Eastern Cornbelt:
Potassium thiosulfate remained at $780/st FOB Terre Haute, Ind., for the last confirmed offers.
All posts by mickeybarb@charter.net
Crops/Weather
Eastern Cornbelt:
Highs across Central Illinois were in the upper-40s to mid-50s during the week, with an increased chance of scattered showers on Thanksgiving. Similar conditions were reported in Indiana, with highs climbing to the 50s ahead of a strong chance of precipitation on Nov. 24-25.
Sunny and mild conditions were reported across central and northern Ohio during the week, with a slight chance of rain by the end of the week. Those conditions created favorable harvest weather, allowing regional growers to wrap up 92-97% of the corn harvest by Nov. 20, with all three states tracking ahead of their five-year averages.
Sources said fall fertilizer application continued at a steady pace in the region. “Fall application hasn’t been overwhelming at all, however it has been steady for a long time,” said one Indiana contact. “Volumes have been great and continue to move.”
Western Cornbelt:
Warmer temperatures were reported across Iowa and Nebraska during the week, which melted most of the previous week’s snow. Highs reached the mid-40s to low-50s in many locations at midweek, with the mild weather expected to last into the Thanksgiving weekend.
Temperatures in the 50s were also common across Missouri during the week, although parts of the state were expecting an increased chance of rain on Thanksgiving.
The fall harvest was winding down rapidly in the region, with progress tracking ahead of the average pace for all crops in all three states. Corn growers had 96-99% of the crop in the bin by Nov. 20, along with 97% of Missouri’s cotton crop and 98% of Nebraska’s sorghum crop.
Southern Plains:
Mostly dry conditions were reported across Kansas and Oklahoma, with highs reaching the 50s during the week. The weather was an improvement from the previous weekend, when highs struggled to reach the 40s in many locations, and lows dipped to the teens.
Temperatures in central and northern Texas were also tracking in the mid-50s to low-60s, but a cold front was expected to bring scattered showers and storms at midweek, with the wet weather continuing through Thanksgiving and the end of the week.
New Mexico was also bracing for a stormy holiday, with forecasts warning of wind, rain, and snow on Nov. 24-25. In Colorado, a dusting of snow was in the forecast for the Front Range on Thanksgiving, although temperatures at midweek were reported in the balmy mid-50s.
The fall harvest was nearly complete in the Southern Plains, with progress tracking ahead of the average pace for all crops. The corn and sorghum harvests were 95-100% complete in the region by Nov. 20, while the cotton harvest had progressed to 71% complete in Texas, 75% in Oklahoma, and 85% in Kansas. Growers in Colorado and Kansas also had 90-93% of the sunflowers harvested by that date.
South Central:
After a cold weekend that prompted hard freeze warnings across the South Central region, temperatures before Thanksgiving warmed to average or above-average levels in many locations. Temperatures in Jackson, Tenn., dropped to a record 14 degrees on Nov. 21, but were expected to reach the upper-50s and low-60s by midweek.
Forecasts warned of wet weather on Thanksgiving and the upcoming weekend. While scattered showers were likely for Tennessee and Kentucky, heavy rain was possible across Arkansas, Louisiana, and Mississippi.
The fall harvest was nearly complete in the South Central region, with progress tracking ahead of average. Growers in Kentucky and Tennessee had 99-100% of the corn in the bin by Nov. 20, while the cotton harvest had progressed to 90% complete in Tennessee, 98% in Mississippi, and 100% in Louisiana and Arkansas.
Southeast:
Weather across Virginia and the Carolinas was described as sunny but cool early in the week, but highs were expected to reach the mid-60s again by midweek. Scattered rain showers were in the forecast for Nov. 24-25.
Scattered showers were also moving through central and northern Alabama at midweek, with more significant rainfall expected late on Thanksgiving and into the holiday weekend. Highs in the 60s were common across the state at midweek.
The prior weekend brought freeze warnings to parts of Georgia and northern Florida, but warmer weather moved in during the Thanksgiving week. The dry weather aided the fall harvest, which was tracking ahead of the average pace in all the Southeast states.
The cotton harvest as of Nov. 20 was 88% complete in North Carolina, 87% in Alabama and Virginia, 79% in Georgia, and 73% in South Carolina. The peanut harvest had reportedly progressed to 94% complete in South Carolina, 95% in Georgia, 98% in Alabama, 99% in North Carolina, and 100% in Florida and Virginia.
Transportation
US Gulf:
Harvey Lock navigation continued to be unavailable during the week due to low water conditions on the Mississippi River. Algiers Lock was suggested as an alternate route. Bayou Sorrel Lock guidewall replacement work is scheduled to persist through February 2023, prompting intermittent weekday travel shutdowns between 6:30 a.m. and 5:00 p.m., while 24-hour navigation resumed on Saturday and Sunday. Wait times were seen as high as 21 hours on Nov. 19-21, down from 3-4 days reported previously.
