All posts by mickeybarb@charter.net

Grannus Technology Proposed for Blue Hydrogen, Ammonia Plants in California, Alaska

Ammonia, Blue Ammonia, Blue Hydrogen, California, Featured, Hydrogen, News, Southwest

Grannus LLC, Tucson, reported that its “next generation” hydrogen and ammonia production technology is proposed for new blue hydrogen and ammonia plants in California and Alaska. Founded in 2012, the company said its patented Grannus Process™ offers significant advantages over current steam methane reformer-based designs, as it creates hydrogen that can be used as a feedstock in the production of ammonia and urea with effectively no emissions.

The company said that in California it is collaborating with a major California oil producer in the development of a hydrogen and ammonia project in the Stockton area. The project is intended to sequester 100% of the CO2 produced in the production of blue hydrogen and ammonia.

The specific location of the 100 st/d hydrogen production facility has not been announced, but will be within a 25-mile radius of the Port of Stockton. It is anticipated that the facility will supply 20 st/d for the mobility hydrogen market, and convert the balance to 440 st/d of ammonia.

Grannus has also revealed that it has entered into a long-term master offtake agreement with CALAMCO for the supply of ammonia-based fertilizer for the entirety of their needs. This agreement allows Grannus to build one or more projects to supply CALAMCO’s demand at mutually agreed locations.

“We have been a long-term investor in Grannus, dating back to 2014, as we sought an avenue to source ammonia locally in California to reduce our exposure to transportation costs and risks associated with international supply,” said Dan Stone, CEO of CALAMCO.

Grannus and CALAMCO have been down this road before, as the two in the past had planned an 87,000 st/y, 250 st/d ammonia plant for Kern County, Calif. (GM May 4, 2018; Jan. 22 & Oct. 14, 2016). However, Grannus CEO Matthew Cox told Green Markets that the project did not advance because it lost its building site.

During the year ended Oct. 31, 2021, CALAMCO took a $2.96 million impairment due to an investment in an ammonia plant that did not proceed, according to CALAMCO’s 2021 Annual Report.

In the meantime, Grannus reported that it is in negotiations with an Alaska-based development company to develop a deep-water marine port at Port MacKenzie, Alaska, and a blue ammonia manufacturing facility. The majority of the product would go for use as a fuel for Pacific-based oceangoing vessels, with additional product available for agriculture and for use as a hydrogen carrier.

“At present, there are only two ammonia-equipped ports on the US West Coast, and we believe that capacity out of Port MacKenzie will be in high demand,” said Cox. “This partnership will bring together renewable energy expertise and knowledge of Alaska’s energy infrastructure with Grannus’ expertise in low-emissions blue ammonia production.”

Grannus said it is also in partnership discussions with a Pacific Rim-based trading company as to the sourcing of blue ammonia to meet the company’s future needs as it converts its fleet of ocean vessels to blue ammonia. Grannus said the first retrofitted vessels capable of burning ammonia will be in operation by 2024, and it is anticipated that 30% of the ships will be ammonia powered by 2050.

Seitz Appointed Nutrien President and CEO

Featured, News, Saskatchewan

Nutrien Ltd., Saskatoon, on Aug. 8 announced that its Board of Directors has appointed Ken Seitz as its President and CEO, effective Aug. 8, 2022. Seitz will also join the Nutrien Board of Directors.

The news follows a seven-month search, during which Seitz was Interim CEO. Seitz stepped up after Nutrien announced in January the departure of Mayo Schmidt (GM Jan. 4, p. 1). Schmidt had only been in the position since April 2021 (GM April 23, 2021), replacing Chuck Magro, who stepped down to pursue other opportunities.

At the time of Schmidt’s departure, Seitz was Nutrien’s Executive Vice President and CEO of Potash, with the company noting that he had over 25 years of extensive global leadership experience in the agriculture and mining sectors and was the former President and CEO of potash supplier Canpotex Ltd.

“Nutrien’s record performance and disciplined execution of strategy during some of the most turbulent times we have seen globally underscore the strength of Ken Seitz’s leadership,” said Russ Girling, Board Chair. “As the company’s President and CEO, Mr. Seitz will continue to drive positive outcomes for all of our stakeholders as we strive to safely and sustainably feed the world.

