All posts by mickeybarb@charter.net

Meristem Partners with Seed Source, McKillip Seeds

Uncategorized

Direct-to-farm crop inputs provider and developer Meristem Crop Performance Group LLC, Columbus, Ohio, announced in early February that it has established new dealership agreements with Seed Source Inc. in Wayne, Neb., and McKillip Seeds in Wabash, Ind.

Under terms of the agreements, Seed Source and McKillip Seeds will now carry the Meristem Crop Performance product line, which includes seed treatments under the brands RaceReady™ and Hopper Throttle; Revline™ plant growth regulators; TruTrack™ drift control; AquaDraft™ water conditioners and surfactants; UpShift™ starter fertilizers; Excavator™ biologicals to break down crop residue; and HomeStretch™ nitrogen stabilizers, micronutrients, and foliar nutritionals.

Seed Source was founded by Lowell Schardt in 2000, and has since expanded to include more than 20 employees and salespeople located in northwestern Iowa, southern South Dakota, and northeastern Nebraska. Schardt serves as the company’s president. McKillip Seeds has been in business for 87 years as an independent, family-owned and operated seed supplier in Indiana.

“We believe planting the right seed is just the beginning in achieving higher yields,” said Schardt. “Real success depends on having a sound crop management strategy and agronomic insight. Now we’ll be able to add high-quality Meristem products that will boost yields at a price point that will allow growers a better ROI.”

“We’re dedicated to customers who face the same challenges and benefits that farming here brings to all of us,” said Troy McKillip, Director at McKillip Seeds. “We’re committed to executing a crop production strategy that includes the most innovative crop inputs: seed, seed treatments, tools, biologicals, and crop management applications. Meristem’s products will fit well into our fully-integrated approach to crop production.”

CF Triples 4Q Adjusted EBITDA; UAN Production Favored Over Urea

Ammonia, Ammonium Nitrate, Earnings, Eastern Cornbelt, Featured, News, UAN, Urea

CF Industries Holdings Inc., Deerfield, Ill., tripled fourth-quarter adjusted EBITDA to $1.26 billion, up from the year-ago $338 million, beating the average analyst projections of $1.2 billion from the Bloomberg Consensus. Net income attributable to CF was $705 million ($3.27 per diluted share), up from $87 million ($0.40 per share), also besting the analyst estimates. Fourth-quarter net sales were $2.54 billion, up from $$1.1 billion.

“The CF Industries team delivered outstanding results in 2021 as strong global nitrogen demand, lower global operating rates, and favorable energy spreads drove company-record free cash generation,” said Tony Will, CF President and CEO.

“We expect global nitrogen fundamentals to remain positive, underpinned by the need to replenish global grains stocks, increased economic activity and global energy dynamics. We are well-positioned to continue to drive strong cash generation, enabling us to invest in our clean energy initiatives, return substantial capital to shareholders, and achieve our goal of $3 billion of gross debt by 2023,” continued Will.

CF sold 4.98 million st of product in the fourth quarter, down from the year-ago 5.48 million. Full-year sales were 18.5 million st, down from 2020’s 20.3 million st. Explaining the decline, CF cited the highest level of maintenance activity in the company’s history, much of which had been delayed from the first year of COVID-19.

Production was also down due to curtailments at the U.K. plants due to high natural gas costs and two significant weather-related (Winter Storm Uri and Hurricane Ida) production outages in the U.S. However, average selling prices for the year were higher than 2020 across all segments.

For 2022, CF expects gross ammonia production to return to normal, at 9.5-10 million st compared to 2021’s 9.3 million st.

CF told analysts that it would favor premium-priced UAN production over urea in 2022, and said urea production would be dramatically reduced. UAN had been CF’s poorest performer in fourth-quarter 2020, with it posting a gross margin of a negative $2 million. However, the gross margin was $372 million in fourth-quarter 2021.

CF projects U.S. corn acreage at 91-93 million acres in 2022. CF told analysts that it would take at least two more growing seasons to fully replenish grain stocks.

