All posts by mickeybarb@charter.net

India Amends Minerals Act to Pave Way for Potash, PGM Auctions

India, News, News Briefs, Potash

India has approved a proposal that specifies the royalty rates for glauconite, potash, emeralds, and the platinum group of metals, among others, paving the way to auction blocks for these minerals for the first time, according to a statement by the Press Information Bureau.

Many state governments have identified mineral blocks for auctions, and the proposed royalty rates in the nation’s mines and minerals act will boost participation in the auctions, which are expected to help the country reduce imports.

Spraytec Proposes $7 M Des Moines Facility

News, News Briefs, Specialty, Western Cornbelt

Spraytec Fertilizers LLC, Urbandale, Iowa, a foliar fertilizer manufacturing and marketer, is proposing a $7 million facility near the Des Moines, Iowa, airport. The 51,000 square-foot facility will include 6,000 square feet of office space, manufacturing of product, and warehousing of finished product.

Spraytec is seeking tax abatement assistance under the Iowa Economic Development Authority’s High Quality Job Program. The facility is expected to employ 11, with qualifying wages of $27.88-$28.82 per hour. The company is seeking up to $700,728 in tax abatement.

Spraytec is a unit of Brazil’s Spraytec Fertilizantes, Maringa, Parana. The Iowa location will be the company’s first manufacturing location in North America. It currently has an office in Urbandale and a warehouse in Bondurant, Iowa.

To date, the company’s products have been marketed in the U.S., Honduras, South America, Ukraine, and Australia. The company said its products focus on sustainability, with 100 percent biodegradable products. It said the average product rate is four ounces per acre for corn, soybeans, and other crops.

Norway’s Scatec Partners on Green Ammonia Projects in Egypt, Oman

Egypt, Green Ammonia, News, News Briefs

Scatec ASA, Oslo, a major renewable power producer, on March 10 announced that it has signed a Memorandum of Understanding (MOU) with the General Authority for Suez Canal Economic Zone, Sovereign Fund of Egypt, Egyptian Electricity Transmission Company, and the New and Renewable Energy Authority (NREA) to jointly develop a green ammonia facility with annual production capacity of 1 million mt and potential to expand to 3 million mt, the company said in a statement.

The facility is to be located in the SCZONE in the Ain Sokhna Industrial Zone and to be powered by renewable energy plants to be built in close proximity on an area of land allocated by NREA. Long term offtake agreements are to be secured to enable non-recourse project financing for the project. The ammonia will mainly be exported to European and Asian markets.

The Egyptian Cabinet put the value of the investment at $5 billion, with production expected to begin in 2025.

On March 7, Scatec announced that it had signed an agreement with the Indian clean tech company ACME Group to establish a 50/50 joint venture to design, develop, build, own, and operate a large-scale green ammonia facility in Oman.

The first phase of the facility is expected to produce 100,000 mt/y of green ammonia, with about 300 MW of electrolyzer capacity and powered by 500 MW of solar. The facility will be located in the Duqm Special Economic Zone of Oman. Once fully developed, the facility is expected to produce up to 1.2 million mt/y.

ACME has developed the Oman project over the last 18 months and has already set up the world’s first single-location integrated solar power to green ammonia facility at Bikaner Rajasthan.

The partners said they are in advanced discussions with reputable offtakers for 20–25-year contracts that will lay the foundation for financing of the project. The partners expect to fund the facility through equity and project finance debt.

The overall schedule for the project is under development, but the partners share the ambition for this facility to be one of the first commercial large-scale green ammonia facilities in operation globally.

India’s UPL Reported in Merger Talks

Eastern Cornbelt, India, News, News Briefs, Northeast

Agrichemical company UPL Ltd., Mumbai, is reported to be in merger talks with two U.S. firms – CF Industries Holdings Inc., Deerfield, Ill., and FMC Corp., Philadelphia – according to Mint, an Indian financial publication. Both CF and FMC said they do not respond to rumors.

Mumbai-based analytic firm B&K Securities speculated that FMC, also an agrichemical company, would have more synergies with UPL, with FMC being stronger in insecticides and UPL in herbicides. The combined entity would have a higher revenue concentration in Latin America.

Biden Seeks End of Normal Trade Relations with Russia, Bipartisan Group Approves

Featured, News, U.S.

President Joe Biden on March 11 was set to call for an end of normal trade relations with Russia, clearing the way for increased tariffs on Russian imports, according to a report by Bloomberg. On March 8, Biden announced the imposition of a ban on U.S. imports of Russian oil, liquefied natural gas, and coal.

