AMMONIA
U.S. Gulf/Tampa: Yara concluded July business with its major customers last week at $355/mt DEL, down from the $370/mt DEL achieved in June. Sources noted that this reflects lower numbers in Yuzhnyy. Others predicted that Tampa prices have now likely hit bottom, speculating that they couldn’t go down much further.
Eastern Cornbelt: 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: Ammonia and UAN continued to move in sidedress applications on corn as weather conditions permitted. The anhydrous ammonia market remained at $380-$410/st FOB regional terminals for prompt tons.
Great Lakes: Ammonia was quoted in the $480-$490/st FOB range by Michigan dealers FOB Courtright, Ontario. Wisconsin sources reported $420 FOB river terminals on a spot basis.
Northern Plains: The anhydrous ammonia market was quoted at $390-$435/st FOB. Agrium’s price was $465/st DEL while Dakota Gas was $495/st DEL, with no fill program yet on either.
Black Sea: Sources report the new settled price in Tampa of $255/mt CFR translates back to $290-$295/mt FOB from Yuzhnyy. The softening of the ammonia price in the area provides no joy to producers. Many have already begun shut-down procedures because the price of selling ammonia is falling below the cost of making it. Some producers are taking traditional summer turnarounds with the hope that the market will rebound. Unfortunately, ammonia demand tends to ease off as winter approaches. At the same time, natural gas prices traditionally go up. This double whammy of higher prices for inputs and lower prices for output could once again force ammonia producers to shut down.
Middle East: Sabic took the FACT/India tender with a price of $341/mt CFR. The small quantity deal – 7,500 mt – closed June 22. Shipment is set for July 5-10 into the port of Cochin. Once freight is backed off, sources say the netback is about $300/mt FOB.
Producers would like to have seen a higher netback, but the large supply of material in the Gulf made pushing the delivered price higher unlikely. At the same time, said one trader, the port is difficult to deal with. Extra freight costs translate into a lower netback.
One comforting factor, said one source, is that the price is in the middle of the existing range. One trader noted the selling price in the area could be as low as $280/mt FOB and as high as $310/mt FOB. Other sources say, however, that a $290-$310/mt FOB range is more realistic.
UREA
U.S. Gulf: Granular barges continued to move up last week. Sources said barges began the week at $240-$245/st FOB and worked their way up to $250-$253/st FOB. New prompt was being quoted at $255/st FOB at the end of the week. However, some were doubtful higher numbers would be achieved, saying the prices were starting to meet buyer resistance.
A forward August barge was reportedly sold for $260/st FOB, with more being offered at $265-$270/st FOB. This had some observers puzzled, saying they believed prices had been topped out and it was too early to be buying that far down the road. Some suggested that players with long positions were working hard to keep prices up, while others argued that long positions were depleted a few weeks ago back when buyers were paying in the $220s/st FOB.
Reports continue that CF is readying urea and UAN for export in order to keep the market in balance.
Eastern Cornbelt: Illinois sources tagged granular urea pricing at $280-$290/st FOB out of river terminals.
Western Cornbelt: Granular urea was quoted at $280-$310/st FOB in the region.
Northeast: Granular urea pricing remained at $330-$335/st FOB regional terminals, with the upper end reflecting dealer list pricing FOB Philadelphia, Pa., and E. Liverpool, Ohio.
Great Lakes: The granular urea market was reported in the $330-$355/st range FOB regional terminals, with the low in Wisconsin and the upper end to the dealer FOB Michigan warehouses. Michigan contacts talked of tight urea inventories at many locations, with some touting dealer reference prices as high as $370/st FOB last week.
Northern Plains: Granular urea was picking up and tagged at $285/st FOB Carrington. Dakota sources pegged the marke at $295/st DEL, depending on location. Sioux City, Iowa, was said to be basically out of urea, with Minneapolis in the $285/ton range.
India: The IPL tender closed June 25, with producers aggressively moving to get prices higher. Offers from the Middle East came in the mid-$260s/mt FOB just as industry observers were confirming $250/mt FOB and hinting at $255/mt FOB.
Material from the CIS was coming in at $255-$265/mt FOB and from China in the $270s/mt FOB.
All in all, said one trader, it looks as if everyone is trying to get as much money in as little time as possible. One observer noted, however, “You can ask for anything in a tender. It is just the first move.”