It believes global nitrogen supplies are low after a year of strong demand and lower nitrogen production. It believes India still needs urea, and said that forward European gas curves remain above historical norms, challenging producer profitability and putting a high floor under nitrogen prices that will benefit low-cost North American producers.

The company noted that Chinese urea exports are expected to be limited through at least the first half, and noted that Russia, Turkey, and Egypt have limited their exports.

Full-year adjusted EBITDA was $2.74 billion, up from the year-ago $1.35 billion, also besting the analysts; however, for net income CF was just barely below analyst estimates, at $917 million ($4.24 per share) compared to $922.6 million. The year-ago figure was $317 million ($1.47 per share).

On Feb. 2, CF declared a $0.30 per share dividend on its common stock. The dividend will be payable on Feb. 28, 2022, to stockholders of record as of Feb. 15, 2022.

Production (000 st) 4Q-21 4Q-20 2021 2020
Ammonia        2,452 2,732 9,349 10,353
Gran Urea 984 1,361 4,123 5,001
UAN 32 2,135 1,798 6,763 6,677
AN 390 583 1,646 2,115
Ammonia 4Q-21 4Q-20 2021 2020
Net Sales ($/M) 778 298 1,787 1,020
Gross Margin ($/M) 291 57 625 170
Sales Volumes (000 st) 1,180 1,092 3,589 3,767
Avg Selling Price ($/st) 659 273 498 271
Gross Margin per st 247 52 174 45
Gas Costs ($/mmBtu) 6.00 2.60 4.21 2.24
Gran Urea 4Q-21 4Q-20 2021 2020
Net Sales ($/M) 662 333 1,880 1,248
Gross Margin ($/M) 375 98 888 401
Sales Volumes (000 st) 1,018 1,346 4,290 5,148
Avg Selling Price ($/st) 650 247 438 242
Gross Margin per st 368 73 207 78
UAN 4Q-21 4Q-20 2021 2020
Net Sales ($/M) 732 272 1,788 1,063
Gross Margin ($/M) 372 (2) 669 114
Sales Volumes (000 st) 1,838 1,888 6,584 6,843
Avg Selling Price ($/st) 398 144 272 155
Gross Margin per st 202 (1) 102 17
AN 4Q-21 4Q-20 2021 2020
Net Sales ($/M) 151 112 510 455
Gross Margin ($/M) 13 12 35 65
Sales Volumes (000 st) 374 545 1,720 2,216
Avg Selling Price ($/st) 404 206 297 205
Gross Margin per st 35 22 20 29
Other 4Q-21 4Q-20 2021 2020
Net Sales ($/M) 217 87 573 338
Gross Margin ($/M) 104 15 170 51
Sales Volumes (000 st) 569 608 2,318 2,322
Avg Selling Price ($/st) 381 143 247 146
Gross Margin per st 183 25 73 22

Vantage Invests C$80 M in Western Potash, Takes Majority Stake in New Company

Canada, News, News Briefs, Potash

Western Resources Corp., Vancouver, said on Feb. 16 that it has signed a subscription agreement with Vantage Chance Ltd. in which Vantage has committed to make a strategic equity investment of C$80 million in Western Potash Holdings Corp. (WPHC), a newly-formed company which, upon completion of a reorganization, will own 100 percent of junior company Western Potash Corp. and its Milestone Potash Project in Saskatchewan. Vantage is a private investment company registered in the British Virgin Islands.

“The last two years have been very challenging for Western, as we attempted to complete Phase I of our Milestone Potash Project, with limited access to capital due to a variety of factors, including COVID-19,” said Bill Xue, Western’s President and CEO. “We expect that the investment by Vantage will allow us to complete the project and allow it to recognize its full potential, including use of the innovative technology we have developed alongside.

“When successfully completed, we expect the project will significantly change potash mining in Canada, as the project is planned to be the first potash mine in the world to leave no salt tailings at surface level, reduce water consumption by up to 50 percent, and significantly improve energy efficiency,” he continued. “We look forward to working closely with our new partner as we continue to develop and expand Milestone.”

