All posts by mickeybarb@charter.net

Air Products Inks $1B Deal for Industrial Gas Complex, Including Hydrogen, in Uzbekistan

Asia, Hydrogen, News, News Briefs, Northeast

US industrial gases company Air Products Inc. has signed an investment agreement for $1 billion with the Uzbekistan government and state-owned Uzbekneftegaz JSC to acquire, own, and operate a natural gas-to-syngas industrial complex in Uzbekistan’s southeastern Qashqadaryo province, the US company reported in a May 25 media statement.

Air Products said the complex is an integral part of Uzbekneftegaz’s gas-to-liquid facility, producing 1.5 million mt/y of synthetic fuels for domestic use and potential export.

Under the terms of the purchase agreement, the US company will acquire, own, and operate two air separation units, two auto thermal reforming units, and a hydrogen production unit within the Uzbekneftegaz facility.

The deal also calls for Air Products to supply oxygen, nitrogen, hydrogen, and syngas under a long-term, take-or-pay/fixed fee contract to Uzbekneftegaz, while the Uzbek gas company will supply the feedstock natural gas and utilities and offtake all products.

Air Products provided no comment on the likely end-uses of the hydrogen, but it potentially could be used to produce ammonia.

India Mulls Green Ammonia Tender

Green Ammonia, India, News, News Briefs

India is studying plans to issue a tender for about half a million tons of green ammonia to spur emissions reduction in hard-to-decarbonize sectors like fertilizer production, according to a Bloomberg report.

Talks are taking place between fertilizer manufacturers and the country’s renewable energy ministry to assess potential demand for the feedstock, Bhupinder Singh Bhalla, the department’s top bureaucrat, said in an interview.

Successful bidders would be offered incentives to help drive down costs of clean ammonia, which is produced using emissions-free green hydrogen and can be an alternative to natural gas for fertilizer firms.

“The number is not final yet, but we may be looking at perhaps around half a million tons of green ammonia,” to begin with, according to Bhalla. A small initial tender would offer lessons for future development of the sector, he said. A timeline for the tender was not reported.

Prime Minister Narendra Modi’s government is aiming to use green hydrogen, created using renewable energy, to clean up heavily polluting sectors including fertilizers, oil refineries, and steel as the nation works to hit net zero by 2070. Using clean hydrogen is also intended to help reduce reliance on energy imports.

India produced about 15 million mt of ammonia in the year through March 2021, mostly using hydrogen from natural gas, and imported about 2.6 million mt of the material, according to a note published by the Fertilizer Association of India.

The renewables ministry is also in talks over adopting cleaner alternatives with other hydrogen consumers, including oil refiners, who need the gas to remove sulfur from fuels like diesel.

Giant Brazil Crop to Push Fertilizer Sales Back to Pre-War Level, Says Retailer

Brazil, News, News Briefs

Record corn and soybeans harvests in agriculture powerhouse Brazil are set to push demand for crop nutrients back to pre-war levels, according to a Bloomberg report citing the nation’s largest farm retailer.

Fertilizer sales will rise 11% in Brazil in the 2023-24 season, bringing demand back to levels seen prior to Russia’s invasion of Ukraine, Lavoro CEO Ruy Cunha said in an interview. Pesticide, fungicide, and other agrochemical sales are forecast to expand as much as 9%, he said.

Farmers around the world slashed fertilizer use after the war in Ukraine temporarily cut off nearly a fifth of the world’s nutrient exports, sending prices skyrocketing. As costs have fallen back to more normal levels, growers expanding plantings in the world’s largest corn and soybean exporter are starting to stock up again.

“For the upcoming crops, we see a return to normality when it comes to the application of fertilizers in Brazil,” Cunha said June 1. “Sales have already accelerated over the last three months.”

Fertilizer prices could still fall further, but the market is now closer to the bottom, he said. Sales for future delivery have gathered pace since March, but are still 10 to 20 percentage points behind levels achieved last year. 

“Farmers are still cautious and are waiting to see commodities and inputs prices stabilize further,” Cunha said. 

