All posts by mickeybarb@charter.net

JERA, VNG, EnBW Sign MOU for Ammonia Cracker

Ammonia, Germany, Japan, News, News Briefs

Japanese energy producer JERA Co. has signed a Memorandum of Understanding (MOU) with German utility company EnBW AG and its gas importing subsidiary, VNG AG, to conduct a joint feasibility study for the construction of an ammonia cracker demonstration plant in Germany’s Rostock port area, according to a June 12 announcement from the companies.

“We are pleased to work together with EnBW and VNG, with whom we have confirmed alignment with regards to our purpose and strategic direction,” said JERA CEO Yukio Kani. “A collaboration with such prominent leaders of the European energy industry is exactly what JERA had been longing for.”

According to the partners, the project would allow for the transport of large quantities of hydrogen as ammonia to Rostock from oversea regions, where it could be re-converted into hydrogen and then transported to German consumers and customers. An existing ammonia terminal in the Rostock port area could be used for importing the ammonia, the companies said.

“At EnBW, we are working at full steam to transform our generation capacities from fossil fuels such as coal to non-fossil fuels such as hydrogen,” said Georg Stamatelopoulos, EnBW Board Member and COO of Sustainable Generation Infrastructure. “The joint project between EnBW, VNG, and JERA fits in very well with our efforts to become climate-neutral by 2035. The key is to create the right conditions now for the fastest possible decarbonization of the business.”

“The construction of a demonstration plant of an ammonia cracker in Rostock together with JERA and EnBW is another important step towards supporting the ramp-up of hydrogen in Germany and thus making a contribution to decarbonization in eastern Germany,” added Hans-Joachim Polk, VNG’s Chief Technology Officer.

The German government in 2022 was reported to be considering a minority stake in VNG and a controlling stake in Uniper SE, Germany’s biggest gas importer, to head off a collapse of Germany’s energy system amid curtailments of Russian gas supplied by PJSC Gazprom, Bloomberg reported (GM Sept. 16, 2022).

Mitsui to Supply Ammonia for Hekinan Project

Ammonia, Japan, News, News Briefs

Tokyo-based Mitsui & Co. Ltd. and JERA Co., Japan’s largest energy generator, have concluded a sales agreement covering the supply of fuel ammonia for use in ammonia co-firing trials at the JERA Hekinan Thermal Power Station in the city of Hekinan, Aichi, Japan, according to a June 16 announcement from both companies.

Built by Chubu Electric Power in 1991, the Hekinan Thermal Power Station is the largest coal-fired power station in Japan, with total generating capacity of 4,100 MW. In April 2019, all thermal power plant operations of Chubu were transferred to JERA, a joint venture between Chubu and TEPCO Fuel & Power Inc, a subsidiary of Tokyo Electric Power Co.

Since 2021, JERA has been implementing a demonstration project to establish technology for large-scale ammonia fuel co-firing at Hekinan, with plans to co-fire the burners with 20% ammonia by 2025.

Mitsui is Japan’s leading importer of ammonia, supplying approximately 700,000 mt/y to primarily the Asian chemical and fertilizer markets. The company has set a target of achieving zero-emission status by 2050 and aims to halve its greenhouse gas (GHG) impact by 2030, compared with 2020 levels.

PGS to Order Six Ammonia-Fueled Bulk Carriers

Ammonia, Finland, News, News Briefs, Norway

Oslo-based Pherousa Green Shipping AS (PGS) reported that it plans to place orders for up to six ammonia-fueled ultramax dry bulk carriers designed by Deltamarin in Finland, using Pherousa Green Technology’s (PGT) advanced ammonia cracking technology.

PGT allows the ship’s engines to be operated with a minimal amount of pilot fuel, providing a zero-emission vessel using enriched ammonia and hydrogen as fuel. The system also enables the use of pure hydrogen in polymer electrolyte membrane (PEM) fuel cells instead of direct ammonia fuel cells for electric power production.

“The only fuel that is truly zero emission is hydrogen, but hydrogen storage is the biggest challenge for deep-sea shipping,” said PGT Group Chairman Hans Bredrup. “Ammonia is the only readily available hydrogen carrier that has no carbon in its molecule, therefore the only truly zero-carbon hydrogen carrier. The ammonia cracking technology developed by PGT is a game changer that could become a major contributor toward the realization of the world’s zero-emission shipping.”

