AMMONIA
U.S. Gulf/Tampa: There was nothing new to report on these locations; however, sources were closely watching the good ammonia demand in the heartland, wondering if it could perhaps impact upcoming Tampa pricing for May.
According to the U.S. Department of Commerce (DOC), imports were up 35 percent in February, to 506,673 st from the year-ago 375,303 st. However, July-February imports remain off by 3 percent at 4.24 million st, down from 4.39 million st.
Eastern Cornbelt: Growers all over the region found favorable weather and soil conditions that allowed a flurry of field activities in mid-April. One source said ammonia suppliers had few tons available on the spot market, and truck availability was limited as demand stepped up.
As a result of those factors, the anhydrous ammonia market had reportedly firmed to $440-$450/st FOB regional terminals to the dealer, up $20-$25/st from the previous week. Illinois terminals at the low end of that range were likely to firm in the near term, several sources said.
Western Cornbelt: Ammonia applications continued at a brisk pace in the region. “We’re running hard,” said one contact, and another added that it was difficult to keep up with demand, forcing some suppliers to scramble to replenish terminal inventories. One Iowa dealer estimated that 80-85 percent of the preplant ammonia work was finished in his trade area after several weeks of hectic activity.
Regional sources quoted spot ammonia pricing in a broad range last week. Although some sources claimed spot tons could still be had for as low as $365/st FOB in the region, others quoted the dealer market out of terminals in Nebraska and central Iowa firmly at $390-$400/st FOB on the low end. The upper end of the regional price range was tagged at $420-$440/st FOB, with reports of some Iowa locations now referenced as high as $450/st FOB to the dealer. Koch notified customers on April 15 that it had raised its ammonia prices by $40/st.
In the Southern Plains market, ammonia tons out of Verdigris and Pryor, Okla., were said to have firmed to $350-$360/st FOB, with Clay Center and Conway, Kan., referenced at $395-$400/st FOB to the dealer.
California: Wet weather slowed fieldwork in Southern and Central California last week. The fieldwork delays in rice producing areas of the state could reduce aqua ammonia usage, one source noted, with growers turning instead to ammonium sulfate and 16-20-0.
Anhydrous ammonia pricing remained at $520-$525/st truck-DEL in California, depending on location and supplier. Aqua ammonia was referenced at $142/st FOB.
Pacific Northwest: The anhydrous ammonia market was steady at $410-$420/st truck-DEL in the region.
Western Canada: A spring storm dumped heavy snow on Alberta and pummeled parts of Saskatchewan with rain and high winds at mid-month. The snow will delay field activities, but sources said the moisture is generally welcome after unseasonably dry conditions in recent weeks. Some regional suppliers announced extended hours of operation at fertilizer terminals beginning with the coming weekend, so sources were optimistic that growers will hit the ground running when field conditions improve. “It looks like the run has begun,” said one source.
Anhydrous ammonia pricing was steady at C$700-$745/mt DEL in the region, with the lower numbers in Manitoba and Saskatchewan.
Middle East: The price seems to be slipping in the area again following a deal between Qafco and FACT/India for $398/mt CFR. The estimated netback on the deal is $370/mt FOB. The deal comes just as producers in the area were highlighting a few deals that took the price to $400/mt FOB. With the Qafco deal, sources expect to see a softening in the formula prices. How much those prices will soften is still up in the air.
In the past, Qafco has often rocked the market with lowball deals. One source had previously said Qafco lacks the necessary storage facilities to hold onto tons to prevent a fire sale. Once a low price is achieved, it quickly goes away.
With the new deal, the low end of the price range has dropped, but the upper end remains the same. Sources now peg the market at $370-$400/mt FOB.
Black Sea: Sources report the storage facilities are filling rapidly, and producers have slowed down deliveries to the port. At the same time, pricing ideas to Europe and the U.S. are dropping.
Nailing down any new business, however, is difficult. Sources report demands for lower prices are not so much being countered as being ignored.
Overall, the reaction is that prices have not moved.
Asia: The tight Asian market is getting tighter. Mitco has moved from reduced production to no production. Industry sources say the Petronas facility shut down last week due to mechanical problems.