The Brazilian fertilizer market has been more resilient than in many other countries, as farmers selling crops in US dollar are making a bigger margin than American growers, for instance.

That’s helped Lavoro, a Sao Paulo-based company listed on the Nasdaq. Gross profit jumped 35% to $285 million in the nine months ended March 31, while revenue gained 25% in the period, the firm reported on June 1.

Lavoro, which also operates in Colombia and Uruguay, has expanded quickly after striking 24 deals since 2017, and more acquisitions are on the table. The company has a 10% market share in Brazil.

“Consolidation is only at the beginning, we see a huge opportunity,” Cunha said.

Synsus Private Label Partners – Management Brief

Houston, TX, Management Briefs, Specialty

Houston-based Synsus Private Label Partners has added Chris Lufkin as Director – Ag Business Unit. He will be responsible for overseeing all commercial activities for the Agriculture segment, including direct management of the Ag sales team. He joins the company with several years of specialty fertilizer experience, having held management and sales roles at NutriAg, Valudor, ICL, Syngenta, and Scotts Miracle-Gro Co.

Synsus is a US chemical manufacturer providing R&D, specialty chemical manufacturing, and private-label custom packaging for the agricultural and turf & ornamental markets. It has two US manufacturing facilities and specializes in liquid fertilizers, nitrogen stabilizers, foliar micronutrients, adjuvants, surfactants, and utility products.

Plug Power to Develop Three Green Hydrogen Plants in Finland; One to Produce NH3

Finland, Green Hydrogen, News, News Briefs, Northeast

Hydrogen market and technology developer Plug Power, Latham, N.Y., said on May 30 that it plans three green hydrogen production plants in Finland for European markets, with at least one of those also producing ammonia. The planned green hydrogen production plants will result in the production of 850 mt/d of green hydrogen, or 2.2 gigawatts of electrolyzer capacity, by the end of the decade, with a final investment decision to be made by 2025/2026.

Plug said the projects are expected to represent some of the largest investments in the European market, and that the sites will be strategically located to take advantage of its abundant decarbonized and clean energy sources, such as nuclear, wind, and hydro power.

A plant in Kokkola is expected to generate 85 mt/d of liquid green hydrogen, and up to 700,000 mt/y of green ammonia, using 1GW of electrolyzers. The hydrogen will be produced for local use and for export to Western Europe from the Port of Kokkola; green ammonia will also be exported through the same port.

Plug is partnering with Hy2Gen, the global project developer of renewable hydrogen, ammonia, and hydrogen-based e-fuels, for the development of the ammonia plant. Hy2Gen is backed by Hy24, the largest global hydrogen infrastructure fund, by Mirova, a management company dedicated to sustainable investment; by CDPQ, a global investment group investing in the energy transition; by Technip Energies, a leading engineering and technology company for the energy transition; and Trafigura, a major global commodities player.

Plug will also collaborate with Hy2Gen on the development of hydrogen derivatives (e-fuels, methanol, and ammonia) on other projects in the region, enabling industry and transport users to reduce their carbon footprint.

At a Kristinestad site a 1GW electrolyzer plant will generate green hydrogen for green steel production, while 100 mt/d of hydrogen produced at a Porvoo plant will be used for local mobility and exported through pipeline injection to Western Europe.

Belarus’ Gomel Chemical Plant Sends Maiden NPK Train Consignment to China

Belarus, China, News, News Briefs, NPK

Belarus’ OJSC Gomel Chemical Plant sent a maiden 60-container train carrying 1,500 mt of NPK fertilizers produced by the company to China on May 31, according to the country’s state-run news agency, BelTA.

For the first time, Gomel Chemical Plant, working with Belarusian logistics operator Beltamozhservice and other companies, organized the new rail container service to deliver Belarusian compound fertilizers to China along from Tsentrolit, Belarus, to Xianguojigang, China.

The train will cover more than 7,000 kilometers in 14 days, according to the report, citing Beltamozhservice.

