All posts by hlancey@bloomberg.net

Northern Nutrients Doubles Capacity

Canada, News, News Briefs, Nitrogen, Sulfur

Saskatoon-based Northern Nutrients Ltd. reported that in July it finished the installation of a second rotoformer allowing it to double its capacity from 28,000 mt/y to 56,000 mt/y for its Arctic S 11-0-0-75% Sulfur and its Triple Kick 38-0-0-17.5% Sulfur with Nitrogen Inhibitors.

The facility began production of Arctic, an enhanced sulfur urea fertilizer, in April 2022 and launched Triple Kick, the first nitrogen and sulfur source designed to limit volatilization and leaching, later that summer (GM Aug. 5, 2022; June 25, 2021).

Covestro Enters Open-Ended Talks with ADNOC

ADNOC - Abu Dhabi, Germany, News, News Briefs

German chemicals company Covestro AG confirmed on Sept. 8 that its Management Board has decided to begin open-ended discussions with Abu Dhabi National Oil Co. (ADNOC) about the state-backed energy group’s takeover bid of some €11.6 billion (approximately $12.4 billion).

The possibility that a deal between the two parties “will be reached is open and will depend on the course of the forthcoming discussions,” Covestro said in a statement.

Covestro’s confirmation follows weeks of speculation that the two companies could begin negotiations after ADNOC expressed interest in June. ADNOC indicated last month that it was willing to boost its informal offer to about €11.6 billion provided Covestro agreed to enter formal talks, according to a Bloomberg report at the time (GM Aug. 18, p. 29).

ADNOC is reported to be willing to fund about $8 billion in investments at Covestro after completing the deal, an offer that may help gain support from executives and labor officials, Bloomberg reported this week, citing unidentified people familiar with the matter.

“ADNOC might be an owner which might not restructure the group,” said Baader Helvea analyst Markus Mayer, as cited by a Dow Jones report. “The unions and the management will prefer it over other potential interested parties, in our view.”

Covestro produces precursors for polyurethane foams and high-performance plastic polycarbonate, as well as precursors for coatings, adhesives, sealants, and specialty products, including films.

ADNOC CEO Sultan Al Jaber is reportedly hunting for acquisitions that would enable the energy group to better compete with Saudi Aramco’s SABIC chemicals business, and to help develop its own downstream and renewable energy options.

Port Workers Hospitalized with Respiratory Issues

Jordan, News, News Briefs, Phosphate

Some 22 workers at Jordan’s Aqaba Company for Port Operation were hospitalized briefly with respiratory difficulties after inhaling dust particles in a recent incident at the port, according to a Sept. 12 report in Petra, the country’s state news agency.

Initial suspicions that ammonia gas was the cause were ruled out, according to Petra, citing the Director of the Environment Directorate in the Aqaba Special Economic Zone Authority (ASEZA).

The incident occurred in the southern industrial area of the port, primarily among ship workers, and was attributed to dust particles carried by extreme weather conditions and strong winds from Storm Daniel.

According to the ASEZA statement, operations in the industrial facilities at the port were temporarily suspended until weather conditions improve. Jordan Phosphate Mines Co. (JPMC) and Arab Potash Co. (APC) are the main users of the bulk handling facilities at Aqaba port.

Ammonia Tank Explosion Sparks Fire at Iran Plant

Ammonia, Iran, News, News Briefs

A large fire broke out following the explosion of an ammonia tank at a food production plant in an industrial park in Iran’s central Yazd province late on Sept. 12, the state news agency IRNA reported.

According to media reports, fire crews were still battling the blaze the following day. There were no reports of the number of possible casualties, or any indication of the possible cause of the explosion.

Van Iperen Reports Expansion

News, News Briefs, Nitric Acid, Nitrogen, Potassium Nitrate, The Netherlands

Dutch specialty fertilizer maker Van Iperen International on Sept. 8 announced plans to scale up its GreenSwitch Nitrate factory in the Netherlands.

The facility, located at the Agro Energie Hardenberg biogas factory, produces liquid potassium nitrate fertilizer. The company said the product has close to a zero carbon footprint and the process upcycles the nitrogen from manure into a crystal-clear nitrate fertilizer. GreenSwitch Original is a 2-0-7 formulation for high-tech greenhouse and open field fertigation.

