All posts by hlancey@bloomberg.net

LSB Industries Inc – Management Brief

Management Briefs

LSB Industries Inc. on Aug. 12 announced the retirement of Richard Roedel as Chairman of the Board of Directors due to personal health reasons, effective immediately. The Board has elected Mark Behrman, LSB’s President and CEO, to serve as Chairman of the Board. Lynn White, a member of LSB’s Board since 2015, has been appointed Lead Independent Director. LSB said Roedel will remain on the Board until a successor is identified to ensure an orderly transition.

“It has been an extremely gratifying experience to serve on a Board of this caliber,” Roedel said. “It has been an honor to work with a group of individuals with such a deep and diverse background in industry and finance. I am very proud of our achievements helping to bring LSB Industries to the point where it is now; a well-capitalized company with strong prospects for future growth.”

Behrman joined LSB in 2014 as Senior Vice President, Corporate Development, became Executive Vice President and CFO in 2015, and was appointed President and CEO in 2018. Behrman has served on the board of PHX Minerals Inc. since 2017 and has been its board Chairman since 2019. Prior to LSB he had a 30-year career in finance and investment banking.

“On behalf of the Board and the entire LSB team, I would like to thank Rich for his years of service to LSB,” Behrman said. “Over the past decade, his extensive experience and knowledge have been a valuable asset as we’ve transformed the company. We move forward well-positioned in our pursuit of growth and our vision of becoming a leader in the global energy transition thanks to Rich’s contributions. We wish him all the best in his retirement.”

Tidal Grow AgriScience – Management Brief

Management Briefs, U.S.

Norm Davy has been named President and Chief Commercial Officer at Tidal Grow AgriScience (TGA), a producer of bioactive carbon-based fertilizers and a division of biomolecular company Tidal Vision Products Inc., headquartered in Bellingham, Wash. Davy has 35 years of experience in production agriculture covering the seed, biotech, crop protection, and enhanced efficiency fertilizer markets.

“I am truly grateful for this opportunity to lead this dynamic TGA team of entrepreneurs who inspire and motivate each other every day to stretch to new heights,” Davy said. “We are on a very important mission helping solve some of agriculture’s greatest challenges with our unique abilities in bioengineering and green manufacturing of chitosan-based technologies.”

USDA Lowers Corn Forecast, Hikes Soybeans, Cotton

News Briefs, U.S., Urea

USDA’s latest Crop Production report, released on Aug. 12, projects US corn production for grain at 15.1 billion bushels in 2024, down 1% from last year and the third highest level on record for the US. Based on conditions as of Aug. 1, the average corn yield is forecast at a record high 183.1 bu/a, up 5.8 bushels from last year.

Total area planted to corn is estimated at 90.7 million acres, down 1% from the previous estimate and 4% below last year’s crop. Area harvested for grain is forecast at 82.7 million acres, also down 1% from the previous forecast and 4% under last year’s total.

Soybean production in the US is forecast at a record high 4.59 billion bushels this year, up 10% from 2023. Yields are expected to average a record high 53.2 bu/a based on conditions as of Aug. 1, up 2.6 bushels from 2023. Area harvested for beans is forecast at 86.3 million acres, up 1% from the previous forecast and up 5% from 2023.

All cotton production is forecast at 15.1 million 480-pound bales, up a full 25% from 2023, while yields are expected to average 840 pounds/a, down 59 pounds from 2023. Cotton harvested area is forecast at 8.63 million acres, up 34% from 2023, while total planted area to cotton is estimated at 11.2 million acres, down 4% from the previous forecast but up 9% from 2023.

All wheat production for grain is forecast at 1.98 billion bushels, down 1% from the previous forecast but up 9% from 2023. Wheat yields are expected to average 52.2 bu/a, up 0.4 bushel from the previous forecast and up 3.6 bushels from 2023. Area harvested for grain is forecast at 37.9 million acres, down 2% from the previous forecast but up 2% from last year.

UP Reports Record 2Q Potash Shipping Volumes

Brazil, China, India, Indonesia, News Briefs, Potash, U.S.

