All posts by mickeybarb@charter.net

Incitec Pivot & Saudi’s Modern Chemicals Ink JV Deal for TAN Project

Australia, News, News Briefs, Saudi Arabia

Incitec Pivot Limited (IPL), Southbank, Victoria, has announced it has signed a joint venture agreement with Saudi Arabian firm Modern Chemicals Co. (MCC) to develop a Technical Ammonium Nitrate (TAN) Plant in the Middle East.

Riyadh-based MCC is developing a 300,000 mt/y TAN production plant in Ras Al Khair Industrial City, in Saudi Arabia’s Eastern Province.

IPL said it has been in discussions with MCC management since 2020 to participate in the project, and the two parties entered into a Memorandum of Understanding (MOU) in early 2022.

Since then they have been jointly undertaking feasibility works for several months, including “significantly” advancing ongoing Front-End Engineering and Design (FEED) activities with German firm Thyssenkrupp.

The TAN plant will be the first in the kingdom.

“The jv formation will expedite key project development processes, through the completion of the FEED and a definitive bankable feasibility study sufficient for financing institutions like the Saudi Industrial Development Fund and other stakeholders,” IPL said.

The TAN output will be targeted to the Saudi Arabian and regional mining sectors.

Indonesia’s PT Pupuk Indonesia Inks Distribution MOU with Fertiglobe; Opens Dubai Office

Ammonia, Indonesia, News, News Briefs, The Netherlands, Urea

Indonesian state-owned enterprise, PT Pupuk Indonesia (Persero), and Fertiglobe, the nitrogen fertilizer joint venture of Netherlands-based OCI NV and Abu Dhabi National Oil Co. (ADNOC), have signed a Memorandum of Understanding (MOU) that will allow Pupuk Indonesia to potentially utilize Fertiglobe’s global distribution business to facilitate the placement of its ammonia and urea in international markets, the Indonesian company said in a statement on its website.

The inking of the MOU took place on Oct. 31 at the opening event of Pupuk Indonesia’s representative office in Dubai, in the United Arab Emirates (UAE).

Pupuk Indonesia is one of Asia’s largest producers of ammonia and urea, with an export volume in 2021 of around 2 million mt of urea and 715,000 mt of ammonia, according to its statement. It also produces and exports other products, including NPKs.

The Indonesian company said its new representative office is aimed at expanding Pupuk Indonesia’s opportunities for trade cooperation in ammonia, fertilizers, and other products, and to gain broader access to the purchase of raw materials, especially for NPK fertilizer, and enable future collaborations with technology and manufacturing companies located in the UAE, which will support the Indonesian company’s trading businesses moving forward.

First Deputy Minister of Indonesia’s State-Owned Enterprises Pahala Nugraha Mansury said the opening of a representative office in Dubai is “a very strategic step” given three initiatives Pupuk Indonesia is developing.

The first of these is to ensure that Pupuk Indonesia has operational excellence, including supply chain efficiency. The second is related to food security and optimization, where he said fertilizer is one of the key success factors for having better food security.

“The third initiative is that Pupuk Indonesia believes it can also become one of the producers of products related to the green and circular economy, such as through green ammonia, green hydrogen, or in the medium term including blue ammonia and blue hydrogen,” said Pahala.

Lifosa Targets Mid-November Restart, Achema Partly Resumes Operations

Lithuania, News, News Briefs, Phosphate

Lithuanian phosphate fertilizer producer AB Lifosa, a subsidiary of EuroChem Group AG, aims to resume production at Kėdainiai in mid-November, according to local media reports, citing the company’s temporary administrator, Rimvydas Vaštakas.

Lifosa halted production in mid-September due to the sudden rise in natural gas prices, as well as the suspension of production by the country’s only ammonia producer, AB Achema (GM Sept. 16, p. 29; Sept. 9, p. 28).

Lifosa said at the time that it expected to reach an agreement with its ammonia suppliers to enable it to resume operations in November.

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).

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

Achema partly resumed fertilizer production at Jonava on Nov. 1 following lower natural gas prices, according to a  Baltic News Service  report, citing Achema head of Communications, Jolita Macelyte.

