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Ravensdown Plant Quickly Resumes Distribution After Major Fire

Featured, News

Ravensdown’s Hornby location in Christchurch, N.Z., began serving customers some 48 hours after a fire affected the eastern section of the 14 hectare site. Customers were able to order and collect product starting at 8:00 a.m. Oct. 11. The company said it had good stocks of finished fertilizer products for the coming season ready for pickup. However, it did say that will the initial restart of service, customers could expect some onsite congestion.

No one was injured in the Oct. 9 fire, which severely damaged four of the company’s 13 storage buildings. The company said the fire started during some maintenance work and spread along the roof line when a rubber conveyor belt ignited. The company said the plant does not store explosives materials and that two small bangs heard during the fire were likely caused by gas bottles being used during maintenance work.

Ravensdown told Green Markets that both the blending plant and the SSP manufacturing facility were not damaged. However, the intake system which takes delivery of unprocessed phosphate rock was severely damaged. The company says it does have existing stocks of rock that will be fed into the manufacturing process. The company said if there are any shortfalls, it can call upon its similar plants in Dunedin and Napier as well as moving around its stocks in the South Island network.

The company said the damaged buildings were insured and will be replaced. The buildings were new fiberglass construction and did not contain asbestos.

“As a proud member of the Hornby community since 1922, we are determined to rebuild, restore and improve the site as it eventually becomes fully operational,” said CEO Greg Campbell.

Yara Secures Ownership of Brazil’s Galvani

Brazil, Featured, News

Oslo-based Yara International ASA announced Oct. 5 that it has reached an agreement with the Galvani family to acquire the remaining minority interest in Brazilian fertilizer producer Galvani Indústria, Comércio e Serviços SA. Yara now owns 100 percent of the shares of Galvani Indústria, having purchased a 60 percent stake in the company back in 2014 (GM Aug. 11, Dec. 8, 2014).

“This deal streamlines our production footprint in Brazil, securing full ownership of key Yara Brazil production assets, complementing its extensive distribution capabilities and achieving a more integrated position in the Brazilian market,” said Lair Hanzen, executive vice president, Yara Brazil.

The deal gives Yara 100 percent ownership of Galvani Indústria’s industrial unit in Paulínia, São Paulo, which has integrated Single Super Phosphate (SSP) production and a fertilizer bulk blend facility. Yara will also own the Serra do Salitre project in Minas Gerais, which has annual production capacity of approximately 1.2 million mt of phosphate ore and 1.5 million mt of SSP equivalent finished fertilizers.

Yara said the agreement includes a cash payment to the Galvani family of US$70 million over a three-year period from closing, and a conditional future payment related to project success. As part of the deal, Yara said certain assets will be transferred to the Galvani family, who will also receive a payment in cash and a contingent amount.

The production unit in Luis Eduardo Magalhães and the mining units in Angico dos Dias and Irecê, as well as the Santa Quitéria greenfield phosphate project, will be separated out from Galvani Indústria and will be fully controlled by a new company managed by the Galvani family. The carved-out assets transferred to the Galvani family have a book value equivalent to US$95 million as of Aug. 31, 2018.

Yara said the transaction is subject to conditions precedent that still need to be met, as well as the approval of the Brazilian antitrust authorities (CADE) and other common approvals.

Galvani was founded in the 1930s as a beverage industry and transportation company in Brazil, but branched out into fertilizer distribution in the 1960s and 1970s. The company’s Paulínia complex opened in the 1980s as one of Brazil’s largest fertilizer production sites, with capacity for sulfuric acid and SSP, as well as granulation, blending, and bagging. This was followed in the 1990s with a liquid and SSP facility in western Bahia.

Galvani has a total SSP production capacity of approximately 1 million mt/y through the industrial complex of Paulínia and Luis Eduardo Magalhães. The company’s units in São Paulo, Minas Gerais, Bahia, Mato Grosso, and Ceará employ approximately 1,800 people.