Union Pacific Corp. (UP) on Aug. 8 reported record potash shipment volumes in the second quarter, led by increased shipments to Canpotex Ltd.’s Port of Portland Terminal 5, which recently completed a $150 million expansion. The expansion has allowed the terminal to receive more than a dozen unit trains per month, each comprising 188 carloads of potash, UP said.

“I’m proud of the collaboration and communication across Union Pacific and with Canpotex to not only meet, but exceed expectations with this volume increase, ensuring all resources were lined up to handle the additional business,” said Beth Steele, UP General Director, Marketing and Sales. “We’re looking forward to more opportunities with Canpotex as we grow together through operational excellence.”

UP said the increase in shipment volumes also involved coordination with Canadian Pacific Kansas City Ltd. (CPKC), as Union Pacific interchanges with CPKC at Eastport, Idaho, and transports the unit trains to Portland via Hinkle, Ore.

Canpotex annually supplies more than 13 million mt of potash to 40 countries overseas, including Brazil, China, India, Indonesia, and Malaysia. Approximately 20% of those exports go through the Port of Portland.

“Reliability is critical for potash shipments. Our customers count on Canpotex to deliver the high-quality potash they need to improve crops and grow food,” said Vinesh Kohli, Canpotex Senior Vice President, Operations. “Partners like Union Pacific have an important role in Canpotex’s supply chain that makes global food security possible.”

Canpotex on July 22 reported that it is fully committed on volumes for potash sales through Sept. 30, 2024, “due to continued strong demand for potash and widespread engagement” in all major offshore markets. “This demand and engagement is supported by solid fundamentals for agricultural commodities, as well as recognition of the clear value and affordability of potash in key growing regions,” the company said.

Phospholutions Partners with Toros Agri

Europe, News Briefs, Phosphorus, Turkey, U.S.

Phospholutions Inc., a sustainable fertilizer technology company based in State College, Pa., announced that is has partnered with Toros Agri, a fertilizer manufacturer and distributor in the European market, as the first commercial-scale producer of Phospholution’s RhizoSorb® dry granular phosphorus fertilizer.

The partnership was formed after Phospholutions received an investment during their Series A funding round from Tekfen Ventures, the corporate venture arm of Tekfen Holding, which includes ownership of Toros Agri. The two companies are on the second year of product performance trials in Turkey on crops such as corn and wheat.

“The partnership between Toros and Phospholutions marks a significant milestone for both companies leading the way in the development and marketing of industry-first technologies for the agricultural market,” said Sinan Uzan, President and Founder of Tekfen Ventures. “Our mission at Tekfen Ventures is to invest and enable new technologies like RhizoSorb to change legacy industries like agriculture.”

RhizoSorb is formulated to increase phosphorus efficiency in the soil utilizing a plant-driven nutrient release mechanism based on a chemical gradient rather than environmental conditions. The company said RhizoSorb reduces the rate of applied phosphorus needed to achieve the yield potential for row crops such as corn based on five years of academic and on-farm field trials. Phospholutions launched RhizoSorb8-39-0 in the US row crop market this past spring.

ICL Reports 27% Drop in 2Q Potash Sales

Earnings, News Briefs, Potash

ICL Group Ltd. on Aug. 14 reported total second-quarter sales of $1.75 billion, down 6% from the $1.87 billion reported last year. Operating income was $211 million for the quarter, down from $300 million, while adjusted EBITDA dropped 15%, to $377 million from $441 million in last year’s second quarter. 

Potash sales totaled $422 million, down 27% year-over-year, fueled by a 26% decline in potash prices over that period. Sales volumes were also lower at 1.15 million mt, down from 1.28 million mt last year. The potash segment generated $118 million in EBITDA for the quarter, down from $213 million last year.

“ICL delivered sequentially improving EBITDA for the third consecutive quarter, as we continued to build momentum by focusing on the areas under our control, including the introduction of innovative solutions and continued cost efficiencies, while managing the risks associated with geopolitical uncertainties,” said Raviv Zoller, President and CEO of ICL.

“All three of our specialties-driven segments were up versus the second quarter of 2023 and contributed to the sequential increase in adjusted EBITDA and margins,” Zoller added. “While we were ahead of our expectations in the first half of the year, we remain cautious regarding short-term expectations for some of the end markets we serve, including electronics, housing and construction, and food.”