Sources in Asia say IPL will most likely move quickly into talks with the offering companies to get the price down. The representative of one producer noted he would be surprised if IPL did not shave a few dollars off the offered prices. The trick, he said, is to not be too aggressive in asking for a price reduction. He noted that MMTC had asked for $10 off in last month’s tender. Counter offers between the offered and bid prices from the producers were rebuffed. And MMTC walked away with only 150,000 mt.
This time, sources say, IPL might go for a large reduction, but it could be more willing to accept a compromise price than was MMTC. The tender results follow on the next page.
Sources say IPL needs to buy. The Indian stockpiles are lower than optimum levels. Local politicians are already pressuring the government to make sure sufficient quantities of urea get into the pipeline for their constituents.
One trader, however, contends that the Indian reserves are still high enough to ensure the first half of the application season can be easily covered. He said IPL could walk away from the tender. Such a move could provide a major shock to the industry and drive down prices.
The downside to such a move would be the narrow timeframe a follow-up tender would have for the arrival of the urea. Ports that are already under pressure because of other commodities moving in and out, coupled with bad weather, could become overwhelmed if too many ships try to arrive at the same time.
Sources say the prices offered by Emmson and Rare Earth are most likely based on Iranian rials. The sanctions against Iran block use of U.S. dollars or Euros for deals with Iran.
IPL Urea Tender Closed June 25, 2010 |
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| Offering Company | Origin | Quantity (‘000 mt) | Loading Port | US$/mt | Lots | Discharge Port | ||
| Firm | S/O | FOB | CFR | |||||
| Swiss Singapore | Open | 75 | 245.00 | 255.45 | 2 or 3 | Kandla | ||
| 50 | 254.45 | Mundra | ||||||
| 25-50 | 245.00 | 255.45 | 2 or 3 | Kandla | ||||
| 254.45 | Mundra | |||||||
| PIC | Kuwait | 25-30 | Shuaiba | 264.00 | ||||
| Sitra | 265.00 | |||||||
| SABIC | Saudi Arabia | 30 | Jubail | 265.00 | ||||
| Toepfer | 20-50 | N. China | 265.00 | 279.84 | 1 or 2 | G’varam – K’Patnam – Pradeep | ||
| Bangladesh | 269.00 | |||||||
| Egypt | 268.00 | |||||||
| 20-55 | N China | 265.00 | 279.84 | 1 or 2 | ||||
| Bangladesh | 269.00 | |||||||
| Egypt | 268.00 | |||||||
| CIS | 256.80 | |||||||
| Gavilon | 55 | China – Middle East – Malaysia | 268.00 | 298.88 | K’Patnam | |||
| Egypt – FSU | ||||||||
| 55-100 | 1 or 2 | |||||||
| Ameropa | 50-60 | CIS | 246.23 | 282.23 | 1 or 2 | Mundra – K’Patnam | ||
| China – Open | 263.23 | |||||||
| 50-60 | Same as above | |||||||
| Transammonia | 50 | Oman | 275.00 | 285.5 | Kandla – Mundra | |||
| 50 | Yuzhnyy | 255.00 | 286.5 | K’Patnam | ||||
| China | 265.00 | |||||||
| 50 | OMAN | 283.00 | 293.5 | Kandla – Mundra | ||||
| 50 | Yuzhnyy | 263.00 | 294.5 | K’Patnam | ||||
| China | 274.00 | |||||||
| Quantum | 50 | N China | 270.00 | |||||
| Dreymore | 50-60 | Yuzhnyy | 255.00 | 289.47 | Mundra – K’Patnam | |||
| Iran | 260.00 | |||||||
| China | 265.00 | |||||||
| Adabiya | 260.00 | |||||||
| Helm | 50 | Iran | 263.00 | 279 | 1 or 2 | Kandla – Mundra | ||
| China | 259.00 | 286 | Vizag – K’Patnam – G’varam | |||||
| 100 | ||||||||
| KPK – Cyprus | Iran | 100 | 228 | 250 | ||||
| Emmson | Iran | 200 | Assulaiyeh | 893.25 | 935.5 | Mundra | ||
| Rare Earth | 25-30 | Assulaiyeh | 901.00 | 937.25 | Kandla – Mundra | |||
Bangladesh: BCIC closed two tenders for 100,000 mt
each of prilled and granular bagged urea. The buying arm
of the Bangladesh government closed the tender June 22.