Commercial travel on the Atchafalaya River was closed at Little Island Pass, Middle Island Pass, and Riverside Pass due to active exposed underwater pipelines in the channel. Detours were available through the Port Allen Lock.
At Algiers Lock, length and width restrictions continued to limit unassisted lockages to four standard barges or two 30,000 mt tankers per turn. Vessels traveling with an assist vessel were reportedly allowed to lock with longer tows, however. Intermittent delays were observed up to seven hours through the early week.
Calcasieu Lock is set to close to daylight-hour navigation on Dec. 4-19, with delays expected. An additional set of shutdowns is anticipated in late January 2023.
Construction underway at Belle Chasse Bridge, located at Mile 3 of the West Canal, was reported to produce sporadic navigation stoppages lasting up to 12 hours at a time. Work at the site was scheduled to run through the end of the year.
Industrial Lock waits were reported at a wide 4-14 hours through the early week. Thirteen hour delays were noted at Colorado Lock, while Brazos Lock saw intermittent nine hour wait times.
Mississippi River:
Low river levels continued to snarl commercial travel on the lower Mississippi River, resulting in both draft limits and reduced barge counts remaining in place during the week.
Recent rains improved levels at Memphis, lifting the NWS gauge to 1.0 feet and falling on Nov. 21, below the region’s 5.0-foor Low Stage. Depths were projected to recede to (-)5.8 feet by Dec. 5. The Vicksburg gauge moved above the 5.0-foot Low Stage on Nov. 18 to sit at 7.79 feet and rising on Nov. 21. Levels in the area were expected to crest at 8.8 feet on Nov. 23-24 before reversing to a forecast 5.8 feet on Dec. 5. St. Louis’ 1.41-foot depth reading, seen on Nov. 21, was likely to fall below the 0.0-foot mark on Nov. 25, the NWS forecast.
Tow lengths were capped at a maximum 25 barges on southbound movements, down from the typical 30-40 barges expected during normal periods. Solid cargoes were reduced to 9.0 feet of draft for both northbound and southbound travel, while tows with liquid cargoes were limited to 8.5-foot drafts. Local loading and unloading drafts were heard at as little as seven feet in some areas. Taken together, per-vessel towing capacity was reduced by 25-50% or more in some cases, sources said.
Draft limits on blue-water vessels were reduced to 41 feet in the Baton Rouge Harbor, down from the typical 45 feet. Dredging was heard kicking off at Mile 839 on Nov. 17. A safety advisory was noted in place at Miles 228-230 due to ongoing repairs to the I-10 bridge, with intermittent navigation shutdowns expected.
Revetment operations were heard to begin at Mile 336.8 on Nov. 17. The project was expected to limit movements daily between 6:00 a.m. and 6:00 p.m., through Nov. 25.
Delays at Chain of Rocks Lock were seen at 3-8 hours during the week.
Illinois River:
Dredging continued at the Illinois Waterway’s Mile 144.5 limiting travel daily between 6:00 a.m. and 6:00 p.m. A safety zone reported in place at Miles 19.5-21 due to power line work was disbanded on Nov. 18, sources said. Dredging was also in progress at Miles 215-216.
Ohio River:
Ongoing low water levels on the Ohio River system were noted reducing maximum drafts to nine feet for the full length of the Ohio, Tennessee, and Cumberland Rivers.
Low water levels in the Cairo area were noted triggering capacity reductions. The Corps was reported dredging in the Mound City area, located at Miles 965-974, reportedly aiming to add one extra foot of draft capacity at Cairo.
At Montgomery Lock, the main chamber was reported shut Oct. 17 through Dec. 19 for repairs and maintenance, necessitating detours through the auxiliary chamber. Tows were reported waiting 3-8 days to pass the site during the week.
Waits were noted at 4-16 hours on the Tennessee River’s Kentucky Lock. Corps data showed intermittent 4-8 hour waits times at Wilson Lock.
Arkansas River:
Repairs at Norrell Lock were scheduled to conclude on Nov. 20, ending a period of daytime navigation outages reported blocking movements daily between 7:00 a.m. and 7:00 p.m. Norrell Lock is scheduled to shut down completely on Jan. 30-31, 2023.
Putin, Mazepin Continue Push for Ammonia Exports; Uralchem Readies Alternative Port
Moscow will continue to work with the UN to resume the supply of ammonia via the Tolyatti-Odessa pipeline as part of the grain deal, according to Tass, citing a Nov. 23 meeting between Russian President Vladimir Putin and Dmitry Mazepin, who heads up Uralchem as well as the RSPP (Russian Union of Industrialists and Entrepreneurs) Commission on Mineral Fertilizers Production and Trading.
Togliattyazot is set to supply ammonia, said Mazepin, adding that the Ukrainian side is putting forward a number of political issues on the resumption of transit. Ukraine President Volodymyr Zelensky has said that a prisoner exchange must come before the reopening of the pipeline.