The Mitco plant had a full order book through May, as do all the other regional producers. Because of the tightness of supplies in the area, the possibility of engaging in swaps with other producers is limited. Mitco may have to go into the spot market to cover some of its contracts if the plant stays down too long. Any spot purchases will most likely have to take place out of the Arab Gulf, which could mean Mitco will have to swallow the differences in freight costs as well as a potentially higher price for the ammonia.
UREA
U.S.Gulf: Most players last week said granular urea barges fell into the $280s/st FOB, but bounced back. Very few barges were reportedly sold below $290/st FOB, said sources, but new business was concluded within the $285-$288/st FOB range earlier in the week. By week’s end, sellers were again quoting $290-$295/st FOB, with $293/st FOB reportedly concluded by the end of the week.
Sellers were anxious to see the price turn around. One reason given was a spate of outages in Canada, with one source estimating that as much as 100,000 st of product could have been taken out of the market as a result. Agrium confirmed that an electrical problem at its Carseland plant took the plant down, but that it has returned to production. Redwater had a failure of the ammonia unit front-end high-pressure waste heat boiler and will be down two to three weeks, coming back up next week.
There were also unconfirmed reports that the CF Medicine Hat plant had been having problems, and that Yara Belle Plaine was not running at full production. There were rumors that one player might be considering an import out of NOLA, though no firm information was available. Some dismissed this outright, saying the economics are not there, but another added that they might be to Mexico.
U.S. imports in February were up 8 percent, to 635,046 st from the year-ago 589,923 st. However, July-February imports were off 8 percent, to 3.7 million st from 4.0 million st.
Eastern Cornbelt: Granular urea pricing continued to slip, with most sources tagging the dealer market at $340-$350/st FOB regional terminals at mid-month.
Western Cornbelt: Granular urea was pegged at $335-$350/st FOB in the region, with the low reported in southern Missouri. One supplier reported moving loads at the $350/st FOB level in his location yet last week, but acknowledged that he had to meet spot quotes at $340/st FOB in some cases.
California: Granular urea was steady at $375-$395/st FOB and $400-$410/st DEL in the state. One source talked of limited urea availability on the West Coast last week.
Pacific Northwest: Granular urea pricing was down from last report, with sources quoting the regional market at $385-$400/st DEL, depending on location.
Western Canada: Granular urea remained at C$491-$516/mt DEL in the region, depending on location, with dealer reference levels quoted as high as C$525/mt DEL in some locations. As noted above, Agrium has seen outages at Carseland and Redwater, with unconfirmed reports of production problems or slowdowns at CF’s Medicine Hat and at Yara Belle Plaine.
Pakistan: The Trading Corporation of Pakistan closed its tender for 75,000 mt with the lowest offer coming in $7/mt lower than its previous tender. Within a day of the tender closing, TCP awarded the tender to Swiss Singapore for 50,000 mt at $304.40/mt CFR. Sources expect TCP to call another tender soon to secure the remaining 25,000 mt.
Tender results follow.
| Offering Company | Quantity (mt) | Country of origin | US$/MT CFR | Remarks |
| Swiss Singapore | 50,000 | China-CIS Egypt-Middle East | 304.40 | |
| Transfert | 50,000 | Open | 306.50 | If Iran origin, L/C to be in UAE DHMS |
| Transammonia | 50,000 | Open | 307.44 | |
| Blue Deebaj | 50,000 | Iran-CIS Egypt-China | 312.00 | |
| Multicommerce | 50,000 | Open | 312.27 | |
| Liven Agrichem | 50,000 | China-Middle East | 313.00 | |
| Shandong Liaocheng Luxi Chemical 50,000 China 315.00 | ||||
| Dreymoor | 50,000 | Open | 328.00 |
Industry observers agree, and government agencies publicly claim that Pakistan will need an additional 200,000 mt even after this round of buying ends.
Sources report the relevant government ministry officials are meeting this week to figure out when to issue the tender.
The main speculation is that the tender will be called in early-to-mid May. For TCP, the problem is that an Indian tender is anticipated at the same time. Even with the softening international urea market, one source said the combination of India and Pakistan buying large quantities at the same time could provide a psychological bump in the price.
