All posts by mickeybarb@charter.net

Algeria Announces New Plans to Set Up $7 B Phosphates JV with China

China, News, News Briefs, North Africa, Phosphate

Algeria this week said it plans to build a $7 billion phosphate project in the country in a joint venture with Chinese companies, China’s Xinhua news agency reported, citing a March 22 statement by Algeria’s national oil producer Sonatrach.

This is the latest of a series of announcements of such a project by the North African country going back several years (GM Jan. 29, 2021; June 12 & Sept. 18, 2020; Sept. 21 & Nov. 30, 2018; July 22, 2016). Others proposed in recent years – more recently involving the participation of Chinese companies – have not progressed.

Asmidal, a subsidiary of Sonatrach, and Algerian mining firm Manal, on March 22 signed an agreement with Chinese companies Wuhuan Engineering and Tian’An Chemical to launch a joint venture Algerian Chinese Fertilizers Co., according to this week’s Sonatrach statement.

Some 56 percent of the shares will be owned by the Algerian parties and the remaining 44 percent by the two Chinese firms.

According to Xinhua’s report, the project is targeting an annual production capacity of 5.4 million mt/y of fertilizer, although some other reports have put the targeted capacity lower, at around 4.5 million mt/y.

The project will exploit the phosphate deposits of the Bled El Hadba and Djebel Onk mines in Algeria’s easternmost province of Tebessa, while fertilizer production facilities are planned to be built in the port of Annaba to facilitate exports.

Algeria has produced around 1.2 million mt/y of phosphate rock in recent years, with much of this volume directed at the export market.

A phosphates megaproject is one of the Algerian government’s projects aimed at reducing the country’s heavy dependence on hydrocarbons.

Anglo America Confirms 70 Redundancies at Woodsmith Project

England, News, News Briefs, Polyhalite, Specialty

Anglo American Plc, developer of the Woodsmith polyhalite mining project in northeast England, has confirmed 70 redundancies at the project as it moves towards the construction phases.

Change in headcount was “relatively normal” for a large project such as the multi-million pound mine project, according to a company statement cited by a Yorkshire Post newspaper report.

Anglo American early this month said it expected to make a number of changes to the phasing of project work, particularly in relation to the two main shafts, ahead of the full project execution phase (GM March 4, p. 30).

“Our new model will deliver the construction of the mineshafts in a slightly different way, meaning some of the roles we had previously are no longer required,” the company said in its statement concerning redundancies.

Kropz Produces First Phosphate Concentrate at Elandsfontein

News, News Briefs, Phosphate Rock, South Africa

Phosphate rock junior Kropz Plc reported it had achieved first production of phosphate concentrate from its Elandsfontein operation in South Africa.

The company started plant commissioning in the fourth quarter of last year, and said it has achieved a concentrate grade of 31 percent P2O5. It said concentrate samples will now be prepared for shipment to a number of potential buyers to confirm product specifications.

Kropz is targeting to start sales to smaller local customers in South Africa late this month.

The company said the focus at Elandsfontein will now shift to increasing ramp-up of operations to achieve nameplate capacity and enable the first commercial large-scale shipment of concentrate, while optimizing process recoveries.

It expects full production capacity by early fourth-quarter 2022. The plant has a targeted design processing capacity of some 1 million mt/y, according to Kropz’s website.

Product for export will be shipped by road and rail the 43 km to the West Coast port of Saldanha, one of Africa’s biggest ports.

Kropz owns a majority 74 percent stake in the Elandsfontein phosphate project.

Ammonia

Ammonia, Black Sea, California, Eastern Cornbelt, India, Market Watch, Middle East, Northwestern Europe, Pacific N.W., Southeast Asia, Tampa, U.S. Gulf, Western Canada, Western Cornbelt

U.S. Gulf/Tampa:

Tampa ammonia for April was confirmed at $1,625/mt CFR, up some $490/mt CFR from the $1,135/mt CFR recorded in March and February. Sources had been predicting a significant increase based on current production outages.

Nutrien’s earlier announcement that it concluded a new sale of 8,000 mt of ammonia to a customer in Northwest Europe from Trinidad at a price of US$1,650/mt, up $200/mt from the last done for Western Europe, was expected to grease the wheels for Tampa’s movement.

Eastern Cornbelt:

A round of rain and cooler temperatures in late March slowed preplant ammonia movement in the Eastern Cornbelt, which had started to pick up during the prior week. On the pricing front, sources said Koch reduced its terminal price in Illinois and Indiana to $1,450/st FOB, down from the prior week’s $1,550/st FOB reference, to match CF’s level. The reference price FOB Lima, Ohio, remained at the $1,475/st level in late March.

