AMMONIA
U.S. Gulf/Tampa: Price ideas for Tampa are moving up with international prices. Sources say that demand may finally bring some adjustment to the thinly-traded barge market.
U.S. ammonia imports were up 36 percent in June, according to the U.S. Department of Commerce (DOC), to 663,951 st from the year-ago 489,363 st. For the fertilizer year ending in June, imports were only up 1 percent, to 6.66 million st from the prior year’s 6.58 million st.
Eastern Cornbelt: Higher fertilizer prices accompanied the high heat in the region last week. Buoyed by firming grain prices, projections for large wheat and corn crops, tight fertilizer inventories, and an empty distribution chain, the tone was bullish, bullish, bullish. Some sources were drawing parallels to the 2008 pricing run-up – and urging caution as a result. “We’ve been down this road before and it didn’t have a good ending,” said one contact. “We have to be careful, but today it’s certainly a rosy picture.”
Sources quoted the ammonia market at a firm $555-$560/st FOB regional terminals, with the low confirmed in the Illinois market for new sales last week. For the Aug. 10-13 order and shipping period, one regional supplier was listed at a solid $560/st FOB Illinois and Indiana terminals, which reflected a $15-$30/st increase from the company’s Aug. 6 ammonia postings in the region. “You’ll probably see a $600 market in Illinois soon,” predicted one source.
Western Cornbelt: The ammonia market was tagged at $530-$560/st FOB regional terminals, with the low end quoted in the Nebraska market. An Iowa source quoted spot ammonia in his trade area at the $540/st FOB level, but acknowledged the postings from some suppliers were at higher levels.
For the Aug. 10-13 order and shipping period, one regional supplier moved its ammonia postings up to $560/st FOB Palmyra, Mo., Minnesota terminals at Glenwood and Pine Bend, and North Dakota terminals at Grand Forks and Velva; $575/st FOB Spencer, Iowa; and $580/st FOB Garner, Iowa, and Nebraska terminals at Aurora and Fremont. Those levels reflected a $15-$60/st increase from the company’s Aug. 6 ammonia postings, depending on location.
Effective Aug. 11, Agrium’s anhydrous ammonia postings in the Leal, Velva, Grand Forks, and Beulah sales area in North Dakota moved up to $530/st FOB and $550/st DEL.
Southern Plains: Sources said ammonia was moving well on preplant wheat in early August. “It’s not flat out, but it is fairly active,” said one contact. The market had firmed considerably from last report. By midweek, most were quoting ammonia firmly at the $515/st mark out of regional production points, where available. “It’s a daily number,” noted one source, who said pricing early in the week was still at the $485-$490/st FOB level out of some locations.
Agrium’s Aug. 2 anhydrous ammonia postings included $470/st FOB Borger, Texas, $510/st FOB Mocane, Okla., $515/st FOB Conway, Kan., and $520/st FOB Clay Center, Kan.
Agrium reported in early August (GM Aug. 9, p. 13) that its Borger plant had gone down unexpectedly due to a structural failure on the west side of the cooling tower. The company said a portable tower would be in place in about two weeks and would allow the facility to return to production. Borger capacity is about 540,000 st/y of anhydrous ammonia and 109,000 st/y of urea, according to the International Fertilizer Development Center (IFDC). The company said the biggest impact would be on ammonia.
South Central: Sources said ammonia pricing FOB Memphis, Tenn., had firmed to at least $475/st FOB last week, up $10/st from the previous week. At Henderson, Ky., the market had moved up more dramatically, with some suppliers now offering a firm $540/st FOB for prompt tons and $550/st FOB for prepay.
Pacific Northwest: Effective Aug. 11, Agrium’s anhydrous ammonia postings moved up to $530/st rail-DEL in Washington, Oregon, and northern Idaho; $550/st truck-DEL in Washington and Oregon east of the Cascades, and in northern Idaho; $555/st rail-DEL in southern Idaho and Utah; and $580/st truck-DEL in Montana and northern Wyoming from the company’s Carseland, Alberta, plant.
Black Sea: Sources report that the dearth of ammonia in the area means the price is getting higher. It does not mean, said one Asian trader, that there is a lot of material available.
Ukrainian producers remain wary. Even at the levels people were talking about last week – unconfirmed deals as high as $390/mt FOB – the producers know that as soon as they restart their plants, the laws of supply and demand will push the price back down. Producers need the price to get into the $380s-$390s/mt FOB and stay there. New prices for natural gas are expected to push the breakeven price for production significantly higher than the $320/mt FOB that dominated the early part of this year.
