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Ammonia

U.S. Gulf/Tampa: After the big rollover last week at Tampa, there was nothing new to report in the market. The NOLA barge market remained quiet, with all the excitement upriver in corn country.

April NYMEX natural gas closed on March 24 at $1.806/mmBtu, down from March 17’s $1.936/mmBtu.

Eastern Cornbelt: Sources continued to report steady movement of ammonia in the region. “There is a good run and it seems supplies are low due to customers not committing in advance, so sellers didn’t want to be stuck with surplus inventory,” said one contact. “Even now customers keep coming back three to four times per day, so it seems everyone is being careful on both sides.”

Ammonia pricing had reportedly firmed from $525/st FOB early in the week to $550/st FOB regional terminals for new sales as of March 24. Sources said some regional terminals were out of product until April, while others said suppliers were trucking in material from their terminals in other locations where demand has yet to take off.

“I’ve had some come in for five numbers four times in the same day, others at 1,000 tons twice in the same day,” said one regional supplier about the ongoing preplant demand in the region. “Customers come in and say, ‘Well I thought we were done, but give me 10 more numbers.’”

Western Cornbelt: Ammonia supply and pricing continued to be the main source of discussion among fertilizer contacts in the Western Cornbelt, although several sources acknowledged that the biggest preplant push on product was already behind them.

“We are basically done, with just a few stragglers finishing up,” said one Missouri source. An Iowa source estimated that 50 percent of the spring tons had been applied in his location, but growers were “starting to wrap up” in southwestern areas of the state.

New pricing levels last week were reported at $510-$525/st FOB in Iowa, depending on location and availability. The low was reported early in the week at Early, while spot pricing at Fort Dodge, Marshalltown, and Washington was quoted at the $525/st FOB level on March 24 after firming from $515/st FOB earlier in the week.

“Suppliers have been jacking us around,” said one regional contact. “First they suspend prepaying, then they suspend orders all together, then they jump the price another $40/st. I have to verify pricing on each quote because we have no pricing transparency.”

Missouri sources said ammonia pricing levels had firmed to $545/st FOB Palmyra, although there were reports that no new orders were being accepted at that location as the week advanced. Delivered tons in Missouri from southern production points were quoted at $520-$525/st based on reference levels at $440/st FOB Verdigris, Okla. Supply remained extremely tight out of southern locations, however.

“Manufacturers have very limited tons to offer, and everyone is in a sold-out position,” said one Southern Plains ammonia contact. “Finding tons is more luck than anything else.”

Demand was certainly fueling the ammonia pricing increases, as evidenced by a number of spot prices in Minnesota and North Dakota reported early in the week. With spring demand still stalled in the Northern Plains due to weather conditions, sources reported pricing levels in Minnesota at $415/st FOB Glenwood, $435/st FOB Murdock, and $460/st FOB Pine Bend.

California: Anhydrous ammonia remained at $545/st DEL in California, with aqua ammonia referenced at $151/st FOB in the state. A pricing adjustment from Calamco was scheduled for March 27, however, with postings slated to drop on that date to $500/st DEL for anhydrous and $140/st FOB for aqua ammonia.

Pacific Northwest: The anhydrous ammonia market was unchanged at $460-$505/st DEL in the Pacific Northwest, depending on location. Aqua ammonia was pegged at $126-$128/st FOB in the region, down $2-4/st from last report. Sources noted that the majority of ammonia usage in the region comes during the early summer months, so there was minimal activity to test the market.

Western Canada: The regional anhydrous ammonia market remained at $730-$740/mt DEL in Western Canada.

Investigators say AN used in Brussels bombs

Investigators revealed that the explosives used by the Brussels suicide bombers on March 22 contained ammonium nitrate and TATP, also known as triacetone triperoxide. News reports said the explosives were estimated at 44 pounds each and were packed with nails and screws. At least 31 people were killed and nearly 300 injured in the explosions, two of which occurred at the Brussels international airport departure terminal shortly before 8:00 a.m., and a third later that morning at a subway station about seven miles away.