According to the agreement, PGT will deliver “plug and play” ammonia crackers to PGS for onboard installation. The initial fleet of six ultramax dry bulk carriers is aimed at the worldwide copper industry. The two companies also plan to enter into a strategic partnership agreement to drive the development of ammonia technology for use within the deep-sea segment.

Viridis Awarded for Ammonia Carrier Design

Ammonia, News, News Briefs, Norway

Viridis Bulk Carriers, a zero-emissions shipping company based in Norway, has been awarded an Approval in Principle (AiP) from the classification society DNV for its ammonia-fueled short sea bulk carrier design. The Viridis Bulk Carriers design, developed by Kongsberg Maritime, is for 5,000 deadweight tonnage (dwt) short seas vessels that offer a 3,000 nautical mile range with safety levels equivalent to conventionally fueled vessels.

“We are delighted with yet another milestone for our ammonia powered short sea bulk vessel,” said André Risholm, Board Member of Viridis. “Considering the heightened emission reduction targets set by the EU and IMO, our Viridis vessels will fully adhere to these standards. This will empower charterers to benefit from exceptional greenhouse gas reductions throughout their logistical value chain.”

Based in Oslo, DNV is an internationally accredited registrar that sets standards for ships and offshore structures. The AiP is an independent assessment of a concept within an agreed upon framework, confirming that the design is feasible, and no significant obstacles exist to prevent the concept from being realized.

“DNV introduced the gas-fueled ammonia notation to enable the industry to foster innovation and drive sustainable solutions in line with the most advanced industry standards,” said Tuva Flagstad-Andersen, Regional Manager of North Europe at DNV. “With these projects, we demonstrate how by working in collaboration, we can shape the future of shipping and advance towards a decarbonized and sustainable tomorrow.”

Sicit Acquires Majority Stake in Chilean Company

Chile, Europe, News, News Briefs, Specialty

Italian biostimulants company Sicit Group, a subsidiary of NB Renaissance and Intesa Holding, has acquired a majority 51% stake in Chilean company Patagonia Biotecnologia, which manufactures fertilizer and soil amendments from seaweed extracts, according to digital news organization Born2Invest.

“The market for biostimulants grows at double digit rates,” said Massimo Neresini, CEO of Sicit Group. “By acquiring Patagonia Biotecnologia, we will be able to broaden our portfolio to include plant-based products that will reach over 80 countries where we are already present. Sicit is the global leader in the production of high-quality biostimulants of animal origin, and our goal is to expand into plant-based biostimulants as well.”

Patagonia Biotecnologia is headquartered in Puerto Montt, capital of the Los Lagos region, at the gateway of the Chilean Patagonia. Patagonia President David Hockley and CEO Rebeca Galvez will remain involved in the management of the company, with current management being supported by Sicit to accelerate technological growth and business development.

Nichino, BioConsortia Sign Biofungicide Agreement

California, News, News Briefs, Northeast

Delaware-based crop protection company Nichino America Inc. and BioConsortia Inc., a microbial products developer based in Davis, Calif., announced on June 20 that they have reached a supply agreement for Nichino to market and sell BEC-60 biofungicide in the US and Canada.

BioConsortia developed BEC-60 as a novel microbial broad spectrum fungicide for control of several key diseases in apples, berries, grapes, stone fruits, and vegetables. As part of the agreement, Nichino is conducting tests to evaluate BEC-60 on additional pathogens and crops.

“It is exciting to add a biological product to our portfolio,” said Dustin Simmons, President of Nichino. “BEC-60 will offer conventional and organic farmers effective control of diseases on important crops, providing a quality yield while managing residues on the final commodity. This new partnership with BioConsortia will enable both organizations to utilize their exceptional research and development capabilities to introduce diverse crop protection solutions to align with the demands of today’s agriculture production.”

The registration package for BEC-60 has been submitted to the US Environmental Protection Agency and is pending approval with state registrations to follow thereafter. Product launch is anticipated in 2024-2025.

