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Sulfur

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

Tampa: Speculation on a potential landing spot for the second-quarter price of molten sulfur delivered to Tampa began to intensify last week.

All agreed the likely direction for next-quarter pricing was down. Continued weakening in the international markets following the conclusion of first-quarter negotiations makes a second-quarter decrease a virtual certainty, sources said.

“The market is still soft,” one market player offered. “(Tampa) will definitely be down for Q2.”

Speculation on the severity of the potential decrease ran the gamut. Expectations of a $10-$15/lt drop were common, based primarily on recent international pricing. “I am sure we will be down to around $85/lt to ‘match’ the world, even though (the price decrease) has been more affected by currency changes than anything else,” said one observer.

Some offered more ominous predictions of a $20-$30/lt drop, however, founded on rumors of molten sulfur tons offered in the Gulf region in the $60s/lt FOB.

The first-quarter contract for molten sulfur delivered to Tampa was $95/lt, $15/lt below the fourth-quarter 2015 price of $110/lt.

Domestic refinery runs increased for the week, according to the U.S. Energy Information Administration (EIA). Utilization was reported at 89.1 percent for the period ending March 4, a 0.8 percent uptick from the prior week’s 88.3 percent, and also above the year-ago 87.8 percent and the five-year average of 85.8 percent.

The EIA put average daily crude inputs higher as well. Inputs average 15.911 million barrels/d, a 59,000 barrel/d increase from the prior week’s 15.852 million barrels/d.

U.S. Gulf: Sources called the U.S. Gulf market unchanged at $75-$80/mt FOB for the week.

U.S. Imports: January imports were up 29 percent, to 148,189 st from the year-ago 115,277 st. January-July imports were off 5 percent, to 981,950 st from 1.04 million st.

Vancouver: Vancouver traders and producers quoted the spot market in a range of $75-$85/mt FOB for the week, unchanged from last report. Contract prices continued to run even with spot, sellers said.

Cargoes to China remained stuck in the $85-$90/mt CFR range, although some market players expressed hope for second-quarter firming. “I was looking at late Q2 cargoes into South East Asia,” a trader said. “There were a couple of bites above $90/mt CFR, but nothing definitive.”

Alberta sellers continued to describe netbacks in the (-)$27-$60/mt FOB range.

West Coast: The West Coast formed sulfur market was unmoved at $70-$80/mt FOB last week.

First-quarter contracts for molten sulfur were reported at $65-$115/lt FOB.

ADNOC: The price of Abu Dhabi National Oil Co. prill was $88/mt FOB Ruwais for the month of March, a $17/mt FOB decline from February’s $105/mt FOB.

Aramco: Saudi Aramco March formed cargoes continued at $90/mt FOB Jubail, a drop of $25/mt from the February price. April pricing is expected to be announced around March 15.

Tasweeq: March offers from Qatari state-producer Tasweeq were listed at $87/mt FOB Ras Laffan, $2/mt below February’s $89/mt FOB.

Potash

Eastern Canada, Eastern Cornbelt, India, Market Watch, Northeast, Northern Plains, Pakistan, Potash Muriate, U.S. Gulf, U.S. Imports, Western Cornbelt

U.S. Gulf: Prompt barges drifted lower for the week. Most traders quoted the market at $180-$190/st FOB, including a number of trades confirmed at the $180/st FOB level.

Upriver barges were expected to bring a premium, likely in the $195-$200/st FOB range, sources indicated.

U.S. Imports: MOP imports were down 23 percent in January, to 831,745 st from the year-ago 1.08 million st. July-January imports were off 19 percent, to 5.54 million st from 6.82 million st.

YTD imports were down from all major supplying countries – Canada, Chile, Russia, and Israel – although there was a slight uptick in imports from Belarus, to 42,346 st from the year-ago 31,196 st.

Eastern Cornbelt: The potash market was pegged at $235-$245/st FOB in the region, with the low reported at Cincinnati and Ottawa and reflecting another $5/st drop from last report. The upper end of the regional range was quoted out of inland warehouses. The Burns Harbor potash market was pegged at the $240/st FOB level for new sales.

Sulfate of potash remained at the $620/st level FOB Toledo, Ohio.

