All posts by 2192

Transportation

Arkansas River, Illinois River, Lower Mississippi River, Ohio River, Transportation, U.S. Gulf, Upper Mississippi River

U.S. Gulf: High water continued to plague the Gulf shipping region last week, forcing transit restrictions and increased travel times.

Baton Rouge levels remained at moderate flood stage on March 24, reading 38.3 feet. Forecasters expected levels to gradually decline, dropping to minor-flood stage on March 25. The Corps restricted navigation through the Baton Rouge area to daylight running only.

The Natchez gauge read 50.88 feet on March 24, just below the 51-foot moderate-flood stage. Natchez depths were also predicted to taper off in the week ahead. New Orleans levels were steady at 15.05 feet, shy of the 17-foot flood stage.

Harvey Lock construction swelled Algiers Lock delays to 35-36 hours for the week, with as many as 48 boats in the queue. The Corps is routing traffic through Algiers Lock until work at Harvey Lock concludes on April 30. Shippers expected the delays to continue.

Bayou Sorrel Lock navigation was reported in the 3-12 hour range, with an excessive water differential between the flood-side and land-side gauges requiring vessels to use added caution while locking. Industrial Lock reported delays in the 13-23 hour range with 26 boats waiting to lock, while Port Allen Lock traffic saw delays of 7-9 hours for the week with an average of seven vessels queued.

A 90-day lock closure at Industrial Lock is expected to foul transit between Aug. 1 and Nov 29. The Corps originally planned to dredge the Baptiste Collette channel to allow for a detour, but insufficient funding forced the Corps to back away from that strategy.

Calcasieu Lock navigation required 2-4 hours for the week with 14 vessels in line for service. Painting and maintenance operations at the West Port Arthur Bridge reduced travel clearance by a minimum three feet through April 30.

Elevated water levels closed the Charenton and East Calumet Floodgates for the week. Freshwater Bayou Lock was offline during daylight hours on March 22.

Ongoing dredge work at Mile 370 in the West Canal slowed traffic for a second week. The dredge allows less than 70 feet of clearance through the site, leading a number of shippers to restrict navigation to daylight-hours-only until the work concludes.

High water and fast flows hampered navigation through Brazos Lock, with 45 vessels in line to lock on March 24 and delays estimated at 12-20 hours or more. Additionally, shippers kept on eye on the water differential at the site’s West Gate, listed at 1.0 feet on March 24. A differential of 1.8 feet at either gate will trigger an automatic lock shutdown.

Lower Mississippi River: High water persisted on the Lower Mississippi, slashing tow sizes on southbound vessels from Cairo to the Gulf. Additionally, tows were limited to daytime-only navigation through the Vicksburg area, shippers said.

The National Weather Service (NWS) pegged Vicksburg water levels at 42.3 feet on March 24, shy of the 43-foot flood stage but above the 40-foot action stage. Depths were forecast to slowly recede before leveling off around 41.2 feet on March 27.

The Memphis gauge was at 22.37 feet on March 24, below the 28-foot action stage. Shippers warned of a Memphis-area wind advisory in effect for March 23-24.

Upper Mississippi River: Lock 27 delays were reported at 1-2 hours for the week. Wait times at Lock 20 climbed to 1-4 hours, and Mel Price Lock delays were reported in the 1-3 hour range.

The St. Louis gauge saw levels at 15.92 feet on March 24, up from 13.84 feet the week before.

Illinois River: The Corps called Marseilles Lock and Dam waits in the 1-2 hour range for the week. Starved Rock Lock also reported waits of an hour or two. Wickets were down at both the LaGrange and Peoria Locks, allowing vessels to pass freely.

Ohio River: Despite Lock 52 allowing vessels to pass without locking again last week, vessel congestion pushed wait times to 2-3 hours. Lock 53 saw delays in the 3-6 hour range for the week. Montgomery Lock navigation was described in the 1-2 hour range.

Cincinnati-area levels were at 28.83 feet on March 24, considerably below the previous week’s 39.76-foot level. Action stage at Cincinnati starts at 40 feet. The Cairo gauge was also on its way down, logging 35.27 feet on March 24 and predicted to dip below the 32-foot action stage on March 25-26.

An auxiliary chamber shutdown at Montgomery Lock is underway through April 1, and the lock’s main chamber is slated to close May 16 through June 10, with significant delays expected. The lock will reopen to pass queued traffic on May 28-29 and June 4-5.

The Greenup Lock main chamber will go offline April 1, prompting shipping operators to brace for “major delays.” All traffic will be routed through the site’s auxiliary chamber until work concludes on Sept. 30.

New Cumberland Lock’s auxiliary unit is scheduled to shut down April 4 through May 27, but will reopen briefly to pass waiting traffic on April 16-17, April 30 through May 1, and May 15-16.

Big delays are also on the books at Emsworth Lock, slated for a total shutdown July 5 through Aug. 10. Waiting traffic will be allowed to pass on July 16-17 and July 30-31.

On the Tennessee River, the Wilson Lock main chamber went offline March 21 for an expected four-day shutdown. The Corps warned that delays could extend up to eight hours per day until the lock’s scheduled March 25 reopening. Maintenance at Chickamauga Lock will push wait times to an estimated 10.5 hours daily between March 28 and April 20.

