AMMONIA
U.S. Gulf/Tampa: At press time, players are still awaiting word as to a final conclusion for business for July. Generally, sources indicate prices may still have room to fall ?Çô but not too much.
U.S. ammonia imports in April were off 13 percent, according to the U.S. Department of Commerce (DOC), to 475,671 st from the year-ago 549,428 st. July-April imports are off only 3 percent, at 5.36 million st from 5.52 million st.
Eastern Cornbelt: Wet weather continued to hamper field activities in much of Illinois and Indiana. Central Ohio sources talked of steady sidedress movement in mid-June, although crops in some areas were suffering from excessive rainfall. “What looked like a very good yield year will be average or below at best now,” said one Ohio contact. “Such a shame for as good as the crops looked.”
In areas where weather and field conditions allowed it, ammonia and UAN continued to move for corn sidedressing. Anhydrous ammonia pricing for prompt tons remained at $420-$430/st FOB in Illinois, and $445-$455/st FOB in Indiana and Ohio. The upper end was quoted by Ohio sources at Lima.
Western Cornbelt: Heavy rains brought rivers and streams out of their banks in central and southern Iowa in mid-June, and also prompted flash flood watches in eastern Iowa. Flooding was also reported along sections of the Missouri River last week.
Ammonia and UAN continued to move in sidedress applications on corn as weather conditions permitted. The anhydrous ammonia market was steady at $380-$410/st FOB regional terminals for prompt tons.
California: Anhydrous ammonia pricing was steady at $520-$525/st truck-DEL in the state. Aqua ammonia pricing was unchanged at $142/st FOB in California.
Pacific Northwest: The anhydrous ammonia market had reportedly slipped to $380-$410/st truck-DEL in the region.
Western Canada:Anhydrous ammonia remained at $700-$755/mt DEL in the region, with the lower numbers in Manitoba and Saskatchewan and the upper end of the range reported in Alberta. Sources said there was little activity to test the market. A wide swath of Western Canada was wet at mid-month, delaying the completion of planting in many areas.
Black Sea: Asian sources report that a cargo sold for $295/mt FOB. Just who bought it and who sold it is up in the air. The sub-$300/mt FOB price is not a surprise, as that low level has been tossed about for almost a month. The problem has always been nailing down an actual deal.
Earlier reports of sub-$300/mt FOB came from people calculating a Yuzhnyy-equivalent price rather than an actual Black Sea deal.
Many in the industry are also leery of sub-$300/mt FOB deals, because that puts the sale below what conventional wisdom says is the break-even point for the producers. The past 18 months have shown that producers are more willing to shut down rather than run at a deficit. There is no reason, said one source, that this line of thinking would change now.
Middle East: Purchases from India and other major buyers remain unabated. Sources say the supply-demand ratio is just strong enough to keep prices stable. Indian buyers remain on the lookout for bargains – and occasionally they find one from Iran or Egypt. It is purchases from these two suppliers that often frustrate the other producers in the area from getting higher prices.
Asia: While reports of a slowdown in fertilizer production in Taiwan circulate, demand for urea into the island remains strong. Sources say industrial demand appears to make up for any easing of demand from fertilizer producers.
Indonesian and Malaysian plants continue to operate at full capacity with full order books. Producers are not anxious to look for spot buyers.
UREA
U.S. Gulf: Barge prices continued to move up last week. Players said the market started off, still at low levels, in the $225-$230/st FOB range. By midweek, most were putting new trades in the mid-to-upper $230s/st FOB. By late Thursday, sources were calling the market a firm $240-$242/st FOB.
Sources explained the increased prices by saying that several buyers came into the market once they figured that the market had bottomed at $222/st FOB. However, those numbers, snapped up by larger players, did not last long, and with each new barge sale prices kept going back up. Some argued that it was plainly demand driven from rice country, and that there were not as many barges on the river as many people had thought. In addition, there were unconfirmed reports that CF has been readying some of its product for an export, thereby taking product off the barge market.
Regardless, others lamented the price spurt, saying that at the end of the season, prices should be at their lowest.
Urea imports were up 80 percent in April, to 757,907 st from the year-ago 422,049 st, according to DOC. This served to boost the year-to-date number into the plus column. As a result, July-April imports are now up 4 percent, to 5.32 million st from the year-ago 5.1 million st.