The company, Lithuania’s biggest nitrogen fertilizer producer, is reported to have restarted one ammonia line and one urea line, with plans to resume production of other products.

Achema has 1.1 million mt/y of ammonia production capacity. It also has 1.3 million mt/y production capacity for UAN, 1 million mt/y urea capacity, and 0.56 million mt/y capacity for ammonium nitrate production, according to Green Markets’ database. The company also can produce CAN and AdBlue.

BHP Completes Shafts at Jansen Potash Mine

Australia, News, News Briefs, Potash, Saskatchewan

BHP Group Ltd, Melbourne, recently completed the excavation and lining of the two 1,000-meter deep shafts at its Jansen potash mine under development in Saskatchewan, according to a company statement, cited in a Bloomberg report.

BHP said the shafts are one of the most technically risky parts of developing a greenfield project like Jansen and their completion will significantly reduce the development risk, as cited by the report.

The mining major last month reported in its Operational Review for the quarter ended Sept. 30, 2022, the Jansen Stage 1 project was tracking to plan, and was 11% complete as at the end of September (GM Oct. 21, p. 32). When complete, Jansen Stage 1 will have capacity to produce 4.35 million mt/y of potassium chloride. First production is being targeted for calendar 2026.

As also previously reported, BHP has accelerated a study of Jansen Stage 2, which on completion would add another 4 million mt/y of production capacity.

Grupa Azoty Expects 3Q Net Loss

Earnings, News, Poland

Polish fertilizer and chemicals producer Grupa Azoty SA expects a Pln79 million (approximately $16.6 million at current exchange rates) group net loss for the third quarter ended Sept. 30, 2022, with EBITDA seen at Pln267 million, according to a PAP news report, citing a company filing of preliminary results.

Third-quarter revenue is expected to come in 19% higher year-over-year, at Pln6.31billion.

These preliminary results compare with a net profit of Pln14 million and an EBITDA of Pln300 million for the third quarter of 2021. Third-quarter revenue last year was Pln3.88 billion (GM Nov. 5, 2021).

Azoty sees its Fertilizers/Agro business segment posting a third-quarter 2022 EBITDA of Pln62 million

EuroChem Subsidiary Buys Power Generator Novomoskovsk GRES

Europe, News, News Briefs, Russia

EuroChem Group AG subsidiary nitrogen fertilizer subsidiary Novomoskovsk Azot has acquired Russia’s Tula Region-based power generator Novomoskovsk GRES from PJSC Quadra Power Generation for an undisclosed sum, Interfax reported on Oct. 28, citing the Unified State Registry of Legal Entities.

According to the report, Novomoskovsk Azot is Novomoskovsk GRES’ sole customer. The power company has installed electricity capacity of 233.7 MW, and thermal capacity of 302.4 Gcal/h.

Sinochem, APC Ink New MOU for Potash Supply

China, Jordan, News, News Briefs, Potash

Sinochem Fertilizer Macao Ltd. and Arab Potash Co. (APC) signed their 2023-2025 Memorandum of Understanding (MOU) during the IFA Strategic Forum held in Washington, DC, on Oct. 31-Nov. 2, Sinofert reported in a Nov. 1 statement on its website.

According to the MOU, Sinochem Fertilizer will continue to be the exclusive agency for the marketing of potash from APC in China between 2023 and 2025.

“This MOU is an extension and further development of the MOU both sides signed during the 1st China International Import Expo in 2018,” said Sinochem Fertilizer Macao Ltd. Chairman Feng Mingwei.

The statement did not disclose the volumes to be supplied under the new MOU.

Russia Humanitarian Fertilizer Shipment to Go to Africa

Africa, News, News Briefs, Russia

The first humanitarian shipment of Russian fertilizers is anticipated to depart for Africa during the first week of November, Post Online Media reported on Nov. 1, citing the Secretary-General of United Nations Conference on Trade and Development (UNCTAD) Rebeca Grynspan.