The current prices under discussion will allow producers to make a profit, but only if the prices stay there. Few say that will happen if all the producers fire up their facilities at the same time.
UREA
U.S. Gulf: Granular urea barge prices continued to spike last week, even though some argued that vessels are on the way this fall. Many fear those vessels will not get to NOLA in time for the river close this fall, and others say they certainly will not get there in time for near-term wheat country demand. Citing fast-paced inland ammonia prices, sources said that urea prices are moving up as well, as higher ammonia prices are making urea look more attractive for those needing product for near-term application.
Granular barges were reported to have started the week in the low $290s and quickly moved to $300/st FOB and beyond. By the end of the week, new trades were called $305-$307/st FOB. Prills were called $290-$295/st FOB.
Sources said prices are getting to the point that they may start to attract more imports. However, as international prices also increase, that possibility diminishes.
June urea imports were off 13 percent, to 220,351 st from the year-ago 253,477 st. However, for the fertilizer year ending in June, imports were up 7 percent, to 6.18 million st from the prior year 5.75 million st.
Eastern Cornbelt: Granular urea pricing had reportedly firmed to $345-$355/st FOB regional terminals, up significantly from the previous week. Although there was little new business to test those numbers, sources confirmed new business at the low end of the range in the Illinois and Wisconsin market at midweek. Agrium on Aug. 13 moved its reference price for urea to $370/st rail-DEL in Wisconsin.
Western Cornbelt: Most sources tagged the granular urea market at $345-$355/st FOB in the region, up some $30/st from the previous week, although there was not a lot of buying activity to test the market. Effective Aug. 13, Agrium’s urea postings firmed to $365/st FOB Marion, S.D., and North Dakota terminals at Alton, Carrington, Colfax, Scranton, and Grand Forks, and $370/st rail-DEL in Minnesota and the Dakotas. Those levels were up $20/st from Agrium’s July 23 list prices.
Southern Plains: Urea pricing was on the move in the region. Effective Aug. 4, Koch’s urea posting FOB Enid, Okla., firmed to $315/st. On Aug. 7, that posting firmed again to $320/st FOB. By midweek, sources said $325/st FOB was common, and Koch officially moved to that level at Enid on Aug. 13. Some suppliers were reportedly contemplating an additional move to $335/st FOB by the end of the week, while a few others continued to lag at the $315/st FOB level. “Two-thirds of the market is at $325, and the remaining third is still at $315,” said one source at midweek.
South Central: Sources pegged the South Central urea market in the $315-$325/st range FOB regional terminals, with the low in Arkansas on spot basis.
Southeast: Granular urea pricing had reportedly firmed to $320-$330/st FOB, with the upper end reflecting list pricing to the dealer FOB Wilmington, N.C., and Norfolk, Va.
Western U.S.: Agrium’s urea postings firmed on Aug. 13 to $365-$375/st DEL in Montana and Wyoming, depending on location; $380/st FOB West Woodburn, Ore.; $385/st FOB Washington warehouses at Glade, Warden, and Wilson, and Idaho warehouse locations at Pella and Acequia; $390/st DEL in Washington, Oregon, Idaho, and northern Nevada; $400/st DEL in northern and central Utah; and $405/st DEL in southern Utah.
Black Sea: While the India/IPL tender has become a main topic of discussion for the urea market, most eyes are fixed on the Black Sea. Reports circulated widely last week that Fedcominvest was back in the market looking for large quantities. Add to those reports the rumor that Fedcom and IPL have been holding pre-tender talks, and the speculation is that Fedcom is working to nail down a major tender award.
And Fedcom is not the only house looking for a lot of urea.
Helm and Transammonia are also said to be talking to producers from China to the Baltics looking for tons.
Sources report producers in the area are now quoting $275/mt FOB. No one could point to any business at that level.
Industry watchers did note that as last week opened, bids in the $250s/mt FOB were being rejected. The producers seem to be trying to skip right past the $260s and move strongly into the $270s. The problem with this strategy, said one trader, is the top price India is willing to pay. Freight for 35-45,000 mt vessels from Yuzhnyy to the west coast of India is pegged at $35-$40/mt. Material sold at $275/mt FOB would arrive into India at or just above the Indian limit. And that price is before adding costs for handling and profit for the trader and importer.
Holding the price in the $260s/mt FOB would allow for the companies handling the urea to make a few dollars in the deal.
With the math in mind for doing a deal into India and with a growing demand for large quantities, sources peg the market at $255-$265/mt FOB.
And that could all change as soon as the IPL results are announced Tuesday.