Western Potash has been around since at least 2008, when it completed an initial public offering and was eyeing a possible potash mine in Manitoba (GM May 12, 2008). However, it soon was granted a potash permit in Saskatchewan (GM June 9, 2008) and eventually announced the Milestone Project.

As of May 2020, Western reported that Milestone Phase 1 was already 83 percent complete in the overall status, and had completed engineering, procurement, and construction of infrastructure, crystallization pond, electrical distribution systems, brine heating, and pumping systems to support operation of commercial solution mining.

In 2019, Western reported that Archer Daniels Midland Co. (ADM) had entered into a binding offtake agreement for 100 percent of the potash production (146,000 mt/y) from Milestone Phase 1 (GM Sept. 27, 2019).

In the current deal, WPHC was incorporated under British Columbia’s Business Corporations Act on Jan. 13, 2022, by Western for the purpose of structuring the transaction. Upon approval by Western’s shareholders, and prior to the completion of the transactions contemplated in the agreement, Western will transfer its 100 percent equity interest in WPC (134,017,653 common shares) to WPHC in exchange for an equivalent number of WPHC common shares, which will represent 100 percent of the issued and outstanding shares of WPHC (the reorganization).

Under the agreement, Vantage will invest C$80 million in WPHC and receive in exchange an aggregate of 157,325,071 WPHC common shares. As a result, Vantage will hold 54 percent of the issued and outstanding common shares of WPHC. Western will hold the remaining 46 percent of the issued and outstanding WPHC common shares.

Completion of the investment transactions is subject to customary closing conditions, including approval by Western’s shareholders at Western’s upcoming Annual and Special Shareholders Meeting scheduled for March 28, 2022, and obtaining certain regulatory approvals. Closing is expected to occur on or around May 31, 2022. The investment proceeds raised from the transaction will be used in the completion of the Milestone Potash Project construction.

Waggaman Plant Offline Due to Hydrogen Release

Australia, Featured, Hydrogen, News

Incitec Pivot Ltd., Southbank, Victoria, said on Feb. 18 that an incident resulting from a release of hydrogen occurred at its Waggaman, La., ammonia plant. It said all employees are safe and accounted for, and there have been no reports of injuries. Additionally, based on initial investigations, there were no chemical releases to the environment or any offsite impacts resulting from the incident.

IPL said an all-clear has been issued at the site, allowing investigations to begin into the cause of the incident, along with assessments of any damage to the plant. Once more information becomes available, IPL said it will be able to estimate the timeframe for the restart of the plant. The plant’s nameplate capacity is 800,000 mt/y.

The Andersons Breaks Earnings Records; Company Eyes Organic, Specialty Growth

Earnings, Eastern Cornbelt, News, Specialty

The Andersons Inc., Maumee, Ohio, broke company-wide earnings records for the fourth quarter and also did so for its Plant Nutrients segment for both the quarter and the year.

“I’m very pleased with our performance, which includes record fourth-quarter results for the company and for our Plant Nutrient business,” said Pat Bowe, President and CEO.

“We continued to execute well throughout a good 2021 harvest, particularly in the eastern grain belt, made good operating and commercial decisions and enjoyed additional profit from growth in new markets, such as renewable diesel and supply chain extensions with our new Swiss trading office. During 2021, our teams operated safely and effectively in these strong agriculture markets leading to each of our three business segments reaching record or near-record performance in the quarter,” Bowe continued.

Bowe said Plant Nutrient followed up a very strong first half with a great second half, leading to a record year. “Fertilizer prices and farm income both remain high; we continue to receive good support from our suppliers in this time of tight stocks and expect continued strong performance as we move into 2022.”

The company said fertilizers will benefit from continuing limited supply and elevated fertilizer prices, but are not expected to experience significant price increases as in 2021. The company said while manufactured products continue to be impacted by inflation and raw materials and labor constraints, it anticipates solid margin opportunities and well-positioned inventory through spring application season.

“We have a robust pipeline of growth projects that we are evaluating which are aligned with our strategy,” Bowe added. “Our evaluation includes both financial and business considerations and we continue to exercise discipline in our diligence processes. We are focused on organic growth projects in grain, renewables, and fertilizer, as well as potential acquisitions and investments.”