“The parameters, figures, and volumes there are clear. The benefit for all participants of the process is also clear,” said Putin. “We will also work with the UN, with colleagues from the organization. Let’s see how that pans out. You know my position, I am not against it,” he noted.
Mazepin noted that once the grain deal was concluded in July 2022, a memorandum was inked, suggesting that the countries under the auspices of the UN would support the unblocking of the Tolyatti-Odessa ammonia pipeline and the delivery of ammonia produced at Togliattyazot.
Mazepin said the ammonia pipeline is in good condition on the Russian side and believes it can work on the Ukraine side as well. Industry observers fear the pipeline could be damaged during the war.
Mazepin noted that US trader Transammonia Inc. was ready to act as a buyer of ammonia from the Togliatti plant in order to transport it through Ukraine, purchasing it at the Russian-Ukrainian border.
In the meantime, Uralchem plans to commission Russia’s first port for ammonia shipment in Taman by the end of 2023, which will enable the opening of an alternative supply route. According to Mazepin, the company’s investments are expected to total 50 billion rubles (US$824 million). He noted that currently, Russia’s ammonia exports depend on ports in other countries.
“We would like to plug this gap. We are working together with the Industry and Trade Ministry, the Administration of the Krasnodar Region, and all agencies,” said Mazepin. “But we would still like to ask you, as part of the grain deal, to help temporarily open and ensure in Odessa the unloading and transportation of ammonia that may also run to developing countries, including Africa.”
On Feb. 24, Tolyattiazot suspended the transit of ammonia through the Tolyatti-Odessa pipeline due to the situation in Ukraine.
Ammonia
US Gulf/Tampa:
Tampa ammonia for December remains under pressure as European ammonia prices have started to slip with more ammonia plants returning to production.
Eastern Cornbelt:
Prompt ammonia pricing slipped to $1,250-$1,350/st FOB in the Eastern Cornbelt, down $25-$50/st, with the low reported for November shipment at Koch terminals in Illinois and Indiana, and the high reflecting limited truck tons offered out of CF terminals. The ammonia market FOB Lima, Ohio, remained at $1,300/st FOB in mid-November.
Western Cornbelt:
Ammonia pricing was quoted at $1,250-$1,320/st FOB for prompt truck tons in the Western Cornbelt, depending on location and supplier, with the low reported for November tons out of some Koch terminals in Iowa.
Northern Plains:
The latest ammonia offers in the Northern Plains remained at $1,200-$1,250/st FOB and $1,245-$1,300/st DEL for fall tons, but sources said most bids for fill or prepay had been pulled. “We had an alright run in North Dakota but not as good as we would have liked,” said one source regarding fall ammonia movement. “Minnesota, however, is still going.”
Black Sea:
Getting Russian ammonia back into the market continues to come up as the United Nations and Turkey work to ensure the deal brokered to get Ukrainian grain to a hungry world. The deal also includes Russian fertilizer. Every so often, the Russian negotiators remind their UN counterparts that besides the dry fertilizers, they also want to ship out ammonia.
The latest round of talks tried to push for the opening of the ammonia pipeline once again from Russia to Odessa. When this idea was first floated, Trammo had signed on to receive the Russian product at the border and then handle the export out of Odessa.
Bulk and ammonia traders dismiss the idea of including ammonia in the deal because of the volatile nature of the product and the difficulties ensuring its safety. The latest round of Russian attacks on Ukrainian power facilities increased their concern, noting that without electricity the pipeline cannot function.
Ammonia traders see little reason to push for Russia to return to the ammonia market. Buyers who once depended on Russian ammonia have moved on, sources said. The availability of ammonia from the Americas and Asia has made it possible for buyers to fill their needs without the Russian product.
With the exception of a price bubble in Europe, ammonia prices are coming off in most global markets. Buyers in Southeast Asia are seeking delays in deliveries of their contracted tons even as producers in the area look for buyers. Phosphate giant OCP in Morocco, once a major buyer of Black Sea ammonia, is back to normal production using tons from Indonesia and Trinidad.
Even Black Sea neighbor Turkey is finding ammonia from North Africa at favorable rates. The price into Turkey has dropped about $100/mt in the past couple of weeks, to a reported $980-$990/mt CFR.
Still, without any exports from the region, there can be no price exploration.
India:
Sources said India is now paying $850-$860/mt CFR for ammonia, down $30-$60/mt from recent purchases. The bulk of India’s spot material is coming from China and Indonesia. Larger buyers are also regularly receiving their contracted tons from the Arab Gulf without any delays.
January-September ammonia imports were reported at 1.6 million mt by Trade Data Monitor, down about 13% from the 1.8 million mt imported during the same period in 2021. The main suppliers were Saudi Arabia with 703,000 mt, Qatar at 282,000 mt, Indonesia with 164,000 mt, and Bahrain with 159,000 mt. Most of the tonnage from the Arab Gulf was delivered under long-term contracts. The Indonesian ammonia, however, was mostly done as spot purchases.