“Our Advanced Microbial System results in biopesticide products like BEC-60, which offer strong performance for growers,” said Marcus Meadows-Smith, CEO at BioConsortia. “The integration of microbial and conventional chemistries gives farmers benefits in terms of diverse modes of action to prevent the development of resistance and improved efficacy. We look forward to Nichino’s launch of this patent-protected product alongside their broad portfolio of crop protection products.”

Ammonia

Ammonia, Black Sea, Eastern Canada, Eastern Cornbelt, India, Market Watch, Middle East, Northern Plains, Northwestern Europe, South Korea, Southeast Asia, Tampa, U.S. Gulf, Western Cornbelt

US Gulf/Tampa:

Expectations for July Tampa ammonia are being heard around the $300/mt CFR mark, down from June’s $340/mt, though no deal has been reported. Plentiful supply, lower natural gas prices in Europe, and recent June fill offers in the inland markets were cited as pressuring the market.

Eastern Cornbelt:

Most of the ammonia fill programs announced in mid-June were reportedly still on the table as the week progressed. Fill business fell in the $345-$365/st FOB range in the Eastern Cornbelt for the week, with the low confirmed for June shipment at East Dubuque, Ill. Fill pricing in the Lima, Ohio, market was reported in the $360-$365/st FOB range.

Western Cornbelt:

Sources continued to report active ammonia fill programs in the $340-$350/st FOB and $350-$370/st DEL ranges in the Western Cornbelt, with Southern Plains fill offers quoted at $290-$300/st FOB, depending on location. The programs were announced the week before, with Koch posting its fill prices on June 12, followed by CF one day later.

Northern Plains:

Ammonia fill offers were reported at $350/st FOB or DEL in the Northern Plains, well below the last $450-$490/st FOB prompt business. Sources suggested producers were also taking sales under their posted prices, though no actual levels were confirmed.

Eastern Canada:

Ammonia fill pricing in mid-June was reported at the C$460/mt level FOB Courtright, Ont.

Black Sea:     

Turkey continues to look for ammoniadeals, and a cargo of Russian material shipped from a Baltic port was counted among its latest purchases. Sources put the delivered price just under $300/mt CFR.

Northwest Europe:      

The reinstatement of the EU’s 5.5% tariff on imported ammonia was not expected to majorly influence the market. Sources expect to see netbacks from the Arab Gulf come down to compensate for the duty.

As the tariff took effect, sources described the Northwest Europe ammoniaprice softening to $360-$365/mt CFR. One trader called the shift insignificant, tying it to softening natural gas prices seen during the week.

Russian ammonia was noted shipping out of a Baltic port, with sources reporting sales into the UK, Bulgaria, and Turkey. The ammonia is being offered at a discount to encourage sales, said one source. As a result, Turkish buyers have snapped up the bargains.

India:     

FACT returned to the international market with two ammonia cargoes of 7,500 mt each, both handled by Trammo. The first traded late last week at $310/mt CFR for late-June delivery, while the second concluded earlier this week at a reported $304/mt CFR for early-July delivery.

FACT also issued a buying inquiry for late-July arrival. Offers are due to the company by June 26.

FACT’s return to the global marketplace reportedly stemmed from the company’s stepping up of demand in a way its domestic supplies cannot cover. Sources noted that the small quantity of each shipment FACT receives is priced at a premium compared to what larger buyers, such as IFFCO, pay. In addition, the FACT orders were done on a prompt spot basis rather than through a long-term contract. One source estimated that larger buyers are purchasing their ammonia under contract for less than $300/mt CFR.

There are reports that FACT is planning more upgrades to its port facilities in order to handle larger vessels. The company previously increased its storage capacity to allow for more tons to be held in reserve. The new port upgrades are also expected to include expansions to the storage facilities.

Middle East: 

Sources said even though the EU tariff is once again in place, sales into Europe from the Arab Gulf are not expected to diminish. Despite comments from producers that material is tight through August, sources said the region appears to be in an oversupplied situation.

Ammonia prices remained steady at $200-$210/mt FOB. While some have argued the market seems to have found a floor at this level, others contend that producers may have to shave a couple more dollars off to compensate for the return of the EU import tariff.

Sales to Pacific buyers picked up this week, as Yara looked for tons to cover production lost during a turnaround at its Pilbara plant in Australia. At the same time, buyers in Southeast Asia are also looking for material as China withdraws from the ammonia export market due to falling prices.

