AMMONIA
U.S. Gulf/Tampa: New Tampa business for November was concluded last week at the $470/mt DEL mark, up just $5/mt from October’s $465/mt DEL. Some sellers were a little surprised by the news, saying they had expected a larger increase. However, phosphate producers, expecting a much larger increase in sulfur prices for the fourth quarter, likely lobbied hard for holding the line on ammonia prices.
Eastern Cornbelt: Anhydrous ammonia remained at $650-$680/st FOB, depending on location, with the low quoted in the Illinois market for prompt tons. One supplier was referenced at $660/st FOB for tons that would be available in the second half of November and December, with spring prepay offered in the $660-$670/st FOB range. Sources said they expect the market to firm in the near term; PCS was reportedly referenced at $700/st FOB Lima, Ohio, for spring prepay ammonia.
Western Cornbelt: Anhydrous ammonia remained at $620-$655/st FOB regional terminals, depending on location and time of delivery. One Iowa contact said fall tons could be had for $620-$630/st FOB pipeline points. Other sources pegged spring prepay ammonia in the $635-$655/st FOB range.
Out of southern production points, the ammonia market was tagged in the $565-$600/st FOB range last week.
California: Anhydrous ammonia remained at $570/st truck-DEL in California, with aqua ammonia referenced at $155/st FOB.
Pacific Northwest: The anhydrous ammonia market was quoted at $625-$675/st DEL in the Pacific Northwest, with the upper end in the Montana market. Effective Oct. 14, Agrium’s anhydrous ammonia postings firmed to $635/st rail-DEL in Oregon, Washington, and northern Idaho; $655/st truck-DEL in Washington and Oregon east of the Cascades, and in northern Idaho; and $685/st truck-DEL in Montana and northern Wyoming.
Also effective Oct. 14, Agrium’s aqua ammonia posting firmed to $161/st FOB Central Ferry and Finley, Wash.
Western Canada: Anhydrous ammonia pricing had reportedly firmed to $727-$736/mt DEL in Manitoba, $736-$745/mt DEL in Saskatchewan, and $745-$772/mt DEL in Alberta, depending on location. Dealer postings ranged from $737-$782/mt DEL in the region last week, depending on location.
Black Sea: The new Tampa price of $470/mt CFR fits with reports this past week that the price out of Yuzhnyy has moved to at least $410/mt FOB. Sources have talked about prices in the $415-$425/mt range for the past couple of weeks. But as the week closed, reports of reduced demand from Turkey pushed more people to accept $410/mt FOB as a reasonable price.
Product from the area is still heading mostly west of Suez. One trader said the current price level out of Yuzhnyy, combined with freight, pretty much keeps product from this area out of Asia.
Depending on the freight rates the new Yuzhnyy equivalent price based on the Tampa business is $410-$420/mt FOB. Some traders willingly accept that level, with a few arguing the upper end could be a bit higher.
Middle East: India/FACT canceled its tender late last week. The action removed an opportunity to set a new price level for the area market.
Most of the business from the area is booked under formula contracts. About the only way to move the published price for Arab Gulf ammonia is to see who wins a tender or concludes a very public private deal.
Producers looked at the Oct. 6 FACT tender as a way to keep the price moving up. In that tender only two offers came in: $455/mt CFR from Qafco and $459.50/mt CFR from Transammonia. Once freight rates and expenses were backed off, sources put the netback at $415-$425/mt FOB.
Now that the tender has been scrapped – sources say FACT objected to the price – nailing down the actual Arab Gulf price of ammonia becomes more of an academic exercise.
The last bit of public business was a sale of Iranian material late last month at $420/mt FOB.
Sources in the area are comfortable saying this is the bottom of the market. One trader called the price range as the low $420s/mt FOB. Few raised objections to this estimate.
The problem for the producers is that they really want to move up the price. They will argue that the price should be in the low $430s/mt FOB. Unfortunately for them, there is nothing in the public domain to back up their claims.
