All posts by hlancey@bloomberg.net

RWE Inks Offtake Agreement with India’s AM Green

Clean Ammonia, Germany, Green Ammonia, India, Low-Carbon

Germany’s RWE Supply & Trading has signed an MoU with AM Green Ammonia B.V. for the long-term supply of up to 250,000 mt/y of green ammonia from India. The ammonia will be supplied by AM Green’s production sites in Kakinada and Tuticorin, India. Initially 50,000 mt/y will be produced from the Kakinada site, with the remaining volume sourced from Tuticorin.

Deliveries are expected to begin in 2027. The ammonia will meet the EU Renewable Fuels of Non-Biological Origin (RNFBO) standards as defined by the Renewable Energy Directive (RED III), according to RWE.

Yara Clean Ammonia has also signed a term sheet with AM Green for the long-term supply of up to 50% of the Phase 1 green ammonia supply from the Kakinada facility (GM May 17, p. 24). The final investment decision for the Kakinada plant was made earlier this month (GM Sept. 6, p. 28).

Mosaic Reports 3Q Potash, Phosphate Impacts

Canada, Earnings, Louisiana, News Briefs, Phosphate, Potash, Saskatchewan, U.S.

The Mosaic Co. announced on Sept. 16 that its Potash and Phosphate operations have sustained “operational challenges” that are expected to reduce production volumes and shipments in the third quarter of 2024.

In potash, Mosaic reported that it has encountered electrical equipment failures impacting both the Esterhazy and Colonsay mines in Saskatchewan. “These operational challenges in aggregate are expected to reduce the third quarter potash production and shipment volumes by 200,000-300,000 mt,” the company said.

Mosaic’s phosphate production volumes and shipments during the quarter were negatively impacted by weather events, including Hurricane Francine (GM Sept. 13, p. 1), with an estimated impact of 80,000-110,000 mt, the company reported. Mosaic’s Uncle Sam and Faustina phosphate operations are in Louisiana, where Francine made landfall on Sept. 11 as a Category 2 hurricane.

India Approves $2.9 B Fertilizer Subsidy

India, News Briefs, Phosphate, Potash

The Indian government has approved a proposal to spend Rs244.78 billion ($2.9 billion) to subsidize phosphate and potash fertilizers for winter-sown crops, according to a Sept. 18 government statement.

“Despite rising prices of fertilizers in the global market, we have decided to keep the prices the same as last season,” said Minister Anurag Thakur at a press briefing after the Cabinet meeting.

The Nutrient Based Scheme (NBS) subsidies will be provided from Oct. 1 through March 31 to facilitate access for farmers to 28 grades of P&K compounds during the Rabi season. The subsidy will be provided directly to fertilizer manufacturers and importers at approved rates, so fertilizers will be made available to end users at affordable prices.

Under the new provisions, the nitrogen subsidy was slashed by 10% compared to the Kharif season, while the potash subsidy was unchanged. The phosphate subsidy was increased by 7% from the prior season, with the increase favoring TSP and SSP over DAP and MAP.

The cabinet also approved Rs350 billion ($4.2 billion) to continue the farm income guarantee initiative, which provides remunerative prices to farmers and controls price volatility of essential commodities.

Grupa Azoty Posts First-Half Loss of €37.4 M

Earnings, News Briefs, Poland

Following repeated delays, Polish fertilizer and chemical major Grupa Azoty on Sept. 11 posted first-half earnings. The company reported a first-half loss of €37.4 million on revenues of €258.5 million, compared with a loss of €22.8 million on revenues of €251.8 million during last year’s first half.

The company cited “adverse global macroeconomic conditions, including the lack of significant recovery in many sectors of both [the] European and global economy. Grupa Azoty added that it is “undertaking proactive measures to undergo an energy transition enabling optimal management of production assets while incurring lower manufacturing costs.”

The company’s Agro segment, which manufactures and sells ammonium sulfate, ammonium sulfonitrite, urea-ammonium sulfate, calcium nitrate with sulfur, as well as ammonia and nitric gas, reported total revenues of €185.2 million and a negative EBITDA of €5.7 million.

Separately, Grupa Azoty on Sept. 10 notified prosecutors in Tarnow, a city in southeastern Poland, of a suspected misuse of powers and the negligent supervision of sponsorship and advertisement contracts by the former management of the company, which generated losses of €1.7 million over the first several months in 2024.