The report cited Grynspan as saying the fertilizers are being donated by Uralchem for humanitarian needs in Africa, Southeast Asia, and Latin America, with the direct engagement of the World Food Programme (WFP).

“Specific actions are bearing some results to our efforts, especially with relation to the fertilizers currently stored in ports and warehouses in European ports,” she said.

Russian President Vladimir Putin in September said Russia was prepared to donate some 300,000 mt of Russian fertilizers that had built up in European Union (EU) ports “free of charge” to developing countries (GM Sept. 16, p. 28). Putin had been urging the UN to exert pressure on the EU to lift restrictions it has imposed on Russian fertilizers.

Ammonia

Ammonia, Eastern Cornbelt, Indonesia, Malaysia, Market Watch, Northwestern Europe, South Central, Southern Plains, Tampa, Thailand, Turkey, U.S. Gulf, Western Cornbelt

US Gulf/Tampa:

Tampa ammonia for November stands at $1,150/mt CFR. With expectations that more European ammonia plants will come back up due to lower natural gas prices, however, sources said Tampa pricing for December will likely be under pressure.

Eastern Cornbelt:

Ammonia pricing remained at $1,300-$1,400/st FOB in the Eastern Cornbelt, with the low at Lima, Ohio, and the high at East Dubuque, Ill. Truck tons out of Huntington, Ind., were pegged at the $1,350/st FOB level during the week.

“Product is going to the ground briskly across Iowa, Illinois, Indiana, and in areas of Nebraska,” said one contact. “There will likely be a slowdown in some areas over the weekend as much-needed rain is forecast through some of the Cornbelt.”

Western Cornbelt:

Ammonia was reportedly moving in parts of Iowa and Nebraska during the week, with the market remaining at $1,290-$1,320/st FOB for prompt truck tons.

Southern Plains:

Ammonia pricing was quoted at $1,100/st FOB Woodward, Okla., $1,150/st FOB Verdigris, Okla., and $1,175/st FOB Coffeyville, Kan., for the last reported offers.

South Central:

Truck pricing for ammonia out of Gulf Coast terminals slipped to $1,050-$1,080/st FOB, down $20-$30/st from last report. No prices were being offered at El Dorado, Ark., Midway, Tenn., or Cherokee, Ala., sources said.

Northwest Europe:

Ammonia prices remained steady at $1,250/mt CFR, with buyers asking for $1,100/mt CFR and suppliers trying to move the price back to $1,300/mt CFR.

Export numbers from Indonesia showed how European buyers were reaching out to non-traditional suppliers. The Trade Data Monitor figures for January-September showed Indonesia supplied 112,000 mt to European buyers out of 1.45 million total tons exported, compared with no tonnage during the same period in 2021. September shipments included 46,000 mt sent to Europe out of an export total of 115,000 mt.

Indonesia:

January-September 2022 exports of ammonia were reported at 1.45 million mt by Trade Data Monitor, up 4% from the 1.39 million mt exported during the same period in 2021. The largest single buyer was South Korea with 425,000 mt. India purchased 187,000 mt, and Taiwan took 166,000 mt.

As noted earlier, European buyers took 112,000 mt, compared with no shipments during the first three quarters of 2021. The demand from Europe, said sources, is directly related to the high cost of natural gas. Even with higher freight rates, buyers were able to find lower prices from producers that would keep prices from moving past the current $1,250/mt CFR.

Third-quarter 2022 exports were up slightly to 450,000 mt. September 2022 exports were reported at 115,000 mt, up 6% from the 109,000 mt exported during September 2021.The main buyers in September were Turkey and South Korea, each with 23,000 mt for 20% of the exports. Taiwan took 15,000 mt for 13% of the market. Finland was the largest European buyer in September with 14,000 mt, for 12% of the market.

Persero, the holding company for the state-owned urea producers, signed an MOU with Fertiglobe to handle global sales of Indonesia urea. At the same time, Persero opened a trade office in Dubai, United Arab Emirates.

In a press release, Persero said the representative office and MOU will ease access to raw materials for NPK production as well as secure new global markets for Indonesian product. Industry watchers said the deal could be a boon for Indonesian plans to upgrade its ammonia production and get into the green ammonia market.