In the meantime, a bipartisan group of lawmakers is pushing ahead with legislation to ratchet up U.S. tariffs on Russian imports and end normal trade relations with Moscow, according to Bloomberg. Legislation passed by the House on March 9 bans importing Russian oil and gas and calls for an evaluation of the nation’s membership at the World Trade Organization (WTO).

But it pulled the provision addressing Russia’s so-called permanent normal trade relations (PNTR) with the U.S., after a request from the White House. Those supporting the bill include Rep. Kevin Brady (R-Tex.), Rep. Richard E. Neal (D-Mass.), Senator Mike Crapo (R-Ida.), and Senator Ron Wyden (D-Ore.).

“Congress should do more to stand up to Putin and protect the Ukrainian people,” Neal said. “Our response to this horrific, unprovoked war cannot end here.” The decision by the key lawmakers could mean changes to the House ban in the Senate before it is enacted.

Crapo wants to amend the House-passed energy embargo with his and Wyden’s bill, which addresses PNTR, and is pushing for a quick mark up, adding that the House bill’s language on the WTO is “meaningless” without addressing Russia’s trade status. “That’s certainly what I want to do,” he said in an interview. “I don’t know why they backed off.”

Suspending normal trade relations with the U.S., which other countries call most favored nation status, would put Russia in the company of Cuba and North Korea. It would allow the U.S. to slap Russia with significantly higher tariffs than it applies to other WTO members, which has as a core principle nondiscrimination among members and treating all its members equally. A White House official said the U.S. is working with allies on the subject of Russia’s trade status.

Manchin Seeks Gas Pipeline to Help Europe

Europe, Natural Gas, News, News Briefs

Senate Energy Chairman Joe Manchin (D-W.Va.) has called on the Biden administration to use the Defense Production Act if necessary to rush completion of a stalled pipeline through his state to help Europe replace Russian natural gas supplies.

Manchin said the 303-mile Mountain Valley Pipeline, which crosses through his home state of West Virginia into Virginia, could transport 2 billion cubic feet a day and be running in 4-6 months. “It’s the quickest thing that we can get – it’s more energy into the market that’s going to be needed,” he said.

Yara Stops Sourcing from Several Russian Entities on Sanctions

Europe, News, News Briefs, Russia, Scandinavia

Yara International ASA, Oslo, said on March 10 that as a result of additional E.U. sanctions implemented on March 9, it has stopped all sourcing from suppliers linked to Russian sanctioned entities and persons.

Yara said it is currently reviewing the detailed scope and impact of the sanctions.

“Yara will utilize its global production system with the objective to keep supplying customers and secure continuity in food supply chains,” the company said. “However, we repeat our concern for global food security and calls on government action to protect food supply chains and decrease dependency on Russia.”

Early this month, noting that Russia and Ukraine are world powers in a global and fragile food system, Yara President and CEO Svein Tore Holsether said it was essential to reduce the dependency on Russia (GM March 4, p. 27).

Ammonia

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

U.S. Gulf/Tampa:

Tampa anhydrous ammonia business for March remains at $1,135/mt CFR. However, with all the news in the ammonia market, most sources were expecting higher prices for April amid idled capacity in Europe, the Russia-Ukraine war, the Waggaman, La., plant being offline, and a delay in production at the new Ma’aden plant until the third quarter.

Eastern Cornbelt:

The ammonia market firmed to $1,375-$1,475/st FOB regional terminals in the Eastern Cornbelt, with the low confirmed in Illinois and the high at Lima, Ohio, for prompt or prepay tons. The new Lima posting reflects a $75/st increase from the previous week.

Western Cornbelt:

Ammonia pricing for spring tons was pegged at $1,365-$1,395/st FOB terminals in the Western Cornbelt, depending on location. The last offers FOB production points in Oklahoma ranged from $1,250-$1,305/st FOB, with the high reported at Pryor, Okla.

Northern Plains:

The ammonia market remained at $1,450/st FOB Velva, N.D., and other regional terminals, with the last spring pricing offers pegged at the $1,550/st DEL level in North Dakota. Sources reported no tons or pricing available at Leal, N.D.

Northwest Europe:

Rising gas prices and limited availability of ammonia is driving up prices in the region. Sources said many plants are shutting down due to high natural gas prices, leaving the major influence to come from North Africa. Recent prices cited by sources put the market at $1,200-$1,300/mt C&F.