KIMA, Bilfinger Partner on New Egyptian Plant

Ammonium Nitrate, Egypt, Germany, India, Middle East, News Briefs, Nitric Acid

German industrial services provider Bilfinger announced on Sept. 17 that it has secured a significant Project Management and Consultancy (PMC) contract from Egyptian Chemical Industries (KIMA) for the construction of a new chemical and fertilizer plant at KIMA’s existing site in Aswan, Egypt.

The $300 million facility is projected to produce 600 mt/d of nitric acid by the end of 2027, which will be upgraded into 800 mt/d of granulated ammonium nitrate for both local and international customers. Bilfinger said its role will involve managing all phases of engineering, procurement, and construction (EPC), including overseeing a third-party contractor consortium, with work taking place across multiple sites, including India and Egypt.

“With KIMA, we are significantly expanding our involvement in Egypt and the region’s promising chemical industry,” said Christian Rugland, President Engineering & Maintenance International at Bilfinger. “For this collaboration, we can build upon our deep engineering expertise gained with clients across industries in the Middle East. KIMA can expect the high standards we have set ourselves in line with our vision at Bilfinger to become the number one partner in enhancing efficiency and sustainability.”

Stamicarbon Contracted for Egypt Plant Expansion

Egypt, News Briefs, Urea

Stamicarbon, a subsidiary of Italian engineering group Maire Tecnimont, was awarded the contract to expand the urea plant for El Delta Company for Fertilizer and Chemical Industries in Egypt, according to a Sept. 18 statement from the company.

Located in Talkha, El Delta’s existing prilled urea plant was commissioned in 1981, also using Stamicarbon technology, and has been idled since 2020. Stamicarbon will provide the technology to increase capacity from 1,725 to 2,250 mt/d. The company’s Ultra-Low Energy Design technology will also reduce steam consumption by 35% and cooling water usage by 16%.

“We are proud to contribute with our solutions to support the growing demand for fertilizers in Egypt,” said Alessandro Bernini, CEO of Maire Tecnimont. “This award further consolidates our global leadership in urea technology licensing and demonstrates the reliability of our value proposition in this segment.”                

Stamicarbon will also design and license a new urea granulation unit with a capacity of 2,250 mt/d using advanced fluidized bed urea granulation technology for high-quality output.

ProGro BIO’s Rhizol Gets OMRI Certification

News Briefs, U.S.

ProGro BIO, an Agtech microbial sciences company based in Atlanta, Ga., announced on Sept. 18 that it has been granted Organic Materials Review Institute (OMRI) certification for its Rhizol organic soil inoculant.

“Achieving OMRI certification for Rhizol is a significant milestone for ProGro BIO,” said  Barry Roberts, the company’s Chief Operating Officer. “Rhizol has delivered impressive results in the field and the addition of the OMRI organic certification is further evidence of our commitment to the principles of regenerative agriculture, which is a linchpin in our company’s mission.”

Rhizol was fully commercialized by ProGro in 2023 and is formulated with 35 plant-beneficial microbial isolates. The product is available in fully soluble powder form and in a microbial-infused planter talc. ProGro said the Rhizol product line rejuvenates soils, enhancing crop performance and producing greater crop yields.

Ammonia

Ammonia, Eastern Cornbelt, India, Market Watch, Middle East, Northwestern Europe, South Central, South Korea, Southeast Asia, Southern Plains, Tampa, U.S. Gulf, Western Cornbelt

US Gulf/Tampa:

Tampa ammonia remained at September’s $530/mt CFR level, with no news reported for October. Nutrien on Sept. 19 confirmed the sale of approximately 15,000 mt of ammonia from Trinidad to Spain at $590/mt CFR, with delivery scheduled for early October.

Eastern Cornbelt:

Ammonia prices remained at $545-$575/st FOB terminals in the Eastern Cornbelt, depending on location and producer. While some sources said CF had pulled all offers on Sept. 19 in anticipation of a price increase, others said offers were still on the table at previous levels late in the week.

Western Cornbelt:

Ammonia was unchanged at $545-$570/st FOB in the Western Cornbelt, depending on location.

Southern Plains:

The ammonia market was quoted at $500-$525/st FOB terminals in Oklahoma and Kansas, with the low reported at Verdigris and Woodward, Okla., and the high at Coffeyville, Kan.

South Central:

Sources continued to report no ammonia offers for truck tons from El Dorado, Ark., Midway, Tenn., or Cherokee, Ala., in mid-September. The truck market out of Gulf Coast production points was quoted at the $480/st FOB level.