Operations at the plant began in 2021 and Van Iperen expects the expansion to be completed in 2024. The company said the capacity will be increased by the installation of a second bioreactor from Pure Green Agriculture. With the new step, Van Iperen expects to broaden its sustainable offerings by starting to produce nitric acid.

Van Iperen said the expansion is supported by a Demonstration Energy and Climate Innovation (DEI+) subsidy, which is a program of the Dutch Ministry of Economic Affairs and Climate Policy.

Nestlé Trials Cocoa Shell-Based Fertilizer

Europe, News, News Briefs

Nestlé reported on Sept. 12 that it is in the midst of a pilot program at its UK confectionary site in York to determine if cocoa shells can be used to create a low-carbon fertilizer.

If the two-year trial is successful, the company said up to 7,000 mt of low-carbon fertilizer could be produced and offered to farmers in Nestlé’s UK wheat supply chain. It said this amount of fertilizer equates to around 25% of Nestlé’s UK’s total fertilizer use for wheat.

The cocoa shells are supplied by Cargill Inc., which processes the cocoa at the York facility to become key ingredients in products such as Kit Kat and Aero. A trial volume of cocoa shell has been processed and pelletized by Swindon-based CCm Technologies.

The trials are currently taking place on arable farms in Suffolk and Northamptonshire. Initial reports found no significant difference in fields fertilized by cocoa shell fertilizer and conventional fertilizer.

Ammonia

Ammonia, Eastern Cornbelt, Great Lakes, India, Indonesia, Market Watch, Middle East, Northern Plains, Northwestern Europe, Tampa, U.S. Exports, U.S. Gulf, U.S. Imports, Western Cornbelt

US Gulf/Tampa:

Another Tampa ammonia increase is expected for October, up from September’s $390/mt CFR, with sources citing firming inland and NOLA barge prices for nitrogen fertilizers, as well as continued strength in international markets. One industry contact speculated that the October hike will be “significant.”

Adding fuel to the fire, the NOLA ammonia barge market firmed to $500/st FOB based on a confirmed 5,000 st purchase.

US Imports:

The US Census Bureau reported ammonia imports of 158,358 st for July, the first month of the 2023-2034 fertilizer year, down 18.2% from the year-ago 193,611 st. Canada sent 94,038 st, Trinidad and Tobago shipped 56,891 st, and Argentina added 7,166 st.

US Exports:

July ammonia exports were 97,870 st, off 32.1% from 144,034 st in the previous July. Morocco was the top export destination with 28,222 st, followed by Spain with 15,554 st. Norway bought 15,157 st, ahead of 14,330 st to Brazil.

Eastern Cornbelt:

Ammonia continued to inch higher in the Eastern Cornbelt for limited offers at mid-month. New prices were pegged in a tight range at $650-$655/st FOB regional terminals for fall tons “if you can find it,” as one source reported. The high end of the range was quoted at Huntington, Ind.

Western Cornbelt:

Ammonia prices firmed to the $610-$650/st FOB range in the Western Cornbelt for the few reported offers in mid-September, up from last week’s $600-$625/st FOB range.

Northern Plains:

Ammonia prices were up in the Northern Plains, with the latest offers confirmed at $650/st FOB terminals in Minnesota and North Dakota. No current delivered pricing was reported in the region.

Great Lakes:

Ammonia pricing in the Great Lakes region covered a broad range in mid-September at $585-$655/st FOB, with the low reported by Michigan sources for tons from Courtright, Ont., and the high FOB Huntington, Ind.

India:

Sources reported the last offer into the FACT tender for 7,500 mt came in at $550/mt CFR. However, sources could not confirm that an award was made.

Traders had earlier speculated the price could be in the $500s/mt CFR for spot purchases, but the lack of any deal other than the FACT tender convinced some that the price was an outlier. Few were willing to accept that level as the actual spot market. However, a Fertiglobe sale to Ma’aden for delivery to Kandla came in at $510/mt CFR. This level is now generally accepted in the marketplace, giving more support to the $550/mt CFR offer to FACT.

Middle East:

Sources estimated the netback from the latest Indian business at $440-$450/mt FOB. The lack of previous spot deals out of the area has left posted prices well below what market players were discussing. This left many without guidance on where the spot market was moving. The presence of the sale into India helped clarify the situation.