India: An IPL tender closes Tuesday, Aug. 17. Sources expect to see large quantities offered and purchased. Reportedly, IPL has already had talks with trading houses looking to secure reasonable pre-tender prices and tonnage.
One trader noted that IPL added a new wrinkle to the tender requirements. In the past, Indian companies asked for FOB and CFR prices. Companies that offered only one of the two versions were not disqualified. This time, however, offers must include not only the FOB price, but also the freight rate used to calculate the delivered price.
One trader called the move shrewd, and one to show that the Indians were taking steps to ensure they get the best deal possible instead of leaving it up to trusting that a seller is offering the best possible price for the material and transportation.
Rumors are circulating that if IPL awards in this tender, it could purchase the most material in the series of tenders held so far this year. One trader speculated that as many as 1 million mt could be purchased.
While the initial offers will be made public Tuesday afternoon, Delhi time, final awards may not be revealed until Aug. 22. IPL was also firm in its tender documents that only offers with a 5-day validity period would be accepted.
Sources figure that IPL will use as much of the validity period as it can to talk down the price of the offers.
The company could face a rough situation. The Indian government will only pay subsidies on urea imported at $310/mt CFR or below. The difference of anything more expensive than that amount will have to be absorbed by the importer.
Prices in Yuzhnyy are pegged in the $260s/mt FOB, which could allow tons from the Black Sea to enter below the target price.
Prices in China, however, are significantly higher – as are the freight rates.
Still, say some sources, there are some bargains to be had in China and in vessel costs.
If selling from China to India was a lost cause, said one trader, we would not see some of the major international and regional trading firms trying to secure as many Chinese tons as possible.
The rush to buy Chinese product is two-fold: one, the traders want tons to offer in the IPL tender; and two, they want tons either already in or on their way to bonded warehouses. After Sept. 15, the export duty jumps to 110 percent through Oct. 15.
The IPL tender also specifies delivery must be completed by Oct. 15. Any Chinese tons under consideration will have to be loaded on a vessel before Sept. 15. Alternatively, the tons could be placed in a bonded warehouse with a nominated vessel and sales contract in hand to allow for the tons to ship with the lower duty.
And even with all the discussion of how many tons IPL might buy and from whom, there are also some who say that if the prices are not to IPL’s liking, they will scrap the tender.
Eventually IPL or another Indian buyer will have to start making some more purchases, say sources. The idea behind the call and scrap move is to beat the market down at a time when things are heating up.
One trader said earlier that the psychological hit of losing a major buyer could force inventories to build up, resulting in a temporary price drop.
Most in the industry, however, say IPL will buy – and that they will buy a significant quantity.
Middle East: Egypt seems to keep pushing its advantage. Earlier this month, tons from Egypt were sold in the low-$290s/mt FOB. Now, sources say $300/mt FOB is the starting price for talks.
And the Arab Gulf producers seem more than happy to follow suit.
Most of the Arab Gulf producers report full books, with only the occasional cargo available, “at the right price.” For the producers, the “right price” is in the low $300s/mt FOB.
Asian sources point out that almost anything from the Arab Gulf at $300/mt FOB or above will not fit into the Indian buying plan – unless someone can find a vessel for $10/mt or less.
Granular remains strong, with prills lagging. Sources put the granular market at $280-$300/mt FOB, and prills at $270-$280/mt FOB.
Activity in the area is expected to slow down now that the holy month of Ramadan has started. No one expects to see work at the factories or ports actually stop. Traditionally, however, the workforce takes it easier during the day as they observe the days of fasting.
China: Domestic demand is strengthening to a level that producers do not feel any pressure to lower prices to ensure an offshore sale. Prices for granular are in the mid- to upper-$280s/mt FOB. Prills are being offered in the upper $260s/mt FOB.
International buyers looking for export tons have to compete against aggressive domestic buyers looking to make sure their local customers do not go wanting.
The export duty on Chinese urea goes up to 110 percent Sept. 16. It comes back down to 7 percent Oct. 16.
Sri Lanka: Asian sources say the agriculture ministry will most likely scrap the urea tender that closed Aug. 6. The tender was for 24,000 mt.
In general, the Sri Lankan tenders are rarely market movers. Rather, many in the industry look to the tenders as an indicator of the mood of the market.
The readings from the Aug. 6 tender indicated aggressive pricing by sellers. It is this aggressiveness that sources say may have the ministry scrap the tender.
Still, said one Asian trader, the Valencay offer of $286.18/mt FOB from three possible sources was not that far off the way the market was looking for two of the sources.
