UREA
U.S. Gulf: Prompt granular barges last week were reported to be trading in the $380-$385/st FOB range. Prills were reported to have traded as high as $390/st FOB.
Eastern Cornbelt: Granular urea pricing was steady at $425-$445/st FOB regional terminals, with the Cincinnati market quoted at the $440/st FOB mark to the dealer.
Western Cornbelt: The granular urea market was unchanged at $410-$440/st FOB for prompt tons in the region, with the low in southern Missouri and the high in Iowa. Dealer postings out of some western Iowa locations were said to be as high as $460/st FOB.
Southern Plains: Granular urea was up from last report at $410-$415/st FOB the Tulsa market, with the low end reflecting the reference price from Koch FOB Enid, Okla.
Northern Plains: Granular urea was quoted at $425-$430/st FOB Minneapolis for spring tons. Dakota sources pegged the urea market at $460-$465/st FOB Carrington, N.D., with delivered tons in the $465-$470/st range in North Dakota.
Northeast: Sources pegged the granular urea market at $425-$435/st FOB last week, with the low at E. Liverpool, Ohio, and the upper end FOB Lancaster, Pa. Those numbers were up from last report.
Pakistan: Even though TCP is expected to handle the purchase of 250,000 mt under a government-to-government deal between Pakistan and Saudi Arabia, sources still expect to see a tender forthcoming.
One source said a tender would help provide a public means of determining the price of the urea, rather than depend on the good will of the producer and buying representatives.
New production has started up in Pakistan, but the big issue of natural gas supplies remains central to urea purchasing plans.
Last year, Pakistan planners had hoped that after some imports in the first quarter the country would move to urea self sufficiency once all the urea plants were up and running. Unfortunately for those plans, the natural gas supply was not enough for consumer and industrial needs. The government diversion of gas to the consumer market forced urea production to drop. The reduction in production prompted a series of tenders in the second quarter of 2010.
The continued diversion of natural gas later into the year prompted the most recent decision to import 250,000 mt by the middle of February 2011.
Middle East: Arab producers continue to argue the price should be in the low-to-mid $400s/mt FOB. The only problem is that they cannot point to any business that justifies anything higher than $400/mt FOB for either prilled or granular urea.
Few in the industry are surprised that the price has not moved yet this year. January and February are usually quiet months while contracts are being filled and buyers begin assessing their needs for the coming year.
Industry sources say things should get interesting by the end of February or early March. By then, India will begin talking about a series of tenders and contract buyers will be looking at the possibility of needing more tons under their agreements.
Sources report that sales to Australia, which once held such great promise, are now slowing down because of massive flooding in the northeast.
Iran remains the fly in the ointment for the Arab producers looking to push prices higher. With fewer buyers willing to take Iranian material because of the sanctions placed on it by the U.S. and the European Community, sources say Iranian suppliers might be willing to shave a few dollars off their netback for the possibility of sales.
Black Sea: Indications are that prices are topping off at $390/mt FOB. Shipments from Yuzhnyy remain steady to buyers in Turkey and Latin America. While these sales are not market movers, they are providing enough of a base for the producers to push back against efforts by buyers for lower prices.
Indonesia: Indonesian producers are moving out the final tons purchased under 2010 buying contracts. Sources say no new export permits will be issued until the second quarter. The weather has been playing havoc with buyers other than Australia.
Sources report that buyers in Thailand are rethinking their urea demands due to heavy rains.
China: Sources say a few tons remain in the bonded warehouses available for export. The price of this material is pegged at $385/mt FOB.
Because the tons have already been processed by customs and presumably have a vessel lined up to take the material, the urea can be sold offshore at the 7 percent export duty rate instead of the current 110 percent rate.
Chinese urea will not be available on the international market again until July, when the export duty drops to 7 percent for four months.
Bangladesh: Bangladesh Industries Minister Dilip Barua told the local press that there will be no urea crisis in the country during the coming crop season. He said that while demand will be 2.83 million mt, it will be met by 800,000 mt in inventory, imports from Qatar, UAE, and Saudi Arabia, and domestic production from KAFCO.
