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Sulfur

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

Tampa: Opinions on the state of the domestic sulfur market were sharply divided last week. With less than a month remaining in the first quarter, Middle Eastern producers moved new offer levels to a range of $87-$90/mt FOB, inviting interpretation from all corners of the market.

Some believed the new pricing was a sign that international markets had found a floor, while others called the move a precursor to yet another round of price cuts. “They’re consolidating,” said one market player. “I don’t think things look good for Q2 or Q3 unless there is a major outage somewhere.”

Still others interpreted the new pricing as a function of the currency market. Renewed strength in the dollar, coupled with steep declines in the Chinese yuan, have contributed to weaken worldwide commodities levels, sources said.

“Prices have been most affected by currency changes,” said one contact. “It appears currency has stabilized, and it would appear (sulfur) pricing has stabilized. I believe March will see substantial movement of volumes internationally.”

The first-quarter contract price of molten sulfur delivered to Tampa was $95/lt, down from $110/lt in fourth-quarter 2015.

Refinery utilization rose for the week, according to the U.S. Energy Information Administration. Capacity was put at 88.3 percent for the week ending Feb. 26, a 1.0 percent increase from the prior week’s 87.3 percent, and also higher than the year-ago 86.6 percent recorded and the five-year average of 86.2 percent.

Average daily crude inputs also grew. Inputs averaged 15.852 million barrels/d, 167,000 barrels/d below the previous week’s 15.685 million barrels/d.

U.S. Gulf: Falling international pricing was echoed in the Gulf market. Fresh price ideas were reported in the $75-$80/mt FOB range, a decline from $85/mt FOB at last report.

Vancouver: A softening Chinese spot market pushed Vancouver values lower last week, sources said. Last-done spot cargoes were reported in the $75-$85/mt FOB range, down from $80-$90/mt FOB at last report.

The China price fell as well, to $85-$90/mt CFR from $90-$95/mt CFR.

Alberta netbacks were unchanged at (-)$27-$60/mt FOB.

West Coast: Tracking Vancouver lower, West Coast prills were quoted in the $70-$80/mt FOB range, down from $75-$85/mt FOB at last report.

Molten sulfur contracts fell in the $65-$115/lt FOB range for the first quarter.

ADNOC: The Abu Dhabi National Oil Co. lowered prices last week. March cargoes were offered at $88/mt FOB Ruwais, a $17/mt FOB decline from the February price of $105/mt FOB.

Aramco: Saudi Aramco valued prill cargoes at $90/mt FOB Jubail for March loading. The February offer was $115/mt FOB, $25/mt above current-month levels.

Tasweeq: Qatar adjusted offer levels downward for March loading, to $87/mt FOB Ras Laffan, a $2/mt drop from $89/mt FOB in February.

Potash

California, Eastern Cornbelt, Market Watch, Middle East, Northwestern Europe, Pacific N.W., Pakistan, Potash Muriate, U.S. Gulf, Western Canada, Western Cornbelt

U.S. Gulf: Large players were now quoting prompt barges ideas as low as $190/st FOB and still lower for all of March.

Eastern Cornbelt: The potash market was commonly quoted in the $240-$245/st FOB range out of warehouses in the Eastern Cornbelt. There were reports of imported potash tons trading at slight discounts to those numbers, but no actual sales levels were confirmed. Several sources said terminal activity was “picking up” now at the lower pricing levels.

Western Cornbelt: The potash market was quoted at $240-$245/st FOB regional warehouses in the Western Cornbelt, with reports of accelerated sales activity in some parts of the region.

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 or DEL in California.

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

Pacific Northwest: The regional potash market in the Pacific Northwest was tagged at $368-$372/st rail-DEL for the most recent sales. The FOB market in the region was reported in a broad range at $330-$368/st, with the upper end reflecting older warehouse inventories and the low called the market for newly resupplied tons in early March.

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/mt FOB Saskatchewan mines for new offers, down significantly from last report following a series of recent price adjustments. One source quoted the dealer market out of regional warehouse locations at the $390/mt FOB level last week.

Northwest Europe: Demand remains slow, with prices for granular potash reportedly unchanged at €280-
€298/mt CIF.

