All posts by mickeybarb@charter.net

Kore Potash Signs HOA for Construction of Kola

Africa, London, News, News Briefs, Potash

Junior miner Kore Potash Plc, London, has signed a Heads of Agreement (HOA) with China’s SEPCO Electric Power Construction Corp. for the construction of its Kola potash project in the Sintoukola Basin of the Republic of Congo.

Kore Potash said in its June 28 statement announcing the HOA that it expects the finalization of all Engineering, Procurement and Construction (EPC) terms and the presentation of the completed EPC construction proposal by SEPCO this coming August.

The HOA follows SEPCO’s recent completion of the optimization phase for the project

The Kola project, which is to be designed and constructed as a conventional underground potash mine and processing plant, will have capacity to produce 2.2 million mt/y of granular potash over an initial 31-year life. The granular potash produced will be at a minimum quality of 95.3% KCl in line with international standards.

The capital cost to construct Kola is put at $1.83 billion, with a construction period of 40 months, according to Kore Potash.

The company noted the capital cost of the underground works component of the Kola project may be reviewed following completion of additional investigations by SEPCO during the pre-construction engineering design phase.

Kore Potash also reported the Summit Consortium has “reaffirmed” its commitment to provide Kore with a financing proposal for the full construction cost of Kola, and that the financing proposal will be provided after Kore has received the EPC proposal and has agreed with SEPCO on the key EPC terms.

Kore and the Summit Consortium, which comprises SEPCO, China’s ENFI Engineering, and BRP Global, signed a nonbinding Memorandum of Understanding (MOU) on financing in April 2021 (GM April 9, 2021).

Kore currently owns 97% of the Kola potash project.

Air Products, Gunvor Ink Deal for Green Hydrogen Import Terminal in Rotterdam

Europe, Green Hydrogen, News, News Briefs, Northeast

Industrial gas supplier Air Products, Lehigh Valley, Penn., and Gunvor Petroleum Rotterdam (GPR), a wholly-owned subsidiary of commodities trader Gunvor Group, have signed a joint development agreement to build a green hydrogen import terminal in Rotterdam.

The terminal is expected to start receiving green hydrogen imports by 2026.

The Gunvor site in Europoort Rotterdam is one of several European locations envisaged by Air Products for the development of a green hydrogen import terminal. In a joint media statement on June 28, Air Products and Gunvor said the site provides strategic access for receiving green ammonia from large-scale green hydrogen production locations operated by Air Products and its partners from projects around the world.

The green ammonia will be converted to hydrogen and distributed to markets within Europe, including the Netherlands, Germany, and Belgium, according to the two companies.

Air Products and Gunvor noted that Europe is unlikely to be able to produce sufficient quantities of green hydrogen locally to meet the targets set under the European Union’s (E.U.) “Fit for 55” legislative package and REPowerEU, given the substantial amount of renewable energy required.

Consequently, large-scale, green hydrogen imports will be essential, and with the Rotterdam import project, the Netherlands would make a leading contribution to E.U. energy transition goals, the companies said.

Thai Government Okays Udon Thani Potash Project

News, News Briefs, Potash, Thailand

Thailand’s Cabinet on June 28 approved the controversial proposal by the country’s Industry Ministry to allow potash mining in Udon Thani, The Nation newspaper reported.

The ministry was given the green light to grant a concession to Asia Pacific Potash Corp. (APPC) to mine potash in Tambon Nong Phai, in Thailand’s northern Muang district, according to the report, citing Industry Minister Suriya Jungrungreangkit.

The Primary Industries and Mines Department will now start the concession process.

According to the report, APPC, a 100% Thai-owned company since 2006, wants to start mining as soon as possible, but the process will take at least six months before mining can begin.

The underground mine is expected to have capacity to produce 2 million mt/y of potassium chloride.

The decades-long proposed mining project has been endorsed by the country’s National Resources and Environmental Ministry and the National Economic and Social Development Council, and approved by locals in public hearings, according to the report, citing the minister.

APPC plans to mine a total of 33.67 million mt of potash during the concession, for which it has offered a fee of Thb16.6 billion (approximately $472 million at current exchange rates).

