AMMONIA
U.S. Gulf/Tampa: The Tampa market remained quiet last week. Nothing new was reported at NOLA despite a flurry of speculation during the prior week.
Eastern Cornbelt: Eastern Cornbelt sources said dry tons continued to move to the field in certain areas of the region last week, but the fall ammonia season was over. Sources quoted the ammonia market at $670-$685/st FOB regional terminals last week, down some $20/st from last report, with the low for prompt tons out of spot Illinois shipping points and the upper end for spring prepay.
Western Cornbelt: Cold temperatures and snowfall put a halt to fall ammonia applications in the region in early December, although sources said dry spreaders were still running in some locations. One Iowa contact said fields in his location froze on Dec. 6.
Ammonia pricing slipped in the region as fall demand ebbed. Sources quoted the dealer market at $645-$670/st FOB regional terminals for prompt tons, with the low in Iowa and the upper end in the Missouri market. One source said spring prepay and/or winter fill offers were on the table for as low as $630-$640/st FOB some locations last week.
One contact noted that fall ammonia volumes were up 25 percent from average in his territory. As a result of that brisk business, he said spring ammonia usage could be off 15-20 percent from normal.
Northern Plains: With fall movement over in the region, sources quoted cash market ammonia at $650/st FOB Minnesota terminals and $655-$665/st DEL in North Dakota. Spring prepay ammonia was reportedly being offered at $715/st DEL in North Dakota for very limited tons.
Effective Nov. 24, Agrium’s ammonia postings in the Leal/Beulah sales area in North Dakota firmed to $695/st FOB and $715/st DEL, up $25/st from the company’s Nov. 2 postings.
Great Lakes: Anhydrous ammonia was quoted at $680-$700/st FOB for spring prepay in the Great Lakes region, with the low end of the range quoted by Wisconsin sources.
Black Sea: As winter approaches, sources say the amount of ammonia coming out of the Black Sea is expected to slow. Part of the decline in output will be due to the diversion of natural gas for domestic consumption. Seasonal drops in demand will also prompt some plants to take turnarounds. In addition, sources point out that the shipping restrictions in the Bosporus Strait will also reduce how much ammonia can get out of the Black Sea.
Turkey restricts the passage of loaded ammonia and natural gas vessels to one at a time and only during daylight hours. With days becoming shorter, the opportunities for ships to transit the Bosporus Strait are reduced.
Asian sources say the price out of Yuzhnyy has not changed and remains in the $390s/mt FOB.
Middle East: Previous business done by a Japanese trader at $430/mt FOB is now being seen as an attempt to jack up the price. Even Arab producers now say that if a spot deal were to be done, it would not be higher than $385/mt FOB.
In the past few weeks the only business coming out of the Arab Gulf has been tied to contracts. Sources peg the market at $375-$385/mt FOB.
UREA
U.S. Gulf: While most folks were putting the granular urea barge market in the $370s/st FOB last week, there were some that said it bottomed out at the beginning of the week as low as $367/st FOB before working its way back up. Sources said sub-$370/st prices drew buyers back into the market. Reacting to this demand, sellers moved quotes upward. Many cited new trades in the $372-$375/st FOB range, with $376-$378/st FOB being achieved by the end of the week. By late Thursday, quotes for the next round of business were $378-$380/st FOB for late December/early January.
Sources said buyers are picking off freshly imported tons and that higher prices will be necessary to assure that any more come in, as U.S. prices have not been that attractive on the world stage. With most expecting 90 million acres of corn or more, they say a steady flow of imports will be necessary to meet demand. Sources also expect end-of-year buying to beat the taxman, and this impetus may also serve to boost seller price ideas as the industry heads toward the New Year.
Prills were reported to be running near granular levels, if not higher, with $380-$385/st FOB being quoted for new business.
In addition, news out of Venezuela’s FertiNitro has been sketchy. However, most reports are that the ammonia and urea plants are down, thereby shrinking available supplies.
