India’s Gujarat State Fertilisers and Chemicals Ltd. (GSFC) on Aug. 23 told CNBC that it expects a 15-20% increase in fertilizer volumes. The company said its fourth ammonium sulfate plant, which will have a capacity of 132,000 mt/y, should start up in December.
In 2024, GSFC said three new plants will come up, including its fifth sulfuric acid plant, a solar power plant, and a facility to produce HX crystal. A revamped urea plant is expected to come online in 2025.
Polish fertilizer and chemicals group Grupa Azoty SA reported on Aug. 17 that it has signed a new distribution agreement with Münster, Germany-based COMPO Expert GmbH, an international manufacturer of foliar and specialty fertilizers. COMPO Expert has been owned by the Polish group since November 2018 (GM Nov. 30, 2018).
Under the new deal, the Grupa Azoty fertilizer products distributed by COMPO Expert will be “significantly expanded,” and the product portfolio will include all nitrogen and compound fertilizers, the Polish group said. According to Azoty, the contract is open-ended, with the distribution schedule set from Oct. 1, 2023, to Dec. 31, 2024.
“The strong international position of COMPO Expert led us to decide to increase the scale of our cooperation on foreign markets,” said Tomasz Hinc, Grupa Azoty President of the Management Board. “I am convinced that the extensive COMPO Expert distribution network will allow Grupa Azoty to effectively expand into new markets.”
As part of the extended agreement, Hinc said COMPO Expert will market Grupa Azoty’s products internationally via its extensive sales network, comprising offices in 22 countries and operations spanning 100 countries, primarily in Europe but also in South and North America, Africa, and Asia.
The agreement also outlines joint marketing efforts for fertilizer sales and the promotion of the Grupa Azoty brand.
Poland’s Grupa Azoty SA is investing in a new concentrated ammonium nitrate (AN) solution plant at its Tarnów production site.
The group reported on Aug. 21 that it has signed a contract with German technology provider Thyssenkrupp Uhde GmbH for the preparation of licensing documentation and the supply of all process equipment for the unit. The start of construction is scheduled for the late first quarter/early second quarter of 2024, with completion due in the fourth quarter of 2025.
The new facility, referred to as a neutralization plant, will replace an older unit and will have production capacity of 1,500 mt/d of concentrated ammonium nitrate solution (100% equivalent) with a concentration of 86-94%, according to Azoty’s statement.
Azoty said the new plant will enhance production efficiency by helping to reduce energy consumption in the fertilizer production process by more than 250,000 gigajoules per year. The new unit will also bring environmental benefits, lowering the amount of wastewater generated in the production process.
The European Commission on Aug. 17 announced the adoption of reporting rules for importers of products under the Carbon Border Adjustment Mechanism (CBAM), the EU’s new carbon tax on imported goods aimed at equalizing the carbon price paid by European producers with those outside the European Union (EU).
The new rules will require companies to begin collecting data on the embedded emissions of imported products in October of this year, with reporting beginning by the end of January 2024, and will apply through the transitional phase of CBAM, which runs until the end of 2025. After which, companies are liable to pay carbon tax.
The main purpose of CBAM, adopted by the EU earlier his year (GM April 28, p. 30), is to avoid “carbon leakage,” a situation in which companies move production of emissions intensive goods to countries with less stringent environmental and climate policies.
The CBAM measures under the initial scope of the legislation will apply to the fertilizer, cement, iron and steel, aluminium, electric energy production, and hydrogen sectors, as well as some precursors and a limited number of downstream products.
The EU Commission also published guidance on Aug. 17 to help importers and third-country producers to implement the new rules, and noted that dedicated IT tools to help importers perform and report the required calculations are currently being developed, along with training materials, webinars, and tutorials.
CBAM is one of the key pieces of legislation that form the main thrust of the EU’s flagship “Fit for 55” climate policy package, which aims to cut 2030 greenhouse gas emissions by 55% from 1990 levels.
JSC National Transport Co.’s (NTC) new fertilizer transshipment terminal under construction in the Russian Baltic Sea port of Ust-Luga has been approved to also handle liquid fertilizers.