The Thai government earlier granted potash mining concessions to Thai Kali Co. Ltd. and to Asean Potash Chaiyaphum Plc.

As with the APPC potash mining project, Thai Kali’s Dan Khun Thot project, located in northeastern Thailand, in Nakhon Ratchasima province, and Asean Potash Chaiyaphum Plc’s project, located in Chaiyaphum province, have faced strong opposition from villagers and activist groups.

Correction:

Correction

In the Green Markets issued dated June 24th, the date given for the TTF front month (at that time July) European gas contract on the ICE Dutch TTF gas futures of €130.4 per megawatt hour (MWh) was incorrectly stated as for 3:59 p.m. (local time) on July 23. It should have read 3:59 p.m. (local time) on June 23.

EuroChem’s AB Lifosa Plant to Restart Production in Early August, Report Says

Lithuania, News, News Briefs, Phosphate

Lithuanian phosphate fertilizer subsidiary AB Lifosa, a subsidiary of EuroChem Group AG, and under a temporary administration, plans to resume operations on Aug. 7, according to an Interfax report, citing a Lifosa statement.

Production is expected to resume at about 70% of capacity. Lifosa’s main product is DAP, with a production capacity of some 1 million mt/y.

The temporary administration already has approved the sale of finished product totaling €19 million (approximately $19.8 million at current exchange rates), according to the report, citing Lifosa. Discussions on the renewal of contracts to buy feedstock, including phosphate rock, are reported to already be underway.

The Kėdainiai-based fertilizer producer was put under a temporary administration by the Lithuanian government (GM June 24, p. 31). Lifosa had been forced to halt operations in April after banks froze the company’s accounts the previous month after the European Union (E.U.) imposed sanctions on EuroChem’s former controlling shareholder and CEO Russian billionaire Andrey Melnichenko on March 9 (GM April 15, p. 1 & p. 35; March 11, p. 1).

EuroChem has been exploring avenues to appeal against the sanctions targeting Lifosa, and earlier in June emphasized that the Zug, Switzerland-based fertilizer group had no plans to sell the Lithuanian plant, according to a Tass report, citing EuroChem CEO Segey Tverdokhleb.

EuroChem, in a June 21 statement on the group’s ownership and control, emphasized that the Zug-based group “is not sanctioned, has never been sanctioned” and that it “complies with all applicable laws at all times.”

On the ownership of the fertilizer group, it said “EuroChem is majority-owned and controlled by E.U. trustees of a trust, whose beneficiary, Aleksandra Melnichenko, has no majority ownership of, nor influence over, EuroChem.”

“Therefore, EuroChem is not controlled by a sanctioned person,” said the group.

Ammonia

Ammonia, Black Sea, Eastern Cornbelt, India, Indonesia, Market Watch, Middle East, North Africa, Northwestern Europe, South Central, Southeast Asia, Southern Plains, Tampa, Turkey, U.S. Gulf, Western Cornbelt

U.S. Gulf/Tampa:

Tampa ammonia for July settled at $960/mt CFR, down from June’s $1,000/mt. Sources had expected some decrease, though the rise in natural gas prices in Europe was starting to idle ammonia production, thereby potentially putting brakes on the Tampa price drop. Still, the $40/mt drop for July was minor compared to the $425/mt plummet recorded from May to June.

Eastern Cornbelt:

Sidedress and post-emergence applications were winding down quickly in the Eastern Cornbelt, resulting in the first round of ammonia fill offers late in the week. CF on June 30 reportedly came out with a program at $950/st FOB in Illinois and Indiana for tons shipped from July 1 through Sept. 30.

In Ohio, prompt tons were still being offered at the $1,250/st FOB Lima level at midweek.

Western Cornbelt:

The awaited launch of summer fill programs pushed ammonia prices lower in the Western Cornbelt. Ammonia fill was announced during the week at $825/st FOB Hoag, Neb., $850/st FOB Port Neal, Iowa, and $950/st FOB Palmyra, Mo., for tons shipped from July 1 through Sept. 30. Sources also reported limited offers at $975/st FOB Wever, Iowa, for tons shipped in June.