Third-quarter 2022 imports were reported at 553,000 mt, about 23% lower than the 714,000 mt imported during July-September 2021.
September 2022 imports came in at 185,000 mt, down 22% from the 237,000 mt imported during September 2021. Saudi Arabia accounted for 45% of September tons, with 82,000 mt. Indonesia took another 19% of the market, with 35,000 mt. This was a dramatic step up for Indonesia, which only sent 15,000 mt to India in September 2021.
China accounted for 13% of September imports, with 23,000 mt. China did not send any ammonia to India in 2021.
Middle East:
Arab Gulf producers continue to draw a line at $1,000/mt FOB, despite strong demands from buyers for a price in the $900s/mt FOB. The impasse leaves prices at a previous spot level of $1,015-$1,030/mt FOB. Traders noted that there is no market for any product at that level, and eventually the producers will have to lower their prices.
Some in the industry look at other deals to argue with the producers. Sources said the Arab Gulf equivalent netback from the recent Turkish deals at $980-$990/mt FOB would be about $870-$880/mt FOB. They also noted that the Indian business has an Arab Gulf equivalent price closer to $800/mt FOB.
So far, said one trader, the producers appear to be satisfied with handling their contracts. However, he said excess material is most likely building up. Eventually, the producers will have to lower their prices to clear out their storage facilities.
Northwest Europe:
Some new deals in Europe at $1,150/mt CFR are providing a solid base for prices in the area. Even though natural gas prices are coming off, the production cost is still much higher than what buyers are willing to accept, especially when ammonia is being imported from Trinidad, North Africa, and even Indonesia at lower rates.
Demand is also an issue. Many buyers are stepping back from their ammonia needs as inflation and high interest rates impact consumer demand for their products.
The end of the year will also see the last of Russian tons being transported across Finland. Finnish rail had tried to cut off the Russian exports to protest the Russian invasion of Ukraine. The courts, however, sided with the Russian firms, citing the contract between the two. That contract expires at the end of the year, however. Sources said the lack of Russian ammonia passing through Finland might cause a momentary hiccup in the market, but is not expected to have a large impact.
Southeast Asia:
South Korean ammonia imports for January-October were reported at 1.1 million mt by Trade Data Monitor, down about 3% from the 1.2 million mt imported during the same period in 2021. The main suppliers were Saudi Arabia with 503,000 mt, and Indonesia with 485,000 mt.
October 2022 ammonia imports totaled 94,000 mt, up from the 42,000 mt imported during October 2021. Saudi Arabia supplied the bulk of the material at 76,000 mt, with Indonesia sending 11,000 mt.
Urea
US Gulf:
NOLA urea barges were reported at $505-$530/st FOB, down from the week-ago $520-$530/st FOB. Prices had already started to soften before word came on Nov. 16 of the much lower India tender prices. Lower NOLA numbers were heard again after the India news broke.
Eastern Cornbelt:
The urea market was pegged at $590-$610/st FOB in the Eastern Cornbelt, depending on location, down from the previous week’s high of $635/st FOB. Pricing at both Ottawa, Ill., and Cincinnati, Ohio, was reported at the $600/st FOB level at midweek.
Western Cornbelt:
Urea prices dropped to $575-$600/st FOB in the Western Cornbelt, down from the prior week’s $580-$610/st FOB range, with the high reported in Iowa. The St. Louis, Mo., urea market was pegged in the $575-$585/st FOB range at midweek.
Northern Plains:
Urea prices in the Northern Plains dropped to $600-$615/st FOB St. Paul, Minn., and $670-$710/st DEL in North Dakota, down from the previous $615-$630/st FOB and $685-$730/st DEL ranges. The latest offers FOB Carrington, N.D., were pegged at the $675/st level, down from $700-$705/st FOB in late October.
Northeast:
The last urea offers were reported at $665/st FOB Fairless Hills, Pa., but sources at midweek said that location is currently out of urea until a resupply vessel arrives on Nov. 24. Delivered urea was pegged at the $675/st level in central Pennsylvania, down significantly from the $740/st DEL level reported in late October.
In the South Central region, new urea offers FOB Convent, La., were quoted at $620/st, down $20/st from the previous level.
Eastern Canada:
The urea market in Eastern Canada remained at C$1,060-$1,120/mt FOB in mid-November, depending on location and supplier.
India:
The NFL tender closed on Nov. 14 with 16 companies offering 2 million mt for shipment by Dec. 22. Ameropa offered the lowest price for an East Coast delivery with 90,000 mt at $578.77/mt CFR. Fertiglobe was the lowest offer to the West Coast with 45,000 mt at $573/mt CFR.