Chinese granular is pegged in the mid-$280s/mt FOB, and the Arab Gulf is now quoting $300/mt FOB for its granular.
Results of the urea tender follow.
Ministry of Agriculture Sri Lanka Urea Tender – August 6, 2010 |
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| Company | Quantity | FOB | US$/MT CFR 180 days | US$/MT CFR 270 days | Origin |
| Valencay | 2 x 12,000 | 286.18 | 318.18 | 323.08 | China – CIS – Middle East |
| Midgulf | 24,000 | – | 327.00 | – | Middle East – China – Ukraine |
| Transammonia | 24,000 | – | 334.00 | – | China – CIS – Egypt |
| Swiss Singapore | 12,000 | – | 335.00 | China – CIS – Egypt | |
| 12,000 | – | 337.80 | – | Indonesia | |
| Ameropa | 12,000 | – | 338.23 | – | China – Saudi Arabia |
| 12,000 | – | 340.23 | – | Indonesia | |
| ETA | 24,000 | – | 346.27 | 350.47 | China – UAE |
| – | *376.17 | 380.55 | *Delivered to buyer | ||
| Incitec | 24,000 | – | 360.00 | – | China |
Pakistan: Local reports say the country is in the midst of the worst flooding in its history. So far, 13.8 million people were affected, with 1,600 people dead as a result of the floods. Further huge losses are feared. While it is too early to assess the actual damage to the economy, industry sources believe that the fertilizer sector will be negatively affected by the flooding at least for the second half.
There is little word about the impact of the floods on urea production. The pictures and media reports tell of destroyed crops and fields. One Asian trader said that until the flood waters recede, Pakistan will most likely hold on to the material it has in warehouses. The trader added that once the fields are again exposed, many may need additional fertilizer applications to reinvigorate the soil.
Pakistan was on track to be urea self-sufficient by the end of the year. The tenders TCP called during the second quarter were due to reduced domestic production because of a government-ordered diversion of natural gas.
The domestic industry has been dealt another blow by the government’s plan to continue to curtail gas deliveries. The industry has asked the Ministry of Petroleum to immediately allow the import of LNG to augment the country’s domestic gas reserves, as global prices of LNG have declined.
A state gas utility – Sui Southern Gas Co. Ltd. (SSGC) – is facilitating the import of LNG by the private sector into Pakistan to overcome the growing gas demand-supply gap. Accordingly, SSGC has embarked upon an LNG import project called the “Pakistan Mashal LNG Project,” which is aimed at importing 3.5 million mt/y – or the equivalent of about 500 mmcfd gas – for late 2011/early 2012.
On a positive note, Pakistan’s private sector urea manufacturer – Engro Fertilizer – said its urea expansion is going as scheduled, with the plant expected to come online by the fourth quarter of 2010. It is being set up at an estimated cost of US$1.05 billion to produce 1.3 million mt/y of urea.
Indonesia: Sources report that Indonesian producers are looking at holding off on another set of selling tenders – at least until the results of the IPL/Indian tender are known.
An Asian trader said that if the IPL tender shows a marked increase in prices, the Indonesians may move quickly to sell to take advantage of the stronger market.
Reportedly, Pusri and Kaltim are still in the process of shipping out the 120,000 mt they sold last month. No one is too concerned about what seems to be a delay in clearing out the export inventory.
Earlier speculation suggested the two companies would hold another set of selling tenders the last half of this month. It now looks as if the tenders will wait until September.
No new reports are expected until the end of the Ramadan celebrations.
Nepal: A tender for 25,000 mt will close Aug. 16. The tender is for two shipments to the warehouses at the northeast Indian port of Haldia. The first shipment will be expected 60 days after the opening of the letter of credit, with the second shipment 90 days after the opening.
The decision to allow shipment to Haldia is a change for Nepal. In the past, tenders have called for offers based on delivery to warehouses in Nepal itself. The new requirements, said one trader, might entice more offers.
Funding for the tender is expected to come from international development aid programs.
Bangladesh: Asian sources say the June 22 tender will most likely be scrapped. That tender, which has still not been awarded, was for 70,000 mt to fill out demand not covered in a previous tender. A new tender for 100,000 mt each of prilled and granular urea is expected to close Sept. 22.
NITROGEN SOLUTIONS
U.S. Gulf: Players called the barge market $205-$210/st FOB. Product continued to be reported in short supply. That said, imports for June were up 89 percent, to 113,237 st from the year-ago 59,939 st. Imports for the fertilizer year ending in June were up 6 percent, to 1.7 million st from the prior year 1.6 million st.