“Mr. Seitz strongly aligned to our comprehensive leadership needs given his extensive international experience in our industries, passionate connection to our purpose, efficacy in driving our stated strategy, and personal commitment to employee safety and an inclusive workplace,” he added. “Additionally, Mr. Seitz demonstrated proven performance in an interim role this year, receiving an extensive range of positive feedback from our stakeholders. The Board has every confidence Mr. Seitz is the right leader to drive our strategy forward.”

“I look forward to continuing the important work of safely and sustainably feeding a growing world with the executive leadership team, our employees globally, and support of the Board of Directors,” said Seitz. “Growing up on a dairy farm in Saskatchewan, I am honored and humbled to work alongside growers during these challenging times today and going forward. Nutrien is extremely well positioned to help meet the global goals of food security and climate action, partnering across the food system. Our purpose is to feed the future, and I am invigorated by the noble pursuit to help solve these critical world needs.”

Ma’aden 2Q Results Beat Estimates

Ammonia, Earnings, News, Phosphate, Saudi Arabia

Saudi Arabian Mining Co. (Ma’aden). Riyadh, reported second-quarter net profit of SAR4.03 billion, compared to a Bloomberg Consensus average analyst estimate of SAR2.48 billion. Year-ago profit was SAR1.1 billion.

Second-quarter operating profit and revenues also beat analyst estimates of SAR3.81 billion and SAR9.72 billion, respectively. Second-quarter operating profit was SAR5.55 billion on revenues of SAR11.88 billion, up from the year-ago SAR1.61 billion and SAR6.1 billion, respectively.

The company cited higher average realized sales prices of all products except industrial mineral products and higher sales volume, mainly from ammonia, primary aluminum, ammonia phosphate fertilizer, industrial mineral products, and gold, with slightly lower sales volume recorded for flat rolled products, alumina, and Meridian’s products.

Six-month net profit was SAR6.2 billion on revenues of SAR20.8 billion, up from the year-ago SAR1.86 billion and SAR11.55 billion, respectively. Operating profit was SAR8.8 billion, up from SAR2.66 billion.

K+S 2Q EBITDA Beats Estimates; 4Q 25% Reduction in Gas Availability Assumed

Earnings, Germany, News

K+S Group, Kassel, reported second-quarter EBITDA of €706 million, beating the Bloomberg Consensus, the average analyst estimate, of €688.1 million and easily passing the year-ago €112 million. Revenues more than doubled to €1.5 billion from the year-ago €U664 million.

K+S said that for the first time, its outlook assumes a scenario in the fourth quarter for a 25% reduction in natural gas availability, with a total burden of a low triple-digit euro amount. Burkhard Lohr, Chairman of the K+S Board of Directors, told analysts there is a chance that K+S will not be affected by the gas shortage, but that the company wanted to give a flavor of what it could mean if it were affected. He suggested it might be easier for K+S to give this guidance since it does not need the gas for the product itself, but only as an energy source.

Still, the company did not adjust its annual EBITDA guidance, keeping it at €2.3-E2.6 billion. The company said sharp increases in its average prices should significantly exceed expected cost increases, particularly for energy, logistics, and materials. The annual EBITDA guidance, however, was below analyst estimates of €2.62 billion.

Despite low water levels on the Werra River, Lohr told analysts that K+S believes it can manage this extraordinary situation without any standstills.

Because of the product mix at its Bethune, Sask., potash operation, Lohr said the company must supply some product into China. However, he now expects this to be in the range of 500,000-600,000 mt/y, versus the previous 1 million mt/y.

Six-month EBITDA was €1.2 billion on revenues of €2.7 billion, up from the year-ago €237 million and €1.4 billion, respectively.

Itafos 2Q Income Quadruples

Earnings, Houston, TX, News, Phosphate

Phosphate producer Itafos Inc., Houston, reported second-quarter net income of $44.3 million on revenues of $155 million, more than quadrupling the year-ago net income of $9.6 million on revenues of $103.3 million, citing a sharp increase in fertilizer prices, strong production at its Conda, Idaho plant, and positive contributions from its re-activated Arraias, Brazil, sulfuric acid plant. Adjusted EBITDA moved to $63.6 million from the year-ago $33.7 million.

