US Imports:
May phosphate rock imports stood at 321,006 st, up 42.6% from the 225,080 st reported in May 2023. July-May volumes were noted at 3.03 million st, a 6.5% rise from the year-ago 2.85 million st. Peru shipped 3.02 million st in July-May, Canada sent 5,090 st, and Japan continued with 1,177 st.
US Exports:
Wet-process phosphoric acid exports rose 7.1% in May, to 12,225 st from 11,413 st in May 2023. July-May totals firmed 16.1% year-over-year, to 318,432 st from 274,362 st. India took 172,953 st of US phos acid in July-May, Mexico followed with 87,146 st, and Canada bought 51,678 st.
Eastern Cornbelt:
July phosphoric acid pricing was steady at $11.00/unit rail-DEL in the Eastern Cornbelt.
Western Cornbelt:
The phos acid market continued at July’s $11.00/unit rail-DEL reference price in the Western Cornbelt.
Northern Plains:
Phos acid pricing for July was reported at $11.00/unit rail-DEL in the Northern Plains, up from June’s $10.50/unit reference.
US Gulf:
The NOLA potash market slipped to $270-$275/st FOB based on the latest trades, down from last week’s $270-$280/st FOB range.
US Imports:
May potash imports totaled 1.46 million st, a 44.3% increase from 1.01 million st in May 2023. July-May imports were counted at 13.64 million st, up 22.7% from the year-ago 11.12 million st. July-May imports from Canada were reported at 11.80 million st, Russia sent 1.41 million st, and Israel added 297,077 st.
US Exports:
Potash exports for May rose 616.6% year-over-year, to 657,994 st from 91,825 st. July-May shipments were 17.4% higher, at 3.79 million st compared to 3.23 million st through the same period of 2022-2023. Exports to Brazil totaled 1.06 million st for the July-May fertilizer year-to-date, followed by 607,809 st to China and 360,879 st to South Korea.
Potash remained at $320-$335/st FOB in the Eastern Cornbelt, with the low reported in Illinois for July-August offers. The Cincinnati market was unchanged at $320-$330/st FOB. The latest offers out of warehouses in the Great Lakes region reportedly slipped to $345/st FOB at the low end, down from last week’s $358/st FOB.
Western Cornbelt:
Potash dropped to $315-$330/st FOB in the Western Cornbelt, down from last week’s $320-$330/st FOB range, with the low confirmed at St. Louis.
Northern Plains:
The potash market was pegged at $325-$340/st FOB and $330-$345/st DEL for fill offers in the Northern Plains. Potash FOB Saskatchewan mines was quoted at the $315-$336/st FOB level, depending on grade.
Northeast:
Potash in the Northeast dropped to $325-$335/st FOB for the latest offers, down from the prior $335-$350/st FOB range, with the low reported at Baltimore and the high at East Liverpool.
Eastern Canada:
The latest potash business was pegged at C$515-$545/mt FOB for red granular potash in Eastern Canada, with the low reflecting June fill offers and the high for post-fill pricing.
Northwest Europe:
Potash prices in Northwest Europe were unchanged again this week, with no new-season offers put forward by suppliers. Some buyers hinted at lower prices available in the market, but these could not be confirmed. Granular potash in Northwest Europe was quoted at €330-€350/mt CIF, while standard was reported at €315-€330/mt CIF.
China:
Russian producer Uralkali reportedly inked a supply contact for standard potash with Chinese buyers CNAMPGC, Sinochem, and CNOOC at $273/mt CFR for tons shipped through Dec. 31, 2024. The new level is down from 2023’s $307/mt CFR annual contract. Further details on volumes were not immediately available.
Southeast Asia:
Standard potash prices declined to $275-$290/mt CFR in Southeast Asia based on lower prices seen in Malaysia and Indonesia. Granular potash was flat $335-$345/mt CFR, with minimal liquidity reported. The market was overall muted, with limited activity for most of the week as players awaited further price direction from the Indian contract settlement.
India:
News of the Indian settlement finally emerged at midweek after prolonged delays. The contract for standard potash was settled between IPL and an unnamed producer at $279/mt CFR, sources reported, some $40/mt lower than last year’s settlement. Other terms were not disclosed.
Brazil:
Potash prices in Brazil slipped to $290-$310/mt CFR from the week-ago of $305-$310/mt CFR. With demand largely covered in Brazil, news of softer long-term contracts in Asia led buyers to focus interest on vessels loading in September.
