Market Watch

California: Anhydrous ammonia pricing remained at $520-$525/st truck-DEL in California, with aqua ammonia steady as well at $142/st FOB.

Pacific Northwest: The anhydrous ammonia market remained at $380-$410/st truck-DEL in the Pacific Northwest region for the last done business.

Western Canada: Anhydrous ammonia had reportedly dropped to $506-$550/mt DEL in Western Canada, down some $200/mt from last report, with the lower numbers in Manitoba and Saskatchewan and the upper end of the range reported in Alberta.

Black Sea: Sources report empty tanks in Yuzhnyy. A not surprising situation, said one trader, given that the Ukrainian plants are closed. The closures are because of continued uncertainty over the price of natural gas.

The upside is that the price now seems to be moving up. But it has not gone up enough to ensure it will surpass production costs.

Sources confirmed a deal late last week at $315/mt FOB. They add that $320/mt FOB is on the horizon. But even at $320/mt FOB, many of the producers will be hard pressed to justify starting up again.

Russia and Ukraine reached an agreement on the discount that will be granted to Ukraine on natural gas. The price the discount will be applied to, however, still needs to be settled.

Sources put the market at $310-$315/mt FOB as last week closed.

Middle East: Producers are now asking $305/mt FOB – and not getting it. Sales earlier this month and late last month at $305-$310/mt FOB are now being described as “one off” deals.

Downward pressure on the price has been coming as Indian buyers look to alternative sources of ammonia. Egyptian and Iranian sales into India have placed a ceiling on many deals, and are leading buyers into playing suppliers against each other for the spot ton deals.

Sources now say the best bet on the range is $295-$305/mt FOB.

UREA

U.S. Gulf: Urea prices in the Gulf river market were a little stronger last week, but not much. Granular urea prices for NOLA barges moved up slightly, from $252-$255/st to $255-$260/st FOB. Sources said efforts were being made to push the price even higher but the swaps price was holding steady, which was not a sign it would increase much.

Another brake on the price was the time of year, and minimal interest in using it for fill. The top price for prill was about $5/st FOB higher than granular last week. Some traders said they were waiting and watching the international market and the recent TCP tender, which drew only four bids – and higher prices.

Eastern Cornbelt: Granular urea remained in a broad range at $285-$310/st FOB, with the low quoted by Illinois sources out of spot river locations and the upper end reported in Ohio.

Western Cornbelt: Granular urea was unchanged at $285-$310/st FOB in the Western Cornbelt, with the low out of spot river terminals and the high at inland shipping points.

California: Rail-delivered urea had reportedly dropped to $360-$380/st in California. No current FOB prices were reported.

Pacific Northwest: Effective July 1, Agrium’s urea postings moved to $315-$325/st DEL in Montana and Wyoming, depending on location; $330/st FOB West Woodburn, Ore.; $335/st FOB Acequia and Pella, Idaho, and Washington terminals at Glade, Warden, and Wilson; $340/st DEL in Washington, Oregon, Idaho, and northern Nevada; $350/st DEL in northern and central Utah; and $355/st DEL in southern Utah.

Western Canada: Granular urea was pegged at $380-$405/mt DEL in Western Canada, down more than $100/mt from last report, with the high again reported in Alberta and the lower numbers in Manitoba and Saskatchewan.

Pakistan: Only four companies offered tons in the TCP 150,000 mt tender that closed July 5. Offers confirmed efforts by sellers to move the price up.

The offers in this tender show pricing ideas about $6/mt higher than those made by the same companies in the IPL/India tender, with the exception of Swiss Singapore. Sources say, however, the differences may be in shipping costs and currency fluctuations.

The bottom line, said one trader, is that the industry is sending a firm message that the market is moving up.

The offers were not enough to cover the request at prices TCP could accept. The buyer traditionally does not engage in negotiations with also-ran offers.

A new tender was called late last week for 100,000 mt to close July 22. The tally from the tender follows.

Sources say TCP approached Transammonia to get them to remove the Gwadar port requirement on its firm offer. Trammo refused. Helm got the award at $292/mt CFR.