India: FACT scrapped its Oct. 6 tender. Sources say that the last price offered of $455/mt CFR from Qafco was higher than what the company wanted to pay. Others in the industry, however, say FACT is having some production problems and does not need the ammonia. One Asian trader said the truth is most likely a combination of the two.
If FACT removes itself from the public tender market, sources say there will be few opportunities to move up the price.
One trader said he figured FACT will be going to its contract suppliers to ask for additional tons under the contract terms.
Even if there are production problems in the FACT facilities, eventually they will have to come back into the market and buy tons. The only question is whether the purchases will be made under contracts or tenders.
For the buyer, getting more ammonia under existing contracts is preferred.
UREA
U.S. Gulf: Barges were reported to be moving last week within the $355-$360/st FOB range, but not many and not with much intensity. Sources said there were barges around to trade; with the upriver closings, however, there was not as big a rush. Similar numbers were put on prills.
Eastern Cornbelt: Granular urea was quoted in a broad range at $390-$420/st FOB regional terminals last week, depending on location and time of delivery.
Western Cornbelt: Granular urea was pegged at $385-$410/st FOB regional terminals, with the upper end reported in the Iowa market and the low in the Missouri bootheel. Iowa sources quoted spring prepay urea in the $410-$420/st FOB range.
California: Granular urea remained in a broad range at $385-$415/st FOB, and $425-$435/st DEL in California.
Pacific Northwest: Sources said urea pricing had firmed to $420-$445/st DEL in the Pacific Northwest, depending on location, with the low reported in Montana. Effective Oct. 14, Agrium’s urea postings firmed to $425-$435/st DEL in Montana and Wyoming, depending on location; $440/st FOB West Woodburn, Ore.; $445/st FOB Washington warehouses at Glade, Warden, and Wilson; and $450/st DEL in Washington, Oregon, Idaho, and northern Nevada. Those levels reflected a $10/st increase from Agrium’s Sept. 22 urea postings.
Western Canada: Urea pricing in Western Canada was quoted at $501-$526/mt DEL, up $10/mt from last report, with the low in Manitoba and the upper end in Alberta. Dealer reference levels for granular urea ranged from $510-$535/mt DEL in the region, depending on location.
India: STC called a tender to close Oct. 27 with delivery no later than Dec. 24. Industry sources have been waiting for a tender call from India. Government and industry estimates say that the country will have to import 1.2-1.5 million mt by the end of February to ensure a proper supply of urea through the fiscal year.
Chances are that STC will only take 600-800,000 mt in this tender, depending on the price.
The buyers this time around will be facing problems earlier buyers have not.
The congestion in the Chinese ports is so serious that the government has “suggested” to exporters – including urea producers – that they slow down or delay deliveries to ports.
Imports of vital raw materials such as coal and iron ore have precedent over exports such as urea.
Area traders are also beginning to think that Beijing might change the rules for exports before the end of the year, including increasing the export duty.
India has depended on a lot of orders from China this year. Still to be loaded are about 600,000 mt awarded in the last tender.
Besides potential limits on Chinese urea this year, sources say getting Iranian urea is getting more difficult.
In the last tender, sources say the Helm Iranian offer was disqualified. Other trading houses that offered Iranian tons were also disqualified. The actions were taken because the offers were not in U.S. dollars.
The international embargo against Iran includes denying the country U.S. money. Deals with Iran have had to be made either in a third currency – such as the Yen or Euro – or need to be cleared through a currency trading house in the U.A.E.
In no case, said one trader, can the offer for Iranian material be made in U.S. dollars. And yet, the Indian buyers require the offers to be in greenbacks.
The potential problems of getting urea shipped from China in time and the difficulty in buying Iranian urea leaves the Indians with only the Arab and CIS producers. And neither is in a mood to lower prices.
Indonesia: Gresik and Pusri closed tenders last week that moved the prilled price up again. Both offered 40,000 mt, with options for more.