Shippers said the Monongahela River’s Braddock Lock and Dam river chamber remained offline for the week, forcing traffic through the land chamber instead.

Arkansas River: Dive inspections on March 22-24 were expected to trigger daily delays of 4-8 hours at Webbers Falls Lock, shippers said. The lock is also planning an upstream shutdown on May 16-22, followed by a downstream closure Aug. 24 through Sept. 11. Delays are expected.

Crops/Weather

California, Crops/Weather, Eastern Cornbelt, Pacific N.W., Western Canada, Western Cornbelt

Grain Futures: As of 4:00 p.m. on March 24, soybean futures were higher compared to the week before, but corn and wheat were mixed.

Corn for May 2016 was $3.70/bushel, up from $3.685/bushel at last report. The December 2016 price for corn was unchanged at $3.8725/bushel, while trading of March 2017 corn contracts checked in at $3.955/bushel, a slight fall from the previous week’s $3.96/bushel.

The May 2016 soybean price firmed to $9.105/bushel from $8.9775/bushel the week before. Soybeans for November 2016 were $9.2275/bushel, up from the previous week’s $9.0925/bushel, while soybeans for January 2017 were posted at $9.265/bushel, up from $9.135/bushel at last report.

Wheat for July 2016 was $4.8275/bushel, up from the prior week’s $4.7075/bushel. September 2016 wheat firmed to $4.9625/bushel from $4.95/bushel the week before, and July 2017 wheat contracts were unchanged at $5.4025/bushel.

Eastern Cornbelt: Spotty rainfall continued to limit fieldwork in parts of the Eastern Cornbelt, but preplant activity was underway in some locations. “One area takes off and runs hard, but then stops as rain moves through,” said one regional contact.

Western Cornbelt: A powerful spring storm dumped heavy snow on northern Iowa during the week, and also hammered western Nebraska with snowfall and high winds.

Local reports said 4-6 inches of snow fell across a wide swathe of northern Iowa at midweek, with some areas seeing as much as 10-13 inches or more. The heaviest total was reported at 17 inches near Sioux City, Iowa. Although snowfall was less in Nebraska, the storm’s 30-40 mph winds produced blizzard conditions that resulted in the closure of Interstate 80 from Grand Island to the Wyoming border.

The storm also pushed into northwestern Missouri, with severe thunderstorm warnings and a tornado watch posted for some locations on March 23. Sources reported strong winds, hail, and heavy rainfall as the system moved through.

The inclement weather put a stop to spring fieldwork in many areas. One contact said activity in his location was shut down on March 22, while an Iowa source described fieldwork as “really crazy” in the days leading up to the storm.

California: Heavy rainfall in March has eased drought conditions across parts of California and helped replenish reservoirs. The moisture was appreciated after a dry February, but mudslides and road closures accompanied the precipitation in some locations.

Authorities reported that Shasta Lake and Lake Oroville were both above 80 percent of capacity last week, compared with 50-59 percent at this time last year. The Sierra Nevada snowpack was estimated at 90 percent of average last week, or 10 times as much as in late March 2015.

Drought ratings in Northern California ranged from abnormally dry on the coast to moderate drought inland, while Central California remained locked in extreme to exceptional drought at mid-month. Drought conditions in Southern California, which did not see as much precipitation in recent weeks, ranged from moderate to extreme last week.

State water officials reported last week that some major farm districts in Northern California and in the Metropolitan Water District of Southern California can expect to receive 45 percent of their demands this year, which is more than twice as much as last year. The federal government’s Central Valley Project reported last week that there is enough snowpack in the southern Sierra to deliver a 30 percent allocation to agricultural customers in the Friant region of the San Joaquin Valley. Most Central Valley Project customers received no water from the project in 2014 and 2015.

Sources reported brisk movement of dry blends across the state, although applications on rice acreage in the Sacramento Valley are still probably three weeks away. “Spring is off to a slow start with the cool weather and rain that we are getting, but that’s a good thing,” said one source.

Pacific Northwest: Wet weather slowed spring fieldwork across the Pacific Northwest in late March. Significant snowfall was reported at higher elevations in Montana and Idaho at midweek, while sources in parts of Washington and Oregon reported rainfall and windy conditions.

“We had a good beginning in February, but March has been different,” said one Washington source. “Every time growers get started again, Mother Nature shuts us down. Rain and wind have us about 7-10 days behind what is considered ‘normal’ for this time of year.”

Western Canada: Several sources reported snowy, blustery weather across much of Western Canada last week. A rain and snow mix was reported across southern Saskatchewan as the week progressed, while rainfall and gusty winds were reported along coastal areas of British Columbia.

The return of cooler temperatures and precipitation was welcome in the region after a February that was drier and warmer than usual. Sources said the cooler weather will hopefully prevent winter cereals from breaking dormancy too early, while the influx of precipitation improves the outlook for soil moisture heading into the spring planting season.

Sulfuric Acid

Market Watch, Sulfuric Acid, U.S. Gulf

U.S. Gulf: No new business was reported on the Gulf import market. Price ideas held steady in the $35-$45/mt CFR range, and sources said the market was currently experiencing little demand.