Industry sources are not sure where Helm will get the tons to cover the award. Speculation about the source ranges from a long position out of Yuzhnyy to recent tons from China. A long-shot proposal is material from the Arab Gulf. But with producers arguing they are sold out, any AG cargo would have to have been contracted some time ago.

One trader ruled out Chinese tons as a possibility. He reports that Helm is in serious discussion with a Chinese producer. With freight from China at $24-$25/mt and Chinese urea running at $260-$265/mt FOB, there is the possibility of a profitable deal.

Another trader, however, threw cold water on the Chinese option. He said Pakistan has long-standing questions about the quality of Chinese urea. An attempt to sell Chinese urea to Pakistan last year led to problems for one trader. Quality control agents tested the urea bound for Pakistan at the loading port and ruled it did not meet the TCP standards. Since then, TCP has avoided Chinese product.

Sources say Iranian material is also out. Pakistan is honoring the U.S.-led economic sanctions against Iran. One trader added that religious differences also play a role in Pakistan accepting Iranian tons.

That leaves the Arab producers and the Black Sea. With the Arab Gulf sold out for July, that leaves them out. The terms of the tender indicate that shipment must be within 21 days of the award.

India: STC called a tender to close July 13 for an unspecified amount. The tender is needed to fill in the gaps left by IPL and MMTC in the previous two tenders.

Industry sources estimate that India needs to import about 500,000 mt each month during the application season. So far it is behind by at least 300,000 mt.

Sources expect to see offers just above the non-Iranian material prices offered in the IPL tender that closed earlier this month.

IPL took the bulk of the Iranian tons that will be available for the next couple of months, leaving STC to pick from China, Yuzhnyy, and other Middle East producers.

Chinese urea sales will be operating in a narrow window that opened July 1 and closes Aug. 31. Beginning Sept. 1 until Oct. 15, the export duty will jump back to 110 percent.

Sources report that a number of traders purchased Chinese tons prior to July 1 for loading during the lower-export duty season. Those tons are now heading to ports and being loaded. Some of those tons could easily be part of the STC tender results on Tuesday.

With prices edging upward, sources say the government cap of $310/mt CFR is playing a larger role in what might happen in the tender. The government will pay subsidies only up to $310/mt FOB. Any price above that must be covered by the importer or end user.

Even though some reports out of India now say the government may revisit the limit, many in the industry dismiss the idea that India will give up one of its major negotiating tools at a time when the market is still in flux.

Few traders last week were willing to say that offers into the STC tender will meet or exceed the $310/mt CFR limit.

Middle East: Iran was the big winner in the IPL/India tender. More than 300,000 mt were awarded to Iranian producers. IPL also came out ahead because the price it paid was significantly lower than what all the other offers provided. In the end, the netback was pegged at $243-$245/mt FOB out of Iran.

The deal, done through three trading houses, pretty much sells out Iran for the next couple of months. That means that lower-priced Iranian material will most likely not be a factor in the upcoming STC/India tender.

Arab producers are all claiming to be sold out. Traders say there is no more material for July available from Arab producers. While some traders are taking the claims of full order books with a grain of salt, they seem to be talking more about August tons than anything in the next 15-20 days.

Contracted tons are flowing out at a steady pace, and a number of spot tons have moved out to make everyone look busy. Even the IPL tender from last month showed only two producers willing to offer tons, and they both came in with only a total of 60,000 mt at that.

Sources report that Egypt sold tons at $264/mt FOB early last week or so. Producers in the Arab Gulf are also adamant that they will only talk with people offering $265/mt FOB and up.

Because of the Iranian tons sold to India and smaller deals around the area, Middle East prices are showing an unusually large spread of $246-$265/mt FOB.

Black Sea: The urea price keeps edging up. Some are saying the price is moving too fast to be sustained, while others claim the higher prices are speculation rather than hard deals.

Sources agree $255/mt FOB was done last week. Rumors of $260/mt FOB also circulated at the end of the week. Romania is quoting $260/mt FOB as its starting price.

One trader confirmed the $255/mt FOB deal, and added that the price has been moving so fast it could easily go past $260/mt FOB by Monday, July 12.