Western Cornbelt: The potash market remained under pressure in the Western Cornbelt. Sources quoted a broad range at $225-$245/st FOB for new sales, depending on location and grade, with the low end of the range reflecting another drop from last report. One Iowa contact pegged the common red granular market at the $232/st FOB level in his trade area last week.

Northern Plains: Potash pricing out of regional warehouses in the Northern Plains was reported at $240-$245/st FOB. Rail-DEL tons remained at $250-$260/st in North Dakota, with the market FOB Saskatchewan mines quoted at $210-$220/st FOB after netbacks, depending on grade.

Northeast: Some sources said potash pricing FOB Baltimore had firmed to the $262/st level last week, while others said the last sales out of that location were concluded at the $242/st FOB level. Other warehouse prices in the region included $250/st FOB Lancaster, Pa.

Several sources said they expect spring potash application rates to be up in the Northeast after several years of reductions, particularly if weather conditions favor an early start to the spring season.

Eastern Canada: Sources reported lower potash prices in Eastern Canada, driven by significant pricing cut in late February. The regional warehouse market was quoted at $405/mt FOB, down $30/mt or more from last report.

India: MMTC on March 11 closed a tender for 1,350 mt +/-10 percent of potassium sulfate in bags. The tender calls for delivery in two containerized shipments, one at 1,020 mt +/-10 percent to JNPT (Nhava Sheva Port) and another at 330 mt +/-10 percent to Krishnapatnam port in the first half of April.

Offers are required to remain valid for a minimum of 30 days after tender opening.

Pakistan: Belarus Minister for Industry Vitaly Vovk met with Pakistan Commerce Minister Khurram Dastgir Khan and other businessmen recently to discuss improving bilateral trade between the two countries, including exports of potash to Pakistan.

Phosphates

Brazil, Central Florida, China, Eastern Canada, Eastern Cornbelt, India, Lithuania, Market Watch, Middle East, Northeast, Northern Plains, Phosphate Rock, Tunisia, U.S. Exports, U.S. Gulf, U.S. Imports, Western Cornbelt

Central Florida: The Central Florida truck market was called flat for the week. Truck-loaded DAP continued to be priced at $370/st FOB, sources said, with MAP commanding an additional $10-$15/st.

U.S. Gulf: Another week into the spring fertilizer season brought firmer NOLA barge pricing. Prompt DAP was quoted in a range of $335-$350/st FOB, while MAP was called $345-$365/st FOB.

Imported material comprised the low end of the DAP and MAP ranges, with sales from domestic producers occupying the top rung. Some described MAP trading as high as $370-$372/st FOB, but the transactions went unconfirmed.

Many traced the market’s ongoing rise to delayed imports. Loading issues at a Moroccan port were believed to have slowed vessels originally slated for first-half March arrival. The result, sources contended, was a demand increase in excess of the normal spring bump.

“(The price increase is) because guys are waiting on OCP,” one contact argued. “There were loading difficulties at port. People got caught when the tons didn’t come, and they had to pay (domestic producers’) prices.”

The market expected a number of import vessels for March arrival, although exactly when they were due at NOLA inspired considerable debate. Some believed the vessels had been pushed back to the end of March for the most part, possibly slipping into early April. Others expected the arrivals to begin as soon as March 11, starting with a EuroChem cargo.

All in all, seven import cargoes were reported to be due in March or early April, including three MAP-heavy cargoes from EuroChem, one PhosAgro vessel carrying 35,000 mt of DAP and MAP, and either two or three Panamax ships from OCP.

“The vessels are all arriving in a two-week window, and all but one of them are already on the water,” said one source. The lone exception was said to be an OCP vessel loading on March 11.

Absent from the expected lineup were cargoes of Chinese origin. “There have been rumors that a Chinese load is coming, but I haven’t seen anything,” said one trader. “The FOB numbers from China just haven’t made sense.” He noted that if something did come, it would have to be a parked cargo, probably combined with urea. “I just don’t know why anyone would bring one in,” he said.

The NOLA DAP market was quoted in a range of $335-$350/st FOB, up from $330-$345/st FOB at last report. MAP had firmed as well, to $345-$365/st FOB from the previous week’s $340-$360/st FOB range.

U.S. Imports: Finished phosphate imports were up in January, with DAP at 38,338 st from the year-ago 2,426 st, and MAP/Other at 27,433 st versus 10,303 st, respectively. July-January was down, with DAP at 332,653 st from 489,041 st, and MAP/Other at 487,546 st from 890,356 st.