Despite this upbeat assessment, other reports from the country are that river transportation of imported urea and other products to northern districts has been stranded due to low water levels on the Jamuna River near Shibalaya in central Bangladesh. However, the Bangladesh Inland Water Transport, in charge of dredging rivers, and the port officials allegedly blamed vessel operators for overloading their vessels to save transport costs.
NITROGEN SOLUTIONS
U.S. Gulf: Most players continue to call the market $280-$285/st FOB ($8.75-$8.91/unit).
Eastern Cornbelt: UAN-32 was pegged in the $335-$340/st ($10.47-$10.63/unit) FOB range in the Illinois market last week, with the upper end of the regional range for UAN-28 reported at $11.05/unit FOB inland terminals in Ohio for nearby tons.
Western Cornbelt: UAN-32 remained at $325-$340.80/st ($10.16-$10.65/unit) FOB regional terminals, with the low in southern Missouri on a spot basis. Delivered UAN-32 tons were pegged in the $335-$340/st ($10.47-$10.63/unit) range in western Iowa. One contact said he expects spring demand for UAN to be up 25 percent from average in his trade area.
Southern Plains: The UAN-32 market was pegged in a broad range at $320-$340/st ($10.00-$10.63/unit) FOB, with the low out of production points for prompt tons and the upper end quoted on a spot basis in the Kansas market.
Northern Plains: UAN-28 was reported at the $315/st ($11.25/unit) mark FOB Pine Bend for March tons, with delivered UAN-28 in North Dakota quoted at $325/st ($11.61/unit) for prompt and $335/st ($11.96/unit) for spring tons out of Canada.
Northeast: Sources quoted the UAN-30 market at $290-$295/st ($9.67-$9.83/unit) FOB Baltimore, with UAN-32 tons at that location reported at the $309.50-$310/st ($9.67-$9.69/unit) level on the low end. Sources talked a little prepay interest in UAN, but little activity otherwise. Out of terminals in upstate New York, the UAN-32 market was quoted at $340/st ($10.63/unit) FOB to the dealer.
Although some sources said UAN vessels had dropped below the $300/mt CFR level for a time and were trying to firm back up, most continued to quote the UAN vessel market at the $305/mt CFR level last week.
AMMONIUM NITRATE
U.S. Gulf: New business is now put at $325-$330/st FOB, with offers as high as $334/st FOB.
Western Cornbelt: Ammonium nitrate was steady at $360-$385/st FOB in the region.
Southern Plains: Ammonium nitrate had reportedly firmed to a solid $350/st FOB the Tulsa market, with limited tons available.
AMMONIUM SULFATE
Eastern Cornbelt: Effective Jan. 6, Honeywell’s granular ammonium sulfate postings moved to $310/st FOB Danville, Ill., with mid-grade moving to $300/st FOB Danville and Byron, Ill. Honeywell’s rail-delivered ammonium sulfate postings moved to $320/st for granular and $310/st for midgrade in Illinois, Arkansas, and Mississippi, but company sources said granular supplies are “very limited” and no new warehouse orders are being accepted at this time. Rail and barge orders are reportedly available for January delivery for granular product, but the company was accepting no new Midwest rail or warehouse orders for mid-grade ammonium sulfate last week.
DSM Chemicals had reportedly moved its rail-delivered granular ammonium sulfate price to $285/st in the Midwest, but was also not taking new orders at this time. A company source said another increase is likely in the near term.
Western Cornbelt: Sources pegged the granular ammonium sulfate market solidly at the $310/st FOB or rail-DEL level, but there was very little, if any, for sale.
Effective Jan. 6, Honeywell’s granular ammonium sulfate postings moved to $310/st FOB Dubuque, Iowa, St. Louis, Mo., and Omaha, Neb., with mid-grade moving to $300/st FOB Omaha. Rail-delivered postings moved to $320/st for granular and $310/st for mid-grade in Iowa, Missouri, Nebraska, and Kansas, but the company was not accepting new warehouse orders for granular product for either rail or warehouse orders for mid-grade ammonium sulfate last week.