NTC is a joint-venture company established by EuroChem Group AG and Siberian Coal Energy Co. (SUEK) at the end of 2020 (GM Jan. 22, 2021). The company’s CEO since May 2021 has been Russian billionaire Andrey Melnichenko, founder of both EuroChem and SUEK.
Russian Prime Minister Mikhail Mishustin approved amendments to the country’s territorial planning scheme, which allowed the construction of the terminal with a design capacity of 8 million mt/y, up from the original 7 million mt/y, Interfax reported on Aug. 22. The additional 1 million mt/y will be for handling the transshipment of liquid fertilizers.
Russia currently has no terminals for the transshipment of liquid fertilizers, requiring shipments to be directed through the Estonian port of Sillamäe. According to earlier reports, NTC was targeting the completion of the first phase of operations at the new terminal in 2024, but it is not clear if this schedule remains on track.
NTC has more than 47,000 cargo railcars and six Russian marine dry bulk terminals under its control, including two terminals in the port of Murmansk and one in Tuapse. SUEK purchased the Tuapse dry bulk terminal and one of the Murmansk terminals from EuroСhem three years ago for a reported $274 million.
Russian mineral fertilizer production increased 16% year-over-year in July, to 2.1 million mt of active ingredient, Interfax reported, citing the Russian Federal State Statistics Service (Rosstat). Compared with June, output grew by 1.6%.
Potash fertilizer production in July rose 50% year-over-year and 8% from June, to 0.8 million mt of active ingredient. Phosphate fertilizer production was up 0.9% year-over-year, to 0.4 million mt, and increased 5% compared with June 2023. Nitrogen fertilizer output for July totaled 960,000 tonnes, up 2% year-over-year but down 4% from June.
Russia produced 14.53 million mt (active ingredient) of fertilizers in the first seven months of the year, up 2% from last year. Potash output for the period fell 0.6% year-over-year, to 4.6 million mt, while phosphate fertilizer production rose 1%, to 2.6 million mt.
Nitrogen fertilizer output in the first seven months rose nearly 5%, to 7.3 million mt. Ammonia production fell nearly 2% year-over-year, however, to 9.9 million mt.
UK police are treating the death of a man who was sprayed in the face with suspected ammonia as murder. The 26-year-old man, Andy Foster, died in the hospital after the assault in Gateshead in northeast England, which happened shortly after 11 pm on Aug. 20, ITV Tyne Tees reported.
According to the report, the victim was sprayed after he opened the door to two men. A 26-year-old man was arrested on suspicion of wounding with intent to cause grievous bodily harm, but has since been released pending further inquiries. Officers in the investigation believe those involved were known to each other.
US Gulf/Tampa:
No news was reported on the Tampa ammonia price for September. Expectations are centered on an increase from August’s $295/mt CFR, with some players speculating the market could move up $40-$50/mt.
Eastern Cornbelt:
Ammonia was quoted in the $500-$525/st FOB range in Illinois and Indiana, depending on location, with no pricing or availability reported at Lima, Ohio, during the week.
Western Cornbelt:
Ammonia remained at $500-$525/st FOB in the Western Cornbelt, with the low reported in Nebraska and the high in Missouri. Recent offers in the Southern Plains included $475/st FOB Enid, Okla.
Northern Plains:
Ammonia was quoted firmly at the $500/st FOB level in the Northern Plains, with no current delivered pricing reported in late August.
India:
FACT has re-entered the market, calling a tender with mid-September delivery set to close at the end of the month. The market’s current spot tightness will make it difficult to estimate prices in the tender, sources said.
For now, the spot market continues to show prices in the low-$380s/mt CFR. With levels moving up in the Arab Gulf and Europe, however, increases in India are expected. The bulk of the business at India is done by long-term contract, at prices significantly lower than spot.
Two vessels of Iranian material will help the Indian ammonia supply. The Romeo Gas was scheduled to arrive in Kandla from Sohar, Oman, on Aug. 23. Another ship, the Fortune Gas, also out of Sohar, is carrying 20,000 mt of ammonia for Goa and Paradip.