YTD imports from China are down, with DAP imports at 169,700 st versus the year-ago 418,270 st, and MAP/Other at 92,815 st versus 267,761 st.

Eastern Cornbelt: DAP pricing continued to firm in the Eastern Cornbelt. Sources quoted the low end of the regional market at $378-$385/st FOB Cincinnati and $380/st FOB Ottawa, with the upper end of the regional range at $390/st FOB inland warehouses.

The MAP market was pegged at $390-$410/st FOB in the region, up another $10-$20/st from last report, with reports of very tight inventories at Cincinnati. The Ottawa MAP market was pegged solidly at the $395/st FOB level last week.

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

Western Cornbelt: Phosphate prices continued to firm, with the DAP market now quoted at $380-$390/st FOB in the Western Cornbelt, up another $10/st from last report.

MAP was quoted in a broader range at $400-$420/st FOB, with the upper end reported in the Iowa market late in the week. Sources talked of tight supplies for both products, but particularly for MAP. “Literally as fast as we unload a barge, they haul it back out again,” said one regional contact.

10-34-0 remained at $475-$500/st FOB in the Western Cornbelt, with the low in Nebraska and the upper end in Iowa and Missouri.

Northern Plains: DAP pricing was quoted at $380-$385/st FOB the Twin Cities, up $15/st or more from mid-February pricing levels. The regional MAP market was pegged at $390-$435/st FOB, with the Twin Cities market reported in the $390-$400/st FOB range and the upper end out of spot warehouse locations in North Dakota.

The 10-34-0 market was pegged at $490/st FOB in the Northern Plains, with delivered prompt tons quoted in the $505/st range in central North Dakota.

Agrium’s March 1 phosphoric acid postings were unchanged from February levels, with rail-DEL SPA and MGA referenced at $1,050/st of P2O5 in Minnesota and Wisconsin, and $1,065/st of P2O5 in the Dakotas.

Northeast: MAP in the Northeast was reportedly priced at $395/st for prompt tons FOB Fairless and East Liverpool, with prepay being quoted roughly $5/st higher at East Liverpool. Those levels reflect a $10/st increase from last report.

DAP was $5/st lower than MAP, where available, with the East Liverpool market quoted at $390/st FOB for prompt and $395/st FOB for prepay.

10-34-0 was reported at $515/st FOB out of terminals in upstate New York.

Eastern Canada: The MAP pricing range in Eastern Canada had reportedly broadened to $660-$680/mt FOB, depending on location.

U.S. Export: Mosaic announced sales of DAP and MicroEssentials totaling 33,000 mt into various Latin American markets last week. The cargoes were expected to ship in March or April and carried a DAP price of $360/mt FOB.

Sources quoted the Gulf export market at $360/mt FOB for the week, unchanged from the previous report.

Phosphoric acid sold to India carried a first-quarter contract price of $715/mt CFR, $95/mt below the second-half 2015 price of $810/mt CFR.

Brazil: Brazil MAP market observers described continued sales in the $360-$365/mt CFR range last week. “There’s a little life to Brazil,” said one contact. “It seems they’ve got a little more movement.”

The market was quoted at $360-$365/mt CFR, unchanged from the week before. New offers were described in the $370-$375/mt CFR range.

Saudi Arabia: Last-done on the Saudi Arabian DAP market was a $345/mt CFR cargo sold into India. The deal was believed to net back $335-$340/mt FOB to the seller.

Rumors described an additional sale from Saudi Arabia last week, possibly facilitated by a trader, although numerous sources were unable to confirm the transaction.

China: Sales of DAP were reported this week, but not at levels to the producers’ liking.

Sources said the price for DAP was at $345-$350/mt FOB, with all the talk on the lower end of the range. One trader said getting a $345/mt FOB deal is much easier now than just a few weeks ago. Getting $340/mt FOB could be done but would take some work, and only if the cargo size and timing is right.

A South Korean buyer reportedly tried to secure a prompt cargo of 6,000 mt at $340/mt FOB, but was told the quantity was too small to consider such a drastic drop in the price.

At the same time, a couple of trading houses have reportedly been talking about a larger quantity being sold to Pakistan at $340/mt FOB. The deal makes sense after Pakistan bought a cargo from Saudi Arabia at $360/mt CFR early last month.