Bowe told analysts the company hopes to expand its organic fertilizer offerings to align with partners, which would create new organic products to market. It is also developing new specialty fertilizer products for customers and growers beyond traditional crops. He said the company would also consider M&A within core areas of strength and product line extensions for manufactured products including industrial applications.

Fourth-quarter Plant Nutrient pretax income was $15.9 million on revenues of $234.2 million, up from the year-ago $3.2 million and $155.5 million, respectively. Gross profit was $39.2 million, up from $30.6 million, while EBITDA was $23.5 million up from $10.8 million.

Full-year Plant Nutrient income was $42.6 million on revenues of $866.9 million up from 2021’s $16 million and $663 million, respectively. Gross profit was $140.4 million, up from $106.2 million, while EBITDA was $72.9 million, up from $47.2 million.

Company-wide fourth-quarter income was $32.8 million ($0.95 per diluted share) on revenues of $3.78 billion, up from the year-ago $17.3 million ($0.52 per share) and $2.51 billion, respectively. Gross profit was $194 million, up from $124 million, while adjusted EBITDA was $130.5 million, up from $71.5 million.

Full-year company net income was $99.7 million ($2.94 per share) on revenues of $12.6 billion, up from $5.8 million ($0.17 per share) and $8.1 billion, respectively. Gross profit was $592.7 million, up from $366.2 million, while adjusted EBITDA was $353 million, up from $170.1 million.

AdvanSix Reports Record Annual Results

Earnings, News, Northeast

AdvanSix, Parsippany, N.J., reported record sales, earnings, and cash flow for the year ending Dec. 31, 2021. Net income was $139.8 million ($4.81 per diluted share) on sales of $1.68 billion, up from 2020’s $46.1 million ($1.64 per share) and $1.16 billion, respectively. EBITDA more than doubled, at $255.5 million versus 2020’s $123.6 million. Free cash flow was $162 million, up from $28.9 million.

“In 2021, we once again differentiated our performance by delivering outstanding results and supporting our customers, all while continuing to successfully navigate the ongoing COVID-19 pandemic, significant industry supply chain disruptions, and an inflationary cost environment,” said Erin Kane, AdvanSix President and CEO.

“We achieved a post-spin record annual EBITDA and free cash flow, executed our first acquisition, initiated a quarterly dividend, entered into a new revolving credit facility, and significantly reduced our debt levels to provide optionality for further value creation,” she continued. “Our strong results reflect the resilience and strength of our execution and business model, as well as our leadership positions across our diverse product portfolio.”

Fourth-quarter results were not quite as robust, as the company endured an $18 million turnaround during the quarter. Net income was $23.6 million ($0.80 per share) on sales of $424.1 million, down from the year-ago $26.8 million ($0.94 per share) and $340.3 million, respectively. EBITDA, however, was up at $49.3 million from $48.5 million. Free cash flow was down at $14 million from $32.4 million.

The company said fourth-quarter sales volumes were off 12 percent, primarily due to the turnaround, as well as a strong year-ago quarter. However, sales were up 25 percent and market-based pricing was favorable by 25 percent, driven by higher pricing in ammonium sulfate and nylon.

Kane noted that the company is in the midst of the strongest fertilizer environment that it has seen in over a decade. The company is targeting significant earnings growth in 2022, supported by strong execution and robust ammonium sulfate fertilizer performance. It also expects strong North American demand for nylon and chemical intermediate products.

The company has declared a quarterly cash dividend of $0.125 per share on common stock, payable on March 15, 2022, to shareholders of record on March 1, 2022.

AdvanSix Acquires U.S. Amines for $100 M

Featured, News, Northeast, South Central

AdvanSix, Parsippany, N.J., on Feb. 18 announced an all-cash $100 million acquisition of U.S. Amines, Axis, Ala., a North American producer of alkyl and specialty amines serving the agricultural chemical, pharmaceutical, electronics, water treatment, and rubber processing markets.

