Calgary — Agrium Inc. on Feb. 17 announced plans over the next 12 months to buy back up to 6,908,450 common shares, being 5 percent of Agrium’s 138,169,000 issued and outstanding shares as of Feb. 5, 2016. All common shares purchased will be returned to treasury for cancellation. In 2015, Agrium purchased approximately 5,574,331 common shares at an average share price of $100.25 pursuant to its prior normal course issuer bid that expired Jan. 25, 2016.
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USN expects full production in mid-2016
Mosheim, Tenn. — US Nitrogen LLC (USN) told Green Markets Feb. 18 that it is completing construction on its liquid ammonium nitrate plant in Greene County, Tenn. Commissioning processes are in progress and will continue over the following months in a phased approach. Current plans call for the facility to come online for full production in mid-2016. Local residents, many of whom are vocally opposed to the project, had complained last week that orange smoke and a smell of burnt rubber was coming from the plant. USN did not respond to the allegations.
El Dorado NH3 plant mechanically complete
Oklahoma City — LSB Industries Inc. said Feb. 16 that the new 375,000 st/y ammonia plant at its El Dorado, Ark., facility is now mechanically complete, adding that process vessels and rotating equipment, including associated piping and valves, have been installed. It said utility equipment systems such as cooling water, steam generation, raw water treatment, and air systems, along with related piping, have been installed. Currently, all that remains to fully complete construction activities is the connection of the electronic instrumentation wiring to the field instruments, along with the painting and insulation of the piping and process vessels and the final grading and concrete containment for proper drainage of the process area. As of Jan. 31, 2016, LSB’s investment in its El Dorado Expansion Project, which, along with the ammonia plant, includes the construction of a new nitric acid plant and concentrator that was completed in 2015, totaled approximately $730 million. LSB expects the remaining expenditures necessary to complete the pre-commissioning and commissioning of the ammonia plant and to put it into production to be in the range of $101-$125 million. Pre-commissioning will involve the flushing of any materials from the piping throughout the plant, in addition to the installation of the process catalyst inside the reactor vessels. The commissioning phase will entail the activation and filling of the utility systems, reduction of process catalyst, and final testing of process control systems. “Mechanical completion represents one of the final critical phases in our EDC expansion project,” stated Daniel Greenwell, LSB CEO. “We were able to achieve mechanical completion in the timeframe that we outlined in September of last year, and we continue to expect ammonia production at El Dorado to begin early in the second quarter of 2016. We also expect that the cost of the project will not exceed the budget of $831 million – $855 million that we have previously disclosed. We believe that the ammonia plant will significantly enhance the financial performance of the El Dorado facility and have a positive economic impact to LSB’s overall performance. We look forward to sharing these results with our shareholders in the upcoming quarters.”
Agro leads way for Tessenderlo in 2015
Brussels — The Tessenderlo Group’s Agro segment led the way for the company in 2015, posting a 39.7 percent increase in REBITDA and a 23.2 percent uptick in revenues. Agro REBITDA was €138.9 million on revenues of €645.6 million, up from 2014’s €99.3 million and €524 million, respectively. The company told analysts that with the strong dollar and good margins on potassium sulfate, it was able to considerably increase the unit’s cash flow. Agro includes Phoenix-based Tessenderlo Kerley Inc. Tessenderlo-wide REBITDA was up 33.1 percent to €180.4 million on revenues of €1.59 billion, an increase from €135.6 million and €1.43 million. Fourth-quarter REBITDA was €38.4 million on revenues of €374.4 million, up from €19 million and €319.8 million, respectively.
Terra reports outage, 4Q, annual results
Deerfield, Ill. — Terra Nitrogen Co. LP on Feb. 17 reported an unscheduled first-quarter outage at one of its Verdigris, Okla., ammonia plants. As a result, approximately one-half of the nitrogen complex will be shut down for about two months for repairs. Terra said this will result in lower ammonia and UAN production, lower sales, and lower profitability during the period, which will reduce available cash for distributions to unitholders. Based on 2015 annual sales (418,000 st ammonia and 1.67 million st UAN), this could result in lost sales of 140,000 st and 278,000 st, respectively. For the fourth quarter ending Dec. 31, 2015, Terra said lower realized ammonia and UAN prices and lower UAN sales volumes were partially offset by higher ammonia volumes. Fourth-quarter net income was $79.2 million on sales of $151.3 million, down from the year-ago $95 million and $168 million, respectively. Net earnings allocable to common units were $46.2 million ($2.49 per unit), down from $56.5 million ($3.05 per unit). Full-year net earnings were $306.8 million on sales of $581 million, down from $370 million and $648.3 million, respectively. Net earnings allocable to common units were $186.2 million ($10.06 per unit), down from $223.3 million ($12.07 per unit).