Southeast Asia:     

Producers in Indonesia and Malaysia are reportedly having no problems finding buyers in the region. The week opened with deals under discussion at $310-$320/mt FOB, while Petronas reported a sale at $325/mt FOB later in the week.

China:    

Chinese ammonia exports firmed to 133,000 mt in January-May, Trade Data Monitor reported, up dramatically from 8,500 mt exported through the same period of 2022. First-quarter exports totaled 127,000 mt, followed by 4,000 mt in April. May exports were 2,500 mt, off from the year-ago 8,000 mt.

The drop in Chinese exports was expected, said sources, as prices came off from near-record highs. As the price that regional buyers were willing to pay came down, Chinese suppliers found their margins narrowing, and sales prices are now falling below the production costs for many producers. At the same time, Chinese industries stepped up their demand for ammonia, drawing tons away from the international market.

January-May ammonia imports were counted at 316,000 mt, a significant increase from the prior-year 100,000 mt. Limited industrial activity in 2022 reduced ammonia demand in China, sources said, prompting a lower import total for that year.

South Korea:

South Korea ammonia imports softened 28% in January-May, Trade Data Monitor reported, to 457,000 mt from 634,000 mt in the previous year. May imports were 96,000 mt, down 10% from 106,000 mt in May 2022. Indonesia led May suppliers with 38,000 mt, while Saudi Arabia sent 36,000 mt and Australia added 22,000 mt.

Urea

Black Sea, Brazil, China, Eastern Canada, Eastern Cornbelt, India, Indonesia, Market Watch, Middle East, Northeast, Northern Plains, South Korea, U.S. Gulf, Urea, Western Cornbelt

US Gulf:

NOLA urea barge prices were up from last week, with prompt, loaded barges remaining at a premium. June barge trades were quoted in a wide range at $297-$330/st FOB during the week, with July reported at $275-$295/st FOB NOLA. Those levels were up from last week’s broad $245-$320/st FOB range.

Eastern Cornbelt:

Urea remained at $460-$480/st FOB in the Eastern Cornbelt, with the upper end of the range reported at Cincinnati, Ohio.

Western Cornbelt:

Urea prices slipped to $440-$470/st FOB in the region, down from last week’s $460-$480/st FOB range, with the St. Louis, Mo., market quoted at $440-$445/st FOB at midweek. In the Southern Plains, the Catoosa/Inola, Okla., urea market remained at $475-$490/st FOB during the week.

Northern Plains:

Urea slipped to $480-$490/st FOB St. Paul, Minn., with the low also confirmed for the last offers out of at Carrington and Alton, N.D. Delivered urea pricing was quoted at $500-$520/st in the Northern Plains in mid-June, well below the $630-$640/st DEL high reported in May.

Northeast:

Urea slipped to $430-$440/st FOB in the Northeast, depending on location, down from the last confirmed $440-$470/st FOB range.

Eastern Canada:

Eastern Canada urea slipped to a broad C$635-$850/mt FOB in mid-June, depending on location and supplier, down C$40/mt at the low end of the range.

Black Sea:

Prilled urea prices tightened to $244-$249/mt FOB from $240-$265/mt FOB reported last week.

India:     

Rashtriya Chemicals and Fertilizers Ltd. (RCF) awarded only 560,000 mt in its tender. The company had hoped receive a minimum of 800,000 mt. Sources said the limited tonnage was mostly a result of Chinese producers unwilling to accept the netbacks from the tender’s $280-$285/CFR price, as well as a short shipping window that required vessels to be loaded by July 17.

The lack of Chinese urea in the tender was evident in the final numbers. Only 95,000 mt will be delivered to India’s East Coast. The remaining 465,000 mt will be sent to ports on the West Coast. The bulk of the awards will be covered by Arab Gulf producers.