Jordan: Arab Potash Co. (APC) produced 2.35 million mt of potash in 2015, a 12.6 percent increase from the previous year’s output of 2.09 million mt. Potash sales in 2015 were 2 percent lower at 2.19 million mt, however, down from 2.24 million mt in 2014.

Given the current market conditions, APC expects its 2016 sales volumes and prices to be reduced from 2015, the company said in a disclosure to the Jordan Securities Commission.

Pakistan: According to Engro Fertilizers, potash demand in Pakistan in 2015 declined by 16 percent year-over-year due to poor crop economics, which shifted farmers’ attentions away from potash-based fertilizers.

Phosphates

Brazil, California, Central Florida, Eastern Cornbelt, India, Lithuania, Market Watch, Middle East, Pacific N.W., Pakistan, Phosphate Rock, Russia, Senegal, U.S. Exports, U.S. Gulf, Western Canada, Western Cornbelt

Central Florida: Sources called the market slightly firmer for the week. Truck-loaded DAP sold at $370/st FOB, higher than the previous week’s $365-$370/st FOB range.

MAP commanded a $10-$15/st premium to DAP with the market quoted at $380-$385/st FOB, compared with $375-$385/st FOB at last report.

U.S. Gulf: NOLA DAP barges showed continued price strength last week, firming to a range of $330-$345/st FOB. Sources were in general agreement on the uptick’s origin. “It’s spring,” said one contact. “Spring is in full swing.”

A dip in supply was also said to be affecting the market, with MAP especially difficult to uncover for the week. “MAP is extremely tight overall,” said one trader. “I’m having trouble finding MAP barges,” another agreed. “The market appears to be tight for prompt shipment.”

Open-origin MAP traded as low as $340/st FOB, with prompt domestic barges quoted as high as $360/st FOB. Full-March MAP trades were reported up to $367/st FOB. DAP paper for March was quoted in the $340-$345/st FOB range.

A number of import vessels are expected for March NOLA discharge, putting prompt offerings at a premium. Traders variously expected cargoes from EuroChem, PhosAgro, and OCP in that timeframe.

Aside from parts of a cargo left over from fall, sources did not expect Chinese material to be offered for spring. “I don’t think we’ll see Chinese tons,” said one market player. “I think they’re testing other markets right now.”

Sources were divided on whether a March influx of phosphate would be enough to tip prices lower, or simply balance demand. “There will be plenty of supply, but it is incredibly tight right now,” one source offered. “We won’t see prices drop in the next couple of weeks, but come April we might. I think we’re going to see our season highs pretty soon.”

Producers were betting April wouldn’t bring a downturn, however, with sources reporting offers for April delivery rising to $350/st FOB for DAP and $370/st FOB for MAP.

The NOLA DAP market was quoted in a range of $330-$345/st FOB, up from $330-$339/st FOB a week earlier. MAP traded at $340-$360/st FOB, up from $335-$345/st FOB at last report.

Eastern Cornbelt: The regional DAP market had reportedly strengthened to $370-$380/st FOB in the Eastern Cornbelt, with MAP quoted at a $10-$15/st premium to DAP, depending on location.

The 10-34-0 market remained at $510/st FOB out of most locations in the region.

Agrium announced no changes to its phosphoric acid postings for March, with pricing levels for rail-DEL SPA and MGA remaining at $1,090/st of P2O5 in Michigan and $1,050/st of P2O5 in Wisconsin.

Western Cornbelt: The DAP market was quoted at $370-$380/st FOB in the Western Cornbelt, up some $10/st from last report, with the low reported in the Missouri market. An Iowa source quoted DAP pricing for new sales solidly at the $375/st FOB mark last week, with MAP $15/st higher at $390/st FOB.

The Twin Cities market in Minnesota was quoted at $375-$380/st FOB for DAP and $390-$400/st FOB for MAP. Limited inventories and strong demand continued to drive the Catoosa, Okla., phosphate market, where sources reported DAP at $400-$405/st FOB last week, up some $25-$30/st from the week before. Sources said MAP inventories at Catoosa were tapped out in early March, but were expected to trade at a $10-$15/st premium to DAP.

