All posts by hlancey@bloomberg.net

Western Potash Completes C$10 M Tranche

January 5, 2024News Briefs, Potash, Saskatchewan, Vancouverhlancey@bloomberg.net

Western Resources Corp., Vancouver, B.C., on Dec. 27 announced that wholly-owned subsidiary Western Potash Corp. received the second tranche of funds in the amount of C$5 million from Vantage Chance Ltd. The initial transaction, which was for C$10 million, is now closed. Western Potash received the first C$5 million tranche payment in September 2023 (GM Oct. 6, 2023).

Western Potash is pursuing the completion of the Milestone Potash Phase 1 Project in Saskatchewan (GM March 24, 2023). The construction of the project was kicked off in June 2019 with an anticipated initial production of 146,000 mt/y.

First Phosphate Pulls in $7.5 M, Speeds Development

January 5, 2024Canada, News Briefs, Phosphatehlancey@bloomberg.net

First Phosphate Corp., Saguenay, Quebec, on Jan. 2 announced that it has closed a second tranche of its non-brokered private placement financing and for the two has aggregate gross proceeds of $7.52 million. The second tranche was oversubscribed.

“We are now in position to be able to drill this winter and begin uncovering the full extent of the Bégin-Lamarche high-purity igneous rock phosphate horizon at only 70 km from the deep-sea Port of Saguenay,” said First Phosphate CEO John Passalacqua. “In our experience, proximity to port and access to infrastructure and workforce are the single largest determinants for the economic viability of any phosphate project. Bégin-Lamarche has all these strong requisites. We feel that it will become the first phosphate mine to see production in Quebec. We are now in a position to accelerate its development.”

Highfield Secures $6 M Investment

January 5, 2024News Briefs, Potash, Spainhlancey@bloomberg.net

ASX-listed junior potash miner Highfield Resources has secured an investment of $6 million (A$8.9 million) from existing strategic shareholders EMR Capital Management Ltd., Tectonic Investment Management, and another institutional investor under a convertible note deed.

“We are fortunate to have a number of existing strategic shareholders who continue to demonstrate strong support for the company at a pivotal time as we focus on finalizing a number of initiatives that will ultimately see the start of construction of the main facilities at Muga in the early part of 2024,” said Highfield CEO Ignacio Salazar.

The company is focusing on its Muga-Vipasca Potash Project in Spain. It reports the receipt of all key permits and licenses. “Concurrently, our focus remains on completing the remaining funding for Phase 1 operations, the culmination of which is expected to deliver a major value inflection point for all stakeholders,” Salazar said.

5E Begins Mining Operations

January 5, 2024Lithium, News Briefs, U.S.hlancey@bloomberg.net

Boron and lithium company 5E Advanced Materials Inc., Hesperia, Calif., announced on Jan. 2 that it has officially begun mining operations at the wholly-owned 5E Boron Americas Complex in Fort Cady, Calif., with the startup of the wellfield injection process. 5E has a US government Critical Infrastructure designation.

5E said it is now working under its EPA permit to begin extracting minerals. It also announced its operational plan and has started wellfield operations with the goal of completing outstanding operational items at the facility in parallel. 5E expects to begin lab production in the short-term and production of boric acid and lithium carbonate from the small-scale facility by the end of first-quarter 2024.

Initial production will be used for customer qualification as the company seeks to obtain bankable offtake agreements and future sales to support FEL 2 (front loading) engineering as the company focuses on commercial scale.

Tecnimont to Start Engineering on KIMA Project

January 5, 2024Ammonium Nitrate, Egypt, Europe, News Briefs, Nitric Acidhlancey@bloomberg.net

Italian engineering and technology group Tecnimont (Maire) SpA said it has been authorized to start engineering works on Egyptian Chemical Industries Co.’s (KIMA) project for a new nitric acid and ammonium nitrate plant located in the Aswan Governorship in Upper Egypt, with the notice to proceed with the full Engineering Procurement and Construction (EPC) activities expected to be received by the end of June 2024.

The advance payment and authorization notice follows the EPC contract award for the project to a Tecnimont-lead consortium last June (GM June 9, 2023). The overall value of the EPC contract is $300 million, of which around $220 million pertains to Tecnimont.

The new plants will replace older units at the site, significantly reducing the present greenhouse emissions due to state-of-the art abatement systems, Tecnimont said in a Dec. 29 statement. The new nitric acid unit will have capacity to produce 600 mt/d and the ammonium nitrate plant 800 mt/d. The granular ammonium nitrate output from the new plant will be sold to local farmers and exported to international markets.