Almost exactly a year ago, IPL closed a tender that had some of the highest prices seen in an Indian tender. The West Coast price was $981.64/mt CFR and the East Coast price was $998.50/mt CFR. Prices have edged downward in the intervening 12 months, dipping to $517-$520/mt CFR in July 2022.
Aarka was disqualified with an offer of 50,000 mt. The Indian buyer did not explain why. Only one urea producer offered directly in the tender, with PIC offering 45,000 mt at $605/mt FOB.
| Offers to East Coast India | |||
| Offering Company | Quantity (mt) | US$/mt CFR | Discharge Port |
| Ameropa | 90,000 | 578.77 | ECI-L1 |
| Fertiglobe | 45,000 | 580.00 | ECI |
| Dreymoor | 45,000 | 589.42 | Kakinada |
| Aries | 90,000 | 591.97 | Vizag-Kakinada-PDP |
| Samsung | 50,000 | 602.50 | Kakinada |
| Swiss Singapore | 75,000 | 605.00 | ECI |
| Gavilon | 50,000 | 608.00 | Krishnapatnam-Gangavaram-Karaikal |
| Keytrade | 45,000 | 610.00 | Kakinada |
| Midgulf | 94,000 | 610.90 | Gangavaram-Kakinada |
| Fertcom | 45,000 | 615.00 | ECI |
| Koch | 45,000 | 620.00 | Krishnapatnam-Gangavaram |
| OQ Trade | 52,500 | 630.00 | Kakinada |
| Offers to West Coast India | |||
| Offering Company | Quantity (mt) | US$/mt CFR | Discharge Port |
| Fertiglobe | 45,000 | 573.00 | WCI-L1 |
| OCI | 45,000 | 574.00 | WCI |
| OQ Trade | 105,000 | 575.00 | Mundra-Kandla |
| Fertcom | 45,000 | 575.90 | WCI |
| Ameropa | 182,150 | 578.77 | WCI |
| Dreymoor | 93,000 | 584.91 | Pipavav |
| Aries | 45,000 | 591.97 | Kandla-Pipavav-Tuna |
| Swiss Singapore | 200,000 | 597.00 | WCI |
| Indagro | 100,000 | 603.00 | Mundra-Tuna |
| Midgulf | 94,000 | 604.90 | Mundra |
| Keytrade | 45,000 | 605.00 | Kandla |
| Samsung | 135,000 | 610.20 | Mundra |
| Koch | 45,000 | 620.00 | Mundra-Kandla |
As expected, the West Coast offers dominated the tender with 1.18 million mt. Sources said, however, they were surprised at the number of tons offered for the East Coast. Twelve companies offered a total of 726,500 mt for East Coast ports. The large amount offered to the East Coast, said traders, could indicate more Chinese material might be available than had been previously estimated.
Counterbids were sent to the trading houses on Nov. 17 with the Ameropa and Fertiglobe prices as the basis for East and West Coast deliveries. Sources reported by the close of business on Friday, Nov. 18, NFL had received commitments from sellers for 1.4 million mt.
Initially NFL said it would take 600,000-800,000 mt because of budget constraints. However, once the prices were released, the Department of Fertilizer reportedly reviewed the situation and authorized NFL to take as many tons as possible. Estimates are now that the buying house is looking for 1-1.2 million mt. It is still unclear if NFL will take the full 1.4 million mt offered by sellers. If NFL is able to secure the tonnage newly offered, sources said no more tenders will be needed for the rest of the year.
The bulk of the material is expected to come from the Arab Gulf, with at least one cargo out of the Baltics. Going into the tender, sources said the view was that China would supply four cargoes. Rumors are now circulating that as many as six cargoes might be available.
The earlier estimate was based on reports that the tonnage for those lots had already passed the rigorous tests that allow for exports. The additional tons are suspected of not yet being cleared, but with every possibility of having the paperwork finished in time to meet the shipping deadline of Dec. 22.
January-September imports of urea were reported at 6.8 million mt by Trade Data Monitor, up 13% from the 6 million mt imported during the same period in 2021. Oman, Qatar, and Russia sent a total of 3.2 million mt, compared with 1.1 million mt in 2021. China has been a major supplier so far this year with 855,000 mt, but its sales into India are down from the 2.2 million mt sent last year.
Third-quarter 2022 imports were reported at 2.2 million mt, down 37% from the 3.5 million mt imported during the same period last year.
September 2022 imports were reported at 567,000 mt, down from 1.3 million mt in September 2021. Some 102,000 mt was imported from Finland in September, compared with no Finnish material in 2021. Sources speculated that the tonnage was most likely Russian urea railed through Finland and exported from a Finnish port, so the port of origin was recorded rather than the production source.
Indonesia:
Producers have fallen silent as urea prices drop. The companies are fulfilling their orders for export, but do not seem to be making any moves to hold another selling tender any time soon.