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

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 Iowa, Minnesota, Missouri, Nebraska, and Kansas; and $1,065/st of P2O5 in North Dakota, South Dakota, Oklahoma, and Texas.

California: The MAP market was quoted at $480-$485/st FOB or DEL in California, with the FOB market reflecting a drop of $20-$25/t from early February. The TSP (0-45-0) market was down significantly, to $420/st FOB French Camp, which reflected a $100/st or more drop from last report.

16-20-0 was lower as well at $395-$407/st FOB in California, down $8-$13/st from last report, with dealer postings quoted in the $400-$407/st FOB range, depending on location.

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’s March 1 phos acid postings remained at $1,070/st of P2O5 for rail-DEL SPA and MGA in California and Arizona.

With no change to phos acid and ammonia prices in the state, the 10-34-0 and 11-37-0 markets in California were steady at $484-$489/st FOB and $525-$530/st FOB, respectively.

Pacific Northwest: The MAP market was quoted at $455-$465/st DEL or FOB in the Pacific Northwest. Simplot’s postings dropped in mid-February to the $465/st FOB or DEL level before discounts, while Agrium was referenced at $455/st DEL in Montana, northern Wyoming, southern Idaho, Utah, Nevada, and Oregon’s Malheur County; $465/st FOB, $465/st rail-DEL, and $470/st truck-DEL in Washington, northern Idaho, and central and northeastern Oregon; and $470/st DEL in northwestern and southwestern Oregon, and the Klamath Basin.

TSP (0-45-0) pricing was reported at $420/st FOB Pocatello, Idaho, down a full $100/st from last report. 16-20-0 was 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 March 1 phos acid postings were unchanged as well at $1,060/st of P2O5 for rail-DEL SPA and MGA in Idaho, Montana, Nevada, Oregon, Utah, and Washington.

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 $765-$775/mt DEL, up $5-$10/mt from last report.

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

U.S. Export: No new export business was reported by Gulf sellers. Last-done was an 18,000 mt cargo of DAP sold into Latin America. The load was priced at $360/mt FOB and set to ship in late March.

Despite the lack of new business, sources reported continued firm offers at $360/mt FOB into the Latin American market, unchanged from the previous report.

Phosphoric acid contracts to India were priced at $715/mt CFR for the first quarter, a decline of $95/mt from the second-half 2015 price of $810/mt CFR.

Brazil: Brazil market players reported 11-52-0 MAP cargoes sold in the $360-$365/mt CFR range for the week, up from the previous range of $350-$360/mt CFR. “There’s no $350/mt out there anymore,” said one observer.

Saudi Arabia: Sources reported a DAP sale into India priced at $345/mt CFR last week. The sale fell considerably below observer expectations for the next round of business, and market watchers speculated that it may have been driven by a need to clear excess supply.

Observers estimated shipping at $5-$7/mt, putting a total freight package in the $5-$10/mt range. At those levels, the transaction would net back $335-$340/mt FOB to the Kingdom, considerably below previous levels of $375-$385/mt FOB.

Russia: PhosAgro is reported to have sold 15,000-16,000 mt of MAP to Brazil at a price in the mid-$360s/mt CFR for second-half March delivery. With freight estimated at around $10-$12/mt, this would netback to around the mid-$350s/mt FOB Baltic.

Lithuania: A.B. Lifosa, part of the EuroChem Group AG, will no longer import phosphate rock from OCP’s Bou Craa mine in the disputed Western Sahara. In a Feb.16 letter to Western Sahara Resource Watch (WSRW) only recently posted on the WSRW website, EuroChem said the group does not intend to purchase phosphate rock from Western Sahara “in 2016 or any time over the foreseeable future.”

Lifosa was the last European Union company to import phosphate rock supplies from Western Sahara. It has been one of the biggest importers of rock from that region, importing some 2 million mt over the past seven years, according to WSRW. EuroChem had not responded to enquiries by Green Markets at press time.

Senegal: Senegal’s phosphate rock production rose 31.8 percent to 1.243 million mt last year, up from 942,900 mt in 2014, according to the country’s Department of Forecast and Economic Studies. Most of this output came from Industries Chimique du Senegal, which was taken over by Singapore-headquartered Indorama Corp. in August 2014.