Malaysia:

January-September 2022 ammonia exports were reported at 332,000 mt by Trade Data Monitor, down about 14% from the 386,000 mt exported during the same period in 2021. The main buyers were Thailand with 195,000 mt and India with 45,000 mt.

Third-quarter 2022 exports were reported at 113,000 mt, down a touch from the 117,000 mt exported during the same three months in 2021.September 2022 exports were reported at 49,000 mt, down 15% from September 2021 exports of 58,000 mt.

Thailand:

January-September imports of ammonia were reported at 207,000 mt by Trade Data Monitor, down about 12% from the 306,000 mt imported during the same period in 2021. Malaysia was the main source of ammonia at 184,000 mt.

Third-quarter 2022 imports were reported at 11,000 mt, up about 15% from the 96,000 mt received during July-September 2021.September 2022 imports were pegged at 33,000 mt, down slightly from the 36,000 mt received during September 2021. Malaysia dominated the sourcing of the ammonia with 30,000 mt.

The difference between the Malaysia quantity reportedly sent to Thailand and what the Thai government confirmed for the same period is usually a result of when product clears the local customs facilities. This often leads the receiving country to show fewer tons than the sending country for the same period.

Turkey:

January-September 2022 ammonia imports were reported at 515,000 mt by Trade Data Monitor, down about 19% from the 635,000 mt imported during the same period in 2021.

The top supplier for the first nine months remained Russia with 162,000 mt, even though there was no difference between the year-to-date August and September figures. The bulk of the Russian material came earlier in the year before exports from the Black Sea were shut down.

Third-quarter 2022 imports were reported at 80,000 mt, up 22% from the 66,000 mt imported during the same period in 2021. Some leftover tons from Russia were counted in the total imports. However, Saudi Arabia was the top supplier with 39,000 mt.

September 2022 imports showed no Russian product. Imports for the month were reported at 80,000 mt, up 22% from the 66,000 mt imported during September 2021. The top supplier was Qatar with 28,000 mt, representing 35% of total imports. Qatar did not send any ammonia to Turkey in 2021 or 2020. Libya took 21% of the import market, with 17,000 mt.

Urea

Black Sea, Brazil, China, Eastern Cornbelt, Egypt, India, Indonesia, Malaysia, Market Watch, Middle East, Pakistan, South Central, Southeast, Southern Plains, Thailand, Turkey, U.S. Gulf, Urea, Western Cornbelt

US Gulf:

NOLA urea barges dropped as low as $508/st FOB early in the week, but quickly climbed back up to as high as $550/st FOB after news broke that India was calling another tender so soon after the last one. The week-ago range was $540-$570/st FOB.

Eastern Cornbelt:

The urea market was down significantly in the Eastern Cornbelt, fueled by falling NOLA barge prices. New terminal offers fell to $590-$625/st FOB in the region, well below the prior week’s $660-$680/st FOB range. The low was reported out of Ohio River terminals on a spot basis, while the Ottawa, Ill., market was quoted at the $610/st FOB level at midweek.

In the Great Lakes region, new urea offers FOB Toledo, Ohio, were confirmed at the $620/st level for November-December tons, down dramatically from last week’s $680/st FOB price.

Western Cornbelt:

Urea prices dropped to $600-$630/st FOB in the Western Cornbelt, down significantly from the prior week’s $650-$670/st FOB range, with the low confirmed at St. Louis, Mo., at midweek.

Southern Plains:

Urea pricing reportedly plunged to $605-$620/st FOB Catoosa/Inola, Okla., during the week, down considerably from the previous week’s $650-$670/st FOB range. Some sources said offers had bounced back up to $660/st FOB after NOLA barge prices firmed in response to the new Indian urea tender.

The Houston urea market was pegged at the $615/st FOB level at midweek, down from $670/st FOB in mid-October.

South Central:

The latest urea offers in the South Central region ranged broadly at $600-$670/st FOB in early November, depending on location, with the low reported at Convent, La. The Memphis, Tenn., market was pegged at $650-$655/st FOB at midweek, down $55/st from mid-October.