BCIC will now take the figures back to the government for
approval to buy. The tallies of the tenders follow.
Prilled Urea Tender for BCIC |
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| Offering Company | Origin | Quantity (mt) | US$/mt FOB | Freight US$/mt | US$/mt CFR |
| Liven | China – Indonesia | 50,000 | 258.87 | 39.00 | 298.87 |
| China National Agricultural Means of Production Group | China | 25,000 | 256.50 | 42.00 | 299.00 |
| Bulk Trade | China – Middle East – Russia | 12,500 | 268.65 | 35.00 | 303.65 |
| Desh Trading | China – Middle East – Indonesia – Russia – Ukraine | 100,000 | 273.64 | 34.00 | 307.64 |
| Helm | China | 25,000 | 267.85 | 40.00 | 307.85 |
Granular Urea Tender for BCIC |
|||||
| Offering Company | Origin | Quantity (mt) | US$/mt FOB | Freight US$/mt | US$/mt CFR |
| Swiss Singapore | China | 25,000 | 283.00 | 25.00 | 308.00 |
| Bulk Trade | China – Turkey – Malaysia – Indonesia | 12,500 | 271.45 | 37.00 | 308.45 |
| Liven | China – Indonesia | 12,500 | 263.00 | 45.00 | 309.00 |
| China – Russia – Indonesia – Middle East – Ukraine | 100,000 | 276.44 | 36.00 | 312.44 | |
| Hubye Yahuw Trading | China | 25,000 | 275.00 | 42.00 | 317.50 |
| China National Agricultural Means of Production Group | China | 25,000 | 270.50 | 46.50 | 318.00 |
| Helm | China | 25,000 | 279.85 | 40.00 | 319.85 |
Sources say Bangladesh needs the material. And, sources add, the fact that more than twice the tonnage requested was offered could indicate that there is plenty of urea to be had. The problem, said one trader, is getting the material at a decent price.
Suppliers have always tacked on a premium for any potential sale to Bangladesh. Bureaucratic delays have often taken longer than the validity period of the tender. Observers have noted that in the past only a handful of the tenders closed by BCIC have ended up with actual purchases.
What appears clear to some observers is that the market is indeed moving up. Sales of Middle East material to other buyers have not yet moved into the $260s or $270s/mt FOB, as indicated in these tenders. But the IPL/India tender shows that the producers are anxious to get prices at those levels.
Similarly, the Ukrainian and Russian prices were nowhere near the FOB levels indicated earlier in the week, but offers into India, again, show aggressive moves by producers and traders.
One trader put off the higher prices to the extra paperwork and possibility that BCIC might not come through, which encourages sellers to tack on a few extra dollars to make sure that their costs are covered if an award is made.
In the end, said one trader, BCIC will most likely buy all 200,000 mt soon. He said the demand for material is too strong in the country.
Delays in the loading and discharging ports could mean that the urea might not reach the fields until the end of August. By then, sources say, whatever tons are in the warehouses will be long gone.
Middle East: Sources report $250/mt FOB was done. Until the IPL/India tender results were announced, producers were eyeing $260/mt FOB and would settle for $255/mt FOB.
One trader noted that the $250/mt FOB sale came just as traders and producers were putting the final touches on their offers for the IPL/India tender. The tender showed that producers were even more anxious to get the price up.
Sabic and PIC were aggressive with their $264/mt and $265/mt FOB offers. But the real aggressive price in the region came from Transammonia at $275/mt FOB for material from Oman.
Talks among IPL and the producers are expected to start immediately. Sources say an award could be issued as early as the Saturday after the tender closed, if producers and buyers are willing to compromise.
One trader noted that the failure of MMTC to accept a $5/mt drop in price from the producers when it wanted $10 off left it without the extra tons at a lower price than what is being offered now. Chances are, say sources, the producers will agree to lower prices – maybe even in the upper $250s/mt FOB.
One observer noted that the $250/mt FOB price from earlier in the week did not work in Asia or Europe. The most likely destination for the purchase then was Latin America, sources say. Buyers in that hemisphere have been quietly snapping up tons and edging the price up.