Northwest Europe:

An Algerian sale at $550/mt FOB late last week pushed delivered ammonia prices in Northwest Europe to a high of $595/mt CFR, moving the regional market to $560-$595/mt CFR from the prior $550-$560/mt range. Tight availability, stable natural gas prices, and upcoming seasonal downstream demand appear supportive of the higher levels.

India: 

Public spot purchases have been put largely aside in India as international prices continue to rise. Ammonia imports now appear to be limited to long-term formula-based contracts and quiet purchases of Iranian material. Sources said both methods provide product at much lower prices than possible in the current international market.

Middle East: 

Sources confirmed a deal from SABIC out of the Arab Gulf to Trammo at $430/mt FOB. While some traders expected a price increase in the region, a jump of this magnitude was seen as too much, too soon. Some speculated the move could represent a hedge made in anticipation of rising prices in Northwest Europe.

Southeast Asia:

No new spot activity was reported in Indonesia and Malaysia this week, leaving the Southeast Asia ammonia market unchanged at $360-$380/mt FOB. The lack of regional interest was evidenced by a reported sale of Indonesian material by Mitsubishi to Koch for delivery to Mexico, one trader noted.

The Ma’aden turnaround has tightened supply, however, resulting in higher indications of $370-$400/mt FOB for the next transactions. A small deal for Indonesian product was reported going to China at $460/mt CFR, a price some traders saw as too high for the current market.

South Korea:

January-August ammonia imports to South Korean totaled 806,000 mt, Trade Data Monitor reported, a 10% increase from the year-ago 733,000 mt. Indonesia shipped 375,000 mt, followed by Saudi Arabia with 308,000 mt. August imports were pegged at 92,000 mt, up 10% from the 83,000 mt received in August 2023.

Urea

Argentina, Black Sea, Brazil, China, Eastern Cornbelt, Egypt, ethiopia, India, Indonesia, Market Watch, Mediterranean, Middle East, South Central, South Korea, Southeast, Southeast Asia, Southern Plains, U.S. Gulf, Urea, Western Cornbelt

US Gulf:

The NOLA urea market widened to $308-$323/st FOB for confirmed business during the week, compared with last week’s $311-$322/st FOB. September trades were quoted at $318-$323/st FOB, with October business reported at the $308-$318/st FOB level.

Eastern Cornbelt:

Urea was steady at $350-$370/st FOB in the Eastern Cornbelt, with the low reported out of spot Illinois River terminals. The Cincinnati, Ohio, market was unchanged at $360-$365/st FOB in mid-September.

Western Cornbelt:

Urea firmed to $350-$370/st FOB in the Western Cornbelt, with the St. Louis, Mo., market reported at the $355-$365/st FOB level at mid-month.

Southern Plains:

Urea pricing edged up to $360-$380/st FOB in the Southern Plains, with the Catoosa/Inola, Okla., market pegged at the upper end of the range.

South Central:

Urea was reported at $355-$380/st FOB in the South Central region, up from a high of $370/st last week, with the low reported at Convent, La., and the high at Little Rock, Ark. The Memphis, Tenn., market was pegged at $365-$375/st FOB at mid-month.

Southeast:

Urea prices were up $5/st at port terminals in the Southeast, to $365-$375/st FOB in mid-September.

India: 

Rashtriya Chemicals and Fertilizers Ltd. (RCF) on Sept. 19 called a urea tender to close on Oct. 3 with a shipping deadline of Nov. 20. Rumors began circulating this week of a new pending urea tender. The market first expected the tender to be called in early October. As the week progressed, however, a handful of traders speculated the call could come as early as this week.

The tender call came as domestic urea offtake projections shifted from steady to aggressive. Sources looked at the country’s current urea reserves of roughly 6 million mt and the urea on order from long-term contracts and the recent Aug. 29 National Fertilizers Ltd. (NFL) tender. They then compared that tonnage against the estimated demand and saw that India could fall as much as 1.5 million mt short of urea for the upcoming Rabi season. More product would have to be purchased quickly to fill the estimated shortfall.

So far, vessels have been nominated for only about 400,000 mt of the 1.17 million mt awarded by NFL, one trader noted. The remaining material still needs to be secured, but prices are moving beyond the NFL tender price.

Prices in the Arab Gulf have reportedly jumped $10-$20/mt since the previous tender was awarded. The increase will impact traders who were looking to buy October tons to fulfill their awards in the NFL tender. With sources speculating that RCF may attempt to buy more than 1 million mt, a higher price could prompt the Indian treasury to encourage RCF to take the bare minimum and refrain from a larger purchase.