RCF Urea Tender Awards (Total – 560,000 mt)
East Coast (95,000 mt at $284.90/mt CFR)
Awarded Company Quantity (mt) Discharge Port
Sun International 50,000 Paradip
Fertiglobe 45,000 Gangavaram
West Coast (465,000 mt at $279.70/mt CFR)
Awarded Company Quantity (mt) Discharge Port
Samsung 45,000 Kandla
Agricom 40,000 Mundra
Swiss Singapore 60,000 Pipavav
60,000 Tuna Adani
OQ Trading 50,000 Jaigarh
50,000 Mundra
40,000 Mundra
40,000 Rozi
40,000 Dahej
40,000 Hazira

There are now expectations that a new tender will be called as early as July 10-15. Sources said this timeframe will allow for all of the awarded tons to have vessels nominated and be in the last steps of loading for shipment, thus preventing suppliers the opportunity to withdraw their tons in the hopes of gaining a better netback in the next tender.

Chinese urea is expected to play a bigger role in the next tender, as the Chinese domestic season will end on June 30, leaving producers looking for markets for their product. As long as pricing remained strong in China’s current domestic market, producers had no reason to accept lower levels from the export market. After July 1, the domestic market’s prices are expected to come off.

China’s export permission routine remains a possible fly in the ointment, however. If the next tender has a similarly tight export window, traders may find it difficult to ensure the export paperwork will be completed in time.

Some traders criticized RCF for going ahead with the tender. They noted that had the buyer scrapped the tender and immediately called a new one, RCF might have been able to get the 800,000 mt it wanted, and possibly more. The change in the shipping deadline would have allowed for more tons to build up in China without buyers lined up. At the same time, supplies in the Arab Gulf would have similarly built up, putting downward pressure on prices.

One trader noted, however, that urea is a sensitive political issue as much as it is an agricultural necessity. Few in the state-owned companies would be willing to risk the wrath of farmers complaining to their local legislators and the national government.

Indonesia:     

The Indonesian government continues to investigate Pupuk’s policies, sources reported. Details are thin, but some traders have said the government is looking into prices achieved by Pupuk and its subsidiary producers in relation to subsidy payments made by the government for the domestic market.

No new export sales opportunities are expected out of Indonesia until late July at the earliest, said sources. Some international traders have even begun excluding Indonesian urea from their July and August purchase plans.

South Korea:

South Korea urea imports totaled 368,000 mt in January-May, Trade Data Monitor reported, off 30% from the year-ago 525,000 mt. May imports stood at 70,000 mt, down from 90,000 mt recorded in May 2022. The month’s largest suppliers were China with 33,000 mt, Qatar with 26,000 mt, and Indonesia with 10,000 mt.

Middle East: 

Sources reported a wide range of activity from the area. Just as prices were settled at $265-$270/mt FOB, based on netbacks from the RCF/India tender, sources noted OQ Trading closing a deal to Myanmar with a $253/mt FOB netback, shifting the market range to $253-$270/mt FOB.

Traders looked at the deal into Myanmar as an effort by OQ to average out the price of the tons it has to supply to India. Many of the tons the company is slated to send to India will be purchased from the OQ’s producing side on a formula basis. By averaging the Myanmar and Indian prices, the trading house seemingly hopes to get a better return on its sales into India, sources said.

Due both to existing contracts and the RCF business, Arab Gulf producers were said to be fully booked. Discussions for new orders will begin with shipments in late July.

Egyptian producers continue to push for – and get – higher prices. The week opened with sales at $312/mt FOB and ended at $340/mt FOB. Many of the sales were for multiple cargoes of about 5,000 mt. However, MOPCO and Abu Qir were able to secure deals involving 10,000 mt each as the price edged upward. As the week closed, Abu Qir sold 15,000 mt of granular at $340/mt FOB. In another deal, the same company sold 20,000 mt of prilled urea at $322/mt FOB.

The most likely destination for each of the lots is Europe. Sources pointed out Egyptian urea – along with that from Algeria – is exempt from the re-instated EU 6.5% tariff on urea.

Egyptian producers continued to push for – and get – higher prices. The week opened with sales at $312/mt FOB and ended at $330/mt FOB. Many of the sales were for multiple cargoes of about 5,000 mt. MOPCO and Abu Qir were able to secure deals of 10,000 mt each as the price edged upward, however.

Europe is the most likely destination for all of the cargoes. Sources pointed out that Egyptian urea, along with product from Algeria, is exempt from the EU’s reinstated 6.5% tariff on urea.

