All posts by hlancey@bloomberg.net

AdvanSix Posts Loss on Operational Disruption

Ammonium Sulfate, Earnings, Sulfur

AdvanSix posted a first-quarter loss of $17.4 million on sales of $336.8 million, down from the year-ago net income of $35 million and $400.5 million, respectively, citing an operational disruption at its Frankford, Pa., manufacturing plant (GM Jan. 19, p. 1). Adjusted EBITDA was only $595,000 versus the year-ago $65.4 million.

“I would like to once again thank our customers, partners, and teammates for their collaboration throughout the first quarter to mitigate value chain impact as we navigated the operational disruption at our Frankford manufacturing site,” said President and CEO Erin Kane.

“The total unfavorable impact to pre-tax income in the first quarter was approximately $27 million comprised of the impact of lost sales and other additional costs, including purchases of replacement product and incremental plant spend,” she added. “We are currently operating at targeted utilization rates across our integrated value chain and are well positioned to serve our key customers, particularly in Plant Nutrients as the domestic planting season progresses and in our acetone portfolio amid a tight global supply and demand environment.”

AdvanSix said first-quarter market-based pricing was unfavorable by 9% compared to the prior year primarily reflecting reduced ammonium sulfate pricing amid lower raw material input costs and a more stable global nitrogen supply environment, as well as lower nylon pricing due to unfavorable supply and demand conditions. Sales volume decreased approximately 7% primarily driven by lost sales resulting from the first quarter operational disruption. Raw material pass-through pricing was approximately flat.

First-quarter ammonium sulfate sales were $85.3 million, representing 25% of total company sales, versus the year-ago $114.2 million, or 28%. AdvanSix expects second-quarter ammonium sulfate sequential pricing improvement amid continued sulfur demand growth and tight North American supply followed by the typical ammonium sulfate seasonal impact in the third quarter.

The company anticipates about a 70% ammonium sulfate granular conversion by the end of 2024 through its SUSTAIN (Sustainable US Sulfate to Accelerate Increased Nutrition) program.  SUSTAIN is a multi-year series of capital investments focused on the planned expansion of granular ammonium sulfate production.

“As we look forward into the second quarter and beyond, there are a number of tailwinds at our back including strengthening fertilizer pricing, a continued tight global acetone supply and demand environment, an anticipated modest improvement in nylon industry spreads, and a return to expected robust plant utilization rates,” Kane said. “With our proven ability to manage through various cycles, we remain highly focused on executing all levers in our control while driving progress on our long-term potential.”

Kane noted the company’s recent certification to the International Sustainability and Carbon Certification (ISCC) PLUS standard for three of its manufacturing sites, helping customers transform and meet their own sustainability goals. She added that the company received its third consecutive Platinum rating by EcoVadis and strong ratings by CDP for water security and climate change.

Ammonia

Ammonia, California, Eastern Cornbelt, Market Watch, Northwestern Europe, Pacific N.W., Tampa, Turkey, U.S. Gulf, Western Canada, Western Cornbelt

US Gulf/Tampa:

The Tampa ammonia price for May was concluded at $450/mt CFR, down $25/mt from April’s $475/mt contract. The downward adjustment softened the NOLA barge market to an indicative $409-$410/st FOB, with the Caribbean ammonia price dropping to $395/mt FOB.

Eastern Cornbelt:

Ammonia remained at $625-$645/st FOB in the Eastern Cornbelt, depending on location and supplier. One source estimated that 90% of the preplant ammonia work in Illinois is now complete.

Western Cornbelt:

Ammonia terminal prices were unchanged at $605-$645/st FOB in the Western Cornbelt, with the low confirmed in Iowa and the high in Missouri.

California:

Ammonia list prices in California were steady at $670/st DEL for anhydrous and $186-$196/st FOB for aqua ammonia.

Pacific Northwest:

Ammonia pricing in the Pacific Northwest remained at $645-$650/st FOB, with the aqua ammonia market quoted firmly at the $168/st FOB level in the region.

Western Canada:

The ammonia market in Western Canada was unchanged at C$975/mt FOB Medicine Hat, Alta., and C$1,150/mt DEL in the region.

Northwest Europe:

With European natural gas retreating to $9/MMBtu and Tampa settling $25/mt lower for May, there were few arguments for a sustained bullish outlook in the Northwest Europe ammonia market. With no confirmed transactions, however, the price remained at $460-$470/mt CFR.