The Belgian prosecutor’s office reported that authorities found more than 33 pounds of TATP during a March 23 raid on a residence linked to the suspects, as well as nearly 40 gallons of acetone and eight gallons of hydrogen peroxide, the materials used in producing TATP. Also found at the residence were nails and screws, and an Islamic State flag. Investigators said two undetonated bombs constructed with 20-40 pounds of TATP, ammonium nitrate, and a mix of metal bolts and nails were found in suitcases at the airport. A suicide belt was also recovered at the airport, and two more suitcases with bombs were confiscated during the sweep of the residence.

Experts cited by news media said TATP has become a common choice for terrorists because the chemical components are much easier to purchase than bulk quantities of ammonium nitrate. TATP is a peroxide-based rather than nitrogen-based explosive, which makes it harder to detect. TATP can also be used as a booster charge to trigger an ammonium nitrate detonation. TATP is also believed to have been used in the terrorist attacks in Paris in November.

Commission votes for moratorium on mining

The Union County Commission in Florida voted unanimously March 21 to put a one-year moratorium on mining applications. However, the matter has to be approved on a second vote in order to take effect. HPS II, which is proposing a phosphate rock mine for Union and Bradford Counties in the state, told Green Markets it understands the concerns being voiced in Union County and will continue their due diligence in working with the county towards a resolution.

In Bradford County, HPS said the process continues to move forward. A town hall meeting in that county held March 16 was generally regarded as supportive, compared to the opposition that has arose in Union County.

HPS II, formerly known as HPPS Enterprises LLC (GM March 11, p. 13), is composed of four family-owned landowners in the two counties.

While the company has touted itself as being owned by locals who plan to stay in the counties and reclaim the land, Union County opponents pointed to two recent incidents. The Suwannee River Water Management District recently required an HPS subcontractor to pay $454 for drilling some 38 groundwater monitoring wells without a permit. The permits have since been procured and HPS said the subcontractor thought he had initially completed the necessary paperwork. In addition, the District on March 15 issued a “notice of violation” to one of the landowners, John Shadd, for not procuring a permit for clearing, dredging, filing, and destroying wetlands for other property that he owns in Union County.

Univar acquires Nexus Ag in Saskatchewan

Univar Inc. in Downers Grove, Ill., announced on March 22 that its wholly-owned subsidiary, Univar Canada Ltd., has acquired the assets of Nexus Ag Business Inc., headquartered in Saskatoon, Sask. Financial terms of the transaction were not disclosed.

Nexus Ag was founded in 1997 and is a wholesale fertilizer distributor to the Western Canada agriculture market. The company has six regional warehouse locations offering a broad range of products, including micronutrients, specialty fertilizers, potash, phosphates, and liquid and soluble nutrients from leading North American producers.

“As a recognized leader in the fertilizer business in Western Canada, the addition of Nexus Ag to the Univar family enhances our existing macronutrient and crop protection inputs by adding a proprietary line of micronutrients, macronutrients, and specialty fertilizers,” said Mike Hildebrand, president, Univar Canada, Agriculture and Environmental Sciences. “This, together with our leading distribution and services network in the region, further strengthens Univar Agriculture’s ability to provide customers in Canada with a complete product and service offering that covers the entire growing cycle from start to finish.”

Univar said the Nexus Ag acquisition expands its distribution network to 16 facilities in four provinces, offering more than 1.2 million square feet of Agrichemical Warehousing Standards Association (AWSA) warehouse space, the most in Canada.

“Nexus Ag now operates as a division of Univar Canada Ltd., and the team begins the important work of determining the best opportunities for the integration of the two companies,” Univar spokesman Scott Johnson told Green Markets. “All areas of operations will be represented in the integration plan, including the warehouse footprint of both companies. At this point, our first priority remains on servicing our customers through our existing channels in preparation for the upcoming growing season.”

Univar Agriculture provides crop protection, seed, and fertilizer products and services to the cereal, oilseed, specialty crop, and horticultural markets in Canada. Parent company Univar is a global distributor of specialty and basic chemicals from more than 8,000 producers worldwide. Univar has been expanding, and currently operates more than 800 distribution facilities throughout North America, Western Europe, the Asia-Pacific region, and Latin America, supported by a global network of sales and technical professionals.

