All posts by hlancey@bloomberg.net

Baltimore Crews to Use Explosives to Free Trapped Vessel; Permanent Channel Opening Expected End of May

Featured, U.S., UAN, Urea

Baltimore salvage crews intend to use explosives to free the cargo ship Dali from the wreckage of the collapsed Francis Scott Key Bridge in the Port of Baltimore, according to multiple media reports. The blast is intended to separate a massive chunk of the bridge’s truss currently resting on the bough of the ship.

Baltimore officials said they have targeted May 10 as the date to remove the truss, refloat the Dali, and open a 45-foot deep channel to ship traffic. A permanent 700-foot wide, 50-foot deep channel will be open by the end of May, officials added.

The Singapore-flagged Dali lost power and struck the bridge on March 26, killing six workers on the span and bringing a halt to marine traffic at the Port of Baltimore (GM March 29, p. 1). The body of the last missing worker was recovered this week, according to a May 7 statement from the Baltimore County Police Department.

Alexis Maxwell, Green Markets Director of Research, said Baltimore handles about one-third of the East Coast UAN trade. Fertilizer market sources have reported no UAN or urea availability at Baltimore since the collapse, though some were speculating this week that a UAN vessel may arrive at the port by the coming weekend, with a urea vessel arriving on May 21.

The Fertilizer Institute (TFI) in late March said the bridge collapse and Baltimore’s port closure would have a relatively limited impact on US fertilizer trade, with an average of just 1% of all US fertilizer imports coming through the Port of Baltimore over the last five years (GM April 5, p. 1).

Baltimore was the seventh most important port for imports of fertilizer from Russia in 2023, with imports of $33.5 million from that trade partner.Less than 1% of US fertilizer exports in 2023 left from Baltimore, TFI said.

A.P. Moller-Maersk was the shipping company that chartered the 984-foot-long Dali. Charles Van der Steene, President of Maersk North America, told local media that if the Baltimore channel is open by the end of May, Maersk vessels could start arriving at the Port of Baltimore by the end of May or early June.

IPP to Market BASF Production Assets in Germany

Ammonia, Featured, Germany, Methanol, U.S.

BASF and International Process Plants (IPP), a New Jersey-based marketer of plant sites and process equipment, announced on May 6 that they have entered into an agreement for IPP to market ammonia, methanol, and melamine plants located at BASF’s Verbund site in Ludwigshafen, Germany.

The agreement includes integrated production assets for ammonia (380,000 mt/y), methanol (165,000 mt/y), and melamine (51,000 mt/y), which IPP is offering for relocation and sale to qualified buyers. Financial terms of the deal were not disclosed.

“We are excited to add these world-class ammonia, methanol, and melamine plants to our portfolio of excellent plants for relocation. These facilities represent a significant opportunity for companies seeking to expand their production capacity with existing assets that operate at a high level of energy and raw material efficiency,” said Ronald Gale, IPP President.

“IPP is committed to finding a new home for these assets in a location with sufficient and economic gas supply or as part of a green ammonia or methanol project where they can continue to operate efficiently and productively,” Gale added.

The plants, which were in operation through 2023, have become available as BASF implements structural measures at its Ludwigshafen site to ensure competitiveness in the European market. BASF said it will continue to produce ammonia and methanol in other assets at Ludwigshafen. 

“BASF is partnering with IPP on the divestment of the idled ammonia, methanol, and melamine plants to ensure that these well-maintained assets are sustained for chemical production,” said Ruediger von Watzdorf, Senior Vice President Technology, BASF Monomers division. “The sale represents a more sustainable and economic approach to the deployment of these production units, and with a net benefit to the global process industry.”

IPP has offices in 14 countries. Its current holdings include 17 complete plant sites, 110 plants for relocation, and 15,000 equipment process systems and major pieces of equipment.

Nutrien 1Q Earnings Off 71%; Fertilizer Prices Down, Sales Volumes Up

Argentina, Australia, Brazil, Chile, Cornbelt, DAP/MAP, Earnings, Featured, Natural Gas, Nitrogen, Phosphate, Potash, U.S., UAN, Urea

Nutrien Ltd. reported a 71% drop in first-quarter net earnings, to $165 million on sales of $5.4 billion, compared to the year-ago $576 million and $6.12 billion, respectively. Nutrien cited primarily lower net fertilizer selling prices, partially offset by increased Retail earnings, higher fertilizer sales volumes, and lower natural gas costs. Gross margin was $1.54 billion, down from $1.91 billion, while adjusted EBITDA was off 26%, to $1.06 billion from $1.42 billion.

“We continued to see strong crop input demand, a normalization of product margins for our North American Retail business, and increased global potash shipments in the first quarter,” said President and CEO Ken Seitz. “Our results highlighted the capabilities of our flexible, low-cost production assets and downstream distribution network to efficiently supply our customers’ needs.”