In the end, Pusri sold 25,000 mt at $339.75/mt FOB bulk and Gresik sold 40,000 mt at $349/mt FOB bagged. Once the cost of bags is backed off, sources say the prices are about the same.
Bids in the Pusri tender follow.
| Company | Bid US$/mt FOB |
| Fertcom | 339.75 |
| Trada | 339.00 |
| Swiss Singapore | 338.25 |
| CCIS | 337.50 |
| Reliant | 337.50 |
| Summit | 337.50 |
| Profeta | 336.25 |
| Parna | 336.00 |
| Brio | 335.25 |
| Liven | 334.25 |
| Indevco | 333.00 |
| Helm | 330.00 |
| Graha | 325.00 |
| RCL | 325.00 |
| Toepfer | 325.00 |
| Universal | 325.00 |
Pusri gave awards to four buyers at $339.75/mt FOB. Fertcom took 10,000 mt and Trada, Reliant, and Swiss Singapore were each awarded 5,000 mt.
The Gresik tender was a more closely held event.
In the end, all that got announced was an award to Summit for the full 40,000 mt at $349/mt FOB bagged.
Once the price of the bags – about $10/mt – is taken off, the final price for the Gresik and Pusri sales is the same.
In the end, the price represents an incremental increase. The last prilled tender was by Kaltim, with a winning price of $338.75/mt FOB.
Traders are still wondering where the tons could go. Most seem to think the urea will end up with regional buyers. Word is that Vietnam is willing to pay a premium for Indonesian material.
Industry sources further speculate that Summit wanted the bagged material as part of an offer to BCIC/Bangladesh. They also say that the bagged material could have been originally destined for a buyer in Indonesia, but was diverted to the international market.
Another tender or two is expected the first half of November from Kaltim.
Black Sea: Rumors of a pending Indian tender early last week helped move the price firmly into the $340s/mt FOB, with some laggard tons in the upper $330s/mt FOB.
Now that the STC tender is a reality, industry sources are saying the current price out of Yuzhnyy is too high for Indian pricing expectations.
Material will continue to move to Latin America and Europe.
Sources report, however, that some of the Latin buyers are beginning to push back against higher prices. There are growing reports of buyers once again buying just what they need and refusing to buy too far in advance.
Some traders say this play might work against the buyers because of growing concern over the availability of Chinese tons and a continued aggressive set of producers in the Arab Gulf.
For now, the price is pegged at $335-$345/mt FOB, with sources saying there is still room to move up.
Middle East: Producers remain firm in their belief that the price should be in the upper $360s/mt FOB. Unfortunately for them, there have been no public deals that back up their claims.
Sources say for all intents and purposes, prilled and granular urea should be at parity. Even with that admonition, industry observers put the granular market at $355-$365/mt FOB, and prills about $10/mt cheaper.
Most producers claim they are sold out for October and November. Some traders, however, say at the right price a cargo or two might be shaken loose come Nov. 1.
The issue is finding a price that works for buyers and sellers. Right now, the gap is very wide.
Arab Gulf producers are expected to participate in the STC/India tender, but only to show their support for much higher prices.
The offers in the upcoming tender are expected to be similar to the ones made in the past couple of tenders. The price will be very high and the quantities limited.
China: Things aren’t looking so great for exports from China. Sources say the central government has issued “suggestions” to exporters – not just urea producers – to slow down or delay shipments to ports for shipment offshore. The problem is too many ships in the ports.
The government wants to ensure the timely unloading of vital imports such as iron ore and coal. After that, exports can be processed.
The country is coming off a full week holiday to celebrate the founding of modern China. The port workers have to clear the backlog created during the holiday, as well as the new vessels that arrive daily.
Besides facing problems of actual loadings, international buyers of Chinese urea may also soon face higher tariffs.
Under the current export regime, exported urea is taxed at 7 percent between Oct. 15 and the end of the year. Recent moves by Beijing to change interest rates and discussion about currency re-evaluation are making people in the fertilizer industry think that the export duty might be increased before Dec. 31.