One source said the closing of Yara’s ammonia plants in France and Italy could take 1 million mt/y out of the market. Other plant closures are expected to follow.

Plants that do not close down reportedly will be looking closely at the price of downstream products, such as ammonium nitrate. If buyers accept the higher prices expected, the ammonia producers will keep turning out their product. If, however, there is pushback on the new prices, more plants are expected to close.

There is still some uncertainty about the situation in the Baltic. Russia moves out much of its ammonia through ports in Finland or the Baltic states. Sanctions on Russian products and an unwillingness of the Baltic states to allow Russian and Belarus product to pass through their countries are causing a shortage of ammonia and some confusion as to what product is subject to sanctions.

Despite the complex situation, prices remain steady for March at $1,135/mt FOB, as earlier negotiated for this month.

The Gas Cobia continues to remain just outside Ventspils. Sources initially said the ship is laden with Russian ammonia, and the sanctions imposed on Russia makes handing the material difficult. This week, however, a new idea has come forward. Sources suggested the ammonia onboard was cleared for global export and the holder of the product is waiting for prices to keep getting higher. Then, at an opportune time, a sale will be made.

Black Sea:

With all the Ukraine ports closed, sources said it is impossible to test the market. Traders also noted that even if any of the ports were operating, as long as the war against Ukraine is waging, ship owners will be reluctant to send their vessels into a war zone.

With Black Sea material nonexistent, buyers from Turkey and Morocco are looking for alternate sources of ammonia. Last year Turkey imported 510,000 mt of ammonia from Russia. Morocco took another 558,000 mt in the same period. Few believe these quantities can be recovered from other sources, leaving buyers to scramble for whatever tons they can find.

Turkish imports of ammonia for January 2022 were reported at 83,000 mt by Trade Data Monitor. This is an 11 percent increase from imports of 75,000 mt in January 2021. Russia accounted for 53 percent of all of Turkey’s ammonia imports in January. Bahrain came in second with 22,500 mt, followed by Egypt with 15,000 mt.

Middle East:

Despite claims of having nothing available for a spot sale, Ma’aden reportedly sold 25,000 mt at $1,100/mt FOB, sources said.

The sale was the first in a long time that was not tied to a specific long-term deal. There is no word if Ma’aden delayed a shipment to another client to accommodate this deal, or if a buyer had to back out of taking a cargo. Either way, the sale dramatically moved the needle on pricing.

Sources said they were hoping talks would keep moving forward between Iran and the U.S. on re-instating the nuclear deal. If the deal gets done, sources speculated that more ammonia would be made available on the open market. However, news reports indicated the talks have reached a snag.

Even without the lifting of U.S. sanctions, a number of buyers take tons from Iran. Sources said Turkey now has a vessel heading its way from Iran.

The sanctions, however, seem to have had an impact on Iranian exports. January exports were reported at only 20,000 mt, according to Trade Data Monitor. This is down almost 70 percent from the 64,000 mt exported in January 2021. The main buyer of the January 2022 material was India, taking 18,500 mt.

Sales from North African suppliers continue without any hiccups. There are reports of sales out of Libya and Algeria at $1,200/mt FOB. Morocco and Turkey seem to be the most aggressive buyers in the region. Both are looking to replace tons lost because of the war in Ukraine.

India:

Sources reported a couple of small sales into India. One deal earlier in the week was pegged at $1,060/mt CFR. The second deal was later in the week at $1,100/mt CFR. Talks for additional tons are now centering on $1,200/mt CFR.

Southeast Asia:

Ammonia prices are slowly edging up, but not at the same pace as west of the Suez Canal. Sources pointed out that the region is mostly self-sufficient, walking a fine line between regional demand and regional production.

The balance in the region could be affected, however, if a major buyer such as OCP/Morocco comes into the area looking for product to replace its lost Russian tons from the Black Sea. While no such overtures have been reported, sources said with the right freight rate and a rising cost for the product, it will not be long before OCP and possibly Turkey come knocking on producers’ doors in the area.

Thai imports of ammonia were down 76 percent in January, to 8,400 mt from 35,000 mt in January 2021, according to Trade Data Monitor. The imports were almost evenly split between Malaysia at 4,200 mt and Indonesia at 4,100 mt.

Brazil:

Ammonia imports for the first two months of the year were reported at 41,000 mt by Trade Data Monitor, with all the tons from Trinidad. This is a 61 percent drop from the 105,000 mt imported during the same period in 2021.February imports this year were at 17,000 mt, down from 52,000 mt in February 2021.