| Sales Volumes | 4Q-15 | 4Q-14 | 2015 | 2014 |
| Ammonia | 122 | 93 | 418 | 331 |
| UAN | 461 | 510 | 1,668 | 1,937 |
| Avg Selling Price | 4Q-15 | 4Q-14 | 2015 | 2014 |
| Ammonia | 443 | 484 | 477 | 456 |
| UAN | 210 | 240 | 227 | 255 |
| Nat Gas Cost | 2.58 | 3.95 | 2.75 | 4.03 |
| Volumes in 000 st and prices in $/st. Terra is majority-owned by CF Industries Holdings Inc. | ||||
Form-A-Feed
Leo “Buzz” Nelson, 90, passed away Feb. 14. He founded Form-A-Feed in 1973 along with his sons, Marty Sr. and Steve. The small feed company grew to a family of 11 companies, employing over 300 people and distributing products around the world. Nelson is survived by his wife, three children, grandchildren, and other family. A service was held Feb. 17 in Hutchinson, Minn.
Intrepid Potash Inc.
Intrepid Potash Inc. has retained Max de Armendi to help develop new international markets for Trio® sales. He will be part of the sales and marketing team led by Kelvin Feist, senior vice president of sales and marketing.
Armendi’s experience includes more than 22 years of international marketing and sales of potash, including 19 years with Potash Corp. of Saskatchewan Inc. and three years with Rio Tinto. Intrepid cited his extensive relationships with distributors, essential shipping and warehouse agents, government officials, and development agencies throughout Latin America. Intrepid said Armendi is knowledgeable about the local markets and speaks Spanish and Portuguese. He can be contacted at 720.648.6163 or maxdearmendi@me.com.
Transportation
U.S. Gulf: The Corps put Industrial Lock wait times at a minimum 24 hours for the week, with 22 vessels in line to lock. Shippers called Algiers Lock delays 2-6 hours, and passage through Port Allen was expected to add 6-10 hours to navigation.
Transit through Bayou Sorrel Lock required 12-14 hours with 13 vessels queued, which shippers attributed to a 3.4-foot differential between the lock’s flood-side and land-side gauges. A differential of three feet or more triggers automatic lock restrictions at Bayou Sorrel.
Elevated differentials closed the Charenton, East Calumet, and West Calumet floodgates for the week, and guide wall repairs at Bayou Boeuf Lock concluded on Feb. 11, returning operations to normal.
The National Weather Service (NWS) noted rising river levels at Baton Rouge. Depths were recorded at 30.81 feet and climbing on Feb. 18, higher than the gauge’s 30-foot action stage. Forecasters called for levels to peak at 31.0 feet before falling off on Feb. 20-21.
The New Orleans gauge read 11.83 feet, and forecasters expected a rise to 12.4 feet on Feb. 1. Flood stage at New Orleans begins at 17 feet.
Shippers reported Calcasieu Lock delays of 1-4 hours for the week, and vessels transiting the West Port Arthur Bridge were warned of a 3-foot clearance reduction. Maintenance and painting operations underway at the bridge are scheduled to run through April 30.
Brazos Lock reported waits of 12-18 hours with 24 vessels queued. Ongoing repairs to both the east and west floodgates prompted intermittent shutdown warnings during daylight hours, Monday through Friday. Shippers put Colorado Lock delays at 1-4 hours with four boats waiting to lock.
Lower Mississippi River: High-water warnings continued in the Lower Mississippi River last week.
Levels at Vicksburg peaked at 37.49 feet on Feb. 16 – above the 35-foot action stage – before registering 37.15 feet on Feb. 18, with further declines expected. Forecasts called for the gauge to show 33.5 feet of depth on Feb. 22. Memphis levels were reported at 16.97 feet and falling, considerably below that gauge’s 28-foot action stage.
Upper Mississippi River: Planned maintenance on the Mel Price Lock auxiliary chamber concluded last week, sources said, returning operations to normal. Transit through Mel Price required 1-2 hours with two boats in line to lock. Lock 27 required up to three hours’ transit time for the week.
River levels at St. Louis showed 8.8 feet and rising on Feb. 18. The NWS predicted the gauge would see 13.8 feet on March 2.
