All posts by mickeybarb@charter.net

Supreme Court Limits EPA Authority Under CWA in Landmark WOTUS Decision

The US Supreme Court on May 25 issued a 5-4 ruling limiting the Environmental Protection Agency’s regulatory authority over wetlands under the Clean Water Act (CWA), striking a blow to the Biden Administration’s newly drafted “Waters of the United States” (WOTUS) definition.

Writing for the majority in Sackett v. EPA, Justice Samuel Alito said the CWA extends only to “wetlands with a continuous surface connection” to water bodies that are already protected as permanent and directly connected to a traditional navigable water. Joining him in the majority opinion were Justices John Roberts, Clarence Thomas, Neil Gorsuch, and Amy Coney Barrett.

The ruling countered the “significant nexus” standard that guided the EPA’s latest WOTUS definition, which was published in late December (GM Jan. 6, p. 1) and went into effect on March 20. Legal challenges prevented the new definition from being implemented in all states, however (GM April 14, p. 1).

The decision was hailed by numerous farm and industry groups, including The Fertilizer Institute (TFI), the Agricultural Retailers Association (ARA), the National Corn Growers Association (NCGA), the American Farm Bureau Federation (AFBF), the National Association of State Departments of Agriculture (NASDA), and the National Cattlemen’s Beef Association.

The original case that was appealed to the Supreme Court involved Mike and Chantell Sackett, a couple that for 16 years has been prevented from building a home on their 0.63-acre property in Priest Lake, Idaho, because EPA claims part of the property contains wetlands and is therefore subject to regulation under the CWA. Oral arguments in the case were presented last October.

While all nine Supreme Court justices agreed that the land owned by the Sacketts should not have been subject to CWA authority, the court was split on how much EPA’s regulatory authority should be limited. Justice Brett Kavanaugh penned a dissenting opinion, joined by Justices Sonia Sotomayor, Elena Kagan, and Ketanji Brown Jackson, arguing for a broader interpretation of EPA authority over wetlands.

“There can be no debate, in my respectful view, that the key statutory term is ‘adjacent’ and that adjacent wetlands is a broader category than adjoining wetlands,” Kavanaugh wrote. “To be faithful to the statutory text, we cannot interpret ‘adjacent’ wetlands to be the same thing as ‘adjoining’ wetlands.”

EPA Administrator Michael Regan issued a statement saying the agency would “carefully review” the Supreme Court decision as it considers its next steps. He expressed “disappointment in the ruling, however, claiming that it “erodes longstanding clean water protections.”

TFI President and CEO Corey Rosenbusch, however, said the decision is a “win for agriculture” by striking down the significant nexus test.

“While regulatory interpretation from the EPA will take time, the SCOTUS decision is a great first step in providing the clarity that the fertilizer industry needs for long-term planning and capital investments that will allow us to continue providing the critical nutrients that feed the crops that feed our communities,” Rosenbusch said.

“All of agriculture has been waiting for this ruling,” said ARA President and CEO Daren Coppock. “The decision finally restores common sense back into WOTUS regulation. Hopefully it lays to rest efforts by EPA and the Army Corps of Engineers to extend CWA jurisdiction well beyond Congressional intent.”

Coppock said ARA had earlier warned that EPA was premature in issuing the new WOTUS rule while the Supreme Court ruling was pending.

“The Court’s ruling today should provide the legal certainly necessary for ag retailers and their farmer customers,” he added. “The EPA needs to expeditiously update the WOTUS regulation according to the clear ruling issued by the Supreme Court.”

“The EPA clearly overstepped its authority under the Clean Water Act by restricting private landowners from developing their land despite being far from the nearest navigable water,” said AFBF President Zippy Duvall. “The justices respect private property rights. It’s now time for the Biden Administration to do the same and rewrite the Waters of the United States rule.”

“This sensible ruling preserves protections for our nation’s valuable water resources while providing clarity to farmers and others about the process of determining federal jurisdiction over wetlands,” said NCGA President Tom Haag. “This is a great day for corn growers.”