Sources said one reason for the lack of activity could be that the producers have used up their export allocations. Without new permits to export, they have to wait until January for the government to issue new permits for 2023. One trader noted that even when January rolls around, the companies and government offices will spend a lot of time negotiating how many tons each producer will be allowed to export. Much will depend on estimates of domestic urea needs.
Without any new deals, the last tender price of $675/mt FOB remains the official rate, even though the market has come off dramatically since that tender.
Middle East:
The netback to the Arab Gulf from the lowest West Coast India price in the NFL tender was estimated at $550-$555/mt FOB. This is only slightly lower than what traders claimed the price should be as the global urea market softened over the last month.
The only producer in the NFL tender, PIC, tried to draw the line at a massive price drop with its $605/mt FOB offer. Even this price showed that producers saw a softer market. The netback from the last Indian tender was estimated at $624-$626/mt FOB.
Industry watchers said the Arab Gulf producers should have enough material to cover most of the West Coast offers in the Indian tender.
Egyptian producers went quiet following the release of the NFL tender prices. Sources estimated that the netback to Egypt from India would be in the low-$530s/mt FOB. This would be a significant drop from the $630/mt FOB achieved just a few weeks ago during a European buying frenzy.
As the week closed, reports surfaced of a small cargo being sold at $565/mt FOB. Shortly after that, traders and producers confirmed that Alexfert sold 6,000 mt of granular urea to a trader for December shipment at $570/mt FOB without designating the destination. Sources reported the hopes of producers to hold the line at $600/mt FOB now seems to have faded.
Demand from European buyers has slackened, said sources. This lack of interest is having an impact on North African producers looking for buyers. Reportedly, the urea warehouses are full, with little demand on hand to clear them out. Sources said farmers appear to be holding off on making any commitments for first-quarter 2023 purchases. Traders are unsure if the lack of sales is related to late demand by farmers, or due to demand destruction. One trader said he fears it is more the latter than the former.
Black Sea:
Sources estimated the netback from the West Coast Indian tender price to Poti in the eastern Black Sea at about $505/mt FOB. Reportedly, at least one inquiry has been made for a vessel to that port but not for product to go to India.
The estimated price matched the low end of where sources called the estimated Black Sea market in the past week. However, because of the distance from the entrance of the Black Sea, the Poti estimated price is lower than that of material coming from other facilities in the area.
South Korea:
Sources reported at least one small deal into South Korea that showed a netback to China of $560/mt FOB. This deal was reportedly done before the numbers in the NFL tender were revealed, and proved prescient
January-October 2022 urea imports were reported at 776,000 mt by Trade Data Monitor, up slightly from the 751,000 mt imported during the same period in 2021. The main suppliers were China with 314,000 mt, Qatar with 183,000 mt, and Indonesia with 89,000 mt. Only China showed a reduction in year-over-year sales to South Korea.
October 2022 imports were reported at 22,000 mt, down from the 48,000 mt imported in October 2021. China supplied 19,000 mt of the 2022 tonnage.
China:
Going into the NFL tender, sources expected Chinese urea to cover only four cargoes. After the tonnage and price offerings were revealed, however, sources now estimate that up to six shipments might come from China.
Sources said the initial four cargoes will reportedly be covered by urea already approved for export by Chinese authorities. There is some suspicion that the other tonnage may not yet have cleared the process to allow for the exports.
The netback to China from the NFL tender is pegged at $555-$560/mt FOB. Just as the tender closed, however, sources said sales to South Korea and the Philippines showed netbacks at $550-$560/mt FOB.
Bangladesh:
The government authorized the purchase of 60,000 mt of granular urea at the beginning of November. According to local media reports, permission was granted for an additional 90,000 mt. The first lot is with SABIC for 60,000 mt. The second lot is with Fertiglobe backed by UAE material.
There are also media reports that BCIC is facing credit issues with Saudi banks to complete existing and future urea purchases. The issue revolves around payment procedures, and BCIC and the Saudi banks are reportedly working to solve the problem.
Ethiopia:
After failing to secure 690,000 mt and nailing down a 200,000 mt government-to-government deal with China, EABC has called a tender to purchase 500,000 mt of urea. The deal is for a series of 10 shipments in 50,000 mt lots to be shipped between December 2022 and June 2023.
The tender calls for two lots for December 2022, three lots during the first quarter of 2023, and the remaining five for the second quarter.
Brazil:
A stagnant market and a midweek holiday led to limited business in Brazil. Sources said the few deals that took place moved the market to $560-$600/mt FOB, with little hope of a price revival. Rondonopolis also saw a drop in pricing, to $705-$760/mt FOB ex-warehouse.
Sources said the large stockpiles of urea, coupled with little demand from farmers, are affecting prices at the ports and at interior distribution centers. There is also uncertainty in the market while buyers and sellers wait to see what actions the new national government will take on agricultural issues.
UAN
US Gulf:
With inland prices under pressure, NOLA UAN barges were called $550/st ($17.19/unit) FOB, if that, compared to the long-standing $550-$555/st FOB.