Besides aggressive buyers, growing inventories in the Chinese warehouses are helping push prices lower. The warehouse reserves are building, partly because domestic demand is off and international purchasers are not willing to buy large quantities in a bear market.

India: Sources report that Indian DAP stockpiles are strong enough to allow buyers a chance to take it easy and not rush to make a purchase.

The last bit of business done into India last month showed a price of $345/mt CFR from the Middle East. Estimating the price of that deal back to China would put it below the current $340/mt FOB price under discussion.

Russian suppliers are reportedly in talks with Indian buyers. An impasse appears to be happening at the price. The Russians are said to have no desire to accept anything less than $350/mt CFR – a move backed up by their Arab competitors.

One source said the Indians may have to move a bit on the talks, as will the Russians. The best guess for a final deal is expected in the upper-$340s/mt FOB.

Lithuania: EuroChem’s Lifosa operation will begin a scheduled 15-20 day turnaround at the end of March/beginning of April.

Europe: EuroChem is reported to be asking $380-$390/mt FOB for DAP for European destinations, while Moroccan DAP is reportedly being offered at around $380/mt FOB.

Tunisia: The country’s phosphate rock production has reached 14,000 mt/d, despite road and rail blockades at several mining sites by protestors since January. This level is deemed “acceptable,” according to the country’s new Minister of Energy and Mining, Mongi Marzouk, in an interview last week with the Tunisian News Agency.

State-run producer Compagnie des Phosphates de Gafsa (CPG) reported commercial production at no more than 361,000 mt between Jan. 1 and Feb. 6 (GM Feb. 12, p. 9). Marzouk believes Tunisia will be able to produce some 4 million mt of phosphate rock this year, but will not be able to achieve an earlier forecast of 6 million mt (GM Dec. 1, 2015).

Tunisia produced 3.2 million mt of rock last year. Production at sister company GCT’s downstream plants is reported to be running at around 70 percent of capacity.

Ammonium Sulfate

Ammonium Sulfate, Eastern Canada, Eastern Cornbelt, Market Watch, Northeast, Northern Plains, U.S. Imports, Western Cornbelt

U.S. Imports: January saw a 350 percent surge in ammonium sulfate imports, to 88,655 st from the year-ago 19,693 st. July-January imports were up 75 percent, to 385,815 st from the year-ago 220,036 st. China continues as a major source for U.S. imports, with some 239,571 st of the tons coming from that country, versus 93,477 st for the year-ago period. Imports from Canada were down to 99,098 st from 125,055 st.

Eastern Cornbelt: Sources reported a broad range of pricing for granular ammonium sulfate in the Eastern Cornbelt. The low end of the regional market was pegged at $230-$245/st FOB spot river locations for imported tons, with the bottom of that range FOB Ottawa and the high FOB Cincinnati. Domestic ammonium sulfate tons continued to be reported at the $280/st FOB and $285/st rail-DEL level at the upper end in the region.

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

Western Cornbelt: Granular ammonium sulfate pricing had reportedly fallen to $240-$255/st FOB in the Western Cornbelt, with the lower numbers driven by imports. High demand had left some Missouri terminals with low sulfate supplies last week, sources said.

Ammonium thiosulfate remained at $295-$315/st FOB in the region.

Northern Plains: Granular ammonium sulfate pricing had reportedly slipped to $240-$250/st FOB for imported tons in the Northern Plains, down another $5/st from last report. Delivered pricing was quoted in the $275-$285/st range for domestic tons, depending on location.

The ammonium thiosulfate market remained at $320/st FOB in Minnesota. No current prices were reported in the Dakota market.

Northeast: Granular ammonium sulfate was tagged at $270-$280/st FOB in the Northeast, with delivered tons reported at $285-$290/st in the region.

Eastern Canada: Granular ammonium sulfate was quoted at $450-$460/mt FOB in Eastern Canada, down $30-$35/mt from last report.

Ammonium thiosulfate remained at $495/mt FOB and $595/mt DEL in the region, depending on location.

Ammonium Nitrate

Ammonium Nitrate, Eastern Canada, U.S. Gulf, Western Cornbelt

U.S. Gulf: The ammonium nitrate market was unchanged at $205-$215/st FOB.