Eastern Cornbelt: The UAN-32 market was quoted at$250-$260/st ($7.81-$8.13/unit) FOB in the region, with the low end confirmed in the Illinois market for limited tons. Several suppliers had pulled terminal pricing altogether. One regional supplier on Aug. 7 issued a new price list showing UAN unavailable at terminals in Illinois, Indiana, Ohio, Kentucky, and Minnesota.
Western Cornbelt: UAN-32 pricing continued to ratchet up in the region, with sources quoting a $245-$260/st ($7.66-$8.13/unit) FOB terminal range last week for limited tons, and the low reported in Nebraska. One supplier was offering limited tons earlier in the week at $250/st ($7.81/unit) FOB to the dealer, but was not pricing as the week advanced. Another source quoted rail-delivered UAN at the $265/st ($8.28/unit) level in the Midwest last week.
On Aug. 7, Koch’s UAN postings FOB Beatrice, Neb., moved to $214.38/st ($7.66/unit) for UAN-28 and $245/st ($7.66/unit) for UAN-32.
Southern Plains: Sources quoted the UAN-32 market in the $230-$250/st ($7.19-$7.81/unit) range FOB regional terminals last week, with most production points reportedly at the $235/st ($7.34/unit) FOB level by midweek.
Effective Aug. 6, Koch’s UAN postings FOB Dodge City, Kan., firmed to $210/st ($7.50/unit) for UAN-28 and $240/st ($7.50/unit) for UAN-32. On Aug. 10, those list prices firmed again, to $218.75/st ($7.81/unit) for UAN-28 and $250/st ($7.81/unit) for UAN-32. On Aug. 7, Koch’s postings FOB Enid moved up to $201.25/st ($7.19/unit) for UAN-28 and $230/st ($7.19/unit) for UAN-32.
South Central: UAN-32 was quoted at $225-$230 ($7.03-$7.19/unit) FOB Memphis, with the upper end of the terminal range pegged at the $245/st ($7.66/unit) FOB level on a spot basis.
Southeast: Sources said terminal values for UAN were not yet reflecting higher replacement costs in the region. The UAN-30 market was quoted at $200-$202/st ($6.67-$6.73/unit) port terminals, while UAN-32 out of inland terminals in Georgia was quoted in the $205-$210/st ($6.41-$6.56/unit) FOB range. “We are expecting to see a firming up in our market area as on-hand inventory begins to be replaced,” said one source. UAN-32 vessel tons were said to be as high as $250/mt CFR for new business.
Western U.S.: Agrium’s UAN-32 postings took another increase on Aug. 13, moving up $15/st from the company’s Aug. 2 reference prices. As a result, new postings from the company include $290/st ($9.06/unit) rail-DEL in Washington, Oregon excluding Malheur County, and northern Idaho; $295/st ($9.22/unit) rail-DEL and $300/st ($9.38/unit) truck-DEL in southern Idaho, Oregon’s Malheur County, and Nevada; and $300/st ($9.38/unit) DEL in Montana and northern Wyoming. Agrium’s UAN-28 posting also moved on Aug. 13 to $263/st ($9.39/unit) DEL in Montana and northern Wyoming.
In California, Agrium’s UAN-32 postings also moved up $15/st on Aug. 13, to $283/st ($8.84/unit) FOB Sacramento, $305/st ($9.53/unit) truck-DEL in Central California, and $310/st ($9.69/unit) truck-DEL in Northern California.
AMMONIUM NITRATE
U.S. Gulf: The barge market itself remains untested; however, sources do report that more movement is seen for smaller lots.
June imports were up 9 percent, to 32,833 st from the year-ago 30,203 st. Imports for the fertilizer year ending in June were off 21 percent, at 499,276 st from the year-ago 629,833 st.
Western Cornbelt: Ammonium nitrate remained at $290-$300/st FOB in the region.
Southern Plains: The ammonium nitrate market was tagged at $290-$295/st FOB Catoosa, Okla.
South Central: Ammonium nitrate was pegged at $280-$290/st FOB regional terminals to the dealer, with the low at Memphis and the upper end in the Arkansas market.
Southeast: Ammonium nitrate remained at $315-$325/st FOB in the region.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was tagged at $180-$190/st FOB in the region. One producer was referenced at $185/st rail-DEL in the Midwest in early August.
Western Cornbelt: Granular ammonium sulfate was steady at $180-$190/st FOB, with the upper end quoted in the Iowa market to the dealer.
