All posts by mickeybarb@charter.net

Lifosa Targets December Production Restart

Di-Ammonium Phosphate, Europe, Lithuania, News, News Briefs, Phosphate

EuroChem Group AG has confirmed that its Lithuanian phosphate fertilizer producing subsidiary, AB Lifosa, has reached an interim agreement with the government-appointed administrator, allowing the resumption of limited production (GM Nov. 11, p. 31; Nov. 4, p. 34).

Lifosa has been under the control of a temporary administrator since the end of May 2022. Production was halted in mid-September due to a shortage of critical raw materials, including ammonia, and high gas prices (GM Sept. 16, p. 29; Sept. 9, p. 28).

The Lithuanian phosphate producer had only resumed operations on Aug. 7 after being forced to stop operations in April following its banks freezing of the company’s accounts the previous month after the European Union (EU) imposed sanctions on EuroChem’s former controlling shareholder and CEO, Russian billionaire Andrey Melnichenko, on March 9 (GM April 15, p. 1; March 11, p. 1).

EuroChem Executive Chairman Samir Brikho, in a media statement, confirmed “recent cooperative work with the administrator resulted in the lifting of some supply restrictions,” allowing for a reduced-capacity restart in December “providing sourcing can be secured immediately.”

But he warned “to ensure sustainable economic operations beyond December, additional steps will need to be taken with regards to Lifosa obtaining access to competitively-priced raw materials and the permission to market its products to a broader customer base.”

Brikho said this requires Lifosa’s “quick reintegration into the EuroChem sales and procurement network.”

Lifosa’s main product is DAP, with a production capacity of some 1 million mt/y.

Lithuania’s only ammonia producer, AB Achema, partly resumed production on Nov.1, having suspended operations at the beginning of September due to a sharp increase in natural gas prices

Swedes Confirm Pipeline Sabotage

Europe, Natural Gas, News, News Briefs, Russia, Sweden

The Swedish Security Service has confirmed sabotage on the Nord Stream 1 and Nord Stream 2 gas pipelines, Russia’s Prime news agency reported, citing a Nov. 18 statement from the security service.

Four leaks were detected on Sept. 26 and 27 on the two pipelines, which run parallel under the Baltic Sea carrying Russian gas to Europe via Germany, after explosions were heard (GM Sept. 30, p. 1).

Preliminary investigations completed by Swedish investigators last month had found detonations caused the ruptures to the pipelines, “with evidence pointing to a deliberate act” (GM Oct. 7, p. 1).

In its latest findings, as cited by Prime, the Swedish Security Service reported the investigation shows that the pipelines have been subject to “gross sabotage.” The service documented “a large-scale damage” on the pipelines and found “foreign bodies with a residue of explosives.”

The investigation continues with the security service working jointly with national police, army, and the coast guard.

Ukraine Grain-Export Deal Extended for 120 Days; Zelensky Seeks Prisoner Exchange for Ammonia Exports

Black Sea, Featured, News, Russia, Turkey, Ukraine

A United Nations-brokered deal allowing exports of Ukrainian grain from the Black Sea will be extended, all sides confirmed on Nov. 17, according to Bloomberg.

Ukraine’s Infrastructure Minister Oleksandr Kubrakov said a decision to renew the accord for 120 days was reached in Istanbul, where talks have been held. Russia later confirmed that the deal will be prolonged without any changes, Tass reported. Turkey echoed the plans, and the UN welcomed “the agreement by all parties.”

That will keep crop shipments flowing from one of the world’s biggest grain and oilseed shippers, bolstering strained world supplies and benefiting Ukraine’s war-torn economy. Chicago wheat futures fell about 2% on the news, and corn and soybean oil retreated.

Ukraine still wants the deal extended by a whole year, and with one more port added to the accord, Kubrakov said; a response is awaited. President Volodymyr Zelenskiy said that Russian exports of ammonia through its territory – a condition that Moscow has pressed for – could only be allowed if the Kremlin agrees to exchange all war prisoners.

The original pact, struck in late July, revived seaborne exports from Ukraine after Russia blockaded the country’s ports following its invasion. It was brokered by Turkey and the UN with Ukraine and Russia and signed for an initial 120 days, which are due to run out Saturday, Nov. 19. The deal provided for an automatic extension for the same duration unless one of the parties decided to pull out or modify it.

Ukraine has shipped more than 11 million tons of crops through the Black Sea since the deal came into force, led by corn and wheat cargoes. The grain has headed across Asia, Europe, and Africa, including some cargoes chartered by the World Food Programme.

Still, its harvests and infrastructure continue to be hampered by Russia’s invasion. The country has also been barraged this week by a fresh round of missile attacks.

Last month, Russia briefly suspended its participation in the pact, but after the UN, Turkey, and Ukraine vowed to continue anyway, started observing it again.