Yara has been steadily expanding its footprint in Brazil. Earlier this year (GM May 11, p. 1), the company’s $255 million acquisition of the Vale Cubatão Fertilizantes complex from Vale SA, Rio de Janeiro, was approved by CADE. Yara’s deal with Vale was first announced in November 2017 (GM Nov. 22, 2017).

Wilbur-Ellis Co. LLC – Management Brief

Management Briefs

Wilbur-Ellis Co. LLC, Denver, Colo., announced on Oct. 8 that Mark Ripato will take over as the company’s Agribusiness division president, effective Nov. 1. For the past three years, Ripato has served as the CEO and president of Tenkoz, a leading agricultural buying group based in Alpharetta, Ga. Wilbur-Ellis is the largest retail member of Tenkoz. Ripato will be based out of Wilbur-Ellis’ Agribusiness headquarters in Denver.

“Mark is a long-time agricultural executive with deep and direct exposure into many relevant areas within the ag industry,” said John Buckley, Wilbur-Ellis CEO and president. “In his roles at Tenkoz, Mark has demonstrated his ability to rapidly take on increasing levels of responsibility in a large, complex and well-respected organization. We will benefit from his deep knowledge of the agriculture supply chain and Mark’s unique insights into the industry transformation.”

Ripato began his career as a flock supervisor at Perdue Farms in Salisbury, Md. He then moved to ICI Agricultural Products, which later became Syngenta, where he managed various chemistry portfolios and worked to integrate them with the introduction of new seed and trait platforms. He has a B.S. degree in agricultural economics from the University of Kentucky in Lexington, an MBA from Salisbury State University in Salisbury, and an International Master of Management degree from McGill University in Montreal, Canada.

Dan Vradenburg, Wilbur-Ellis’ current Agribusiness president, will transition to the role of board chair for Wilbur-Ellis’ venture capital arm, Cavallo Ventures.

Gulf Coast Ammonia Project Advancing in Texas City

Ammonia, Featured, News, U.S. Gulf

Gulf Coast Ammonia LLC (GCA), Miami Beach, Fla., which plans an $800 million world-scale anhydrous ammonia plant along the Texas Gulf Coast (GM May 25, 2015), is advancing in Texas City, Texas, where it has already achieved a 10-year property tax abatement from the Texas City. GCA told local planners that the abatement was necessary to retain financing. The project is being developed by Agrifos Partners LLC, New York City, and Borealis AG, Vienna, which is involved in polyolefins, base chemicals and fertilizers. Initial filings indicate the plant is expected to produce over 750,000 mt/y.

Next up for the project is to gain approval for a Texas Commission on Environmental Quality (TCEQ) permit that would allow the company to discharge some 2.2 million gallons per day of utility wastewater and storm water into Lower Galveston Bay. The State Office of Administrative Hearings (SOAH) is scheduled to conduct a formal contested case hearing on the matter Nov. 19 in Austin, Texas.

According to the TCEQ, degradation reviews have preliminarily determined that existing water quality uses will not be impaired by granting the permit. The area does have high aquatic life use and is used for recreation and as oyster waters. However, TCEQ says preliminary determinations can be reexamined and be modified if new information is received.

While ammonia production is expected to remain on the shore at a 25-acre brownfield site at 201 Bay Street South, Texas City, GCA is planning an offshore dock and pipeline tower that in itself is controversial, according to a story in the Houston Chronicle. The pipeline system would include ammonia lines, potable water, sewer, electrical and communications.

The plant, pipeline, and/or discharge have been criticized not only by a local shrimper, represented by an environmental group, but by other industrial producers, the Port of Texas City, and the Galveston Texas City Pilots. The latter two groups fear the offshore barge and dock facility connected by a pipeline some 3,800 feet from shore would be a dangerous addition to the high-traffic Texas City Ship Channel. Port President Karol Chapman said some 12,000 ships sail past this point each year.