Gomel Chemical Plant “is ready” to send two such container trains every month, BelTA reported, citing the company’s Acting Deputy Director for Commercial Affairs, Irina Lapitskaya.

The recent consignment follows two trial runs comprising two containers of NPKs from the Gomel plant to China last September.

In addition to NPK fertilizer capacity for various grades, the company is Belarus’ largest producer of phosphate fertilizers, as well as having the capacity to produce ammophos and superphosphate, according to its website.

Since the imposition of Western sanctions, Gomel Chemical Plant has been refocusing its exports to Russia and China, as well as Libya (GM Jan. 13, p. 29).

Ammonia

Ammonia, Black Sea, Eastern Cornbelt, India, Market Watch, Middle East, Northern Plains, Northwestern Europe, Tampa, Thailand, Turkey, U.S. Gulf, Western Cornbelt

US Gulf/Tampa:

June Tampa ammonia prices of $340/mt CFR will likely remain under pressure into July. Lower European natural gas prices are prompting more ammonia producers to return their plants to production, though perhaps cautiously in some cases. In the meantime, ammonia prices in the US heartland continue to sink as the application season wanes.

Eastern Cornbelt:

Ammonia pricing remained under pressure in the Eastern Cornbelt. Sources quoted new prompt offers at $425-$450/st FOB regional terminals, depending on location, but prices were reportedly negotiable.

Western Cornbelt:

Ammonia remained at $425-$450/st FOB in the Western Cornbelt for the latest offers, while prices in the Southern Plains dropped to $350-$405/st FOB, with the low confirmed at Pryor, Okla.

Northern Plains:

Ammonia pricing in the Northern Plains slipped to $450/st FOB and $450-$475/st DEL in North Dakota, down from the prior $525-$570/st DEL range. Sources reported several terminals on allocation or not offering tons in late May.

Black Sea:     

The Ukrainian government said it would consider talks to reopen the ammonia pipeline from Russia to Pivdennyi, but only if Russia will fulfill the commitments already made to ensure safe passage of grain from Ukrainian ports in the Black Sea. Kyiv also said it wanted the ability to export its grains from additional ports.

Russia’s demands remained the same. The country not only wants the pipeline reopened, but also called for the Russian Agricultural Bank to again have access to the SWIFT electronic payment system. Without access to SWIFT, Moscow contends, it is difficult for it to export its fertilizers.

While there are no sanctions on Russian fertilizers, including ammonia, the US and EU have imposed sanctions on banks, such as the Agricultural Bank, denying them access to the global payment system most used for international deals.

Romania:

The Azomures plant in Romania announced that lower natural gas prices in Europe will allow it to restart its operations. The company said that because ammonia prices have dropped with the price of natural gas, it is now able to secure the tons it needs for production of its various nitrogen-based and complex fertilizers. The facility will start operations at just 10% of its rated 1.6 million mt/y capacity and slowly build up production as market forces allow.

Turkey:

Turkey imported 272,000 mt of ammonia in January-April, Trade Data Monitor reported,up 19% from the year-ago 228,000 mt. April imports stood at 73,000 mt, up 145% from the 30,000 mt in April 2022. The US sent 32,000 mt to Turkey, Algeria sent 25,000 mt, and Libya added 14,000 mt.

India:     

Sources noted no new activity. Buyers continue to push for lower prices than the last-reported $290-$300/mt CFR. There were reports that $280/mt CFR may have been done, but sources could not identify a buyer or seller to back up the lower value.

Middle East: 

Sources saw Arab Gulf prices softening to $200-$220/mt FOB. The new price comes from calculating the landed price in Asia, along with netbacks from deals reported West of Suez.

The bulk of Arab Gulf business was done under contract, mostly from India, but with growing interest for spot deals. Production remains strong enough that a surplus is building in the area, giving pushy buyers more influence in their efforts to lower prices.