“We are pleased to report record performance during the second quarter and first half of 2022 in terms of safety and financial results, along with continued strong operational performance,” said Itafos CEO G. David Delaney, noting the company’s trailing 12 months adjusted EBITDA of $213 million sets a new record, allowing it to make significant progress toward deleveraging its balance sheet.

“We have also updated our full-year guidance for 2022 to reflect the continued strength of the business and market fundamentals. Finally, we remain focused on our key objectives, including extending Conda’s current mine life through permitting and development of H1/NDR, and evaluating strategic alternatives for our non-North American assets.”

Second-quarter DAP NOLA prices averaged $860/st compared to the year-ago $571/st, up 51%, driven by strong agriculture and phosphate fertilizer market supply and demand dynamics.

Itafos expects sulfur and sulfuric acid prices to decrease globally due to increased refinery activity and softer demand from phosphates and metals consumers.

During the second quarter, Conda highlights included the completion of a scheduled plant turnaround and a return to full capacity; production of 80,297 mt P2O5, up from the year-ago 67,835 mt P2O5; generated revenues of $148.8 million, up from $103.3 million; generated adjusted EBITDA of $66.7 million, up from the year-ago $37.7 million; and the reaching of a settlement agreement related to shared environmental and asset retirement a Lanes Creek mine.

Company-wide financial performance was partially offset by higher input costs and the restart of Arraias, which produced 20,549 mt of sulfuric acid during the quarter and 30,200 mt during the first half with no production during the year-ago periods.

First-half net income was $77.3 million on revenues of $304.9 million, up from the year-ago $11.5 million and $193.5 million, respectively. Adjusted EBITDA was $124 million, up from $54 million. First-half DAP NOLA prices averaged $827/st, up from the year-ago $536/st, or 54%.

Going forward, Itafos retained full-year adjusted EBITDA guidance of $210-$230 million, and increased net income to $100-$115 million from $80-$95 million.

Second-half adjusted EBITDA is projected at $86-$106 million, up from $90-$100 million, and net income at $23-$28 million, a change from the earlier $25-$30 million.

Brazil Regulator Approves Orígeo

Brazil, India, News, News Briefs, Western Cornbelt

Brazil’s Administrative Council for Economic Defense (CADE) has approved Orígeo, a new joint venture between Bunge Ltd., St. Louis, and India-based UPL Ltd. (GM July 1, p. 28), according to the Official Gazette and CADE’s website.

Orígeo will combine Bunge’s expertise in financing, marketing, and logistics and UPL’s portfolio of sustainable agricultural inputs, solutions, and services.

Orígeo will serve farmers who already have relationships with Bunge and UPL in the region known as Mapitobapa, which comprises Maranhao, Piaui, Tocantins, Bahia, and Para states. It will offer inputs such as seeds, pesticides, bio-solutions, and fertilizers; assistance for crop planning; agronomic advice; sustainability consultancy and certifications in regenerative and low carbon agriculture; agricultural finance solutions; and harvest marketing and logistics services.

The company will also offer farmers digital agriculture services, including real-time information, recommendations, and alerts using field data collected by satellite.

Meristem, Stoller Form Product Development, Marketing Alliance

Great Lakes, Houston, TX, News, News Briefs

Meristem Crop Performance Group, Delavan, Wisc., and Stoller USA, Houston, announced on Aug. 9 a strategic product development and marketing alliance focused on distributing Stoller’s biostimulant technology through Meristem’s growing network of dealer-partners.

“Stoller’s reputation for developing quality plant-performance solutions to help farmers make the most of every crop is second to none,” said Mitch Eviston, Founder and CEO of Meristem Crop Performance. “We are thrilled to be selected as a Stoller go-to-market partner for their PGRs all across the American Midwest.”

He added that Stoller will help Meristem with assuring a reliable supply of needed products, as well as navigating the regulatory issues associated with boosting innovations to US farmers.