The fear of rapidly rising prices is often accompanied by a rapid drop in prices. Some traders have argued that step-by-step increases allow for a sustainable strong market. A jump-up in prices could quickly be cancelled out by a collapse in the market.

One thing that seems to be providing some sort of braking force on the Black Sea market is China. As long as China offers tons in the $260s/mt FOB to major markets such as India, sources say Black Sea producers will be shut out. Chinese sales enjoy better freight rates and timing options.

What the Black Sea, and Yuzhnyy in particular, has to offer is better loading time. Unfortunately for the Black Sea, freight rates seem to be on the rise. In the end, unless a trader nabbed a cargo or two while the price was still in the $230-$240/mt FOB range, sources do not expect to see tons from this area offered to India.

China: Prices are moving up, but not as fast as producers would like. The cost of producing urea keeps climbing at a rate faster than the price of the final product. Sources say producers are hoping the price can more quickly move to the $270/mt FOB level, but so far the price is hovering in the mid-$260s/mt FOB.

Chinese exports are no longer the cheap option for international buyers. The agreement to slowly revalue the renminbi means that the price of the fertilizer will go up without a corresponding positive value to the producers.

At the same time, the producers are under pressure from the government to limit price increases. Farmers are complaining about higher fertilizer prices at a time when they are not getting higher income from their crops.

Sources report that farmers are increasingly using middle men to move their crops to market. As expected, these middle men are bumping up the price of the food goods before they hit the public market. The combination of higher food costs and the revaluation of the RMB are causing a growing concern of inflation in the economy.

For now, the price keeps edging up.

Indonesia: Regional traders are still waiting for the Indonesian government to issue export permits to the urea producers.

NITROGEN SOLUTIONS

U.S.Gulf: Efforts to push up the price for nitrogen solutions were meeting with only limited success last week, trending along the same lines as urea. The price range changed only slightly, from $150-$160/st to $150-$165/st ($4.69-$5.16/unit) FOB. Buyers said they had little reason to go long at this time. A few said the long holiday weekend had slowed business and helped keep prices stable.

Eastern Cornbelt: UAN-32 was pegged at $205-$220/st ($6.41-$6.88/unit) FOB to dealers in the region, depending on location.

Western Cornbelt: UAN-32 remained at $200-$220/st ($6.25-$6.88/unit) FOB regional terminals to the dealer.

California: UAN-32 was tagged at $240-$245/st ($7.50-$7.66/unit) FOB Stockton, Calif., with rail-delivered tons in the $227-$240/st ($7.09-$7.50/unit) range in California. Sources continued to talk of truck-delivered product as high as $250-$260/st ($7.81-$8.13/unit). One source said there should be good movement of UAN on corn for silage well into August in his trade area.

Pacific Northwest: Sources tagged the UAN-32 market at $250-$260/st ($7.81-$8.13/unit) DEL in the region, down roughly $5/st from last report. Effective June 16, IRM’s postings for UAN-32 moved to $255/st ($7.97/unit) DEL in Eastern Oregon and Washington.

Western Canada: UAN-28 was quoted at $231-$247/mt ($8.25-8.82/unit) DEL, with the lower end in Manitoba and Saskatchewan and the higher numbers reported in Alberta and British Columbia.

AMMONIUM NITRATE

U.S. Gulf: Lack of demand was keeping ammonium nitrate prices in check last week, and that situation was not likely to change very soon. There was nothing to push the price downward, either, however, so the price range did not change.

Western Cornbelt: Ammonium nitrate pricing to the dealer remained at $305-$325/st FOB 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 for CAN-17 had reportedly dropped to $242/st FOB on the low end, with the high pegged at $255/st FOB.

Pacific Northwest: Ammonium nitrate was a nominal $334-$340/st rail-DEL in the region, and CAN-17 was steady at $235-$245/st DEL.

AMMONIUM SULFATE

Eastern Cornbelt: Granular ammonium sulfate remained at $170/st FOB or rail-DEL based on dealer pricing for summer fill tons, with mid-grade sulfate referenced at $155/st FOB or rail-DEL. One source put the low end of the DEL range for granular sulfate at the $161.50/st level after discounts.