Turkey:         

Ammonia imports in Turkey for the first quarter totaled 231,000 mt, Trade Data Monitor reported, a 16% increase from the year-ago 199,000 mt. Algeria supplied 98,000 mt, Trinidad and Tobago sent 40,000 mt, and Qatar added 37,000 mt. March imports were 76,000 mt, up about one-third from 57,000 mt in March 2023.

Urea

Black Sea, Brazil, California, China, Eastern Cornbelt, ethiopia, India, Indonesia, Market Watch, Mediterranean, Middle East, Pacific N.W., Pakistan, Southeast Asia, Thailand, U.S. Gulf, Urea, Western Canada, Western Cornbelt

US Gulf:

The NOLA urea market was quoted at $298-$308/st FOB for prompt/loaded barges, with first-half May business reported at $288-$291/st FOB and full-May trades reportedly concluded at a low of $285/st FOB. Last week’s range was $288-$315/st FOB for prompt and May business.

Eastern Cornbelt:

Urea remained at $390-$410/st FOB in the Eastern Cornbelt, with the low confirmed out of spot Ohio and Illinois River terminals. The Cincinnati, Ohio, market was unchanged at $400-$410/st FOB in early May. In the Great Lakes region, the latest Michigan terminal offers slipped to $418-$450/st FOB, depending on location.

Western Cornbelt:

Urea prices in the Western Cornbelt were reported in a broad range at $370-$410/st FOB during the week, with the high reported in Iowa. The St. Louis, Mo., market was pegged at $370-$380/st FOB, down from last week’s $380-$395/st FOB range. Delivered urea in Nebraska was quoted at the $425/st level for tons shipped from Oklahoma.

In the Northern Plains, the latest St. Paul, Minn., urea offers slipped to $380-$410/st FOB, down from $410-$430/st FOB the week before. In the Southern Plains, the Catoosa/Inola, Okla., market was reported at $385-$400/st FOB, down from $390-$410/st FOB, while the low in the South Central region dropped to $350-$360/st FOB Convent, La., down from $370/st FOB.

California:

Urea prices were down in California, with the latest offers quoted at $520/st FOB Stockton, below the previous $545/st FOB level.

Pacific Northwest:

Urea prices in the Pacific Northwest slipped to $445/st FOB Rivergate, Ore., $450/st FOB Aurora, Ore., and $465-$475/st DEL, down sharply from the prior $525-$530/st FOB and $540-$590/st DEL ranges.

Western Canada:

Delivered urea in Western Canada was quoted at C$775-$780/mt in early May, largely unchanged from mid-April levels.

India: 

Players continued to voice expectations that a new urea tender will be called in mid- to late-May.

Pakistan:

The Pakistan government called on domestic urea producers to lower the price of urea during the week. A price hike announced by the three major producers came without justification, Bloomberg reported, leading the government to demand the price rollback. Producers have requested a few days to prepare a response.

Traders said the government appears ready to import 200,000 mt of urea for the upcoming application season. Top trading houses remain hesitant to participate in a urea tender with Pakistan, however, with sources describing the country’s payment process as disadvantageous to suppliers. In order to avoid the tender process, Trading Corp. of Pakistan Ltd. (TCP) has negotiated recent import transactions through government-to-government deals, sources said.

Black Sea:

Black Sea prilled urea prices tightened to $250-$260/mt FOB.

First-quarter urea imports to Turkey stood at 1.1 million mt, Trade Data Monitor reported, a 21% increase from the 886,000 mt received in January-March 2023. Oman led suppliers with 614,000 mt, for 57% of the tonnage, followed by Egypt with 325,000 mt.

Mediterranean:

Small sales in Italy at $320/mt CFR brought urea prices down in the Mediterranean. In nearby Romania, prices were reported down to $315/mt CFR, which constitutes this week’s low. There continued to be higher offers in the market as well, however, including €330/mt FCA in France, which reflects around $335/mt CFR, a level no longer deemed workable by buyers.

It remains to be seen whether Egyptian producers succeed in propping up prices at or above the $300/mt FOB mark. For now, granular urea in the Mediterranean was reported at $315-$320/mt CFR. There were no further reports of new prill business, but prices were indicated at $325-$345/mt CFR, in line with the downward trend for granular.

Indonesia:     

Pupuk closed granular urea sales totaling 85,000 mt priced at $305-$306/mt FOB, with the entire amount slated for delivery to eastern Australia. The price for the deals was based on last week’s concluded tender.

Southeast Asia:

With Malaysia and Brunei reported fulfilling contract business, this week’s Southeast Asia granular price was reported at $305-$306/mt FOB.

Middle East: 

While no deals were cut this week, sources said talks for new urea business have settled in the low-$280s/mt FOB. Producers are said to be pushing for $285/mt FOB, while buyers are arguing for $280/mt FOB.