Southern Plains: Effective Dec. 20, America Plant Food Corp.’s (APF) granular ammonium sulfate postings at Texas shipping points firmed $20/st to $245/st FOB Freeport, $255/st FOB Galena Park, $270/st FOB Fort Worth, and $285/st FOB Littlefield. The granular ammonium sulfate posting at Mermentau, La., moved to $275/st FOB.
APF’s coarse grade ammonium sulfate postings firmed on Dec. 20 to $235/st FOB Freeport, $245/st FOB Galena Park, $260/st FOB Fort Worth, and $275/st FOB Littlefield, while standard grade moved to $230/st FOB Freeport and $270/st FOB Littlefield. The company’s N-Pac Compacted posting moved on Dec. 20 to $260/st FOB Galena Park.
Martin Resources also raised its ammonium sulfate postings FOB Plainview, Texas, on Dec. 20, to $285/st for granular, $280/st for coarse, and $270/st for standard grade.
Northern Plains: Effective Dec. 16, Agrium’s granular ammonium sulfate posting firmed to $310/st DEL in North Dakota, Minnesota, and Wisconsin, but regional sources said no tons are currently available. Dakota Gasification will reportedly have a program out at mid-month, but no pricing was available from them last week.
Effective Jan. 6, Honeywell’s granular ammonium sulfate postings moved to $310/st FOB Roseport, Minn., Amherst Junction, Wisc., and Prairie du Chien, Wisc., with mid-grade moving to $300/st FOB Roseport. Rail-delivered postings moved to $320/st for granular and $310/st for mid-grade in Minnesota and Wisconsin. The company notified customers, however, that granular supplies are “very limited” and no new warehouse orders are being accepted at this time. No new rail or warehouse orders are being accepted for mid-grade either.
Northeast: Sources reported only slight changes in spot fertilizer prices last week, although tight supplies and higher numbers were on the radar for ammonium sulfate. One source said granular ammonium sulfate had moved to the $280/st FOB level in his location last week, up some $50/st from last report, while rail-delivered product in the Northeast was reportedly listed at the $330/st level before discounts from Honeywell.
DSM Chemicals was listed at $295/st rail-DEL in the Northeast for granular ammonium sulfate last week.
PHOSPHATES
Central Florida: Freezing temperatures in Florida caused at least $273 million of damage to the state’s crops in December. The crop damage included citrus, strawberries, and produce – which will be reflected in higher prices at the grocery store.
Although no new prompt sales were found, a trader said the call volume from prospective buyers had increased substantially toward the end of last week, which was a good sign.
The spring season was still a question for some. It was not clear how much phosphate had already been applied in the portion of the Cornbelt served from Florida.
Inventories remained low last week, and that was not likely to change anytime soon. Even if production becomes less dependent on exports, the domestic market should have noproblem filling the gap.
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 $585/st FOB for DAP and $595/st FOB for MAP, but was $5/st FOB less for rail.
U.S. Gulf: Last week, traders on the Gulf’s river system were just shaking off the dust and getting back to work after the holiday season. Some even got a few things done, like buying or selling NOLA phosphate barges.
Most of those with something to sell were seeking $550/st FOB, but no one had actually received that amount. Supplies of blonde Russian DAP were beginning to run low but were still available, but the price was at a parity with domestic phosphate. Several sources said buyers seeking large quantities were bidding below the current range, but were expected to accept higher offers within a week or so.
Most believe the spring will bring a bounty to the phosphate industry, primarily because of the healthy price of corn. Late last week, corn on the futures board was retreating somewhat from the $6/bushel mark. Corn for December was $5.53/bushel and $5.17/bushel for December 2012. Soybeans for November were $12.58/bushel, and November 2012 was running $12.12/bushel. Wheat for July was at $8.334/bushel, and $8.36/bushel for July 2012.