Thailand:      

January-April ammonia imports totaled 130,000 mt, according to Trade Data Monitor, a 30% increase from 100,000 mt in January-April 2022. April imports were pegged at 34,000 mt, down about 40% from 56,000 mt in the prior-year period. Malaysia sent 16,000 mt, followed by 15,000 mt from Australia, the country’s first ammonia exports to Thailand in 2023.

Northwest Europe:      

Buyers and sellers are at a standstill. Sources said buyers are looking at sub-$300/mt CFR prices, but sellers have so far refused to drop so low. The impasse led to another week without spot business in the region.

Sources said the market will eventually drop to where buyers are targeting, as the public price, reported in the $360s/mt CFR, is now higher than Europe’s estimated $320/mt ex-plant production cost. Lower gas prices are prompting more companies to either restart their facilities or to step up production in already-opened plants. At the same time, offers for cargoes from Venezuela, Iran, and the Russian Baltic Sea are beginning to show up in Northwest Europe.

Due to the sanctions against Venezuela and Iran, buyers are limited, and purchases of the Russian material are complicated. While the Russian ammonia is not sanctioned, buyers need to ensure they follow all the rules related to transfer of payment for the product. Payment is made more difficult because Russian banks are sanctioned by the US and EU, and are not allowed access to the SWIFT payment system used for most other transactions.

The Russian material appears to be the first lot of ammonia secured through a jury-rigged loading system set up at a port located just outside of St. Petersburg. As previously reported, a ship stationed just outside the harbor is serving as a holding tank after receiving ammonia that was railed to the facility. From that ship, other vessels are loading cargoes bound for international buyers. The system was established after countries along the Baltic Sea denied Russia access to their ammonia terminals due to sanctions enacted in response to the war in Ukraine.

Urea

Black Sea, Brazil, China, Eastern Canada, Eastern Cornbelt, India, Indonesia, Market Watch, Middle East, Northeast, Northern Plains, Thailand, Turkey, U.S. Gulf, Urea, Western Cornbelt

US Gulf:

The NOLA barge price range stretched as the week progressed, from $300/st FOB for all-June up to $375/st FOB for prompt. By late Thursday, however, those prices were $275/st FOB and $400/st FOB, respectively.

Eastern Cornbelt:

The urea market remained at $490-$500/st FOB in the Eastern Cornbelt, with the low confirmed at Cincinnati, Ohio. In the Great Lakes region, new offers were confirmed at $520-$540/st FOB for May-June tons.

Western Cornbelt:

Urea was pegged at $485-$500/st FOB in the Western Cornbelt, depending on location, with the St. Louis market reported in the $485-$495/st FOB range. In the Southern Plains, pricing at Catoosa/Inola, Okla., was quoted at $475-$500/st FOB during the week.

Northern Plains:

Urea slipped to $480-$500/st FOB in the Northern Plains, down from the prior $500-$540/st FOB range, with the low confirmed at Carrington and Alton, N.D., and the high for “very tight” inventories at St. Paul, Minn. Delivered urea remained strong at $630-$640/st in North Dakota in late May.

Northeast:

Urea pricing in the Northeast dropped to $450-$470/st FOB, down from $470-$520/st FOB earlier in May, with the low confirmed at Fairless Hills, Pa., for June tons. Delivered offers were quoted at the $475/st level in central Pennsylvania.

Eastern Canada:

Eastern Canada urea slipped to a broad C$675-$850/mt FOB in late May, depending on location and supplier, down C$25/mt at the high end of the range.

India:     

India has finally called its much-anticipated urea tender. Rashtriya Chemicals and Fertilizers Ltd. (RCF) released the tender documents just after the close of business on May 31. The tender is slated to close June 12, with a shipping deadline of July 17. The buyer advertised that it wishes to purchase 800,000 mt, but may take more depending on recommendations from the Department of Fertilizers.

Just a week ago, as the IFA Annual Conference in Prague was winding down, sources estimated the price in the tender at approximately $300/mt CFR. This week, however, estimates have softened to $275-$280/mt CFR, with a rising bearish attitude. Sources pointed to growing reserves from both China and Russian Baltic ports that could be targeted toward India. China alone was estimated have 500,000 mt available for export through July 15.