Eastern Cornbelt: Granular urea pricing covered a broad range in the region, but sources reported no demand for product. On the low end, Illinois sources talked of $270/st FOB out of river terminals. On the upper end, Ohio sources pegged the dealer market for urea at $305/st FOB Toledo, $310/st FOB Cincinnati, and $315/st FOB out of locations in eastern Ohio.
Western Cornbelt: Granular urea was quoted at $270-$310/st FOB in the region, with the low out of spot river locations and the high at inland shipping points.
California: Granular urea was moving to the field at mid-month, with dealer pricing unchanged at $375-$395/st FOB and $380-$390/st rail-DEL in California.
Pacific Northwest: Granular urea was reported at $310-$340/st DEL in the region, down significantly from WesternCanada:Granular urea was steady at $491-$516/mt DEL in the region, with dealer reference prices quoted in the $500-$525/mt DEL range, depending on location.
Pakistan: TCP closed its second urea tender June 12 with six offers. Only one, Transammonia, came in below the offers of the previous tender.
Following the successful route of Gavilon in the previous tender, companies kept their firm and optional offers at the same price.
Unfortunately for TCP, Trammo decided not to exercise its option for the 150,000 mt offered. Sources in Asia say the move is an indication by Transammonia that it sees prices heading up in the next couple of months.
Because of the Trammo move, TCP only took 50,000 mt in this tender. The Pakistan buying company issued another tender to close July 12 to make up the 150,000 mt.
All told, firm offers in the tender totaled 320,000 mt, with an additional 230,000 mt in options.
Results follow.
| Offering Company | Quantity (mt) | Origin | US$/mt CFR |
| Transammonia | 50,000 (Firm) | Open | 253.77 |
| 150,000 (O) | 253.77 | ||
| Transfert FZCO | 50,000 (Firm) | Iran-Middle East | 259.90 |
| 50,000 (O) | 259.90 | ||
| SABIC | 50,000 (Firm) | Saudi Arabia | 259.95 |
| 30,000 (O) | 259.95 | ||
| Swiss, Singapore | 50,000 | Middle East-China-CIS-Egypt | 268.50 |
| Liven Agrichem | 50,000 | China-Middle East | 279. 00 |
| Multicommerce | 50-70,000 | Open | 280.00 |
Going into this tender, the industry expected the price to be softer. The winning offer in the June 5 tender was $257.89/mt CFR. The lowest offer this time represents a $4/mt drop in price. In fact, the average price for the whole tender is lower than the previous one. The average price of the June 5 tender, with nine companies offering tons, was $264.90/mt CFR. This tender, with six offering firms, averaged out at $261.97/mt CFR.
Offered tonnage was also lower than the previous tender. The June 5 tender had 550,000 mt in firm offers and 270,000 mt in optional tons.
Had Trammo and TCP come to an agreement for the full 200,000 mt, this tender could have been the last from TCP – not only for this year, but possibly for some time. New production in Pakistan, at least according to local sources, may make the country self sufficient for next year’s demand.
The government had hoped that the June 5 and June 12 tenders would not be needed. Shortages in natural gas for domestic consumption, however, forced the national natural gas company to divert gas from urea production and other industrial sites for three months. The loss in urea production forced the tenders to ensure sufficient urea for the current application season.
Middle East: The TCP tender that closed June 12 showed a softer market and possibly the nadir of pricing. Traders and producers now see firmer prices on the horizon with the IPL/India tender that closes this week.
The estimated netback on the TCP order came to $233-$240/mt FOB. One trader noted that the most likely source of the Transammonia order is Oman.
Sources report that the steady flow of contracted tons is doing its part to keep the supply and demand situation in balance, but that supply is slowly gaining on demand.
Increased production in the area is not helping producers move the price. They point out that Latin American buyers are focusing on CIS material. At the same time, stagnant demand from Europe and the United States means that adding extra tons to each contracted shipment is out of the question. Demand from Europe is only now picking up, but appears to be focused on the Black Sea. The only bright spot, said one trader, is increased demand from Australia and New Zealand.
And the occasional India or Pakistan tender.