Even if the government does not change the current export policy, sources say the industry should be ready for rates to go up Jan. 1, and for no exemptions to be granted for late loadings of lower-taxed urea.
Bangladesh: BCIC closed two tenders Oct. 18 for 25,000 mt each of prilled and granular urea in shipments of 12,500 mt each.
Desh came in the lowest in the prilled tender, at $383.84/mt CFR bagged for delivery to Chittagong or $386.74/mt CFR bagged to Mongla.
It looks as if BCIC might scrap the granular tender. Desh and Swiss Singapore had the two lowest offers in that tender. But at $423.90/mt CFR bagged for Mongla and $411/mt CFR bagged for Chittagong, respectively, BCIC decided the price was too high.
It looks as if the buyer is ready to issue letters of intent to buy 200,000 mt from the Oct. 4 tender.
The Bangladesh urea supply chain was disrupted again in mid-October by a fire at BCIC’s Ashuganj factory. According to the local media, the fire broke out following an explosion at its ammonia plant. Thereafter, production in the fertilizer factory was suspended.
The BCIC import vessel Ocean Pearl at the Chittagong port was reported to still be in trouble Oct. 21, with fears that it would sink with its 8,000 mt of product.
Pakistan: Numerous media reports of the aftermath of the flooding that devastated large swathes of Pakistan describe the need for seeds and fertilizer to get the agriculture sector restarted. Fertilizer industry sources agree Pakistan will soon need large quantities of urea to get things started again. But so far, there has been no word from Pakistan about wanting to buy.
One trader noted that the need will most likely be so great that Pakistan will need a grant or low-interest loan to buy the urea necessary. And so far, no one seems to be talking about such a deal.
To add to the country’s problems, local media report that TCP – the sole importer of urea – is near insolvency. The reports say that TCP has exceeded its line of credit with Pakistan’s banks and still owes money to overseas suppliers.
NITROGEN SOLUTIONS
U.S. Gulf: Prices for UAN barges were called $280-$285/st FOB ($8.75-$8.91/unit). Finding product was a problem. However, some said imports should come in to help meet any shortfalls before the spring season. That said, some last week were saying what imports that were coming to the East Coast were going up, with numbers being called $315-$330/mt DEL.
Eastern Cornbelt: UAN was tagged at $10.31-$10.82/unit FOB, with the low in Illinois for prompt tons and the upper end reported out of inland terminals in Ohio. One source pegged the rail-delivered market for UAN-32 in the $348-$355/st ($10.88-$11.09/unit) range in Ohio, Indiana, and Michigan.
Western Cornbelt: The UAN-32 market was quoted at $320-$335/st ($10.00-$10.47/unit) FOB regional terminals. The low end was reported out of river locations in southern Missouri. Iowa sources quoted the dealer market at $330/st ($10.31/unit) FOB both for spring and prompt tons, although the availability of prompt tons depended upon location.
California: The UAN-32 market was quoted in a broad range at $305-$335/st ($9.53-$10.47/unit) FOB, depending on location and supplier. The low was quoted from Simplot terminals early in the week, but the company firmed its postings to $325-$335/st ($10.16-$10.47/unit) FOB on Oct. 22. Yara was also referenced at the $335/st ($10.47/unit) FOB level last week.
Effective Oct. 15, Agrium’s UAN-32 postings firmed to $333/st ($10.41/unit) FOB Sacramento, $355/st ($11.09/unit) truck-DEL in Central California, and $360/st ($11.25/unit) truck-DEL in Northern California. Those levels reflect a $20/st increase from the company’s Sept. 23 postings.
Pacific Northwest: UAN-32 was pegged at $320-$340/st ($10.00-$10.63/unit) DEL in the Pacific Northwest region last week. Agrium’s UAN-32 postings firmed on Oct. 15 to $340/st ($10.63/unit) rail-DEL in Washington, northern Idaho, and Oregon excluding Malheur County; $345/st ($10.78/unit) rail-DEL and $350/st ($10.94/unit) truck-DEL in Nevada, southern Idaho, and Oregon’s Malheur County; and $350/st ($10.94/unit) DEL in Montana and northern Wyoming. Agrium’s UAN-28 posting firmed on Oct. 15 to $306/st ($10.93/unit) DEL in Montana and northern Wyoming.