Producers say they are under no pressure to reduce their prices dramatically – and the offers into the IPL tender back up that view. Sources report most of the producers are sold out for July just as demand is picking up in Europe and Latin America.
Confirmed business at $250/mt FOB, along with a growing demand for material, has pushed the regional price range to $250-$255/mt FOB. The IPL tender shows that producers clearly want prices in the $260s/mt FOB. As Green Markets goes to press, no deal between the producers and IPL has been concluded. Sources say the best bet is to call the market at the end of the week at $250-$260/mt FOB.
Black Sea: Buyers from Europe and Latin America have begun to provide a ray of sunshine to urea producers in the area. And then there was the IPL/India tender. Prices are moving up.
While some sources at the end of last week called the market at $240/mt FOB, the IPL tender offers show everyone is looking at higher prices from the region. Offers ranged from $255-$265/mt FOB in the tender.
Just prior to the release of the IPL numbers, producers were willing to talk to buyers starting at $240/mt FOB. Now, the bar has been raised. Sources say $240/mt FOB was done just before the tender results were made public. The deal was reportedly done by Transammonia for top off tons.
Industry watchers will now be looking to see what happens in the post-tender negotiations. Sources expect to see some tough bargaining from IPL. Middle East producers only offered 60,000 mt. Sources say the Indians will need closer to 500,000 mt. Yuzhnyy and China will need to fill out the balance.
The goal of the Indian buyers is to stay under $310/mt CFR. The current offers from Yuzhnyy will just barely meet that goal. IPL is said to be anxious to make sure the deals come in below $300/mt CFR.
With higher freight rates on the horizon, the netback to Yuzhnyy area producers would have to come in the low $240s/mt FOB.
Industry observers had expected prices in July and August to pick up as summer demand for replenishment stocks strengthened. The high price of Chinese urea and the softness of the Black Sea market has made Yuzhnyy-loaded tons more acceptable to buyers.
Until a deal is struck with IPL, sources peg the Yuzhnyy market at $235-$240/mt FOB.
China: Sources say the price levels of Chinese urea – $245-$255/mt FOB – just before the IPL/India tender results came in made sales into India or Pakistan difficult.
Now it appears as if the entire urea market is moving up.
Offers out of China into India are now put at $265-$270/mt FOB. Sources say either special deals on freight will have to be found, or the price will have to come down, if any Chinese tons are to enter India under the $310/mt CFR target.
Sellers were hoping for a stronger international market that would make Chinese material competitive in the global market. Unfortunately for them, the international market is only now picking up steam. Observers note that the Arab Gulf producers still hold a strong advantage on sales into India and Pakistan.
If the price from the other major producing areas continues to rise, the Chinese material might be considered if it stays at its current levels. Unfortunately for the producers, sources say the mid-$240s/mt FOB is too close to the break-even point for many of the manufacturers.
Producers are anxious for the price to go up and for sales to be made.
And now adding grief to the producers’ efforts to export, sources say, is the latest plan to conditionally float the renminbi (RMB, or yuan), which could mean the export price will be even higher.
The RMB has been held even at 6.7 RMB to $1. Governments in the U.S. and Europe have been leaning on Beijing to revalue the yuan, or at least allow it to float.
An agreement with the U.S. early last week provides for a modified float of the RMB. Sources in Asia were not sure how it would affect the price of exported urea, but all agreed it would make it more expensive.
Pakistan: Once IPL makes awards from its tender, all eyes will turn to Pakistan for the TCP tender that closes July 12. Sources say if IPL takes at least 500,000 mt – as it is expected to do – TCP will have a hard time arguing for lower prices. If, however, IPL takes just a few “hold-over” tons and then calls another tender, the market may once again enter a state of flux and uncertainty.
NITROGEN SOLUTIONS
U.S. Gulf: NOLA prices are indicated at $165-$170/st FOB ($5.16-$5.31/unit). Most sources say the industry is waiting on the summer fill number, rather than anything prompt. In the meantime, there are reports that CF is doing all it can to assure there will not be a glut of domestic product around during fill season. Sources say the company is exporting as many as four cargoes to Mexico, Argentina, and Europe.
Eastern Cornbelt: UAN was reported at $7.14-$7.70/unit FOB regional terminals. The low was reported at $200/st ($7.14/unit) 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 dropped to $205-$215/st ($6.40-$6.70/unit) FOB regional terminals, depending on location. The low end was quoted out of spot river locations, with the upper end at inland terminals.