“Today’s ruling proves that protecting our nation’s waterways and growing food, fiber and fuel are two tandem efforts – not two competing interests,” said NASDA CEO Ted McKinney. “There is, however, still work to be done to ensure farmers and ranchers are equipped to best care for their land while following applicable federal or state requirements.”

Yara to Build $150 M Global Specialty/Biostimulant Plant in UK

Yara International ASA announced on May 23 that it will build a $150 million global production plant for specialty crop nutrition products and biostimulants near its existing site at Pocklington in Yorkshire, UK. The company said it will be one of the largest facilities in the world for these products.

“The size of the investment is around US$150 million, which includes the purchase of land, the construction of the buildings, and the procurement of machinery and equipment,” said David Tomkinson, Operations Director and Plant Manager at Yara Pocklington. “This is a considerable investment for this sector.”

Yara said the new plant will allow it to increase its footprint in this specialty crop nutrition business, one of the fastest growing markets in agriculture. It said sales of YaraVita specialty crop nutrition products and biostimulants have grown five-fold in the last 20 years.

The new plant, which is expected to be operational by the end of 2025, will allow Yara to double the capacity of its YaraVita products and further expand production capacity if needed. Virtually all the output from the plant will be exported to markets around the world.

“Our specialty crop nutrition products help farmers increase yields and quality without increasing land use,” said Mónica Andrés Enríquez, Executive Vice President for Europe at Yara International. “That not only benefits farmers, but is also good for the planet. It’s no wonder that this market is growing exponentially. Amid today’s food security and climate change challenges, it’s more important than ever to feed the world with nutritious food while also protecting the planet.”

Yara said around 3,000 trials have been conducted to test the quality of YaraVita products. The trials have resulted in higher yields, typically increasing by 3%-8%, and as much as 30%.

“If one nutrient is lacking or under stress, crop growth, yield, and quality can be reduced. Specialty crop nutrition products are complementary to traditional mineral fertilizers and are crucial for achieving balanced crop nutrition. Although only needed in small amounts, they can make a big difference for farmers and are critical to ensure a lower carbon footprint for food production by increasing yield per unit of land,” said Rejane Souza, Senior Vice President of Global Innovation at Yara International.

Yara is already one of the largest producers of specialty crop nutrition products in Europe. It said it has more than 50 years of agronomic expertise in foliar nutrients and biostimulants and more than 100 years of agronomic knowledge in crops and soils, allowing it to offer a comprehensive range of crop nutrition solutions combined with agronomic advice and digital tools.

The market for global specialty fertilizers is projected to grow at compounded annual growth rate (CAGR) of 6.8% between 2022-2027, according to MarketsandMarkets. The CAGR for biostimulants is growing at an even higher rate – more than 12% – DunhamTrimmer estimates, referring to the period from 2018 to 2030.

Wilson Chemical Solutions to Distribute Phinite Manure-Based Regenerative Biofertilizer

Wilson Chemical Solutions, Rensselaer, Ind., is partnering with Phinite, a North Carolina corporation, to bring the company’s manure-based regenerative biofertilizer to the market.

“Wilson Chemical Solutions’ partnership with Phinite has the potential to change the world, and we’re honored to be part of bringing sustainability to the agricultural industry,” said Keegan Wilson, President and CEO of Wilson Chemical Solutions, a distributor of hazardous and non-hazardous industrial and agricultural chemicals and fertilizers throughout North America and Canada.

“We are thrilled to partner with Wilson Chemical Solutions to bring our breakthrough technology to farmers across the country,” said Jordan Phasey, Phinite CEO and Founder. “Our regenerative biofertilizer has the potential to transform the agricultural industry by providing a sustainable, low-cost, and high-quality source of phosphorus. We look forward to working with Wilson Chemical Solutions to help farmers improve profitability, build soil health, and create a more sustainable future.”

Phinite said its proprietary drying process uses solar energy and robotic technology to dry manure, creating a low-cost, low-energy product that is easily transported and blended with other materials to create a certified organic fertilizer that works better than synthetic fertilizer. It said the product offsets greenhouse gas emissions, benefits soil content, and turns a liability into an asset, helping farmers monetize a new revenue stream.