Western Canada: UAN-28 was quoted at $300-$316/mt ($10.71-$11.29/unit) DEL, up $6/mt from last report, with the low again reported in Manitoba and the upper end of the range in Alberta. Dealer reference levels in the region moved up to $310-$326/mt ($11.07-$11.64/unit) DEL at mid-month, depending on location.
AMMONIUM NITRATE
U.S. Gulf: The last trades were still called $300-$302/st FOB. There was a rumor that a trader had sourced Russian product to bring in to Tampa or NOLA.
Western Cornbelt: Ammonium nitrate remained at $330-$340/st FOB in the region.
California: No market was reported for ammonium nitrate in California. CAN-17 was pegged at $255-$270/st FOB in the state. That range was up from last report; Simplot’s reference prices for CAN-17 were in the $260-$270/st FOB range, reflecting a $20/st increase from the previous level.
Pacific Northwest: Ammonium nitrate was tagged in a broad range at $378-$430/st DEL in the Pacific Northwest. No current pricing was reported for CAN-27.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was pegged at $235-$240/st FOB in the region. An Illinois source quoted mid-grade ammonium sulfate at $215/st FOB last week.
Western Cornbelt: Granular ammonium sulfate was quoted at $230-$240/st FOB regional terminals, with delivered tons tagged in the $245-$250/st range in the Iowa market.
California: Ammonium sulfate was quoted at $230-$240/st FOB in California, with the lower end for standard and fluid grade and the upper end for granular product.
Pacific Northwest: Sources quoted the ammonium sulfate market at a solid $250-$255/st DEL in the region last week. Effective Oct. 13, Agrium’s granular ammonium sulfate postings firmed to $255/st FOB warehouses in Washington, Oregon, Idaho, Nevada, and Utah; and $260/st DEL in those states plus Montana and Wyoming. Those prices reflected a $10/st increase from Sept. 13 postings.
Western Canada: Granular ammonium sulfate pricing in Western Canada was up $15/mt from last report at $330-$335/mt DEL. Dealer reference levels ranged from $340-$345/mt DEL in the region last week.
PHOSPHATES
Central Florida: Finding any phosphate for sale on a prompt basis out of Central Florida last week was a eureka moment for the buyer. A trader said that the small amounts available at remote locations had become a trade secret.
Fingers remained crossed in Central Florida last week, in hopes the hurricane season passes without a major strike. The most dangerous period for the state is during the month of October, and a little over a week remained before the allclear. At this time of year, storms form in the Caribbean and can move into the Gulf of Mexico, where west-to-east winds can bring storms to the western side of Florida.
Last week CF’s price for prompt DAP was $530/st FOB but it had nothing available to sell. Mosaic’s posted price was $540/st FOB for forward buys in late December and January. MAP was bringing a premium of $10/st FOB. Based on posted prices, since nothing else was available, the Central Florida DAP price range last week was $530-$540/st FOB. PCS was making sales at “competitive prices.” Agrifos was considering offers to sell on a “case-by-case basis,” and truck sales were the most likely to be accepted. Agrifos had no MAP available for sale.
U.S. Gulf: Barges on the river system were even scarcer last week than a week earlier, and most of what was available was from offshore sources. Russia, Morocco, and China were moving into the North American market to fill the gap in inventories for U.S. producers.
Exactly how much offshore phosphate was available was difficult to determine, but was estimated at between 250,000 and 500,000 tons. So far, domestic prices were unfazed by the imports. The fall season was coming to an end, and the winter fill season was arriving with a roar. Mosaic was selling DAP for the period December through February in the $560/st FOB range.