Cargoes to Brazil were expected to command $35-$45/mt CFR, and the Chilean market was called $45-$60/mt CFR. Northwest European smelter pricing was described in the (-)$5-$5/mt FOB range.

Alcoa Inc. confirmed it will permanently close its 269,000 mt/y Warrick Operations aluminum smelter by the end of March, the company said in a press release. Alcoa had previously stated it would curtail the Evansville, Ind., facility’s remaining production by the end of the first quarter.

Including the upcoming Warrick smelter closure, Alcoa has curtailed or permanently shut down 812,000 mt of smelting capacity since March 2015, citing an approximate 30 percent drop in the Midwest transaction aluminum price and a roughly 40 percent decline in the Alumina Price Index.

London Metal Exchange prices were mixed in March 23 trading. Copper, lead, nickel, and zinc were higher for the week, but aluminum was down.

Aluminum fell to $1,480.00/mt from $1,495.00/mt a week earlier, and copper was logged at $5,060.50/mt, an increase from $4,945.00/mt at last report. Lead firmed to $1,795.00/mt from the prior week’s $1,768.00/mt, and nickel closed at $8,625.00/mt, up from $8,460.00/mt the week before. Zinc was up as well at $1,855.00/mt, compared with $1,738.50/mt a week earlier.

Sulfur

ADNOC - Abu Dhabi, Aramco, India, Market Watch, Sulfur, Tampa, Tasweeq, U.S. Gulf, Vancouver, West Coast

Tampa: Expectations for the second-quarter contract price of molten sulfur delivered to Tampa continued to crystallize last week. Sources predicted a drop of $20-$30/lt from the first-quarter price of $95/lt.

Softening in a number of international markets, including China, Brazil, and the Middle East – along with weakening U.S. Gulf prices – have set the stage for downward movement at Tampa, observers said. Second-quarter negotiations are expected to begin in April.

Domestic refining capacity fell for the week, according to the U.S. Energy Information Administration (EIA). Refineries ran at 88.4 percent for the week ending March 18, a 0.6 percent decline from the previous week’s 89.0 percent and also below the year-ago 89.0 percent, but higher than the 85.8 percent five-year average.

The EIA also called average daily crude inputs lower. Inputs were logged as 15.820 million barrels/d for the week, 176,000 barrels/d lower than the 15.996 million barrels/d quoted at last report.

U.S. Gulf: Last-done on the Gulf formed sulfur market continued to be called in the $70-$75/mt FOB range, although some market players predicted near-term softening.

“Brazil has traded $81/mt CFR, and is now pushing for $70s/mt CFR,” one source said, leaving likely Gulf netbacks in the $60s/mt FOB for the next round of business.

Vancouver: A drop in China CFR prices last week will probably trickle down to Vancouver in the near future, sources said. Vancouver-equivalent sales have yet to conclude at China’s new reported $80-$90/mt CFR level, however, which is down from $85-$90/mt CFR at last report.

Last-done Vancouver spot was called in the $75-$85/mt FOB range. Alberta pricing continued at (-)$27-$60/mt FOB.

West Coast: West Coast prills were unchanged at $70-$80/mt FOB for the week, but a further softening Chinese market led sources to forecast lower prices in the next round of business.

West Coast molten contracts were $65-$115/lt FOB for the first quarter. Mirroring Tampa’s speculated decline, sources predicted a $20/lt drop in second-quarter pricing.

ADNOC: The Abu Dhabi National Oil Co. set March pricing at $88/mt FOB Ruwais, a $17/mt FOB dip from the February price of $105/mt FOB.

UAE state-owned Etihad Rail announced that its fledgling rail line has transported more than 5 million mt of solid sulfur from production units in Shah and Habshan to the port of Ruwais since operations began in 2014. At full capacity, the line is expected to boast an annual sulfur freight capacity of 7 million mt.

Aramco: Saudi Aramco cargoes for April were offered at $85/mt FOB Jubail. The March price was $90/mt FOB.

Tasweeq: The official March price of sulfur produced by Qatar’s Tasweeq was $87/mt FOB Ras Laffan, $2/mt below the February price of $89/mt FOB. An updated price is expected on April 1.

India: The Indian government is raising the subsidy for sulfur for the upcoming fiscal year, moving from Rs1,677/mt (US$25/mt) to Rs2,044/mt (US$31/mt).

The increase was put off to reports that the government wants to encourage more DAP production in the country. It is already using subsidies to encourage companies to build new urea production rather than increase the subsidy for individual urea sales. Sources said the increase in the sulfur subsidy could help DAP producers step up their production.

Potash

California, Eastern Cornbelt, India, Jordan, Market Watch, Northwestern Europe, Pacific N.W., Potash Muriate, U.S. Gulf, Western Canada, Western Cornbelt

U.S. Gulf: Most continued to call prompt barges in the $180-$190/st FOB range. While some were bullish that prices were starting to move up, others said they would not be surprised to see them go lower.

There were unconfirmed reports that one player was re-exporting potash, an indication of both a weak market as well as an opportunity to shore it back up.

Eastern Cornbelt: Potash was quoted at $230-$245/st FOB in the Eastern Cornbelt for new sales.

Western Cornbelt: The potash market remained flat at $225-$245/st FOB in the Western Cornbelt, with the low confirmed in St. Louis, Mo., and the upper end FOB St. Joseph, Mo. Several sources pegged the bulk of spot quotes in the $330-$335/st FOB range in the region in late March.