“For all practical purposes, this is a ‘call for availability and price’ market,” said one regional contact about the late March ammonia market.

Western Cornbelt:

Wind and rain put a damper on preplant ammonia activity in many parts of the Western Cornbelt during the week. The ammonia market reportedly remained at $1,375-$1,400/st FOB regional terminals in late March, with the low confirmed at Beatrice, Neb., and the high at Palmyra, Mo.

New ammonia sales in North Dakota were confirmed at $1,480-$1,500/st FOB at midweek, with the posted price remaining at $1,450/st FOB Velva, N.D.

California:

The anhydrous ammonia market remained at $1,220/st DEL in California, with aqua ammonia pricing reported in the $315-$325/st FOB range in the state. Sources said they expect another increase in the near term, but no new prices have been announced yet.

Pacific Northwest:

New spring posted prices for ammonia in the Pacific Northwest reportedly jumped to $1,650/st DEL from some suppliers, up from the last reported $1,400-$1,450/st range. The aqua ammonia market was pegged at $405/st FOB in the region for spring tons, up $50/st from last report.

Western Canada:

Spring ammonia offers in Western Canada were quoted at C$2,230-$2,250/mt DEL in late March, up from the last reported range of C$2,000-$2,100/mt.

Black Sea:

With the closure of the Ukrainian ports because of Russian attacks, sources said vessels that were once headed for Yuzhnyy are now being diverted to other locations. The shutdown of these ports has also effectively closed any activity in the area to set prices.

Traders noted that southern ports in Bulgaria and Turkey continue to operate, but primarily for imports. Bulgarian ammonia production, for example, has long been mostly for domestic use. With the removal of Russian ammonia from the market, the need for homemade ammonia got even more acute in Bulgaria.

India:

Sources said no new deals were done this week. Buyers – mostly DAP producers – are said to be holding off on new purchases until the national policy on subsidies and the maximum retail price are worked out.

The rising cost of inputs is making DAP production more expensive. Producers want to be sure they are covered. Sources said clarity on these issues will most likely not come until after the new fiscal year starts on April 1.

Middle East:

Sources are now calling the ammonia market at $1,230-$1,245/mt FOB out of the Arab Gulf. The range came as sources ran their own calculations about the netback from last week’s SABIC/OCP deal. SABIC confirmed the lower price.

Availability remains tight as producers move to cover existing contracts. Sources said there were rumors of SABIC shopping around a cargo, however.

Northwest Europe:

Sources reported new deals moved the price to $1,630-$1,650/mt C&F. A small deal was reportedly done out of Poland at $1,600/mt FOB. Another deal with Acron reportedly settled at $1,500/mt FOB. The Acron price, said sources, represents a discount for Russian product. Acron was not on the sanction lists and now seems able to export product.

A slight dip in natural gas prices may allow some producers to keep operating. Sources put the production cost of 1 mt of ammonia at $1,000/mt.

While no new deals were reported out of Baltic ports, sources said at least three vessels are heading for Baltic loading facilities. Whether there will be Russian material at the ports when the ships arrive, whether the ships will be allowed to load if the product is available, and who will buy the ammonia are all questions still unanswered.

The Gas Cobia, which loaded Russian material just as the sanctions were imposed a little less than a month ago, is now heading to Turkey. For several days it lingered near Ventspils while the owners of the ammonia reportedly searched for a buyer willing to risk going against the American and European Union sanctions against Russia.

Southeast Asia:

Producers are said to be sold out through April, and May availability is reportedly limited. Industrial buyers in South Korea and Taiwan are easing back on their demands for product, sources said. Cutbacks in orders from factories are causing limits on both the production and need for ammonia.

Chinese imports of ammonia continue to show a decline. Sources said a combination of reduced demand by phosphate producers and increased internal trade in ammonia led to the drop.

January-February 2022 imports were reported at 62,000 mt by Trade Data Monitor. This amount reflects a 71 percent drop from the same period of 2021, which came in at 204,000 mt. February imports were pegged at 16,000 mt – all from Indonesia, which represented a drop of 66 percent from the February 2021 imports of 47,000 mt.

Urea

Black Sea, Brazil, California, China, Eastern Cornbelt, India, Indonesia, Market Watch, Middle East, Nepal, Nigeria, Pacific N.W., Urea, Vietnam, Western Canada, Western Cornbelt

U.S. Gulf:

NOLA granular barges were reported to have traded at $875-$930/st FOB, up from the week-ago $865-$905/st FOB. The higher end of the range reportedly occurred late in the week. The last done prill business continued to be called $860/st FOB.