Deals from last week reported just above the $300/mt FOB mark no longer appear to be possible for producers. The closest they might come will result from backing potential awards into Ethiopia.

Sources put Arab Gulf netbacks from the Ethiopian Agricultural Businesses Corp. (EABC) tender at $290/mt FOB. While awards have yet to be issued in the tender, sources said it is likely at least some of the awards will include Arab Gulf material, leaving granular urea from the region at $280-$290/mt FOB.

The unusual $290/mt FOB prilled urea deal from last week is now seen by the market as a one-off, and new talks underway for prilled tons are expected to return the price to its typical discount to granular. Sources reported discussions in the upper-$270s/mt FOB and lower-$280s/mt FOB, though no deals were concluded during the quiet week.

Following last week’s sale at $302/mt FOB, Egyptian producers have gone silent. Since that deal, nothing new has been publicly conceded by producers or buyers, leaving the price unchanged.

China:

Both the Labor Day Golden Week holiday and uncertainty surrounding China’s updated export regulations have left few opportunities for price discovery in China. With urea exports still unsettled, sources said few players appear willing to take large positions involving Chinese product.

Traders expect the dust to begin settling next week. Urea sales might begin to conclude in time for the IFA conference in Singapore, players said.

Thailand:      

Extreme heat has many in Thailand worried about the upcoming application season, and urea imports have slowed compared to 2023. Buyers are reportedly awaiting predictions for the rain season expected to begin in June.

First-quarter urea imports fell 8% year-over-year, according to Trade Data Monitor, to 88,000 mt from 96,000 mt. Australia and Malaysia supplied 31,000 mt and 30,000 mt, respectively. March imports were pegged at 24,000 mt, a roughly one-quarter decline from the 31,000 mt received in March 2023.

Ethiopia:       

EABC has yet to issue awards in the urea tender that closed last week. The bulk of the lowest-priced offers will likely originate from the Arab Gulf, sources said, with an estimated netback of $290/mt FOB. All told, EABC is seeking six cargoes of about 52,000 mt each for May-June shipment.

Brazil:

Brazil granular urea prices stood at $310-$315/mt CFR, narrowing from last week’s $305-$320/mt CFR range. Offers reported at $320/mt CFR and bids at $300-$305/mt CFR failed to attract business during the week, players said.

Rondonópolis prices fell to a flat $455/mt FOB, the bottom of last week’s $455-$475/mt FOB range, as buyers in the region remain focused on phosphates rather than nitrogen.

UAN

California, Eastern Cornbelt, France, Market Watch, Pacific N.W., U.S. Gulf, UAN, Western Canada, Western Cornbelt

US Gulf:

No new NOLA UAN trades were reported during the week, but a $20/st or more drop in upriver terminal prices pressured the barge market down to $250-$260/st ($7.81-$8.13/unit) FOB for the latest indications, below the prior $265-$275/st ($8.28-$8.59/unit) FOB range.

Eastern Cornbelt:

CF reportedly lowered its UAN-32 postings at midweek, with the Mount Vernon, Ind., and Cincinnati markets dropping to $290/st ($9.06/unit) FOB for new offers, down from $305-$315/st ($9.53-$9.84/unit) FOB at the start of the week. Sources said other CF terminals in the region were down $20-$30/st from last week’s $310-$320/st ($9.69-$10.00/unit) FOB range.

Western Cornbelt:

UAN-32 dropped to $290-$320/st ($9.06-$10.00/unit) FOB terminals in the Western Cornbelt, down from last week’s $310-$325/st ($9.69-$10.16/unit) FOB, with the low confirmed at St. Louis and other Mississippi River terminals following a downward adjustment from CF on May 1. The upper end of the regional range was reported at Hastings, Neb.

California:

UAN-32 remained at $340-$360/st ($10.63-$11.25/unit) FOB terminals in California, with rail-DEL pricing quoted at the $370-$380/st ($11.56-$11.88/unit) level in Northern California. Sources said they expect UAN prices to drop in the near term, but no changes were confirmed during the week.

Pacific Northwest:

UAN-32 was quoted at $350-$360/st ($10.94-$11.25/unit) FOB terminals in the Pacific Northwest, with the Kennewick, Wash., market reported at the $355/st ($11.09/unit) FOB level, up $10/st from mid-April. Delivered pricing was pegged at $340-$360/st ($10.63-$11.25/unit) in the region.

Western Canada:

UAN-28 prices slipped to C$470-$480/mt (C$16.79-$17.14/unit) DEL in Western Canada, down from a solid C$480/mt DEL at last report.