The report said the increase was driven by gains in calcium phosphate production, which stood at 1.062 million mt in 2015 versus 752,200 mt in 2014. Conversely, attapulgite production fell 5.2 percent in 2015, to 180,800 mt.

North African phos rock sales were called in a range of $97-$132/mt FOB for the first quarter.

India: Sources reported a sale from a Middle East producer – most likely Ma’aden – to an Indian buyer for $345/mt CFR. Traders were hard pressed to confirm the deal, but none were surprised at the price.

Buyers will be looking for lower-priced product as much as possible, said one trader. The government’s proposed 2016-2017 budget calls for cuts to subsidies for phosphates by about $50/mt.

Pakistan: According to Engro Fertilizers, local DAP industry sales increased by 5 percent to 1.768 million mt in 2015 due to the implementation of government subsidies in the fourth quarter. Sales were down 6 percent from the five-year average, however, due to poor crop economics for cotton and rice, which resulted in lower phosphate applications.

Engro Fertilizers imported 461,000 mt of DAP during 2015 and recorded sales of 391,000 mt, of which 240,000 mt were sold in the fourth quarter. DAP prices declined by US$50/mt during the fourth quarter, to US$400/mt CFR Pakistan, while full-year 2015 prices fell by US$90/mt.

Ammonium Sulfate

Ammonium Sulfate, California, Eastern Cornbelt, Market Watch, Pacific N.W., U.S. Gulf, Western Canada, Western Cornbelt

U.S. Gulf: The barge market continues to be put between $210-$220/st FOB.

Eastern Cornbelt: The granular ammonium sulfate market was quoted at $260-$280/st FOB in the Eastern Cornbelt, with delivered product pegged at the $285/st level for domestic tons in the region.

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

Western Cornbelt: Granular ammonium sulfate was unchanged at $260-$270/st FOB regional terminals in the Western Cornbelt.

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

California: Central Valley sources reported heavy movement of ammonium sulfate on nut trees in early March. Ammonium sulfate was quoted at $265-$305/st FOB in California, depending on grade and location. Simplot’s premium grade postings were 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 remained 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 pricing had reportedly slipped to $285-$295/st FOB in the region, down $10-$15/st from last report.

Western Canada: The granular ammonium sulfate market had reportedly firmed to $425/mt DEL for March tons in Western Canada, with April shipments quoted at the $440/mt DEL level from some suppliers.

Ammonium Nitrate

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

U.S. Gulf: The market continued to be called $205-$215/st FOB.

Western Cornbelt: Ammonium nitrate remained at $275-$280/st FOB in the Western Cornbelt, with the upper end reported in the Iowa market on a spot basis.

California: The CAN-17 market in California remained at $303-$305/st FOB import terminals and up to $325/st FOB at inland locations. AN-20 was steady at $295/st DEL in the state.

Pacific Northwest: CAN-17 was quoted at $290-$300/st FOB and $325/st rail-DEL in the Pacific Northwest. AN-20 was steady at $260/st FOB and $270/st rail-DEL.

Nitrogen Solutions

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

U.S. Gulf: UAN was on an upward march last week. While some players were still calling it as low as $175/st
($5.47/unit) FOB, others said the market was as high as $190/st ($5.94/unit) FOB. Most put it at $180-$185/st ($5.63-5.78/unit) FOB.

The same was true on the East Coast, where players said price ideas had moved from $185/mt CFR to as high as $200/mt CFR.

Eastern Cornbelt: UAN pricing in the Eastern Cornbelt was firming in the wake of stronger urea and ammonia values. Sources pegged the UAN-28 market out of Indiana and Ohio terminals at $196-$205/st ($7.00-$7.32/unit) FOB in early March, while UAN-32 pricing in the Illinois market had reportedly firmed to as high as $230-$240/st ($7.19-$7.50/unit) FOB on a spot basis.

Western Cornbelt: UAN pricing appeared to be ratcheting up in the Western Cornbelt, fueled by the uptick in urea and ammonia values. Sources quoted the UAN-32 market in a broad range at $230-$250/st ($7.19-$7.81/unit) FOB in the region, up some $10-$20/st, with the upper end reported in the Iowa market on a spot basis.