ICL increased its guidance for full-year 2024 and now expects specialties-driven EBITDA of $0.8-$1.0 billion, an increase from previous guidance of $0.7-$0.9 billion, without any change to expected potash sales volumes.

K+S Posts Five-Fold Increase in 2Q EBITDA

Earnings, Europe, News Briefs

K+S Aktiengesellschaft, the German fertilizer and salt producer, posted second-quarter EBITDA of €128 million ($141 million), up sharply from €24 million ($26.5 million) in last year’s second quarter. K+S cited a significant increase in sales of fertilizer specialties, a strong European fertilizer business, and improved demand for chemical and industrial products.

“Both our European business and the share of fertilizer specialties continued to be strong in the second quarter, so that we can look back on a robust first half of the year overall,” said Dr. Burkhard Lohr, Chairman of the Board of Executive Directors. “For the full year 2024, we confirm our expectations for free cash flow and are now specifying the EBITDA forecast at between €530 million and €620 million.”

In the Agriculture customer segment, revenues increased to €616 million in the second quarter, up 11% from €557 million last year. Lower average prices were offset by significantly higher sales volumes, particularly for fertilizer specialties. Revenues in Europe rose to €271 million and sales volumes totaled 1.84 million mt for the quarter, up more than 200,000 mt from last year.

Revenues for the first half of the year were €1.86 million, down 7% from last year’s €2.01 million. K+S said it expects stable pricing in the Agriculture segment with sales volumes of 7.4-7.7 million mt for the full year, while noting that an oversupply of the potash market is not expected for the year as a whole.

Chemtrade Posts 2Q Results; Upbeat on Full Year

Canada, Earnings, News Briefs, U.S.

Toronto-based Chemtrade Logistics Income Fund reported second-quarter net earnings of $14.6 million, down 83.3% from the year-ago $87.7 million mainly due to lower adjusted EBITDA, which was off 20.2%, to $115.1 million from last year’s record $144.2 million.

Higher net finance costs and higher income tax expense also impacted the company’s second-quarter earnings. Revenue for the quarter was $448.1 million, down 4.7% from last year’s $470 million.

“While adjusted EBITDA was lower on a year-over-year basis, it is worth noting that this is in comparison to record quarterly adjusted EBITDA reported by Chemtrade in the second quarter of 2023,” said Scott Rook, Chemtrade President and CEO. “Further, the biennial maintenance turnaround at our North Vancouver chlor-alkali plant was conducted during the current quarter.”

Rook said strong hydrochloric acid and chlorine pricing helped mitigate the impact of significantly lower caustic soda index pricing during the quarter. Sodium chlorate volumes and pricing were also up year-over-year.

Chemtrade said it plans to invest $70-$100 million in growth capital expenditures in 2024, including approximately $50 million for the company’s ultrapure sulfuric acid business at its Cairo, Ohio, facility. Chemtrade said the Cairo project is on track to finish construction later this year, with commercial ramp-up beginning in 2025. The company said this will be the first ultrapure sulfuric acid plant in North America.

Chemtrade also reported that it has put on hold a second large ultrapure sulfuric acid growth project in Casa Grande, Ariz., undertaken via a joint venture with KPCT Advanced Chemicals LLC. The company has also decided to cease sodium chlorate production at its Prince George, B.C., facility following a production curtailment by the plant’s principal customer earlier this year. Chemtrade said the facility is being converted to a sodium chlorate dissolving operation, which is expected to be completed during the third quarter of 2024.

Chemtrade boosted its full year adjusted EBITDA guidance to $430-$460 million, up from the previous guidance of $395-$435 million and the company’s second highest year for adjusted EBITDA ever.

South Harz Potash Announces Equity Raise

Germany, News Briefs, Potash

Junior miner South Harz Potash Ltd., which is developing potash assets in Germany, reported that it has secured binding commitments for a placement of A$1.03 million ($670,000), with a further A$2.97 million proposed through a rights issue.

The combined equity raise of up to A$4 million is aimed at advancing the development of the company’s brownfield Ohmgebirge potash project and the acquisition of the Sollstedt mine in Germany. The placement includes an investment by South Harz directors, with a total of 40,116,690 shares allocated to them.