Univar’s purchase of Nexus Ag follows its March 2 acquisition of Bodine Services and related companies in Decatur, Ill., a regional provider of environmental and facilities maintenance services. Last October, Univar bought Future Transfer and BlueStar Distribution (GM Oct. 12, 2015), which will eventually be combined with Univar’s Fort Storage business to expand the company’s logistics, warehousing, packaging, and formulation services capabilities within the Canadian agriculture market. Univar Environmental Sciences business, another of the company’s segments, provides products for vegetation management in forestry, industrial sites, and rights-of-way.

Univar also announced a number of distribution agreements with Dow Corning over the past year, the most recent reported on March 8 and involving Univar’s ChemPoint.com Inc. subsidiary. Under the agreement, ChemPoint will manage order placement, fulfillment, and technical support for Dow’s Molykote® brand compounds, greases, pastes, anti-friction coatings, dispersions, and oils for the industrial assembly and maintenance market in the U.S. and Canada.

Nearly one year ago (GM April 20, 2015), Univar purchased Key Chemical Inc., a supplier of fluoride and other chemicals to the municipal water, industrial, and oil and gas markets, including aqua ammonia, caustic potash, lime, phosphoric acid, and sulfuric acid. In 2012, Univar acquired Magnablend (GM Dec. 10, 2012), a Texas-based provider of custom chemical manufacturing, blending, and packaging solutions.

Univar acquires Nexus Ag in Saskatchewan

Univar Inc. in Downers Grove, Ill., announced on March 22 that its wholly-owned subsidiary, Univar Canada Ltd., has acquired the assets of Nexus Ag Business Inc., headquartered in Saskatoon, Sask.

Nexus Ag was founded in 1997 and is a wholesale fertilizer distributor to the Western Canada agriculture market. The company has six regional warehouse locations offering a broad range of products, including micronutrients, specialty fertilizers, potash, phosphates, and liquid and soluble nutrients from leading North American producers.

“As a recognized leader in the fertilizer business in Western Canada, the addition of Nexus Ag to the Univar family enhances our existing macronutrient and crop protection inputs by adding a proprietary line of micronutrients, macronutrients, and specialty fertilizers,” said Mike Hildebrand, president, Univar Canada, Agriculture and Environmental Sciences. “This, together with our leading distribution and services network in the region, further strengthens Univar Agriculture’s ability to provide customers in Canada with a complete product and service offering that covers the entire growing cycle from start to finish.”

Univar Agriculture provides crop protection, seed, and fertilizer products and services to the cereal, oilseed, specialty crop, and horticultural markets in Canada. The Nexus Ag acquisition expands its distribution network to 16 facilities in four provinces, offering more than 1.2 million square feet of Agrichemical Warehousing Standards Association (AWSA) warehouse space, the most in Canada.

Parent company Univar is a global distributor of specialty and basic chemicals from more than 8,000 producers worldwide. Univar operates more than 800 distribution facilities throughout North America, Western Europe, the Asia-Pacific region, and Latin America, supported by a global network of sales and technical professionals.

Univar’s purchase of Nexus Ag follows its October 2015 acquisition of Future Transfer and BlueStar Distribution, which expanded its logistics, warehousing, packaging, and formulation services capabilities within the Canadian agriculture market. Univar’s Fort Storage business also provides storage and logistics services to segments of the crop protection industry, and its Univar Environmental Sciences business provides products for vegetation management in forestry, industrial sites, and rights-of-way.

Commission votes for moratorium on mining

The Union County Commission in Florida voted unanimously March 21 to put a one-year moratorium on mining applications. However, the matter has to be approved on a second vote in order to take effect.

HPS II, which is proposing a phosphate rock mine for Union and Bradford Counties in the state, told Green Markets, that it looks forward to working with the Union County Commission regarding the proposed project. The company said it understands the concerns being voiced in Union County, and will continue their due diligence in working with the county towards a resolution.

In Bradford County, HPS said the process continues to move forward. Indeed, a town hall meeting in that county held March 16 was generally regarded as supportive compared to the opposition that has arose in Union County.

HPS II, (formerly known as HPPS Enterprises LLC, GM March 11, p. 13) is composed of four family-owned landowners in the two counties.

