Unseasonably warm air and a strong cold front triggered a rare tornado outbreak on Jan. 3 in central Illinois. At least seven tornadoes were confirmed across Logan, Christian, Macon, and Ford counties, but damage was described as minimal.

Rain and snow flurries were reported across Indiana as the week progressed, with highs dropping to the upper-30s on Jan. 5-6. Similar conditions were reported in Ohio and southern Michigan, with a greater chance of rain and snow in both states by the weekend.

Western Cornbelt:

Rain and freezing rain were reported across central Iowa early in the week, with light snow in northwestern areas of the state. Some locations reported up to an inch of rain as the system worked its way through Iowa, with up to a quarter inch of ice near Mason City and Fort Dodge.

Nebraska recorded much higher snowfall totals during the week, with central and northern areas seeing the greatest accumulation. More than 16 inches fell in Atkinson, with other totals reported at 8 inches in Ogallala, 6 inches in North Platte, and 4 inches in Trenton.

Northern Plains:

A powerful winter storm brought heavy snow to South Dakota and Minnesota during the first week of 2023.

Three-day snowfall totals in South Dakota from Jan. 2-4 included 12 inches in Sioux Falls, 16 inches in Humboldt, and 20 inches in Armour and Mitchell. Over the same time period, Minnesota collected 12-15 inches in Minneapolis and up to two feet in some northern parts of the state.

Northeast:

After a rainy start to the month, much of New England experienced cooler temperatures and another round of winter precipitation as the week progressed. Forecasts warned of sleet and freezing rain in Massachusetts, New Hampshire, and Vermont, with up to six inches of snow in the mountains.

Temperatures reached the 60s in New York City during the week, while western New York continued to dig out from the Christmas weekend blizzard that left 42 dead and prompted emergency and disaster declarations from state and federal lawmakers. Frigid temperatures at midweek resulted in a Code Blue declaration for Buffalo.

Highs across central and southern Pennsylvania climbed into the 50s early in the week, but much of the state was bracing for rain and snow showers as the week progressed, with temperatures dropping to the 30s and low-40s. Maryland residents saw highs in the 60s during the week, but cooler weather was on tap for the coming weekend.

Eastern Canada:

Most of Eastern Canada experienced a wintry mix of precipitation during the week. Southern Ontario was hit with rain and freezing rain at midweek, resulting in 5-15 mm of ice in some locations by Jan. 5. A heavier swath of snow was reported north of Ottawa, Ont., with 10-25 cm of accumulation reported in North Bay and south of the St. Lawrence River in Quebec.

Freezing rain and light snow were also reported in Montreal at midweek, while 5-15 cm of snow was expected in eastern New Brunswick, Prince Edward Island, and eastern Nova Scotia by the end of the week.

Transportation

January 6, 2023Arkansas River, Illinois River, Market Watch, Mississippi RIver, Ohio River, Transportation, U.S. Gulfmickeybarb@charter.net

US Gulf:

Intermittent weekday travel restrictions continued at Bayou Sorrel Lock due to guidewall replacement, with wait times reported in a 4-19 hour range on Jan. 1-2. Work at the site is tentatively set to run into March 2023, sources noted.

Repairs and maintenance at Colorado Lock, expected to continue through Jan. 27, slowed travel daily between 7:00 a.m. and 7:00 p.m., prompting intermittent waits in a 5-13 hour range. Calcasieu Lock is expected to see a complete 4-5 day shutdown in late January.

The Atchafalaya River’s Little Island Pass, Middle Island Pass, and Riverside Pass were shut to commercial travel until further notice due to exposed underwater pipelines in the channel. Vessels were reported detouring through Port Allen Lock.

Port Allen Lock delays were noted in a 4-18 hour range through the week. Most Industrial Lock passages ran 4-11 hours, although intermittent delays ran as high as 35 hours on Jan. 1-2. Algiers Lock wait times topped out at 5-6 hours.

Mississippi River:

Travel conditions on the lower Mississippi River continued to improve during the week, sources said, with most tows noted returning to full capacity. The river’s largest towing vessels continued to see barge counts reduced by a 10-15%, however.

Conditions were forecast to worsen on the upper river. Northbound vessel drafts were capped at 8.5 feet for both liquid and dry tows moving through St. Louis during the week, sources said, while southbound tows were limited to nine-foot drafts. Southbound barge counts were reduced by 20% at St. Louis. Lingering slowdowns were also noted at St. Louis due to Winter Storm Elliott, as ice, fog, and reduced barge availability combined to delay navigation.