Imports are off 14 percent so far this fertilizer year (July-January), to 244,679 st from the year-ago 284,326 st. January was down 9 percent, to 24,977 st from 27,433 st.

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

Eastern Canada: Ammonium nitrate remained at $555/mt FOB in the Ontario market for spot tons, where available.

Nitrogen Solutions

Eastern Canada, Eastern Cornbelt, Market Watch, Northeast, Northern Plains, Pacific N.W., U.S. Gulf, UAN, Western Cornbelt

U.S. Gulf: Guided by a firming paper market valued at $190-$195/st FOB, prompt UAN prices were quoted in the $180-$190/st ($5.63-$5.94/unit) FOB range.

The East Coast vessel market was called strong and getting stronger. Most sources continued to put price ideas around $200/mt CFR, although some had bigger ideas. “I think the next import sale will be at $215/mt CFR,” one trader said.

UAN imports were down 18 percent in January, to 271,579 st from the year-ago 332,839 st. July-January imports were off 11 percent, to 1.75 million st from 2 million st. YTD imports from China were down at 93,467 st from the year-ago 201,759 st, while imports from Russia were up at 815,522 st from 701,632 st.

Eastern Cornbelt: The UAN-28 market was quoted at $197-$201.32/unit ($7.04-$7.19/unit) FOB Cincinnati on the low end, with the upper end of the regional range pegged at $219.80 ($7.85/unit) FOB inland terminals on a spot basis. Illinois sources pegged the UAN-32 market at $244.80-$246.40/st ($7.65-$7.70/unit) FOB for new business.

The UAN-28 market out of Michigan terminals was tagged at $225-$228.20/st ($8.04-$8.15/unit) FOB last week, with the dealer market FOB Courtright quoted at $215-$217/st ($7.68-$7.75/unit) for new sales

Western Cornbelt: Sources quoted the UAN-32 market at $240-$250/st ($7.50-$7.81/unit) FOB in the Western Cornbelt, with the low end reported at Fort Dodge and reflecting a
$10/st increase from last report.

Northern Plains: UAN-28 pricing was pegged at $214-$220/st ($7.64-$7.86/unit) FOB regional terminals in the Northern Plains, up some $15-$20/st from last report. Delivered UAN-28 in North Dakota was higher as well at $250/st ($8.93/unit), representing a $20-$30/st increase.

Northeast: Citing “lots of (buying) activity” and “very limited supply for March/April,” sources reported a rapidly firming UAN market out of East Coast terminals. UAN-32 pricing FOB Baltimore had reportedly firmed to $210-$220/st ($6.56-$6.88/unit) FOB for March tons, up a full $30-$35/st from just three weeks earlier.

Out of terminals in upstate New York, the UAN-32 market was pegged at $245/st ($7.66/unit) FOB, up $17/st from last report.

Eastern Canada: UAN-28 was quoted at $300-$318/mt ($10.71-$11.36/unit) FOB regional terminals in Eastern Canada, with the low end of the range showing a slight reduction from last report.

Pacific Northwest: Effective March 7, Agrium’s posting for UAN-32 FOB Kennewick, Wash., moved to $265/st ($8.28/unit).

Urea

Bangladesh, China, Eastern Canada, Eastern Cornbelt, India, Market Watch, Middle East, Northeast, Northern Plains, U.S. Gulf, Urea, Western Cornbelt

U.S. Gulf: The prompt granular urea market expanded for the week, with trades confirmed in the $257-$274/st FOB range. Full-March transactions fell in the $255-$258/st FOB range, while first-half April sales were quoted at $235-$245/st FOB. Traders put barges for second-half April at $226-$233/st FOB, and full May at $210/st FOB.

Most sources called prills in the $250-$255/st FOB range, above the previous week’s $245-$250/st FOB range.

January urea imports were off 23 percent, to 596,973 st from the year-ago 774,394 st. July-January imports were down 10 percent, to 4.2 million st from 4.64 million st. YTD imports from China are way down at 201,012 st from the year-ago 889,242 st.

Eastern Cornbelt: The granular urea market remained at $295-$305/st FOB for new sales in the Eastern Cornbelt, with the lower numbers reported at Cincinnati, Ohio, and Ottawa, Ill., and the upper end FOB Burns Harbor, Ind. Some sources reported May prepay offers available for $10/st less than current spot offers, depending on location.