California: UAN-32 pricing remained at $235-$245/st ($7.34-$7.66/unit) FOB port terminals in California, with some locations posted at $250-$255/st ($7.81-$7.97/unit) FOB. Rail-DEL tons remained at $265-$275/st ($8.28-$8.59/unit) in the state on a spot basis.

Pacific Northwest: UAN-32 was quoted at $270-$280/st ($8.44-$8.75/unit) DEL in the Pacific Northwest, up some $5-$12/st from last report. Although there were still reports of lower priced tons circulating on a spot basis in the region, major suppliers were reportedly no longer matching those levels.

Western Canada: UAN-28 was pegged at $320-$325/mt ($11.43-$11.61/unit) DEL for March tons in Western Canada.

Urea

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

U.S. Gulf: New prompt granular barges continued to garner a premium last week, with most players putting new trades within the $260-$270/st FOB range. Trades for all of March were generally put between $242-$253/st FOB. Product all the way out to May was priced at $220/st FOB.

Prills continued to strengthen, with prompt at $245-$250/st FOB and all March called $255/st FOB.

Eastern Cornbelt: The granular urea market remained at $295-$305/st FOB for new sales in the Eastern Cornbelt. One Illinois contact pegged the dealer market commonly at the $300/st FOB level or higher last week.

Western Cornbelt: Iowa sources quoted the granular urea market solidly at the $300/st FOB level for new sales last week. Region-wide, the urea market remained in the $295-$305/st FOB range in the Western Cornbelt, depending on location.

California: The granular urea market was quoted at $320-$325/st FOB port terminals in California.

Pacific Northwest: The granular urea market was quoted at $330-$340/st FOB port terminals in the Pacific Northwest, up $5/st from last report, with some sources touting the upper half of that range for new sales. One contact said urea supply could be a problem going forward due to projected delays for some import cargoes to the West Coast.

Rail-DEL urea was up a full $20/st from early February, with sources pegging the market at $348-$360/st DEL in the Pacific Northwest.

Western Canada: Sources reported firming prices for granular urea in Western Canada. The dealer market was quoted at $505-$515/mt DEL for March tons, up some $20-$25/mt from last report, with some suppliers reportedly pushing another $10/mt increase for April shipments.

India: The expectation of a softer market helps make the proposed 2016-2017 urea subsidies stretch further, said sources.

The proposed budget, released this week, will not increase the urea subsidies. Traders said the move actually means a decline in real buying power because of the declining purchasing power of the rupee compared to the U.S. dollar. According to the budget numbers released by the government, imported urea will be subsidized to the tune of about US$1.6 billion in the upcoming fiscal year.

Even though the market showed a bump up in the past few weeks because of increased U.S. demand, sources said the peak appears to have already been hit. Sources said April NOLA prices are being quoted at $50/mt lower than immediate March prices. Global production of urea shows no evidence of slowing down, putting additional pressure on prices.

For Indian buyers, the expected softer prices in April, combined with reserves of about 1 million tons, could give them a stronger bargaining position once a tender is finally called. International watchers said the first tender will most likely be called in mid-April.

China: Producers are now quoting prilled prices higher than granular, especially for April shipments. One trader said the move appears to be a reaction to the lower April prices quoted in the U.S. Gulf ports, and to expectations that India will come in with a mid-April tender.

Now that the U.S. demand for new cargoes has faded, sources said granular demand has gone soft. The next big market demand will be for prills when India comes back into the market.

Granular prices are being quoted at $210-$215/mt FOB, while prills are now being offered at $215/mt FOB. Sources could not point to any deals for prilled product at this new and higher level. One trader said by the time the first Indian tender is called, prices will once again drop.

Producers are said to have little influence over prices. Many plants are already running at 60 percent of rated value. One trader said the producers apparently have little desire to reduce output further for fear of causing massive layoffs in the industry.

The domestic market in China – a largely prilled market – is expected to slow down by the end of this month. Once local demand backs off, sources said April prices will definitely soften, leading Indian buyers to push even more aggressively for lower prices.

Also working against the producers to push up international prices are reports that the ports still hold about 1.5 million mt in storage, with no buyers in sight.

