Deliveries from Yuzhnyy are facing the traditional seasonal delays.
The Turkish government has long required only one ammonia vessel at a time to pass through the Bosporus Straits, and only during daylight hours. With shorter days in the winter, fewer ships can move out of the Black Sea than during the summer season.
Middle East: Sources report that Mitsui has helped Iran move its price up.
The latest price out of Iran is now pegged at $407/mt FOB. That put the Iranian tons just a few dollars below the last noted Arab producer price.
The push on prices comes at a time when Indian buyers were using the lower Iranian price to hammer their Arab suppliers.
Sources report that Indian buyers were refusing any Arab tons until the producer matched the much lower Iranian price.
At one point the gap between Persian and Arab ammonia was more than $20/mt.
The latest Mitsui deal closed the gap to single digits.
India remains a big buyer of Iranian ammonia. Sources say New Delhi is not buying the product using U.S. Dollars or Euros, and so does not have a problem with the currency embargo placed on Iran.
The tons that Arab producers once sold to India are now being diverted to the Far East.
Sources report that demand in the rest of Asia is so strong that even the loss of the Indian business is not enough to raise concerns among producers about having excess tons on hand.
The price for the region is now pegged at $407-$410/mt FOB.
UREA
U.S.Gulf: Urea granular barge prices were moving around last week. Sources reported that trades dropped as low as $378/st FOB before a midweek rally spurred on by USDA crop news and higher corn prices. There were reports that prompt barges moved back up – as high as $385/st FOB. However, other sellers could not find the better deals, saying instead that their higher prices ideas met yawning buyers.
Most agreed that there is currently no shortage of urea as major importers are pulling in cargoes right now to get them ready for the spring season. While sellers predict this product will still be needed, others say buyers are taking their time. One said buyers have bought up enough product to meet the first round of demand from farmers, but will need to top off their supplies once farmers come forward.
Prills remained at a premium, called $390/st FOB.
According to the U.S. Department of Commerce (DOC), U.S. urea imports in November were 487,651 st, up 44 percent from the year-ago 337,578 st. July-November imports were up 31 percent, to 2.27 million st from the year-ago 1.74 million st.
Eastern Cornbelt: Granular urea remained at $425-$445/st FOB regional terminals, with the upper end out of inland Ohio shipping points and the lower numbers out of river locations.
Western Cornbelt: The granular urea market was unchanged at $415-$440/st FOB for prompt tons, with the low in Missouri and the high reflecting dealer list prices in Iowa. Truck-delivered urea tons in the Iowa market were also quoted at the $440/st level last week.
South Central: The granular urea market was steady at
the $405-$415/st range FOB regional terminals to the dealer,
with sources reporting that most spot business was taking
place at the lower end of that range.
Southeast: The granular urea market was pegged at the
$420/st mark FOB port terminals at mid-month. Some talked
of one-off deals taking place as low as $400/st FOB at some
locations in early January, but others doubted those lower
numbers last week.
Eastern Canada: Granular urea pricing was up slightly
from last report in Eastern Canada, with sources quoting the
dealer market at $540-$559/mt FOB regional terminals.
Middle East: Egypt’s MOPCO closed a selling tender last
week for 20-25,000 mt of granular urea, but has not released
the bid numbers at press time.
The tonnage is available for the second half of January.
The tender surprised many in the industry.
As the new year opened, sources reported that Egypt and Arab Gulf producers were all sold out through February.
Now, tonnage is suddenly available from Egypt.
Sources also report that some of the Arab Gulf producers are looking to move a few extra tons as well.
Egyptian material has moved at $418/mt FOB. Industry watchers say there have been bids at $422-$425/mt FOB.
While some traders doubt the price has broken $420/mt FOB, a sale to Transammonia was rumored at E336/mt FOB. The U.S. Dollar equivalent as of Friday, Jan. 14, is $449.47/mt FOB.
Sources say Transammonia also led the way with a bid in the $420s/mt FOB in the MOPCO tender.
Transammonia reportedly wants the Egyptian tons for a sale to Italy.
Skeptics in Europe and Asia, however, question the high Trammo prices. One trader commented the leaking of the prices sounds more like someone trying to move the market rather than a real shift.