Reference pricing for granular urea out of Michigan terminals ranged from $310-$320/st FOB for new business.

Western Cornbelt: The granular urea market had reportedly firmed to $300-$310/st FOB in the Western Cornbelt, up another $5/st from last report, with the low quoted in Iowa out of spot river locations and the upper end in the Missouri market for confirmed new business. “We can hardly keep product in the house,” said one Missouri contact. One source said his location was expecting upriver barges to arrive in 7-10 days.

Northern Plains: The granular urea market was pegged in a broad range at $295-$310/st FOB the Twin Cities for prompt tons, with April shipments quoted at the $295/st FOB level and May reported at $280-$285/st FOB.

North Dakota sources quoted delivered granular urea tons in a broad range as well at $320-$339/st for new business, with prompt terminal pricing reported as high as $335-$339/st FOB in the state on a spot basis.

Northeast: Granular urea pricing in the Northeast was moving up. The low end of the regional range was reported at $290/st FOB Baltimore, Md., from at least two suppliers who are now reportedly offering tons in that market after a lengthy absence. The upper end of the regional range was pegged at $300/st FOB Fairless, Pa., and $305/st FOB East Liverpool, Ohio.

Eastern Canada: The granular urea market was pegged at $450-$480/mt FOB in Eastern Canada, down slightly from last report. “Even though replacement cost has moved up, we are pretty well positioned on urea based on fall costs,” said one regional contact.

China: Industry observers said published prices near $220/mt FOB are too high. As the week ended, traders were calling the market $195-$200/mt FOB. To back up their claim, traders said calls to producers ended with the producers willing to sell in the upper-$190s/mt FOB if the buyer was ready to settle right away.

Sources said part of the new willingness to sell quickly and at lower prices is because the domestic market in China is not performing as expected. Local purchases are reportedly well below last year’s levels. Part of the decline is blamed on bad weather, from additional snowfall to lack of rain. Another part is blamed on lower crop prices.

Without the subsidies the government once supplied, many farmers now are reportedly less willing to buy any reserve quantities of fertilizer. One trader noted that the whole domestic fertilizer season is now operating on a hand-to-mouth basis.

Without the pull of the domestic market, urea supplies are building and producers are not yet cutting back on production. They are, however, looking for ways to clear out the warehouses to make room for the new material.

The lack of new, large-scale granular business following the buying furor for the U.S. has driven down prices. With no big prilled business expected until next month when India comes in the market, prilled prices are also under pressure.

The few deals that were circulating all showed prices under $200/mt FOB. Reportedly, a Korean buyer took 6,000 mt of granular product at just under $210/mt CFR. An order for 22,000 mt of prilled urea reportedly went to Malaysia at $200/mt FOB.

Questions were raised about the Malaysian order, however, with some sources noting that the Malaysian warehouses are already full. Also, said one trader, there are not many buyers in the country who can handle a shipment this size. Usually smaller quantities are ordered for blending.

India: Reserves of urea in India are said to be just above 1 million mt. Sources said that kind of tonnage makes it easy for the Indian government to hold off until the middle of April before it has to call the first tender for the upcoming application season.

Without the reserves, one of the three authorized buying houses would most likely call a tender as soon as the new fiscal year begins on April 1. As things now stand, said one trader, India can easily wait well into the third week of April before calling a tender.

The middle of the month is also when a major fertilizer confab will be held in Beijing. Some industry watchers expect the tender announcement to come just after the event.

One theory is that once a tender is called, the Indian buyer will only take the quantity needed for a short duration. Then another tender will be called, and so on. Sources said if India does not take large quantities with each tender, the accumulating product in China and the rest of the world will maintain a downward pressure on prices.

Middle East: Producers continue to claim their price is $215/mt FOB and that they are sold out for March. No one in the industry is doubting that a spot deal is not possible this month. Most of the market watchers, however, have already turned their gaze to April.

Sources said sales out of the Arab Gulf for April do not look as promising as March business. Big producers such as Sabic and PIC will still have their contracts to ensure a steady flow outward of some material. Also helping the producers may be orders out of Australia. Those sales, however, may not be enough to make things as tight as they currently are.

Once India calls a tender, Iran is expected to provide a healthy portion of the final award. Arab producers may sit this one out, said one observer, rather than get into a pricing war with the Chinese and Iranians.