Upper River locks were believed to remain on track for a mid-March opening, shippers said. Locks 13-21 are scheduled to return to service on March 4, and Lock 9 is expected to come online on March 17.
Illinois River: High-water conditions persisted on the Illinois River last week. The elevated levels limited tow sizes and delayed deliveries, shippers said.
The Corps reported Lockport Lock delays at 1-2 hours with two vessels queued, and wait times at Dresden Lock were called 1.5 hours. Marseilles Lock passage was possible in an hour or less, the same as Starved Rock Lock, and the Peoria and LaGrange Locks did not operate for the week, allowing vessels to transit freely.
The Havana river gauge read 9.7 feet and falling on Feb. 18. The NWS projected depths to level out around the nine-foot mark starting Feb. 20.
Ohio River: Shippers noted high water levels at all points on the Ohio River. The conditions caused transit congestion and slowed deliveries, sources said.
Depths at Cairo receded below the 32-foot action stage to 28.33 feet on Feb. 18. Levels were projected to return to the action stage by Feb. 22.
Locks 52 and 53 were not locking again last week, but the Corps allowed vessels to pass freely. Despite its open status, Lock 52 navigation required 1-2 hours to transit, and Lock 53 added an additional hour.
Emsworth Lock transit was estimated at 1-2 hours, and waiting at Dashields Lock was pegged at an hour or less. Pike Island Lock required over an hour to transit, and wait times at R.C. Byrd Lock fell in the 1-3 hour range.
Further out in 2016, Montgomery Lock main chamber maintenance is expected to slow transits between May 9 and June 10, and an additional shutdown is on the books from Aug. 15 to Nov. 18. Work is slated to close the Emsworth Lock main chamber from June 20 through Aug. 5.
Allegheny River ice flows were reduced last week, but sources noted new high-water operating conditions instead.
The Tennessee River experienced elevated levels as well, leading to delivery delays. The Chickamauga Lock continued to report sporadic 10-11 hour closures due to electrical maintenance. The work was scheduled to conclude on Feb. 23.
High water was described on the Monongahela River, delaying transits. The Braddock Lock river chamber remained offline due to ongoing equipment failure, though shippers said the site’s land chamber was available for navigation.
High-water conditions on the Cumberland River further delayed Nashville-area navigation already slowed by CSX railroad bridge maintenance. Shippers said the river remained open, but anticipated the slowdowns would continue through the end of February. Barkley Lock delays, reported since Feb. 8, are scheduled to conclude Feb. 22.
Arkansas River: Shippers reported normal operating conditions on the Arkansas River.
Looking ahead in 2016, Webbers Falls Lock upstream locking is slated to close on May 16-22. A downstream shutdown is scheduled for Aug. 24 through Sept. 11.
Crops/Weather
Grain Futures: As of 4:00 p.m. on Feb. 18, corn, soybean, and wheat futures were higher compared to the week before.
Corn contracts for March 2016 clocked in at $3.655/bushel, a rise from the previous week’s $3.6025/bushel. May 2016 corn was $3.6975/bushel, an increase from $3.65/bushel in the previous period, and corn for December 2016 was $3.865/bushel, up from $3.8275/bushel reported last.
The March 2016 soybean price rose to $8.7975/bushel from $8.735/bushel a week earlier. Beans for May 2016 were $8.8275/bushel, an increase from the last-reported $8.7775/bushel, and November 2016 soybeans were posted at $8.905/bushel, higher than $8.8775/bushel the week before.
Wheat for March 2016 was $4.5325/bushel, up from the previous period’s $4.44/bushel, and July 2016 wheat was $4.7325/bushel, higher than $4.6425/bushel at the previous report. Contracts for September 2016 wheat were listed at $4.8725/bushel, above the $4.78/bushel from the week before.
Eastern Cornbelt: Winter Storm Olympia hit the Eastern U.S. hard with heavy snowfall and freezing rain at mid-month, but also left its mark on the Eastern Cornbelt. Winter storm conditions caused the cancellation of more than 250 flights at Chicago’s O’Hare on Feb. 14, with reports of freezing rain and fog that lingered into Feb. 15 as well.
The Valentine’s Day weekend storm also brought 2-4 inches of snow to a wide swathe of Indiana, along with freezing rain and poor visibility that resulted in a multi-vehicle highway accident that closed part of Interstate 65 on Feb. 14. Several inches of wet, heavy snow also caused highway and school closures in central and northern Ohio on Feb. 14-16.