Southern Plains:

Ammonia fill programs for 3Q delivery were announced on June 28-29 and reportedly included $805/st FOB Borger, Texas, and Oklahoma terminals at Enid, Woodward, and Pryor; and $825/st FOB Verdigris, Okla., and Dodge City, Kan. Prompt truck offers for ammonia out of Beaumont, Texas, were quoted at $900/st FOB at midweek.

South Central:

The truck market for ammonia reportedly fell to $900-$910/st FOB Gulf Coast terminals in the South Central region. No truck prices were reportedly being offered at El Dorado, Ark., Donaldsonville, La., Cherokee, Ala., or Midway, Tenn.

Black Sea:

The lack of material coming from the region is still impacting the global market. Sources said even new output coming online in the Arab Gulf will not be enough to replace the tonnage lost due to Russia’s war on Ukraine.

One trader said while some may make statements about what the price should be out of the Black Sea, the lack of any product flowing from the usual sources makes those statements more speculation than reality.

Northwest Europe:

The high price of natural gas into Western Europe is causing some concern for producers. Industry observers noted that the current quotes for natural gas will be felt by producers in another four to six weeks. The gas presently being used in Europe is priced at lower levels.

The expectations of higher production costs have already caused some plants to close, with many more quietly considering closures. Sources said there are reports out of BASF that they are indeed making plans to shut down their main operations in Germany unless gas prices come down.

The lack of any transparency in the Northwest Europe ammonia market has industry watchers looking for any plausible price indicators. Many have seized on the estimates of production costs tied to existing and expected natural gas prices.

At present, sources said the production break-even cost is probably $1,050/mt. For July and August, that price is expected to move up to $1,100/mt.

The final sales price out of Rotterdam is estimated at $1,100-$1,200/mt C&F now, with a likelihood that it could move to $1,400/mt C&F. Unfortunately, said one trader, without any indicators from the Baltic ports, nailing down the actual price is growing ever more difficult.

Earlier prices at $1,500/mt C&F were pegged to estimates from European production only. New pricing estimates now include the possibility that more product from Trinidad and North Africa could cycle through the Northwest European terminals.

The Trinidad ammonia could be heading to Europe to seek a higher return after the drop in pricing in Tampa. The North African product is partly laid to Algeria sending its tonnage away from Spain as part of a political dispute.

North Africa:

Sources said tonnage out of North Africa keeps flowing, but the cargoes from Algeria once slotted for Spain now seem to be going to Turkey and Northwest Europe.

After Spain sided with Morocco in a dispute with Algeria over disputed territory in the Western Sahara, Algeria said it was suspending its treaty with Spain and cut off access to Algerian ammonia and natural gas.

Phosphate giant OCP continues to take its contracted tons from various buyers and seems to be uninterested in searching out spot tonnage. Sources reported that OCP has shifted its production emphasis to MAP and TSP to reduce its demand for ammonia. This move, said one trader, will allow OCP to still turn out DAP for its main customers while exploiting demand for other phosphates from other buyers.

Middle East:

Producers keep saying that the price for their ammonia is $950-$1,000/mt FOB. Others, however, said that for a deal to work into Southeast Asia, the price has to be well below $900/mt FOB.

The impasse on pricing for spot tons is said to be creating a slight surplus of ammonia. For now, however, sources said supply and demand is almost balanced, with a nod to the supply side. The operations from Saudi Arabia seem to be handling all contracts well and covering swaps that took place as the world waited for Ma’aden III to come online.

Those arguing for strong prices point to reports that Saudi exports for the first quarter of this year were about half of the exports from the same period in 2021. The drop came as Russian material was taken from the market because of the war with Ukraine. Even if Ma’aden makes it to full rate output, it will not be enough to counter the loss of the Russian ammonia.

On the other side, sources arguing for softer prices note the drop in demand from Southeast Asia, and the combined effect of the Ma’aden output with that of a new line opening in Oman in August. The reduced demand from a major market for the Arab Gulf producers and new production, said one trader, points to softer prices.

Southeast Asia:

Major buyers in Taiwan and South Korea are reportedly backing away from asking for any additional tons from suppliers. In fact, said one trader, some of the buyers are asking suppliers to hold off on shipping new tons.