Nutrien Retail guidance of $1.65-$1.85 billion in adjusted EBITDA reflects expectations for increased crop nutrient sales and margins in North America for the first half, the company said. It expects corn plantings of about 90 million acres and soybeans at 87 million, and said application rates have been strong, though wet weather has caused delays in the Cornbelt.

“We expect growth in Retail earnings and fertilizer sales volumes compared to the prior year and have maintained our 2024 guidance ranges,” Seitz said. “Our focus remains on strengthening our capability to serve growers and enhancing our core businesses to improve the quality of our earnings and free cash flow.”

In Brazil, Nutrien said safrinha corn acreage has exceeded expectations and it foresees improved soybean margins in the second half. Retail guidance assumes a full-year of earnings from retail assets in Argentina, Chile, and Uruguay, which Nutrien has up for sale (GM April 19, p. 1).

The company added that Australian conditions remain supportive for the upcoming growing season and that the Indian monsoon is projected to produce average to above-average precipitation, which supports yield potential and grower demand for inputs.

Nutrien said potash supply and demand has been relatively balanced, with strong demand in North America as channel inventories have been tight. It has maintained a 2024 full-year potash shipment forecast of 68-71 million mt.

Nutrien said the US nitrogen supply and demand balance remains relatively tight, particularly for ammonia and UAN, with net nitrogen imports down 21% on a fertilizer year basis compared to historical averages. The company said its 10.6-11.2 million mt 2024 annual sales volume guidance assumes higher operating rates at its North American and Trinidad plants, as well as growth in sales and upgraded products such as urea and UAN.

Nutrien said phosphate fertilizer prices remained firm through the first quarter due to strong demand in the Northern Hemisphere, supportive Indian DAP purchases, Chinese export restrictions, and production outages. However, it said prices have softened in the second quarter driven by lower seasonal demand.

Nutrien maintained its regular quarterly cash dividend at 54 cents per share.

Retail (millions)   1Q-241Q-23
Adjusted EBITDA  77(34) 
Gross Margin 747615
Total Sales  3,3083,422 
CN Sales 1,3091,335  
CN Margins 254141
CN Volume (000 mt) 2,3822,040
CN gross margin per mt106 69 
Potash (millions)  1Q-241Q-23 
Adjusted EBITDA 530676 
Gross Margin455 697
Total Sales813 1,002
Sales Volume (000 mt)3,4132,636
Avg ($/mt)238   380
Nitrogen (millions)  1Q-24 1Q-23
Adjusted EBITDA  464676
Gross Margin 307541
Total Sales 911  1,312
Sales Volume (000 mt)2,507 2,357
Avg ($/mt)326 500
Gas Costs ($/mmBtu)3.20 4.85
Phosphate (millions) 1Q-241Q-23
Adjusted EBITDA 121 137
Gross Margin 65 87
Total Sales 437514
Sales Volume (000 mt)  620548
Avg ($/mt) 689 814

Compass Posts 2Q Loss, Suspends Dividend, Cuts Jobs; Fertilizer Volumes Up 23%

Earnings, Featured, West Coast

Compass Minerals posted a net loss of $48 million, compared to year-ago loss of $21.6 million for the second quarter ending March 31, 2024.

“Our results this quarter, as well as our full-year outlook, were directly and meaningfully impacted by one of the mildest winters experienced in over 25 years and by obstacles to the advancement of our fire-retardant business (GM March 29, p. 29),” said President and CEO Edward C. Dowling Jr.

Dowling said Compass was announcing “a series of new and ongoing actions to address these challenges,” including the indefinite suspension of dividend payments, adoption of operational changes to enhance flexibility and right-size the company’s highway deicing inventory and production profile, and the advancement of SG&A cost saving measures, including a recent reduction in the company’s corporate workforce.

“These actions are in line with our previously announced focus on improving cash flow generation and returns on capital in the Salt and Plant Nutrition businesses, and accelerating debt reduction,” Dowling said. “While difficult decisions to make, each action was carefully considered and determined to be the best path forward to unlock the intrinsic value of our company amid a difficult landscape.”

The Board of Directors has decided not to declare dividends for the foreseeable future, which will free up about $25 million annually. The company will immediately begin to curb salt production levels at its Goderich mine, including the recent temporary layoff of approximately 22% of the mine’s represented workforce. The headcount at the company’s Overland Park headquarters has also recently been reduced.

Dowling told analysts that Goderich would run at a lower rate probably through much of next winter, but he held out hope that if it is a good winter for salt demand, some of the employees could return to work. He reiterated that the company does not have any plans right now to make it a permanent layoff.

Compass had a second-quarter operating loss of $45.8 million on revenue of $364 million, compared to year-ago operating earnings of $47.9 million and $411.1 million, respectively. Adjusted EBITDA was up 13%, to $87.3 million from the year-ago $77.4 million.