Egypt continues to turn out material even as prices soften. Earlier selling tenders watched the price drop from the upper-$340s/mt to the low-$330s/mt FOB. Now, said one trader, an Egyptian company concluded another tender loading in late April of 25,000 mt with prices reportedly in the $320s/mt FOB. The Egyptian product is most likely slated for southern European ports.

Bangladesh: Bangladesh plans to import 50,000 mt of urea from the Middle East on government-to-government deals in April and May 2016. Bangladesh Chemical Industries Corp. (BCIC) has issued an international tender for 50,000 mt of granular urea in two shipments from Ruwais, United Arab Emirates (UAE). Bids are due March 21, 2016.

According to a recent Bangladesh Economic Survey for the year 2015, the country imported urea, DAP, and other fertilizer at a cost of US$1.33 billion for FY 2014-15, compared with US$1.02 billion for the previous year. Bangladesh consumed about 2.63 million mt of urea in FY 2014-15, versus 2.46 million mt in FY 2013-14. The country produced only 0. 8 million mt of urea, with the rest imported.

Total consumption of urea, DAP, and other fertilizers stood at 4.8 million mt for FY 2014-15, up from 4.5 million mt in FY 2013-14.

Ammonia

Ammonia, Eastern Canada, Eastern Cornbelt, Market Watch, Northern Plains, U.S. Gulf, Western Cornbelt

U.S. Gulf/Tampa: No new activity was reported on the NOLA barge market. Last-done was quoted in the $285-$292/st FOB range.

January anhydrous ammonia imports were down 11 percent, to 443,849 st from the year-ago 500,429 st, according to the U.S. Department of Commerce. July-January imports were off 6 percent, to 3.1 million from 3.32 million st.

April NYMEX natural gas closed March 10 at $1.788/mmBtu, up from March 3’s $1.639/mmBtu.

Eastern Cornbelt: Sources continued to report firming markets for ammonia, with preplant demand described as steady. The low end of the regional range was quoted at $480/st FOB Illinois terminals on a spot basis, while pricing out of Indiana locations had reportedly firmed to $490/st FOB for new business.

The market FOB Courtright, Ont., was also pegged solidly at the $490/st FOB level to U.S. customers during the week.

Western Cornbelt: Sources reported firming markets for ammonia, with one source reporting that “suppliers have jacked the price almost daily because of strong demand in the South and a run on supplies. We suspect a similar run could occur here as demand escalates.”

Sources said anhydrous ammonia pricing had surged to $460-$485/st FOB in the Western Cornbelt, up $40-$45/st, with the low reported for very limited tons out of Nebraska terminals and the upper end out of terminal locations in central and eastern Iowa. Other spot terminal pricing levels included $465/st FOB Fort Dodge, Iowa, and $475/st FOB Palmyra, Mo.

No current delivered ammonia prices were available from southern production points in the region due to tapped-out inventories and suppliers “not taking orders,” sources said. One contact said the last spot business he’d heard out of Oklahoma and Kansas was in the $425-$430/st FOB range for very limited tons, but that was reportedly offered earlier in the month.

Northern Plains: Although postings had reportedly moved to as high as $470/st FOB in North Dakota, the regional ammonia market was quoted at $435-$450/st FOB for actual sales, up $20/st from last report, with delivered ammonia pegged at $455-$465/st in the Northern Plains.

Eastern Canada: The anhydrous ammonia market for Canadian buyers had reportedly firmed to $710-$730/mt FOB Courtright, Ontario, for March-June shipments, up a full $25-$35/mt from last report. Sources reported little new business to test the market, however, with one contact noting that ammonia is “not very much used now in Ontario.”

K+S posts higher 2015 operating income, warns of 2016 earnings drop

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K+S Group reported a 22 percent increase in full-year 2015 operating income (EBIT), to €781.6 million ($858.7 million) on revenues of €4.18 billion, up from 2014’s €641.3 million and €3.82 billion, respectively. Full-year adjusted group earnings after tax came in 48 percent higher at €542.3 million, up from €366.6 million.

Fourth-quarter operating income (EBIT) increased 18 percent, to €153.6 million on revenues of €992.6 billion, up from the year-ago €130.4 million and €1.02 billion respectively.