The cutback in demand is seen as a result of higher inflation and interest rates impacting the global economy. With reduced demand for the products that need ammonia as an input, the manufacturers are in no rush to build up their stockpiles of ammonia.

Another hit to the market comes from China, which is only slowly coming out of its COVID-related shutdowns. The government has ordered factories shut as part of its Zero-COVIDpolicy. At the same time, it has limited how many vessels are allowed to dock to reduce the possibility of additional infections.

Sources expect to see prices continue to come off.

India:

Demand for ammonia by the DAP producers remains limited because of the high price of phos acid. Even with reports that JPMC will supply 100,000 mt of phos acid to Coromandel Fertilizers, sources said prices are still high enough to encourage more DAP imports.

January-April 2022 imports of ammonia were reported at 650,000 mt by Trade Data Monitor. This represented a 13% drop from the 748,000 mt imported during the same period in 2021. The main suppliers in the first four months of the year were Saudi Arabia with 287,000 mt and Qatar with 140,000 mt.

April 2022 imports were reported at 134,000 mt, up from the 101,000 mt imported during April 2021. Saudi Arabia accounted for 51% of the tonnage received in India with 68,000 mt. Bahrain and Qatar accounted for about another 20% of the import market each.

Indonesia:

January-April 2022 exports of ammonia from Indonesia were reported at 652,000 mt by Trade Data Monitor. This is only marginally down from the 694,000 mt exported during the same period in 2021. South Korea was the single largest buyer in the first four months of the year, taking 205,000 mt.

April 2022 imports were reported at 174,000 mt, down just slightly from the 175,000 mt exported in April 2021. South Korea took 47% of the exported tonnage at 82,000 mt. India and Taiwan each took an additional 20,000 mt.

Turkey:

January through May 2022 imports of ammonia were reported at 289,000 mt by Trade Data Monitor. This is a slightly more than a 25% drop from the 389,000 mt imported during the same period of 2021. Russia remained the top supplier with 117,000 mt, followed by Bahrain with 64,000 mt.

May 2022 imports were reported at 61,000 mt, down 20% from the 76,000 mt imported during May 2021. Bahrain was the dominate supplier with 23,000 mt. The next two major suppliers were Saudi Arabia with 15,000 mt and Algeria with 12,000 mt.

Urea

Brazil, China, Eastern Cornbelt, India, Indonesia, Market Watch, South Central, Southeast, Southern Plains, Turkey, U.S. Gulf, Urea, Western Cornbelt

U.S. Gulf:

NOLA granular urea barge prices were reported to have retreated a bit early in the week, falling to as low as $505/st FOB from the week-ago high of $515/st FOB. Prices rebounded to $530/st FOB by the end of the week, however. The week-ago range was $465-$515/st FOB.

Eastern Cornbelt:

Urea pricing was reported at $545-$570/st FOB in the Eastern Cornbelt, up slightly from the previous week, with the high confirmed in Illinois. Sources quoted the Cincinnati, Ohio, market at $555-$565/st FOB, up from $545-$560/st FOB the week before.

Western Cornbelt:

Urea prices continued to firm in the Western Cornbelt. The regional market was quoted at $550-$570/st FOB, up from the prior week’s $535-$550/st range, with the high confirmed at Caruthersville, Mo. The St. Louis urea market was pegged at $550-$560/st FOB, while pricing at St. Paul, Minn., had reportedly firmed to $560-$580/st FOB, up $10/st.

Southern Plains:

Urea pricing was quoted at $550/st FOB Houston, Texas, and $545-$565/st FOB Catoosa/Inola, Okla., down from last week’s broad $550-$590/st FOB range. One source reported hearing a low of $530/st FOB Catoosa/Inola for Russian urea early in the week, but that level was not confirmed.

“Farmers really aren’t going to need anything significant for urea volume for 90-120 days, and since urea wears the volatility label proudly, I expect it to drop down again,” said one regional contact. “How low is anybody’s guess. There’s been Russian urea finding its way to various places all along.”