Eastern Cornbelt:
UAN-32 pricing remained at $585-$610/st ($18.28-$19.06/unit) FOB in the Eastern Cornbelt, depending on location, with the low confirmed at Ottawa, Cincinnati, and Mount Vernon, Ind. Rail-DEL UAN-32 pricing was quoted at $620-$630/st ($19.38-$19.69/unit) in the region, down $5/st from last report.
The last UAN-28 offers were pegged in a broad range at $508-$530/st ($18.14-$18.93/unit) FOB in Ohio.
Western Cornbelt:
The UAN-32 market was pegged at $580-$610/st ($18.13-$19.06/unit) FOB in the Western Cornbelt, with the low reported at Port Neal, Iowa, and the high at Muscatine, Iowa.
Falling urea values and a lack of liquidity pushed UAN-32 prices lower in the Southern Plains, with new offers quoted at $530-$540/st ($16.56-$16.88/unit) FOB Verdigris and Woodward, Okla., down from the prior $555-$560/st ($17.34-$17.50/unit) FOB level.
Northern Plains:
The UAN-32 market remained at $610/st ($19.06/unit) FOB Winona, Minn., with no current offers reported at Pine Bend, Minn. UAN-28 pricing in North Dakota was pegged at $530/st ($18.93/unit) FOB in mid-November, down from the previous $550-$555/st ($19.64-$19.82/unit) FOB range.
Northeast:
UAN-32 pricing in the Northeast remained at $590-$600/st ($18.44-$18.75/unit) FOB Baltimore, Md., with UAN-30 offers pegged at the $554/st ($18.47/unit) FOB level at that location. The market out of terminals in upstate New York was unchanged at $640/st ($20.00/unit) FOB.
Eastern Canada:
The UAN-28 market was steady at C$875-$935/mt ($31.25-$33.39/unit) FOB in Eastern Canada, with UAN-32 offers confirmed at the C$1,000/mt (C$31.25/unit) FOB level on a spot basis in Ontario.
Ammonium Nitrate
Western Cornbelt:
The ammonium nitrate market was unchanged at $640-$650/st FOB Missouri terminals for the last reported offers.
Ammonium Sulfate
US Gulf:
NOLA ammonium sulfate barge prices were reported to have dropped again, to $365-$370/st FOB from the week-ago $390-$395/st FOB range.
Eastern Cornbelt:
The granular ammonium sulfate market dropped to $425-$455/st FOB in the Eastern Cornbelt, down $15-$25/st from last report, with the low confirmed at Cincinnati.
Western Cornbelt:
Granular ammonium sulfate pricing was pegged at $425-$450/st FOB in the Western Cornbelt, with the low confirmed at St. Louis and the high in Iowa.
Northern Plains:
Ammonium sulfate pricing in the Northern Plains slipped to $400-$420/st DEL for new offers, down from the last confirmed $460-$470/st DEL level.
Northeast:
Delivered ammonium sulfate prices in the Northeast remained at $510-$545/st following the mid-October increase in postings at Hopewell, Va., to $490/st FOB for granular, $450/st FOB for mid-grade, and $430/st FOB for standard.
Eastern Canada:
Ammonium sulfate fill pricing was unchanged at C$818-$825/mt FOB in Eastern Canada.
China:
Prices remain soft. A recent tender by Gresik in Indonesia showed a netback to China at $200/mt FOB and below, leaving a sense the market is now at $195-$200/mt FOB.
South Korea:
January-October exports of ammonium sulfate from South Korea were reported at 206,000 mt by Trade Data Monitor, down 56% from the 466,000 mt exported during the same period in 2021. The main buyers were Mexico with 83,000 mt, and the US with 59,000 mt.
October 2022 exports were reported at 15,200 mt, up slightly from the 13,000 mt exported during October 2021. Italy took 15,000 mt of the material offered.
Brazil:
Ammonium sulfate prices moved up slightly, to $720-$780/mt CFR. Rondonopolis prices also edged up to $410-$450/mt FOB ex-warehouse. Sources did not discuss why prices shifted upward. They did note, however, that the drop in urea prices now makes ammonium sulfate less attractive as a urea substitute in blending.
DAP/MAP
Central Florida:
Central Florida phosphate producers were reportedly sold out of DAP and MAP through the first half of December. Posted DAP truck pricing continued at $770/st FOB, while MAP trucks were posted at $790/st FOB, steady from the prior report.
Truck-loaded MAP offered from North Florida continued at $820/st FOB, unchanged from last week.
US Gulf:
NOLA phosphate pricing fell for the week, sources said, as the combined forces of the impending winter navigation season and ongoing trouble on the inland river system limited trading at NOLA.
Nearby NOLA DAP pricing sank to a $640/st FOB low, down $35/st from last week’s $675/st FOB floor, while sources described pricing as high as $665/st FOB, off from the prior $680/st FOB top.