The next Indian tender could see producers continue to dig in their heels on pricing. In the last tender MMTC asked for a nearly $10/mt reduction in price. The producers met them halfway in a failed attempt to secure some business. The Indians declined the offer, and the producers refused to come down any further.
The reluctance of the producers to cut a deal at any price indicated to some traders that the market could indeed be on its way back up. Proof of what could be a stronger market will come when the IPL tender results are announced this week.
Sources say IPL will want to buy about 1 million mt. Arab Gulf producers have always held a shipping advantage that allows them some leeway in pricing. If IPL counters with reasonable bid – a couple of dollars off instead of $10 – sources say the producers might go for the deal.
India: The reaction to the TCP/Pakistan tender could mean higher prices when the IPL tender closes June 25.
Sources say the fact that Transammonia did not exercise its option to sell 150,000 additional tons to TCP meant the trading powerhouse sees the market firming in the coming months. One trader noted that IPL may have moved late last week to call its tender to get ahead of the price increase curve.
The call for a tender came as prices began to edge upward in Yuzhnyy and as sources say the Arab Gulf prices are ready for a rebound.
Industry observers also noted that the Indian buying houses have changed their practices.
In the past, buyer agents would talk to producers from the Arab Gulf to the Black Sea to secure pre-tender tons at an agreed-to price. The tender would then confirm the price and set a target for those not in the earlier talks.
This year, there have been no pre-tender talks of any substance. Sources report none of the producers in the Arab Gulf were contacted prior to the IPL tender call.
While that practice worked well to help stem the rising cost of urea in the previous two years, this year has been more of a buyers’ market. The Indian government changed its subsidy program and set a limit on what it would pay for urea subsidies. The action set a ceiling on what can be imported and supported by the government.
When IPL called its tender in April, the government placed a cap of $310/mt CFR on imports eligible to receive subsidies. The final purchase price was $305-$307/mt CFR.
The MMTC purchase of only 150,000 mt was significantly lower. But when MMTC tried to get even lower prices, traders and producers balked. Sources said the relatively small tonnage taken by MMTC, when more than a million tons were offered, ensured that another tender would be called soon thereafter.
Black Sea: Urea producers are beginning to feel the joy of a rising market.
June was expected to be a quiet month with little movement. Sources had said the July-August prices would begin to edge upward to come more in line with the Chinese FOB price.
It now appears as if the price increase got started a little early. Sources now report that the Black Sea market has moved into the $230s/mt FOB.
The increase comes as TCP/Pakistan is wrapping up its last buying of the year and as India still needs about a million tons. At the same time, European interest also seems to be picking up.
Latin American buyers, on the other hand, seem to remain satisfied buying only what they need when they need it. This hand-to-mouth style of purchasing has been going on for a while as buyers try to assess the market situation.
No one wanted to be caught with a long position of high-priced material in a declining market. Now that the price seems to be recovering, some sources are expecting to see a more aggressive posture from the Latin American buyers.
Even if Yuzhnyy suppliers do not get any of the Indian business, sources say these producers will be able to step in to fill some of the gaps left by those who do win in the tender.
China: Apparently the domestic market is not as strong as producers had hoped. Sources are ready and willing to move tons to the bonded warehouses beginning July 1, when the export duty drops to 7 percent.
The rising global market may make Chinese tons more attractive to buyers.
Besides the Indian and Pakistani tenders, Bangladesh is looking for several large orders. The combination of these three large-scale buyers taking tons at the same time could prove advantageous for the Chinese exporters.
The producers still have to move out tons that remain in the bonded warehouses from earlier this year. That material is significantly more expensive than what the current market will allow. Several sales in the past month indicated some producers and traders were willing to take a short term loss to help clear out the warehouses. The new material that will be available July 1 could be mixed with the older tons to average out the price and allow some profits in upcoming deals.
Southeast Asia: Despite its heavy lobbying of the Indonesian government, Kaltim has yet to receive permission to sell its excess urea.
Sources say the government is continuing to look at the domestic urea situation before allowing Kaltim and other state-owned producers to sell their product offshore.
The absence of the Indonesian producers on the international market is not seen as a major blow to the industry. Most of the Indonesian product is consumed regionally. Occasionally, some Indonesian tons are offered to India or Pakistan, but most of the cargoes are done in small allotments to nearby buyers.