Northeast: UAN-30 was at the $195-$205 FOB ($6.50-$6.83/unit) level FOB Chesapeake to the dealer. A Delaware source said there was none in Seaford or Baltimore that he could pick up. Out of terminals in upstate New York, the UAN-32 market was pegged at $7.50/unit FOB to the dealer.
Great Lakes: The UAN market was pegged in a broad range in the region. In Michigan, UAN-28 was reported in the $230-$240/st ($8.21-$8.57/unit) FOB range to the dealer, while Wisconsin sources quoted UAN-32 at $200/st ($6.25/unit) FOB on the low end.
Northern Plains: The UAN-28 market was pegged at $192/st ($6.85/unit) FOB Minnesota terminals. North Dakota sources quoted delivered UAN-28 at $245/st ($8.75/unit) in late June.
AMMONIUM NITRATE
Western Cornbelt: Ammonium nitrate pricing remained at $305-$325/st FOB, and was in tight supply in the region as farmers were finishing up sidedressing.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was $240-$250/st FOB in the region.
Western Cornbelt: Granular ammonium sulfate was quoted as changing, but in a range of $230-$250/st FOB in the region.
Northeast: Granular ammonium sulfate remained in a broad range at $214-$240/st FOB.
Great Lakes: Granular ammonium sulfate was quoted at $238-$260/st FOB, with the low in Michigan. The upper end was reported by Wisconsin sources for FOB or rail-delivered tons from Honeywell.
Northern Plains: Sources said that granular ammonium sulfate was changing and that more should be known next week. Current pricing sounds like $230-$250/st but changing, and a source said that everyone was waiting for fill numbers by the end of the week. Ammonium sulfate out of Beulah was quoted at $250 DEL.
PHOSPHATES
Central Florida: Although the NOLA DAP barge market was a blue streak on the charts and export was showing new signs of life, the Central Florida DAP/MAP market was dormant. On the positive side, the traditional price difference to the river had returned. If business in the other markets continues to improve this week, Central Florida could arise from its slumber.
Most of the non-formula sales last week were for truckloads, but trucks were becoming harder to find. The truck shortage has been a problem for at least a month, and may continue.
The Central Florida DAP price range last week moved from $395-$410/st FOB down to $395-$400/st FOB. CF’s price was $395/st FOB, and Mosaic was offering at the same price. 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: During the previous reporting period, activity began to pick up as the week went along and jumped up to around $390/st FOB at the end of that period. Last week, the trend not only continued but also accelerated. More NOLA phosphate barges were traded last week than in the previous two months, and prices shot up.
The question was – why? No serious fill programs were offered, or were even in the short-term picture. A number of sources credited moves by major buyers to shore up their supplies before the fall season began, but it appeared smaller customers and retail-level dealers were staying out of the market and might for another few weeks, at least.
Dealers were telling their sellers that they had fears farmers might be reluctant to buy phosphate in the amounts needed if the retail price to the farmer was $500/st FOB or higher. The reason for the concern was the price of corn on the futures board. As of the middle of last week, the price for December 2010 corn was $3.65/bushel, which would net the farmer somewhere in the low $3/bushel range – very close to the point of barely making a profit. Dealers have not forgotten the lesson learned when the phosphate price rose to astronomically high levels, before the bubble burst and dropped to a fraction of what they had paid. They don’t want to get caught without a chair when the music stops – not again.
Warehouse prices remained essentially low in the market last week, mostly running from around $430/st FOB to $450/st FOB, which would make the margin fairly tight.
The prices reached last week may hold this week, but the level of activity will not, simply because there will not be enough to meet the same kind of demand. Mosaic, along with most others with barge capacity, was pulling back to evaluate its inventory level. However, Transammonia still had NOLA DAP barges available and was offering below the top of last week’s range, about $405/st FOB for prompt as of late last week.
Based on a large level of actual transactions last week, the NOLA DAP barge range was higher than the previous week’s $383-$390/st FOB to $390-$410/st FOB. The low prices were achieved during the beginning of the week and, no surprise – the high price was near the end.