Phinite also said the product solves the global problem of phosphorus depletion by creating a new source of high-quality phosphorus. “Countries are running out of phosphorus,” said Phasey. “If we change nothing, America will run out within 20 years- reserves in Europe and Australia are already gone. It’s a huge concern for farmers, because phosphorus means food. We’re excited to be part of the solution.”

Unlike other organic fertilizers, Phinite said its product is more uniform, with approximate content of 3-12-0, and that it is easier to combine with other materials. It also offers a broader spread pattern than traditional organic fertilizers – 60 feet compared to 15 feet from conventional versions, which translates to fewer trips to the farm, resulting in lower labor costs, less fuel used to spread, and a quicker process overall.

Phinite said its product is entirely odorless, and as a result application equipment can be stored indoors without dealing with lingering smells, thus avoiding complaints from adjoining property owners. The company added that the low moisture content allows for extended storage times without caking or clumping.

The parties said the product will be available in limited amounts immediately, with availability set to increase by early next year and the total capacity of 100,000 st/y expected by 2029. Wilson will handle the storage, marketing, and logistics for Phinite’s biofertilizer, making it more widely available to farmers nationwide.

Missing AN Investigation Continues, Criminal Activity Not Believed Involved

“Our investigation is still ongoing at this time,” a spokesperson for Union Pacific Railroad told Green Markets on May 25, with respect to some 30 st of ammonium nitrate that went missing on UP’s tracks between Dyno Nobel Inc.’s production facility in Cheyenne, Wyo., and Saltdale, Calif. “Union Pacific cannot comment on the details or status of an active investigation, other than to say that at this point in the investigation, we do not believe there is any criminal or malicious activity involved.”

According to a report submitted to the National Response Center made on May 10 by Dyno Nobel, the railcar left Wyoming on April 12 and arrived in California empty after a two-week journey. The railcar was sealed when it left the Dyno Nobel facility and those seals “were still intact,” when it arrived in California, according to the report, which was cited by The New York Times. “The initial assessment is that a leak through the bottom of the gate on the railcar may have developed in transit,” said the statement.

“We are continuing to conduct an exhaustive review of this matter, and that review is ongoing,” a Dyno Nobel spokesperson told Green Markets. “As a result of that process, we will implement any additional appropriate steps to ensure we are fulfilling our commitment to zero harm to the environment and the communities in which we operate.

“The chemical composition of the product is identical whether it is used for industrial or agricultural purposes,” the spokesperson added. “By itself, in pellet form, such a leak of small quantities over a large area would not create additional risks for the public or rail transport.”

Dyno Nobel sent the railcar back to Wyoming for further investigation, according to the Times, and said it had “limited control” of the train’s activity while the product was being transported.

Viterra Said in Merger Talks With Bunge

Glencore Plc-backed agriculture trader Viterra is in talks to merge with US rival Bunge Ltd., according to a Bloomberg report, citing individuals with knowledge of the matter.

The companies are discussing the structure of a potential deal, according to sources, who asked not to be identified discussing confidential information. Chesterfield, Mo.-based Bunge has a market value of about $13.4 billion.

Glencore has flirted with the idea of a deal with Bunge on and off for years, and there is no certainty they will be able to reach an agreement on terms of a transaction, sources said. In 2017, it approached Bunge about a friendly takeover but was publicly rebuffed by the US firm.

Representatives for Bunge and Glencore declined to comment, while a spokesperson for Viterra didn’t immediately provide comment.

Bunge CEO Greg Heckman spent most of his tenure – which started in 2019 – shrinking the business, selling underperforming assets, and transforming the company into the king of cooking oils. Bunge operates the world’s largest network of crushing facilities, processing everything from soybeans to canola and sunflower seeds to make frying oil and animal feed.

Russia’s invasion of Ukraine last year threw global commodity markets into disarray, boosting crop prices and cutting off supply. That created the perfect conditions for trading houses that buy, sell, and transport the world’s agricultural resources – a market that is dominated by the so-called ABCD quartet of Archer-Daniels-Midland Co., Bunge, Cargill Inc. and Louis Dreyfus Co.