Depending on the location, terminal prices were running $600-$620/st FOB, and prices for winter fill from terminals were $600-$610/st FOB. Even with those slightly higher prices, sources said terminals were running out nearly as fast as replacement product could be brought in. Trucks were accounting for a large percentage of the tons moving.
Crop prices were high and threatening to go up even more. December 2010 corn was $5.73/bushel, and December 2011 corn was $5.32/bushel. Soybeans were bringing $12.12/bushel on the futures board, while wheat was running about $6.84/bushel. Needless to say, farmers were happy and eager to buy to boost their profits.
Despite the expected arrival of offshore product, prices were holding relatively firm, which was a good indication of how low domestic inventories were.
Last week, the NOLA DAP barge price range was $558-$565/st FOB based on actual trades, a change from the previous week’s range of $545-$570/st FOB. Asking prices late last week were in the range of $550-$565/st FOB NOLA, but some lower prices may be available from smaller traders, who had little or no storage space. MAP, where available, was bringing a premium of about $10/st FOB last week.
Eastern Cornbelt: Warehouse prices for DAP continued to be quoted in the $605-$625/st FOB range in the region, with MAP pegged at $625-$650/st FOB. An Illinois source pegged the MAP market firmly at the upper end of that range for any available tons last week, and availability was questionable.
10-34-0 was a solid $460-$470/st FOB in the region, and was also in tight supply.
Western Cornbelt: DAP was also pegged in a broad range at $600-$625/st FOB, with the low again in southern Missouri on a spot basis. MAP was quoted at $620-$650/st FOB, with the low end quoted for spring tons and the upper reported by Iowa contacts for very limited spot tons.
10-34-0 remained at $445-$465/st FOB in the region, but sources said spot quotes were hard to run down due to very tight inventory.
California: Effective Oct. 19, Agrium’s MAP postings firmed to $635/st FOB warehouse or rail-DEL in California and Arizona. Simplot moved its DAP and MAP postings up $25/st on Oct. 18 to $630/st in the California market.
16-20-0 was up as well, to $394-$406/st FOB in the state, depending on location. 10-34-0 remained at $406-$411/st FOB, but sources said an increase would occur in November in tandem with higher acid postings.
Phosphoric acid remained at $9.25/unit DEL for both SPA and MGA, but an increase will take place in November. Producers currently have $9.50/unit DEL on the books for November, but one source said an updated – and higher – posting is likely.
Pacific Northwest: Effective Oct. 19, Agrium’s MAP postings firmed to $625/st FOB and $630/st DEL in Washington, northern Idaho, and Oregon excluding Malheur County; $625 /st DEL in southern Idaho, Utah, Nevada, and Oregon’s Malheur County; and $620/st DEL in Montana and northern Wyoming. Those levels are up $30/st from Agrium’s Sept. 17 MAP postings, and $60/st higher than the company’s Sept. 13 postings.
Simplot’s DAP and MAP postings moved on Oct. 18 to $615/st DEL in Montana, $620/st DEL in Idaho and Utah, and $625/st DEL in the rest of the Pacific Northwest and Nevada.
16-20-0 was quoted at $386-$391/st DEL from Simplot, with the low in Montana, Idaho, and Utah, and the upper end in Washington, Oregon, and Nevada.
Phosphoric acid was at a firm $9.25/unit DEL in the region for both SPA and MGA, with a move to $9.50/unit DEL slated for Nov. 1.
10-34-0 was quoted at a firm $470/st FOB in the region, up another $45/st from last report and in very short supply. Simplot’s 11-37-0 prices ranged from $455-$465/st FOB in the region, also up significantly from last report.
Western Canada: The MAP market had reportedly firmed to $717-$722/mt DEL in Manitoba, $722-$732/mt DEL in Saskatchewan, and $727-$752/mt DEL in Alberta, depending on location. Those levels reflected a $20/mt increase from last report. MAP postings ranged from $725-$760/mt DEL in the region last week.
10-34-0 was pegged at $530-$543/mt DEL in the region last week, also up from last report.