Southeast:

Urea pricing in the Southeast slipped to $660-$670/st FOB Wilmington, N.C., and other port terminals, down $15-$25/st from last report.

India:

Rumors were running wild early in the week that another Indian tender would be called soon. For once, the rumors were correct. National Fertilizer Ltd. called a tender to close Nov. 14 with a shipping deadline of Dec. 22. The technical and price envelopes from offering companies will not be opened until Nov. 15.

Sources expect to see slightly softer prices in the tender. Expectations are that NFL will try to take at least 1.5 million mt. So far this year India has purchased 6.1 million mt from tenders. In 2021 the country bought 7.9 million mt in tender, and in 2020 it bought 9 million mt.

Sources said to just stay even with demand, NFL will have to take the estimated 1.5 million mt. The tender documents did not specify a desired quantity, as did the recent IPL tender documents.

The buyer might have some wiggle room in how many tons it seeks. India has closed deals for tonnage to be supplied from OMIFCO outside the tender process. However, observers do not expect these tons to completely fill the gap between what is bought by tender and domestic production and the estimated demand. Government figures estimated demand is about 35 million mt/y, with production at 25 million mt/y. If NFL buys 1.5 million mt, that will take them close to the same levels as last year, but not enough to cover the supply and demand chasm.

The government announced that it expects to end all urea imports after 2025. The statement said existing production, combined with new facilities coming online in the next few months, combined with the use of nano urea, will be sufficient to cover domestic needs without imports.

Increased cost of fertilizers forced the Indian government to increase its budget for subsidies. Even though the cost to farmers has not changed, the difference between what is paid for imported urea and the farmers’ price changes with each new tender purchase. The government estimated that a 45-kg bag of urea would cost about $32 at market price. Farmers, however, only pay $3.21. The difference is covered by the urea subsidy.

Sources reported numerous issues distributing the urea that has already arrived. They noted protests around the country that were related to delays in distributing urea and DAP. One trader said the urea purchased in the NFL tender is probably going to be used to build inventory for next year, because December shipments will most likely not be able to reach the farmers in time for the current season.

Pakistan:

The government authorized TCP to accept the low offer in its 300,000 mt urea tender. Makhtom Logistic International offered the full quantity at $520/mt CFR.

Sources said finding any urea at that price will be difficult, if not impossible. China and the Arab Gulf urea prices are pegged in the $620s/mt FOB, based on the last Indian tender. They are not asking more than that from spot buyers. Black Sea material might work if Makhtom can find a way to secure Russian urea in a timely manner. The whole 300,000 mt must be delivered by the end of December, or Makhtom will lose its 5% performance bond and possibly additional costs as determined by TCP.

The tight schedule and concern over timely payments outlined in the tender documents kept most of the major international trading houses away from the tender. Only three companies participated.

The shooting of former Prime Minister Imran Khan has put much of Pakistan in chaos. Sources wondered if the situation would allow for the tender documents to be processed in a timely manner, including timely issuance of the letter of credit for the tonnage ordered. One trader speculated the tender may end up getting scrapped.

Egypt:

Prices started the week low at $545/mt FOB for 50,000 mt to a non-European buyer. As the days passed, prices moved up sharply to close out at $630/mt. All shipments were for either late November or early December.

Producer Quantity (mt) US$/mt FOB
Monday
MOPCO 50,000 545
Tuesday
Helwan 6,000 580
KIMA 10,000 582
AlexFert 6,000 580
Alexfert 5,000 585
Alexfert 5,000 590
MOPCO 5,000 615
MOPCO 5,000 615
Wednesday
AlexFert 5,000 625
AlexFert 5,000 630

European buyers have been reported to be anxious to secure tons from outside to make up for their own lost production due to high natural gas prices forcing plants closed.

Indonesia:

Persero, the holding company for the ammonia and urea producing companies in Indonesia, signed an MOU with Fertiglobe that will allow Persero to have access to the Fertiglobe global distribution network and to handle global sales of Indonesia urea. At the same time, Persero opened a trade office in Dubai.