Increased urea production in India, along with the introduction of liquid Nano Urea, were designed to reduce dependency on imported urea, thus saving money on subsidy payments. Even with these actions, sources said India would need to call another tender soon after the last of the tons from the about-to-close tender are loaded. One trader said that by keeping purchases limited, India will not empty global reserves, leaving strong global surpluses that will help keep prices down.

Black Sea:     

Prilled urea moved down to a single $270/mt FOB price point. With Chinese and Baltic urea reportedly competing for the just-called Indian urea tender, further drops are expected.

Turkey:

Turkish urea imports firmed 79% in January-April, Trade Data Monitor reported, to 1.3 million mt from the year-ago 738,000 mt. Russian material accounted for 204,000 mt during the period, a dramatic rise from 6,000 mt in 2022. Tons from Egypt also firmed considerably, to 388,000 mt from 132,000 mt in the same period of 2022, a 195% increase.

April urea imports were counted at 434,000 mt, up 107% from the prior-year 209,000 mt. Oman led suppliers with 231,000 mt, followed by Egypt with 132,000 mt and 58,000 mt from Russia.

Indonesia:     

Sources said the government is still looking at export allotments for the second half of the year. The lack of any new business kept the official price in the $330s/mt FOB. However, once a selling tender is called, sources said, much lower prices will be bid.

Thailand:      

Trade Data Monitor reported January-April urea imports at 602,000 mt, up 16% year-over-year from 517,000 mt. April imports fell 22%, however, to 210,000 mt from the year-ago 268,000 mt. Saudi Arabia sent 59,000 mt for the month, while Qatar sent 57,000 mt. Malaysia shipped 51,000 mt, and Oman sent 30,000 mt.

Middle East: 

Large reserves of Chinese and Russian urea could push Arab Gulf producers to the sidelines for the just-called RCF/India tender.

Producers wrapped up the last of the shipments to India under the March Indian Potash Ltd. (IPL) tender this week. Sources reported no spot deals coming in to change pricing ideas in the area. The announcement of the next tender also sent a signal to producers to remain publicly quiet as traders try to work out deals for the tender.

If the RCF/India tender comes in at the currently-projected $275-$280/mt CFR level, the estimated netback to the Arab Gulf would be $255-$260/mt FOB at best, a drop of about $70/mt from the area’s current public price.

Iranian producers are now said to be quoting $280/mt FOB to potential buyers, off about $10/mt from offers reported during last week’s IFA conference in Prague. With stockpiles building for June and July, sources expect softer prices to continue.

Egyptian producer MOPCO sold 6,000 mt of granular urea at $320/mt FOB to a trader for delivery to Europe. The price was off about $40/mt from the last public deal, but in the range expected by traders.

Softer prices are already under discussion. As soon as MOPCO closed its deal, traders began bidding at $305-$310/mt FOB for mid-June shipments, while some aggressive buyers were even reported pushing for $300/mt FOB or less. Sources said these prices were being offered for about 50,000 mt of granular product, with an eye toward securing a series of small 6,000-8,000 mt lots for sale into Europe. No one seemed to be looking to take the full 50,000 mt for a long-distance sale.

China:   

After price discussions were reported starting the week at $300/mt FOB, sales of prilled urea to Taiwan and the Philippines showed netbacks to China at $275-$280/mt FOB. Sources were not surprised at the drop, having predicted the price would soften to the low-$300s/mt FOB and beyond one week earlier.

The less-available granular urea was priced at $305-$310/mt FOB, sources said. There were reports of a vessel being sought to take 16,000 mt of Fudao granular urea to Vietnam for prompt shipment.

Sources speculated that China will have reserves as high as 500,000 mt through the middle of July. This comes as domestic demand has drawn to a close and production remains at nearly 165,000 mt/d, about 75% of rated capacity.