Limited MAP trades and offers were reported down to $630/st FOB for nearby loading, while some saw the market topping out around $650/st FOB. Week-ago MAP levels were reported at $650-$665/st FOB,.
Domestic producers continued to report being sold out of NOLA DAP and MAP barges for loading through the first half of December. Tons located at upriver locations were drawing a considerable premium to NOLA, with some noting trades at or above a $700/st FOB NOLA-equivalent.
Sources quoted the nearby DAP barge market at $640-$665/st FOB, down from $675-$680/st FOB one week earlier. MAP barge pricing was reported at $630-$650/st FOB, also down from last week’s $650-$665/st FOB range.
US Exports:
Sources noted a quiet week on the US Gulf phosphate export markets. Recent reported business included a 25,000 mt DAP cargo selling into Latin America at $692/mt FOB.
Mosaic reported shifting a portion of the loading for a previously reported export vessel from Central Florida to NOLA. The cargo is slated to load in December.
With nothing new reported, the Gulf export DAP and MAP markets continued at $692/mt FOB, unmoved from the prior report.
Eastern Cornbelt:
DAP was quoted at $795-$810/st FOB in the Eastern Cornbelt, down $5-$10/st from last week, with Cincinnati pricing reported at $800-$810/st FOB. MAP pricing fell to $800-$830/st FOB in the region, with both the high and low reported at Cincinnati. The Ottawa market was pegged at $800/st FOB for both DAP and MAP at midweek.
Western Cornbelt:
DAP was quoted at $795-$810/st FOB in the Western Cornbelt, with MAP dropping significantly to $780-$810/st FOB, depending on location. St. Louis pricing at midweek was reported at $795-$800/st FOB for DAP and $780-$785/st FOB for MAP.
Northern Plains:
DAP pricing remained at $800-$810/st FOB St. Paul, with MAP reported at the $820-$830/st FOB level at that location. Delivered green MAP in western North Dakota dropped to $792/st for 1Q shipment, down from the last $860/st DEL prompt price.
Northeast:
DAP pricing was unchanged at $830/st FOB East Liverpool, Ohio, in mid-November. MAP in the Northeast was pegged at $850/st FOB East Liverpool and $880/st FOB Fairless Hills, with delivered MAP reported at the $905/st level in central Pennsylvania.
Eastern Canada:
MAP pricing in Eastern Canada covered a broad range at C$1,180-$1,280/mt FOB in mid-November, while the latest DAP offers at Montreal were quoted at the C$1,170/mt FOB level, down C$10/mt from last report.
Saudi Arabia/Bangladesh:
The Saudi Arabian Mining Co. (Ma’aden) has renewed its phosphate fertilizers supply deal with Bangladesh Agricultural Development Corp. (BADC). The agreement makes Ma’aden Bangladesh’s largest phosphate supplier, according to the Zawya news portal.
In accordance with the agreement, Bangladesh would continue to receive around 40% of the country’s estimated DAP needs through 2023 from Ma’aden.
China:
Small lots of DAP continue to be sold to buyers in Southeast Asia. Sources said the netback on these deals is around $720/mt FOB, leaving the price on a steady path.
The buyers are beginning to look elsewhere for their 2023 requirements. Sources said nothing seems to be changing in reports that China will ban all DAP/MAP exports during the first quarter of 2023.
India:
Indian buyers are winding down their activities as the year ends. Buying has focused on picking up DAP from sources other than China. The result is a landed price at $740/mt CFR, which is too low for the Chinese producers.
Buyers were aggressive in the last half of the year securing DAP. Government changes in the subsidy program helped make it possible for the buyers to purchase the tonnage needed.
January-September DAP imports were reported at 4.3 million mt by Trade Data Monitor, up 48% from the 2.9 million mt imported during the same period in 2021. The main suppliers were Saudi Arabia with 1.3 million mt, Morocco with 1.1 million mt, and China with 890,000 mt. Imports from Saudi Arabia and Morocco were up, while imports from China were down. During the January-September 2021 period, China sent 1.2 million mt to India.
Third-quarter imports of DAP were reported at 2.1 million mt, up 61% from the 1.3 million mt imports during July-September 2021.
September imports were reported at 968,000 mt, up from the 242,000 mt imported in September 2021. Moroccan DAP accounted for 30% of DAP imports, at 289,000 mt. Saudi Arabia came in second with 267,000 mt, for 28% of the import market.
Brazil:
The MAP price in Brazil remained steady at $590-$620/mt CFR. During this lull in price movement, sources said pressure seems to be building for some buyers to take positions for the first quarter of 2023. So far, however, no one has stepped forward.
Rondonopolis showed softness in pricing, dropping to $710-$770/mt FOB ex-warehouse. The softer prices come as buyers remain on the sidelines. Sources said some of the hesitancy is related to uncertainties about the agricultural policies the new government will implement in January 2023. Another factor is a devaluation of the Brazilian currency.