California: The potash market continued to be reported at $425-$430/st FOB California warehouses, with delivered tons pegged in the $430-$440/st range, depending on grade and location.

Sulfate of potash (SOP) was steady at $682-$695/st FOB in California, although some sources reported rail-DEL tons coming into the state for as low as $637/st in late March.

Crystalline potassium nitrate was unchanged at $950/st FOB for bulk tons and $1,020/st FOB for bags.

Pacific Northwest: Regional sources quoted the potash market at $338-$350/st rail-DEL or FOB warehouses for new sales, with the low for 60 percent and the upper end for 62 percent MOP. The potash market FOB Utah mines remained at reference levels of $315-$320/st.

“Potash has not slipped like it has elsewhere, and I really don’t expect it to change dramatically until the season begins to wind down,” said one regional contact. “If you don’t have your supply planned out by now, the season will be over I suspect. Based on my scorekeeping, we are about half through the potash season.”

Sulfate of potash (SOP) remained at $610-$627/st FOB in the Pacific Northwest.

SOP Magnesia was steady as well at $443-$463/st FOB in the region.

Western Canada: Western Canada sources quoted the potash market at $350-$355/mt FOB Saskatchewan mines, with the regional warehouse market pegged at $385-$390/mt FOB.

India: The Indian government is reducing the subsidy of potash from Rs15,500/mt (US$231.76/mt) to Rs15,470/mt (US$231.26/mt). The move comes as the government expects lower prices for potash in the upcoming fiscal year.

Northwest Europe: While spring application is getting underway, demand for potash is described as lackluster amidst high inventories across the region. Prices for granular material remained unchanged in the €275-€290/mt CIF range.

Jordan: Arab Potash Co. said its potash sales to China increased 6 percent in 2015 compared with a year earlier, to 679,613 mt.

Phosphates

Brazil, California, Central Florida, Eastern Cornbelt, India, Market Watch, Pacific N.W., Pakistan, Phosphate Rock, Tunisia, U.S. Exports, U.S. Gulf, Western Canada, Western Cornbelt

Central Florida: Central Florida DAP sales were reported in the $360-$365/st FOB range for truck-loaded material, sellers said, unmoved from the previous week. MAP commanded an additional $10-$15/mt FOB over DAP.

U.S. Gulf: Trading on the NOLA DAP market largely moved sideways for the week, with sales reported in the $320-$355/st FOB range.

Sales of prompt Russian DAP were quoted as low as $320/st FOB on March 18, with new offers cited in the $323-$325/st FOB range on March 23.

DAP marketed as open origin was reported in the $325-$330/st FOB range, while a number of domestic barge sales were announced in the $350-$355/st FOB range between March 18-22.

Traders called April DAP paper unchanged at $321- $326/st FOB. May paper also remained flat at $315-$320/st FOB.

Prompt MAP was said to carry a $10-$15/st FOB premium over DAP, with sales quoted down to $331.50/st FOB. No domestic MAP sales were reported for the week.

Phosphate players voiced disagreement on where the market was headed. Some argued prices would move lower in the weeks ahead, spurred by the arrival of expected imports from PhosAgro, EuroChem, and OCP. Other pointed to a slight lag in spring application so far this season, arguing that the spring peak was still to come, especially for Northern buyers.

“(Upper River) demand hasn’t picked up yet,” said one source. “I believe we still have 2-3 weeks before we really get going.”

The NOLA spot market was called $320-$355/st FOB for DAP, up from $315-$355/st FOB at last report. MAP was $331.50-$345/st FOB NOLA, compared with a broad range of $325-$372/st FOB the week before.

Eastern Cornbelt: DAP remained at $380-$390/st FOB in the Eastern Cornbelt, with MAP quoted in the $390-$410/st FOB range for limited tons.

The 10-34-0 market was steady at $510/st FOB in the Eastern Cornbelt.

Western Cornbelt: DAP pricing continued to be quoted at $380-$390/st FOB in the Western Cornbelt, with MAP pegged at $400-$410/st FOB and in tight supply in the region. “MAP is tight, but we’ve had good luck keeping guys going,” said one regional contact. An Iowa source quoted delivered MAP at the $425/st level in his location.

10-34-0 was pegged in a broad range at $475-$510/st FOB in the region, with the low in Nebraska and the upper end in Missouri.

California: MAP remained at $480-$485/st FOB or DEL in California. The TSP (0-45-0) market was steady as well at $420/st FOB French Camp, with 16-20-0 unchanged at $395-$407/st FOB in California.

Simplot’s phos acid postings were unchanged at $10.65/unit rail-DEL in California for both SPA and MGA, with MGA also referenced at the $10.85/unit level FOB Lathrop. Agrium remained at $1,070/st of P2O5 for rail-DEL SPA and MGA in California and Arizona. No phos acid pricing changes were planned for April.

The 10-34-0 market was steady at $484-$489/st FOB in California, with 11-37-0 unchanged as well at $525-$530/st FOB.

Pacific Northwest: The MAP market was quoted at $460-$465/st FOB and $460-$470/st DEL in the Pacific Northwest.