Northwest Europe:

Sources reported a sale by Trammo to CF in the UK at $455/mt CFR. The sale was part of a series of discussions in the market pointing to higher prices. Reportedly some spot inquiries are circulating with expectations that prices will climb higher.

The Trammo deal and subsequent discussions now have ammonia prices significantly higher than the production cost, still around $400/mt ex-plant based on natural gas prices. The big question now is whether plants will step up production to take advantage of these higher prices.

Indonesia:     

January-July ammonia exports from Indonesia totaled 967,000 mt, Trade Data Monitor reported, down about 19% from the year-ago 1.2 million mt.

July exports were 131,000 mt, falling by nearly one-third from 194,000 mt in July 2022. Regional buyers dominated the month’s purchases, with South Korea taking 48,000 mt, followed by China with 39,000 mt. Taiwan and Vietnam received 16,000 mt each.

Urea

Black Sea, China, Eastern Cornbelt, India, Indonesia, Market Watch, Middle East, Northeast, Northern Plains, U.S. Exports, U.S. Gulf, U.S. Imports, Urea, Western Cornbelt

US Gulf:

NOLA urea barges dropped from last week’s $450/st FOB high, falling to $390-$408/st FOB, with the low reported for first-half October trades and the high for prompt, loaded tons. September business reportedly fell in the $400-$408/st FOB range during the week.

US Imports:

July urea imports softened 62.4% year-over-year, to 66,358 st from 176,578 st in July 2022. Imports from Canada totaled 30,760 st, Russia sent 25,215 st, and Algeria shipped 3,919 st.

US Exports:

July urea exports were noted at 73,109 st, down 75.8% from 301,655 st recorded one year earlier. Exports to Chile were 35,979 st, followed by 27,958 st to Mexico. Canada took 8,120 st.

Eastern Cornbelt:

Urea terminal prices were down slightly from last week as NOLA barge values softened. Sources quoted urea terminals in the $465-$480/st FOB range in the Eastern Cornbelt, with the low at Cincinnati, Ohio, and the high reported at Peru, Ill.

Western Cornbelt:

Urea slipped to $450-$470/st FOB in the Western Cornbelt, down from last week’s $460-$480/st FOB, with the low reported at St. Louis, Mo.

Northern Plains:

Urea prices fell to $450-$475/st FOB St. Paul, Minn., down from last week’s $480/st FOB peak. The market in North Dakota was quoted at $475-$500/st FOB terminals and $525-$550/st DEL in mid-September.

Great Lakes:

Urea prices were up in the Great Lakes region, fueled by last week’s spike in NOLA barge values. Sources quoted the terminal market at $510-$525/st FOB in the region for new offers, up from $470-$490/st FOB at last report.

Northeast:

Urea prices broadened to $440-$470/st FOB Baltimore, Md., depending on supplier, with the latest Fairless Hills, Pa., offers quoted at the $465/st FOB level for truck tons.

India: 

The Rashtriya Chemicals and Fertilizers Ltd. (RCF) tender closed on Sept. 15, with a shipping deadline of Nov. 14. Only the technical offers had been opened as Green Markets went to press. Sources reported offers from 18 companies totaling 3.62 million mt, the most tonnage presented in about three years.

Going into the tender, sources said RCF would be looking to buy 2 million mt to ensure sufficient supply through the calendar year. However, sources are now predicting the final take will be 710,000-715,000 mt.

In addition to the limits on exports from China, the urea market’s subsequent price increase following the tender call would argue for the buyer taking fewer tons, sources said. Predictions at the close of the tender put prices at $412-$420/mt CFR, up marginally from the $396-$399/mt CFR seen in the August Indian Potash Ltd. (IPL) tender.

