could be had from Midwest suppliers for as low as $750-$760/st DEL in mid-April.
Western Canada: Potash FOB Saskatchewan mines was reported at $960-$1,000/mt FOB to Canadian customers, depending on grade and supplier.
U.S. Imports: Potash imports were off 74 percent in February, to 307,754 st from the year-ago 1.2 million st. July-February imports were off 24 percent, to 5.7 million st from the year-ago 7.5 million st.
SULFUR
Tampa: If second-quarter sulfur contracts were settled based on current levels of supply and demand, the sulfur industry would be in command and could secure a bump of around $50/lt, according to sources. However, projecting out into the next few months, the story would be quite different.
Refineries were generally up and running after many took a break for turnarounds, and were busy producing fuel for the summer driving season, so production was up and will probably continue to be in the near future. However, the phosphate industry was not sharing the same rosy scenario.
Phosphate production increased in January after taking a big drop late last year, but that does not appear likely to continue. Most figure domestic sales will be down and exports off a bit as well, and prices were taking a dive. Last week it appeared phosphate production may be curtailed again, at least until sales pick up sometime this summer. That means phosphate will need less sulfur. Another negative of more immediate consequence for the sulfur industry is the big block Mosaic has in storage at Galveston. This week or early next week, the company will have to begin melting that supply for delivery to Tampa, and will not be taking as much molten product as it has been. The move was determined to be necessary to meet its contracted supply obligations. Supply will soon outstrip demand.
Last week, the sides were far, far apart on any possible agreement. The phosphate industry was looking for a rollover at the current $0.00/lt price, while sulfur would like something near $50/lt.
West Coast: Contract negotiations for the West Coast will not begin until around the end of the month, when current agreements were scheduled to expire.
U.S. Import: February imports were off 72 percent, to 47,316 st from the year-ago 169,110 st. July-February imports were off only 11 percent, to 1.24 million st from 1.4 million st.
Vancouver: The world sulfur market was somewhat healthier than the U.S. situation and spot prices out of Vancouver were holding in the $40-$45/mt price range, which was about twice as high as spot prill from the U.S. Gulf Coast. Brazil, which was said to have only a limited need, had not reached a new semester agreement last week, but was somewhat active in the spot market.
MARKET NOTES
Pakistan: Private sector Pak-Arab Fertilizer Ltd. (PAFL) in Punjab earned an after-tax profit amounting to Rs 7,160.29 million (US$89.50 million) for the year ended on Dec. 31, 2008. Its production capacities were operated at a high level during 2008, manufacturing 312,095 mt of nitrophosphate, in addition to 342,574 tons of CAN and 104,102 mt of urea.
With a vision for the future, Pak Arab continued to invest in its fully-owned subsidiary, the Fatima Fertilizer Co. Ltd., which is a greenfield complex being set up with an investment of Rs 15 billion for producing 1.5 million mt of urea and other fertilizers. Fatima is expected to go into production by mid-2009. It will mark a big step forward in overcoming a major shortage of urea, which has been a hurdle for the country. As the Fatima facility comes on stream, the combined capacity of the two group units would shoot up to 2.3 million mt, which would bring the group’s fertilizer production at par with other fertilizer producers in the country.