“You’ll have a barge or a ship tied up alongside that dock, and we have prevailing southerly winds out there, let’s say they get up to 20 mph, what impact would that have on (ships) ability to to pass,” said Chapman. He suggested that it might cost more money in dredging, but that GCA should consider a dock next to their facility instead of offshore.

GCA had no comment on the project last week.

Coal-Based NH3, Gas, Electric Plant Proposed for Australia

Australia, Featured, News

Australian Future Energy Pty Ltd., (AFE) Brisbane, has announced that its proposed Gladstone Energy and Ammonia Project (GEAP) has been declared a Co-Ordinated Project by the Queensland Co-Ordinator General. The decision will help streamline approvals and fast-track delivery of the project, according to Queensland Minister for State Development, Manufacturing, Infrastructure and Planning Cameron Dick. A coordinated project approach also means that all the potential impacts and benefits of the project are considered in an integrated and comprehensive manner.

The next step is preparation of draft terms of reference by the Coordinator-General who will then invite community comment on the matters to be investigated in the environmental impact statement (EIS).

The GEAP is an above-ground coal-gasification facility that will be located in the Gladstone State Development Area (GDSA) in Queensland. The proposed project will process 1.5 million mt/y of low-quality coal sourced from currently operating mines in Central Queensland, to produce up to 330,000 mt/y of anhydrous ammonia, and up to 8 petajoule (PJ) of pipeline quality gas for Australia’s East Coast domestic gas market. In addition, the proposed project will generate approximately 90 MW of electrical power, with approximately 25 MW of this being available for export to the local domestic grid.

The ammonia and gas produced will then be used by major industrial users, including those focusing on agriculture, the mining industry and advanced manufacturing.

While ammonia is produced elsewhere in Australia, AFE says this is the first time that the proposed coal gasification technology will be used to produce ammonia in Australia.

The coal gasification technology to be utilized has been developed over the last approximately 20 years by Synthesis Energy Systems (SES), Houston, a Nasdaq-listed company, which holds approximately 40 percent of the issued capital in AFE.

AFE says the coal gasification technology is commercially proven and is operating at 5 commercial operations with 13 gasifiers in Asia. The largest of those operations is currently producing 300,000 mt/y methanol and is in the process of expanding that operation to 1 million mt/y methanol based on the SES technology.

The peak construction workforce for the project is put at 800-1,000 jobs during the two-year construction period and up to 250 full-time equivalent jobs for the 30-year operational period. It is estimated that a further 1,280 indirect jobs will be also be created during the operational phase, generating significant additional jobs for regional suppliers and contractors as well as increased employment opportunities for local communities.

The project is estimated to commence construction by mid-2020, with the first ammonia and gas production proposed in mid-2022.

The project’s associated infrastructure including a coal conveyer, electricity and gas pipeline will be built with the GDSA. The GDSA, first established in 1993, is located in northwest Gladstone and contains a dedicated industrial development and materials transportation infrastructure and is strategically connected to road, rail and the Port of Gladstone. The site is already home to an Orica chemical manufacturing plant, Cleanaway Waste Management, Australia Pacific LNG, Santos Gladstone LNG and Queensland Curtis LNG. Other nearby industrials include Cement Australia, Queensland Energy Resources and Northern Oil Refinery.

AFE subsidiary Great Northern Energy Pty Ltd. (GNE) owns the Pentland Coal Mine Project, also in Queensland. Coal from this project is targeted for both export and for use in gasification, according to the company. GNE is currently finalizing the preparation of its initial advice statement for that project to the Queensland government for the development of the project for an initial 6 million mt/y of run-of-mine (ROM) coal operation, with allowance for expansion of the project for up to 9 million mt/y ROM coal operation.

In its first phase of operation, 4.5 million mt/y of coal is planned for export to Asian markets, with the balance of 1.5 mt/y for feedstock to a future proposed coal gasification project. It is anticipated, based on current planning, for the project to be operational in 2022. AFE says the Pentland project has a 266 million mt coal resource in place.