“U.S. Amines is a complementary and cohesive fit with our existing portfolio and supports further penetration in high-value end markets and applications,” said Erin Kane, Advansix President and CEO. “We will leverage our core strengths across its unique manufacturing capabilities to enable sales synergies and unlock incremental value. We see robust opportunities for incremental growth through increased utilization of assets, new market opportunities and high-return organic investments.

“The transaction will have minimal impact to our debt leverage and we are confident in our ability to attain strong returns,” she added. “Today’s announcement marks another step as we evolve and enhance our capital allocation strategy to support sustainable and robust shareholder returns over the long-term. We are eager to welcome the U.S. Amines team to AdvanSix and look forward to their contributions to our continued growth.”

The company said the acquisition strengthens its North American position, as the assets are adjacent to both its ammonium sulfate adjuvant and solvent businesses, with the ability to leverage regional scale.

U.S. Amines employs approximately 50 people in the U.S. at manufacturing locations in Bucks, Ala., and Portsmouth, Va. Estimated 2022 revenue for the business is approximately $70 million.

Urea

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

U.S. Gulf:

NOLA granular urea continued to trend downward, but not by leaps and bounds. New trades were put in the $525-$545/st FOB range versus the week-ago $525-$575/st FOB. The new numbers were for second-half February and first-half March. Full March was reported at $515/st FOB.

The last done prill business was quoted at $560/st FOB.

Eastern Cornbelt:

Urea prices continued to fall in the Eastern Cornbelt. The market was quoted at $600-$620/st FOB, depending on location and time of the week, down from the prior week’s $625-$645/st FOB range. Urea pricing at Cincinnati, Ohio, reportedly fell to the $600-$605/st FOB level before rebounding slightly to $610-$615/st FOB on Feb. 17.

Michigan contacts pegged the urea market at $655/st FOB Toledo, Ohio, for February-March and $665/st FOB for 2Q tons.

Western Cornbelt:

Urea prices continued to slip in the Western Cornbelt. The regional market was quoted at $590-$615/st FOB, depending on location, down from the prior week’s $610-$630/st FOB range, with the low reported at St. Louis, Mo. Urea pricing FOB Catoosa/Inola, Okla., was pegged in the $585-$595/st FOB range, down from $600-$620/st FOB the previous week.

Northern Plains:

Sources reported slightly softer urea prices in the Northern Plains at mid-month. The market slipped to a broad $650-$725/st DEL range for prompt tons, depending on location and time of the week, with reports of spring pricing in the $710-$755/st range in North Dakota. The St. Paul, Minn., urea market was pegged at $625-$635/st FOB in mid-February, down from $650-$660/st at last report.

Northeast:

Sources reported softer urea pricing in the Northeast at mid-month. The regional market was pegged at $630-$650/st FOB, depending on location, with the low confirmed at terminal locations in southern Pennsylvania.

Eastern Canada:

The urea market was quoted in a broad range at C$1,165-$1,235/mt FOB in Eastern Canada, depending on location, with the low reflecting a C$35/mt drop from late January.

India:

The week opened with IPL accepting offers for 1,357,500 mt of urea. All but 90,000 mt will be bought at $596.45/mt CFR for both coasts. The remaining 90,000 mt will come directly from Fertiglobe at a reported $568.50/mt FOB. The Fertiglobe sale is from Abu Dhabi rather than Egypt.

Going into the weekend, sources were expecting IPL to buy 850,000 mt at most. The much larger purchase indicated to the market that producers had more material than expected and a desire to clear their warehouses before prices went down further.

Awarded Company Quantity(mt) Total (mt)
ECI WCI FOB Basis
Swiss Singapore 50,000 190,000   240,000
Fertiglobe 87,500   90,000 177,500
Samsung 94,000 77,000   171,000
Continental 52,500 95,000   147,500
Midgulf 25,000 118,500   143,500
OQ Trading 42,000 84,000   126,000
Koch 40,000 50,000   90,000
OCI   90,000   90,000
Amber 33,000 45,000   78,000
Gavilon   50,000   50,000
Ameropa 44,000   44,000
Total 468,000 799,500 90,000 1,357,500

Sources for the tonnage supplied by the trading houses is expected to come from every major urea producer east of the Atlantic Ocean. Sources said possibly two cargoes from Nigeria will be in the mix, along with tons from the Arab Gulf, North Africa, Indonesia, Vietnam, and Egypt. Reportedly, some material will come out of Russia and Georgia, but not Yuzhnyy.