Eastern Cornbelt: Granular urea pricing had slipped slightly. Sources quoted the dealer market at $420-$440/st FOB in the region last week, with the low in Illinois and the higher numbers in the Ohio market for prompt tons. One contact also reported spring prepay urea offered at the $420/st FOB level in his trade area.
Western Cornbelt: Although list prices for granular urea remained as high as $440/st FOB in the region, most sources quoted the dealer market more commonly in the $415-$420/st FOB range last week, with the low in Missouri and the upper end in Iowa.
Northern Plains: The granular urea market was quoted at $415/st FOB the Twin Cities and $445/st FOB Jamestown, N.D., for prompt tons, with spring prepay reportedly being offered in the $420-$430/st range FOB Minnesota terminals. Delivered urea in North Dakota covered a wide range at $465-$495/st last week, depending on supplier and point of origin, with the upper end quoted for tons shipped from Brandon, Manitoba.
Effective Nov. 24, Agrium’s granular urea postings firmed to $465/st FOB North Dakota terminals at Alton, Carrington, Colfax, Scranton, and Grand Forks, and $470/st rail-DEL in Minnesota, Wisconsin, and the Dakotas. Those postings reflected a $20/st increase from Agrium’s Nov. 2 list prices, and a $40/st increase from Oct. 14 postings.
Great Lakes: Granular urea was quoted at $420-$440/st FOB in the region, with the low reported by Wisconsin sources and the upper end in the Michigan market.
Northeast: Sources quoted the granular urea market at $410/st FOB Lancaster, Pa., and $415-$417/st FOB Philadelphia, with one regional source pegging rail-delivered urea tons in the $440-$450/st range, depending on location.
Middle East: Sources report the usual cargoes of contracted tons are moving out without a problem. Those shipments, however, are not enough to compensate for production.
Industry watchers say the price of material coming out of the region has been softening. Producers and some traders argue that the price hovers in the $380s/mt FOB. A few other traders, however, say a firm bid under $380/mt FOB would rapidly be accepted. Because of the perception by many at this time that producers might be willing to accept a $380/mt FOB deal, buyers and traders are hesitant to book a cargo at this time. Sources say global demand for urea is soft enough to encourage buyers to wait until the last minute.
Arab producers say they are getting positive responses from buyers in Australia and New Zealand. Reportedly the weather has been just good enough in these two countries to encourage more purchases into the summer.
For now, prices are pegged at $380-$390/mt FOB for both prills and granular.
Black Sea: Sources report that no major new purchases are on the horizon from the area. Sales to India and Turkey in the past month are now being loaded, leaving sellers looking for more buyers.
Reportedly, the price has begun to slip, with traders confirming sales at $375/mt FOB. Some traders have talked of a couple $370/mt FOB deals, but could not point to any specific sales to back up the reports.
This time of year is traditionally slow in Yuzhnyy, so few are concerned about the dip in prices from the region.
For now, the best estimates for material out of Yuzhnyy are pegged at $370-$380/mt FOB.
India: Despite some optimistic comments late last month, sources say Indian buying is pretty much shut down until March or April.
Sources say buying won’t start until April, when the new fiscal year starts.
Discussions within the government about changes in the urea import and subsidy programs have everyone involved with Indian business watching and waiting.
If the various government agencies can come to an agreement on new urea policies, sources figure nothing will take effect until the new fiscal year.
Sources say everything is on the table for discussion, including removal of restrictions on urea imports and drastic changes in the urea subsidy program.
Few seem to think the subsidies will be removed. The massive fluctuations in urea prices – if passed on to the farmers – would cause political problems for the government.
The most likely scenario, said one source, is for a modified subsidy system that allows for some increases in prices.
At the same time, the government is looking at removing the import monopoly from STC, MMTC, and IPL. The issue will be ensuring there is no short-term disruption in urea supply or costs.
Pakistan: Sources say that TCP has not yet received the necessary paperwork to begin importing the 250,000 mt the government says it needs for the current application season.
Asian sources say tenders for the needed tonnage will most likely be called by mid-January.
Government sources tell local media there is still hope that the governments of Pakistan and Saudi Arabia might reach an accord for another loan that will allow TCP to buy urea from Sabic without having to draw funds from the national treasury.