South Central:

Urea prices were quoted at $550-$595/st FOB in the South Central region, up from the prior week’s $540-$580/st FOB range, with the low confirmed at Memphis, Tenn., and out of river terminals in Kentucky, and the high reported at Shreveport, La. Most Arkansas terminals fell in the $560-$565/st FOB range during the week.

Southeast:

Urea prices dropped to $595-$600/st FOB port terminals in the Southeast, down from the last reported $600-$650/st range, with the low confirmed at Wilmington, N.C., and the high at Charleston, S.C.

China:

Exports remain limited to contracted tons. Pricing out of the country points to $460-$465/mt FOB ex-factory for a portside export price closer to $500/mt FOB. However, the lack of any spot deals out of China is keeping the “official” price at $685-$690/mt FOB, which is based on estimates from the last Indian tender.

There are rumors circulating that some new export quotas or restrictions might be announced soon. At this point, however, sources said it is only whispers.

India:

The global urea market is still anxiously waiting for the next urea tender to be called. Sources said the most likely time is still during the first two weeks of July.

Even as India works to cut deals with Russia for fertilizers, sources said India will have to buy at least 1.5 million mt in this next tender to meet basic urea demands by farmers. Reportedly, two more similar purchases will need to be completed quickly after the latest tender closes.

Efforts to buy Russian product are seen as a win-win for India. They might get more urea than usual from Russia, and thereby reduce the amount they will have to buy in a tender. The price most likely will also be well below market levels.

Already there are reports that Russian urea is being shopped around at levels even below what Iranian suppliers are willing to accept. The reason for such low-priced offers, said sources, is to encourage buyers to ignore the economic sanctions against Russia. While the sanctions do allow for the purchase of Russian fertilizers and food products, making sure the financing for the products and insurance for the vessels does not conflict with the sanctions has many nervous.

Urea imports for January-April were reported at 3.6 million mt by Trade Data Monitor. This is a major jump from the 1.4 million mt imported during the same period in 2021. Arab Gulf producers accounted for about half of the imports, while Russia sent 296,000 mt during the first four months of the year.

April 2022 imports were reported at 353,000 mt, up from the 177,000 mt imported during April 2021. Interestingly, Finland was reported as the top supplier with 53,000 mt. Chances are, said sources, this was really Russian urea shipped through a Finnish port.

Indonesia:

January-April exports were reported at 471,000 mt by Trade Data Monitor. This was a drop of 18% from the 572,000 mt exported during the same period in 2021. The top two buyers in the first four months of the year were India at 137,000 mt and Australia at 106,000 mt.

April 2022 exports were reported at 268,000 mt, up 28% from the 219,000 mt exported during April 2021. Australia accounted for about one-third of the exports, taking 99,000 mt.

Brazil:

Urea prices continue their rebound in Brazil. Sources put the landed price at $650-$680/mt CFR, with people still talking about exceeding $700/mt CFR.The price in Rondonópolis has also moved up to $780-$815/mt FOB ex-warehouse as buyers begin anticipating needs for the next application season.

Turkey:

January through May 2022 imports of urea were reported at 825,000 mt by Trade Data Monitor. This was down from the 1.2 million mt imported during the same period of 2021. Product from Oman accounted for more than half of the imports at 458,000 mt. The next closest supplier was Egypt with 133,000 mt.

May 2022 imports were reported at 86,500 mt, down from the 179,000 mt imported during May 2021. New supplier Qatar topped the supplier list with 44,000 mt, followed by Oman with 21,000 mt and Turkmenistan at 10,000 mt.

UAN

Eastern Cornbelt, Market Watch, South Central, Southeast, Southern Plains, U.S. Gulf, UAN, Western Cornbelt

U.S. Gulf:

Inland UAN prices continued to drop, pressuring NOLA price ideas, now put at $440-$460/st ($13.75-$14.38/unit) compared to the week-ago $450-$460/st FOB ($14.06-$14.38/unit).

Eastern Cornbelt:

UAN-32 prices slipped to $530-$560/st ($16.56-$17.50/unit) FOB in the Eastern Cornbelt, with reports of UAN-28 offers as low as $460-$475/st ($16.43-$16.96/unit) FOB in the Ohio market on a spot basis.