Also, maybe one cargo will come from China, but that is more of a rumor rather than an expectation, said one trader.

India will still need product going into the second quarter. Even with the IPL tonnage shipping by March 20 and the recent arrival of the first cargo from the 1 million mt contracted from OMIFCO, sources reported supplies are lower than anticipated, but no longer at the critically short level.

Industry watchers are divided on how soon the next tender will be called. Some have said they expect one as soon as the tonnage booked in this tender is all assigned vessels. Others said the call may not come until the end of March, so all decisions about the tender will be made after April 1, when the new fiscal year starts.

Middle East:

Sources reported that Fertiglobe accepted the counterbid from IPL of $568.50/mt FOB for the 90,000 mt it offered directly in the last tender. Taken with the estimated netback of Arab Gulf material offered by traders, the area now shows a price range of $568-$580/mt FOB.

Egyptian producers have not spoken out since the IPL tender closed. Sources point to the last done deals in the $750s/mt FOB for February and March shipments. Others, however, look at the Fertiglobe offer of Egyptian tons at $645/mt FOB as a starting point.

Most in the industry point out the estimated netback to Egypt from the IPL tender delivered price is $550-$555/mt FOB. The IPL-related prices, said one source, is the most likely to consider when looking at the Egyptian market.

Black Sea:

Sources said traders are leery of trying to book any tons out of a Ukrainian port as tensions rise between Russia and Ukraine. One source said the increased presence of the Russian navy has heightened concerns about doing any business out of Ukraine.

There are other ports, however, on the east side of the Black Sea that have handled previous sales to India from Russia and Georgia. Sources expect to see at least one cargo coming out of there to cover the Indian tender.

Sources put the current freight rate between the Black Sea and India at $45-$50/mt. That would indicate a netback of $545-$550/mt FOB from the Indian deal.

Indonesia:

Two quick-selling tenders closed on Feb. 16. Kaltim offered 12,000-45,000 mt of granular urea and Pusri offered 5,000-10,000 mt of prilled urea. Both tenders received several offers, and both were scrapped soon after the numbers were released.

Kaltim Granular Tender
Bidding Company US$/mt FOB
Oracle 529
Synergy 520
Swiss Singapore 506
Samsung 505
Koch 500
Liven 478
Pusri Prilled Tender  
Bidding Company US$/mt FOB
Ameropa 581
Oracle 529
Liven 515
Samsung 495

Right after the tenders were scrapped, sources reported that Pusri sold 10,000 mt of its prilled urea to Ameropa at $581/mt FOB. In the past when Indonesia scrapped a tender, it then entered into private talks with the top bidding companies to try to secure a higher price. Sources noted with surprise how fast the scrapping and follow-up award occurred.

Shipment of the product is for late-March or early April.

Sources said only the granular product could have been considered for placement in the Indian tender. It would have been a tight deal, but it could have been possible to ship by the March 20 IPL deadline and still meet the Kaltim requirement of taking the product in the last half of March. As Green Markets went to press, however, no deals were announced for the Kaltim product.

China:

Sources confirmed that the Chinese government will be holding back at least 1 million mt even after it lifts export restrictions.

Sources said the main goal of the restriction on exports was not so much because the government feared the producers could not fully serve the domestic market – they can – but rather to build up reserves to force domestic prices down. Soon after the restrictions went in place, the price on the Chinese domestic market started falling. As February opened, sources quoted prices at $700/mt against an international price in the upper-$800s/mt.

The estimated netback to China from the IPL tender takes that price even lower. Calculating back from the IPL number, sources put the Chinese export market price at $575-$580/mt FOB.

If global prices continue to fall, sources said the Chinese government might consider easing back some of the restrictions that have kept their urea from the world, except in small lots to regional buyers. The 1 million mt reserve is designed to buffer the local market from any bumps that might occur when exports are once again allowed.