The industry’s recovery has opened up options for Bunge.

“As we told the shareholders, everything is on the table,” Heckman said in an interview earlier this year. “We will continue to consolidate the industry where it makes sense globally to fill in any weaknesses that we have and continue to build on our strengths.”

Glencore has been trying to break the ABCD stranglehold by growing its own crop operations through Viterra. The Swiss commodities giant acquired Viterra for C$6.1 billion ($4.5 billion) in a 2012 deal that gave it grain assets in Canada and Australia. About four years later, it sold stakes totaling roughly half the business to Canada Pension Plan Investment Board and British Columbia Investment Management Corp.

Last year, Viterra spent $1.1 billion acquiring the US-focused grain business of Gavilon from Japan’s Marubeni Corp.

Talks about a potential deal between Viterra and Bunge come as Glencore separately battles to acquire Canadian miner Teck Resources Ltd. In April, it reiterated a $23 billion offer to buy Teck and said it was willing to go higher.

Bunge shares increased to $94.77 from $90.46, higher than any close since April 24. The stock was the best performer among its peers.

Phospholutions Wins IFA/UM6P Africa AgTech Startup Showcase

Pennsylvania-based Phospholutions was selected by agricultural industry leaders as the winner of the IFA/UM6P Africa AgTech Startup Showcase at the International Fertilizer Association (IFA) Annual Conference in Prague this past week. The company beat seven other startups to secure the grand prize of €20,000 during a competitive, live final round judged by a jury of experts and with voting by Annual Conference delegates.

“Being recognized by the IFA/UM6P Africa AgTech Startup Showcase is a tremendous honor,” said Phospholutions CEO Hunter Swisher. “This recognition is a testament to the hard work of our team and will further our mission of creating sustainable agriculture solutions for Africa and beyond. I look forward to partnering with the fertilizer industry to further develop our solution and bring it to the market at scale.”

In March, Phospholutions launched RhizoSorb®, a patented fertilizer additive that increases efficiency of phosphorus fertilizers, to the US row crop market. It said extensive university and multi-year field trials show that growers can achieve a 50% reduction in applied phosphorus on corn and soybeans without compromising yield.

Farmer Lifeline Technologies came in second, and was awarded a runner-up prize of €10,000.

The eight finalists were:

  • Phospholutions, which develops technologies to increase fertilizer efficiency and affordability, and minimize the environmental impact of global phosphorus use.
  • Natura Crop Care, which offers innovative, patented climate-resilient solutions for sustainable soil health, reducing carbon footprint, and doubling farmers’ incomes.
  • Agri IOT, which is developing Croptune, a real-time mobile application that recognizes nutritional deficiencies in crops. With a simple one-time setup and ongoing analysis, Croptune is a solution to optimizing farmers’ operational costs.
  • Foodlocker, a farming-as-a-service platform that connects African smallholder farmers with large buyers through market access and precision agriculture. Foodlocker supports farmers with access to inputs, credit, expertise, and markets.
  • Albo Climate, which offers a remote and accurate solution for quantifying, mapping, and monitoring carbon sequestered in ecosystems worldwide.
  • Farmer Lifeline Technologies, which has developed a solar-powered device that scans crops and alerts farmers to pests or diseases while providing recommendations on fertilizers or pesticides.
  • Agricolleges International, which is a cloud-based online learning institution that provides affordable, accessible, and industry-relevant education and training in agriculture and related agri-industries.
  • Safi Organics, which envisions a world where rural underserved communities are self-sufficient in their crop production and consumption of agricultural inputs and commodities through decentralized fertilizer production.

The Showcase was launched by IFA and the Mohammed VI Polytechnic University (UM6P) to provide an opportunity for entrepreneurs to connect with professionals, experts, and investors from all over the world.

The competition is aimed at AgTech startups working on innovative solutions that can be adapted to the African context to ensure the sustainability and inclusivity of its agriculture. The showcase was sponsored by OCP and International Raw Materials.

GreenPoint Ag – Management Brief

GreenPoint Ag on May 25 announced several organizational changes within its Retail division, effective Aug. 1. GreenPoint said the changes signify its growth and progression since its inception nearly three years ago.