Sources say Swiss Singapore may source its award from Iran. If that happens, said one trader, TCP and Swiss Singapore will have to negotiate which currency will be used to conclude the deal, because U.S. dollars cannot be used for the purchase of Iranian material.
Middle East: The Arab Gulf price is holding steady in the mid-$280s/mt FOB. The first marker for the price came with the IPL/India tender. The next indicator came from the TCP tender. The upper end of the price range was set by the Indian buyer. When last week opened, the lower end was set by Pakistan.
Sources say lower prices are on the horizon as the global market goes soft. July 1 – when the Chinese export duty drops back to 7 percent – is rapidly approaching, adding to the downward pressure. The influx of Chinese tons to a market with plenty of material available is expected to lower regional prices.
For now, however, producers in the Middle East report healthy sales. Most of the tons being shipped are under contract.
More Iranian tons are appearing on the global market, especially in regional tenders. Sources say many of the tons are backup tons in case a CIS or Arab producer cannot come through.
The price for prilled and granular urea remains at $283-$289/mt FOB, with softening expected.
India: Industry sources expect to see another tender come from an Indian buying house soon. For now, talk about India buying is just in the rumor stage. No one is reporting any activity by MMTC or STC to talk to producers in Ukraine or the Middle East. And there has been no new activity among the Indian government bureaucrats to move the paperwork necessary for a tender.
Sources say late April initially seemed to be the target period for the next tender. Now folks are talking about early or mid-May.
Everyone now seems to be playing the situation by ear. The buying season is done for most of Asia and North America. Only India, Pakistan, and some Latin American countries now appear to need material. And of that group, India is the largest single buyer.
The Indian buyers can easily sit back and wait for building reserves to push prices down, said one trader.
Vietnam: A lack of rain in the Mekong Delta region has
pushed back the application and planting season. A natural
result of this delay is a reduced demand for urea.
Sources report some urea is now being offered on the international market. Reportedly, the price being talked about is $270/mt FOB. And some of those tons are said to be in Chinese bags.
China: Sources say the Chinese tons offered in the recent TCP tender were backup tons just in case the other sources fell through.
Reportedly, more holders of the bonded material in the portside warehouses are coming to the realization that they will not get the $270-$280/mt FOB they expected. Some of them paid higher than that when they picked up the tons in the last quarter of 2009.
With the global market now in a downturn, sources say Chinese urea in bonded warehouses has to be offered at $250-$260/mt FOB.
And until July 1, the only material that can be considered for export consists of the 200-300,000 mt estimated to be sitting in the bonded warehouses. These tons arrived before the export duty went up to its current 110 percent.
The price of urea in China is dropping because of reduced demand.
A longer and harsher winter in the north is still preventing farmers from getting started in earnest for the spring season. At the same time, floods in central China and a drought in southwest China are preventing farmers from getting their season started.
And while demand remains limited, production continues. Sources say local and regional governments continue to pressure the plants to keep operating to protect employment in their areas. Even the temporary closing of urea plants could cause local governments major economic problems.
Correction: China will lower its export duty on urea to 7 percent July 1 and not June 1, as reported last week. The duty on DAP will be lowered June 1.
Indonesia: The rains have picked up, making the demand for urea strong once again. Until that demand wanes, said one source, Indonesian producers will not be offering tons on the international market.
Latin America: Reports that Brazil may conclude a deal with Iran for the importation of urea is seen as a political move by industry observers. One analyst said the move would fly in the face of Brazil’s stated goal of seeking fertilizer self-sufficiency in 10 years.
A trader noted that the shipping costs would make Iranian material more expensive than similar product from Russia or Ukraine. He added that he doubted Iran would be willing to offer a steep discount to secure a sale to Brazil, or that Brazil would be willing to pay a premium for Iranian tons.
Besides the cost problem, the buyer and seller would have to work out some sort of deal that ensured no U.S. dollars or U.S. subsidiaries in Brazil were involved in the deal.