Sources noted steady reports of Iranian ammonia going into India. However, the official Indian import figures, as reported by Trade Data Monitor, show no imports from Iran in 2022 or 2023. Traders said the vessels usually stop at a third country, where new paperwork is prepared to indicate a different point of origin.
The Iranian cargoes arriving in August helped to ease pressure on the market. Product expected from Saudi Arabia was delayed due to production issues at Ma’aden, sources said, although the problems have now reportedly been corrected.
January-June ammonia imports firmed to 1.3 million mt, Trade Data Monitor reported, increasing from the year-ago 1 million mt. Saudi Arabia led importers with 548,000 mt, followed by Bahrain with 200,000 mt.
June imports were up 53%, to 307,000 mt from 201,000 mt in June 2022. Imports for the second quarter were 669,000 mt, up 52% from the 160,000 mt logged in April-June 2022.
Middle East:
Nutrien has reportedly bought 20,000 mt from Ma’aden at $400/mt FOB, an $80/mt jump from the Arab Gulf’s last-done spot deal. Sources reported scratching their heads at the deal, which has significantly raised prices in the region.
Market players are trying to figure out where the ammonia will go. A $400/mt FOB price would push up both Northwest Europe and Morocco by about $150/mt, to over $500/mt CFR, or even higher if the ammonia is heading for the US.
At the same time, market players are looking at the late-September loading date with curiosity, claiming that such an arrangement does not sound like a normal spot deal.
Northwest Europe:
Gas prices are on a rollercoaster, sources said. The production cost in Europe is now estimated at $400/mt ex-plant. Sellers were reportedly discussing deals at $450/mt CFR before the Nutrien deal with Ma’aden, which could ultimately push prices to $500/mt CFR. For now, however, the estimated price remains at $400-$450/mt CFR.
Traders said the higher prices do not make sense at this time. Demand is soft, with buyers taking tons on a hand-to-mouth basis, while earlier efforts to push up the price based on European production costs were countered with lower-priced imports. Price increases related to both the Nutrien deal and efforts by sellers to lift the market appeared to dominate current discussions, despite the market’s ongoing weak demand conditions.
China:
Chinese ammonia imports and exports increased during the first seven months of the year. Trade Data Monitor reported exports at 144,000 mt, up from the 28,000 mt shipped in January-July 2022. January-July ammonia imports firmed to 449,000 mt, up from 155,000 mt in the same period last year.
July exports softened to 9,000 mt, down from 11,000 mt in July 2022. Sources attributed the reduction to softer prices in Southeast Asia, making offshore sales uneconomical. July imports firmed significantly, however, to 59,000 mt from 10,000 mt received in July 2022. Indonesia led July suppliers with 29,000 mt, followed by Saudi Arabia with 20,000 mt.
South Korea:
Imports into South Korea mirrored the soft demand reported from the region. According to Trade Data Monitor, January-July imports stood at 649,000 mt, a 23% decline from 846,000 mt in the prior-year period. July imports were 91,000 mt, a 39% decrease from 148,000 mt received in July 2022.
Bulgaria:
Neochim resumed operations at its ammonia unit at Dimitrovgrad in south-central Bulgaria on Aug. 20 after a two-week shutdown, the producer said in a bourse filing cited by SeeNews.
Earlier this month, Neochim reported it had halted ammonia production “after storing the necessary quantities of ammonia for the operation of installations technologically connected to the ammonia unit.” Neochim has capacity to produce 0.45 million mt/y of ammonia and 0.63 million mt/y of ammonium nitrate at its Dimitrovgrad site.
US Gulf:
NOLA urea remained under pressure, with the market falling to $335-$360/st FOB, depending on time of shipment, down from last week’s $350-$370/st FOB range. The high was confirmed for August tons, with September trades ranging from $335-$350/st FOB during the week. October-November business fell in the $330-$342/st FOB range.
Eastern Cornbelt:
Fueled by softening NOLA barge values, urea pricing in the Eastern Cornbelt fell to $415-$430/st FOB, down from last week’s $430-$460/st FOB, with the low confirmed at Cincinnati, Ohio.
Western Cornbelt:
Urea prices slipped to $410-$430/st FOB in the Western Cornbelt, down from last week’s high of $450/st FOB, with the lower end of the range confirmed at St. Louis, Mo.