Prices were reported at $430-$445/mt FOB Rondonópolis, depending on delivery needs, while fourth-quarter deliveries were priced up to $460/mt FOB.
Imports totaled 1.6 million mt in June, a 30% year-over-year increase. Tons loading from Canada increased 80% from June 2023, while Russian material jumped 30% year-over-year to 700,000 mt.
Tampa:
Third-quarter Tampa molten sulfur contracts were noted at $76/lt CFR, down 6.2% from the second quarter’s $81/lt CFR level.
US Gulf:
US Gulf sulfur firmed to $80-$85/mt FOB amid reports of hurricane-related production disruptions and strong demand from phosphate producers.
US Imports:
Sulfur imports for May moved 4.1% higher year-over-year, to 196,301 st from 188,533 st. July-May imports softened 11.3%, however, to 2.24 million st from 2.52 million st in the prior July-May. Canadian cargoes were noted at 1.22 million st in July-May, followed by Saudi Arabia with 168,985 st. Mexico moved into third place with 167,498 st, ahead of 161,345 st from Iraq.
US Exports:
May sulfur exports were 97,560 st, a 61.7% increase from the year-ago 60,331 st. Exports lifted slightly to 1.88 million st in July-May, up 0.3% from the prior 1.86 million st. Brazil took 819,322 st of US sulfur in July-May, ahead of 581,300 st to Mexico and 236,098 st to New Caledonia.
Brazil:
A 40,000 mt CMOC tender set to close this week was expected to draw offers in the $110-$125/mt CFR range. With no pricing available from the tender, the market’s latest transactions continued to be reported into Aratu and Santos at $103/mt CFR.
Vancouver:
Vancouver pricing followed China higher, to $80-$86/mt FOB from $69-$74/mt FOB at last report.
Alberta:
Alberta sulfur estimates continued at (-)$39-$6/mt FOB. Molten cargoes contracted into the US market set both the high and low prices, while solid tons selling through the Vancouver export market tracked toward the high side of the range.
West Coast:
The West Coast prill market moved up in line with Vancouver to $80-$86/mt FOB. Second-quarter molten contracts were reported at $60-$62/lt FOB. No new pricing has been reported for the third quarter.
China:
River-delivered cargoes spiked to the $122-$125/mt CFR range in China, a significant increase from last week’s $105-$110/mt CFR, with sources noting high demand from phosphate producers.
ADNOC:
Abu Dhabi National Oil Co. (ADNOC) sulfur firmed to $82/mt FOB Ruwais for July, up $2/mt from $80/mt FOB in June.
Qatar:
Muntajat offers for July were reported at $81/mt FOB Ras Laffan, rising from June’s $79/mt FOB price.
US Gulf:
US Gulf sulfuric acid imports were steady at the $120-$125/mt CFR level.
US Imports:
July-May sulfuric acid imports moved up 14.2% year-over-year, to 3.59 million st from 3.14 million st. May shipments were 374,212 st, up 28.2% from 291,964 st in the previous May. July-May imports from Canada totaled 1.84 million st, Mexico sent 680,407 st, and Spain added 341,468 st.
US Exports:
Sulfuric acid exports for May stood at 17,026 st, down 8.4% from the year-ago 18,594 st. July-May exports totaled 174,622 st, a 53.7% decline from the 376,762 st posted one year earlier. July-May exports to Canada stood at 124,470 st, ahead of 32,575 st to Mexico. Uruguay took 4,409 st.
Brazil:
Brazil sulfuric acid import prices continued in the $145-$150/mt CFR range, players said.
Members of the International Longshore and Warehouse Union (ILWU) Canada on July 28 will be voting on a tentative labor contract with the British Columbia Maritime Employers Association (BCMEA), just a week after union leadership rejected the contract and strike activity temporarily resumed at the Port of Vancouver (GM July 24, p. 1).
There was no announcement on when the voting results would be made public, but dockworkers are back on the job at the ports Vancouver and Prince Rupert after ILWU leadership issued and then rescinded a strike notice on July 18 as negotiations resumed.
According to media reports, the terms of the labor contract are unchanged from the tentative agreement reached with the help of a federal mediator on July 13 between the BMCEA and ILWU (GM July 14, p. 1), nearly two weeks after roughly 7,400 dockworkers walked off the job on July 1 (GM July 7, p. 1).
What exactly changed at the negotiating table is unclear, but ILWU leadership announced that it was conducting a Stop Work meeting on July 25 to familiarize union employees of the terms of the agreement and recommend that they vote to accept.