Warm weather was on the way, however, with weekend forecasts calling for highs in the 50s throughout the Eastern Cornbelt. The onset of spring had some sources expressing growing concerns about the lack of commitments from farmers and the likelihood of logistics problems when they do step back into the market.
“I have had some talks with a few growers, but overall things are still very quiet,” said one regional contact. “They are in no hurry to make purchasing decisions, because everything they read is weak pricing and markets, etc. I think we are setting up for some big logistic issues this spring if the right things happen at wrong times.”
Western Cornbelt: Sources reported wet snowfall in central and southern Iowa on Feb. 16, while gusty winds were expected to hit parts of Nebraska on Feb. 18-19. Forecasts warned of gusts up to 60 mph in parts of the region as the week progressed, with snow and rainfall also likely.
Northern Plains: Unseasonably mild weather continued to blanket much of the Northern Plains in mid-February, prompting “lots of talk about an early spring,” according to one regional contact.
Dakota sources talked of temperatures in the upper 40s and 50s last week, with reports of rainfall in some areas. Just one week earlier, strong winds and blowing snow caused highway closures in parts of South Dakota and Minnesota. Snowfall was also reported in South Dakota over the Valentine’s weekend, with wide temperature fluctuations noted in the state.
One North Dakota contact said spring fieldwork could start in early April this year if current weather conditions continue. The region needs more precipitation, however. “We are hoping for moisture so we don’t end up in a drought situation,” he said.
Great Lakes: Despite a brief period of severe cold in early February, the Great Lakes region was expecting a return to mild temperatures as the month progresses, prompting more speculation of an early start to the spring planting season.
Great Lakes ice coverage as of mid-February offers an interesting gauge of winter temperatures in the region, and shows a remarkable change from the last two years. As of Feb. 16 just 16 percent of Lake Michigan was covered by ice, and that was a significant increase from previous weeks due to the recent period of cold weather.
By contrast, fully 70.7 percent of Lake Michigan was ice-covered by Feb. 16, 2014, and 51.3 percent by Feb. 16, 2015. The average ice coverage for this time of year is roughly 27 percent, according to the National Oceanic and Atmospheric Administration’s Great Lakes Environmental Research Lab.
Northeast: The Northeast was once again digging out from heavy snows after Winter Storm Olympia hit the region on Feb. 15-16. Snowfall totals included 18-22 inches in parts of upstate New York, more than 20 inches in Ottawa, Ont., 13 inches in Union Township, Pa., 9 inches in Dowell, Md., and 3-5 inches across a wide swathe of New England.
The powerful storm was preceded by frigid temperatures, with wind chills on Feb. 14 dropping to 36-40 below zero in upstate New York and New England. Boston posted a record low of minus 9 degrees on Feb. 14, with New York City dropping to 1 degree below zero.
The surge of winter weather once again put fieldwork on the backburner in the Northeast.
Sulfuric Acid
U.S. Gulf: Sliding prices from Northwest European smelters were expected to cut the cost of sulfuric acid cargoes delivered to the Gulf of Mexico.
“Prices continue (to be) under pressure,” a source said. “We’re seeing negative sulfuric acid sales prices FOB.”
European cargoes were called as low as (-)$5/mt FOB, pushing Gulf CFR prices to a broad range of $35-$45/mt CFR, down from the previous week’s $45-$50/mt CFR.
Cargoes into Brazil were called $35-$45/mt CFR, and Chilean price ideas were described closer to $45-$60/mt CFR.
Deteriorating commodities prices continue to apply pressure to North American smelters, with Horsehead Holding Corp. becoming the latest entity to show signs of the market’s effects.
Horsehead announced it would temporarily shut down its Mooresboro, N.C., zinc smelter, citing a seven-year low in the price of zinc and resulting cash-flow difficulties. Sources believed the smelter’s closure was unlikely to affect the national market, but could impact a handful of regional consumers.
The $525 million facility produced 2,200 mt of zinc in January.
Prices on the London Metal exchange were mixed at the close of trading on Feb. 17. Aluminum, copper, and nickel prices were higher compared to the week before, while lead and zinc tons were down.
The price of aluminum was $1,520.00/mt, above the previous week’s $1,499.00/mt, and copper closed at $4,562.00/mt, higher than the $4,507.00/mt last reported.
Lead’s $1,750.00/mt closing price was below $1,830.00/mt from a week earlier. Nickel edged higher to $8,240.00/mt from $8,040.00/mt in the prior week, and Zinc stood at $1,664.00/mt, below the week-ago price of $1,712.00/mt.