Offering Company Quantity
ECI WCI Total
Ameropa 316,950 358,850 675,800
Swiss Singapore 200,000 300,000 500,000
Samsung 165,000 177,000 342,000
Midgulf 150,000 150,000 300,000
Coastal 135,000 135,000 270,000
Dreymoor 129,000 80,000 209,000
Aries 100,000 100,000 200,000
SABIC   200,000 200,000
Koch 93,200 93,200 186,400
EuroChem Trading 85,000 43,570 128,570
Overseas Oil and Gas   100,000 100,000
Compagnie Indo Francaise de Commerce 45,000 45,000 90,000
Fertcom 45,000 45,000 90,000
MacroSource 45,000 45,000 90,000
Sun International 90,000   90,000
Agri Commodities 26,000 26,000 52,000
OQ Trading   50,000 50,000
Keytrade   48,000 48,000
Total 1,625,150 1,996,620 3,621,770

Traders with awards from the IPL tender have gotten nervous over reports that China would limit urea exports. One trader noted that even if the inspection process in China picks up speed, there remains a problem getting vessels loaded on time due to port congestion.

In reaction to the potential for delays in China, sources said some of the traders appear to have made deals with Arab Gulf producers for tonnage to cover their awards if it looks as though shipping from China will drag beyond the Sept. 26 deadline. There is even talk of some traders declaring force majeure based on unforeseen actions by the Chinese government.

Black Sea:     

Urea prices dropped to $340-$360/mt FOB as the market waited for the RCF tender to close, as well as on reports that Russia will stop offering discounted fertilizers to India.

Indonesia:     

Pupuk Indonesia Holding Co. has gone quiet. Sources said the company will most likely come out with another selling tender next week, after the RCF/India tender numbers are made public.

The last sale out of Indonesia concluded in August at $367/mt FOB for granular urea. However, Petronas, in Malaysia, made a sale last week in the low-$400s/mt FOB. This level is seen as the basis for future Indonesian pricing ideas.

Urea exports were counted at 653,000 mt for January-July, according to Trade Data Monitor, a 37% decline from the 1 million mt shipped one year earlier. July exports were noted at 11,000 mt, all to a buyer in the Philippines, against 220,000 mt shipped in July 2022.

Middle East: 

Producers quoted urea prices in the $400s/mt FOB for September shipments and $450/mt FOB for October and November cargoes, sources said. Unconfirmed reports put a number of deals at $350-$400/mt FOB, while sources confirmed business at $360-$380/mt FOB this week.

Traders initially thought the deals were being made in preparation for the RCF tender. However, views then shifted to the idea that purchases were being made to cover awards issued by IPL. These new purchases are said to be replacing tons that were supposed to come from China. Between the export inspection process and congested ports, there is growing anxiety in the market that IPL-bound urea might not be loaded at China by the Sept. 26 deadline.

Egyptian producers remained quiet as the urea world prepared for the RCF tender, though sources said any pricing discussion had to begin where the market ended last week, at $455/mt FOB. Traders said there is no material available below that level, and $455/mt FOB will set the floor for talks next week.

Iranian producers boosted their pricing idea to $380/mt FOB for October shipments, above the $340s/mt FOB that producers discussed for September cargoes late last week. The lack of Chinese material in the global urea market has given producers the idea that they are under no pressure to lower prices.

China:

The week opened with concerns that urea already booked for the IPL tender might be held back, and that slow export inspections could cause problems in meeting the tender’s Sept. 26 shipping deadline. By the end of the week, however, both concerns were superseded by worries of port congestion causing a delay in shipment.

Traders earlier in the month said logistics would be the main concern, rather than export inspections. At the time, however, many were looking at the problem of getting the urea from the port to the docks in time, as well as potential delays in the berthing and loading of vessels. Now the spotlight is on getting ships into a port facility and loaded in time. Some traders have reportedly stepped away from their Chinese product in favor of purchases from other suppliers to ensure a timely shipment.

Sources now expect to see no more than 800,000 mt shipped out of China for the IPL tender, instead of the 1.1 million mt previously predicted.

Urea producers will reportedly be focused on ensuring plentiful stocks for the domestic market. Some exports will be allowed, but only in small lots. Sources said the 45,000-50,000 mt cargoes needed by India would not be permitted. Instead, the deals are expected to be much smaller, in the 4,000-8,000 mt range. One result of this policy, said one trader, is that these small shipments will set the export price instead of the larger, cheaper deals.

The process has already begun. Sources said a sale to Atlas in the Philippines for 6,000 mt of granular and 6,000 mt of prilled has shifted the export price. The granular deal reportedly settled in the high-$440s/mt CFR, for a netback to China of $410-$420/mt FOB. The prilled deal was done in the $430s/mt CFR, for a netback of $400-$405/mt FOB to China.