The Indian government has already reassessed the country’s subsidy needs for the upcoming application season. The government will increase the amount available for urea subsidies by 10%, local media reported, to $14 billion.

Black Sea:     

Prices edged up to $300-$305/mt FOB for prilled urea in the Black Sea region.

Mediterranean:

France continued to see granular urea activity $375/mt CFR this week. Offers in Spain climbed to $390/mt CFR to reflect the latest Egyptian FOB values, but there were no takers at that level, leaving the regional market unchanged at $360-$375/mt CFR.

The latest tender news from India has triggered upward pressure in the market, however, and is likely to move prices higher once the inland wholesale markets in France and Spain begin accepting higher offers.

Delivered prilled urea prices in the Mediterranean were quoted lower at $320-$340/mt FOB on reports of offers in the Black Sea following the Indian tender award, which reflects around $290/mt FOB Black Sea.

Southeast Asia:

As many as three urea cargoes from the Southeast Asia region are reportedly committed for India following the NFL urea tender, yielding netbacks of around $320/mt FOB, down from last week’s low of $330/mt FOB. No further updates on Indonesian granular exports were reported, resulting in an unchanged high of $366/mt FOB.

BFI/Brunei is said to have one cargo of 35,000-40,000 mt available for sale in late October. Petronas, in Malaysia, is reportedly sold out through October and possibly into early November.

Activity has been muted on the buy side, with a small volume secured via tender in the Philippines netting back to around $330-$335/mt FOB and falling within the existing range.

Indonesia:     

Pupuk Holdings closed a quick tender on Sept. 19 for 30,000-45,000 mt of granular urea for October shipment. Initial reports put pricing in the mid-$350s/mt FOB, though confirmation of the price and awards is expected next week.

In the past, the tons offered in Indonesian tenders have marked an entry point for further discussions. Pupuk will most likely go into private talks with bidding companies for additional sales. The last granular tender was for a similar amount to the current offer, but ultimately generated sales totaling approximately 200,000 mt over a roughly two-month period.

Pupuk’s last granular tender settled at $366/mt FOB. Sources have recently discussed prices in Southeast Asia in the $330s/mt FOB. While Indonesian product typically carries a premium over tons from Malaysia or Brunei, a $20/mt gap is unusual. If Pupuk does settle in the mid-$350s/mt FOB, other prices in the region should expect to see a bounce.

The tender marks the return of Pupuk to the granular export market after a longer-than-usual break. Sources attributed the delay to a number of factors. Severe weather initially delayed the loading of product sold in June. Only in the past few weeks was the last of that tonnage finally loaded and shipped. At the same time, sources reported that disputes between Pupuk officials and the new leadership in government ministries caused additional delays in selling product offshore.

Government officials were overly anxious to ensure a domestic supply of urea beyond normal demands, said one trader. The political leadership has changed, however, and Pupuk has now been allowed to prepare the paperwork for a tender.

A July prilled tender left the market at $381/mt FOB, and Pupuk reportedly sold a small 5,000 mt lot to a Philippines buyer at that price this week. Prilled urea has been trading at a premium to granular in the Southeast Asia region due to the absence of Chinese product.

South Korea:

South Korea has been working to reduce its dependency on Chinese urea. According to the latest figures from Trade Data Monitor, the efforts are beginning to pay off.

Urea imports firmed 17% in January-August, to 492,000 mt from the 460,000 mt received in the same period of 2023. Vietnam led suppliers with 121,000 mt, up from 33,000 mt last year. Qatar sent 115,000 mt and China shipped 93,000 mt, off from 203,000 mt purchased through the same period of 2023. August imports of 72,000 mt were up 81% from the 40,000 mt received in August 2023.

Middle East: 

Sources discussed deals at $340/mt FOB during the week. By the end of the week, however, reports surfaced of a late-October sale of granular urea at $350/mt FOB. Prior to that, sources were putting the market at $335-$345/mt FOB.

Until the end of the week, producers seemed content with pricing centered around the $340/mt FOB level. However, noted one source, the RCF urea tender call appears to have jump-started the market. The new price range of $335-$350/mt FOB represents an increase of $10-$20/mt from the netbacks earned in the last Indian tender.

Thanks both to the NFL tender and long-term contract sales, Arab Gulf producers are reportedly in a comfortable position. Claiming to be sold out through October, some are only willing to discuss deals for November.

The higher prices and growing supply tightness are expected to cause some concern for traders who have not yet secured October product as part of their NFL awards. While many have already cut deals at the tender-related price in the $320s/mt FOB, others will have to deal with the rising market.