The discussion of some sort of government-to-government deal between Iran and Brazil comes as the Brazilian president continues to argue against the imposition of sanctions against Iran as he prepares to visit Tehran next month.
NITROGEN SOLUTIONS
U.S.Gulf: With little interest for barges, sources were calling them $200-$205/st FOB ($6.25-$6.50/unit) last week. Some suggested that to prod a buyer into an actual deal, you would have to offer $195-$200/st FOB. According to sources, the $180-$190/st FOB figures that some have been equating to NOLA were netbacks from inland locations, not actual trades.
Imports were up a healthy 66 percent in February, to 172,336 st from the year-ago 104,037 st, according to DOC. However, July-February was off 16 percent, at 963,111 st from 1.15 million st.
Eastern Cornbelt: Sources quoted the UAN-32 market in a broad range at $240-$260/st ($7.50-$8.13/unit) FOB in the region, with the low reported on a spot basis in Illinois. Those numbers reflected a drop from last report, with some sources speculating that the strong ammonia run may be putting pressure on UAN pricing.
Western Cornbelt: UAN-32 pricing was down from last report. Sources quoted the market at $240-$248/st FOB ($7.50-$7.75/unit) FOB most terminals to the dealer, with delivered tons in Oklahoma and Kansas quoted in the $245-$250/st ($7.66-$7.81/unit) range. There were even reports of some suppliers quoting UAN at river tanks for as low as $240/st ($7.50/unit) FOB direct to the farmer last week.
California: UAN-32 pricing was up slightly from last report. Sources tagged the dealer market in California at $252-$262/st ($7.88-$8.19/unit) FOB most terminals to the dealer, with list prices at some desert locations as high as $275/st ($8.59/unit) FOB. With UAN movement picking up steam in the Midwest, sources reported no rail-delivered prices to California from Midwest suppliers in mid-April.
Pacific Northwest: Sources tagged the UAN-32 market at $270-$275/st ($8.44-$8.59/unit) DEL in the region. Sources said solutions inventories were getting tight, and railcars from the Midwest had dried up as movement in that region kicks into high gear.
Western Canada: UAN-28 was unchanged at C$294-$310/mt ($10.50-$11.07/unit) DEL, with the low in Manitoba and the upper end in Alberta. Dealer postings were referenced as high as C$320/mt ($11.43/unit) DEL in the region.
AMMONIUM NITRATE
U.S. Gulf: Floaters were hard to find. Sources said most of the action was for May barges, with business going at $245-$250/st FOB.
February imports are off 19 percent, at 58,146 st from the year-ago 73,168 st. July-February imports are off 31 percent, to 317,766 st from the year-ago 462,210 st.
Western Cornbelt: Ammonium nitrate remained at $285-$290/st FOB in the region. Inventories were low at some locations, and suppliers were reportedly throttling back on new orders as they run out of product.
California: No market was reported for ammonium nitrate in California. CAN-17 was unchanged at $255-$275/st FOB in the state.
Pacific Northwest: Ammonium nitrate was quoted at a nominal $348-$365/st rail-DEL in the region. CAN-17 was steady at $245-$250/st FOB and $260/st DEL.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate remained at $235-$240/st FOB in the region, with most sources touting the upper end of that range as the common dealer price. Rail-delivered granular tons were also pegged solidly at the $240/st level.
Western Cornbelt: Granular ammonium sulfate was tagged at $235-$240/st FOB in the region.
California: Ammonium sulfate was pegged at $220-$247/st FOB, depending on grade and location, with the low for standard and the upper end for granular in desert locations. One supplier raised its standard grade ammonium sulfate posting $10/st on April 1 to $230/st FOB in the state.
Pacific Northwest: Granular ammonium sulfate was unchanged at $240-$245/st DEL in the Pacific Northwest.
Western Canada: Granular ammonium sulfate in Western Canada was pegged at C$325-$330/mt DEL to the dealer, with dealer postings at the C$340/mt DEL level in some locations.
PHOSPHATES
Central Florida: Weather in the Northeast improved significantly last week, and warmer and drier weather allowed fieldwork to get underway. That tended to be true across the country. Rail shipments were on the increase, and trucks were hard to find. Trucks will continue to be difficult to arrange as the season gets into high gear.