Western Cornbelt: Granular ammonium sulfate was pegged at $170/st FOB or rail-DEL, with discounts bringing the low end of the delivered range to $162/st.

California: Ammonium sulfate was unchanged at $220-$247/st FOB, with the low for standard grade and the upper end for granular product in desert locations.

Pacific Northwest: Ammonium sulfate pricing was down from last report, with sources tagging the Pacific Northwest market at $220/st FOB and $225/st DEL. Effective July 2, IRM’s postings for granular and regular grade ammonium sulfate moved to $220/st FOB and $225/st DEL in Oregon, Washington, Idaho, and Montana. Agrium’s July 1 ammonium sulfate postings included $225/st DEL in Washington, Oregon, Idaho, Montana, Wyoming, Utah, and Nevada, and $220/st FOB warehouses in Washington, Oregon, Idaho, Utah, and Nevada.

Western Canada: Granular ammonium sulfate pricing slipped to $295-$300/mt DEL in Western Canada, down $30/mt from last report.

PHOSPHATES

Central Florida: Railcars were loaded at Central Florida last week, but only on a formula basis, and no new prompt sales were made, although a few deals for truckloads were done here and there.

Sources said CF Industries told its customers that it had no DAP available for sale and would not until September. Meanwhile, Mosaic had little available for prompt shipments due to volumes that need to be loaded for export. PCS Sales was receiving more inquiries for domestic buyers than in past weeks, although it, too, was busy filling existing orders.

The July Fourth holiday took a toll on transactions in many of the areas serviced from Central Florida, and more than a few in the industry took a few extra days off, which did little to stimulate business.

With a lack of prompt, new sales last week, the Central Florida DAP price range remained unchanged at $395-$400/st FOB. CF Industries’ price was $395/st FOB. However, Mosaic increased its asking price from $395/st to $400/st FOB. 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 less.

U.S. Gulf: With phosphate inventories low, some buyers were moving to grab up available supplies, and that was pushing up the market last week. The longer the week went on, the higher the price became.

Interestingly, many said they had seen no activity, while others said they were making far more sales than normal, especially for this time of year. At the same time, many extended their vacation time after the holiday weekend.

The greater interest in securing phosphate for the fall season began shortly after the USDA announced its revised estimate for the corn crop. The report said that fewer acres were planted, yields would be essentially unchanged, and inventories of corn were down. All of that meant farmers would – or should – do better financially than originally anticipated. Late last week the price of corn was closing in on $3.90/bushel, and that was encouraging news for both farmers and phosphate producers.

However, a couple of sources questioned the government’s estimate on yields, and said they should be higher than anticipated. If that turns out to be the case, those who commit to selling on the futures market earlier may prove to be the winners.

While prices for NOLA phosphate barges were heading upward, warehouse prices were holding firm in the $430-$450/st FOB range. That could change dramatically if the upward surge continues for NOLA barges.

Meanwhile, phosphate producers in the West – Simplot and Agrium – were making DAP available at prices low enough to keep the big companies from the East away.

NOLA DAP barges could be purchased and were as low as $408/st FOB, but began to rise, and offers to sell were being made at $410-$415/st FOB range later in the week. Based on actual sales last week, the NOLA DAP range was $408-$415/st FOB, compared to the previous week’s range of $405-$410/st FOB.

Eastern Cornbelt: DAP was unchanged at $435-$450/st FOB regional warehouses, with MAP $10/st higher. 10-34-0 remained at $335-$355/st FOB in the region.

Western Cornbelt: DAP was steady at $435-$445/st FOB, with MAP $10/st higher. 10-34-0 was pegged at $325-$350/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). Simplot was also referencing MGA at $8.65/unit FOB in the state. Effective July 1, Agrium’s phos acid postings moved up $40/st from June reference levels, to $845/st rail-DEL for both SPA and MGA in California and Arizona.

Effective July 1, Agrium’s MAP postings moved down to $480/st FOB and $485/st rail-DEL in California and Arizona.

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: DAP and MAP were quoted by Washington sources at the $475/st DEL level, down $10-$15/st from last report. 16-20-0 was steady at $319-$325/st DEL. 10-34-0 pricing to the dealer was down slightly at $360-$370/st FOB in the region.