President Vladimir Putin had complained that the deal did not do enough to ease exports of Russian grains and fertilizer, even though they are not subject to sanctions and shipment volumes rose.

The UN said it is “fully committed to removing the remaining obstacles to exporting food and fertilizers from the Russian Federation.”

Copa-Cogeca Warns of EU Fertilizer Usage Cuts Amid Soaring Prices

Europe, News, News Briefs

Fertilizer consumption in Europe may drop by 10% year-over-year as higher prices deter farmers from buying nutrients, according to the Secretary-General of Brussels-based Copa-Cogeca, which represents European Union (EU) farmers and agri-cooperatives.

Copa-Cogeca Secretary-General Pekka Pesonen told Bloomberg in an interview that most EU farmers plan to use less fertilizer and rotate to plants requiring less nutrients in a bid to cut the cost of production. Pesonen said this will impact the quality of wheat planted, given it is a nitrogen-intensive crop.

He said fertilizer stockpiles are currently “well below” the levels built up in previous years after farmers depleted these inventories in the last season when input prices soared.

High fertilizer costs have made it difficult for farmers to replenish their stocks and acquire supplies for the spring season, Pesonen said.

Prices are becoming prohibitive for many farmers in the EU to use fertilizers, he said.

Copa-Cogeca is urging EU Member States to approve the temporary suspension of tariffs on fertilizers to ease a supply shortage.

GROWMARK Partners on New Ag Complex

News, News Briefs

GROWMARK Inc. has announced a partnership with Heartland Community College to advance its agriculture program and create more work-ready students for the region.

The partnership features an investment by The GROWMARK Foundation in the construction of Heartland’s new agriculture complex. The facility is under construction at Heartland’s Normal, Ill., campus, and is set for completion in late 2023.

Bion Breaks Ground on Gen3Tech Facility

News, News Briefs, Specialty

Bion Environmental Technologies Inc., a developer of livestock waste treatment technology, announced that it has broken ground on a small commercial-scale Gen3Tech facility near Fair Oaks, Ind. Bion expects building construction to be completed by Dec. 15, 2022, with waste processing equipment delivered by mid-January.

The company said successful operation of the Gen3Tech platform will demonstrate its scalability and allow nitrogen recovery efficiencies to be optimized at scale. The platform simultaneously produces renewable energy and fertilizer – ammonium bicarbonate, which will be used for both commercial testing and university growth trials.

Operating data from the facility will be used to design Bion’s first full-scale commercial project and will support certification requirements for various regulatory agencies, including the California Department of Food and Agriculture’s (CDFA) organic program and USDA’s Process Verified Program (PVP) to establish a USDA-certified sustainable brand.

The facility will also produce ammonium bicarbonate fertilizer for both commercial testing by potential joint venture partners and university growth trials.

KBR Awarded DFPCL Contract

Houston, TX, India, News, News Briefs

KBR announced on Nov. 7 that it has been awarded a contract by India’s Deepak Fertilizers and Petrochemicals Corp. Ltd. (DFPCL) to help three DFPCL plants achieve lower emissions and simultaneously increase production capacity.

“We have a long-standing relationship with DFPCL and are pleased to help them modernize their existing assets and lower their carbon-footprint,” said Doug Kelly, President of KBR Technology. “We are confident that these plants will continue to contribute towards DFPCL’s business and ESG objectives.”

Mosaic Fertilizantes to Buy Wind Power

Brazil, News, News Briefs

Casa dos Ventos, a Brazilian renewable energy company, and Mosaic Fertilizantes on Nov. 17 announced the signing of a commercial agreement for the supply of 30 MWm wind power for 14 years, starting in 2026. This energy will come from the Umari Wind Complex in Rio Grande do Norte.

The project will supply 30% of the energy needs contracted by the company in the grid from 2026 to 2039. The partnership awaits approval from CADE (Administrative Council for Economic Defense).

Mosaic Fertilizantes said it is the first fertilizer company in Brazil to make an investment in wind energy acquisition, with the possibility of becoming self-producing. The project is part of the company’s strategy to become Net Zero by 2040, fulfilling scope 1 of this objective, which concerns eliminating emissions from the company’s productive activities, of which it is directly responsible; and also scope 2, referring to the electricity used in its production processes – in this scope, Mosaic will ensure the reduction of about 30% (24,500 tons) of the company’s total atmospheric emissions.

“This partnership is another demonstration of the consistency of our business strategy aligned with the ESG commitment. We are doing everything in our power to limit the impacts of climate change,” said Corrine Ricard, President of the company.

Casa dos Ventos started construction of the Umari Wind Complex last year. The Umari Wind Complex will have 45 wind turbines and total power of 202.5 MW, with the capacity to avoid the annual emission of approximately 405,000 tons of CO2 equivalent in the atmosphere.