But no one is denying that the market is hesitantly ready to move up.
At the same time Egyptian prices are passing $420/mt FOB, the price for Arab Gulf material moved above $400/mt FOB.
Asian sources say the push of the Egyptian business, along with steady demand from Latin America, has convinced buyers in the Arab Gulf that prices are now higher.
Prices for the region from Egypt to the Arab Gulf are pegged at $400-$425/mt FOB.
Black Sea: It seems that Fedcominvest has been busy buying material from Yuzhnyy.
Sources speculate that some of the tonnage is being used to back Indian awards given to Emmsons and Swiss Singapore. Some tons may also be destined for Turkey or Brazil.
In the past week or so, at least 80,000 mt has been picked up by Fedcom. Sources reported late last week that an additional 20,000 mt may have also been purchased.
The problem the buyers are facing is that the contracts to India were awarded at $360-$380/mt CFR, and the Black Sea price remains pegged at $380-$390/mt FOB.
Sources also report some port congestion at Yuzhnyy that could delay some of the cargoes.
Indonesia: Sources in Asia are now saying that rumors are circulating that the government may allow some of the producers to offer tons for sale in the next 30 days.
Earlier reports that there were no leftover 2010 tons are now being challenged.
Sources say at least 20,000 mt of granular and 15,000 mt of prilled urea are available under the 2010 export permits.
The strengthening Middle East market may have been a motivating factor in getting the government to allow a January or a February sale.
Traders add that the actual tonnage sold could vary depending on the price. Pusri and Kaltim are both known to add extra tonnage with favorable pricing.
Nepal: Only two companies offered material for a government-run tender for 30,000 mt that closed Jan. 12.
The urea is to be delivered to the port of Calcutta in India. From there it will be trucked to Nepal.
The Wilson Trading offer came in at $449.30/mt CIF. The IPL offer was at $507/mt CIF.
At press time, no award was issued.
India: Sources are now beginning to speculate that changes in the Indian urea buying methods will not happen this year.
Traders point to dropped meetings and continued conflicts among the domestic urea industry and the finance and agriculture ministries.
Even as sources talk about delays in getting an agreement that can be taken to the cabinet level, some broad strokes of the changes appear to be winning support.
Among the ideas that have earned general agreement are allowing some private sector interests to import urea for direct application and changes in the subsidy program. Nailing down the details appears to be the main stumbling block.
Pakistan: The total production of urea in Pakistan has been suspended from Dec. 27, 2010, because of the closure of all urea plants in country due to gas load shedding by three gas supplying companies – Sui Southern Gas Company Ltd. (SSGC), Sui Northern Gas Pipelines Ltd. (SNGPL), and Mari Gas Ltd.
S. Aamir Ahsan, CFO of Fauji Fertilizer Bin Qasim Ltd. (FFBQL), told Green Markets that their plant and holding company plant – Fauji Fertilizer Ltd. – have been closed since Dec. 27. They are on SSGC’s gas pipeline network. He said all the urea manufacturers have urged the government to reduce the gas load shedding period from 45 days to 15 days in order to meet urea requirements for the last three months (January-March) of Rabi season 2010-11. The industry request is yet to be approved by the Prime Minister of Pakistan. Similarly, Naz Khan, CFO, Engro Fertilizers Ltd., told Green Markets that their old and new plants are also closed. She has estimated that the government has to import about 250,000 to 300,000 mt of urea to meet the shortage in Rabi season and to carry on good stock for next season. The new Engro plant, however, closed Jan. 7 after trial production of 10 days.
It is estimated by industry that the gas outage in the country is likely to reduce the urea output by 10-13 percent. According to Farhan Bashir Khan, analyst at InvestCap Securities, as far as individual companies are concerned, they have planned their scheduled annual turnaround in line with this closure, and the government has to import 400,000 mt to 600,000 mt of urea.
The Fertilizer Price Review Committee (FPRC) met last week and recommended to the Prime Minister that Gas Load Management may be curtailed to 30 days instead of 45 days as per the practice of previous years. Moreover, a two-member delegation comprising the Federal Secretaries of Industries & Production and Food & Agriculture has been tasked to negotiate with the concerned Saudi authorities for an immediate import of 225,000 mt of urea through Sabic. The delegation is yet to proceed to Saudi Arabia. Pakistan needs 3.2 million mt of urea for the Rabi season.