Southern Plains: Granular ammonium sulfate pricing remained at $175-$215/st FOB Texas shipping points, with the low at Freeport and the upper end FOB Littlefield or Plainview, depending on supplier.
American Plant Food Corp. announced new ammonium sulfate postings in Texas, effective Aug. 18. Granular postings will firm on that date to $195/st FOB Freeport, $205/st FOB Galena Park, $220/st FOB Fort Worth, and $235/st FOB Littlefield. Coarse grade postings will move on Aug. 18 to $185/st FOB Freeport, $195/st FOB Galena Park, $210/st FOB Fort Worth, and $225/st FOB Littlefield, while standard will firm to $180/st FOB Freeport and $220/st FOB Littlefield. APF’s N-Pac Compacted posting FOB Galena Park will move up to $210/st FOB.
South Central: Granular ammonium sulfate was quoted in a broad range at $210-$235/st FOB terminals in the region. APF reported that its granular ammonium sulfate posting FOB Mermentau, La., will firm on Aug. 18 to $225/st.
Southeast: Granular ammonium sulfate fill tons were quoted at $175-$185/st DEL in the region, with the upper end in Florida. DSM Chemicals was referencing standard grade ammonium sulfate at the $160/st DEL level in Florida. One source quoted granular ammonium sulfate at the $160-$165/st level FOB Hopewell, Va.
U.S.Imports: For the fertilizer year ending in June, imports were up 13%, to 399,209 st from the prior-year 351,797 st.
PHOSPHATES
Central Florida: The drought in Pennsylvania and Maryland was taking a toll on crops, and that could affect fertilizer sales in those states. Most of that area is served by rail from Florida. A source said the drought was having “a devastating effect” on the corn crop, and farmers were already filing for drought insurance payments.
Sales of prompt phosphate were relatively low last week, because producers had nothing left to move and would not until October. Still, they were able to supply those who had contracts. The inventory shortage was also putting a damper on new export deals.
Inventory could continue to be a problem for some time into the future. Mosaic has said it will shut down operations at South Fort Meade if it was not successful in overcoming a suit filed by environmentalists over its plan to expand its mine more than 10,000 acres. A federal judge in Jacksonville approved the appeal of the approval for the permit issued by the Army Corps of Engineers.
Prompt sales were done last week. In one case, a trader sold from a terminal at $450/st FOB, with the FOB price adjusted for Central Florida. The same trader also sold truckloads at the same price. The lowest price for available DAP was $440/st FOB.
The Central Florida DAP price range increased from the previous week’s $420-$430/st FOB last week to $440-$450/st FOB this week. Neither Mosaic nor CF had anything available for prompt delivery. PCS was making sales at “competitive prices.” Agrifos increased its asking price from $470/st FOB to $475/st FOB for DAP, while railcars were about $5/st FOB less. Although Agrifos was sold out through August, it did have supply available for September.
U.S.Gulf: With phosphate producers busy filling contracts and export orders, supplies on the Gulf’s river system remained tighter than normal for this time of year. With producers out of the prompt market, traders were in control – although few had more than a couple of barges to sell.
Prices for NOLA DAP barges rose rapidly in the last week. A trader said that on Monday morning he purchased a DAP barge at $460/st FOB, and that same afternoon he paid $464/st FOB for several additional barges. On Wednesday,he sold at $468/st FOB.
With barge prices rising, terminals were raising theirs as well, and were around $500/st FOB by the middle of last week.
On Aug. 12, the USDA issued its crop report and updated estimates for yields – slightly less corn and slightly more wheat. Early in the day, corn prices increased $0.05/bushel to $4.16/bushel, and the price of wheat increased $0.17/bushel overnight to $7.12/bushel on the futures board.
As the week progressed, the price of phosphate steadily increased, and that was before the USDA report came out. Near the end of the week, unverified rumors held NOLA DAP barges were selling in the mid $470s/st FOB. However, sources later attributed those to forward sales in mid-September.
Based on actual sales last week, the NOLA DAP barge range increased $8/st FOB, from $450-$460/st FOB to $460-$468/st FOB. Due to the inventory shortage, the ban on Russian wheat exports, and the USDA’s crop report, prices are expected to rise this week.
Eastern Cornbelt: DAP pricing had reportedly firmed to a solid $485-$495/st FOB for DAP, with MAP $10/st higher. On Aug. 13, DAP postings from one regional supplier moved up to $485/st FOB Peoria, Ill., and $490/st FOB Cincinnati, Ohio. The 10-34-0 market was pegged at $365-$375/st FOB in the region.