Great Quest Fertilizer to Add Gold, Lithium

January 5, 2024Lithium, News Briefs, Russia, Vancouverhlancey@bloomberg.net

Exploration company Great Quest Fertilizer Ltd., Vancouver, B.C., announced on Dec. 22 that it has committed to purchasing and subscribing for up to 70% of the total issued and authorized ordinary shares of Belmont Mineral Exploration (PTY) Ltd., a Namibian private company. Great Quest expects to close the initial acquisition in early 2024.

Belmont holds 14 exclusive prospecting licenses covering 307,778 hectares of exploration licenses, including the Khorixas Gold Project, the Omatjete Gold and Lithium Project, and the Outjo Gold Project. The Khorixas Project is Belmont’s principal asset and upon closing of the transaction would be Great Quest’s principal asset.

To date, the company’s flagship assets have been in Mali, including the Sanoukou Gold Project in western Mali and the Tilemsi Phosphate Project (GM April 17, 2020) in northeastern Mali. However, Tilemsi is in a state of force majeure due to the geopolitical situation in northern Mali.

The United Nations was asked to withdraw its peacekeeping force last summer by the Mali government, which instead has allied with Russia’s mercenary Wagner Group. The UN has gradually left and is in the process of making its final exit. Tuareg separatists have fought to take the northern part of the country and violence has reportedly intensified. Great Quest said it is watching the situation prior to committing to any new work in the region.

CFIA Seeks Input on PFAS

January 5, 2024Canada, News Briefshlancey@bloomberg.net

The Canadian Food Inspection Agency (CFIA) is leading a 60-day public consultation to seek comments on the proposed implementation of an interim standard for per- and polyfluoroalkyl substances (PFAS), for municipal biosolids imported or sold in Canada as commercial fertilizers. PFAS are also known as forever chemicals.

The proposed limit (less than 50 parts per billion of perfluorooctane sulfonate, a type of PFAS) will prohibit the importation and sale of biosolids with high PFAS content. To verify that importers and domestic waste processors comply with the standard, the CFIA will require laboratory results (Certificate of Analysis). Products that exceed the limit will be subject to regulatory action.

The CFIA’s proposed action is part of a broader Government of Canada suite of risk control measures intended to reduce human and environmental exposure to PFAS and PFAS-containing products, using a life cycle approach from their point of manufacture through to their disposal.

CFIA is seeking feedback from Canadians including growers, farmers, and the general public on the implementation of the interim standard. The agency has already gathered input from federal partners, provinces, and the biosolids industry. More information is available at inspection.canada.ca.

Ammonia

January 5, 2024Ammonia, Eastern Cornbelt, Iran, Market Watch, Northern Plains, Pacific N.W., Tampa, Thailand, Turkey, U.S. Gulf, Western Cornbelthlancey@bloomberg.net

US Gulf/Tampa:

Tampa ammonia was steady at January’s $525/mt CFR contract level, with no word on the expected direction for February. The latest truck pricing out of Gulf Coast production points was pegged in the $475-$500/st FOB range, down from December’s $570-$725/st FOB range following the drop in Tampa ammonia.

Eastern Cornbelt:

Ammonia reference prices in the Eastern Cornbelt remained at $600-$610/st FOB for winter fill tons and $625-$650/st FOB for spring prepay, but sources reported minimal interest and very little buying taking place in the region.

One contact suggested that the market may follow last year’s trajectory, when the initial prepay offers were followed by steadily lower prices to generate sales.

Western Cornbelt:

Ammonia reference prices in Nebraska and Iowa remained at $600-$620/st FOB for December-February fill tons and $625-$645/st FOB for spring prepay, depending on location, though sources reported few new sales to test the market. One contact said producers are “open to offers,” but interest currently remains low.

Northern Plains:

Ammonia pricing in the Northern Plains was quoted at $600-$610/st FOB regional terminals for winter fill tons and $630-$640/st FOB for spring prepay. Delivered offers were reported in the $600-$670/st range in the region for spring tons.

Pacific Northwest:

Ammonia prices in the Pacific Northwest were reported at $650/st FOB for anhydrous and $165/st FOB for aqua in early January, down from the prior $830-$850/st FOB and $220/st FOB levels, respectively.