Warehouse prices for DAP were between $585/st FOB and $600/st FOB, depending on location. Those prices should remain stable this month, but could increase as the spring season approaches.
The prepay market began earlier this season and was taking a break last week, but that was expected to resume as buyers attempt to lock in prices that were anticipated to be lower than in the near future – like February.
“Buyers have to have a sense of losing something, such as lower prices, which they didn’t have in December,” said one trader. “Now, they see the price (of phosphate) moving up.”
Most believed prices will increase as the spring season gets underway, because inventories are low and corn prices are high. Farmers will not skimp on phosphate while crop prices remain robust.
The NOLA DAP barge market range moved up, but only a little from the previous week’s range of $545-$547/st FOB to $545-$548/st FOB, based on actual barges sold. MAP was bringing a premium of $20/st FOB for NOLA barges. Prices will probably be firm or higher for the next month or so. Once the spring season starts, the trend should be up, not down.
Eastern Cornbelt: DAP was generally quoted in the $600-$610/st FOB range in the region in early January, with MAP $10-$20/st higher, depending on location and supplier. The Central Florida DAP price range remained at $540-$550/st FOB.
10-34-0 pricing had reportedly firmed to $580-$600/st FOB in the region, but availability was the larger question, as sources said most locations were out of product.
Western Cornbelt: MAP was quoted in the $620-$630/st FOB range in the Iowa market last week, with the low reported at $605-$610/st FOB in southern Missouri. DAP remained at $585-$605/st FOB, with the upper end in Iowa and the low in Missouri on a spot basis.
10-34-0 was pegged at $580-$600/st FOB for any available tons, which were scarce. One supplier who quoted the lower end of the range said he was no longer taking orders as the week advanced.
Southern Plains: DAP was quoted at $585-$590/st FOB the Tulsa market, down slightly from last report, with MAP tagged at a solid $610/st FOB for limited tons. Sources described 10-34-0 inventories as very tight, with the market firmly at $525/st FOB for any available tons in the region.
Effective Jan. 1, Agrium’s phosphoric acid postings firmed to $1,250/st rail-DEL for both super phosphoric acid (SPA) and merchant grade acid (MGA) in Colorado, Kansas, New Mexico, Oklahoma, and Texas. That number was up $150/st from Agrium’s December list price in the region.
Northern Plains: Minnesota sources quoted DAP at $590/st FOB the Twin Cities, with MAP at the $608/st FOB mark for spring take. Dakota sources pegged the MAP market at $650-$660/st FOB North Dakota warehouses.
10-34-0 was also in extremely tight supply. A North Dakota contact said the only spot tons available are at the $580/st mark FOB Grand Forks, while Minnesota sources quoted the market as high as $600/st for any available tons.
Effective Jan. 1, Agrium’s phosphoric acid postings firmed to $1,250/st rail-DEL for both SPA and MGA in Minnesota and the Dakotas, up $150/st from the company’s December list price.
Northeast: DAP was pegged in the $610-$625/st FOB range, with the low again at E. Liverpool. MAP was reported at $635/st FOB in Pennsylvania on a spot basis, with delivered MAP tons quoted in a broad range at $635-$660/st in the region, depending on location.
10-34-0 was quoted solidly at the $525/st FOB mark out of terminals in upstate New York.
U.S. Export: No new export phosphate deals were found last week, but TFI’s export report showed it was a very good month for the industry.
TFI said India continued its dominance in the export marketplace, as it received 264,561 mt of DAP in November. Through the end of November, India had taken more than half the total of DAP exports from the U.S., 2,718,154 mt of the total 4,436,351 mt in the calendar year. Thailand was the second biggest DAP buyer in November with 40,675 mt, and Brazil was third at 35,656 mt. The total of DAP exports in November was 390,063 mt, an increase of 3.7 percent over the same period in 2009. For the calendar year to date as of November, Mexico was shipped 207,444 mt and Australia got 171,192 mt. The total for the calendar year to date was down 17.7 percent from the previous year.