APF, NeuAg Dispute Goes to Trial

News, News Briefs, Texas

Opening arguments in a lawsuit between American Plant Foods (APF), Galena Park, Texas, and NeuAg LLC, The Woodlands, Texas, were heard in Harris County District Court in Harris, Texas, on Nov. 17.

APF alleges fraud, saying NeuAg stole trade secrets, including its long-standing ammonium sulfate contract with BASF and plans for a facility in Freeport, Texas (GM Dec. 3, 2021), while NeuAg maintains it stole nothing from APF and that there is “nothing improper about competition (GM Dec. 31, 2021).

SQM 3Q Results Soar on Lithium Performance; Higher Prices Pressure Fertilizer Volumes

Earnings, Lithium, News, Potassium Sulfate, Specialty

SQM Inc. posted third-quarter net income of $1.1 billion on revenues of $2.96 billion, up from the year-ago $106.1 million and $661.6 million, respectively. SQM beat the average analyst estimate, the Bloomberg Consensus, on both income and revenues, which were $973 million and $2.74 billion, respectively. Gross profit was $1.63 billion, up from $224.8 million, while adjusted EBITDA was $1.66 billion, up from $250.9 million.

Third-quarter lithium volumes were 41,600 mt, the highest ever reported for the company, and average prices reached record high levels of over $5,600/mt. SQM believes 2022 global demand will grow at least 40%, and that its own sales volumes this year will surpass 150,000 mt. At the same time, SQM said it believes new lithium supply outside of SQM has been delayed and that the supply balance will be tight for the remainder of the year and into 2023. SQM also announced that it has recently signed new, long-term lithium and iodine supply contracts.

SQM reported on Nov. 16 that its Board of Directors has just approved the first stages to expand lithium hydroxide capacity from 40,000 mt/y to 100,000 mt/y in Chile, requiring additional investment of $360 million to the previously announced capex plan. The new capacity should be in full operation by 2025. In September, SQM announced the purchase and development of a new plant in China that will allow it to produce up to 30,000 mt/y of lithium hydroxide in China using lithium sulfate coming from Chile. Also during the third quarter, the company announced its Salar Futuro project in Chile, which entails new technologies, increased yields, and use of sea water and investment of $1.5 billion, which the company said will allow it to be the most sustainable mining operation in the world.

Third-quarter Specialty Plant Nutrition (SPN) revenues were up 28%, to $292.5 million from the year-ago $229.2 million. Volumes sank 29%, to 207,900 mt from 292,800 mt. Potassium-based products were off 26%, to 108,500 mt from 147,000 mt, while specialty blends fell 39%, to 62,300 mt from 102,900 mt.

Due to historically high prices, as well as increases in other raw materials, SQM believes that global demand for agricultural potassium nitrate could decrease 15-20% this year compared to global demand in 2021. It said this decrease, combined with additional supply that has entered the market from China, will pressure SPN sales volumes for the year, a continuation of the trend that it saw during the first nine months of the year. It said 2022 sales volumes will be significantly below 2021’s 1.15 million mt.

Nine-month SPN revenues were up 40%, to $898.1 million from the year-ago $640.5 million. Volumes were off 25%, to 648,600 mt from the year-ago 869,500 mt. All major categories saw declines. Potassium-based products were off 23%, to 371,100 mt from 484,700 mt, while specialty blends dropped 31%, to 167,600 mt from 241.900 mt.

Third-quarter Potassium Chloride and Potassium Sulfate (MOP/SOP) revenues were down 32%, to $60.2 million from the year-ago $88.7 million, while volumes were off 69%, to 62,700 mt from 201,800 mt.

SQM said that as a result of high prices earlier in the year it has seen a downward pressure on global demand in the third quarter and believes demand will decrease significantly compared to 2021. It said in recent months, this decrease in demand has already begun to impact prices, and during the third quarter SQM said its average prices decreased approximately 3% compared to second-quarter prices.

SQM expects this downward trend to continue into the fourth quarter. It said third-quarter sales were affected by tougher market conditions, specifically in Brazil, which is one of its main markets. It believes sales volumes in the MOP/SOP business line will be approximately 500,000 mt in 2022, compared to 2021’s 893,000 mt.

Nine-month MOP/SOP revenues were up 71.5%, to $356.7 million from the year-ago $208 million, while volumes declined 35.1%, to 382,000 mt from 588,600 mt.

SQM’s nine-month net income was $2.76 billion on revenues of $7.58 billion, up from the year-ago $263.9 million and $1.78 billion, respectively. Gross profit was $4.09 billion, up from $547.3 million, while adjusted EBITDA was $4.17 billion, up from $626 million.