Middle East: Arab producers claim they are sold out for the month of March, and few in the industry are able to disagree. Sources pointed to some spot business that was booked late last month, but more importantly to the large number of long-term contracts with buyers from the U.S. to Australia.

April shipments are expected to depend mostly on the contracts, leaving some producers with a few extra tons that could work their way into the anticipated Indian tender. Sources said any discussions with producers about April tons are rebuffed as being too early, or begin with $215/mt FOB for destinations other than the U.S.

Traders say the $215/mt FOB level is too high for any buyer currently, and definitely too high for any April shipments in Asia or Europe.

In Egypt, MOPCO closed a tender for several 6,000 mt lots of granular material. Sources said the bids were in the low-$230s/mt FOB, and reflect the general view of a softer market.

Last week Helwan closed its auction at $245/mt FOB. The week prior, Algeria reportedly sold a cargo for $250/mt FOB. Sources said now that the euphoria from the U.S. buying spree has ended, the granular market is looking weaker.

The cargoes purchased from MOPCO are slated for delivery to southern European ports in April and early May.

Black Sea: Sources reported that prices are coming off. One trader reported a deal at $212/mt FOB only a week after producers were arguing for $220/mt FOB. Even though producers were looking at $220/mt FOB, sources said the price out of the area never really topped $215/mt FOB.

The Yuzhnyy market did not face the wild ups and downs of other areas, such as the Arab Gulf or North Africa, because most of the exports are prilled urea. The wild market swings were largely for granular product because of strong U.S. demand. Prilled prices only went along for the ride, said one trader.

Pakistan: Urea consumption and sales in Pakistan during the 2015 calendar year were flat at 5.6 million mt, according to a report from Engro Corp. Imports of urea declined from 700,000 mt to 600,000 mt in 2015 due to better local production, which stood at 5.3 million mt in 2015 and represented an 8 percent increase over 2014’s domestic production, the report said.

Pakistan imported 1.373 million mt of urea, DAP, and other fertilizer in the seven months from July 2015 through January 2016, at a cost of US$596 million. This compares with 1.224 million mt at US$561.52 million for the same prior-year period, according to data released by Pakistan Bureau of Statistics.

For the month of January 2016 alone, the country imported 23,796 mt of fertilizer at a cost of US$6.58 million, compared with 173,500 mt at US$49.73 million in December 2015, and 139,062 mt at US$63.44 million in January 2015.

In other news, Engro Corp., the parent company of Engro Fertilizers Ltd., has expressed its intention to sell up to 24 percent of its 86 percent share in Engro Fertilizer, according to a notice issued at the Pakistan Stock exchange.

The company has appointed advisors for the potential sale, subject to market conditions, by way of a private offering to local and international investors to allow the company to diversify its portfolio and meet its capital allocation requirements.

Ammonia

Ammonia, California, Eastern Cornbelt, Market Watch, Pacific N.W., Tampa, U.S. Gulf, Western Canada, Western Cornbelt

U.S. Gulf/Tampa: After a March rollover for Tampa and increased demand in the Cornbelt, the NOLA market was under pressure to move up. It did within the past week, with new trades of $285-$292/st FOB being reported.

March NYNEX natural gas rolled off the board Feb. 25 at $1.711/mmBtu. April closed March 3 at $1.639/mmBtu.

Eastern Cornbelt: Although some areas remained wet in early March, fieldwork was picking up in the region, with reports of steady ammonia movement out of Illinois terminals last week. The ammonia market had reportedly firmed to $455-$470/st FOB, up another $15-$20/st from the previous week, with the upper end confirmed for new spot sales in the Illinois market as the week advanced.

Western Cornbelt: Sources continued to quote spot ammonia business in the $415-$445/st FOB range out of regional terminals, with the low reported in the Nebraska market and the upper end in Missouri. One source pegged the Iowa terminal market in the $420-$430/st FOB range last week, with reports of ammonia moving to the field in parts of Iowa as well, weather permitting.

California: Anhydrous ammonia remained at $545/st DEL in California, with aqua ammonia referenced at $151/st FOB in the state.