Amy Winstead has been promoted to the position of Vice President of Retail Sales and Operations. “Her pivotal role in establishing GreenPoint as the premier provider of agronomy in the southern US has made her the perfect fit for her new leadership role within Retail,” said Joey Caldwell, Head of Retail. “Amy’s experience and expertise will undoubtedly be invaluable in her new position.”

The Ag Tech and Agronomy teams will be integrated into the Retail team under the leadership of Daniel Mullenix. He will now serve as the Director of Advanced Services and Operations, overseeing the combined team. While situated within Retail, the team will continue providing service and support to GreenPoint’s co-op partners.

Reporting directly to Winstead will be the Directors of each retail division: Chris Casey for the East region, Greg Sadler for the West region, Emmett Gadberry for the North region, Ryan Waguespack for the Central region, and Mullenix for the Advanced Services and Operations division.

Additionally, Mark Browning will assume the role of Director of Sales Enablement, a newly-created position aimed at contributing to GreenPoint’s growth and strengthening relationships with key customers. He will play an instrumental role in developing a new sales process and implementing a seller accountability plan.

Both Winstead and Browning will be direct reports to Caldwell.

Unigel Nitrogen Plant Restart, Project Delay Reported as Possible Covenant Breach Feared

Brazil nitrogen and chemical producer Unigel is planning to delay the restart of its Sergipe nitrogen plant for 90 days starting in June beyond its current maintenance outage, though the Bahai location will remain in operation, according to Valor International, which cited recent poor financial results that may have put the company at risk for covenant violations.

The Sergipe unit has an installed urea production capacity of 1,800 mt/d, and can sell ammonia, carbon dioxide, and ammonium sulfate, while Bahai has an installed urea production capacity of 1,300 mt/d, with the ability to sell ammonia, carbon dioxide, and automotive liquid reducing agent (Arla 32).

In a conference call with analysts earlier this month, executives also announced the reduction in investment plans to safeguard the company’s financial strength, according to Bloomberg.

Completion of the 450,000 mt/y sulfuric acid plant has been pushed back from mid-2023 to early 2024, added Valor, which noted that Unigel’s green hydrogen/ammonia project (GM July 29, 2022) is still in its early stages.

The situation reflects lower chemical, urea, and ammonia prices, while feed stock prices have not declined. Unigel is reportedly in negotiations with Petrobras for lower natural gas prices, which Valor currently estimates at $14.00/mmBtu, significantly below US prices of $3.00/mmBtu. Unigel has long-term leases with Petrobras for both of its urea plants.

The company saw adjusted EBITDA drop 82% in the first three months of 2023 from a year earlier. That sent its leverage ratio to 2.2 times, closer to a threshold of 3.5 times that, if surpassed, gives holders of local notes issued just last year the option of declaring the early maturity of debt obligations.

“Unigel signaled it expects equally weak operating performance in the second quarter, and showed less conviction on a cyclical recovery by the end of the year,” said Sebastian Hofmeister, a Senior Credit Analyst at Lucror Analytics.

The company’s “cash-preservation mode” added to concerns around earnings, and management suggested some leverage covenants may require waivers, he added.

Unigel declined to comment.

Brazil’s local-debt market had a bumpy start to the year after retailer Americanas SA and utility Light SA filed for bankruptcy protection. The turmoil led to scrapped issuances of local bonds, as well as several firms hiring financial advisers to restructure debt amid a high-rate environment.

“Given the earnings profile over the cycle, we think the logical next step would be a covenant waiver,” said Ben Hough, Director of Corporate Research at BCP Securities in Greenwich, Conn. “We think the company will likely engage with debenture holders to achieve a constructive outcome.”

UralChem Reaffirms Plans to Commission Ammonia Terminal in Late 2023

Uralchem has reaffirmed plans to commission a new ammonia terminal in the Russian Black Sea/Azov Sea port of Taman by the end of this year, according to a Tass report, citing the Russian fertilizer group.

Uralchem reported late last year that it planned to commission the new terminal by the end of 2023 (GM Nov. 23, 2022).