A delegation of urea manufacturers led by Engro CEO Asad Umar attended the FPRC meeting and assured attendees that they would reduce the recently increased prices of urea (Rs.190 per 50 kg bag) by the same percentage the government reduces gas load shedding to their plants, according to a government statement.
NITROGEN SOLUTIONS
U.S. Gulf: More sources last week were indicating an uptick in UAN prices. Most are now calling barges at least a little stronger at $285-$290/st FOB ($8.91-$9.06/unit), if not higher. Sources were citing higher prices in Europe and stiffer price ideas for East Coast imports, now seen as $310-$315/mt DEL rather than $300-$305/mt DEL.
U.S. UAN imports in November were up 1,033 percent, according to the DOC, to 384,817 st from the year-ago 33,977 st. July-November imports were up 205 percent, to 1.05 million st from the year-ago 345,431 st.
Eastern Cornbelt: UAN was pegged in a broad range at $10.47- $11.05/unit FOB regional terminals, depending on location and time of delivery, with the low quoted in Illinois and the upper end in Ohio on a spot basis.
Western Cornbelt: UAN-32 was steady at $325-$340/st ($10.16-$10.63/unit) FOB regional terminals, depending on location and time of delivery. A Nebraska source quoted spring UAN tons at the $335/st ($10.47/unit) FOB level for March or April delivery, while Iowa sources talked of prompt tons offered at the $330/st ($10.31/unit) FOB level after discounts.
South Central: UAN-32 was quoted at $315-$325/st ($9.84-$10.16/unit) FOB in the region, depending on location and time of delivery. Sources pegged the Memphis market at the $320/st ($10.00/unit) FOB level for spring prepay tons.
Southeast: Sources reported weaker UAN prices in the region in early January. While postings for UAN-30 remained as high as $290/st ($9.67/unit) FOB regional terminals, most sources put the actual market in the $275-$280/st ($9.17-$9.33/unit) range FOB Norfolk, Va., and Wilmington, N.C. UAN-32 tons out of Savannah, Ga., were pegged in the $295-$300/st ($9.22-$9.38/unit) FOB range in early January.
Several sources said import UAN vessels were being indicated at the $305/mt CFR level or higher last week.
Eastern Canada: The UAN-28 market remained at $350-$355/mt ($12.50-$12.68/unit) FOB regional terminals in Eastern Canada, with UAN-32 quoted at the $397/mt ($12.41/unit) mark out of spot Ontario locations in early January.
AMMONIUM NITRATE
U.S. Gulf: Most continued to put recent business within the $225-$230/st FOB range, though some postings are higher.
Imports for AN are down, according to the DOC, with November imports off 25 percent, to 37,766 st from the yearago 50,265 st. July-November imports, however, were up 22 percent, to 212,873 st from the year-ago 173,821 st.
Western Cornbelt: Ammonium nitrate was tagged at $365-$385/st FOB in the region, with the low in Missouri and the upper end in the Iowa market.
South Central: Ammonium nitrate was tagged at $350/st FOB regional terminals to the dealer.
Southeast: Ammonium nitrate pricing had firmed in the region. Sources quoted the Tampa market at $350/st FOB. Delivered tons in South Carolina were pegged at the $377/st level, with the Wilmington market reported in the $380-$390/st FOB range in early January.
Eastern Canada: The ammonium nitrate market had firmed in Eastern Canada, to $477-$480/mt FOB terminals to the dealer. Ontario sources quoted the CAN-27 market at $475/mt FOB, up some $35/mt from last report.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was pegged at $310-$320/st FOB for any available tons, which were scarce in the region.
Western Cornbelt: Sources quoted the granular ammonium sulfate market in the $310-$320/st FOB range, but supplies were extremely tight. Effective Jan. 14, Agrium’s granular ammonium sulfate postings firmed to $330/st DEL in North Dakota, Minnesota, and Wisconsin.