Compass recognized a quarterly loss on impairments of $106.6 million related primarily to writedowns of goodwill and intangible assets related to its Fortress North America fire retardant business ($55.6 million) and a goodwill impairment in the Plant Nutrition segment ($51 million). However, it recognized a non-cash gain of $24.3 million within other operating income related to the decline in the valuation of the contingent consideration liability associated with the Fortress acquisition.

Second-quarter sales volumes and revenues were up for the Plant Nutrition segment, though the $51 million impairment helped pull operating losses to $53.4 million, down from the year-ago loss of $700,000. Adjusted EBITDA was $6.9 million with sales of $50.1 million for the segment, compared to the year-ago $7.8 million and $47.7 million, respectively.

Plant Nutrition sales volumes were up 23%, to 74,000 st from 60,000 st as demand normalized in the company’s core West Coast markets following extraordinary prior-year weather events. Compass said the average segment sales price was down 15% year-over-year, to $680.24/st from $795.87/st, reflecting a rebalancing of global supply and demand for potassium-based fertilizers. Dowling told analysts that second-quarter fertilizer prices, however, increased 3% on a sequential basis after five quarters of price decreases.

Salt operating earnings were down at $66.4 million on sales of $310.4 million from the year-ago $73.1 million and $360.5 million, respectively. The average price was up at $89.55/st on volumes of 3.5 million st, compared with the year-ago $81.87/st and 4.4 million st, respectively.

Compass posted a six-month net loss of $123.1 million on revenue of $705.7 million, down from the year-ago loss of $21.9 million and $763.5 million, respectively. The operating loss was $101.1 million, compared to year-ago earnings of $75.8 million. Adjusted EBITDA was up at $146.7 million from $139.2 million.

Plant Nutrition reported a six-month operating loss of $55.7 million on sales of $99.8 million, down from the year-ago earnings of $10.3 million and $89.3 million, respectively. Adjusted EBITDA was $13 million, down from $27.1 million. Sales volumes were up 44% at 149,000 st from 105,000 st, while average prices declined to $670.22/st from $850.84/st.

Six-month Salt operating income was $116.9 million on sales of $584.7 million, down from the year-ago $120.2 million and $668.6 million, respectively. Adjusted EBITDA was almost level at $148.7 million versus the year-ago $149.9 million. The average price for the period was $92.50/st on volumes of 6.32 million st, up from the year-ago $84.37/st on 7.92 million st, respectively.

Going forward, Compass gave 2024 adjusted EBITDA guidance of $160-$191 million, down from $180-$245 million. Plant Nutrition adjusted EBITDA guidance was $15-$30 million, reflecting a $5 million cut to the top end. Year-to-date, the company said it has managed to maintain strong product pricing to alternative products, with sales volumes tracking toward the lower part of the provided range of 280,000-310,000 st. Revenue is seen as $170-$205 million.

Salt adjusted EBITDA guidance is $200-$210 million, down from $230-$270 million, with revenue of $900-$920 million, down from $1.03-$1.11 billion. Total salt volumes are now seen as 9.2-9.4 million st, down from the earlier 11.3-12.15 million st.

The Andersons 1Q Results Improve; Nutrient & Industrial Volumes Up 12%

Earnings, Featured

The Andersons reported net income attributable to the company of $5.6 million on revenues of $2.72 billion for the first quarter ending March 31, 2024, up from the year-ago loss of $14.8 million on revenues of $3.9 billion. Adjusted EBITDA was $51.2 million, down from $55.3 million.

“Overall, our first-quarter results were fairly comparable to last year’s first quarter,” said President and CEO Pat Bowe. “Renewables doubled our 2023 results on great operating performance in our ethanol plants. We had good improvement in Nutrient & Industrial’s agricultural product lines. Trade had a tough comparison against last year’s record first quarter but posted an above average Q1 result in generally quiet ag markets.”

The company’s Nutrients & Industrial (N&L) sector posted an adjusted pretax loss of $1.9 million on sales of $167.3 million, versus the year-ago loss of $10.4 million and $163.9 million, respectively. Adjusted EBITDA was $6.9 million, up from the year-ago negative $1.3 million.

While the quarter is seasonally slow for the N&L segment, the company said the majority of the improvement was driven by increased volumes and margins in core agricultural product lines. Total group volumes were up 12% with an overall increase in margins.

The company said N&L’s second-quarter outlook remains solid, despite delayed spring application in its core geographic areas due to wet and cold weather. The company expects strong demand on normalized fertilizer prices over the next several weeks if planting conditions improve.

“We are feeling some market sluggishness, with farmers reluctant to engage in this lower-price environment and softer global demand for US crops,” Bowe said. “We are also seeing a return of carry in the wheat markets and expect an increase in the wheat storage rates.”