OCP 2015 results up

Morocco’s OCP SA today reported a 55 percent increase in full-year 2015 EBITDA, to MAD 17,660 million ($1.8 billion) on revenues of MAD 47,747 million ($4.9 billion), up from 2014’s MAD 11,402 million ($1.4 billion) and MAD 41,436 million ($4.9 billion) respectively.

Adjusted operating cash generated for the full year increased 67 percent to MAD 12,293 million ($1.3 billion), up from MAD 7,338 million ($873 million) in 2014.

Fourth-quarter EBITDA was 31 percent higher year-on-year at MAD 3,737 million ($377 million) on revenues of MAD 10,610 million ($1.1 billion), up from the year-ago MAD 2,848 million and MAD 10,521 million, respectively.

“Our ability to deliver improved fourth-quarter margins in a difficult industry environment reflects targeted investments over recent years to enhance our production optimization and achieve further cost efficiencies,” said Mostafa Terrab, OCP chairman and CEO. “In the quarter, we benefited from transportation and energy cost savings following the ramp-up of the slurry pipeline, and realized competitive raw material sourcing.”  He said the investment program is also increasing the company’s industrial flexibility, which enables it to quickly adapt its production mix to optimize capacity and margins.

OCP attributed the 15 percent year-on-year increase in full-year revenues on a local currency basis to higher phosphate rock and acid revenues, which, it said, offset decreased fertilizer sales. The company’s 2015 top-line results benefited from higher prices for rock and acid, stable fertilizer prices, and growing Indian demand and higher sales to Africa. These compensated for lower Brazilian fertilizer imports and higher Chinese exports. OCP said it achieved a “significant” increase in new product sales through expanding in high growth markets, notably Africa. In 2015, Africa accounted for 24 percent of the company’s total fertilizer exports, up from 13 percent in 2014.

OCP’s 2015 capital expenditure totalled MAD 14,264 million ($1.5 billion) as part of its ongoing industrial investment program, initiated in 2008. Key projects completed last year were: the continued ramp-up of the Jorf Lasfar slurry pipeline which transported 6.5 million mt of rock in 2015, more than double the 2.7 million mt transported in the previous year, resulting in MAD 0.8 billion of cost saving; the first integrated fertilizer plant at Jorf Lasfar became operational in the first half of the year with the second plant expected to come online by mid-2016; the first phosphoric acid line adapted for processing phosphate pulp was launched in September; and the desalination plant at Jorf Lasfar had its first start-up tests in July and has since begun commercial operations.

One dead at CF facility

One man died and another was injured at CF Industries Holdings Inc.’s Port Neal, Iowa, plant, March 19, according to the Sioux City Journal. The men were reportedly working on a tower tank when one became unconscious. CF is in the process of expanding its Port Neal facility.

AGI to acquire NuVision Industries

Equipment provider Ag Growth International Inc., Winnipeg, Manitoba, said March 13 that it has entered into a binding agreement to acquire NuVision Industries Inc., Carseland, Alba., a designer and builder of complete turnkey fertilizer-blending plants and material-handling facilities.

“The acquisition of NuVision is another step in our developing platform for fertilizer-storage and handling equipment in Western Canada and beyond,” said Tim Close, AGI president and CEO. “NuVision is a leading provider of commercial fertilizer distribution systems and allows AGI to now offer market-leading, turnkey fertilizer systems for our customers.

“Our developing fertilizer platform is unique to AGI and positions us to offer the products and services our customers are asking for in the fertilizer sector,” continued Close. “The growth of our fertilizer business continues our strategy of diversification and risk mitigation by adding complementary seasonality and demand drivers within our core markets and with our core customers.”

NuVision’s entire team is joining AGI, including Lionel Kambeitz and Joe Wollner-Kallis, who grew the company. Wollner-Kallis will continue to lead NuVision, and Kambeitz will continue as an adviser for both Wollner-Kallis and AGI in the fertilizer space.

NuVision designs, manufactures, installs, and maintains fertilizer-blending and handling facilities throughout Western Canada.

AGI has been on a buying spree, buying GJ Vis Enterprise Inc., Oak Bluff, Man., a manufacturer of material-handling equipment used in the fertilizer, feed, and grain sectors, late last year (GM Dec. 7, 2015). In early March 2016 it acquired Brazil’s Entringer SA, a manufacturer of grain bins and equipment. In May 2015, it bought Winnipeg-based grain storage provider Westeel.