America Plant Food Corp. (APF) announced another ammonium sulfate pricing increase. Effective Jan. 17, APF’s granular ammonium sulfate postings at Texas shipping points will firm $15/st to $260/st FOB Freeport, $270/st FOB Galena Park, $285/st FOB Fort Worth, and $300/st FOB Littlefield. APF’s coarse grade ammonium sulfate postings will move to $250/st FOB Freeport, $260/st FOB Galena Park, $275/st FOB Fort Worth, and $290/st FOB Littlefield, while standard grade will firm to $245/st FOB Freeport and $285/st FOB Littlefield. The company’s N-Pac Compacted posting will move on Jan. 17 to $275/st FOB Galena Park.
South Central: Granular ammonium sulfate pricing had reportedly firmed to a solid $270/st FOB regional terminals for limited tons. American Plant Food Corp.’s Dec. 20 reference prices for granular ammonium sulfate included $275/st FOB Mermentau, La., but added another increase to $290/st FOB on Jan. 17.
Southeast: Granular ammonium sulfate postings from DSM Chemicals took another increase in early January, moving to $265/st FOB Augusta, Ga., and $280/st DEL in the Southeast region. Standard ammonium sulfate pricing from the company remained at $192/st FOB Augusta and $210/st DEL in Florida.
Eastern Canada: Granular ammonium sulfate had reportedly firmed to $405/mt FOB in Ontario for any available tons in early January. Although some suppliers remained at lower posted levels, sources said no tons were available at those numbers and new reference prices were under review.
PHOSPHATES
Central Florida: Although Florida was the only state that did not have snow last week, the state was deep in the grips of winter. A hard freeze blanketed Florida, and crop damage was expected to once again be widespread after the state suffered several hundred million dollars in damages in December. The pain will be felt at the grocery store in the form of higher prices for citrus, strawberries, and other produce.
Prompt railcar sales out of Central Florida were made last week, but all were done within the previous week’s range.
With expectations that the spring will be robust and fertilizer prices firm to getting higher, inventories continued to be low. Still, it was not clear how much empty bin space there was, but with crop prices high, farmers will undoubtedly seek as much as possible to take advantage of the market.
Based on prompt sales last week, the Central Florida DAP price range was still 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. Availability of all phosphate products was limited. 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: The USDA’s report on 1/12/11 caused a splash and a dash for buyers on the futures board last week, and crop prices shot up overnight. Nearby corn for March was pegged at $6.43/bushel late last week, while soybeans soared to $14.225/bushel. The USDA said the amount of corn produced in 2010 was down 5 percent from a year ago, while beans were down 1 percent. The amount in stores was 8 percent lower than a year ago.
The news was welcomed by the phosphate industry, especially in regard to corn, which is a high-use phosphate crop. As spring approached, some were laying plans to push up profits once the expected rush begins – probably by mid February. That’s probably wise. Demand was expected to be higher this year, and inventories were still near record lows. The combination lays the groundwork for higher prices this spring.
Transammonia was busy sweeping up the few remaining cheap NOLA DAP barges in the system, which had the effect of pushing up the price toward the end of the week.
Extremely rotten weather – in the form of cold, snow, and ice – had a chilling effect on commerce in general, including the phosphate industry. Transportation problems – especially for trucking – were found throughout the country.
Warehouse prices were still paying a handsome differential to the barge price, and some operations were concentrating on buying and not selling NOLA DAP/MAP barges last week. Terminal prices were generally in the $585-$595/st FOB level, but a few spots had posted as low as $580/st FOB, although they were quickly disappearing.
Prepay DAP prices for NOLA barges were running $554-$555/st FOB for February, and $558-$559/st FOB for March. MAP prices were between $20/st FOB and $25/st FOB more than DAP.
The NOLA DAP barge market range moved up a little from the previous week’s range of $545-548/st FOB to $545-$550/st FOB, based on actual barges sold. Asking prices had moved to $550/st FOB and higher by the end of last week. MAP was bringing a premium of $20-$25/st FOB for NOLA barges. Most sources were bullish, saying prices should be up, not down, as the spring season approaches.
Eastern Cornbelt: Dry spreading activity was slowed or stalled in many Eastern Cornbelt locations last week due to snow and ice. Sources reported few changes to spot prices, and little buying activity.