Bowe noted The Andersons is actively pursuing opportunities for growth across its businesses, including the recent acquisition of Reed and Perrine, a bolt-on acquisition that will result in the geographic expansion of the company’s Turf business.

“We continue to manage a very robust pipeline with significant growth opportunities in each of our businesses,” he said. “With our well-positioned balance sheet, we have good capacity for growth.”

Plug Power, Allied Green Ammonia Ink MOU

Australia, Clean Ammonia, Green Ammonia, Low-Carbon, U.S.

New York-based Plug Power has signed a Memorandum of Understanding (MOU) with Australian-based Allied Green Ammonia for the supply of up to 3 GW electrolyzer capacity in support of a proposed green ammonia facility in Australia’s Northern Territory.

The supply of electrolyzers is set to begin in 2027 with the Final Investment Decision (FID) for the Basic Engineering and Design Package expected in 2025.

The planned facility on the Gove Peninsula is expected to produce 2,500 mt/d of green ammonia.  Allied Green Ammonia stated that the facility location is strategic given its proximity to Asia.  The Australian company previously put the investment required for the project at an estimated $8.5 billion (GM Sept. 29, 2023).

Hygenco, Tata Steel Partner on Green Ammonia

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

Hygenco Green Industries Pvt Ltd., an Indian company that develops green hydrogen and green ammonia assets., has entered an agreement with Tata Steel Special Economic Zone Ltd. (TSSEZL) for the development of a green ammonia plant at Gopalpur Industrial Park in Odisha, India, according to a May 3 company statement.

The facility will have an annual capacity of 1.1 million mt of green ammonia. Hygenco aims to commission the initial phase of the project by December 2026. Hygenco commissioned the Green Hydrogen project in Hisar earlier this year and is looking to invest $2.5 billion over three years to set up Green Hydrogen projects in India.

“Having already demonstrated our mettle in the space of Green Hydrogen by commissioning India’s first Green Hydrogen project earlier this year, we will extend application of our superior technology to this project, thereby producing the lowest cost Green Ammonia for our clients,” said Hygenco CEO Amit Bansal.

“In line with our strategic vision of being a dominant player in this sector worldwide, the product from this plant, in the initial phase, will be predominantly exported for which advanced discussions with various off takers are already taking place,” Bansal added.

“We are very happy to have Hygenco on board with us at the Industrial Park,” said Manikanta Naik, TSSEZL Managing Director. “This solidifies our Industrial Park as a potential green hydrogen/ammonia hub of the country.”

Ports Plan Namibian Hydrogen/Ammonia Facility

Ammonia, Clean Ammonia, Europe, Germany, Hydrogen, Low-Carbon

The Port of Antwerp Bruges and the Namibian Ports Authority are planning a €250 million hydrogen and ammonia storage and export facility at the Namibian Port of Walvis Bay. The facility will store and ship green hydrogen and ammonia produced by companies in the region, including Belgium’s Cie Maritime Belge.

The port will be equally owned by the Port of Antwerp and the Namibian Port Authority and is expected to be built within three to five years at a greenfield site near the existing port. The port will be used to refuel passing ships and export green ammonia to Belgium and other European locations.

An expanded port elsewhere in Namibia has recently come under criticism from local groups due to construction near protected areas. The expansion of a port in Shark Island, which is roughly 250 miles south of Walvis Bay, was proposed to export hydrogen by German-based Hyphen.  The location was once the location of a German-run concentration camp in the early 1900s and is considered sacred ground by the indigenous Nama ethnic group of Namibia.

Trafigura Orders Ammonia-Powered Vessels

Ammonia, Asia, Clean Ammonia, Low-Carbon, South Korea

Singapore-based Trafigura has signed a contract with HD Hyundai for four Medium Gas Carriers that will carry either LPG or ammonia and will be equipped with a dual-fuel, low-carbon ammonia engine. The vessels will be built at the HD Hyundai Mipo Dockyard located in Ulsan, South Korea. Delivery of the first vessel is expected in 2027.

HD Korea Shipbuilding has secured orders to construct 72 vessels totaling $8.75 billion so far in 2024 (GM March 22, 2024).

Tekfen, Enerjisa Sign MOU for Green Ammonia

Clean Ammonia, Green Ammonia, Low-Carbon, Turkey

Tekfen Holding A.Ş. and Enerjisa Enerji Üretim A.Ş., both based in Turkey, have signed a Memorandum of Understanding (MOU) to work on a joint investment plan for low-carbon green ammonia production, including collaborating on engineering and installation of the facility.

Tekfen is Turkey’s largest fertilizer producer and Enerjisa is a private sector electricity producer.  The CEO of Tekfen had stated that the facility will allow subsidiary Toros Agri to meet its own raw material needs while selling some of its production to domestic and foreign customers.