Sources are skeptical that even Sabic will be able to satisfy the short-term needs of Pakistan. They point to large contracts around the world that Sabic needs to fulfill. Any new commitment might force other buyers to wait for delivery.
Pakistan’s private sector – Engro Corp. Ltd., the parent company of Engro Fertilizers Ltd. (EFL) – says that mechanical installation at their new 1.2-million-mt urea plant was successfully completed at Dharki, in Sindh Province, in November. Mr. Asad Umar, Engro president, told Green Markets on the sidelines of a company event in Karachi that production from the new urea plant would start in two to three weeks to meet the country’s requirements. He requested that the government stop the gas curtailment program on urea manufacturing in order to honor the gas supply agreement with industry. He was of the view that government should have imported 200,000 mt of urea before December 2010 to meet the shortfall in the Rabi season. However, it may be imported early next year in view of the upcoming Christmas and New Year holidays. He said the private sector would not import urea due to price differences in imported and locally produced urea.
Indonesia: While the conventional wisdom is that there will be no more sales from Indonesia until April or so, some Asian traders are speculating that some tons might come on the market in the next couple of weeks.
Sources say that some of the winners in previous urea tenders may try to walk away from the deals. The price for the urea when purchased is now too high for the regional market.
Sources say if the buyers do forfeit their bid bonds and walk away, the producers will have no choice but to call a selling tender.
One trader said that even though Indonesia is entering its own domestic season, the producers do not want to be in the situation of having to explain to the government why they did not use their full export quotas.
A source said that the thinking seems to be that the government might reduce the 2011 export quota if the producers have tons left over.
NITROGEN SOLUTIONS
U.S.Gulf: Barges continue to be called a very flat and very quiet $285-$290/st FOB ($8.91-$9.06/unit).
Eastern Cornbelt: The UAN-32 market was tagged in the $325-$340/st ($10.16-$10.63/unt) FOB range out of regional terminals, also reflecting a drop from recent reports. Sources quoted the lower end of the range for prompt tons, with spring prepay offers in the $335-$340/st ($10.47-$10.63/unit) FOB range.
Western Cornbelt: UAN-32 remained in the $325-$340.80/st ($10.16-$10.65/unit) range FOB regional terminals for prompt or prepay tons.
Northern Plains: Minnesota sources quoted UAN-32 at $325-$340/st ($10.16-$10.63/unit) FOB, with the low for prompt tons and the upper end for spring prepay. Delivered UAN-28 in the North Dakota market was reported at $325-$330/st ($11.61-$11.79/unit) from Canadian shipping points, with the low for prompt tons and the upper end for prepay.
Great Lakes: The UAN market was pegged at $10.63-$10.89/unit FOB regional terminals for spring prepay.
Northeast: Sources continued to quote the low end of the UAN-30 market at the $295/st ($9.83/unit) level out of Baltimore, Md., for prompt tons. There were reports of spring prepay being offered at higher levels, with one source quoting a $305/st ($10.17/unit) FOB level for UAN-30 and another quoting UAN-32 spring prepay at $325/st ($10.16/unit) FOB Baltimore for tons delivered by June 2011.
Rail-delivered UAN-32 tons were quoted in the $330-$335/st ($10.31-$10.47/unit) range in the Northeast last week. Out of terminals in upstate New York, the UAN-32 market was pegged at $10.75/unit FOB to dealers.
UAN vessel tons were pegged at the $315/mt CFR level for inbound tons. One source said tank space on the East Coast is fairly full or committed.
AMMONIUM NITRATE
U.S. Gulf: The last done trades were called $320/st FOB. However, some sellers, citing higher inland numbers, were predicting the next round of sales could be as high as $330-$350/st FOB. Others were doubters at the $350/st FOB level, but said $330/st FOB might be doable in the near term.
Western Cornbelt: Ammonium nitrate was reported at $350-$385/st FOB in the region, with the low again in Missouri and the upper end in the Iowa market.