Iran:

Iran exported 631,000 mt of ammonia in 2023, according to Trade Data Monitor, up 13% from the year-ago 556,000 mt. India received 89% of the exports, taking 564,000 mt, whileTurkey purchased 66,000 mt. December exports were pegged at 81,000 mt, rising from the 66,000 mt reported one year earlier, with 79,000 mt going to India.

Thailand:

January-November ammonia imports in Thailand totaled 316,000 mt, Trade Data Monitor reported, a marginal increase from the 306,000 mt received through the first 11 months of 2022. November imports of 30,000 mt were up compared to 18,000 mt in November 2022, with half of the month’s total coming from Australia.

Turkey:

January-November ammonia imports in Turkey were up 9% year-over-year, Trade Data Monitor reported, at 767,000 mt. November 2023 imports were counted at 82,000 mt, falling from 127,000 mt in November 2022.

Urea

January 5, 2024Argentina, Brazil, China, Eastern Canada, Eastern Cornbelt, ethiopia, India, Indonesia, Market Watch, Middle East, Northeast, Northern Plains, Pakistan, Thailand, Turkey, U.S. Gulf, Urea, Western Cornbelthlancey@bloomberg.net

US Gulf:

New NOLA urea business was confirmed during the week at $300-$307/st FOB for January physical tons, with most volume trading at the $305/st FOB level. February trades were reported in the $310-$312/st FOB range. Those levels were up from the last reported range of $292-$308/st FOB for December-January trades.

Eastern Cornbelt:

The urea market was pegged at $355-$375/st FOB in the Eastern Cornbelt, with the low confirmed in Illinois on a spot basis. The Cincinnati, Ohio, market was pegged at the $365-$370/st FOB level in early January.

In the Great Lakes region, Michigan urea prices were quoted at $385-$395/st FOB and $405-$410/st DEL.

Western Cornbelt:

Urea prices were quoted at $360-$390/st FOB in the Western Cornbelt, with the low confirmed at St. Louis, Mo., and the high in Iowa on a spot basis. The Catoosa/Inola, Okla., urea market was pegged at the $365-$370/st FOB level in early January.

In the South Central region, the Convent, La., urea market slipped to $350/st FOB, down from $385/st FOB in mid-December.

Northern Plains:

The urea market dropped to $385/st FOB St. Paul, Minn., below the $400-$410/st FOB range reported in mid-December. Delivered urea offers in the Northern Plains were reported in the $425-$435/st range for fill tons and $445-$465/st DEL for spring.

Northeast:

The latest urea prices fell to $385-$395/st FOB in the Northeast, down from the prior $400-$410/st FOB range, with the low confirmed at Fairless Hills, Pa., for January tons. February-March pricing at Fairless Hills was quoted at the $390/st FOB level.

Eastern Canada:

The urea market slipped to C$680-$725/mt FOB in Eastern Canada, down from prior low of C$710/mt FOB.

India:

The National Fertilizers Ltd. (NFL) urea tender closed on Jan. 4 with 20 companies offering a total of 2.7 million mt. The technical envelopes containing individual tonnage offerings were opened on Jan. 5, while the envelopes with pricing offers are not expected to be opened until Jan. 8.

Trading companies offered 1.6 million mt for West Coast deliveries and 1.1 million mt for East Coast facilities. An additional 45,000 mt was offered directly by PIC on an FOB basis.

Offering Company	Quantity (mt)
	Total	West Coast	East Coast
Aditya Birla Group	479,000	295,000	184,000
Midgulf	300,000	150,000	150,000
Samsung	270,000	180,000	90,000
Fertistream	180,000	100,000	80,000
OQ Trading	150,000	105,000	45,000
Continental	145,000	95,000	50,000
Dreymoor	121,500	45,000	76,500
Agri Commodities	106,000	71,000	35,000
Sun International	100,000		100,000
Aries	100,000	50,000	50,000
MacroSource	100,000	50,000	50,000
Keytrade	100,000	100,000
Koch	95,000	47,500	47,500
Ameropa	94,300	47,150	47,150
Indagro	94,000	47,000	47,000
Fertiglobe	90,000	45,000	45,000
Fertcom	50,000	50,000
RE Energy	50,000	50,000
Medallion	50,000	50,000

FOB
PIC	45,000

Pricing ideas shifted as 2023 ended and the deadline for submission to NFL neared. Market watchers initially expected offers at $310-$320/mt CFR, though expectations shifted to $320-$340/mt CFR as the tender deadline approached. As the week ended, however, rumors suggested that West Coast offers may drop back to sub-$320/mt CFR levels, with East Coast offers landing in the low-$320s/mt CFR. Awards at $320/mt CFR would represent a drop of $80/mt from the previous tender.