Fertilizer Operations Report Minimal Impact from Hurricane Michael

Featured, News

Hurricane Michael hit the Florida panhandle on Oct. 10 as a Category 4 storm with 155 mph winds, causing massive structural damage in coastal areas. Widespread flooding from a peak storm surge estimated at 9-14 feet inundated coastal communities such as Mexico Beach, Apalachee Bay, and Panama City.

The National Weather Service said Michael was entering the record books as the third most intense continental U.S. landfall by pressure, the fourth strongest by maximum sustained winds, and the most intense storm ever to strike the Florida panhandle.

Sources said the impact on cotton, peanut, and pecan crops in the storm’s path would be devastating. Peak wind gusts measured on Oct. 10-11 included 129 mph at Tyndall AFB in Florida, 115 mph in Donalsonville, Ga., 89 mph in Apalachicola, Fla., 70 mph in Albany, Ga., and 68 mph in Dothan, Ala.

Notable rainfall totals as of Oct. 11 included 5.26 inches in Sumatra, Fla., 5.54 inches in Ozark, Ala., 6.48 inches near Powder Springs, Ga., and 4.92 inches in Dothan, Ala. Even heavier amounts were reported as the storm lumbered through the Carolinas and Virginia, in many areas that were still reeling from Hurricane Florence in September.

One North Carolina source said his location was expecting 3-6 inches of rain from Michael. Precipitation totals on Oct. 11 included 6.01 inches in Hartsville, S.C., 6.75 inches near Boone, N.C., and up to 9.62 inches near Black Mountain, N.C. White Gate, Va., reported 5.75 inches of rain late on Oct. 11.

“The bad news is that it is coming right through some of the most productive farmland in the whole state,” one Georgia contact told Green Markets at midweek. “The cotton is largely defoliated in South Carolina, so there’ll be more damage to cotton,” added a Carolina contact. “If we get 50-60 mph winds, it’ll be gone.”

Michael was also threatening a number of fertilizer facilities. Nutrien Ltd. reported on Oct. 10 that its White Springs, Fla., phosphate production complex was in “preparation mode,” with operations shutting down at the mine and at some plants. Spokesman Will Tigley told Green Markets that Michael was “expected to have minimal impacts” to the company’s operations, however.

“The site is in the process of securing loose objects and materials,” Tigley said. “Staffing levels will be determined based on the forecast, with safe operations and the safety of our personnel top of mind.”

The Mosaic Co. also reported at midweek that its Florida operations were operating as normal as Michael approached. “The storm is moving west of our facilities, so we don’t expect impacts,” company spokesman Ben Pratt told Bloomberg.

Attempts to reach Big Bend Agri-Services Inc. in Cairo, Ga., were unsuccessful on Oct. 11. Sources with Florida Fertilizer Co., Wauchula, Fla., and Growers Fertilizer Corp., Lake Alfred, Fla., reported no impacts to their facilities from Michael, other than heavy rain and gusty winds at some locations. Florida Fertilizer’s facilities are primarily in central and southern Florida. Growers Fertilizer’s Newberry location is in northern Florida’s Alachua County, but the company’s other sites are in central Florida.

Cal-Maine Foods Inc., one of the country’s largest egg producers, closed down its Quincy, Fla., operations on Oct. 10. Chicken and egg farms across Georgia were also idled at midweek, with companies reportedly closing down operations early and relocating birds, Bloomberg reported.

CF Industries Holdings Inc. – Management Brief

Management Briefs

CF Industries Holdings Inc., Deerfield, Ill., said Oct. 11 that its board of directors has elected Celso L. White, 56, global chief supply chain officer of Molson Coors Brewing Co., as an independent director of the company. The election brings CF board membership to eleven. He is expected to stand for re-election by stockholders at the company’s 2019 annual meeting.

White holds an MBA with a concentration in Operations Management from DePaul University and a B.S. degree in Electrical Engineering from Bradley University.