Effective July 1, Agrium’s MAP postings moved to $465/st DEL in Montana and Wyoming; $470/st DEL in southern Idaho, Utah, Nevada, and Oregon’s Malheur County; and $470/st FOB and $475/st DEL in Washington, northern Idaho, and Oregon excluding Malheur County.

SPA and MGA were tagged at $8.45/unit rail-DEL in the region. Agrium on July 1 moved its phos acid postings up $40/st from early June reference levels, to $845/st rail-DEL for both SPA and MGA in Idaho, Montana, Nevada, Oregon, Utah, and Washington.

Western Canada: MAP pricing slipped to $570-$605/mt DEL in the region, with the low again in Manitoba and Saskatchewan and the upper end in Alberta and British Columbia.

No current prices were reported for 10-34-0 in the region last week.

U.S. Export: With PhosChem sitting on the sidelines with enough orders to keep them going for the next couple of months, no export phosphate sales were made last week. If prices start to rise, watch for PhosChem to find enough to get back to business.

However, both Argentina and Brazil were said to be at least kicking tires and may be in the market sometime soon. Ocean-going freight rates have been down in recent weeks, which could help to increase FOB prices when deliveries are actually made.

With no new sales last week, the export DAP price range was unchanged at $450-$460/mt FOB.

POTASH

Eastern Cornbelt: Potash was quoted at $390/st FOB regional warehouses and $400/st rail-DEL in the region, based on summer fill postings from Agrium and PCS Sales for the July 1 through Sept. 30 fill period. Agrium’s postings FOB Vade, Sask., moved to $345/st for standard and $350/st for red premium potash for that period, while PCS moved its Saskatchewan mine postings down to $345/st for standard, $350/st for granular, and $357/st for soluble and white granular. PCS said a $20/st increase is slated for Oct. 1.

Western Cornbelt: Potash pricing was unchanged at $390/st FOB and $400/st DEL based on summer fill postings from producers.

California: Potash pricing had slipped as well, with sources quoting delivered tons at the $420/st level in the Central Valley on the low end. 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 quoted at $620-$650/st FOB for bulk tons.

Pacific Northwest: Potash pricing had slipped in the Pacific Northwest, with sources quoting the dealer market at $410-$425/st DEL in the region, depending on grade and location.

Agrium’s red premium potash postings for the July 1 through Sept. 30 period include $405/st FOB and $415/st rail-DEL in southern Idaho, Utah, and Oregon’s Malheur County; $410/st FOB and $420/st rail-DEL in Washington, the Idaho Panhandle, and Oregon excluding Malheur County and the Willamette Valley; and $415/st FOB and $425/st rail-DEL in Oregon’s Willamette Valley.

Western Canada: Potash to Canadian customers FOB Saskatchewan mines had dropped to $405/mt FOB, with warehouse locations in Manitoba reportedly referencing dealer tons at the $420/mt FOB level.

SULFUR

Tampa: Negotiations for new third-quarter prices for molten sulfur delivered to Tampa finally got underway last week, although no progress was reported. A rumor held that one supplier had reached an agreement with a phosphate producer at $115/lt, but that could not be confirmed.

Meanwhile, supply and demand remained in balance as refineries were cranking out product at a rate of 86.7 percent of capacity, according to API. The summer driving season appears to be healthier this year than last, although the prolonged recession will still hurt. Still, any improvement was welcome.

A recent ruling by the Florida Supreme Court could have an impact on BP’s Deepwater Horizon spill in the Gulf. In a case involving the spill of highly acidic water that reached Tampa Bay in 2004, the court ruled fishermen do have the right to sue Mosaic Co. for losses they suffered due to the diminished supply of fish in the bay. Two lower courts had ruled in favor of Mosaic. Cases will surely be filed in the oil spill in the state, and that will not be favorable for the oil company.

Correction: A spot price for Tampa published in Green Markets for the past few weeks was withdrawn this week because sources now say it was not actually done for that market. Instead, it was made elsewhere on the Gulf Coast and adjusted to reflect a Tampa price.