TSP (0-45-0) remained at $420/st FOB Pocatello, Idaho, with the 16-20-0 market pegged at $390-$395/st DEL in the region.

Simplot’s phos acid prices remained at $10.15/unit FOB Pocatello and $10.65/unit rail-DEL for SPA and MGA in the Pacific Northwest. Agrium’s phos acid postings were steady at March levels of $1,060/st of P2O5 for rail-DEL SPA and MGA in Idaho, Montana, Nevada, Oregon, Utah, and Washington. Sources said no phos acid pricing changes have been announced for April.

10-34-0 was steady at $461-$476/st FOB in the region. The 11-37-0 market remained at $502-$517/st FOB Hedges, Wash.

Western Canada: MAP pricing in Western Canada was quoted at $745-$765/mt DEL, down some $15-$25/mt from last report.

The 10-34-0 market remained at $680-$690/mt DEL in the region for new sales.

U.S. Export: Mosaic announced a number of small-lot sales for the week. The cargoes, totaling 11,000 mt of combined DAP and MAP, were sold into “various” Latin American markets. The material was priced at $360/mt FOB Tampa and tabbed for April shipment.

The Gulf export price was flat at $360/mt FOB for the week.

U.S. phosphate exports rose in February, according to The Fertilizer Institute (TFI). Producers sent 156,929 st of combined DAP and MAP offshore for the month, up from January’s 113,195 st and a 15.3 percent increase from the February 2015 total of 136,145 st.

The largest buyer of American product in February was once again Brazil at 53,109 st, which represented a 15.3 percent jump from the year-ago 46,055 st. Mexico’s 30,139 st was a 1,059.0 percent leap over the 2,601 st received in February 2015, while Australia’s 26,589 st represented a 5.2 percent increase from last year’s 46,055 st.

TFI noted year-over-year increases from each of the month’s three largest importers, with orders combining for a 35,913 st bump over last year. Japan also contributed to the healthy bottom line with 22,667 st received for the month, a 240.7 percent increase from the 6,653 st logged last February. The increased orders were more than enough to offset weak buying from Canada, whose 11,439 st represented a 40.6 percent drop from the year-ago 19,266 st.

With two months logged in the calendar year, Brazil was the largest buyer of U.S. phosphate at 83,569 st, followed by Australia at 53,980 st, Mexico at 35,197 st, Japan at 27,870 st, Colombia at 27,347 st, and Canada at 25,015 st. Brazil’s two-month total represented a 20.9 percent increase from last year’s 69,131 st, while Australia was up 2.3 percent from last year’s 52,769 st. Mexico was up a full 76.0 percent from the 20,003 st logged during January and February 2015.

Despite the strong month, calendar year-to-date sales remained considerably behind 2015 figures. Phosphates exported through February totaled 270,123 st, a 12.2 percent decline from last year’s 307,123 st. Anemic demand from Canada accounted for a portion of the reduced sales, along with slow buying from a number of South and Central American markets, including Costa Rica, Honduras, and Ecuador.

The price of phosphoric acid to India was $715/mt CFR for the first quarter, down $95/mt from the second-half 2015 price of $810/mt CFR.

Brazil: Last-done on the Brazil MAP market remained in the $360-$365/mt CFR range, sources said.

Andrey Guryev, CEO of Russian fertilizer producer Phos-Agro, predicted a considerably firmer Brazil phosphate market in the year ahead, according to a Bloomberg report. Brazilian demand could jump up to 34 percent in 2016 after beginning the year on a two-year low in the global price of phosphates, Guryev said.

PhosAgro, responsible for roughly 20 percent of Brazilian MAP imports, forecast demand of up to 6.7 million mt in that market in 2016. Brazil imported about 5 million mt in 2015.

India: Sources reported a lot of talk about DAP purchases, along with a lot of prices. One trader said the talk has to be taken with a grain of salt, however. The deals under discussion are all reportedly related to contracts, which means prices could vary as much as $20/mt.

One trader pointed out that discussions of $345-$348/mt CFR material are based on an optimistic view of the buyers.

What is clear so far, said one trader, is that prices are expected to be lower this year than next year. The Indian government is also taking the position that phosphate prices will not dramatically rise during the fiscal year starting April 1.

The anticipation of lower prices prompted the government to reduce the subsidy for phosphates to Rs13,241/mt
(US$193/mt), down from Rs20,875/mt (US$310/mt).

Tunisia: GCT is said to be operating its DAP capacity at normal rates, with sales of DAP to France and Italy reportedly concluded at prices in the $370s/mt FOB.

Pakistan: The Ministry of National Food Security and Research has reviewed the government’s subsidy on phosphate fertilizers and decided to resolve issues concerning availability.

The ministry is implementing its support package for the agriculture sector, which includes a DAP subsidy of Rs20 billion, equally shared by the federal and provincial governments.

Ammonium Sulfate

Ammonium Nitrate, California, China, Eastern Cornbelt, Market Watch, Pacific N.W., South Korea, U.S. Gulf, Western Canada, Western Cornbelt

U.S. Gulf: Barges were quoted in the $195-$210/st FOB range, with the lower end reflecting Chinese imports and the higher end domestic product.

Eastern Cornbelt: The granular ammonium sulfate market remained in a broad range at $230-$280/st FOB in the Eastern Cornbelt, with the low confirmed out of spot river locations for import tons and the upper end for domestic product.