“This alliance fits perfectly with our desire to bring innovation to more acres faster,” said Rob McClelland, Meristem President and Chief Marketing Officer. “We’ve had solid success with products such as Excavator™, Hopper Throttle™, and Revline™ – teaming with Stoller will further boost our ability to bring more innovative products to more farmers and more acres faster.”

“Our products and technologies offer proven plant-performance solutions to ensure optimum ROI for farmers,” said Greg Warren, Stoller Regional Vice President. “Meristem Crop Performance shares our vision of helping farmers grow more with less. Stoller is elated with this alliance with Meristem to develop beneficial, innovative technology solutions to benefit farmers.”

Stoller is a global company, with 17 subsidiaries and sales in over 70 countries.

Commission Research, Industry Profits Helped Tip Scale Against CF in UAN Case

Featured, News, Russia, Trinidad and Tobago, U.S., U.S. Imports, UAN

The US International Trade Commission (ITC) released its full report on Aug. 9, explaining in more detail its July 18 unanimous decision that the US UAN industry was not materially injured or threatened with material injury by reason of imports of UAN from Russia and Trinidad and Tobago (GM July 22, p. 1).

In evaluating the price effects of the subject imports, ITC said under the Tariff Act it considered whether there had been significant price underselling by the imported product and if the effect of the imports depressed prices by a significant degree or prevented price increases.

The ITC collected usable price data from seven US producers and nine importers. It said the price data showed that cumulated subject imports undersold the domestic product in 39 of 108 monthly comparisons, or 36.1% of the time, at margins ranging between 0.1 and 22.1%, averaging 8%. The imports oversold domestic product in the remaining 69 of 108 monthly comparisons, or 63.9% of the time, at margins ranging between 0.1 and 47%, averaging 14.3%.

Months in which subject imports undersold domestic product accounted for 41.9% of the reported volume, or 2.5 million st, whereas the months imports oversold domestic product accounted for 58.1% of reported volume, or 3.5 million st.

A majority of responding purchasers (22 of 33) reported that they usually purchased the lowest priced UAN. However, the ITC noted that other purchasers identified non-price reasons for purchasing imported product instead of domestic, including lack of domestic product availability, regional unavailability, and logistics.

“In light of the evidence on record, we find that subject import underselling was not significant,” said the decision. “We note that the domestic industry gained 2.2 percentage points of market share from subject imports over the period.”

ITC also said that in 2021, subject imports maintained a significant presence in the market, but the domestic industry was able to raise prices substantially, including prior to the petitions being filed. It also said the record did not show any significant buildup of subject import inventories during the 2019-2020 period, whether held by importers or by purchasers. It added that the domestic industry increased US shipment quantity by 7% and market share by 3.7% between 2019 and 2020.

“As domestic prices increased sharply from 2020 to 2021, and subject import volumes remained relatively flat, the domestic industry’s financial performance increased dramatically to the highest level of the period of investigation (POI),” said ITC.

ITC noted that volumes of product from Russia and Trinidad and Tobago both declined over the POI, and while their volumes remained significant, pricing data indicated that the imports generally followed the same price trends over the POI.

“It is noteworthy that the subject producers’ declining focus on the US market during the POI, and their declining exports to the US, occurred despite the antidumping measures imposed by the EU on UAN from Russia and Trinidad and Tobago in 2019.”

ITC found that the subject imports did not depress prices for the domestic product to a significant degree.

ITC said the record indicated that the subject producers are unlikely to substantially increase their exports to the US in the imminent future, with reported capacity and production down from 2019 to 2021, with a projected decrease in 2022 and 2023.

The ITC found that the domestic industry’s performance improved by many measures and the industry gained market share over the POI. It said the domestic industry added capacity and workers and raised prices during the POI, and its gross profits and operating income both exceeded $1 billion in 2021.

“Given the domestic industry’s strong financial performance in 2021, we do not find that the industry is vulnerable to material injury from cumulated subject imports.”