“Despite weaker conditions in the potash market, we performed well in 2015 and met our earnings forecast, thanks to our broad product portfolio,” said Norbert Steiner, chairman of K+S’ Board of Executive Directors. The 22 percent increase in EBIT fell within the company’s forecast range of €780-€830 million, albeit close to the bottom end of the range. The increase in operating income was due primarily to the rise in average prices in the Potash and Magnesium Products and Salt business units compared with 2014, as well as the increased strength of the U.S. dollar against the euro, Steiner noted. The company expects to increase dividends 28 percent, to €1.15 from €0.90, at its annual meeting May 11.

Full-year operating income (EBIT) in the Potash and Magnesium Products business unit increased 12 percent, to €546.1 million on revenues of €2.09 billion, up from 2014’s €488.8 million and €1.88 billion. respectively. Fourth-quarter operating income for this business unit came in 50 percent higher at €126.5 million on revenues of €511.0 million, up from the year-ago €84.4 million and €464.5 million, respectively.

K+S reported that “extensive efforts” were continued in 2015 to make the cost and organizational structures of the entire group more efficient, particularly in the areas of production, materials management, logistics, and IT. Under this “Fit for the Future” program, the company is targeting total cost savings of €500 million between 2014 and 2016, and said a good two-thirds of the announced savings already were achieved.

K+S said its Legacy potash project in Saskatchewan remains on its way to commissioning as scheduled in summer 2016, producing the first tons of potash towards the end of the year, and meeting the investment budget of C$4.1 billion (U.S.$ 3.1 billion). The company reported 80 percent of the total budget for Legacy has been spent to date. It invested around €1.3 billion in 2015, much of which was accounted for in capital expenditure for Legacy.

K+S was downbeat in its outlook for 2016, and is expecting a “significantly lower” result. “Along with intense competition, an ongoing difficult economic situation in emerging market countries is expected, continued low agricultural prices, and less availability of credit for farmers, particularly in Latin America, the downturn in the potash market, which became apparent in the second half of 2015, may continue this year,” the company said. It added that temporary production cuts at its Werra plant cannot be ruled out this year, given the restrictions placed on the permit to inject saline wastewater at the Hattorf site (see separate news item).

K+S consequently anticipates a “significant drop” in average prices in the Potash and Magnesium Products business unit, as well as sales volumes “slightly below” those of 2014. Overall, the company sees a “moderate decrease” in its revenues year-over-year in the 2016 financial year, while operating earnings (EBITDA and EBIT) are expected to be “significantly lower” than for 2015, and adjusted group earnings consequently also will be “significantly below” last year’s numbers.

The Equity buys Kohlbrecher Truck Service

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The Equity, one of Illinois’ largest independent agricultural cooperatives, announced that it has purchased Kohlbrecher Truck Service Inc., a family-owned-and-operated agricultural retailer offering agronomy, feed and farm supplies, and commercial trucking operations from its location in St. Rose, Ill.

“The Kohlbrecher business and location is very complementary to our expansion in Greenville, Ill.,” said Bruce Vernon, CEO of The Equity. “The addition of Kohlbrecher’s will enable us to offer a wider range of products and services for this upcoming spring application season.”

The Equity reported on Feb. 10 that it had entered into a Letter of Intent to purchase Kohlbrecher, with the transaction expected to close in early March. “Our team is excited to join the ranks of an organization such as The Equity,” said Butch Kohlbrecher, owner of Kohlbrecher. “We share core values and are aligned in our vision of providing excellent customer service.”

The Equity is headquartered in Effingham, Ill., and operates from 19 locations offering agronomy, grain, energy, feed and livestock, and hardware products and services to Illinois growers. The company’s market area covers approximately 10,000 square miles, with locations at Effingham, Stewardson, Lovington, Altamont, Marshall, Galton, Farina, Alma, West Liberty, Dieterich, Montrose, Strasburg, Pana, Robinson, and Greenville.

The company has announced a number of expansions in the last year, including the launch of its new Greenville branch last September and the construction of additional grain storage at its Strasburg location. The Equity also constructed a new crop care center in Pana in 2015, and purchased additional ground in Marshall to expand its agronomic services at that location.

“It’s important for us to always be aware of how to best serve our member-owners,” Vernon said.  “Our new Greenville location, facility enhancements, and service expansions not only help us meet the demands of area farmers, they also add value for our member-owners.”