Brazil:

Imported urea prices fell to $415-$425/mt CFR in Brazil, a roughly 7.2% decline from the week-ago $450-$455/mt CFR. The market saw minimal activity as players await the results of the Indian tender on Sept. 15. Most offers were positioned at the higher end of the price range, while sanctioned product has transacted at $385/mt CFR.

No new urea negotiations for the corn safrinha season were reported at Rondonopolis, leaving the range unchanged at $540-$590/mt FOB ex-warehouse.

The prior increase in urea prices, combined with the devaluation of corn in the futures market, has left barter ratios unfavorable for farmers. As a result, buyers are expected to delay purchase decisions for corn production until the last minute.

UAN

Eastern Cornbelt, Great Lakes, Market Watch, Northeast, Northern Plains, U.S. Exports, U.S. Gulf, U.S. Imports, UAN, Western Cornbelt

US Gulf:

The NOLA barge market for UAN firmed to $250-$260/st ($7.81-$8.13/unit) FOB based on actual trades and firming upriver terminal prices, up from the prior $235/st FOB level. CF early in the week reportedly reposted the NOLA price at the $260/st FOB level for new business.

US Imports:

UAN imports lifted 185.0% in July, to 224,880 st from 78,918 st in the prior year. Russia sent 113,264 st, Trinidad added 71,815 st, and Canada sent 39,801 st.

US Exports:

UAN exports firmed 7.9% in July, to 167,667 st from the year-go 155,419 st. The US sent 90,388 st to France, ahead of 42,436 st to Australia. Mexico purchased 13,068 st, followed by Belgium with 13,068 st.

Eastern Cornbelt:

UAN-32 terminal prices from CF reportedly firmed $20/st during the week, with new levels quoted at $295/st ($9.22/unit) FOB Mount Vernon, Ind., and $300/st ($9.38/unit) FOB Cincinnati and Peru for 4Q tons. The latest UAN-28 offers for December shipment were reported at $274/st ($9.79/unit) FOB Cincinnati.

Western Cornbelt:

UAN-32 prices for December-January shipment moved up $20/st early in the week, to $295-$300/st ($9.22-$9.38/unit) FOB regional terminals in the Western Cornbelt, with the low reported at St. Louis and Port Neal, Iowa. Prices were also up in the Southern Plains, to $275/st ($8.59/unit) FOB Verdigris, Okla., and $280/st ($8.75/unit) FOB Woodward, Okla.

Northern Plains:

The latest UAN-32 offers firmed to $295-$310/st ($9.22-$9.69/unit) FOB in Minnesota for 4Q tons, while UAN-28 pricing in the North Dakota market was reported at $320-$330/st ($11.43-$11.79/unit) DEL.

Great Lakes:

The UAN-28 market was moving up in the Great Lakes region, with new pricing reported at $278-$291/st ($9.93-$10.39/unit) FOB Michigan terminals for September-December tons, depending on location.

Northeast:

The UAN-32 market tightened to $245-$250/st ($7.66-$7.81/unit) FOB Baltimore, with the high end of the range also quoted at Fairless Hills for November-December shipment. UAN-32 out of terminals in upstate New York remained at the $330/st ($10.31/unit) FOB level.

The latest Baltimore price for 28-0-0-5S and 27-0-0-3S were quoted at $255/st FOB and $245/st FOB, respectively.

Ammonium Nitrate

Ammonium Nitrate, Market Watch, Poland, U.S. Exports, U.S. Imports, Western Cornbelt

US Imports:

Ammonium nitrate imports rose 39.9% in July, to 23,936 st from the 17,114 st reported in July 2022. Canada topped the supplier list with 23,754 st. Vietnam sent 103 st, followed by China with 75 st.

US Exports:

July ammonium nitrate exports totaled 51,010 st, up 56.1% from the year-ago 32,686 st. Canada was the top destination with 35,451 st. Mexico received 15,499 st.

Western Cornbelt:

Ammonium nitrate was unchanged at $400-$420/st FOB for the last offers in Missouri.

Poland:

Grupa Azoty produced an estimated 251,000 mt of nitrogen fertilizers in August, up from 151,000 mt in July. In a Sept. 12 statement, the producer said the increase primarily reflected a “marked improvement in demand, especially when compared with the demand patterns from the first half of 2023.”