The regional market may tighten a bit in the last quarter of the year. Sources report that PETRONAS will be taking down some of its production. One trader noted that by the time PETRONAS shuts down, the Indonesian producers may once again be allowed to sell.
NITROGEN SOLUTIONS
U.S. Gulf: Most players continue to call the market $170-$175/st FOB ($5.31-$5.47/unit). There appears to be more interest in summer fill numbers. Sources say that $170/st was shot down, and there were reports last week that $150/st FOB was as well. Although some had been hoping for last year’s $120/st FOB for summer fill, one source last week said that higher natural gas prices might push those expectations a little higher to the $130s/st FOB.
April UAN imports were up 105 percent, to 185,796 st from the year-ago 90,830 st. July-April imports are up 1 percent, to 1.46 million st from 1.44 million st.
Eastern Cornbelt: UAN was reported at $7.14-$7.70/unit FOB regional terminals. The low was reported at $200/st for UAN-28 FOB Cincinnati, Ohio, with the upper end pegged at $215.60/st ($7.70/unit) FOB E. Liverpool, Ohio. An Illinois source quoted the common dealer price for UAN-32 at $235/st ($7.34/unit) FOB terminals at mid-month.
Western Cornbelt: UAN-32 was pegged at $215-$235/st ($6.72-$7.34/unit) FOB regional terminals, depending on location. The low end was quoted out of spot river locations, with the upper end at inland terminals.
California: UAN was moving briskly last week on a variety of crops. Rail-delivered UAN-32 was quoted in the $240-$250/st ($7.50-$7.81/unit) range in California, with truck-delivered tons pegged at $260-$270/st ($8.13-$8.44/unit). On an FOB basis, the California market was reported in the $250-$260/st ($7.81-$8.13/unit) range.
Pacific Northwest: Sources tagged the UAN-32 market at $255-$265/st ($7.97-$8.28/unit) DEL in the region, down slightly from last report.
Western Canada: UAN-28 was unchanged at $294-$310/mt ($10.50-$11.07/unit) DEL, with the low in Manitoba and the upper end reported in Alberta and British Columbia. Dealer postings were pegged in the $304-$320/mt ($10.86-$11.43/unit) DEL range in the region.
AMMONIUM NITRATE
U.S. Gulf: Many continued to call the market quiet at $250-$260/st FOB. Some called the market dead, though one speculated that lower prices might spur some movement.
Ammonium nitrate imports were off 11 percent in April, to 33,358 st from the year-ago 37,378 st. July-April imports were off 27 percent, to 411,108 st from 559,395 st.
Western Cornbelt: Ammonium nitrate pricing remained at $305-$325/st FOB, and was in tight supply in the region.
California: No market was reported for ammonium nitrate in California. Sources talked of brisk CAN-17 movement in early June. The dealer market was unchanged at $255-$275/st FOB in the state.
Pacific Northwest: Ammonium nitrate was pegged at $334-$340/st rail-DEL in the region, down roughly $15-$25/st from last report. CAN-17 was quoted at $235-$245/st DEL in the region, also down from last report.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was steady at $240-$250/st FOB in the region.
Western Cornbelt: Ammonium nitrate pricing remained at $305-$325/st FOB, and was in tight supply in the region.
California: Granular ammonium sulfate was steady at $240-$250/st FOB in the region
Pacific Northwest: Granular ammonium sulfate pricing was unchanged at $240-$245/st DEL in the Pacific Northwest region.
Western Canada: Granular ammonium sulfate remained at $325-$330/mt DEL, with dealer postings in the $335-$340/mt DEL range in the region.
U.S. Imports: April imports were up 3 percent, to 47,907 st from the year-ago 46,618 st. July-April imports were up 14 percent, to 355,727 st from 312,283 st.
PHOSPHATES
Central Florida: The Central Florida phosphate market was as quiet as a church mouse last week – a dead one, that is. New, prompt sales were essentially nonexistent.
A trader who sells out of Central Florida commented that the spring season was over and no one was interested in ordering fill for fall because of the belief prices would come down. They may be right. While Florida remains around $400/st FOB, the NOLA DAP barge market, which should be about $10-$15/st FOB higher, was $10-$15/st FOB lower. Not only that, but transportation costs out of Central Florida are higher than the barge market.