TFI said phosphate production was down in March, and inventories grew by only about 23,000 st. The lower inventories were most likely the result of a shortage of sulfur.
The Central Florida DAP price range last week continued to be unchanged at $410-$420/st FOB. Although Mosaic’s posted price was $415/st FOB, it was also offering some buyers prices as low as $410/st FOB. CF’s price was $410/st, although supplies were limited. PCS Sales was charging market-based prices. Agrifos’ prices were $450/st FOB for DAP and $460/st FOB for MAP, but railcars were about $5/st FOB less, if available.
U.S. Gulf: Farmers will most likely not be able to put as much phosphate on their fields this season as they would have preferred for maximum results. After using sparse amounts for the past two years, leaving many dealers holding the bag, not enough was in bins when the season began. Dealers were afraid of getting stuck with high-priced phosphate, so many held off buying, and there will not be enough time remaining to bring replacement product. Terminals and warehouses will run out before the season is over, and will not be refilled. One source pointed out that will likely mean farmers will use more next season, due to the reduced quality of their soil.
On the Arkansas, the terminal price was generally $445/st FOB, with the exception of CF, which was $5/st FOB higher. In the more northerly areas of the Mississippi, the price was a range of $450-$455/st FOB, and $455-$460/st FOB on the Ohio. Buyers would barely break even on barge deals, and that was discouraging activity. Most terminal operators will run out of product before the end of the season. Activity during this week and next will probably be the busiest of the season, and outages will begin occurring soon.
The price of corn recovered toward the end of the week after dipping to around $3.80/bushel, and was close to $3.90/bushel on the rebound.
Based on actual transactions last week, the NOLA DAP barge price range changed from $410-$416/st FOB to $420-$425/st FOB. Unless warehouse prices go up, it will be difficult for NOLA phosphate prices to go up more than a few dollars. Time and location will continue to be the biggest influences during the next week, and some locations will not be able to receive new shipments in time.
Eastern Cornbelt: DAP was quoted at $450-$460/st FOB most regional warehouses to the dealer, with MAP $10-$15/st higher than DAP. Ohio sources continued to quote the upper end of the DAP market at $465/st FOB out of inland warehouses. 10-34-0 remained at $355-$365/st FOB in the region.
Western Cornbelt: DAP was pegged at $440-$455/st FOB, reflecting a slight drop from last report, with the low reported in southern Missouri and the upper end in Iowa to the dealer. MAP was $10-$15/st higher, with truck-delivered MAP quoted at $475-$480/st to points in western Iowa. 10-34-0 remained at $350-$360/st FOB in the region.
California: Phosphoric acid pricing was reported at April pricing levels of $8.45/unit DEL in California for both super phosphoric acid (SPA) and merchant grade acid (MGA). Simplot was also referencing MGA at $8.65/unit FOB in the state.
DAP and MAP were both quoted at $490-$495/st FOB or DEL in California. 16-20-0 remained at $324-$331/st FOB. 10-34-0 was pegged at $378-$390/st FOB, up $10/st from last report following the April 1 phos acid pricing increase.
Pacific Northwest: SPA and MGA had firmed to April pricing levels of $8.45/st DEL in the region. DAP and MAP remained at $485-$490/st FOB or DEL, with 16-20-0 quoted at $319-$325/st DEL in the region. 10-34-0 was tagged at $375-$385/st FOB in the region.
Western Canada: MAP pricing was steady at C$582- MAP pricing was steady at C$582-$617/mt DEL to the dealer, depending on location, with the low reported in Manitoba and Saskatchewan and the upper end in Alberta and British Columbia. Dealer reference levels remained as high as C$625/mt DEL in the region. 10-34-0 remained at C$470-$483/mt DEL in the region.