Pacific Northwest: The anhydrous ammonia market remained at $460/st rail-DEL in the Pacific Northwest, while truck-DEL tons had reportedly slipped to $505/st. Aqua ammonia was pegged at $128-$132/st FOB in the region.

While noting firming markets for ammonia and urea in the Midwest, sources said the Pacific Northwest has “not witnessed the bull run that our other counterparts have experienced as of this time.”

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

Green Markets webinar addresses fertilizer supply/demand for spring season

Featured, News

Panelists for the Green Markets Spring 2016 Fertilizer Outlook webinar on March 2 addressed key issues impacting fertilizer supply and demand in the U.S. and Canada for the upcoming planting season.

The theme of the event was reflected in its subtitle, “An Uneasy Start to the Season,” with speakers noting falling commodity prices, low farm income, delays in fertilizer buying, and a poorly stocked supply chain.

Matt Carstens, vice president of crop nutrients for United Suppliers Inc., offered what he called a “state of the union” for agriculture, noting that “very low” farm income and pressured margins have pushed lesser players from the field. Successful operators, by contrast, have “quite a pile of cash to invest,” and “maximizing yields is key when crop prices are low.”

As a result, Carstens said he expects minimal cuts in nitrogen rates this spring, although he acknowledged that lower-end operators are under a “tremendous amount of pressure” to cut phosphate and potash. Despite this, he said potash is a “good value” at current price levels, and now is “a really good time for farmers to invest in potash.” Although he expects phosphate rates to be trimmed to minimal levels to ensure yields, he noted that improved potash volumes could drag phosphates along.

As for planting intentions, Carstens said corn prices will remain below their five-year average, but corn still offers a better return than alternatives. “Every farmer wants to plant corn,” he said. “That is their livelihood.”

Carstens said the stand-off in fertilizer buying is now coming to an end. “We have had a very tough six months, without a doubt, but the outlook is positive,” he said. Regarding application rates, he noted that “in geographies that are running today, there is no doubt that they are at or above expectations.” Although grower prepay purchases were light and logistics will be tested as a result, he said the industry “always finds a way. I see this spring as not much different than in the past.”

Looking at spring supply, Carstens said urea is likely the most uncertain due to lower imports. He noted, however, that domestic urea production and carry-over stocks are up, so he continues to think that inventories will be adequate to meet demand.

Jeremy Goodfellow, crop nutrient purchasing manager for La Coop fédérée, said the Canadian/U.S. dollar exchange rate has offset falling nitrogen prices for Canadian operators. Despite significant price risk, he said Eastern Canada experienced normal fall application rates thanks to favorable weather, and the region’s fertilizer distribution chain is generally full heading into spring.

Goodfellow said Eastern Canada is expecting “strong and early” nitrogen demand due to a significant increase in winter wheat acreage and expectations for “consistent” corn acreage in the region. “We’re shaping up for an early and quick planting season, like in 2012,” he said, although he cautioned that ice coverage on the Great Lakes is very low at only 15 percent, and this typically results in a wet spring for Eastern Canada.

When pressed about fertilizer prices, Goodfellow said he thinks the potash market has likely hit bottom, and that buying interest has now started at the new pricing levels. “It’s a good value for farmers, so there’s no reason for them not to buy,” he said. “It makes tremendous sense for farmers to stick with normal rates, although I’m not sure they’ll go heavy.”

Talon Custer, industry analyst for Bloomberg Intelligence, addressed the rail logistics landscape for 2016. He said railroads saw “big improvements” in performance in 2015 over 2014, but demand was weaker than expected after a record amount of volume in 2014.

Custer said CSX is predicting an “unfavorable outlook” for fertilizer volumes in 2016 due to low crop prices. He said Union Pacific, Canadian National, and Canadian Pacific are “less so, but certainly not bullish” on fertilizer.

“Mild weather and lower demand means less congestion and fewer bottlenecks, and this is currently happening,” he said. Railroads had to “quickly flip the switch” in 2015 after increasing staff in 2014 and spending more to align resources. He said rate hikes “have drawn ire from customers,” but capacity for fertilizer transportation shouldn’t be an issue this spring. “This year is completely different than 2014,” he said. “There really shouldn’t be much competition.”