Ammonia

Ammonia, Black Sea, Eastern Cornbelt, India, Market Watch, Middle East, South Central, Southern Plains, Tampa, U.S. Exports, U.S. Gulf, U.S. Imports, Western Cornbelt

U.S. Gulf/Tampa:

Nothing new was reported in the Tampa market during the week, but sources reported a fresh barge trade at $322/st FOB, up from the prior $311/st. As for Tampa in the near term, while some sources argued that Tampa pricing may have about topped out in the near term, but others noted expectations of increased short-term curtailments in Trinidad and rising prices in the Cornbelt.

U.S. Imports:

August ammonia imports totalled 264,260 st, down 32 percent from the year-ago 386,588 st, according to the U.S. Department of Commerce. July-August imports were off 29 percent, to 506,422 st from 716,761 st.

U.S. Exports:

August ammonia exports were down 9 percent, to 50,096 st from the year-ago 55,000 st. July-August exports ticked up 2 percent, to 140,537 st from 138,093 st.

Eastern Cornbelt:

Anhydrous ammonia pricing remained at a firm $450/st FOB or higher out of Illinois terminals, with the upper end of the regional range quoted at $465-$470/st FOB in Indiana. One source said he expects wet weather delays in Illinois to cut into the fall application window for ammonia.

Western Cornbelt:

The ammonia market was quoted at $435-$455/st FOB in the Western Cornbelt, with the low confirmed in Nebraska and the upper end in Iowa and Minnesota for fall tons.

Southern Plains:

The ammonia market was pegged at a firm $380-$395/st FOB Oklahoma production points, with the low at Pryor and the upper end at Verdigris. The Enid market was pegged at the $390/st FOB level in early October. Truck pricing out of Beaumont, Texas, was reported at the $335/st FOB level for new sales.

South Central:

Sources continued to report no current anhydrous ammonia offers out of Memphis, Tenn. The last business was pegged at $337-$355/st FOB regional terminals for truck tons, with the low out of Louisiana production.

Black Sea:

The continued lack of extra material makes nailing down spot ammonia prices difficult, but sources said pricing expectations have edged up. Deals in the area are being pegged at $340-$350/mt FOB, with more of an emphasis on the lower end of the range.

Middle East:

Sources said rumors were circulating that Trammo picked up a cargo from Saudi Arabia at $363/mt FOB. Industry watchers said the price seemed too high to be workable for any buyer.

On the other hand, said one observer, supplies from the Arab producers have been tight, with no sign of excess anywhere. The tightness in the Middle East got more severe, said one trader, as more buyers were forced to drop Iran as a supplier, with demand for ammonia from other sources putting upward pressure on prices.

Traders put the current market at $340-$350/mt FOB, with the possibility that some deals may be a bit higher.

JPMC in Jordan is expected to come in at the end of this month for a tender to book their 2019 needs. Sources estimated the tonnage that JPMC will ask for at 100,000 mt, with shipments to be spread out over the year.

India:

Ammonia sellers were happy to hear reports that Indian DAP buyers went quiet this week. The calm came after a flurry of DAP purchases from China. Traders now figure that India will make up the rest of its DAP needs with its own production.

Sources said even though the market is tight, there is still enough material to satisfy Indian demand. The ammonia, however, will have to come from sources other than Iran, as the impact of the U.S. sanctions against that country drives away buyers.

Sources put the market at $380-$410/mt CFR.

Urea

Bangladesh, China, Eastern Cornbelt, India, Indonesia, Market Watch, Middle East, Pakistan, South Central, Southeast, Southern Plains, U.S. Exports, U.S. Gulf, U.S. Imports, Urea, Western Cornbelt

U.S. Gulf:

NOLA urea markets were a bit wobbly during the week, with sources saying prices topped out at $325/st and gradually sank to the $308-$310/st FOB range. Sources said a huge amount of rain across the heartland quickly put a lid on demand. However, players were optimistic that once dryer weather prevails, demand will return.

The prompt granular range was called $308-$325/st FOB, compared with the week-ago $310-$320/st FOB. Prills were also less robust at $305-$310/st FOB, down from the prior week’s $305-$320/st FOB.