U.S. Export: No new prompt export sales were found last week, and the demand for phosphate in this country had eclipsed export demand and price.
With Russia embattled in a drought, more phosphate from there was moving to the export market, and the U.S. was becoming a major customer. Imports from Russia, Morocco, and China were moving into the domestic market last week, and will be in the near future.
Nevertheless, the U.S. was continuing to export phosphate under existing contracts. The major benefactor was India, which received the vast majority of exported DAP – 489,707 mt of September’s total of 524,309 mt. September’s exports were down 8.3 percent from the previous September. Next on the list was Japan, which took 17,967 mt. The Dominican Republic, at 4,754 mt, was third. For the calendar-year-todate, TFI reported that India has received 2,209,364 mt of the 3,584,589 mt exported so far this year from the U.S. This country’s second biggest importer was Mexico at 189,283 mt, followed by Australia at 171,192 mt. TFI said DAP exports thus far this year were down 17.2 percent for the year.
In September, TFI said MAP exports were up 26.1 percent from the previous September, at 108,986 mt. Brazil was the largest buyer at 39,167 mt, followed by Canada at 37,173, and Mexico at 7,956 mt. For the calendar-year-to-date, TFI said a total of 1,366,993 mt of MAP, an increase of 9.9 percent over 2009, was exported. Brazil led for the year at 433,411 mt, with Australia’s 252,979 mt and Canada’s 246,979 mt rounding out the top tier of MAP buyers.
The export DAP price range was unchanged last week at $570-$580/mt FOB.
POTASH
U.S. Gulf: Citing depleted inventories at inland locations, sources last week said barges had moved up from $425/st FOB to $435-$440/st FOB.
Eastern Cornbelt: Illinois sources said the potash market had jumped to $465-$480/st FOB for any available spot tons, with the low reflecting producer reference levels and the upper end coming from resellers. “It depends on who has tons and what people are willing to pay,” said one contact.
Western Cornbelt: Inventories remained extremely tight for phosphates and potash. Sources quoted the low end of the potash market in the $450-$460/st FOB range in southern Missouri, while spot tons in the Iowa market were pegged as high as $480/st FOB last week. Another Iowa source quoted spring potash tons in the $460-$465/st FOB range, while prompt tons were as high as $465-$490/st DEL last week.
California: Several sources said potash will move briskly in the coming weeks in preparation for winter vegetables. One source said producers were now referenced as high as $505/st DEL for new orders of granular potash, while another said soluble potash could still be had at the $440/st mark for bulk tons.
Potassium nitrate remained at $929-$996/st FOB, with the low for bulk tons and the upper end for bagged product.
Sulfate of potash (SOP) was quoted at $620-$630/st FOB for bulk tons. Effective Nov. 1, however, the SOP market will firm to $640-$650/st FOB in California, depending on grade.
Pacific Northwest: Washington sources quoted delivered potash at $485-$495/st, up significantly from last report. Intrepid Potash hiked its potash postings FOB Moab and Wendover, Utah, on Oct. 15 to $430/st for 60 percent standard and $435/st for 60 percent granular.
Western Canada: Potash was steady at $471-$502/mt FOB regional warehouses, depending on grade and location. Sources quoted the market FOB Saskatchewan mines at $462-$471/mt FOB to Canadian customers, depending on grade and location. The low end of both ranges reflected pricing for 60 percent muriate, with the upper end for 62 percent.
China: Canpotex Ltd. said Oct. 20 that it has entered into a new three-year Memorandum of Understanding (MOU) with Sinofert Holdings Ltd. (Sinofert) covering a minimum of 3.15 million mt of potash at pricing to be negotiated every six months (January to June and July to December), based on market conditions. The MOU covers the period Jan. 1, 2011 to Dec. 31, 2013, allows for growth in Chinese consumption, and guarantees that Canpotex will maintain a market share over the three-year period that is equal to the greater of the agreed tonnage – or one-third of the seaborne potash imports to China in each year.