Eastern Cornbelt:

The urea market was quoted at $950-$980/st FOB in the Eastern Cornbelt, depending on location and time of the week, with the Cincinnati, Ohio, market pegged firmly at the higher end of the range on March 24.

Western Cornbelt:

The urea market was pegged in a broad range at $920-$960/st FOB in the Western Cornbelt, up $10/st from the prior week, depending on location and time of the week. Both the high and low were reported at St. Louis, Mo., during the course of the week.

Sources quoted the Catoosa/Inola, Okla., urea market at $955-$965/st FOB late in the week, with the same level reported at St. Paul, Minn. New urea sales in North Dakota were reported at $980-$990/st FOB and $1,000-$1,020/st DEL, up from last week’s $970-$1,015/st DEL range.

California:

Urea pricing in California was confirmed at $960-$1,010/st FOB during the week, depending on location, up from $940-$990/st the week before and a full $130/st higher than early March levels. Sources said the low was reported at West Sacramento, with the Stockton market generally falling in the $990-$1,010/st FOB range.

Bagged urea tons were quoted as high as $1,060/st FOB West Sacramento.

Pacific Northwest:

Urea prices were quoted at $990-$995/st FOB in the Pacific Northwest, up $25-$30/st from the previous week and a full $160/st higher than pricing levels in early March, with the lower end of the range confirmed at Rivergate, Ore. No current delivered prices were confirmed in the region in late March.

Western Canada:

Urea prices in Western Canada climbed to C$1,320-$1,390/mt FOB and C$1,350-$1,400/mt DEL for April-May tons, up some C$200/mt from early March.

“Buyers have been hesitant,” commented one regional source. “It’s mostly small volumes. Retailers are cautious and waiting for grower commitments.”

India:

The last vessels booked under the previous tender are now on their way to India. In the past, the passage of the shipping deadline would signal another tender call. However, higher prices and limited resources have delayed the call.

Sources said the next tender could easily see offers at $1,000-$1,100/mt CFR, and there may be limited tonnage available to be offered in the tender. China has voluntarily taken itself out of the global market into May. Financing for Russian material is blocked under sanctions imposed by the U.S. and the European Union.

Even if deals not involving the American or E.U. banks could be worked out, the Ukrainian ports in the Black Sea are closed. There are also reports that Baltic countries may ban the exporting of Russian product from their ports.

Besides the usual other suppliers in the Arab Gulf and North Africa, sources expect to see offers with Nigerian material in the upcoming tender. Reportedly, there may be a cargo available from Vietnam. Indonesia might also be a possible source of product, but rumors of delays in loading tons recently awarded in a tender could make those tons unavailable.

Industry watchers said the call could come at any time. Once the call is made, the buying house waits seven days before closing the tender and announcing the results. A call made on March 25 would take the closing of the tender into the next fiscal year, giving the buying house a new cache of cash.

Black Sea:

The closure of the Ukrainian ports by Russian attacks has also closed the ability to do price discovery from the area.

Some in the industry have begun to speculate about pricing, putting the estimated market at $1,005-$1,010/mt FOB out of Yuzhnyy. Traders in Asia, however, said the price cannot be verified because of the lack of any outbound traffic from the area.

Some deals might get concluded out of Russian ports in the Far East. This has happened in recent sales to India. However, the current costs of entering the Black Sea and approaching any Russian or Ukrainian port is much higher due to the War Zone premium imposed by insurance carriers.

Even if Russian material can be loaded and shipped through the Black Sea, sources note the real issues facing any deal are the sanctions against Russia and its financial institutions by the U.S. and E.U.

Reportedly, Russia and India are looking at expanding an already operating system of rupee-ruble exchange. The plan is said to remain free from any entanglement with U.S. or European banking facilities, and without fear of being hit with penalties for violating the sanctions.

Indonesia:

There are reports that Kujang sold a cargo at $989/mt FOB. The deal is on the heels of a tender that recently closed with prices at $938/mt FOB. No details of the Kujang sale were reported.

Sources said the tonnage sold under the previous auction may not be available as soon as expected. Initially, the cargo was to be loaded in mid-April. Sources speculated this would allow the urea to be offered in the upcoming Indian tender. Now, according to one trader, the loading may not take place until the end of April. This could make it too late for the Indian business.

Middle East:

Sources said the latest offers from Arab Gulf producers are at $1,100/mt FOB, but with no business concluded at that level. The price, said sources, remains at $990-$1,000/mt FOB.

Reportedly, some Iranian material is being offered at $900/mt FOB. Traders said this nearly $100/mt discount from the Arab Gulf price is the largest seen. Usually Iranian material is $25-$30/mt off the Arab Gulf price. Sources expect to see Iranian material included in the Indian tender, but not necessarily listed as Iranian origin.