France:

Prompt UAN prices were flat at €230-€240/mt FCA on low demand. Market actors are more interested in new-season prices in the €210-€220/mt FCA range, with some sales for July lifting reportedly concluded.

With July outside the scope of the prompt price assessment, however, the market remained at €230-€240/mt FCA, with the expectation that spot and new-season prices will converge in May.

Ammonium Sulfate

Ammonium Sulfate, Brazil, California, China, Eastern Cornbelt, Market Watch, Northwestern Europe, Pacific N.W., Thailand, Turkey, U.S. Gulf, Western Canada, Western Cornbelt

US Gulf:

The NOLA ammonium sulfate market edged up to $400-$405/st FOB for the latest business, with the high reported for a loaded/moving barge transaction concluded early in the week. Some sources suggested that a slight softening in upriver terminal prices could pressure NOLA barges down to sub-$400/st FOB levels for the next round of business, however.

Eastern Cornbelt:

A slight easing in granular ammonium sulfate prices was reported in the Eastern Cornbelt during the week, with spot Illinois River terminals slipping to $415/st FOB from last week’s low of $425/st FOB. The upper end of the regional market was quoted at the $440/st FOB level out of inland Ohio terminals, down from $450/st FOB.

Delivered ammonium sulfate offers in Michigan were quoted at the $463/st level at midweek.

Western Cornbelt:

The granular ammonium sulfate market remained at $420-$440/st FOB in the Western Cornbelt unchanged from the prior week.

California:

Ammonium sulfate prices were quoted at $410-$460/st FOB and $470-$520/st DEL in California, with the low for standard and the high for granular tons. Reference prices included granular at $447/st FOB Richvale and Helm, and $457/st FOB French Camp.

Pacific Northwest:

Ammonium sulfate pricing in the Pacific Northwest firmed to $360-$420/st FOB or DEL, depending on grade and supplier, up from $330-$400/st at last report. Most granular ammonium sulfate prices were quoted firmly in the $390-$420/st FOB or DEL range in the region.

Western Canada:

The latest granular ammonium sulfate prices in Western Canada were quoted in a wide range at C$580-$620/mt DEL in early May for limited tons, stretching from C$585-$595/mt DEL at last report.

Northwest Europe:

Standard ammonium sulfate prices in Northwest Europe slipped to $155-$160/mt FOB (€145-€150/mt FOB) on ample availability and muted demand. New-season prices were rumored higher, but no firm buyer interest could be confirmed, with buyers expressing doubts that these indications would materialize into transactable business.

China:

With many offices in China closed due to the weeklong Labor Day holiday, price checks on caprolactam grade amsul were limited. International traders claim that any serious future price discussions will have to track below $120/mt FOB. Rumors put expected settlements for some of those talks at $115-$118/mt FOB, though lacking in confirmed deals, the price remained at $120-$125/mt FOB for the week.

Thailand:

Amsul imports to Thailand moved up sharply in the first quarter, Trade Data Monitor reported, to 145,000 mt from 44,000 mt in January-March 2023, with China supplying 100,000 mt. March imports firmed to 70,000 mt from 30,000 mt in March 2023.

Turkey:         

Turkey imported 382,000 mt of ammonium sulfate during the first quarter, according to Trade Data Monitor, a26% rise from the 304,000 mt received through the first three months of 2023. China sent 369,000 mt, for about 97% of the total. March imports were reported at 145,000 mt, a significant increase from the 61,000 mt received in March 2023.

Brazil:

Ammonium sulfate imports slipped $5/mt at the bottom of the range, to $160-$170/mt CFR from $165-$170/mt CFR. Urea currently sits at a 13.5% discount to ammonium sulfate on a nitrogen-unit basis. Rondonópolis pricing firmed to $290/mt FOB ex-plant, up from last week’s $270-$285/mt FOB.

DAP/MAP

Baltic Sea, Benelux, Brazil, California, Central Florida, China, DAP/MAP, Eastern Cornbelt, India, Market Watch, Morocco, Pacific N.W., U.S. Exports, U.S. Gulf, Western Canada, Western Cornbelt

Central Florida:

Central Florida phosphate prices held steady, with truck-loaded DAP posted at $580/st FOB. MAP trucks continued at $600/st FOB despite a reported lack of availability. North Florida MAP prices were unchanged at $650/st FOB, sources said.

US Gulf:

Limited phosphate trades were noted at NOLA for the week. DAP barges moved up $5/st, to $525-$540/st FOB from the prior $520-$535/st FOB, while sources reported zero MAP trades during the week, leaving prices unchanged at $480-$485/st FOB.