In a press release, Persero said the representative office and MOU will ease access to raw materials for NPK production as well as secure new global markets for Indonesian product.

January-September 2022 exports of Indonesia urea were reported at 1.5 million mt by Trade Data Monitor, down about 13% from the 1.7 million mt exported during the period in 2021. The main buyers were Australia with 338,000 mt, and India with 280,000 mt. European buyers, facing the shutdown of their own plants due to high natural gas prices, took 72,000 mt, compared with no tons during the same period last year.

Third-quarter exports were reported at 639,000 mt, down slightly from the 658,000 mt exported during the same period in 2021.

September 2022 exports were reported at 196,000 mt, up 39% from the 141,000 mt exported during September 2021. No single buyer dominated the market. The Philippines took 33,000 mt for 17% of the exports, followed by Argentina with 29,000 mt for 15% of the market. The 72,000 mt taken by European buyers all happened during September.

Brazil:

The high stockpiles of urea in Brazil, coupled with the political unrest that followed the Oct. 30 presidential election, led to a slight drop in urea prices in Brazil, to $580-$630/mt CFR.

The price in Rondonopolis remained relatively stable at $740-$790/mt FOB ex-warehouse. Sources said farmers spent the week demonstrating in support of defeated presidential candidate Jair Bolsonaro, and distributors saw roads blocked to protest his loss, leaving few reasons to engage in trading.

October urea imports were reported at 597,000 mt, down from the 862,000 mt imported during October 2021. January-October imports were pegged at 5.8 million mt, about 7% down from the 6.2 million mt imported during the same period in 2021.

Malaysia:

January-September 2022 urea exports were reported at 1.4 million mt by Trade Data Monitor, down about 7% from the 1.5 million mt exported during the same period in 2021. Australia dominated the purchases with 402,000 mt, followed by Thailand with 298,000 mt, and India with 131,000 mt.

Third-quarter 2022 exports were reported at 554,000 mt, up 22% from the 455,000 mt exported during the same period in 2021.

September 2022 exports were reported at 248,000 mt, up dramatically from the 134,000 mt exported during September 2021. Australia took 44% of the exports at 108,000 mt. Chile with 33,000 mt accounted for 13% of the export sales, followed by New Zealand with 30,000 mt for 12% of the market.

Turkey:

January-September 2022 urea imports were reported at 1.6 million mt by Trade Data Monitor, down about 18% from the 2 million mt imported during the same period in 2021. The main supplier was Oman with 897,000 mt.

Third-quarter 2022 imports were reported at 627,000 mt, up 10% from the 568,000 mt imported during the same three months of 2021. Imports during the third quarter also represented a substantial leap over the 529,000 mt imported in the first quarter and the second quarter imports of 477,000 mt.

September 2022 imports were reported at 154,000 mt, down about a third from the 226,000 mt imported during September 2021. Oman accounted for 83% of the imports with 128,000 mt.

Thailand:

January-September 2022 urea imports were reported at 1.5 million mt by Trade Data Monitor, down about 18% from the 1.9 million mt imported during the same period in 2021. Saudi Arabia was the largest supplier with 598,000 mt, followed by Qatar with 341,000 mt, and Malaysia with 339,000 mt.

Third-quarter 2022 imports were reported at 584,000 mt, down from the 677,000 mt imported during the same three months in 2021. September 2022 imports were pegged at 79,000 mt, down drastically from the 285,000 mt imported during September 2021.

Black Sea:

Sources reported a slight increase in the price of Black Sea prilled urea. The increase came on the lower end of the price range to $500-$525/mt FOB.

Middle East:

Sources said the current price under discussion for Arab Gulf material is now $610-$620/mt FOB. However, no new spot deals were reported at that level.

China:

Indications of new and higher prices are coming out of China for the limited tonnage being sold. Sources said producers are now asking $680-$700/mt FOB for their product. So far, no deals have been confirmed at the higher rate, leaving the price at the level calculated from the last Indian tender in the upper $620s/mt FOB.