Even with the lower prices, sources expect NFL to buy just 500,000-800,000 mt in the tender. They point to existing urea reserves of about 7 million mt and steady pressure from the government to limit imports as a cost-saving move. Should offers come in significantly lower than expected, there is some chatter that NFL could take closer to 1-1.5 million mt. Sources estimate that only 2 million mt will be offered, however, and it would be rare to see a commitment for such a high percentage of offered tons.

The dramatic drop in pricing expectations came as the global urea market showed growing reserves and limited demand. India is currently the market’s only major buyer, sources said, and India’s first-quarter demand is insufficient to tighten the market. Demand from the global market’s other two major buyers, the US and Brazil, is not expected to kick in until after the NFL tender’s Feb. 29 shipping deadline.

The Indian media is beginning to report on planned subsidies in the FY2024/25 budget. Government officials claim that India will require fewer imported tons of urea in the upcoming fiscal year and will thus be able to reduce the amount spent on subsidies. According to the reports, the government is counting on stepped-up domestic urea production and increased use of Nano urea to replace imported tons.

Pakistan:

A second lot of 100,000 mt booked from Azerbaijan was delivered to Pakistan this week. The cargo was part of a 200,000 mt deal to fill a shortfall in urea supplies for the current application season.

The government of Pakistan was initially ready to call a standard tender for the 200,000 mt, but later settled on securing a government-to-government deal instead. Talks were initiated with several urea-producing countries, and the deal was struck with Azerbaijan. The first lot of the order was delivered during the last week of December.

By itself, Azerbaijan could not deliver the 200,000 mt in the brief period set by Pakistan. Azerbaijan’s State Oil Company of Azerbaijan Republic (SOCAR) arranged for its own material, as well as urea from the UAE, Qatar, and Russia to be shipped to Pakistan.

The Azerbaijan government also offered Pakistan favorable financing on the deal. In addition to a generous payment schedule, Azerbaijan will not charge Pakistan interest on the extended payment plan, according to local media reports.

Black Sea:

Urea prices in the Black Sea held steady in the first week of 2024. Prilled urea remained at $270-$280/mt FOB.

Indonesia:

Pupuk wasted no time offering tonnage for sale under its 2024 export permits. A tender for 10,000-45,000 mt each of granular and prilled urea closed on Jan. 5, with initial reports indicating that pricing for the granular material will not shift much.

Ameropa was reported to bid slightly above $320/mt FOB for the full 45,000 mt of granular urea. Other bids came in around $315/mt CFR, with some bidding for less than the full tonnage offered.

The last Indonesian tender was settled at $321.50/mt FOB. The Ameropa bid represents a flatness to the market that others see as softening.

There are expectations that Pupuk will release more than the 45,000 mt if Ameropa and other buyers are willing. In the past, Pupuk has sold more tons than it has advertised, using the tender results to set prices for the private deals.

Sources previously said that an award price in the $320s/mt FOB could eliminate Indonesian tons from consideration in the NFL/India tender. However, there are still regional buyers willing to pay a slight premium for product from Indonesia, one trader noted, especially at a time when Chinese exports are unavailable or severely restricted.

Middle East:

Traders are calling the market $315-$320/mt FOB. However, if the NFL/India tender shows prices in the $320s/mt CFR, the netback to the Arab Gulf would run about $10/mt lower.

The Iranian government set its new official urea price at $290/mt FOB. Sources quickly reported discussions in the low-$280s/mt FOB, however.

Exports of urea from Iran softened 5% in 2023, Trade Data Monitor reported, to 4.8 million mt from 5.1 million mt. Turkey led buyers with 2.3 million mt, followed by South Africa with 445,000 mt. Exports totaled 1.1 million mt in the fourth quarter and 309,000 mt in December, off from last year’s 1.4 million mt and 440,000 mt, respectively.

Buyers of Egyptian material remained quiet following the short price run-up reported in the last half of December. The latest deal out of Egypt was valued at $340/mt FOB in late December. While producers are now looking for $345/mt FOB, they face a weaker global urea market and more aggressive buyers looking for bargains.