The St. Louis river gauge, posted at 2.44 feet on Jan. 4, was projected to fall below the 0.00-foot mark on Jan. 13. The Memphis gauge was posted at a Low-Stage 0.51 feet and rising on Jan. 4. Long-term weather forecasts suggested ongoing poor travel conditions persisting into mid-late January at a minimum.

Dredging at Mile 180-181 on the upper river was paused on Jan. 3 due to ice floes in the area, while dredging at Mile 42 was expected to trigger daily 12-hour shutdowns on Jan. 4-18. On the lower river, dredging near Memphis was reportedly on hold for the week due to pump repairs.

The primary chambers at Mel Price Lock and Chain of Rocks Lock shut Jan. 1 through March 31 for maintenance and repairs, although movements remained available through both sites’ auxiliary chambers. Delays were noted in a general 5-12 hour range through both locations.

I-10 bridge repairs necessitated a safety advisory at Miles 228-230 of the lower river, anticipated to continue through June 2023. Channel work at Miles 192-193 was scheduled for Jan. 2-13 and Jan. 16-21.

Illinois River:

Icy conditions were reported to impact Illinois River travel during the week. Ice couplings were required at Marseilles Lock and Peoria Lock on Jan. 4, and recommended at all other locks.

Tows traveling in the northbound direction were restricted to a maximum 12 barges due to the conditions, while tows moving to the south were assessed on an individual basis. Wickets were raised at Peoria Lock and LaGrange Lock for the week, triggering resumed lockages through both locations. Corps data showed Marseilles Lock waits up to 21 hours for the week, while delays ran up to 27 hours at Starved Rock Lock.

Starting in June, the river is scheduled to undergo a 120-day commercial shutdown due to large-scale lock maintenance.

Ohio River:

Low water levels and icy conditions were noted to limit drafts to a maximum nine feet on the Ohio River.

Planned work at Mile 13.3, postponed from Dec. 16-19 due to crane repairs, was slated to begin in mid-January. Auxiliary chamber closures at Belleville Lock and Racine Lock were scheduled to run Jan. 30 through Feb. 26, while Racine will follow with a main chamber shutdown lasting Feb. 26 through March 12. Greenup Lock will close its primary chamber March 13 through April 12.

Delays at Montgomery Lock were posted in a 6-21 hour range for the week. Corps data showed Meldahl Lock waits at 5-10 hours. Wait times at the Tennessee River’s Kentucky Lock were recorded up to 33 hours on Jan. 3-4, while tows waited up to 32 hours to pass Wilson Lock.

Arkansas River:

Daytime shutdowns at Norrell Lock were scheduled to continue through Jan. 20. Norrell is expected to shut for a 48-hour period on Jan. 30-31.

Russia Sets Jan.-May Fertilizer Export Quota

December 23, 2022News, News Briefs, Russiamickeybarb@charter.net

The Russian government, as anticipated, has extended the quota for exports of mineral fertilizers to May 31, 2023, Tass reported on Dec. 21, citing the Russian Cabinet on its website.

The total volume of the export quota to be affected from Jan. 1 to May 31 will be “slightly more than 11.8 million mt.”

According to the decree, as cited by the report, the quota of 5.87 million mt is set for certain nitrogen fertilizers and 4.9 million mt for NPK fertilizers from Jan. 1 to May 31.

The quota for ammonium nitrate (AN) is set as 225,000 mt from Jan. 1 to March 31, and 828,000 mt from April 1 to May 31.

The quotas apply to fertilizer exports outside of the Eurasian Economic Union and do not apply to transit. The government said its decision is aimed at maintaining sufficient fertilizer supply on the domestic market.

Reports had been circulating last month that Russia planned to extend the export quotas through to May 31 (GM Nov. 25, p. 28).

Russia first introduced quotas for the export of nitrogen and complex fertilizers on Dec. 1, 2021 (GM Nov. 5, 2021). They were due to expire on May 31, 2022, but the government on May 31 extended the quotas (GM June 3, p. 1). The new export quotas were to be in effect between July 1 and Dec. 31, 2022. For the month of June, producers were able to export these fertilizer products without limits.