The first stage rated for freight turnover of up to 2 million mt/y of ammonia will be put into operation in late 2023, a Uralchem spokesperson said.

Under a second stage of development, the capacity of the new terminal will grow to 3.5 million mt/y of ammonia and 1.5 million mt/y of urea, and is scheduled for completion by the end of 2025, according to the spokesperson.

Completion of the new terminal and its ramp-up to design capacity will help partly mitigate the problem of the suspension of ammonia transit through the Togliatti-Yuzhny pipeline, the company said.

Russia’s biggest ammonia producer and exporter, Togliattiazot, suspended ammonia transit through the pipeline on Feb. 25, 2022, following Russia’s invasion of Ukraine.

Russia used to pump up to 2.5 million mt of ammonia annually for export via the pipeline, and has threatened to end its participation in the “Black Sea Initiative” unless the United Nations (UN) forces Ukraine to re-open the pipeline.

The Black Sea agreement was brokered by Turkey and the UN and allows for Ukrainian grain to be shipped from Black Sea ports without being threatened by Russian warships. In turn, Russian fertilizer exports were to be allowed on the global market without sanctions.

While US and European Union sanctions against Russian products do not apply to fertilizers, the sanctions do not allow Russian banks access to the international “SWIFT” payment network.

Opposition to the re-opening of the Togliatti-Yuzhny is not only coming from Ukraine’s government, but from industry sources that said the pipeline passes through an active war zone, making damage to the line likely.

Ammonia

US Gulf/Tampa:

Tampa ammonia for June fell to $340/mt CFR, off $40/mt from May’s $380/mt CFR. Most sources had expected another drop, citing falling natural gas prices in Europe and plentiful ammonia supplies.

European gas prices continued to move down again this past week, though it was not assured this would prompt more plants on the continent to return to production, especially when European producers can still import product at prices below their own cost of production.

Sources said that NOLA prices continue to track below the Tampa equivalent.

Eastern Cornbelt:

Ammonia prices remained under pressure in the Eastern Cornbelt. Sources quoted new prompt offers at $435-$450/st FOB regional terminals, depending on location, down from last week’s $490-$500/st FOB range.

While one Illinois contact said that sidedress movement in his area was “well over half done,” others said the big push is still weeks away. “It’s been a crazy busy week finishing planting,” commented an Ohio source. “It’s going to be a few weeks in my opinion before the sidedress wave kicks open.”

Western Cornbelt:

Ammonia prices dropped again, falling to $425-$450/st FOB in the Western Cornbelt, down from last week’s $450-$490/st range. In the Southern US, new offers were confirmed at $405/st FOB Verdigris and Pryor, Okla., with truck pricing down to $300-$305/st FOB out of terminals in Louisiana and Alabama.

While no summer fill programs were out in late May, sources said there is a fair amount of discussion about where Cornbelt ammonia prices will fall. As one contact said, most expected “a $3” in front of any new fill offers that are announced in the coming weeks.

California:

Anhydrous ammonia continued to be referenced at $890/st DEL in California. Aqua ammonia postings were unchanged as well at $237/st FOB Stockton and $247/st FOB Sycamore.

Pacific Northwest:

Delivered ammonia pricing in the Pacific Northwest was quoted in the $695-$730/st range, down from $710-$740/st earlier in May. While the upper end of the range was in play earlier in the week, sources said the low was more common as the week progressed. No current FOB terminal prices were confirmed in late May.

Aqua ammonia dropped to $150/st FOB in the region, down from the prior $190/st FOB level.

Western Canada:

The last reported spring ammonia offers in Western Canada were quoted at C$700/mt FOB and C$960-$1,040/mt DEL, down from the previous C$1,040-1,070/mt DEL range.

Black Sea:

Russia has threatened to end its participation in the Black Sea Grain Initiative, the agreement allowing for Ukrainian grain to be shipped out of the Black Sea without being threatened by Russian warships, unless the UN forces Ukraine to reopen the ammonia pipeline from Russia to Pivdennyi. The move would allow for Russian ammonia to once again be shipped to the global market.