Ammonium thiosulfate was steady at $325-$335/st FOB in the region.

Western Cornbelt: Granular ammonium sulfate was pegged at $240-$255/st FOB in the Western Cornbelt. As for supply, one source noted that there are “plenty of imports, but it’s a little tough getting domestic product.”

Ammonium thiosulfate was unchanged at $295-$325/st FOB.

California: Ammonium sulfate was steady at $270-$310/st FOB in California, depending on grade, location, and supplier. IRM was posted at $270/st FOB Chico and Woodland for WesternStandard, and $280/st FOB Chico for WesternPremium, while Simplot’s premium grade produce was referenced at $270-$275/st FOB Lathrop and $305-$310/st FOB El Centro.

Ammonium thiosulfate was unchanged at $275-$300/st FOB in the state, with the low for 11-0-0-24 FOB Stockton.

Pacific Northwest: Ammonium sulfate pricing was steady at $275-$285/st DEL in the Pacific Northwest, with the low end for lower quality imported tons. IRM’s postings in the region included $275/st FOB and $285/st DEL for WesternPremium, with WesternStandard at $235/st FOB and $245/st DEL.

Ammonium thiosulfate remained at $285-$295/st FOB in the region.

Western Canada: The granular ammonium sulfate market was reported at $425-$440/mt DEL in Western Canada.

China: Prices are in flux on caprolactam-grade ammonium sulfate.

Sources reported that bids of $94-$95/mt FOB were seriously being considered, but prices are now closer to $108/mt FOB. One trader said $105/mt FOB might be achieved with some hard bargaining, but those tons are moving away fast.

Reports of sales out of South Korea have put some pressure on the Chinese suppliers, even though the Korean product is more expensive at about $120/mt FOB. The Brazil sales reportedly netback to $110-$112/mt FOB China.

Sources said the buyers in Brazil and on Central and South America’s West Coast appear willing to pay the premium because the color and quality is similar to the Honeywell product they used to buy before China entered the market.

Sources also reported that some granulated steel-grade product has been sold to the Western Hemisphere for a netback close to $100/mt FOB.

South Korea: Reportedly, Brazil and other parts of Latin America appear willing to pay a premium to get South Korean caprolactam-grade ammonium sulfate, knocking out Chinese product. The netback on recent sales is pegged at $120/mt FOB.

Sources said the Korean product has the same look and feel as the Honeywell material the buyers once took.

Ammonium Nitrate

Ammonium Nitrate, California, Market Watch, Pacific N.W., U.S. Gulf, Western Cornbelt

U.S. Gulf: Price ideas for barges continued to edge down, with sources now calling the market $195-$210/st FOB.

Western Cornbelt: Ammonium nitrate was steady at $275-$280/st FOB in the Western Cornbelt.

California: The CAN-17 market in California had reportedly slipped to $285-$295/st FOB Stockton and $293-$303/st FOB Helm. AN-20 was steady at $295/st DEL in the state, with no pricing change scheduled for March 27.

Pacific Northwest: The CAN-17 market was reported at $290-$300/st FOB and $325/st rail-DEL in the Pacific Northwest. AN-20 pricing remained at $260/st FOB and $270/st rail-DEL in the region.

Nitrogen Solutions

California, Eastern Cornbelt, Market Watch, Nitrogen Solutions, Pacific N.W., U.S. Gulf, UAN, Western Canada, Western Cornbelt

U.S. Gulf: NOLA barges continued to work their way up, although there was contention on both ends of the $190-$205/st ($5.94-$6.41/unit) FOB range. Some argued lower, others higher, but most put it within the $190-
$205/st FOB range.

UAN numbers appear stiff for now, despite assertions by some that a big spring ammonia season in the Cornbelt may lead to less UAN and urea use, and perhaps lower prices.

Most are now calling the East Coast vessel market $220-$225/mt CFR, with some expecting the next sale to be higher than that range.

Eastern Cornbelt: The UAN-28 market was pegged at $205-$219.80 ($7.32-$7.85/unit) FOB in the Eastern Cornbelt, with the low out of spot river locations and the upper number inland. Illinois sources quoted the UAN-32 market at $244.80-$246.40/st ($7.65-$7.70/unit) FOB for new business.

Western Cornbelt: The UAN-32 market was quoted at $245-$255/st ($7.66-$7.97/unit) FOB in the Western Cornbelt, up $5/st from last report, with the low confirmed out of river locations in the Iowa market and the upper end in Missouri on a spot basis.

California: UAN-32 was quoted at $235-$250/st ($7.34-$7.81/unit) FOB port terminals in California, with rail-DEL tons steady at $265-$275/st ($8.28-$8.59/unit) in the state on a spot basis.

Pacific Northwest: Slightly stronger UAN pricing was reported in the Pacific Northwest in late March. The UAN-32 market was quoted at $280-$285/st ($8.75-$8.91/unit) DEL in the region, up $5-$10/st from last report, with the low reported for truck-DEL material and the upper end for railed tons from the Midwest.