In November, Russia decided to raise export quotas for urea, AN, and UAN to the end of this year “to allow the country to maintain the volume of nitrogen fertilizer production and prevent overstocking at warehouses, but with only the tons not needed on the home market going for export,” according to the report, citing Russia’s Deputy Industry and Trade Minister Mikhail Ivanov.

Quotas were raised to the end of 2022 by 400,000 mt for urea, 200,000 mt for AN, and 150,000 mt for UAN, as per a decision by a ministry subcommittee, according to an Interfax report on Nov. 21, citing the Ministry of Industry and Trade.

The quotas, which had been set originally to run between July 1 and Dec. 31, were slightly more than 8.3 million mt for nitrogen fertilizers and 5.95 million mt for complex fertilizers.

EU Ninth Sanctions Package Exempts Potash and Phosphate Rock from New Mining Investment Ban

December 23, 2022Europe, News, News Briefs, Phosphate Rock, Potash, Russiamickeybarb@charter.net

The European Union’s (EU) ninth sanctions package on Russia, agreed by the bloc’s ambassadors on Dec. 15 (GM Dec. 16, p. 1), included a prohibition on new investments in the Russian mining sector (GM Dec. 9, p. 1), as well as an extension of the already existing prohibition targeting new investments in the Russian energy sector.

However, the new regulation provides for an exemption of the prohibition for mining and quarrying activities related to certain critical raw materials, including mineral fertilizers, potash, and phosphate rock.

Other critical raw materials that are exempt include aluminium (including bauxite), chromium, cobalt, copper, iron ore, molybdenum, nickel, palladium, rhodium, scandium, titanium, vanadium, certain heavy rare earths, and certain light rare earths.

EU Agrees on Gas Price Cap

December 23, 2022Europe, Natural Gas, News, News Briefsmickeybarb@charter.net

After months of wrangling, European Union (EU) energy ministers have struck a deal for a gas price cap, aimed at protecting the bloc’s economies – and citizens – against excessively high gas prices.

Energy ministers meeting in Brussels on Dec. 19 reached a political agreement on a so-called “market correction mechanism” (GM Dec. 16, p. 27; Dec. 9, p. 1; Dec. 2., p. 34).

Under the agreed plan, which will come into force on Feb. 15 and last for one year, the market correction mechanism will be triggered if the month-ahead price on Europe’s main gas trading hub, the TTF in Amsterdam, exceeds €180 (approximately $191 at current exchange rates) per megawatt-hour (MWh) for three working days and the month-ahead price on TTF is €35 higher than a reference price for liquefied natural gas (LNG) on global markets for the same three working days, according to a Council of the EU statement.

Member states agreed that the mechanism will apply to month-ahead, three-months ahead, and a year-ahead derivatives contracts, but the price ceiling will not apply to over-the-counter trades, day-ahead exchanges, and intra-day exchanges.

The price cap is aimed at avoiding the price hikes seen in Europe this past summer when the front-month TTF briefly hit €345 per MWh. Price levels have now eased considerably – closing at €92.195 on Dec. 22 – but remain higher than where they largely were trading in January and much of February this year before Russia invaded Ukraine, at between €71-€80 per MWh.

The price cap agreed has been set well below the European Commission’s original proposed trigger price of €275 per MWh, and was approved by EU countries with a qualified majority, while Hungary opposed and Austria and the Netherlands abstained, Politico reported.

Germany, which had been long opposed to the price cap proposals, finally supported the plan, but only with significant “safeguards” that address the country’s concerns that intervening in the European gas market could drive LNG cargoes away from Europe at a time when the continent – and Germany in particular – is trying to reduce its dependence on Russian gas, according to the report.

Germany has not imported gas from Russia since the leaks – subsequently confirmed to be sabotage – on the Nord Stream 1 and 2 undersea pipelines on Sept. 26 and 27 (GM Sept. 30, p. 1). Russia supplied some 55% of Germany’s natural gas before the start of the Russian invasion of Ukraine in February.

Sharing the concerns of the members countries opposed to price cap, the European Commission included in the new regulation a suspension mechanism if risks to security of energy supply, financial stability, intra-EU gas flows, or risks of increased gas demand are identified.

The market correction mechanism will be suspended, notably if gas demand increases by 15% a month or 10% in two months, LNG imports into the EU decrease significantly, or traded volume on the TTF drops significantly compared to the same period a year ago, according to the EU Council statement.