The conference, presented on the cusp of the busy spring planting season, was the 11th annual spring outlook event sponsored by Green Markets. The 90-minute, interactive webinar allowed registrants to listen via computer or telephone, to submit questions in a live Q and A, and to view more than 30 slides and graphs delivered electronically. A recording of the webinar can be ordered by visiting www.FertilizerPricing.com/Forums.

Proposed phosphate rock mine would produce 2.4 million st/y, remain family-owned

Featured, News, Phosphate Rock

A proposed phosphate rock mine in Northeast Florida would produce some 2.4 million st/y of low cadmium 66-68 BPL product, HHPC Enterprises LLC Project Manager Jack Schmedeman told Green Markets March 3. He said the mine, which would have a 60-year mine life, would cost approximately $100-$120 million to get started.

Schmedeman said the four families that own the property (GM Feb. 29, p. 1) are adamant that the property will remain family-owned and will be quickly reclaimed and returned to farm and ranch use. Reclamation is to start within 90 days of mining completion of each 300 acre tract. Unlike other phosphate rock mines, he says there will be no clay settling ponds, and there will be no downstream production or phosphogypsum stacks since this will be just a phosphate rock mine.

Schmedeman said Dr. Hassan El-Shall from the University of Florida has developed a process whereby excavated sand can be combined with the clay to leave the land in good – or even better – shape after the mining. He said the Florida Industrial and Phosphate Research Institute is also interested in this process, and that HPPC is building a pilot project to prove that it works.

The families plan to continue farming the property as the mining progresses. At least three family homes are on the 7,400 acres. HPPC stresses since it is local and family-owned, with plans for the families to retain the property, it will look out after any environmental concerns.

The property, which is in both Bradford and Union counties, is split by the New River. Some 300 acres are expected to be mined on each side of the river at the same time, using traditional draglines and producing 1.2 million st/y on each side.

The plan is to use a High Solids Ore Transportation System to move the rock offsite, with the company looking at different conveyer belt options. There will not be a slurry pipeline. There is also rail access for the property.

As previously reported, the company has proactively been in talks with the Florida Department of Environmental Protection, as well as local county commissioners, about its plans. Town hall meeting are set in both counties at mid-month to further discuss the project. Permit applications are yet to be filed.

While initial reports were hopeful that mine construction could begin as early as 2017 and production in 2018, Schmedeman noted that much depends on how the permitting process and the procuring of customers develop. The nearest port is the Port of Jacksonville.

Finding a customer might be an interesting task, as the number of finished phosphate processing companies continues to shrink due to consolidation and bankruptcy. Obvious candidates would be in-state neighbors The Mosaic Co. and Potash Corp. of Saskatchewan Inc., though both have their own phosphate rock in Florida. However, both do import rock. Agrium Inc. is in the midst of a seven-year rock import agreement with OCP in Morocco to supply its Redwater, Alba., plant. It has the mission of finding a new source of rock or consider exiting the phosphate space altogether. Specialty phosphate producer Innophos Holding Inc. might also be a candidate. And what about Mississippi Phosphates Corp.? Would someone be interested in that bankrupt and idled facility in Pascagoula, Miss., if they had an economic source of rock?

The mine is expected to directly employ some 152 people, according to a study prepared by an Orlando consulting firm, Fishkind & Associates. In addition, the study said the project will generate 181 indirect jobs, and the spending by these employees and their households will induce an additional 237 jobs. The statewide economic impact is put at $95.5 million, and the indirect and induced impacts total $156.3 million.

Fishkind says the Union County part of the mine will have a taxable value of $60.1 million and generate some $631,332 in annual operating ad valorem revenue to the county by 2022. For Bradford County, the value is $103.8 million and $946,090, respectively.

The project now has a website – http://www.hpsii.net – and is on Facebook, as is its opposition group, the Coalition Against Phosphate Mining in Union and Bradford County.

Schmedeman is a phosphate industry veteran, having worked for over ten years for Cargill Fertilizer Inc. He left in 1998, and his most recent position was vice president of minerals technology. Thereafter he has been president of JRS GeoServices and has worked as an industry consultant. He holds a B.S. in Mineral Engineering from the Colorado School of Mines and an MBA from the University of Houston.