Egyptian producers continue to call for higher prices. The lack of any new business this week has prices holding at $1,130/mt FOB, however.

China:

For now, the only urea being allowed out of China seems to be small cargoes of 5,000-6,000 mt. However, some larger cargoes have been released in government-to-government deals, such as the 101,000 mt shipped to Pakistan in February. Other efforts by countries to secure tons are also underway, sources said.

Traders and other industry watchers said quotes out of the Chinese ports were coming in at $1,000/mt FOB, but with no new deals to actually confirm these levels. One trader noted that the $1,000/mt FOB price is closer to market prices than previous calculations based on the ex-factory price. Using basic calculations for an export-equivalent price from the factory showed a price around $700/mt FOB, which everyone agreed was too low.

While government leaders are talking with their Chinese counterparts for permission to buy more urea, sources said permission for exports is getting harder to arrange. The lack of transparent business out of China continues to effectively remove them from the global market.

January-February exports this year were reported at 237,000 mt by Trade Data Monitor. This is a 45 percent drop from the 434,000 mt exported during the same period last year. February 2022 exports were up 6.5 percent from February 2021, to 152,000 mt from 143,000 mt. Pakistan took the bulk of the February 2022 shipments at 101,000 mt.

Brazil:

Urea prices showed a slight uptick to $1,000-$1,100/mt CFR. Sources said the increase came as no surprise following reports of higher natural gas prices.

Rondonopolis saw a tightening of the range to $1,000-$1,200/mt FOB ex-warehouse. Demand for urea and other nitrogen products is reportedly low because buyers are hesitant to make any commitments while prices remain so high. Reportedly, the few deals being done are for small quantities and for immediate delivery.

Nigeria:

Dangote announced that its new 3 million mt/y plant is now fully operational. The company has indicated that 2 million mt will be dedicated to export, mostly to Brazil. The remaining 1 million mt will be for the domestic market and neighboring African countries.

While Brazil is expected to be the main beneficiary of the new plant’s output, the company told the press it would also be selling tons to India and the U.S. The Indian business is no surprise to international trades. Some Nigerian product was included in the last two Indian tenders, partly because of the absence of Chinese product.

Vietnam:

Sources reported offers at $850-$875/mt FOB for prilled urea cargoes. Some of these tons might be included in the upcoming Indian tender, said one trader. Sources said they were unsure why the Vietnamese price was so far off the rest of the markets, which were all in the upper-$900s/mt FOB.

Nepal:

A tender closed on March 22 for 22,000 mt of urea. No results from the tender were public by press time. Another tender closes on March 25 for the same amount.

In the past, tenders with such small quantities would have been covered by product out if India. However, the tightness of the urea market moved the Indian government to clamp down on re-exporting urea to its neighbor or sending Indian-made urea.

UAN

California, Eastern Cornbelt, Market Watch, Pacific N.W., U.S. Gulf, UAN, Western Canada, Western Cornbelt

U.S. Gulf:

NOLA UAN barges continued to be reported at $600-$630/st ($18.75-$19.69/unit) FOB for the week, though CF posted $620-$630/st FOB on March 23, according to sources.

Eastern Cornbelt:

CF announced higher UAN-32 postings on March 23, with terminal prices reflecting a roughly $20-$25/st increase. New levels were reportedly $650/st ($20.31/unit) FOB Mount Vernon, Ind.; $655/st ($20.47/unit) FOB Cincinnati; $660/st ($20.63/unit) FOB Peru, Ill.; and $670/st ($20.94/unit) FOB Terre Haute, Ind.

Sources quoted the UAN-28 market at $590/st ($21.07/unit) FOB Ohio terminals late in the week.

Western Cornbelt:

Sources reported the UAN-32 market at $650-$660/st ($20.31-$20.63/unit) FOB regional terminals for April-May tons, up from the previous $625-$635/st FOB range. The low reflected CF’s new posting at St. Louis as of March 23.

New postings FOB Woodward and Verdigris, Okla., were reported at $640/st ($20.00/unit) on March 23, reflecting a $20/st increase.

California:

UAN-32 pricing in California was quoted at $670-$700/st ($20.94-$21.88/unit) FOB Stockton, depending on supplier, up from $660-$680/st ($20.63-$21.25/unit) FOB in early March. No current rail-DEL prices were confirmed in late March.

Pacific Northwest:

The UAN-32 market was pegged at $660-$685/st ($20.63-$21.41/unit) FOB in the Pacific Northwest, with the low reported at Umatilla, Ore., and Pasco, Wash. The high was confirmed at Kennewick, Wash., and reflected a $20/st increase from last report.