Urea

Black Sea, Brazil, China, Eastern Canada, Eastern Cornbelt, India, Indonesia, Market Watch, Middle East, Nepal, Nigeria, Northeast, Northern Plains, Pacific N.W., U.S. Gulf, Urea, Western Cornbelt

U.S. Gulf:

NOLA granular urea barges quickly shot up early in the week to as high as $900/st FOB. For the week, sources placed the range at $770-$900/st FOB for March business, up from the week-ago $600-$740/st FOB. Full-April trades were reported at $755-$915/st FOB.

NOLA prills were reported to have traded at around $860/st FOB, up $200/st from the last reported business.

Eastern Cornbelt:

The urea market firmed to $935-$955/st FOB terminals in the Eastern Cornbelt, up dramatically from the prior week’s broad $725-$775/st FOB range. Both the low and high ends of the new range were reported at Cincinnati, Ohio, as the week progressed, with the $955/st FOB level also confirmed at Ottawa, Ill.

In the Great Lakes region, Michigan sources quoted urea pricing at $955-$985/st FOB during the week, depending on location.

Western Cornbelt:

The urea market was quoted at $910-$950/st FOB in the Western Cornbelt, depending on location and time of the week, up dramatically from the prior week’s $720-$760/st FOB range. Both the high and low ends of the range were reported at St. Louis, Mo., during the course of the week.

Sources pegged the Catoosa/Inola, Okla., urea market solidly at the $920-$940/st FOB level at midweek.

Northern Plains:

Urea reportedly firmed to $900-$940/st FOB and $970-$1,015/st DEL in the Northern Plains, depending on the time of the week, up significantly from the prior week’s ranges of $760-$805/st FOB and $795-$840/st DEL Sources pegged the St. Paul, Minn., market firmly at the $940/st FOB level at midweek.

Northeast:

Urea pricing jumped to $950-$955/st FOB in the region, with the high confirmed at East Liverpool, Ohio, at midweek. That range was up from $750-$780/st FOB the previous week, and some $300/st higher than pricing levels in mid- to late-February.

In the Southeast, sources reported new urea offers at $940/st FOB Savannah, Ga., and $950/st FOB Wilmington, N.C., for April tons.

Eastern Canada:

The urea market was quoted at C$1,375-$1,400/mt FOB in Eastern Canada, up dramatically from the last reported range of C$1,165-$1,235/mt FOB in late February.

Pacific Northwest:

Sources reported new urea pricing at $950/st FOB FOB Rivergate, Ore., up from $830/st FOB the week before.

China:

Sources said the only shipments of urea coming out of China are either smuggled out or are small container deals for countries that mostly need the product for emission control systems.

Until the recent run-up in pricing, sources were satisfied to calculate the estimated price of a hypothetical deal out of China by working back freight and handling from India, based on the last tender price. Another method was to take reports of ex-factory prices and add transportation costs to the ports.

In the former method, prices were pegged in the upper-$570s/mt FOB. Using the latter format, however, the price was closer to $750/mt FOB. One trader said the movement in the urea market since Russia’s invasion of Ukraine has made these calculations meaningless.

The Arab Gulf is now looking at prices in the $900s/mt FOB, as is Indonesia. Egypt has broken $1,000/mt FOB. Unfortunately, sources said there have been no deals to calculate an equivalent price from China that makes sense in this market.

Traders are looking forward to the next India tender. One source said at least global market players will be involved, and any calculation of the China-equivalent price will be agreed to by most in the business. There are rising expectations that India will call another tender by the end of this month, with awards to be issued in early April.

Sources are now expecting the self-imposed restrictions on urea exports to extend into May, and possibly June. The Chinese government had earlier announced that once the export restrictions expired in April, it wanted to build reserves of at least 1 million mt for a special summer program. This new program could continue to restrict global access to Chinese urea for some time.

Indonesia:

Pupuk Indonesia closed a snap tender on March 8 for 30,000-45,000 mt of granular urea and 20,000-45,000 mt of prilled urea. Awards were issued on March 9 at $938/mt FOB for granular and $929/mt FOB for prilled.

Sources said if past practices hold true, Liven may get more granular urea than advertised, with the same going for Oracle and prilled urea.

Bidding Company Granular US$/mt FOB Prilled US$/mt FOB
Liven 938.00 788.00
Oracle 929.00 929.00
Synergy 850.00 850.00
Samsung 827.00 766.00
Ameropa 821.00 —
Koch 800.50 —
Dreymoor 800.00 —
Heartychem 750.00 725.00
Swiss Singapore 722.00 722.00

India:

Industry watchers speculate that the next Indian urea tender will come in the last week of March. Sources said the call at that time will allow for the awards and purchases to all be made in the next fiscal year, which begins April 1.