Chinese urea is expected to be a major player in the soon-to-close RCF/India tender. The tender’s estimated $275-$280/mt CFR price into India would mean the Chinese price will have to come down to the upper-$250s/mt FOB to be viable. Sources did not think this would be a problem.

Brazil:

Prices dipped slightly on the news of the Indian urea tender. Sources now put the price at $290-$300/mt CFR, just $5/mt down from last week. RCF’s request for just 800,000 mt added to the bearish attitude, as traders in Brazil did not think this would be enough to absorb the surplus in the global market.

New bids for urea were said to come in at $280/mt FOB, previously reported as the price level for sanctioned material. Now, buyers are trying to make this the standard price.

The price in Rondonopolis remained stable at $420-$430/mt FOB ex-warehouse. Some sellers are trying to push the market up to $445-$455/mt FOB ex-warehouse, but with no success so far.

Sources reported lingering demand related to the Safrinha season. With the global price sliding, however, buyers are waiting until the last minute to take needed tons. High inventories in Brazil confirm to the buyers that there is no need to be pushed into a deal.

Ammonium Sulfate

Ammonium Sulfate, Brazil, China, Eastern Canada, Eastern Cornbelt, Market Watch, Northeast, Northern Plains, Thailand, Turkey, U.S. Gulf, Western Cornbelt

US Gulf:

NOLA ammonium sulfate barge prices remained in the $305-$315/st FOB range.

Eastern Cornbelt:

Ammonium sulfate prices were steady at $385-$410/st FOB in the Eastern Cornbelt.

Western Cornbelt:

Granular ammonium sulfate was steady at $375-$400/st FOB in the Western Cornbelt, with the low at St. Louis and the high in Iowa.

Northern Plains:

Ammonium sulfate prices in the Northern Plains firmed to $510-$520/st DEL in North Dakota, up significantly from the prior $450-$480/st DEL range. Terminal pricing was pegged at $390-$410/st FOB for very snug supply in late May.

Northeast:

Granular ammonium sulfate prices in the Northeast fell to $410-$425/st DEL, down from the prior $450-$470/st DEL range. Terminal pricing was pegged at $405-$408/st FOB in the region.

Eastern Canada:

Ammonium sulfate was quoted at C$690-$825/mt FOB in Eastern Canada, down C$30/mt at the low end of the range.

China:   

Two deals into Indonesia have again shifted prices downward.

Pupuk closed a tender for 40,000 mt of caprolactam grade amsul on May 29, for an estimated netback of $105/mt FOB. Sources said this is the current price level out of China.

Another tender, this time by Gresik, showed a netback from a very aggressive offer at $96/mt FOB. While this deal has not yet been settled, sources said it was no surprise that amsul prices had dipped below $100/mt FOB.

Buyers looking for spot tons might not find the market so friendly, however. Sources said producers appear to have sufficient orders on the books for June, and may not be willing to sell a small spot cargo at the levels reported out of Indonesia. There are still plenty of tons available for July.

Brazil:   

Unsurprisingly, the Brazil market has mirrored the global decline in amsul pricing. Sources pegged the landed price at $160-$170/mt CFR for granular amsul. Demand for ammonium sulfate is down, said sources, because the price of urea is also down. Buyers no longer see a need to buy amsul as a nitrogen substitute.

The Rondonopolis price remained steady at $285-$310/mt FOB ex-warehouse. The general malaise for nitrogen products has impacted the amsul market alongside the urea market.

Thailand:      

Thailand imported 67,000 mt of ammonium sulfate imports in January-April, according to Trade Data Monitor,down 40% from 111,000 mt in the same period of 2022. April imports – all from China – totaled 23,000 mt, down 66% from the year-ago 67,000 mt.

Turkey: 

January-April ammonium sulfate imports were counted at 489,000 mt, Trade Data Monitor reported, a 15% decline from the prior-year 575,000 mt. April imports firmed to 185,000 mt, however, from 65,000 mt received in April 2022. China supplied 156,000 mt of the April tonnage, while Belgium sent 16,000 mt. Italy added 13,000 mt.