Brazil continued to be the major importer of U.S. MAP with another 38,840 mt in November. It was followed closely by Australia at 36,736 mt and Canada with 29,663 mt. Total MAP exports for November were 133,460 mt, an increase of 10.1 percent over November 2009, according to TFI. For the calendar year to date, Brazil took 556,345 mt, with Canada the second biggest customer at 292,124 mt, followed by Australia at 289,278 mt. Total MAP exports for the calendar year to date through November were 1,639,944 mt, an increase of 8.5 percent over the previous year.
With no new sales, the export DAP price range remained a flat $600/mt FOB.
Nepal: Only one company offered tons in the Nepal tender for 25,000-30,000 mt that closed Jan. 6. Desh Trading of Bangladesh offered at $784.40/mt CFR for the 25,000-30,000 mt. The material will first be delivered to an Indian port and then trucked inland to Nepal. At press time there was no word if the Nepalese accepted the offer. One Asian trader noted the price was very high and opined that the tender might be scrapped.
India: Sources report that IFFCO settled a phos acid deal at $800/mt CFR. One trader noted that in the end, however, the real price might be closer to $780/mt CFR. Either way, the purchase indicates to area sources that there is no reason to think the DAP price will be coming down anytime soon.
Despite the IFFCO news, PhosChem reports that it has yet to conclude business with IFFCO for the first quarter.
POTASH
U.S. Gulf: The NOLA barge market is put at $480-$485/st FOB.
Eastern Cornbelt: Potash was unchanged at $505-$525/st FOB regional warehouses, depending on grade, supplier, and location, with the upper end reported for 62 percent white granular tons on a spot basis. Most sources put the red granular potash market at the $515/st FOB level in the region.
Western Cornbelt: Potash out of regional warehouses ranged widely from $505-$525/st FOB in early January, depending on location. One Iowa contact put the common granular potash number at a solid $515/st FOB most river warehouses.
Southern Plains: Sources continued to quote the potash market in the $505-$515/st range FOB regional warehouses. Potash pricing FOB Carlsbad, N.M., was steady at $480/st for 60 percent standard, $482/st for 62 percent standard, $485/st for 60 percent granular and 62 percent fine standard, and $493/st for 62 percent granular.
Northern Plains: Minnesota sources pegged the potash market at $505-$515/st FOB warehouses and $525/st railDEL. Granular potash FOB Saskatchewan mines ranged from $475-$480/st FOB.
Northeast: Potash out of regional warehouses was pegged in the $510-$525/st range, depending on location, with the low at Lewistown, Pa., and the upper end FOB Lancaster. Delivered potash was reported in the $530-$540/st range in the region last week.
SULFUR
Tampa: With a lot of the players still on vacation, negotiations for first-quarter prices had not started as of late last week. There was a fairly good probability they will some time this week, or next. One source said an agreement may not be reached until the TFI meeting in Arizona in early February.
The supply and demand situation remained tight last week. Although world prices edged up a little since the end of last year, the uncertainty about China’s plans seemed to be a moderating influence on pricing.
Refinery capacity rates edged up a little last week from 87.8 percent to 88 percent, a mere 0.2 percent increase. Turnarounds generally occur during the first quarter, and that will likely take a bite out of supplies.
The high price of diesel fuel was pushing up the fuel surcharge for sulfur trucking and was running about 33.3 percent, while the rail fuel surcharge was about 15 percent, but will go up next month.
Vancouver: Negotiations for new contract pricing for the first quarter appeared to be closing in on a price of $180/mt FOB. Spot pricing last week was in the $145-$150/mt FOB range. China’s export duty on phosphate exports was causing uncertainty in the Vancouver market.
MARKET NOTES
Australia: Exploration stage mining company Legend International Holdings Inc. said Jan. 4 that the floods in eastern Queensland have not impacted its Mt. Isa Phosphate Project as they are about 1,300 kilometers (800 miles) away. It said the QR Network has confirmed that the Mt. Isa-to-Townsville railway line continues to operate with no interruption.