AMMONIUM SULFATE
Eastern Cornbelt: Ammonium sulfate was in extremely tight supply, and sources reported higher prices for any available tons. Illinois sources put the granular market at $280-$290/st FOB, up $20/st from the previous week, with the low also quoted for mid-grade tons on a spot basis. “It is an availability issue,” said one contact. “The price is high, but you can’t get any anyway.” Another source said rumors were circulating that new granular ammonium sulfate pricing would come out at the $325/st FOB or rail-DEL level in the Midwest in the near term.
Western Cornbelt: The granular ammonium sulfate market remained in a broad range at $250-$290/st FOB, with the low reported in Missouri on a spot basis and the upper end in Iowa for very limited tons.
Northern Plains: Delivered ammonium sulfate was pegged at $270-$275/st in North Dakota for limited tons, while Minnesota sources quoted granular ammonium sulfate firmly at the $280/st mark FOB terminals. Effective Nov. 24, Agrium’s granular ammonium sulfate posting moved to $275/st railDEL in North Dakota and Minnesota.
Great Lakes: Granular ammonium sulfate was pegged as high as $300-$305/st FOB or rail-DEL in the region last week for limited tons. Effective Nov. 24, Agrium’s granular ammonium sulfate posting moved to $275/st rail-DEL in Wisconsin.
Northeast: Granular ammonium sulfate pricing had reportedly firmed to $255-$265/st DEL in the region for very limited tons, up roughly $25/st from last report. Pennsylvania sources quoted granular ammonium sulfate tons FOB Hopewell, Va., at the $235/st level for the most recent pricing quotes, although no tons were available last week.
PHOSPHATES
Central Florida: Prompt sales out of Central Florida were slim last week, but producers and traders were eagerly awaiting the beginning of the prepay season later this month. The advantage to customers for making prepay deals is the savings they would get on their taxes if they are done before year’s end.
The industry will take a break between the Christmas and New Year holidays, then gear up for more prepay until the real spring season gets underway in February. Generally, prices are expected to increase as the spring season approaches, mainly because of low inventories.
Within the next couple of weeks, Mosaic’s inventories are expected to reach all-time lows – not just for the time of year, but ever. Loading product for the big PhosChem contracts for India will account for the biggest chunk of the drawdown. That will have the effect of driving up prices, as people will be just getting started buying for spring once more.
Agrifos switched from producing DAP for the market to MAP, and the move was paying off. Last week, it sold unit trains at solid prices. The company expected to have enough room left on its phosphogypsum stack to be able to continue production at least through the first quarter of next year.
Well-below-average temperatures were threatening strawberry and citrus crops in Central Florida last week, but no damage estimates had been released as of late in the week. Temperatures were expected to return to normal by week’s end, but will take another tumble by the middle of this week.
With no new prompt sales last week, the Central Florida DAP price range was unchanged from the previous week at $540-$550/st FOB. Smaller lots from traders could cost $5-$10/st FOB more. CF’s price was $540/st FOB. Mosaic’s price was $550/st FOB. MAP was listed at a premium of $10/st FOB in comparison to DAP. PCS Sales was making sales at comparable prices to the market. Agrifos’ price for truck sales was $580/st FOB for DAP and $595/st FOB for MAP, but $5/st FOB less for rail.
U.S. Gulf: After a lull during the past couple of weeks, NOLA phosphate barges began to move again last week, after the few cheap barges that had been available were snapped up.
Russian DAP was having a hard time finding a home, although the opposite was true for Russian MAP barges. Many dealers don’t want to take the DAP because of the difference in color and the lack of bin space to store a different product, according to some sources. The same was true for some farmers, although the more savvy growers don’t have a problem with the Russian variety.
Russian DAP is a high-quality product and it has been only the color that chased buyers away, said sources. Still, as a couple of sources pointed out, a small fortune could be made blending Russian with domestic DAP. To get Russian DAP sales moving, customers were being asked to take DAP in addition to their MAP buys, according to several sources.
Even though most in the industry shied away from Russian DAP, almost everyone wants to see it sold out so they will be able to sell the domestic product they have at higher prices. It was not known whether more phosphate was being shipped from the former Soviet Union, but what has already arrived should not put a serious dent in the inventory shortage expected this month and leading into the spring season.