U.S. Imports:

August urea imports were up 7 percent, to 209,267 st from the year-ago 196,490 st. July-August imports were up 10 percent, to 294,559 st from 268,947 st.

U.S. Exports:

August urea exports were up 4 percent, to 165,881 st from the year-ago 159,288 st. July-August exports were off 9 percent, to 337,944 st from 371,441 st.

Eastern Cornbelt:

Granular urea pricing fell in the $350-$360/st FOB range in the Eastern Cornbelt.

Western Cornbelt:

The granular urea market was pegged at $350-$355/st FOB in the Western Cornbelt, with the lower end of the range confirmed at St. Louis and Caruthersville, Mo., and Port Neal, Iowa.

Pricing at St. Paul, Minn., was quoted firmly in the $355-$360/st FOB range for the week, up another $5/st from last report.

Southern Plains:

The urea market was quoted at $350-$355/st FOB Catoosa/Inola, Okla., and up to $360/st FOB Enid, Okla., up another $10/st from the prior week and $20/st higher than late-September pricing levels.

South Central:

The granular urea market was reported at $350-$360/st FOB in the South Central region, with the lower end at Memphis and the upper out of spot Arkansas River terminals. The Convent, La., market was also reported in the $350-$360/st FOB range at midweek.

Southeast:

Granular urea had reported firmed to $365-$370/st FOB port terminals in the Southeast, up a full $25-$30/st from mid-September levels, with the low reported at Wilmington, N.C., and the upper end for import tons at Tampa.

One North Carolina source said he purchased Wilmington tons earlier in October at $355/st FOB and $378/st DEL, but he said the market had firmed since then.

India:

The MMTC tender closed on Oct. 5 with 1.7 million tons offered by 15 companies. The lowest price for the West Coast was $252.88/mt CFR, and for the East Coast at $256/mt CFR.

By Wednesday MMTC had booked just over 560,000 mt, with the bulk of the orders to be delivered to East Coast ports. Just as traders thought the buying was over, MMTC said it was continuing talks with trading houses up to the validity date of Oct. 12. The talks concluded with MMTC picking up an additional 115,000 mt from Midgulf and Swiss Singapore.

MMTC Urea Tender Awards:
West Coast Deliveries

Company Quantity (mt) US$/mt Source
Gavilon 42,000 352.88 CFR China
Ameropa 42,000 352.88 CFR China
Muntajat 40,000 340.00 FOB Qatar
Adnoc 35,000 339.00 FOB UAE

MMTC Urea Tender Awards:
East Coast Deliveries

Company Quantity (mt) US$/mt CFR Source
Keytrade 42,000 356.00 China
Dreymoor 31,500 356.00 China
Midgulf 248,000 356.00 Egypt-China
Swiss Singapore 75,000 356.00 Indonesia-China
Transglobe 63,000 356.00 China
Aries 60,000 356.00 China

Sources said even with nearly 780,000 mt already booked for shipment by Nov. 19, India will need another 1.4 million tons to close out the year. Another tender could be called as early as Nov. 20, said traders.

When the next tender comes, sources said India will be facing the same issues it did in the last tender. Iranian material will not be available, leaving the global market tight. Prices are expected to remain firm well into the time the next tender is called. At the same time the rupee continues to weaken against the U.S. Dollar.

The combination of a weak currency, coupled with a tight market that is denominated in a different currency, could lead to India paying much more of its hard-cash reserves than was expected when the budget was written earlier this year.

Pakistan:

The TCP tender for 100,000 mt of urea was slated to open on Oct. 15, but has now been pushed back a week. Sources could not explain why TCP took this action.

Traders speculated that the delay might be because of some paperwork that wasn’t completed. Also under consideration are reports that Pakistan’s hard currency reserves are dangerously low. The ever-higher urea prices could put too much strain on the reserves to cover the called-for tons.

One trader suggested that TCP and its government minders are comparing the cost of importing urea against the cost of purchasing additional natural gas to allow the domestic producers to make up the 100,000 mt shortfall that the tender hoped to plug.