However, one commentator cited by the Politico report, Simone Tagliapietra, a senior fellow at the Bruegel think tank, said there are so many safeguards that it is difficult to understand fully how the price cap will play out.

German gas industry group Zukunft Gas CEO Timm Kehler, also cited by Politico, described the new regulation as a “political illusion” and one that will not “survive the reality check” given that in a market economy, prices are determined by supply and demand, and not by political decrees.

Others warned that the price cap could hinder efforts to secure gas supplies next year, since Europe will need to buy a lot of gas during the spring and summer to fill up its reserves ahead of next winter.

Thierry Bros. oil and gas analyst, as cited by an Agence France Presse (AFP) report, believes the price cap will have negative consequences since usually supply is guaranteed with high prices. “With low prices, you no longer guarantee anything,” he said.

Petrobras Ends Sale Procedure for ANSA Nitrogen Unit; Likely to Resume Fertilizer Investments, Says Report

December 23, 2022Brazil, News, News Briefs, Nitrogen, Norwaymickeybarb@charter.net

Brazilian state-owned oil and gas major Petróleo Brasileiro SA (Petrobras) has approved the end of the competitive procedure for its latest attempt to sell its wholly-owned nitrogen fertilizer plant, Araucãria Nitrogenados, known as ANSA, in the southern Brazilian state of Paraná, the company said in a Dec. 19 statement. The sale, according to the statement, was in the binding phase.

Brazil’s Valor Econômico on Dec. 19 reported that Norwegian crop nutrition major Yara International ASA had given up on buying the ANSA unit, a deal that came near to being closed earlier this year for around $50 million, according to the newspaper report.

Yara’s bid for the nitrogen fertilizer assets was unanimously rejected in August by the Petrobras Board of Directors after talks between the two companies for more than a year over the sale of ANSA, according to a Bloomberg report, citing people familiar with the matter (GM Aug. 5, p. 36).

However, Yara was reported to have remained interested in the plant, with an Aug. 19 vote for a new Petrobras Board thought to have re-opened the door to approval.

Russian fertilizer group EuroChem Group AG and Brazil steel and iron ore producer Cia Siderugica Nacional SA (CSN) had also shown interest in the ANSA assets, according to the August Bloomberg report, citing people familiar with the matter.

In its Dec. 19 statement, Petrobras said it will now evaluate its next steps related to the divestment of ANSA.

ANSA has installed daily production capacity of 1,975 mt of urea and 1,303 mt of ammonia, but has been mothballed since early 2020 after a series of losses since being acquired in 2013.

Yara also has been linked as a potential buyer of Petrobras’ other nitrogen fertilizer unit, “Nitrogen Fertilizer Unit-III” (UFN-III), in Três Lagoas, in the state of Mato Grosso do Sul.

Petrobras in September was reported by Reuters to be on the verge of selling the assets to the Norwegian company, a report denied by Petrobras, according to Bloomberg, citing a statement by Petrobras that the information is “untrue” and that the sales process is still in the binding stage and has not reached the stage to receive proposals (GM Sept. 16, p. 30).

According to the Reuters report, Yara would pay less than $100 million for the facility and the deal would be announced within a few weeks.

UFN-III has been under construction since 2011, and at last report was 81% complete. Upon completion, the unit will have a projected urea and ammonia production capacity of 3,600 m/d and 2,200 m/d, respectively. The buyer is expected to complete the plant.

However, according to a banamericas report this week, citing a researcher at Brazilian petroleum research institute Ineep, Henrique Jäger, Petrobras is halting sales of key downstream assets – while moving forward with its upstream divestments – following the election victory of Luiz Inácio Lula da Silva as the country’s new president at the end of October. Da Silva will resume power on Jan. 1.

His transition team for the energy sector considers it of strategic importance that the state-owned Petrobras remains an integrated upstream-and-downstream company with a major presence in the refining, natural gas, and petrochemical sectors, while also investing in alternative energy sources,

Jäger, according to the report, believes Petrobras will resume investments in the fertilizer sector, likely putting ANSA back into operation with the reconversion to natural gas. Previously, the plant has been operated from asphaltic rock, whose market value has appreciated, making the operation expensive, which led to the plant’s mothballing, he said.

Jäger also thinks Petrobras will probably finish the construction of UFN-III, “if only to recover the investments already made and sell it later,” according to the report.

Petrobras has not commented on this week’s media reports, and Yara has said it does not comment on market rumours.