Eastern Cornbelt: DAP was reportedly on the increase due to export demand at $438-$450/st FOB the terminals in the Illinois market. 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-$445/st FOB, with MAP $10/st higher. 10-34-0 was up at $335-$350/st FOB in the region. Agrium posted SPA and merchant grade acid at $785/st, effective July 1 in Iowa and Nebraska.
Northeast: MAP was quoted at $465-$472/st FOB regional warehouses to the dealer. A Pennsylvania source said he last saw a price of $472/st DEL trucked from North Carolina. DAP was $10/st less than MAP, where available, with the E. Liverpool market pegged at the $465/st level.
10-34-0 was referenced at $360/st FOB in upstate New York, with Pennsylvania sources saying they had been out of the market the past month.
GreatLakes: DAP pricing covered a broad range at $430-$480/st FOB regional warehouses, with the upper end out of Michigan warehouses and the low reported by southern Wisconsin sources out of spot river locations. MAP was $10/st higher than DAP.
The 10-34-0 market was pegged at $350-$360/st FOB regional shipping points.
Northern Plains: DAP was pegged at $425/st FOB the Twin Cities, with MAP $10/st higher. Dakota sources quoted the MAP market at $460/st in Sioux City, with delivered MAP in North Dakota tagged at the $480/st level to dealer locations. Agrium posted SPA and merchant grade acid at $785/st DEL, effective July 1 for Minnesota and the Dakotas, as well as in Wyoming.
The 10-34-0 market remained at $340-$345/st FOB Minnesota terminals, with delivered 10-34-0 quoted at $355-$360/st in North Dakota.
Southern Plains: Agrium posted SPA and merchant grade product at $785/st DEL, effective July 1 for Colorado, Kansas, New Mexico, Oklahoma, and Texas.
California and Pacific Northwest: Agrium has posted SPA and merchant grade acid at $845/st DEL, effective July 1.
U.S. Export: Sales on the export phosphate front showed new signs of life last week, not only for suppliers from the U.S., but the Middle East as well.
PhosChem moved several vessels to Brazil, both on a formula basis and for its own warehouses there, and also made a sale into Argentina. The sale of 25,000-30,000 mt into Argentina was done at $490/mt CFR, but the FOB price was still uncertain because freight rates were still being negotiated. The bright spot was ocean freight rates have been on the way down, especially in the Atlantic. KeyTrade was also said to have made a sale into Argentina at around the same price. Although the FOB prices were not available, it was relatively certain they would be the same or higher than the current export price range.
Tunisia made a sale of 200,000 mt into Turkey at $470/mt CFR, and sold another vessel into Pakistan.
The most promising markets for export were Brazil, which still needs more phosphate, and Argentina. India and Pakistan will also be seeking more supplies sometime in the near future.
Despite the lack of confirmed prices from sales last week, the export DAP price appeared to be at least stable in the $445-$450/mt FOB range.
POTASH
Eastern Cornbelt: Potash remained at $390-$400/st FOB regional warehouses, depending on grade and location, with the low again in Illinois and the upper end in Ohio.
Western Cornbelt: Potash was tagged at $390-$405/st FOB regional warehouses.
Northeast: The potash market was tagged at $400-$410/st FOB Pittsburgh. A source said that no one was taking potash in Delaware right now, which is nothing different than what has been occurring.
Great Lakes: Potash was pegged at $390/st FOB from Wisconsin.
SULFUR
Tampa: With sulfur prices in the Middle East falling to around $80/mt FOB, speculation that the Tampa molten sulfur market will follow suit during the third quarter continued last week. However, no one was very confident about how low it will go.
The current Tampa price was about $140/lt DEL, but a recent sale from a refiner on the Gulf Coast was done at $80/lt, which the seller said would translate into a price of around $115/lt FOB for Tampa. That would be a $25/lt decline from the second quarter. Negotiations for new prices won’t start for another week or three, so there was still time for the market to change direction.
With refineries running about 87.9 percent of capacity, supply has improved and customers are getting what they need. As the economy continues to improve, more fuel will be processed, and more sulfur will be put into the market. Sulfur still is a byproduct and will be made regardless of the market for the material.
Some time ago, forecasts held there would be an excess of supply by the fourth quarter of this year, and that appeared to be more likely than in the past.
Vancouver: Negotiations between sulfur interests in Vancouver and China were continuing last week, although there was no sign of a settlement.