China:

Sources continue to expect urea exports from China to be limited to small and infrequent cargoes. The export constraints are anticipated to remain in force throughout the first quarter of the year.

Thailand:

Thailand imported 2.4 million mt of urea in January-November, Trade Data Monitor reported, up 40% from the 1.7 million mt received in January-November 2022. November imports were 108,000 mt, a sharp increase from 57,000 mt in November 2022.

Turkey:

Urea imports in Turkey totaled 2.9 million mt in January-November, according to Trade Data Monitor, a 28% increase from the year-ago 2.3 million mt. November imports were down 45%, however, to 154,000 mt from the 282,000 mt received in November 2022.

Brazil:

Brazil urea prices increased 2.4%, to $320-$335/mt CFR from $310-$330/mt CFR at last report. The market remains slow as players await the results of the Indian tender, though sources reported multiple offers of warehouse product during the week.

The Rondonópolis market has remained stagnant after a slight demand increase boosted prices by 4.4% in the second week of December. Offers were noted at $475-$480/mt FOB ex-warehouse, narrowing from $460-$490/mt FOB.

Recent rains brought favorable prospects for soybean sowing, sources said. Soybean acres in Mato Grosso state are now 100% planted, according to data from Brazil’s National Supply Co. (CONAB), and suppliers have shifted the focus to deliveries for the start of corn planting in February. The northern region of the state is reportedly facing supply difficulties due to discharge delays in the port of Santarém.

Argentina:

Trade Data Monitor pegged January-November urea imports at 732,000 mt in Argentina, a 16% decline from the 871,000 mt received during the same period of 2022. November imports jumped 68%, however, to 172,000 mt from 71,000 mt in November 2022. Egypt supplied 77,000 mt for the month, followed by 53,000 mt from Nigeria.

Ethiopia:

Urea imports in Ethiopia rose 68% in 2023, according to Trade Data Monitor, to 765,000 mt from 457,000 mt in 2022. Egypt led suppliers with 506,000 mt, and Oman added 161,000 mt. Ethiopia registered zero imports in December, down from 24 mt in December 2022.

The fourth quarter is generally a slow period for imports to Ethiopia, with the bulk of the year’s shipments instead coming during the first half of the year. Fourth-quarter 2022 imports exemplified this norm with only 301 mt received. The 2023 urea market’s volatile nature upended the normal pattern, however, with Ethiopia importing 208,000 mt in October-December 2023.

UAN

January 5, 2024Eastern Canada, Eastern Cornbelt, Market Watch, Northern Plains, U.S. Gulf, UAN, Western Cornbelthlancey@bloomberg.net

US Gulf:

The latest indications on NOLA UAN remained at $240-$245/st ($7.50-$7.66/unit) FOB based on river terminal pricing, though there was no new barge business reported during the week. “I expect something will happen in the next few weeks that will test these values,” commented one industry contact.

Eastern Cornbelt:

The UAN-32 market remained at $280-$300/st ($8.75-$9.38/unit) FOB regional terminals in the Eastern Cornbelt, depending on location, with the low reported at Cincinnati and the high at Peru, Ill.

In the Great Lakes region. Michigan terminals were unchanged at $275/st ($9.82/unit) FOB for UAN-28 and $315/st ($9.84/unit) FOB for UAN-32.

Western Cornbelt:

UAN-32 pricing was steady at $275-$295/st ($8.59-$9.22/unit) FOB in the Western Cornbelt, depending on location, with the low reported at St. Louis.

Northern Plains:

The last UAN-32 offers were reported at $295-$310/st ($9.22-$9.69/unit) FOB terminals in Minnesota, with UAN-28 quoted at $300-$330/st ($10.71-$11.79/unit) DEL in the Northern Plains for tons shipped from Canada.

Northeast:

The UAN-32 market remained at $265/st ($8.28/unit) FOB Fairless Hills and Baltimore, Md., for 1Q tons, with 2Q offers reported at the $285/st ($8.91/unit) FOB level. UAN-32 out of terminals in upstate New York was steady at $320/st (10.00/unit) FOB for the latest offers.

The 28-0-0-5S market was unchanged at the $277/st level FOB Baltimore, with 27-0-0-3S pegged at $246/st FOB Baltimore.

Eastern Canada:

UAN pricing in Eastern Canada was down slightly from last report, with recent offers reported at C$520/mt (C$16.25/unit) FOB for UAN-32 and C$460/mt (C$16.43/unit) FOB for UAN-28 in the region.