Sources also reported delivered UAN-32 offers at the $680/st ($21.25/unit) level in eastern Oregon and Washington.

Western Canada:

The UAN-28 market in late March was pegged at C$860-$880/mt (C$30.71-$31.43/unit) DEL in Western Canada for new spring offers, up from C$775-$785/mt (C$27.68-$28.04/unit) at last report.

Ammonium Sulfate

Ammonium Sulfate, Brazil, California, China, Eastern Cornbelt, Market Watch, Pacific N.W., U.S. Gulf, Western Canada, Western Cornbelt

U.S. Gulf:

NOLA ammonium sulfate barge price ideas were quoted at $655/st FOB or higher, according to most sources. This compares to the week-ago $620-$655/st FOB.

Eastern Cornbelt:

The ammonium sulfate market was pegged at $690-$710/st FOB in the Eastern Cornbelt, with the Cincinnati market quoted solidly at the $700/st FOB level.

March 14 postings from AdvanSix included granular ammonium sulfate at $690/st FOB Granite City, Ill., and Prairie du Chien, Wisc., $695/st FOB Amherst Junction, Wisc., and $700/st rail-DEL in Illinois and Wisconsin. The company’s mid-grade postings included $630/st FOB Byron and Tolono, Ill., and $640/st rail-DEL in Illinois and Wisconsin.

Western Cornbelt:

The ammonium sulfate market was pegged at $685-$700/st FOB in the Western Cornbelt in late March. New sales were confirmed at $705-$740/st DEL in North Dakota, up from $670-$700/st at last report.

AdvanSix’s March 14 ammonium sulfate postings included granular at $690/st FOB Winona, Minn., $700/st FOB Brooten, Minn., and $715/st FOB Sioux City, Iowa, with mid-grade referenced at $630/st FOB Winona. The company’s rail-DEL postings in Iowa and Minnesota firmed on that date to $700/st for granular and $640/st for mid-grade.

California:

The ammonium sulfate market was quoted at $670-$685/st FOB in California, up $45/st from last report, with the low confirmed at Lathrop and the high at Helm. Other terminal prices included $675/st FOB Woodland and Richvale.

Pacific Northwest:

IRM’s March 15 postings for ammonium sulfate in Oregon, Washington, Montana, Idaho, and Utah included WesternStandard at $620/st FOB or DEL, and Tranzform and WesternPremium at $670/st FOB or DEL. New prices from other suppliers included granular at $715/st FOB regional warehouses and $720/st DEL for tons from Canada.

Western Canada:

Ammonium sulfate prices were up significantly in Western Canada, with reports of new offers for limited tons climbing to C$875-$925/mt DEL, up from C$825-$840/mt in early March.

China:

Prices moved up as demand picked up in Southeast Asia and Brazil. Sources said the new price level is pegged at $350-$400/mt FOB for caprolactam-grade ammonium sulfate.

Exports of ammonium sulfate during January and February this year were reported at 1.6 million mt by Trade Data Monitor. This amount represents a 24 percent increase from 1.3 million mt exported during the same period in 2021.

February 2022 exports were down just under 1 percent, to 641,000 mt from 646,000 mt in February 202. Turkey was the main buyer in February 2022 with 136,000 mt, followed by Brazil with 72,000 mt and Vietnam with 71,000 mt. Together the three buyers accounted for a little more than half of all exports for the month.

Brazil:

Demand for ammonium sulfate is so strong that 489,000 mt in vessels is slated to arrive soon at Brazilian ports. The current price is pegged at $480-$505/mt CFR, reflecting a roughly $50/mt bump in prices.

Rondonopolis prices have not caught up with the rising port prices. Sources said the market remains at $595/mt FOB ex-warehouse, but this is expected to change as demand for the product picks up.

More NPK producers are looking for amsul to replace the more expensive urea in their blending formulations. The buyers are also aware that while they face competition in demand from Southeast Asian buyers, the Chinese product is not export restricted.

For the buyers, the issues all revolve around basic market forces instead of government-imposed shortages, as is the case with Chinese phosphates and urea.

16-20-0

California, Market Watch, NPK 16-20-0, Pacific N.W.

California:

16-20-0 prices were moving higher in California, with the market jumping to $750-$757/st FOB in late March, up from $705-$712/st the week before and a full $70-$90/st higher than pricing levels at the start of the month.

Pacific Northwest:

16-20-0 prices were higher in the Pacific Northwest at $705/st FOB and $745/st DEL in late March, up from $675/st and $695/st, respectively.