The tonnage amount for 2011 is 1.0 million mt with a proposed transaction cap of US$600 million. For 2012, it is 1.05 million mt and $730 million, and for 2013 it is 1.1 million mt and $870 million.
“We are very pleased with this development. This new MOU reflects our continued joint commitment to the Chinese market, where the pursuit of self-sufficiency in food production remains a priority,” said Steve Dechka, Canpotex’s president and CEO. “This MOU also demonstrates our confidence in Sinofert as our long-term business partner in this critically important overseas market.” Canpotex member PotashCorp owns a 22 percent stake in Sinofert.
SULFUR
Tampa: Last week, sulfur suppliers reached an agreement with the two major phosphate companies on new prices for the fourth quarter. The new arrangement kicked the price up $65/lt Tampa, which put the fourth-quarter price at $160/lt Tampa.
The hike was an acknowledgement of higher prices on the world market and that sulfur has become extremely tight on the Gulf Coast. The current economic problems have led oil refineries to cut back on production, because Americans were driving less. At the same time, other areas of the economy were in the process of recovering and needed more sulfur.
Last week, the U.S. Department of Energy reported refinery rates were at 82.5 percent, a change of 0.6 percent.
Mosaic was said to be bringing in a 30,000-mt sulfur vessel from Russia to Galveston to insure it has sufficient sulfur to meet the needs of its production plants. The price was not available. The phosphate industry has been on a boom in recent months, and demand has been outstripping supply. Mosaic has arranged to have sulfur supplies from various sources as insurance.
Vancouver: Recent contracts for the fourth quarter called for a price in the range of $125-$145/mt. A source said spot deals have been closer to the top of the contract range.
MARKET NOTES
Pakistan: The country said on Oct. 21 that imports of DAP, urea, and other fertilizers during the first three months of the current financial year, July-September 2010-11, recorded a tonnage drop of 60 percent. Imports were only 291,055 mt at $147.7million, compared to 728,185 mt at $287.3 million in the corresponding period last year, showing a decline of 60.03 percent and 48.59 percent in terms of quantity and value in dollar, respectively, over the same period last year.
India: The government estimates the country will need about 27.4 million mt of fertilizer for the rabi season. Estimates are urea at 15.4 million mt, DAP at 5.2 million mt, MOP at 2.5 million mt, and NPK at 4.3 million mt. Last year during the season the country used 14.4 million mt of urea, 5 million mt of DAP, 2.5 million mt of MOP, and 4 million mt of NPK.
In the meantime, for April-September of the current year, India imported 2.58 million mt of urea, 5.78 million mt of DAP, 2.65 million mt of MOP, and 600,000 mt of NPK. For the year-ago period, India imported 2.53 million mt of urea, 3.89 million mt DAP, and 1.71 million mt of MOP.
India: Major fertilizer company Coromandel International Ltd. (CIL), is entering the urea business. CIL, which is known for phosphates and complex fertilizers, will sell the product under its “Godavari” brand during the current rabi season, for which sowing operations will start after the middle of this month. CIL says it has been nominated as a handling agent for urea imported on the government account at the Karaikal port in Puducherry. That will enable it to receive and unload vessels carrying official urea cargos at the port. The first vessel of 50,000 mt was slated to arrive in mid-October.
During the year ended March 31, 2010, CIL sold 2.909 million mt of fertilizer materials, including 1.963 million mt of complex fertilizers, 603,000 mt of DAP, 92,000 mt of SSP, and 251,000 mt of MOP. This makes it the second-largest domestic player in complex fertilizers and DP behind Indian Farmers Fertiliser Cooperative (IFFCO).
Brazil: With the Brazil national election just a few days away, few candidates seem willing to talk about new taxes. The proposal that Brazil should impose a 3 percent duty on all imported fertilizers (GM Oct. 18, p. 13) will most likely not reach the legislature until after the new government is sworn in. The winner of the Oct. 31 presidential election will be sworn in Jan. 1, 2011.