The placement terms stipulate the issuance of 103,000,000 shares at A$0.01 each, amounting to A$1.03m before costs. Of these, 40,116,690 shares are director placement shares, pending shareholder approval, and the remaining 62,883,310 shares were issued under the company’s existing Australian Securities Exchange Listing Rule 7.1A placement capacity on Aug. 8.

Ammonia

Ammonia, California, Eastern Cornbelt, Market Watch, Northwestern Europe, Pacific N.W., Southeast Asia, Tampa, U.S. Exports, U.S. Gulf, U.S. Imports, Western Canada, Western Cornbelt

US Gulf/Tampa:

Several market sources said Tampa ammonia for September will likely see an increase from August’s $475/mt CFR, fueled by firming international and domestic prices. The looming rail strike in Canada, and the length of any work stoppage should an agreement fail to be reached, was also impacting the North American market.

Recent sales out of Trinidad to buyers in Northwest Europe were confirmed in the $550-$555/mt CFR range for approximately 25,000 mt scheduled for delivery in first-half September.

US Imports:

Ammonia imports fell 5.2% for the July-June 2023/24 fertilizer year, according to US Census Bureau data, to 2.32 million st from 2.45 st in the prior year. June imports moved down 39.8%, to 129,557 st from the year-ago 215,157 st.

Canada sent 1.20 million st to the US for the fertilizer year, Trinidad and Tobago shipped 972,964 st, and Algeria sent 99,200 st.

US Exports:

Ammonia exports slipped 13.5% in July-June, to 1.17 million st from the year-ago 1.35 million st. June cargoes were noted at 146,302 st, however, a 76.1% increase from the 83,091 st reported one year earlier.

Morocco took 380,850 st of ammonia in July-June, followed by Norway with 239,984 st. Chile received 99,650 st, and Mexico purchased 96,631 st.

Eastern Cornbelt:

Ammonia firmed to $535-$560/st FOB in the Eastern Cornbelt, depending on location and time of the week, up from last week’s $520-$550/st FOB, with sources citing the looming rail strike in Canada as a possible driver of the increase.

CF and Koch ammonia terminals in Illinois and Indiana reportedly moved to the $545/st FOB level or higher on Aug. 15 after reports of $535/st FOB earlier in the week, while offers at East Dubuque, Ill., firmed to $560/st FOB from the prior $550/st FOB level.

Western Cornbelt:

Ammonia prices in the Western Cornbelt strengthened to $545-$560/st FOB during the week, up from last week’s $520-$550/st FOB range. Prices also moved up in the Southern Plains, with the latest offers firming to $505-$515/st FOB Oklahoma production points and $510/st FOB Coffeyville, Kan.

California:

Ammonia reference prices in California were steady at $680/st DEL for anhydrous and $187-$197/st FOB for aqua ammonia.

Pacific Northwest:

Ammonia prices dropped to $545/st FOB terminals for anhydrous and $145/st FOB for aqua ammonia in the Pacific Northwest. No current delivered prices were confirmed in mid-August. Sources said they expect higher postings soon, however, with some producers withholding offers until the Canadian rail strike is resolved.

Western Canada:

Ammonia remained at C$775/mt FOB Medicine Hat, Alta., for October-November offers, with delivered fall tons in Western Canada slipping to C$875-$900/mt from earlier offers in the C$900-$910/mt DEL range.

Northwest Europe:

With natural gas firmly above $11.5/MMBtu in Europe and supply tight, the latest ammonia business ex-Algeria reportedly reflects a $550-$560/mt CFR Northwest Europe price, up from the prior $510-$550/mt range. Recent sales by Nutrien out of Trinidad to buyers in Northwest Europe were also confirmed in the $550-$555/mt CFR range at midweek.

Some players expressed doubt that the market’s rapid price development can be repeated and sustained, however, pointing to a depressed downstream nitrates market.

Southeast Asia:

Ammonia availability was improving in the region, with both Indonesia and Malaysia reported to have export capacity with price ideas in the $380s/mt FOB. No spot business has yet concluded, however, leaving prices stable at $350-$400/mt FOB.