The biggest unknown was the hurricane season, which started June 1. So far no tropical storms have made it onto the tracking chart, but that could change at any time. With the end of the El Nino effect, storms should be both more frequent and more severe.
The Central Florida DAP price range last week moved from $400-$410/st FOB down to $395-$410/st FOB. CF’s price was $395/st FOB; Mosaic was offering to sell at $410/st FOB, but would probably sell for less, said sources. PCS was making sales at “competitive prices.” Agrifos’ prices were unchanged at $440/st FOB for MAP and $430/st FOB for DAP, and railcars were about $5/st FOB less.
U.S. Gulf: In contrast to the Central Florida market, the NOLA DAP barge market not only showed signs of life, but growth as well – at least in terms of activity.
Early in the week prices had sagged, but apparently reached the point that made making buys for fall fill seem like something other than insanity. Numerous sources reported making both buys and sales. Vacation time was over, and people were going back to work.
At the same time, the December price of corn was beginning to make a recovery after a fall that began a couple of weeks ago. Corn and phosphate go together like carrots and peas, and both were up last week.
The cheapest barge found on a confirmed sale was done at $383/st FOB, and there was more than one at that price. Once the market began to see activity, prices started to rise. Later in the week, sellers were seeking as much as $395/st FOB for July DAP barges, although none were found at that price. In fact, a barge deal for August was completed at $387/st FOB, but was not included in the range due to the delayed loading date.
Mosaic sold “multiple” NOLA DAP barges on a prompt basis at $390/st FOB, which set the high for the week.
Warehouse prices were basically unchanged from the previous week. Terminals on the Arkansas River were out of phosphate, but a couple of barges were on the way. CF was asking $435/st FOB and $420/st FOB at Inola for July DAP, but was out of product last week.
Based on actual sales last week, the NOLA DAP barge range was both higher and lower than the previous week’s $385-$387/st FOB, to $383-$390/st FOB. If buyers have decided the price has hit bottom, both sales and prices could rise again this week.
Eastern Cornbelt: DAP was steady at $435-$450/st FOB regional warehouses, unchanged from last report, with the low reported in the Illinois market and the upper end FOB E. Liverpool and Maumee, Ohio. MAP was $10/st higher than DAP. 10-34-0 remained at $335-$355/st FOB in the region.
Western Cornbelt: DAP was unchanged at $435-$450/st FOB in the Western Cornbelt region, with MAP $10/st higher. 10-34-0 was steady at $325-$335/st FOB in the region.
California: Phosphoric acid was tagged at $8.45/unit DEL for both super phosphoric acid (SPA) and merchant grade acid (MGA) in California. Simplot was also referencing MGA at $8.65/unit FOB in the state.
DAP and MAP remained at $490-$495/st FOB or DEL in California. 16-20-0 was pegged at $324-$331/st FOB, and 10-34-0 was quoted at $370-$390/st FOB in the state.
Pacific Northwest: SPA and MGA were tagged at $8.35-$8.45/st DEL in the region. DAP and MAP were steady at $485-$490/st FOB or DEL in the region, with 16-20-0 quoted at $319-$325/st DEL. 10-34-0 was unchanged at $365-$385/st FOB in the region.
Western Canada: MAP was quoted at $582-$617/mt DEL, with the low in Manitoba and Saskatchewan and the upper end in Alberta and British Columbia. Dealer reference levels remained in the $590-$625/mt DEL range, depending on location.
10-34-0 was $470-$483/mt DEL in the region, with reference levels reported in the $485-$488/mt DEL range.
U.S. Export: Export phosphate deals never quite happened last week, and although the price range has not risen, sellers were holding out hope for a better tomorrow. The FOB prices for DAP and MAP could increase without any change in the delivered price because of more favorable rates for oceangoing vessels. However, buyers were also aware of the situation and were offering a bit less. Still, one seller declined a deal of $440/mt FOB, in the belief the price will rise.
Despite the lack of new activity, the export DAP price appeared to be stable in the $445-$450/mt FOB range.