DAP continued to be quoted in the $600-$610/st FOB range, with MAP $10-$20/st higher, depending on location and supplier.
10-34-0 was tagged at a solid $580-$600/st FOB in the region for very limited tons. One regional contact said he was in touch with four different suppliers at mid-month, and all were out of product.
The slowdown in field activities was well-timed to accommodate the steady slate of trade shows in January and early February. The 2011 Missouri Agribusiness Association (MO-AG) Winter Convention was held Jan. 5-7 at the Lodge of Four Seasons in Lake Ozark, Mo. The Illinois Fertilizer and Chemical Association (IFCA) Convention will be held Jan. 18-20 at the Peoria Civic Center, and the Nebraska Agri-Business Exposition will be held Feb. 1-3 at the Omaha Qwest Center and Hilton Hotel in Omaha. The Agribusiness Association of Iowa Showcase and Conference will be held Feb. 8-9 at the Iowa State Fairgrounds in Des Moines.
Western Cornbelt: Although some areas saw some dry spreading activity in early January, winter precipitation put the brakes on in many locations last week. A Nebraska source said a steady application pace was stalled by 9 inches of snow at mid-month, and a Missouri contact said field activities in his territory came to a halt with the arrival of 6-7 inches of snow and mid-month wind chills as low as 15-20 below.
DAP was unchanged at $585-$600/st FOB, with the low in southern Missouri on a spot basis. Most dealer quotes for DAP fell to the $600/st FOB level in the region at mid-month. MAP out of regional warehouses was generally quoted at a $20/st premium to DAP, with delivered MAP pegged at the $630/st level in central Iowa.
10-34-0 remained in the $580-$600/st FOB range for very limited tons, provided any were available at all. One Iowa source said he booked some prepay 10-34-0 at the $630/st DEL level, and “we had to push for it.”
South Central: DAP remained at $580-$590/st FOB regional warehouses to the dealer; one Arkansas source said most sales were taking place at the $585/st FOB level in early January. No current spot quotes were available for MAP. The TSP warehouse market was pegged in the $490-$505/st FOB range last week. “We certainly took care of spring business for P and K in the fall that we normally wouldn’t do, so there should be lighter spring demand,” said one source.
Eastern Canada: Sources tagged the MAP market at $745-$768/mt FOB, depending on location, with DAP reported at the $735/mt FOB level on a spot basis in Ontario.
California: Effective Jan. 14, Agrium’s MAP postings in California and Arizona firmed to $670/st FOB warehouse or rail-DEL.
U.S. Export: PhosChem added a couple of thousand mt to a vessel already destined for South America last week, but at the same price of $600/mt FOB.
KeyTrade was believed to have made a sale into Latin America, but the amount and the price were not available.
The export market has not been and will not be the primary focus of the industry, unless prices rise in proportion to domestic prices, which were poised to increase during the next couple of months.
The export DAP price range continued at the same flat $600/mt FOB as it has for the past month.
Nepal: Sources report the Jan. 6 DAP tender was scrapped. A new tender for 35,000 mt was called.
This time the only company offering was Wilson Trading at $719/mt CIF.
This is a significant drop in pricing ideas from the previous – now scrapped – tender.
In the earlier tender, Desh Trading of Bangladesh offered 25,000-30,000 mt at $784.40/mt CFR.
In both cases the material will first be delivered to an Indian port, and then trucked inland to Nepal.
India: IFFCO called a tender to close Jan. 30 for 1 million mt of SSP.
Sources expect to see the deliveries stretched out over several months. They also say domestic producers will play a prominent role in the tender.
POTASH
U.S. Gulf: Potash barges were being offered at $475-$485/st FOB last week.
November imports were up 92 percent, to 1.09 million st from the year-ago 569,038 st, according to the DOC. July November imports were up 90 percent to 4.2 million st from 2.2 million st.
Eastern Cornbelt: Potash was pegged at $505-$515/st FOB most regional warehouses at mid-month. One Ohio source said he was still waiting on potash fill tons ordered last August.
Western Cornbelt: Potash was reported in a broad range last week, from a low of $495/st FOB in some Missouri locations up to $517/st FOB for white granular tons from some suppliers. A Nebraska dealer put the granular potash market at $500-$510/st FOB in his location, with rumors of an increase coming in February or March.