The Commission public report, Urea Ammonium Nitrate Solutions from Russia and Trinidad and Tobago [Inv. Nos. 701-TA-668-669 and 731-TA-1565-1566 (Final), USITC Publication 5338, August 2022] contains the views of the Commission and information developed during the investigations. The report may be accessed on the USITC website at http://pubapps.usitc.gov/applications/publogs/qry_publication_loglist.asp.

European Gas Prices Spike Again; K+S Sees 4Q Gas Cut; Ammonia Outages “Substantial,” Says CF

Europe, Featured, Natural Gas, News

European natural gas prices climbed to their highest level in more than two weeks on Aug. 11, according to Bloomberg, as the continent grapples with a heat wave and braces for a potentially deeper supply crunch over the winter.

Benchmark futures increased as much as 5.5%, reaching levels seen during the first weeks of Russia’s war in Ukraine. Prices have been elevated by curtailed supplies from Russia, but now a climate crisis is compounding the situation. Dutch front-month gas, the European benchmark, rose 1.3% to close at €208.11 ($215.10) per megawatt hour.

German potash and salt producer K+S Group, Kassel, said on Aug. 11 its fourth-quarter outlook assumes a scenario for a 25% reduction in natural gas availability, though unlike nitrogen producers, the company only needs the gas as an energy source, not for the product itself (see related earnings story).

“When you look at the plants that have announced shutdowns, BASF, Yara, OCI, and others, it’s substantial,” said Bert Frost, Senior Vice President of Sales, Market Development, and Supply Chain, CF Industries Holdings Inc., speaking at the Jeffries Industrials Conference on Aug. 10. “So we don’t see the full shutdown of European assets, but it could be 10 million mt.” He added that some plants will stay up to produce CO2 and some finished products.

“In a world of 180 million mt of consumption of ammonia and a globally traded tonnage of about 17-20 million mt, adding 10 million additional tons of demand tightens up the market as we have said.” He added other constraints facing the nitrogen industry, such as tons not coming out of Russia, Ukraine, and China, with the latter historically exporting 4-6 million mt of urea, which represented 10% of global urea trade.

CF CFO Christopher Bohn added that a good portion of the new nitrogen tons that are coming up in the next four years are in Russia. “Some of that is going to be deferred or delayed given the sanctions that are on with just getting equipment.”

“Despite the gas supply crisis in Europe, gas ended up as the largest overall source of power generation in Europe in July, showing how few alternatives there are,” Rystad Energy said in a note.

France, which normally exports electricity, has about half of its nuclear plants offline for maintenance. Hydropower is negatively impacted by the low river levels across Europe, as are nuclear plants, which require water for cooling.

The Rhine – northwest Europe’s most important river for the transport of industrial goods – is set to become virtually impassable at a key waypoint in Germany on Aug. 12 due to low water. That could severely restrict the flow of coal, fuels, and other commodities.

Germany last month raised its target for natural gas storage to 95% full by Nov. 1, compared with 90% previously.

“Here in Germany, very often measures need to be implemented by the regulator,” Annegret Groebel, President of the Council of European Energy Regulators, said on Bloomberg TV on Aug. 11. “Maybe in the worst-case, if Russia cuts off the gas, there might not be enough gas for the whole demand, then there would be rationing.”

Russian gas flows via Ukraine and the Nord Stream pipeline remain steady, but at low levels. “All eyes are still on Russia and if the country decides to cut supply to Europe completely. This still causes a lot of risk premium to be priced in,” analysts at trading firm Energi Danmark said in a note.

Petrobras Starts Sales Process for Potash Mining Rights

Brazil, News, News Briefs

State-owned oil company Petróleo Brasileiro SA (Petrobras), Rio de Janeiro, reported on Aug. 11 that it has begun the process of selling potassium mining rights located in the Amazon Basin.

Petrobras said the asset is composed of 34 mining titles of potassium salts located in the Amazon Basin and granted by the National Mining Agency (ANM). Of these 34 titles, eight are mining concessions, four are mining requirements, and 22 are in the process of obtaining a research authorization.

More information about the opportunity, as well as the eligibility criteria for the selection of potential participants, is available at Petrobras’ website: https://investidorpetrobras.com.br/pt/resultados-e-comunicados/teasers.