In a tweet, Federal Labor Minister Seamus O’Regan thanked the union for sending the latest terms to its membership. “Thank you to the ILWU Canada Longshore Caucus for sending the Terms of Settlement to a membership vote, with their recommendation for ratification,” O’Regan said. “Right now, BC ports are operating, but we need long-term stability.”
Details of the tentative agreement were not made public, but the striking ILWU members were reportedly seeking an 11% wage increase in the first year, a 6% increase in the second year, a C$8,000 signing bonus, and protections against contracting out work and automation, the Globe and Mail reported.
The 13-day strike caused significant disruptions to port activity, prompting calls from industry groups for the federal government to enact back-to-work legislation if a quick resolution was not reached. The Greater Vancouver Board of Trade last week estimated the strike’s cost at C$10 billion, with backlogs that could take months to clear.
The strike hit the fertilizer industry hard, with Canpotex withdrawing all offers for new potash sales on July 19 and Nutrien Ltd. curtailing production at both its Rocanville and Cory mines in Saskatchewan. Canadian Pacific Kansas City Ltd. (CPKC) and Canadian National Railway Co. both announced that they had reduced movement of railcars to West Coast ports.
On July 27, CPKC Chief Financial Officer John Brooks told analysts that the strike had an estimated negative impact of about C$80 million on the railroad’s revenue, “much of which we will work hard to claw back over the remainder of Q3 and Q4.”
CF Fertilisers UK Ltd., a subsidiary of CF Industries Holdings Inc., on July 25 announced a proposal to permanently close the ammonia plant at its Billingham complex in northeast England. The company intends to continue to produce ammonium nitrate and nitric acid at the Billingham site using imported ammonia, as it has for the past 10 months following its decision to temporarily idle the plant in August 2022 (GM Aug. 26, 2022).
CF said the decision to shutter the plant stemmed from forecasts that producing ammonia at Billingham would not be cost-competitive for the long term compared to importing ammonia, primarily due to the impact of carbon costs and projected high natural gas prices in the UK relative to other regions.
In addition, CF said shutdowns in recent years of industrial customers in the UK that had consumed “significant” ammonia volumes for their businesses have created a supply-demand imbalance for ammonia production at the Billingham complex.
“We believe that ample global availability of ammonia for import, including from CF Industries North American production network, will enable more cost-competitive and efficient production and sales of ammonium nitrate fertilizer and nitric acid for our UK agriculture and chemicals customers moving forward,” the company said.
CF’s Billingham complex is the largest ammonia, ammonium nitrate, and CO2 production facility in the UK, with an ammonium nitrate production capacity of 0.58 million mt/y, according to the Green Markets global capacity database.
The site – unlike CF’s now shuttered Ince plant in northwest England – has additional operational flexibility from a 40,000 mt ammonia storage tank and the ability to import lower-cost ammonia if necessary.
The permanent closure of the Billingham ammonia plant could result in up to 38 redundancies at the site. CF said it will be entering into the required collective redundancy consultation process with the recognized union, Unite, and elected employee representatives, adding that some of the proposed redundancies might be avoided by redeployment opportunities.
The UK’s National Farmers Union (NFU) Deputy President Tom Bradshaw said the closure decision was “concerning.”
“Availability of fertilizer is a crucial element of domestic food security and relying on importing ammonia from global markets exposes British fertilizer production to possible long-term risks, and increases farmers’ exposure to global volatility,” Bradshaw said. “It’s important that the government now look closely at how this shift to a reliance of imported ammonia could impact our domestic food production and highlights the need to maintain access to all nitrogen fertilizer products, including urea.”
In June 2022, CF announced that its Ince fertilizer plant in Cheshire would close permanently as part of a restructure to make operations at Billingham “viable for the long term” (GM June 10, 2022). The Ince plant produced ammonia, nitric acid, ammonium nitrate, and NS and NPKs, and had been mothballed since September 2021 due to high natural gas prices.
Until the mothballing of its Billingham ammonia plant, CF was an important supplier of CO2 gas to industrial customers in the UK, including food processors, hospitals, and nuclear power plants. The Billingham complex is capable of producing 750 mt of CO2 per day for commercial use.
Billingham and Ince had the combined capability to produce an estimated 60% of the UK’s CO2. But users of CO2 in the UK said the permanent closure of the Billingham ammonia plant poses no immediate threat to CO2 supplies because the country’s industrial gas customers have been diversifying their supply away from CF. They added, however, that the closure reduces capacity and leaves the industry vulnerable, particularly if facilities undergo maintenance shutdowns.