Effective March 7, Agrium reposted UAN-32 at $265/st ($8.28/unit) FOB Kennewick, Wash. On March 11, IRM’s UAN-32 postings moved to $265/st ($8.28/unit) FOB Umatilla, Ore., and Pasco, Wash.; $270/st ($8.44/unit) FOB Central Ferry, Wash.; and $290/st ($9.06/unit) DEL in Washington and eastern Oregon.

Western Canada: UAN-28 remained at $320-$325/mt ($11.43-$11.61/unit) DEL in Western Canada.

Urea

Black Sea, California, China, Eastern Cornbelt, India, Market Watch, Middle East, Pacific N.W., Pakistan, Southeast Asia, U.S. Gulf, Urea, Western Canada, Western Cornbelt

U.S. Gulf: Prompt granular barges spanned a broad range last week at $228-$255/st FOB. Sources said the low represented tons from a vessel due in toward the end of the month, while the high end was for loaded barges ready to go.

Others reported barges as high as $260-$265/st FOB, but those were generally reported as moving barges, with some almost to their destinations. April was generally put between $225-$235/st FOB.

Prill price ideas were waning, with the most recent prompt trades put as low as $243/st FOB. Product was quoted for late April at $228/st FOB.

Eastern Cornbelt: The granular urea market was quoted at $300-$310/st FOB in the Eastern Cornbelt, with the low out of river locations and the upper numbers inland. “If there isn’t enough ammonia supply, then certainly urea and UAN will move, but right now it’s looking pretty dismal for those products,” said one source.

Western Cornbelt: The granular urea market in the Western Cornbelt was quoted at $300-$315/st FOB, depending on location, with inventories described as limited. One Missouri contact pegged the dealer market solidly at the $310/st FOB level in his area, and said tons were “shipping out as fast as we can unload it.”

California: The granular urea market was steady at $320-$330/st FOB port terminals in California.

Pacific Northwest: The granular urea market remained at $330-$340/st FOB port terminals in the Pacific Northwest, with the rail-DEL market steady $348-$360/st DEL in the region.

Western Canada: Granular urea was quoted at $505-$515/mt DEL in Western Canada, with some sources talking of a possible $10/mt increase for April delivery.

China: The hot domestic market has kept producers from offering any discounts to exporters. Sources said domestic prices have pushed the ex-port equivalent price to well above $230-$235/mt FOB.

While the export price is pegged around $215-$220/mt FOB, sources said producers have no incentive to move new material to the export warehouses until the domestic season calms down. To back up his estimate of the current price, one trader pointed to a purchase by Korea with a netback of $214/mt FOB. He noted that the Koreans usually bargain hard and get a good price on their purchases. To end up paying what the Koreans did, this source said, means the Chinese market has gained strength.

The producers got an initial boost in prices when the U.S. market heated up last month. By the time the last of the few cargoes were purchased for NOLA, the Chinese market domestic season began showing signs of strength. This past week confirmed a stronger-than-expected demand in China, which has pushed prices even higher.

Producers are looking hard at any overseas bids. Export warehouses hold about 1.5 million mt, said one trader. The owners of that tonnage are said to be willing to send the product back into the domestic system rather than accept a low bid. One trader said only a few cargoes have already been booked. The rest are sitting in the warehouses at the producers’ discretion.

Besides the material in the warehouses, sources said another 500,000 mt or so are slated for transfer to those warehouses. As of the middle of the week, sources reported that producers are seriously considering moving those tons back into the domestic market pipeline.

Producers could end up having a good first semester, said one source. The strong domestic market will last 30-40 days. When that market ends, India will have already called a tender to begin its 2016/17 buying. While India is not expected to make a large purchase in the first tender – about 800,000 mt at the most – the psychological impact of the beginning of the Indian buying season could have a bullish impact on Chinese prices.

The bottom line, said one trader, is that the combination of the flurry of activity for U.S. purchases followed by a strong Chinese domestic season has stemmed the slide in urea prices.

India: Industry watchers tend to agree that India is sitting on about 1.5 million mt of urea ready for the seasonal rains. That amount of product on hand means India is in no rush to buy product.

Sources expect the first tender to be called no earlier than April 15, about two weeks into the new fiscal year. By that time, said one trader, the maximum retail price and funds allocated for urea will be finalized. In the run up to the new fiscal year, media reports quoted government sources as saying there will be no changes to the MRP or funds to pay for subsidies.

Sources pointed out that the lack of any increase in the budget for urea subsidies is in fact a reduction, given inflation and currency fluctuations.

The Modi government has been enticing companies to either open shuttered urea plants or build new ones with a series of subsidies that require substantial up-front private investment. The goal of the government is to make India self-sufficient, either with domestic plants or through offshore joint ventures with favorable offtake arrangements.

Industry watchers said no matter how much the government argues to the contrary, India will still need to import at least 8 million mt this fiscal year, about the same amount as the current year. A portion of that tonnage will come from existing joint ventures, but the bulk will come from regular tenders run by MMTC, STC, and IPL.

Product will need to start arriving in May and is expected to end in mid-January. According to one trader, this means that India will have to receive about 800,000 mt each month. Sources said the only way the Indian infrastructure can handle that many tons is to spread the deliveries around a number of ports instead of just a few large facilities that can handle large vessels more quickly.