Western Cornbelt: Sources said DAP pricing out of regional warehouses had firmed to $485-$495/st FOB, with reports that the lower-priced tonnage was “drying up left and right and getting firmer by the day.” One supplier was referencing DAP at $485/st FOB St. Louis, Mo., and $490/st FOB Pine Bend, Minn., for the Aug. 13-20 order and shipping period, with MAP posted at $500/st FOB Pine Bend.
10-34-0 was inching up as well, with sources tagging the dealer market last week at $360-$370/st FOB in the region
Southern Plains: DAP pricing covered a broad range, reflecting a continually firming market as the week progressed. The low end of the DAP range was quoted at $475-$480/st FOB the Tulsa market early in the week, but that price moved quickly to $485/st before some suppliers reposted as high as $500/st FOB for DAP and $515/st FOB for MAP as the week advanced.
The 10-34-0 market had reportedly firmed to $345-$360/st FOB in the region for limited tons, where available. Agrium issued a new price list for phos acid, with SPA and MGA moving on Aug. 1 to $795/st DEL in Colorado, Kansas, New Mexico, Oklahoma, and Texas.
South Central: DAP out of regional warehouses was quoted at $475-$485/st FOB, with most sources touting the upper end of that range as the week advanced. One supplier at the higher end of the range said he was making no sales at that level at midweek, and he was just waiting to see if dealers would bite before they move the price up again to reflect higher replacement values. Noting an increase in winter wheat acreage, he said his location will have a fall fertilizer season this year.
MAP was $10/st higher than DAP, where available. TSP was pegged in the $425-$450/st range FOB regional warehouses, with limited availability.
U.S.Export: Low inventories and “sticker shock” prevented new export sales last week. PhosChem had nothing available for new deals, and would not until sometime in October.
Transammonia, which sells output from Mississippi Phosphates, was asking $520/mt FOB, but had moved nothing at that price.
With no new sales last week, the export DAP price range was unchanged at $496/mt FOB, based on the most recent transaction. Watch for higher prices on the next deal.
India: Kribhco has announced a tender for 30-45,000 mt of DAP for shipment to Mundra by Sept. 15.
RCF has announced a tender closing Aug. 16 for three lots of 13-15,000 mt of phosphate rock.
Helm has sold a DAP panamax vessel ex China for November shipment at US$477/mt CFR Mundra.
Valency, Singapore, has sold 15-18,000 mt of powdered MAP ex-China to RCF at US$407/mt CFR Mumbai.
Sri Lanka: The Ministry of Agriculture tender for 12,000 mt of TSP closed Aug. 6.
Asian sources say the ministry may scrap the tender because prices are higher than they wanted.
Sri Lankan buyers usually end up paying a premium because of their small quantity demands when compared to India or Pakistan. But this time, say sources, the government wants lower prices. Tender results follow.
Ministry of Agriculture Sri Lanka TSP Tender – August 6, 2010 |
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| Company | Quantity | FOB | Sight | US$/MT CFR 180 days | US$/MT CFR 270 days | Origin |
| Swiss Singapore | 12,000 | – | – | 357.60 | – | China – Egypt – Tunisia |
| ETA | 12,000 | – | – | 359.97 | 366.97 | China |
| – | – | 390.56 | 397.97 | CIF Delivered | ||
| Valencay | 12,000 | 332.48 | – | 364.48 | 370.08 | China |
| Midgulf | 12,000 | – | – | 372.00 | – | China – Egypt |
| Ameropa | 12,000 | – | – | 384.19 | – | China |
| Blue Deebaj | 12,000 | 341.50 | 376.50 | 389.49 | 395.99 | China |
Sources add that the country may have sufficient quantities of TSP and other phosphates on hand that could allow them to scrap this tender.
Pakistan: The country’s only DAP plant – Fauji Fertilizer Bin Qasim Ltd. (FFBL) – has announced that it will produce 640,000 mt of DAP between Jan.-Dec. 2010, compared to 540,000 mt of DAP last year, recording a growth of 18.52 percent. So far, it produced 299,000 mt of DAP in the first half, compared to the year-ago 213,000 mt. Meanwhile, the profit after tax of FFBL has increased to Rs1.722 billion in the first half, as compared to the year-ago Rs0.497 billion.
POTASH
Eastern Cornbelt: Most sources pegged the potash warehouse market at the $390/st FOB mark last week, but it appeared higher numbers were just around the corner. Company sources confirmed that PCS is no longer taking new potash orders at the $390/st FOB and $400/st DEL prices listed for the July 1 through Sept. 30 fill period, and that any new orders would reflect the $20 increase slated for Oct. 1. Mosaic also reportedly raised its potash prices by $20/st, to $410/st FOB and $420/st DEL in the Midwest.