South Korea:

January 2022 imports of urea in South Korea were reported at 155,000 mt by Trade Data Monitor, representing a two-fold increase from the 76,000 mt imported in January 2021.

Six suppliers – Qatar, Vietnam, Saudi Arabia, China, Indonesia, and Malaysia – accounted for 98 percent of the imports in January, with individual shipments ranging from 15,000-32,000 mt.

The diversity of suppliers exemplified the impact that the Chinese export restrictions have had. In January 2021, only China sent any urea to South Korea. Sources noted that shipments to South Korea are small and done mostly to stay in the good graces of the Southeast Asian nations. Reportedly, the urea is shipped in containers and is designated for the emissions control program in South Korea.

Brazil:

Farmers’ expectations of lower urea prices are reportedly keeping them from the market. Anticipating a falling market and a traditionally slow period at this time of the year, the result was lower prices. Source now put the landed price at $540-$565/mt CFR.

Inland traders are mirroring the lack of enthusiasm for any major deals. Holders of product are reportedly anxious to sell rather than get caught holding tons in a falling market. However, the action is limited. Sources reported the Rondonopolis price at $839/mt FOB ex-warehouse for a few recent deals.

Martin FY21 Fertilizer Volumes Up, Sulfur Down

Earnings, News, Sulfur, Texas

Martin Midstream Partners LP, Kilgore, Texas, reported a 9 percent uptick in fertilizer sales volumes in the year ending Dec. 31, 2021, to 301,000 lt, up from 2020’s 275,000 lt. Sulfur volumes were off 29 percent, to 456,000 lt from 642,000 lt. Total volumes were off 17 percent, to 757,000 lt from 2020’s 917,000 lt.

The Sulfur Services segment, which includes both fertilizer and sulfur, posted 2021 operating income of $24 million, down from the year-ago $29 million. Total revenues were up, at $145 million from $108 million. Product revenues were $133.2 million, up from $96.4 million, while service revenues were almost even at $11.8 million, up from $11.6 million.

Fourth-quarter Sulfur Services results were improved over year-ago levels. Adjusted EBITDA was $11.4 million, up from the year-ago $7.4 million. The company said the results reflected increased volumes and margins for both sulfur and fertilizer. Operating income for the quarter was $8.9 million, up from $4.7 million.

“The partnership finished the year with another strong quarter leading to adjusted EBITDA of $114.5 million for 2021, exceeding the high end of our guidance by approximately $12.5 million,” said Bob Bondurant, President and CEO of Martin Midstream GP LLC, the general partner of MMLP. “These results allowed us to make significant progress towards our leverage goals, as adjusted and total leverage were reduced over a full turn from both Dec. 31, 2020, and Sept. 31, 2021. The rebound in the global economy and strengthening commodity prices resulted in solid annual results across all segments, and particularly in our fertilizer, land transportation, and butane optimization businesses.”

The company expects to generate $100-$110 million in adjusted EBITDA in 2022.

Company-wide, MMLP reported a $211,000 net loss on revenues of $882.4 million for 2021, compared to 2020’s loss of $6.8 million and revenues of $672.1 million. Adjusted EBITDA was $114.5 million, up from the year-ago $94.9 million.

Fourth-quarter MMLP results were improved, with net income at $10.8 million versus the year-ago loss of $2.6 million. Adjusted EBITDA was up at $39.7 million from $17.4 million. Revenues were up at $285.9 million from $180.1 million.

Ammonia

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

U.S. Gulf/Tampa:

Tampa anhydrous ammonia for February continued at $1,135/mt CFR, with news on March business expected by the end of the February.

Market participants speculated that March may see a drop in prices after a long climb, pointing to weaker prices in the international market. However, others have noted the pushback in production of the new Ma’aden ammonia plant to the third quarter, and possible production issues elsewhere. And on Feb. 18, Incitec Pivot announced that its Waggaman plant was offline due to a hydrogen leak (see Related Story).