Western Cornbelt:

UAN-32 prices fell to a broad $460-$540/st ($14.38-$16.88/unit) FOB range in the Western Cornbelt, with the low reported at Port Neal and reflecting a reported $60/st drop from the last confirmed level at that location.

Southern Plains:

UAN-32 prices remained under pressure in the Southern Plains. Terminal values in the region were pegged at $490-$510/st ($15.31-$15.94/unit) FOB for prompt tons, depending on location, down significantly from the last reported $520-$565/st FOB range.

South Central:

The UAN-32 market was pegged at $550-$565/st ($17.19-$17.66/unit) FOB in the South Central region, with the low confirmed in Louisiana and the high out of river terminals in Kentucky.

Southeast:

The UAN-32 market was reported at $600-$610/st ($18.75-$19.06/unit) FOB port terminals in the Southeast, with the low confirmed at Wilmington and Norfolk, Va., and the high at Savannah, Ga.

Ammonium Sulfate

Ammonium Sulfate, Brazil, Eastern Cornbelt, Market Watch, South Central, Southeast, Southern Plains, Turkey, U.S. Gulf, Western Cornbelt

U.S. Gulf:

New AdvanSix postings lowered price ideas for NOLA ammonium sulfate. Based on the upriver postings and recent offers, sources put the NOLA market within the $450-$465/st FOB range, down from $500-$530/st FOB.

Eastern Cornbelt:

Granular ammonium sulfate pricing fell to $595-$640/st FOB for prompt pull in the Eastern Cornbelt, down from the prior week’s $625-$655/st FOB range, with the low confirmed out of spot Illinois River terminals. The Cincinnati market was pegged at $610-$615/st FOB at midweek.

AdvanSix on June 30 issued new Midwest pricing for granular ammonium sulfate at $480/st FOB river terminals in Illinois and Wisconsin, with inland warehouses priced at traditional premiums over the river. The company said product at this pricing level will be available for delivery starting July 15.

Western Cornbelt:

Granular ammonium sulfate pricing slipped to $575-$640/st FOB in the Western Cornbelt for prompt tons, with the low confirmed at St. Louis and reflecting a $20/st drop from last report. In the Northern Plains, new offers FOB Sioux City, Iowa, were quoted at the $615/st level.

June 30 granular ammonium sulfate postings from AdvanSix dropped to $480/st FOB river terminals in Missouri, Nebraska, Iowa, Minnesota, and the Dakotas. The company said inland warehouses will be priced at traditional premiums over the river, and product will be available for delivery starting July 15.

Southern Plains:

Granular ammonium sulfate was quoted at $550-$560/st FOB Houston and $625/st FOB Catoosa/Inola. Some contacts reported Houston pricing at significantly lower levels based on netbacks, however, with prices falling to the mid-$400s to low-$500s/st on some deals.

South Central:

Ammonium sulfate pricing was quoted at $620-$645/st FOB most South Central terminals, down from $650-$670/st FOB the week before, with the low confirmed at Memphis and the high at Shreveport and Little Rock, Ark.

Southeast:

Ammonium sulfate postings from AdvanSix FOB Hopewell, Va., remained at $670/st for granular, $630/st for mid-grade, and $610/st for standard. Pricing in the Florida market was steady at $635/st FOB or DEL for standard and $735/st FOB or DEL for granular.

Brazil:

Ammonium sulfate prices in Brazil rose in tandem with the increase in urea prices. Sources now put the market at $340-$370/mt CFR.

International sources said earlier in the week that exports of byproducts, such as much of the amsul on the global market from China, were slowing down because of cuts in industrial output. One trader said it was becoming more difficult to assemble the larger cargoes necessary to make a journey to Brazil economical.

The Rondonópolis ammonium sulfate price held relatively stable at $450-$520/mt FOB ex-warehouse.

Turkey:

January through May 2022 imports were reported at 653,000 mt by Trade Data Monitor. This was up by more than a third from the 482,000 mt imported during the same period of 2021. China dominated the supplies, sending 535,000 mt.

May 2022 imports were reported at 78,000 mt, down 24% from the 102,000 mt imported during May 2021. China with 61,000 mt and Belgium with 15,000 mt were the two major suppliers in May.