Western Cornbelt: Most sources continued to quote granular potash at the $390/st level out of regional warehouses, but producers were reportedly closing – or had already closed – the window for fill orders at that level. The upper end of the warehouse market was quoted at the $397/st FOB level in Missouri for white granular potash.
Southern Plains: Potash FOB Carlsbad, N.M., continued to be quoted at $360/st for 60 percent red granular, $362/st for 62 percent white standard, $365/st for 62 percent white fine standard, and $368/st for 62 percent white granular. Out of regional warehouses, the potash market was pegged at $385-$395/st FOB.
Intrepid Potash’s sulfate of potash magnesia (Intrepid Trio™) postings FOB Carlsbad are slated to move on Sept. 1 to $193/st for standard and $211/st for granular grade. Those prices represent a $15/st increase from the company’s March 1 list prices.
South Central: Potash pricing out of regional warehouses remained in the $380-$385/st FOB range.
Southeast: Sources said potash fill orders could still be placed at the $397-$405/st FOB and $410/st rail-DEL levels for small quantities, but several producers had reportedly already moved up $20/st from the summer fill levels published for the July through September fill period, putting reference prices for new orders at the $430/st rail-DEL level in the region.
U.S. Imports: June MOP imports were up 86 percent, to 605,859 st from the year-ago 326,358 st. Imports for the fertilizer year ending in June were up 27 percent, to 8.8 million st from the prior year 6.93 million st.
Sri Lanka: While the government is expected to scrap the urea and TSP tenders, sources say Sri Lanka needs the MOP offered in its Aug. 6 tender. An award was not yet announced as of press time, but one is expected soon.
Tender results follow.
Ministry of Agriculture Sri Lanka MOP Tender – August 6, 2010 |
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| Company | Quantity | US$/MT CFR 180 days | US$/MT CFR 270 days | Origin |
| ETA | 12,000 | 422.97 | 429.97 | CIS – Jordan – Middle East |
| 456.77 | 464.13 | CIF delivered | ||
| Dragon Asia | 12,000 | 435.00 | 442.00 | CIS |
| Swiss Singapore | 12,000 | 439.96 | – | Israel |
NPK
India: RCF has announced a tender for 425,000 mt of various NPK grades – 10-26-26, 12-32-16, 16-20-0-13, 17-17-17, 19-19-19, and 20-20-0 – for arrival at Indian ports during September/October, 2010. The tender closes Aug. 25.
MMTC has issued a tender for the import of 95,000 mt of NPKs for supply during September-October; 60,000 mt will be ammonium phosphate sulfate (APS), with the balance 35,000 mt for NPK grade 12-32-16-0. The price is to be offered on CFR terms in three lots to the ports of Kandla, Jamnagar, Vizag, Kakinada, and Mumbai.
Zuari has bought 25,000 mt of NPK 12-32-16 ex South Korea to Zuari at US$428/mt CFR India. RCF has purchased 25,000 mt of similar NPK grade from Daewoo, S. Korea, at US$436/mt CFR India.
Sources report that NFL’s recent NPK tenders (GM Aug. 9, p. 9) were cancelled, and a new one will be announced soon. The tender was for 300-400,000 mt.
SULFUR
Tampa: Last week, refineries were running at 88.1 percent of capacity, which was down about 3 percent from the previous week. That may or may not reflect the coming end of the summer driving season. Regardless, it means less sulfur.
In general, supply and demand remained roughly in balance, although some were looking for additional supplies. Phosphate producers have been and were still running at maximum, and industrial customers were seeking extra. The economy was continuing to improve, and that will help tighten supplies in the next several months.
However, the fall fertilizer season will be coming to an end in the next two months, and phosphate producers will slow down production once they catch up to back orders and contract commitments.
Another thing that could have an impact on the sulfur supply was the possible closing of Mosaic’s South Fort Meade Mine, which would take roughly a million tons of DAP out of production. Mosaic has threatened to close the operation if it does not prevail in an appeal of its permit filed in federal district court.
Sulfur prices on the world market were on their way north again. China was paying between $120/mt and $130/mt, which was a big improvement in the past month.
U.S. Imports: June imports were up a whopping 206 percent, to 216,410 st from the year-ago 70,671 st. Imports for the year ending in June were up only 3 percent, however, to 1.54 million st from the prior-year 1.49 million st.