Only about 400,000 mt of the 1.17 million mt awarded in the NFL tender has been booked to vessels to date, sources said. The remaining tonnage still needs to be secured and shipped, all at a time of rising prices.

Egypt:

The week closed with Egypt urea prices moving up $5-7/mt from last week’s levels. Helwan sold several lots of granular urea totaling 20,000 mt at $365/mt FOB, followed by MOPCO selling 10,000 mt at $367/mt FOB. All of the sales were for October shipment to buyers in Europe.

China:

Sources reported further urea price softening at factories in China. There appears to be no softening of the central government’s policy on restricting urea exports, however.

Ethiopia:       

The Ethiopian Agricultural Businesses Corp. (EABC) tender for 250,000 mt closed on Sept. 17. The EABC called for offers to ship in five equal lots from late September through mid-November.

The lowest offer was from Pacific International at $355/mt CFR for the first lot, about $8/mt down from the July EABC tender.

Offering Company Price ($/mt CIF)
Lot 1 Lot 2 Lot 3 Lot 4 Lot 5
Pacific International 355.00 359.00 368.00 373.00 375.00
West Trade 375.00 378.00 380.00 385.00 382.00
ETG 418.00 419.00 435.00 422.00  

Samsung submitted offers on an FOB basis. The company’s offers for Lot 1 at $352/mt FOB and Lot 5 at $362/mt FOB were expected to be sourced from the Middle East, and a Lot 3 offer of $375/mt FOB was slated to come from Egypt. Midgulf also reportedly offered Egyptian tons – for Lot 5 only ­– at $410/mt FOB.

It appears as though Pacific International and West Trade each offered material from Oman. The single offer from Midgulf and one of the four offers from ETG were for Egyptian product. Nigerian suppliers appear to have backed the remaining offers from ETG.

Brazil:

Granular urea prices softened to $350-$360/mt CFR in Brazil. Early-week prices noted toward the lower end of the range firmed to $356-$358/mt CFR as rumors of a new India tender circulated. Prices reached $360/mt CFR when the tender was called, causing some sellers to exit the market.

The domestic market was stable at $480-$500/mt FOB Rondonópolis. Growers remain focused on planting for the summer crop, pushing nitrogen demand closer to the season’s typical fourth-quarter peak.

While the import lineup shows approximately 700,000 mt due to unload in September, port congestion may force some carryover into October, sources said.

Argentina:

The Argentina urea market remained at a standstill during the week, with prices holding at $370-$375/mt CFR.

UAN

Eastern Cornbelt, France, Market Watch, South Central, Southeast, Southern Plains, U.S. Gulf, UAN, Western Cornbelt

US Gulf:

The latest UAN barge indications continued in the $202-$205/st ($6.31-$6.41/unit) FOB NOLA range, though no actual trades were confirmed during the week. An increase in terminal prices from CF on Sept. 19 may push the next NOLA business higher.

Eastern Cornbelt:

UAN-32 was steady at $235-$265/st ($7.34-$8.28/unit) FOB in the Eastern Cornbelt for most of the week, depending on location. Sources said CF raised prices $2-$5/st on Sept. 19, however, pushing terminal levels to $245/st ($7.66/unit) FOB Mount Vernon, Ind., $250/st ($7.81/unit) FOB Cincinnati, $248-$255/st ($7.75-$7.97/unit) FOB in Illinois, and up to $278-$280/st ($8.69-$8.75/unit) FOB in Michigan.

Western Cornbelt:

UAN-32 was unchanged at $240-$260/st ($7.50-$8.13/unit) FOB in the Western Cornbelt, depending on location. The St. Louis market reportedly firmed to $250-$255/st ($7.81-$7.97/unit) FOB during the week, up $5/st from last report, with the lower end of the range reflecting CF’s updated reference price on Sept. 19.

Southern Plains:

The UAN-32 market was quoted at $225-$250/st ($7.03-$7.81/unit) FOB in the Southern Plains, with the low reported in Oklahoma and the high in Texas.

South Central:

UAN-32 was pegged at $225-$245/st ($7.03-$7.66/unit) FOB terminals in the South Central region, with the low reported in Louisiana and the high out of Ohio River terminals in Kentucky.

Southeast:

The UAN-32 market remained at $235-$250/st ($7.34-$7.81/unit) FOB in the Southeast, with the low confirmed out of port terminals and the high at inland terminals in Georgia.

France:

No updates were reported for UAN at Rouen, with demand unlikely to pick up in earnest until October. As a result, prices were unchanged at €240-€250/mt FCA.