Warehouse operations were still doing well last week, with farmers able to put phosphate on frozen ground. Prices ranged from as low as $595/st FOB in the southern areas to $605/st FOB in the north.
Crop prices were still positive late last week on the futures board. Corn for December 2011 improved from $5.245/bushel to $5.33/bushel, but December 2012 drifted south from $5.0125/bushel to $4.975/bushel. Soybeans for November 2011 were up from $11.995/bushel to $12.04/bushel, while November 2012 soybeans were running $11.51/bushel. Wheat for July 2011 increased from $7.9075/bushel the previous week to $8.50/bushel late last week, and July 2012 was $8.02/bushel.
The somewhat brighter picture for phosphates last week was reflective of the mood of the industry and the view of the upcoming spring season. Most of the transactions done last week were for in-house warehouse operations and not for resale.
Prices last week depended on two factors – when the product was purchased and what the product’s origin was. Russian phosphate bought last week was generally done in the low $530/st range, while domestic DAP was sold in the mid-$530s/st FOB to mid-to-high $540s/st FOB range.
The NOLA DAP barge market started to march northward from $525-$530/st FOB the previous week to $531-$547/st FOB last week, based on prompt sales. MAP was bringing a premium of $10/st FOB for NOLA barges and $10-$20/st FOB higher at terminals, although the premium will likely increase. Prices appeared to be firm or higher for the next month or so.
Eastern Cornbelt: Although phosphate inventories remained tight in the region, warehouse prices were slipping as fall demand slowed. “We’re still running off the floor on dries,” said one Illinois contact last week. The DAP market was quoted at $595-$605/st FOB river terminals, with MAP tagged at $605-$620/st FOB in the region. The MAP range was down from a high of $650/st FOB for sales at some locations during the heavy fall run.
10-34-0 pricing, by contrast, continued to ratchet up on the basis of firming acid prices and extremely tight supply. Sources quoted the 10-34-0 market in the region at $550-$570/st FOB “if you can find it.” That range was up some $30-$35/st from last report.
Western Cornbelt: DAP pricing slipped to $590-$600/st FOB regional warehouses, with most dealer quotes at the upper end of that range. MAP was pegged at $610-$620/st FOB river terminals, with delivered MAP in the $630-$640/st range in western Iowa, depending on time of delivery.
The 10-34-0 market, provided any spot tons could be had, was quoted at $530-$560/st FOB in the region last week, reflecting a sizable jump again from the previous week. One Iowa source said spring prepay 10-34-0 was being quoted at the $550/st FOB level in his area for “very limited” tons.
Northern Plains: Sources quoted the MAP market in a broad range at $615-$655/st FOB, with the low reported in Minnesota for prompt tons. North Dakota sources quoted MAP FOB Jamestown at $645/st for prompt and $655/st for prepay. DAP out of the Twin Cities market was pegged in the $590-$600/st FOB range last week.
One Minnesota source said spot 10-34-0 tons could still be had for as low as $500/st FOB last week, but others put the spring prepay market at $560-$570/st FOB, with the upper end of that range also quoted for some 10-50-0 prepay tons out of the Twin Cities market. Delivered 10-34-0 in North Dakota was quoted at $550/st for prompt tons last week.
Effective Dec. 1, Agrium’s phosphoric acid postings firmed to $1,100/st rail-DEL for both super phosphoric acid (SPA) and merchant grade acid (MGA) in Minnesota and the Dakotas.
Great Lakes: DAP was pegged at $605-$620/st FOB in the region, with the low in Wisconsin and the upper end in the Michigan market. MAP was tagged at $620-$640/st FOB, where available. Sources said phosphate inventories remained very tight in the region.
Regional sources pegged the 10-34-0 market firmly in the $560-$570/st FOB range for spot or prepay, with very limited tons available.
Northeast: Phosphate inventories remained tight in the Northeast region. Sources quoted MAP at $645/st FOB Lancaster and E. Liverpool, Ohio, and $650/st FOB Philadelphia. DAP was reported at the $625-$630/st FOB level for any available tons last week.