Middle East:

With the sale of two cargoes to India, Arab producers are now expected to be firmer in their demand for $350/mt FOB.

The producers in the UAE and Qatar agreed to prices at $339-$340/mt FOB for their cargoes to MMTC. These sales will give the producers public cover to claim their supplies are limited and that only higher prices can shake loose more spot tons.

Sources said buyers in Brazil and the U.S. should already be feeling the pressure from the producers. Both major buying countries, however, have also shown a willingness to forego large quantities at high prices in favor of a hand-to-mouth purchasing regime.

Such actions have forced down prices in the past. However, this time the Arab producers do not have to look over their shoulders to watch Iran fill orders that normally would have been covered by the Arabs. This absence of Iranian product in the global market, said one trader, added at least $10/mt to the price of urea in an instant. Additional increases came as material availability tightened.

Abu Qir in Egypt will close a selling tender on Oct. 16 for 25,000 mt each of prilled and granular urea. Sources said the producer is hoping to hit $350/mt FOB, but traders doubted the final number will get that high. The last Abu Qir tender closed with granular at $335/mt FOB and prills at $306/mt FOB.

Sources said it would be difficult for any Egyptian material at $350/mt FOB to find a home. The most obvious place to move the product would be southern Europe, but sources said the Europeans have picked up all they need for their fall fill program. The weaker demand in Europe, said one trader, is due to poor weather so far this year. Buyers appear to be unwilling to step out too far in case the winter is also bad.

Indonesia:

Kaltim closed an auction on Oct. 10 for two cargoes at 30,000 mt each of granular urea, and a prilled cargo of 30,000 mt. Swiss Singapore and Liven won the granular cargoes with bids of $321.50/mt FOB. Aries took the prilled cargo at $319.97/mt FOB.

A series of 5,000 mt prilled lots were offered by Pusri on Oct. 9. The auction was for a total of 30,000 mt. In the end, only one buyer met the reserve price of $305/mt FOB. Sources said Pusri is asking traders to resubmit their bids.

Sources said the material sold this week will work in the MMTC/India tender. One suggestion was that once Kaltim confirmed its sale to Swiss Singapore, the trading house upped the amount of urea it was offering to MMTC.

Bangladesh:

The BCIC tender for 100,000 mt of granular urea and 50,000 mt of prilled urea closed on Oct. 8, with only a few offers and prices that confirmed levels more favorable to producers. All offers were to be in lots of 25,000 mt, with delivery in the second half of November.

The lowest price in the granular tender came from Swiss Singapore with Chinese material at $399.00/mt CFR bagged. Only three other companies offered material, each in lots of 25,000 mt. The highest price was $415.40/mt CFR bagged.

Swiss Singapore was also the lowest price in the prilled tender at $377.95/mt CFR bagged. Bulktrade and Aries also participated in this tender, each with offers of 25,000 mt.

BCIC Granular Urea Tender for 100,000 mt

Offering Company Quantity (mt) US$/mt CFR bagged Source
Swiss Singapore 25,000 399.00 China
Dragon Asia 25,000 400.74 China
Aries 25,000 414.79 China
Bulktrade 25,000 415.40 China-Indonesia

BCIC Granular Prilled Tender for 50,000 mt

Offering Company Quantity (mt) US$/mt CFR bagged Source
Swiss Singapore 25,000 377.95 China
Bulktrade 25,000 414.40 China
Aries 25,000 416.79 China

As expected, Chinese urea dominated the tender. Only Bulktrade offered Indonesian material as an option in its granular offer. The cost to bag, ship, insure, and make a profit on the deal put the Swiss Singapore granular netback to China at $350/mt FOB. The prills came in around $325-$330/mt FOB.

As Green Markets went to press BCIC had not issued any awards in this tender. In the past, BCIC just worked its way down the list of offers, from low to high, until it reached the tonnage it desired. This time, however, with only four companies offering, the range in prices is much larger than in previous tenders for similar quantities.