Sources were unsure how the Indian government will handle the record-high prices for urea around the world. In its budget plan for the next fiscal year, the Indian government reduced the amount of money available for urea subsidies. At the time the budget was drafted, prices were at near-record highs, but showing signs of falling.

The last tender, which closed on Feb. 7, showed a $300/mt drop from the December 2021 tender. All indicators were for lower prices until natural gas prices skyrocketed and Russia invaded Ukraine.

Middle East:

Arab Gulf and Egyptian producers secured significantly higher prices in deals this week. Sources said sales out of the Arab Gulf started the week at $860/mt FOB and closed the week at $910/mt FOB. Reportedly, new orders are under discussion at $950/mt FOB and up.

The week in Egypt started with a sale of $1,030/mt FOB from KIMA. It was soon followed by MOPCO selling 5,000 mt at $1,050/mt FOB for April loading, with reports that additional small deals were done at higher levels. The week ended with MOPCO selling another 10,000 mt to a trader for $1,100/mt FOB.

The paper market for the Arab Gulf was reported at $865/mt FOB for March and $975/mt FOB for April. The Egyptian paper market showed prices at $955/mt FOB for March and $1,057/mt FOB for April.

Getting more Iranian urea on the open market will not happen as fast as many in the industry would like. Sources said delays in coming to an accord on nuclear research with the U.S. are preventing the lifting of sanctions on doing business with Iran.

January urea exports from Iran were reported at 285,000 mt by Trade Data Monitor. This is about 20 percent down from the 359,000 mt exported in January 2021. Turkey took 49 percent of Iran’s exports in January at 140,000 mt. Oman took another 83,000 mt, and South Africa was the third largest buyer with 60,000 mt.

Black Sea:

Sources said some Russian ports are officially operating, but seem to be focusing on clearing out grain vessels that were trapped soon after Russia invaded Ukraine. The Ukrainian ports remain closed and under siege.

Sources said the movement of vessels in the area seems to be dedicated to getting the ships out of the Black Sea. Insurance rates for vessels seeking entry to the Black Sea have jumped dramatically because of the war risk premiums being tacked on. There are reports that some insurance companies are refusing to cover any ships looking to enter the area.

Because of the closed ports, the lack of any urea business denied industry players any opportunities to test pricing.

Urea imports into Turkey for January were reported at 172,000 mt by Trade Data Monitor. This amount is down about 30 percent from January 2021 imports of 246,000 mt. Oman supplied 46 percent of the imports with 78,000 mt. Iran was second with 46,000 mt, representing 27 percent of Turkey’s urea imports.

Nepal:

The country will close a tender on March 22 for 30,000 mt of bagged urea. Normally the tenders are serviced with Chinese product. However, with China out of the market, Nepal will have to look elsewhere.

At times, some product also came from Iran after being bagged in India. Sources now say India has become more nervous about handling Iranian urea and may not continue its past practices.

Nigeria:

Sources reported a major shutdown in Nigerian urea production. An Indorama urea and ammonia production line went down, leaving only one line to operate at reduced capacity. Sources said the apparent reason for the shutdown was sabotage to the gas line feeding into the plant.

The shutdown and reduced production are expected to last about four weeks.

Brazil:

The Ukraine invasion and lack of Chinese product on the market have combined to make buyers anxious and willing to pay more for their needs. Sources said the urea price at the ports came in this week at $850-$950/mt CFR, with an emphasis on the upper end of the range.

Local distributors are nervous about getting replacement tons because of sanctions against Russia and Belarus. This nervousness is causing them to require buyers to take their tons immediately instead of buying forward. The pressure from a potential short global market has moved the Rondonopolis price up to $1,015/mt FOB ex-warehouse.

Urea imports for the first two months of the year were reported at 1.1 million mt by Trade Data Monitor. This is a drop of about 9 percent from the same period last year, when Brazil imported 1.3 million mt. The main suppliers so far this year have been Oman with 264,000 mt and Nigeria with 217,000 mt.

February 2022 imports were reported at 738,000 mt, up slightly from the 718,000 mt imported in February 2021. Sources of urea in February were spread out among five major supplying countries, with Oman topping the list at 202,000 mt and Russia at the bottom with 81,000 mt.