Eastern Cornbelt:

The ammonia market remained at $1,300-$1,400/st FOB regional terminals in the Eastern Cornbelt, depending on location and time of shipment, with the low confirmed for prompt tons in Illinois and the high reported in Ohio for both prompt and spring prepay pricing. Most prepay offers in Illinois and Indiana were firmly in the $1,375-$1,385/st FOB range.

Western Cornbelt:

Ammonia pricing remained at $1,350-$1,395/st FOB terminals in the Western Cornbelt, depending on location and time of shipment, with the bulk of spring prepay offers pegged in the $1,365-$1,395/st FOB range in the region.

Northern Plains:

The ammonia market remained at $1,450/st FOB Velva, N.D., and other regional terminals in the Northern Plains, 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.

Black Sea:

The area market remained quiet, with contract tons moving out. However, sources said the tensions between Russia and Ukraine are leaving buyers nervous about being able to receive and ship material.

A recent sale by Rassosh to Trammo of 15,000 mt appears to be going to Turkey, but nothing has been said yet about the price. One trader said the seller is likely not willing to talk because, if rumors are correct, it will be below the current $1,100/mt FOB.

Trammo reportedly will not talk because it is still negotiating a sale to an end user. With deals out of the area mostly done on a formula basis, sources said the trading house would be foolish to reveal a lower price that could alter its selling price.

India:

Some ammonia buying is continuing in India. Sources said cargoes from Egypt and Indonesia have been booked, and the best guess for the price showed a slight softening to $890-$910/mt CFR.

More ammonia is expected for the next fiscal year starting in April because the Indian government is emphasizing more domestic DAP production. With the market poised for a drop in prices, buyers might be getting ready to take advantage of the pending down market as soon as they can.

Middle East:

Sources said the Arab Gulf ammonia equivalent of the recent Indian purchases is $800-$850/mt FOB. One source said using the calculation is the only way right now to nail down what the spot price in the Arab Gulf might be.

Product remains tight as the market waits for the new Ma’aden plant to begin full operations sometime in the third quarter. Likewise, hiccups in other regional production are preventing the producers from building any excess tons for the spot market.

Some extra tons might come available, depending on how Southeast Asian buyers move. Right now, the sense is that some of the buyers are merely postponing shipments in the coming months, as allowed under their contracts. However, if some of the major buyers begin to cancel a cargo or two, some spot tons will pop up quickly and most likely get snapped up.

North Africa:

Demand for ammonia is steady from Morocco. Sources said its reserves are at the level they like, and no delays in deliveries are on the horizon.

Production in Algeria and Libya is going well, with any offered tons quickly getting picked up. There are reports that a cargo from Algeria made it to Northwest Europe at a level that could affect the March Baltic price negotiations. But, so far, it is just a rumor.

Northwest Europe:

There is a rumor that a deal was done at $1,000/mt C&F. However, sources stress that no one knows the source of the ammonia, who sold it, who bought it, or how many tons were involved. At this point, said one source, the talk only underscores the general feeling that prices are poised to come off in the coming months.

The price cannot get too low, however. Sources pointed out that high energy costs still determine how far down the Northwest Europe price can go. The break-even price is pegged at $900/mt, leaving some room for the sales price to drop below the current $1,180-$1,250/mt C&F, but not much.

Baltic November price talks are not expected to start until next week. If the deal for $1,000/mt C&F did happen, sources said the best price Baltic suppliers can get is $920/mt FOB. In the meantime, the material going out is at the February price of $1,115/mt FOB.

Southeast Asia:

Reports are circulating that some of the large chemical plants in the area are cutting back on production as the price begins to fall for their end products. The resulting potential reduction in production is leading to rumors of less ammonia required.

At this point, said traders, it appears that some of the buyers are asking their contracted suppliers to delay a shipment or two until the need picks up. However, there is a rumor that some orders are being canceled, leaving some excess ammonia in the market for spot deals.

South Korean imports of ammonia in January 2022 were reported at 163,000 mt by Trade Data Monitor, down 43 percent increase from imports in January 2021. The main suppliers were Saudi Arabia with 71,000 mt and Indonesia with 67,000 mt. These two countries accounted for 80 percent of the South Korean ammonia imports.