South Central: The potash market was steady at $495-$505/st FOB most regional warehouses, with little new business reported. Potash barges were reportedly being offered in the $475-$485/st FOB range at the Gulf.
Southeast: Rail-delivered potash was quoted in the $525-$535/st range last week. Several sources said they continue to wait for potash fill tons ordered earlier from producers. One contact said he’ll have to book more potash tons for spring, and will likely hunt around on the secondary market for reseller tons.
Eastern Canada: Potash pricing remained at a firm $590-$600/mt FOB regional warehouses, depending on grade and location, with the low quoted by Ontario sources for 60 percent red granular potash and the upper end for 62 percent white granular.
The K-Mag market was tagged in a broad range at $380-$420/mt FOB in the region. Sulfate of potash (SOP) was quoted by Ontario sources at $720/mt FOB, up some $60-$75/mt from last report.
China: BPC, the joint venture trader of Uralkali and Belaruskali, reports that it has agreed to a contract with major Chinese importers Sinochem and CNAMPGC at a price of $400/mt CFR. The deal is for 600,000 mt, including 120,000 mt of mutual optional quantities. The contract period is Jan. 13-June 30, 2011.
SULFUR
Tampa: Halfway into the first month of the first quarter, no negotiations for new quarterly prices had begun as of late last week. However, the parties had exchanged market information they believe should help shape a new agreement.
As to whether there will be an increase, or how much of an increase, was in debate within the industry, and will be for sulfur and phosphate interests. In some areas of the world prices have remained steady, while increases have been found in other locations.
On the Gulf Coast, however, the supply situation was tight and showing signs of growing tighter. Refineries were experiencing problems related to the cold weather, and production was down last week from 88 percent of capacity to 86.4 percent, a 1.6 percent decline. Production during the first quarter of the year will be lower due to turnarounds, and cold weather was creating problems in Canada.
A source said PotashCorp was planning to begin shipping from the Rainbow stacks south of the oil-sands project in Alberta. If so, the cost would be high due to the transportation distance. That was considered a sign of the short supply situation.
Transportation, especially for sulfur trucks, was a problem last week due to poor road conditions. That situation was not expected to have long-term effects.
Vancouver: The Vancouver market was said to be looking elsewhere to sell its sulfur, because China has backed away from the market. South Africa and Brazil were said to be the primary targets, with Brazil the most needy.
In addition, contracts for the first quarter were in the process of being settled up $20-$40/mt FOB higher than the previous agreements.
U.S. Imports: November imports were up 146 percent, to 174,176 st from the year-ago 70,850 st, according to the DOC. July-November imports were up 88 percent, to 983,279 st from the year-ago 524,278 st.
MARKET NOTES
Bangladesh: The country’s export-oriented international joint venture company – Karnaphuli Fertilizer Company Ltd. (Kafco) – plans to set up its second urea plant, to produce 1.2 million mt urea at an estimated cost of US$1 billion at Ashuganj in Southern Bangladesh.
CEO Salahuddin Ahmad told Green Markets that southern Bangladesh was selected because there is a possibility of getting natural gas for the plant. A formal proposal will soon be submitted to Bangladesh’s Ministry of Industries for approval. He disclosed that 1 billion dollars – the estimated cost of the project – would be arranged through equity and financing from local and international financial institutions. If necessary, an international tender will be floated to acquire consultancy services and technology suppliers for setting up the plant.
Kafco’s existing plant, located in Chittagong, started commercial production in 1995 and has annual production capacity of 680,000 mt of granular urea and 150,000 mt of ammonia based on Stamicarbon BV and Haldor Topsoe technology, respectively. Their shares are held by the Government of Bangladesh through Bangladesh Chemical Industries Corp. (BCIC), Kafco Japan (consisting of Japan Int’l Corp Agency (JICA), Marubeni, and Chivoda Corp.), Subcontinent Ammonia Investment Co. (Haldor Topsoe of Denmark), Industrialization Funds for Developing Countries (IFDC), and Stamicarbon of Netherlands.
Kafco sold 421,384 mt of urea to the local government and exported 91,851 mt in the last fiscal year, 2009-10.