China:   

Sources reported prilled urea prices as all over the map. The estimated export price was put at $300/mt FOB, based on the ex-plant price. At the same time, deals with Southeast Asian buyers showed netbacks at $275/mt FOB.

Granular urea was more stable, with prices reported at $300-$310/mt FOB. Granular showed less volatility due to limited spot availability.

Sources noted that most of the granular suppliers only had licenses to export large cargoes, while the main demand from regional buyers was focused on smaller lots closer to 6,000 mt. Deals for these small quantities could be done, but only for mid-July shipment at the earliest. The delay was attributed to the export control regime imposed by Beijing. Local customs officials need to first ensure the exported material will not cause a shortage in the domestic market, before permission will be granted for a producer to sell a specific amount to a specific buyer.

Export prices are expected to begin coming off on July 1, when the domestic season closes. So far, Chinese producers have been able to get better prices from the local market than from exporting tons. The strong demand for the domestic top-off season allowed producers to reject the lower prices available from the RCF/India tender. The absence of that safety net means that producers will have to either accept the price from India, or risk building up large reserves in their warehouses with limited selling opportunities.

Urea exports totaled 785,000 mt in January-May, Trade Data Monitor reported, up 46% year-over-year from 538,000 mt. May exports were noted at 183,000 mt, more than doubling the 86,000 mt sent in May 2022. May’s main buyers were India with 46,000 mt, Australia with 36,000 mt, and South Korea with 34,000 mt.

Brazil:   

The Brazil market reacted to the inability of RCF/India to achieve its 800,000 mt purchase goal, jumping to $300-$320/mt CFR, a roughly 12% increase from the previous week. Even Iranian material was offered at levels higher than non-sanctioned product from last week. Sources said a trader offered Iranian product at $290/mt CFR into a market with limited buying interest.

The price bump was seen by many as a clear indication that a urea price floor has been found.

The Rondonopolis market showed a slight increase, with sources putting the range at $410-$440/mt FOB ex-warehouse. Some inland areas have withdrawn their pricing lists, however, leaving possible future price trends up in the air.

UAN

Eastern Canada, Eastern Cornbelt, Market Watch, Northeast, Northern Plains, U.S. Gulf, UAN, Western Cornbelt

US Gulf:

NOLA UAN barges were quoted at $210-$220/st ($6.56-$6.88/unit) FOB in a quiet market, down slightly from last week’s $210-$230/st FOB range.

Eastern Cornbelt:

UAN-32 was steady at $255-$275/st ($7.97-$8.59/unit) FOB in the Eastern Cornbelt, with the low confirmed at Cincinnati and Mount Vernon, Ind. The last UAN-28 offers were reported at $235-$240/st ($8.39-$8.57/unit) FOB Cincinnati.

Western Cornbelt:

UAN-32 was pegged at $245-$270/st ($7.66-$8.44/unit) FOB in the Western Cornbelt, with the low reported at St. Louis and the high at Port Neal, Iowa. The latest offers in the Southern Plains reportedly dropped to $225-$230/st ($7.03-$7.19/unit) FOB Woodward, Okla., and $245/st ($7.66/unit) FOB Verdigris, Okla., down some $10-$15/st from last report.

Northern Plains:

The latest UAN-32 prices at Winona, Minn., slipped to $312/st ($9.75/unit) FOB, down from $315/st at last report. UAN-28 pricing in North Dakota was steady at $280-$300/st ($10.00-$10.71/unit) FOB and $330-$335/st ($11.79-$11.96/unit) DEL for the last offers.

Northeast:

UAN-32 pricing in the Northeast dropped to $285-$300/st ($8.91-$9.38/unit) FOB, down from $300-$310/st ($9.38-$9.69/unit) FOB at last report, with the low confirmed at Baltimore, Md., and the high at Fairless Hills, Pa. The market out of terminals in upstate New York remained at $360/st ($11.25/unit) FOB for the last confirmed offers.

Eastern Canada:

UAN-28 was quoted in a broad range at C$480-$680/mt (C$17.14-$24.29/unit) FOB in Eastern Canada, depending on location and supplier, with UAN-32 offers pegged at the C$545/mt (C$17.03/unit) FOB level on a spot basis in Ontario, down C$25/mt from last report.