China:

Chinese urea producers came out winners in two tenders. The netbacks on the offers in the MMTC/India tender are in the upper-$330s/mt FOB. The Bangladesh tender offered better raw numbers, with granular coming in at $350/mt FOB and prills near $330/mt FOB. Sources said the package costs may be higher – especially considering financing – than the traditional $50/mt used to estimate netbacks to China.

While producers were holding out for $350/mt FOB to remain at parity with the price expected from Arab Gulf producers, they did settle for the upper-$330s/mt FOB for both prilled and granular urea. Sources were surprised to see Chinese granular offered in the MMTC tender. The Chinese granular size reportedly does not meet the Indian requirement of 2-4 mm. No one accepted the idea that a Chinese granular producer will make a special run to accommodate the Indian standard.

Soon after the MMTC awards were announced, Chinese producers stepped up their demands. Sources said inquiries had producers quoting $340/mt FOB for granular and $335/mt FOB for prills, but with implications that the price will be going up.

Producers have other arguments for higher prices, besides the strong global urea market. Sources said national production is still near 50 percent of capacity. Efforts to bring up production to meet the international demand have come up against the government’s active campaign to reduce pollution.

At the same time, China is about to enter its fill program. Sources said urea demand is strong enough that producers don’t need the global market to make a profit.

UAN

Eastern Cornbelt, Market Watch, South Central, Southeast, Southern Plains, U.S. Exports, U.S. Gulf, U.S. Imports, UAN, Western Cornbelt

U.S. Gulf:

NOLA UAN barge prices continued to move up, with new trades reported at $210-$215/st ($6.56-$6.72/unit) FOB, up from the prior week’s flat $210/st ($6.56/unit) FOB level.
East Coast UAN vessels continued to be called $230-$240/mt CFR.

U.S. Imports:

August UAN imports were up 99 percent, to 246,452 st from the year-ago 123,695 st. July-August imports were up 48 percent, to 423,019 st from 286,522 st.

U.S. Exports:

August UAN exports were up 31 percent, to 201,432 st from the year-ago 154,150 st. July-August exports increased 32 percent, to 377,456 st from 285,592 st.

Eastern Cornbelt:

The UAN-28 market was quoted at $220-$230/st ($7.86-$8.21/unit) FOB in Ohio and Indiana for the last confirmed business, but sources reported “not a lot available” since CF’s late-September tender offer. UAN-32 was pegged at $240-$250/st ($7.50-$7.81/unit) FOB in Illinois, with one contact reporting $245/st ($7.66/unit) FOB as the market out of Illinois River terminals.

Western Cornbelt:

The UAN-32 market remained in a broad range at $230-$255/st ($7.19-$7.97/unit) FOB in the Western Cornbelt, depending on location, with the lower end of the range reported in the St. Louis market. Sources reported “no new offers” since the CF tender in late September, however.

Southern Plains:

While some Southern Plains sources claimed UAN-32 tons could still be booked for as low as $220/st ($6.88/unit) FOB out of regional production points on a spot basis, others said producers had moved up to a firm $235-$240/st ($7.34-$7.50/unit) FOB in the Oklahoma market, with reports of terminal pricing in Kansas and on the Texas Gulf Coast as high as $250/st ($7.81/unit) FOB for new business.

South Central:

UAN-32 pricing was reported at $225-$235/st ($7.03-$7.34/unit) FOB in the South Central region, with the low at Memphis, Tenn., and the upper end reporting in the Kentucky market out of spot river locations.

“All fertilizer inputs are trending up,” said one regional contact. “We have seen the biggest moves in UAN and potash.”

Southeast:

UAN-32 pricing was up considerably from last report, although new offers remained limited. Pricing out of inland Georgia terminals was reported at the $215-$220/st ($6.72-$6.88/unit) FOB level, while the upper end of the regional market was pegged at a firm $230/st ($7.19/unit) FOB Wilmington and Norfolk, Va.