U.S. Export: No new export deals were found late week, but TFI released its export phosphate report for March. The monthly report said Pakistan was the biggest DAP customer at 82,337 mt, with Thailand the next largest at 47,418 mt, closely followed by Mexico at 46,130 mt. The total amount of DAP exports for March was 313,397 mt, a decline of 31.6 percent from a year earlier. For the calendar-year-to-date, Australia has taken the most, 140,436 mt, with Mexico second at 127,714 mt, while Pakistan received 82,337 mt this year. The total exported by March was 752,229 mt, which was 19.1 percent less than at the same time last year. Deliveries to India by PhosChem had not begun by March, and India will likely regain its title of the most important phosphate importer.
TFI said the sale of MAP was also down in March, but up for the year. In March, a total of 155,087 mt was sent offshore, a decline of 32.7 percent compared to the same month in 2009. Australia was the most prolific buyer of U.S. MAP at 86,716 mt, with Canada a distant second at 30,294 mt and Argentina third at 20,541 mt. For the calendar-year-to-date, Australia has been the biggest buyer by taking 213,594 mt. Canada, which was second, received 109,545 mt, and Argentina got 55,484 mt. Total MAP exports were 457,982 mt, an increase of 19.6 percent.
Including a sale to Ecuador not reported last week, the export DAP price range last week was $465-$470/mt FOB.
Bangladesh: BCIC has issued a tender to import 15,000 mt (72 percent BPL Min.) of phosphate rock on a C&F Chittagong basis. Offers are to be received up to May 18 and should be valid for 30 days from closing.
POTASHM
Eastern Cornbelt: Potash pricing was “all over the board,” as one source put it. Sources talked of Russian tons available on a spot basis for as low as $390-$395/st FOB, while others quoted dealer pricing out of regional warehouses more commonly in the $405-$410/st FOB range. Producer postings remained at the $420/st FOB and $430/st rail-DEL levels.
Western Cornbelt: Potash was quoted at $390-$395/st FOB regional warehouses on the low end, with the upper end at the $405/st FOB mark to the dealer.
California: Potash was unchanged at $440-$460/st DEL in California, depending on grade. Potassium nitrate pricing remained at $929-$996/st FOB, with the low for bulk tons and the upper end for bagged product.
The sulfate of potash (SOP) market was quoted at $635-$650/st FOB, but for bulk tons. That range was up from last report, with the low reported for granular product and the upper end for standard/water soluble tons.
Pacific Northwest: Potash was pegged at $440-$450/st FOB regional warehouses, with delivered tons reported in the $448-$455/st range, depending on grade and location. Those numbers were up slightly from last report.
Western Canada: Potash to Canadian customers FOB Saskatchewan mines was quoted at C$423-$432/mt FOB, depending on grade and supplier. Out of warehouse locations in the region, the potash market was quoted in a broad range at C$438-$463/mt FOB, depending on grade and location.
U.S. Imports: Imports were up a whopping 271 percent in February, to 1,141,198 st from the year-ago 307,754 st. However, for July-February, they remain off 12 percent, at 5 million st versus the year-ago 5.73 million st.
SULFUR
Tampa: Phosphate producers were still talking to their sulfur suppliers late last week, and it appeared it could take another week or more before they reach an agreement for second-quarter sulfur prices.
During the past few weeks, prices on the world market have sagged, but only a little, and still remain around $100/lt more than the molten price at Tampa. The price will go up, but how much more phosphate producers will pay was unclear.
Oil refinery production increased again last week, to 85.6 percent of capacity, compared to 84.5 percent the previous week. Still, inventories of gasoline, diesel, and other oil-based products were growing as economic activity remained depressed, but showed signs of improving.
U.S. Imports: Sulfur imports were up 179 percent in February, to 132,031 st from the year-ago 47,316 st. However, for July-February they remain off 31 percent, to 858,899 st from 1,238,050.
MARKET NOTES
India: Fertilizer officials are unhappy with the government’s lack of action on assuring natural gas for proposed urea plant expansions. “Several thousand million rupees of investments have been committed to these projects, but none of them have been able to achieve financial closure because there is uncertainty over the critical gas supply component,” said Fertilizer Association of India (FAI) Director General Satish Chander. “If the gas issue is not resolved immediately, these investments run the risk of not fructifying at all.” The government is non-committal on a specific timeframe to sort out the gas crisis. Fertilizer companies have cumulatively announced about 7 million mt of urea capacity expansion plans.