Northern Plains:
Urea dropped to $410-$430/st FOB St. Paul, Minn., with delivered tons remaining in a broad range at $485-$525/st in the Northern Plains.
Great Lakes:
Urea in late August was reported at $430-$478/st FOB in the Great Lakes region, down from recent pricing in the low-$500s/st, with the low reported in Wisconsin and the high confirmed out of spot Michigan terminals.
Northeast:
The latest urea offers in the Northeast slipped to $430/st FOB Fairless Hills, Pa., and $440/st FOB Baltimore, Md., down from the prior $460-$470/st FOB level.
Eastern Canada:
Urea was quoted at C$705-$770/mt FOB for the latest offers in Eastern Canada.
Black Sea:
Black Sea prilled urea came off $25/mt to $325-$335/mt FOB, in line with pricing attitudes in the global market.
India:
Urea tender award winners moved quickly to line up vessels to supply product from the Indian Potash Ltd. (IPL) tender. Twelve ships have been booked so far, sources said, accounting for about 600,000 mt.
Eight of the vessels will load about 400,000 mt from China, sources estimated, while another three ships will bring in about 150,000 mt from the Baltic. One Arab Gulf cargo has been booked so far.
India imported 2.9 million mt of urea in January-June, Trade Data Monitor reported, a 38% decrease from the year-ago 4.6 million mt. Oman led suppliers with 1 million mt, and China contributed 438,000 mt. Russia added 403,000 mt.
The tonnage from Oman included material shipped under India’s urea tenders so far this year, as well as the contract with OMIFCO, responsible for at least one urea cargo per month.
June imports were reported at 477,000 mt, a 37% decline from 751,000 mt received in June 2022. Russia sent 161,000 mt, China added 139,000 mt, and Oman shipped 136,000 mt. India received 1.2 million mt in 2Q, down 14% from 1.4 million mt recorded in April-June 2022.
Indonesia:
Pupuk Indonesia Holding Co. closed another selling tender on Aug. 23. Initial bids were reported at $360-$369/mt FOB for granular urea and in the low-$360s/mt FOB for prilled. The company offered 45,000 mt of granular material and 28,000 mt of prilled in the tender.
Following private talks with traders, a deal was reached for 30,000 mt of granular at $392/mt FOB, and at $377/mt FOB for all 28,000 mt of the prilled material. Sources said the granular is most likely bound for Australia, while the prilled cargo will probably be divided into small lots for shipment in the region.
The new price is lower than the $414/mt FOB reported last week from a publicized auction deal. The price declined even more sharply from a side deal done quietly after the previous tender, where 10,000-15,000 mt were reportedly sold at $416/mt FOB.
Sources said it is not unusual for Pupuk to negotiate additional sales based on its most recent tender, and further tonnage is expected to be sold following the latest deal. The price could end up pushing higher, sources said, depending on the intensity of demand.
Middle East:
Producers are focused on fulfilling orders related to the IPL tender. At the same time, buyers are not pushing for any spot business, knowing producers will try to push the price higher based on the large orders they must fill for India.
While the lack of spot deals was expected, sources noted that contract renewal talks are moving more slowly than in previous years. Producers seem to be in no hurry to conclude new contracts.
Offers from Iran softened $20/mt from last week, to $350/mt FOB, equal to the reserve price reported from a recent urea auction. A deal was reportedly cut at $350/mt FOB for 30,000 mt of granular, to be loaded in September. The downward price pressure was said to come from important buyers in Brazil and Turkey.
Egyptian producers remained quiet. The producers are likely happy to fulfil orders placed in July for August and September shipments, international sources said, rather than enter the market at a time when prices are facing downward pressure.
China:
Speculation in the domestic market raised prices so quickly that paper trading was temporarily halted, players said. Based on the domestic market, sources estimated the export price at $385/mt FOB, up $5-$10/mt from the last business, although no deals have been done at that level.
The main export activity is now centered on arranging export inspections for tonnage located at portside warehouses and factories. At the same time, traders are working to time the arrival of vessels to match their material’s anticipated export approval.