The temporary closure of CF’s UK sites in 2021 due to soaring production costs caused significant disruption to sectors reliant on CO2, leading the UK government to step in and support CF’s operations for a three-week period (GM Sept. 24, 2021).
Indonesian state-owned fertilizer company PT Pupuk Kalimantan Timur is reported to be in talks to acquire the fertilizer business of ASX-listed Incitec Pivot Ltd. (IPL), according to a Reuters report, citing two unnamed sources familiar with the matter.
Pupuk Kaltim has engaged both Citi and Gilbert+Tobin as advisors on the potential acquisition, the Australian Financial Review reported on July 23, citing unnamed sources. The Indonesian company is “actively” looking for overseas acquisition opportunities, particularly phosphate and potash assets, to support Indonesia’s long-term food security, Pupuk Kaltim President Director Rahmad Pribadi said in a May interview with NikkeiAsia .
IPL, which commands a market value of A$5.4 billion (approximately US$3.65 billion at current exchange rates), declined to comment on the reports beyond an ASX statement issued on July 12, confirming that it had “received a number of approaches for the potential acquisition of its fertilizers business” (GM July 14, p. 1).
IPL declined to identify any interested parties, but the Australian Financial Review revealed on July 11 that at least one Asia-based state-owned enterprise – at the time speculated to be Pupuk Indonesia – has shown interest in buying Incitec Pivot Fertilisers.
In its July 12 statement, IPL also said its Board’s assessment of a potential sale is being considered along with the ongoing proposal to structurally separate Incitec Pivot Fertilisers and the Dyno Nobel explosives business.
But IPL is facing investor opposition to its plans to demerge, with multiple investors warning that rising interest rates and tougher business conditions would make survival harder for the two smaller businesses with higher capital costs, the Australian Financial Review reported.
Pupuk Kaltim’s reported talks with IPL come as the Kalimantan-based producer has committed at least $1.5 billion on expansion plans, after two straight years of record profits, to meet rising demand resulting both from the Ukraine war and lingering effects of the coronavirus pandemic.
Pupuk Kaltim, which is 99.99% of owned by PT Pupuk Indonesia, is already Indonesia’s largest ammonia and urea producer and one of the largest fertilizer producers in Southeast Asia. The company posted 14.5 trillion rupiah ($964 million) in net income last year, more than double the approximately 6 trillion rupiah reported in 2021, which was already higher than pre-pandemic levels, according to the NikkeiAsia report, citing Pribadi.
Currently, Pupuk Kaltim’s biggest expansion project is a new complex costing more than $1 billion in Fakfak regency in Indonesia’s West Papua province. Construction is slated to start in the third quarter of this year, with commercial operations targeted for 2027. The new facility will produce 1.1 million mt/y of urea and 825,000 mt/y of ammonia, with the Indonesian government describing the project as of “national strategic” importance.
Pupuk Kaltim currently has 13 plants located in a huge production complex in Bontang, East Kalimantan province. Current output is put at some 3.4 million mt/y of urea, 2.7 million mt/y of ammonia, and 300,000 mt/y of NPK, NikkeiAsia reported. The company’s exports have overtaken domestic sales as it entered several new markets, including Australia for urea, Japan for ammonia, and South America.
Pupuk Kaltim has yet to decide whether to launch a domestic initial public offering (IPO) this year or in 2024 due to global capital market situation and geopolitical uncertainties, according to NikkeiAsia, citing Pribadi. Local media reported in early January that the company was planning an IPO of between $500 million and $1 billion amid the Indonesian government’s push for some state-owned companies to privatize (GM Jan. 6, p. 29).
Egyptian nitrogen producer MOPCO has agreed to be part of a new company that will produce green hydrogen to be used in green ammonia production, according to a July 25 announcement from the company’s Board of Directors. MOPCO will be joining with the SCATEC out of Norway and the Egyptian Petrochemicals Holding Company.
The announcement did not specify percentages of contributions or ownership of the new company, nor when construction will begin. Sources said the MOPCO action is seen as the first step to backing more green production operations.
MOPCO currently operates three urea and ammonia plants with an annual production capacity of 2 million mt of urea. The Green Markets database lists total MOPCO capacity at 1.92 million mt/y for urea and 1.2 million mt/y for ammonia.