US Exports:

DAP and MAP exports from the US Gulf remained at $570/mt FOB for the last reported deals.

Eastern Cornbelt:

DAP prices remained under pressure in the Cornbelt, with Illinois River terminal offers dropping to $630/st FOB on a spot basis, down from last week’s $640/st FOB low. The Cincinnati DAP market was pegged in the $650-$660/st FOB range, down from $665-$675/st FOB.

MAP was quoted at $670-$690/st FOB in the region, with the low again reported out of spot Illinois River terminals and the high at Cincinnati. In the Great Lakes region, delivered MAP offers were pegged at the $708/st level for May tons.

Western Cornbelt:

DAP slipped to $640-$675/st FOB in the Western Cornbelt, with MAP pegged at $675-$695/st FOB in the region. The St. Louis market was quoted at $640-$660/st FOB for DAP and $675-$685/st FOB for MAP. In the Northern Plains, the latest St. Paul offers were confirmed at $675/st FOB for DAP and $695/st FOB for MAP.

California:

MAP was unchanged at $790-$795/st FOB or DEL for the latest offers in California.

Pacific Northwest:

MAP pricing remained at $770-$780/mt DEL in the Pacific Northwest, depending on location.

Western Canada:

MAP in Western Canada was unchanged at C$1,135-$1,145/mt FOB or DEL in early May.

Benelux:

The Northwest European DAP market was quiet as new business came to a standstill with the end of the application season. Prices were flat at $637-$650/mt FCA, with any minor fluctuations attributed to exchange rates rather than market supply and demand dynamics.

Baltic:

DAP prices in the Baltic have retreated, following trends seen in the CFR markets of Northwest Europe and India/Pakistan, which were reflected in this week’s $470-$595/mt FOB range. Given the price direction in Southeast Asia and a lack of demand in Europe, coupled with a rather saturated Brazilian market, it is expected that prices will continue to trend lower.

Morocco:

Moroccan DAP nosedived this week, falling to a low of $495/mt FOB due to significantly lower CFR prices in India and Pakistan, where new business and offers have slipped to as low as $525-$535/mt CFR.

The Moroccan producer is achieving significantly higher returns on business to Europe, but volumes remain modest given the seasonal lull there. This week’s DAP range in Morocco was reported at $495-$600/mt FOB.

China:

The latest talk of DAP pricing out of India put the estimated price at $500-$510/mt FOB China. No deals were done this week to justify lowering the price from the last-reported $528-$530/mt FOB, however.

The $500/mt FOB price appears to be a hard floor for producers. One trader described circulating reports putting the average breakeven price for Chinese DAP at $485/mt FOB. Producers were said to be anxious to keep prices at $500/mt FOB or above to avoid sliding too close to that breakeven level.

India: 

Rumors are circulating that a major Indian buyer is in talks with at least one Chinese producer for DAP at $530/mt CFR. That price would represent a roughly $20/mt drop from the last concluded deal, a $548/mt CFR purchase by GSFC reported in early April.

Brazil:

The Brazil MAP range lifted to $570-$575/mt CFR, up from the prior $565-$575/mt CFR range. Players noted limited availability from China for tons arriving in time for the soybean season, and buyers are waiting on the sidelines in expectation of lower prices ahead. NP 11-44 was quoted at $460-$470/mt CFR, down from $470-$475/mt CFR at last report.

Rondonópolis MAP edged up to $690-$710/mt FOB during the week, above last week’s $690-$705/mt FOB. Purchasing activity in the region has been muted due to currency fluctuations and buyer expectations for a near-term decline in prices, while sellers expect the market to remain firm due to a sharp decline in first-quarter MAP imports. January-March MAP receipts totaled 658,000 mt, Trade Data Monitor reported, off 42.7% from the year-ago 1.15 million mt.

TSP

Brazil, Eastern Cornbelt, Market Watch, Triple Superphosphate, U.S. Gulf, Western Cornbelt

US Gulf:

NOLA TSP barges pulled back $5/st, to $430-$440/st FOB from last week’s $435-$445/st FOB range.

Eastern Cornbelt:

TSP was steady at $510-$530/st FOB in the Eastern Cornbelt. Delivered TSP in central Michigan slipped to $553/st for May, down $5/st from last report.

Western Cornbelt:

TSP remained at $510-$520/st FOB in the Western Cornbelt, with the low confirmed at St. Louis.

Brazil:

Landed TSP prices firmed $10/mt at the top of the range, to $410-$430/mt CFR from last week’s $410-$420/mt CFR.