Eight vessels, totaling about 400,000 mt, have so far been nominated to pick up material from Chinese ports for the IPL tender, sources said, while about 800,000 mt is currently sitting in portside warehouses. Most of those tons are still awaiting export clearance from customs officials, however.
The Chinese government still appears to be allowing expedited inspections to move the tonnage out quickly, said international traders. Even if more tons become available for export, the threat remains of port congestion slowing the loading process. Recent storms have caused delays in port activities, leaving some vessels to wait almost a week before loading or unloading. There are hopes that fertilizer vessels will be granted priority to meet the Sept. 26 IPL tender loading deadline.
As the week closed, sources noted rumors that the government has reinstituted environmental checks on fertilizer production facilities. The action could force plants to reduce production to meet environmental standards. Similar actions taken a few years ago drastically reduced outputs, especially from older urea plants.
January-July urea exports reached 1.3 million mt, Trade Data Monitor reported,a 52% increase from the 875,000 mt shipped through the same period of 2022. China has diversified its markets, moving away from a reliance on large buyers such as India and a few regional customers. The top three buyers, India, South Korea, and Myanmar, combined to receive 42% of the exports, while the remaining 58% went to 80 different countries.
July exports were reported at 324,000 mt, rising from 151,000 mt shipped in July 2022.
South Korea:
Trade Data Monitor reported South Korea’s January-July imports at 420,000 mt, a 31% decline from the year-ago 610,000 mt. July imports stood at 21,000 mt, down 58% from 49,000 mt logged in July 2022.
Brazil:
Landed urea prices at Brazil softened to $370-$375/mt CFR from last week’s $380-$400/mt CFR, a roughly 4.5% decline. Sources noted a relatively inactive market, causing prices to drift lower. With plenty of offers reported in the market, however, buyers could wait a few weeks before stepping forward to make purchases.
Rondonopolis fell by $20/mt during the week, reflecting recent declines in the international markets. The week’s $500-$520/mt FOB ex-warehouse range could see further softening due to decreased purchasing from farmers. Barter ratios have been impacted by declining corn prices, which have fallen below the Chicago Board of Trade (CBOT) five-year average in recent weeks.
US Gulf:
The NOLA UAN barge market remained at $230-$235/st ($7.19-$7.34/unit) FOB, unchanged from last week.
Eastern Cornbelt:
The UAN-32 market in the Eastern Cornbelt remained at $275-$290/st ($8.59-$9.06/unit) FOB regional terminals for 4Q tons. Rail-DEL UAN-32 pricing in the region was pegged in the $295-$305/st ($9.22-$9.53/unit) range.
The latest UAN-28 offers were reported at $245-$253/st ($8.75-$9.06/unit) FOB Cincinnati and $261/st ($9.32/unit) FOB Burns Harbor, Ind.
Western Cornbelt:
UAN-32 was steady at $275-$290/st ($8.59-$9.06/unit) FOB in the Western Cornbelt, depending on location, with the low at St. Louis and the high in Iowa. Rail-DEL offers to Nebraska and Kansas were pegged in the $285-$300/st ($8.91-$9.38/unit) range.
Northern Plains:
The latest UAN-32 offers remained at the $291/st ($9.09/unit) level FOB Winona, Minn., while UAN-28 pricing in the North Dakota market was reported at $320-$330/st ($11.43-$11.79/unit) DEL from Canada.
Great Lakes:
The UAN-28 market was pegged at $265-$277/st ($9.46-$9.89/unit) FOB Michigan terminals, depending on location and time of shipment.
Northeast:
UAN-32 remained at $245-$265/st ($7.66-$8.28/unit) FOB Baltimore in late August. The market out of terminals in upstate New York dropped to $330/st ($10.31/unit) FOB, down from the $350/st ($10.94/unit) FOB level earlier in the month.
The latest Baltimore prices for 28-0-0-5S and 27-0-0-3S remained at $255/st FOB and $225/st FOB, respectively.
Eastern Canada:
UAN-28 remained at C$442-$560/mt (C$15.79-$20.00/unit) FOB in Eastern Canada, with the latest UAN-32 price pegged at the C$505/mt (C$15.78/unit) FOB level on a spot basis in Ontario.