The Fertilizer Institute (TFI) issued its monthly export phosphate report for May. India accounted for most of the deliveries and took 408,864 mt of DAP, out of the total of 536,473 mt for the month. The total was down 19.8 percent from the previous year during the same period. Pakistan received 42,438 mt and Japan accounted for 25,130 mt. After a big month in May, India regained the honor of being the number one customer for U.S. DAP and received 517,195 mt so far this calendar-year-to-date, which was about one-third of the total 1,522,870 mt of DAP exported during the first five months of the year. That represented a decline of 27.4 percent from the previous year. Mexico was the second most popular market at 163,330 mt, followed closely by Australia, which received 162,265 mt.
TFI said MAP deliveries in May were down 9.8 percent compared to a year ago, at 88,073 mt. Brazil was the biggest buyer at 33,665 mt, followed by Canada at 21,894 mt, and Colombia at 13,136 mt. For the calendar-year-to-date, Australia had received the most MAP at 221,294 mt, with Canada second at 148,962 mt and Argentina third at 83,366 mt. Total MAP exports so far this year amounted to 644,937 mt, down slightly by 0.4 percent.
POTASH
Eastern Cornbelt: Potash was pegged at $390-$400/st FOB regional warehouses, depending on grade and location, with the low again in Illinois and the upper end in Ohio. “I think you can buy for less through negotiations,” said one source.
Western Cornbelt: Potash was tagged at $390-$405/st FOB regional warehouses, depending on location.
California: Potash was steady 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. Sulfate of potash (SOP) pricing was quoted at $620-$650/st FOB for bulk tons.
Pacific Northwest: Potash was steady at $440-$450/st FOB regional warehouses, with delivered tons quoted at the $448-$455/st range, depending on grade and location.
Western Canada: Potash to Canadian customers FOB Saskatchewan mines was steady at $423-$431/mt FOB, depending on grade and supplier. Out of warehouse locations in the region, the market was quoted in the $438-$446/mt FOB range, depending on grade and location.
U.S. Imports: April imports were up a whopping 431 percent, to 1.17 million st from the year-ago 220,380 st. July-April imports were up 17 percent, to 7.37 million st from 6.32 million st.
SULFUR
Tampa: With refineries running at relatively high rates for the summer driving season, which was expected to improve this year, sulfur supplies were in balance with demand. According to the U.S. Department of Energy (DOE), refineries were running at 87.9 percent, which was down slightly from the previous week.
However, with the likelihood of a price decrease for the third quarter, spot sales slowed to a stop last week. World prices were in decline, and although that does not always affect the U.S. market, it probably will. No one was predicting how low prices will deteriorate before negotiations begin, but most seemed to agree it will be down. As the economy in the U.S. and the world was making a tepid comeback, the supply situation for sulfur should continue to improve.
No transportation issues were found last week, but hurricane season has already started and any storm that enters the Gulf of Mexico will affect deliveries to Tampa. Mosaic has already prepared for that contingency and stockpiled sulfur for the summer storm season.
Vancouver: Contract negotiations with China were still ongoing last week but may be narrowing in on a price of about $125/mt DEL, which would make the price at Vancouver around $90/mt FOB at current freight rates.
U.S. Imports: April imports were up 260 percent, to 151,042 st from the year-ago 42,000 st. July-April imports, however, are off 12 percent, to 1.173 million st from 1.33 million st.
MARKET NOTES
Brazil: Reports are circulating that Vale will soon consolidate all its fertilizer operations under the Fosfertil name. When asked, the company declined to comment. The consolidation move would make sense, said one Brazilian observer. Vale has fertilizer interests spread out among different parts of the company. Its mining operations in Brazil and Peru are under one branch of the large firm, while the processing facilities are under others. Additional moves to streamline the exploration, exploitation, and processing of fertilizer raw materials are expected in the near future.
India: Indian Farmers Fertiliser Cooperative (IFFCO) has announced plans to invest Rs 5bn in the next three years to modernize its DAP plant. The proposed revamp will enhance production of DAP/NP fertilizers to 2.5-3 million mt from the existing installed capacity of 1.92 million mt. Following its takeover of the Paradeep plant from Oswal Chemicals and Fertilisers in 2005 at Rs 20.8bn, IFFCO has spent Rs 15bn to revamp the unit and resume production. Since 2009, the unit has also started exporting phosphoric acid to its Kandla unit.