NuVision sales and adjusted EBITDA, normalized primarily for related party items, over the previous four years have averaged approximately $18 million and $3.4 million, respectively. For the year ended Dec. 31, 2015, NuVision sales and normalized EBITDA were approximately $32 million and $6.6 million, respectively.

The purchase price is based on five times NuVision’s average EBITDA for the financial years 2015 – 2018, with a maximum purchase price of $26 million. The maximum purchase price represents a multiple of four times 2015 normalized EBITDA. Terms of the transaction include payment of $12 million upon closing, with additional amounts payable annually based on achieved EBITDA in 2016, 2017, and 2018. All payments under the agreement are payable 50 percent in cash and 50 percent in AGI equipment, and the cash amount payable upon closing will be financed from AGI’s cash balance.

Completion of the transaction requires regulatory approval and the approval of the shareholders of HTC Purenergy Inc., a publicly traded entity on the TSX Venture Exchange and the majority shareholder of the parent company to NuVision. The transaction is expected to close on April 1, 2016.

Rentech income weighed down by impairments; gross profits up

Rentech Nitrogen Partners LP reported fourth-quarter 2015 results March 16 that are still being weighed down by writedowns at its Pasadena facility – $26.3 million in the fourth quarter, $160.6 million for the year. As a result, a fourth-quarter loss of $18.8 million ($0.48 per diluted unit) on revenues of $77.4 million was reported, versus the year-ago net income of $7.8 million ($0.20 per unit) and $80.6 million, respectively. Absent impairments, fourth-quarter net income was $7.6 million ($0.20 per unit).

Fourth-quarter gross profits were $17.9 million, up from the year-ago $11.8 million.

Full-year net losses were $101.5 million ($2.62 per unit) on revenues of $340.7 million, compared to 2015’s loss of $1.1 million ($0.03 per unit) and $334.6 million, respectively. Absent the impairments, Rentech had net income of $59.1 million ($1.51 per unit).

Full-year gross profit was $100.8 million, up from 2014’s $60.5 million.

Rentech Nitrogen said improved revenues and gross profits for 2015 were driven by three factors – higher ammonia sales volumes at East Dubuque, lower gas prices (excluding derivatives losses or gains), which averaged $3.71/mmBtu versus $5.00/mmBtu, and improved performance at Pasadena after the 2014 restructure.

Senior Vice President of Sales and Marketing Marc Wallis told analysts March 16 that since Jan. 1 through the present the market has continued to improve. He said East Dubuque’s markets are fairly depleted of both UAN and ammonia and the stage is set for an excellent first-half of the year.

Fourth-quarter East Dubuque net income was $15.8 million on revenues of $45.7 million, up from the year-ago $12.9 million and $47.9 million, respectively. Gross profit was $17.1 million, up from $14 million.

Full-year East Dubuque net income was $90.8 million on revenues of $201.3 million, up from $69.8 million and $196.4 million, respectively. Gross profit was $96.1 million, up from $74.8 million.

While for the fourth-quarter Pasadena reported a loss of $26.7 million due to impairments on revenues of $31.6 million, gross profit was a positive $804,000. The segment had a year-ago net loss of $3.4 million on revenues of $32.6 million, with a gross loss of $2.2 million.

For the full-year, Pasadena reported a gross profit of $4.6 million on revenues of $139.4 million, compared to 2014’s gross loss of $14.3 million and $138.2 million, respectively. Due to impairments, it had a net loss of $159.3 million compared to 2014’s net loss of $47.9 million.

Delivered st (000)

East Dubuque

4Q-15

4Q-14

2015

2014

Ammonia

44

47

186

153

UAN

70

53

276

267

Other

18

17

72

66

Average Sales Price $/st

Ammonia

499

558

538

549

UAN

238

267

255

280

Delivered st (000)

Pasadena

4Q-15

4Q-14

2015

2014

AS

118

114

473

572

Sulfuric Acid

36

51

150

112

ATS

27

11

76

67

Average Sales Price $/st

AS

202

228

236

203

Sulfuric Acid

79

79

84

86

ATS

150

178

168

153