Opposition to reopening the pipeline has come from not only the Ukrainian government, but also many international ammonia traders. Sources said the pipeline passes through an active war zone, making damage to the line likely. 

Moscow is also demanding that its agricultural bank be given access to the SWIFT international financial payment system. While Russian fertilizers, including ammonia, are not on the sanctioned list, denial of access to SWIFT was one of the actions taken against Russia following its invasion of Ukraine.

Frustrated with the inability to reopen the pipeline, Russia has stepped up development of an ammonia terminal at Taman, near Crimea. The Russian government said it will begin ammonia exports by the end of year.

In the meantime, ammonia is being sent to a port near St. Petersburg. The intention is to use one ship as a floating terminal to receive the railed ammonia, and then transfer it to vessels for international sales. Sources said that three vessels have already been chartered for this purpose. Exports are expected to start in June.

India:

Sources said the contract price for ammonia has been going down, and that the spot price will follow. While the industry met in Prague for the IFA Annual Conference, buyers were noted talking about pricing material at sub-$300/mt CFR levels.

The contract price was reportedly pegged at $270-$280/mt CFR, while talks for spot material are focused on $290-$300/mt CFR. One trader said an aggressive spot buyer might even be able to push the price into the $280s/mt CFR.

Sources reported that FACT may soon return to the international market after not purchasing imported ammonia for more than one year. The company was previously able to operate with domestic ammonia alone, but is reportedly getting ready to open a second line of production. The need for more ammonia will also prompt FACT to expand their port facility to accommodate larger quantities of material.

January-March imports totaled 621,000 mt, Trade Data Monitor reported, up about 20% from the year-ago 516,000 mt. March imports stood at 139,000 mt, down 43% from 244,000 mt imported in March 2022. The main suppliers were Bahrain with 46,000 mt, Oman with 37,000 mt, and Saudi Arabia with 31,000 mt.

Middle East: 

Sources said that no new spot deals were concluded while the industry attended the IFA conference in Prague. The estimated price for any new business was pegged at $220-$225/mt FOB, while the contract price was reported at $210-$220/mt FOB, based on recent formula-derived sales into India.

Northwest Europe:      

Sources said that realistic prices have moved to $350-$360/mt FOB, following reports of ex-plant pricing at $368/mt. The lower price has not been done, however, but was reportedly where talks are settling. There were reports that some buyers are pushing hard for $320/mt CFR, but without success.

Prices are expected to continue to fall. Sources said that softer natural gas prices and a general malaise in the market could lead to buyers becoming more aggressive in their pricing demands. There was talk in the market of prices moving closer to $300/mt CFR and below. Sources said, however, that the $300/mt CFR mark could be the market’s floor.

The industry has started preparing for the EU’s new plan to restrict carbon emissions (GM May 12, p. 33). So far, none of the measures are affecting prices. Sources said the impact to the cost of ammonia may not be felt until 2025-2026.

Southeast Asia:

The latest business from the area came on a sale from Petronas at $260/mt FOB. The price generated much discussion in the industry, as conventional wisdom puts the current break-even price for ammonia produced in Malaysia and Indonesia at $280-$300/mt FOB.

Plants in Malaysia and Indonesia are expected to go down in June for routine turnarounds. The plants have reportedly built enough reserves to service their contracts during the shutdown period.

China:   

Trade Data Monitor reported January-April ammonia imports at 214,000 mt, a 137% increase from 90,000 mt imported during the same period of 2022. April imports were noted at 109,000 mt, up from 11,000 mt in the prior-year period. Indonesia sent 49,000 mt, followed by Oman with 25,000 mt. Saudi Arabia and Malaysia each supplied 15,000 mt.

January-April exports were reported at 131,000 mt, against 437 mt shipped out during the same period of 2022. April exports came in at 4,300 mt, significantly above the year-ago 44 mt.

China exported a great deal of ammonia in second-half 2022 and into 2023, as prices were high enough to handle the deals, and China’s domestic industrial customers did not need as much ammonia as in previous years. Sources have predicted that once China’s industries begin building up once again, and as the global price of ammonia drops, China will begin exporting fewer tons.