Tata Chemicals shut down its Babrala plant in Uttar Pradesh for a routine maintenance turnaround. The plant went down March 22 and is expected to remain offline for about a month. The plant’s urea output is rated at 864,000 mt/y. Sources said the shutdown, if it stays on schedule, should not impact the overall import plans for the country.

Middle East: Arab Gulf producers remain comfortably booked into April, and, if the producers are to be fully believed, well into May.

Sources reported that Oman was looking to sell a cargo, but was asking $215/mt FOB. One trader said that might be a realistic price given the bullish nature for spot tons. The general price from the Arab producers, however, is pegged at $200-$205/mt FOB for contract tons.

One trader noted that some deals have gone out trading movement and liquidity for price. Sales of contracted tons into Brazil reportedly have a netback in the upper-$190s/mt FOB. Likewise, some product slated for Thailand is pegged at $200-$205/mt FOB. Industry watchers pointed out, however, that these sales were set weeks ago and are based on a formula that allows for lower netbacks than spot deals or even newly negotiated contracts.

Part of the price support came when demand from the U.S. kicked into high gear last month. The last of the tons for NOLA are being loaded now. Additional purchases from Brazil, Africa, and Turkey added to the producers’ general feeling of well-being.

Egyptian production continues to go up and down based on natural gas supplies. Sources said the best the Egyptian plants can do right now is operate at 70-80 percent capacity.

The latest bid for Egyptian product came in at $220/mt FOB, and had, by press time, not yet been accepted by the producers. One trader said a weekend deal might be concluded a couple of bucks higher, but anything in the upper-$220s/mt FOB would make the product unsellable into southern Europe. This latest bid is down from the $232/mt FOB figure of several weeks ago that was rejected by the sellers as too low.

Egypt mostly sells its cargos in 6,000-7,000 mt quantities. Sources said this is the perfect size for the southern European ports. The Egyptians face the problem of southern European replenishment buying plans not being as strong as initially expected. Buyers apparently see no need to buy product at a premium, said one trader.

Southeast Asia: Sources said buying interest in Thailand will pick up once the rains start next month. For now, said one trader, buying is only based on cargos required under long-term contracts.

Thai buyers are reportedly looking for $200-$205/mt CFR for their product from the Arab Gulf. One observer noted that this is same price the producers are looking at for a contract netback. Another trader said the more likely Arab Gulf netback for the current few cargoes that are booked for Thailand is in the $190s/mt FOB.

Thai buyers have rejected the prices out of China as too high. Sources said the Chinese producers are under no pressure to sell thanks to a strong domestic market, and refused to meet or beat the Arab Gulf price.

The Indonesia domestic season still has a month or so to go before demand seriously kicks in. At the same time, producers are rejecting export bids lower than $230/mt FOB.

Indonesian farmers are preparing fields for the rain. Residents of nearby Singapore are already feeling the impact of the slash-and-burn activities in Indonesia. A haze settled over the city-state and is expected to get worse in the next few weeks.

Black Sea: There remains limited availability from Yuzhnyy. Some Ukrainian plants are shut down because of the Russian occupation of some areas of the country, and others because of disputes over the price of natural gas.

What material is being made and pushed through Yuzhnyy remains pegged in the low-$190s/mt FOB.

Pakistan: The United Business Group (UBG), which governs the Federation of Pakistan Chamber of Commerce and Industry (FPCCI), has asked the government to reduce the price of locally-produced urea in order to boost agricultural production, arguing that high prices are beyond the capacity of struggling farmers.

UBG said the difference in price of a 50 kg bag of locally-produced and imported urea is Rs200. In a March 23 statement, UBG Chairman Iftikhar Ali Malik said local producers must reduce profit margins to benefit growers and bar imports, which are expected soon. He said the government should also consider revising the sales tax and Gas Infrastructure Development Cess (GIDC) to make locally-produced urea cheaper. He warned that if appropriate steps are not taken, cheap imported urea will soon flood the market.

The National Assembly Standing Committee on Industries and Production earlier in March recommended that the government allow National Fertilizer Marketing Ltd. (NFML) to import urea.

The committee expressed concerns about inflated urea prices in the country and urged NFML to play an active role in breaking the “cartelization” of the industry by importing urea and selling it below domestic rates. The committee was informed by an NFML official that the total landed price of an imported urea bag in Karachi is Rs1,490, compared with the local urea manufacturer selling price of Rs1,900/bag.

Separately, the Finance Division and the Ministry of Petroleum have given the go-ahead to the Ministry of National Food Security and Research for framing a policy that will allow urea imports by the private sector. Under the existing policy, urea usually is manufactured locally or is imported only by the state-owned Trading Corp. of Pakistan (TCP) if the need arises.

Pakistan’s urea manufacturers, meanwhile, have asked the government to reduce or roll back feed stock gas prices instead of importing urea. The fertilizer manufacturers blame expensive gas for higher urea prices in the country.

In a March 12 letter to the Ministry of Industries and Production, they said that if a recent increase in gas prices is withdrawn, the average price of urea produced locally would be cheaper by Rs600-700 per 50 kg bag compared with imported urea. They said the GIDC has swelled to Rs300/mmBtu, compared with Rs197/mmBtu in 2011.

The manufacturers added that the average gas prices in the country were currently at $5.4/mmBtu for the fertilizer sector, compared with $2.54/mmBtu in the Middle East.