10-34-0 was quoted solidly at the $520/st FOB mark out of terminals in upstate New York. Pennsylvania sources quoted delivered 10-34-0 at $525/st from Mount Jackson, Va., where the FOB market was quoted at $500/st.
U.S. Export: PhosChem made a relatively small sale into Central America last week of 4,000 mt at the same price it has the past few shipments, $600/mt.
The export market has still fallen short of the prices paid in the major domestic markets, and there will be no major push to increase exports as long as that situation continues.
From this week until at least the first of the year, the main activity for the export market will be loading and shipping vessels to India.
The export DAP price range was unchanged last week at a flat $600/mt, despite the most recent sale into Central America, which was at the same price as the current flat range.
Pakistan: The country consumed about 1.052 million mt of DAP between January and October 2010 compared to the year-ago 1.233 million mt, thus registering a drop of 14.7 percent. A report of Invest Finance Securities Ltd. says besides the flood factor, a 31 percent year-over-year surge in DAP prices during the first ten months of 2010 also contributed to the fall in DAP consumption. According to Mr. Asad Umar, Engro president, farmers usually apply DAP in the month of October, which has passed, so there is no need for the immediate import of DAP.
In the meantime, during January-December 2010, Pakistan so far booked orders for the import of 571,249 mt of DAP/MAP from Russia, the U.S., China, Australia, Tunisia, Morocco, and CIS at prices ranging from $358 to $605 per mt CFR. It includes Engro at 269,060 mt; Fauji Fertilizer 55,000 mt; United Agro 128,589 mt; Jafar Bros 33,000 mt; Dawood Hercules 30,000 mt; and Chawla Int’l 55,600 mt. The DAP was supplied by Dreymoor, Transammonia, Ameropa, Quantum, Multicommerce, Valency Int’l, ICEC, Morocco, Seatrade/Wengfu, and IPL. The last contract was awarded by Engro to Dreymoor for 30,000 mt of DAP at $605 CFR for Nov./Dec. shipment.
POTASH
Eastern Cornbelt: The potash market was pegged in a broad range at $500-$525/st FOB regional warehouses, depending on grade, supplier, and location. Sources continued to report delays on fill shipments.
Western Cornbelt: The potash market was tagged at $500-$521/st FOB, depending on grade, location, and time of delivery. The upper end was quoted in Missouri for white granular tons, with red granular commonly at the $515/st FOB mark. Iowa sources pegged 60 percent red potash for spring delivery in the $500-$515/st range.
Northern Plains: Minnesota sources pegged the potash market at $505-$515/st FOB warehouses and $525/st rail DEL. Granular potash FOB Saskatchewan mines ranged from $475-$480/st FOB.
Great Lakes: Potash was quoted at $515-$525/st FOB regional warehouses, depending on grade and location.
Northeast: Delivered potash was quoted in the $530-$542/st range in the region, with the upper end for white granular tons. On an FOB basis, sources quoted the potash market at $510-$525/st at regional warehouses.
SULFUR
Tampa: Last week, the Tampa spot market – buys that were based on the Tampa price – was running about $30/lt higher than the current Tampa contract market, a spot price of $190/lt.
Meanwhile, the world price remained steady after ADNOC dropped its price by $10/mt two weeks ago. The lack of sales into India and China was said to be responsible for depressing the world market.
If the world market price does not improve in January, the Tampa molten price will either remain the same or increase only slightly.
Nevertheless, the domestic sulfur market remained much tighter than the world market, and that, too, will figure into the upcoming negotiations for the first quarter.
Oil refineries were operating at higher capacity levels last week, at 87.5 percent compared to 82.6 percent the previous week, an increase of 4.9 percent of capacity.
Vancouver: Spot prices out of Vancouver declined $5-$10/mt last week as uncertainty grew about what China will do about the production of phosphate now that it imposed a 110 percent tariff on phosphate exports. If production continues at the same pace, it will need roughly the same amount of sulfur.