All posts by mickeybarb@charter.net

Koch’s Enid, Fort Dodge Upgrades Expected Up in 2022; ATS, Beatrice Projects Complete

Featured, News, Specialty, UAN, Urea

Koch Fertilizer, Wichita, has updated the status of its plant upgrades. At the $150 million Enid, Okla., upgrade (GM March 12, 2021), the construction is complete on the new rail tracks and nearly complete on the new anhydrous ammonia truck loading racks. Koch installed some of the urea expansion equipment during the June 2021 turnaround, and the remaining construction is underway. Total project completion is anticipated later this year.

These Enid improvements, combined with the previous expansion, will allow the facility to supply up to 1.8 million st of ammonia upgrade products (urea, DEF urea solution, SuperU® fertilizer, and UAN) annually, according to Koch. The previous capacity was in excess of 1.5 million st/y, according to earlier reports (GM Sept. 6, 2019).

The current Enid investment builds on the $1.3 billion Enid expansion and modernization improvements made from 2014-2017 (GM Oct. 20, 2017). The centerpiece of that expansion was a new 900,000 st/y urea plant. The company also added 90,000 st of urea storage, an electric power substation, and DEF production, and tripled its SuperU production capacity.

Koch’s $140 million expansion at Fort Dodge, Iowa, is expected to be fully operational later this year. It includes an 85,000 st/y increase in ammonia capacity (GM Nov. 20, 2020). However, Koch said that a separate project, a new two-million-gallon ammonium thiosulfate (ATS) terminal at Fort Dodge that was announced last May (GM May 21, 2021), is complete and operational.

The $90 million Beatrice, Neb., expansion was completed and commissioned in the fall of 2021. It included an additional 75,000 st/y of UAN capacity (GM Nov. 13, 2020).

Verde Receives Potash Mining Concession

Brazil, News, News Briefs, Potash, Specialty

Verde Agritech Plc, Belo Horizonte, Minas Gerais, Brazil, said on Feb. 10 it has received a Mining Concessionfor the extraction of up to 2.5 million mt/y of potash rich ore, which it can process into its multi-nutrient potassium products BAKS® and K Forte®. Verde’s product is sold internationally as Super Greensand®. With the new concession, the company said it is now fully permitted to produce up to 2.83 million mt/y.

“This mining concession marks one more milestone for Verde,” said Cristiano Veloso, Verde Founder and CEO. “It will supply raw material for our Plant 2, which will boost production and accelerate sales growth. It is also another important governmental stamp of approval for our efforts towards reducing Brazil’s crippling dependency on imported potash.”

Verde is targeting 700,000 mt of production in 2022 and 1.4 million mt in 2023.

Consortium Completes Purchase of DuPont Clean Technology Business

News, News Briefs

A consortium of private equity firms has completed the purchase of the Clean Technologies business of DuPont de Nemours Inc. and named the new business Elessent Clean Technologies. The equity firms consist of BroadPeak Global LP, Asia Green Fund, and The Saudi Arabian Industrial Investments Co. (Dussur).

The new company is based in Chesterfield, Mo., and will supply process technologies to the fertilizer, chemical, metal, and oil refining industries. Technologies include MECS® sulfuric acid and environmental technologies, Belco® scrubbing technologies, Stratco® alkylation technology, and IsoTherming® hydroprocessing technology.

Project Haber Receives Major Project Status

Ammonia, Australia, News, News Briefs, Urea

Thebarton, South Australia-based Strike Energy Ltd. reports that its Project Haber has been awarded Major Project Status by the Australian Federal Government. This status gives Strike access to the Major Projects Facilitation Agency for approvals, project support, and coordination.

Project Haber is adjacent to Geraldton Port, Western Australia, and includes the development of a 1.4 million mt/y urea plant and an 800,000 mt/y ammonia plant (GM Jan. 15, 2021).

Leigh Creek Reports Carbon Neutral Milestone, Applies for Patent

Australia, News, News Briefs

Leigh Creek Energy Ltd., (LCK) Adelaide, South Australia, reported that its Leigh Creek Urea Project (LCUP) has become the first large-scale fertilizer project in the world to achieve Carbon Neutral status.

“Through our active participation in carbon offset projects, the Leigh Creek Urea Project (LCUP) has achieved carbon neutrality for FY-22 – the first large scale fertilizer project in the world to achieve this,” said LCK Managing Director Phil Staveley. “Our commitment to reaching carbon neutrality eight years earlier than originally planned not only aligns with the United Nations Global Compact principles, the world’s largest corporate sustainability initiative, but also promotes our values and purpose as an organization.”

In other news, LCK reported that it has applied to the Australian Patent Office to protect its intellectual property rights pertaining to predicting and controlling syngas operations that it has developed at the LCUP project. The company said it is likely to be the first of many patents protecting proprietary information and adding to the value of the project.

LCK plans to establish a 1 million mt/y urea facility utilizing in-situ gasification (ISG) at the Leigh Creek Energy Project (LCEP), located some 550 kilometers north of Adelaide and overlaying the Leigh Creek coalfield (GM Jan. 22, 2021).

PhosAgro Boosts 4Q/FY-21 on Higher Sales Volumes & Prices

Earnings, News, Phosphate, Russia

PJSC PhosAgro, Moscow, reported a 223 percent increase in fourth-quarter net income to RUB41.83 billion on revenue of RUB127.92 billion, up from RUB12.96 billion and RUB58.89 billion, respectively, a year ago.

Net profit adjusted for non-cash foreign exchange gain/loss came in at RUB45.14 billion ($622 million), up from RUB2.17 billion, while EBITDA for the quarter jumped to RUB61.52 billion ($847 million) versus the year-earlier RUB17.87 billion.

The Russian fertilizer group attributed the earnings boost to upgrades to its production assets, efficiency improvements at key production units, and high levels of self-sufficiency in key inputs.

The more than double year-over-year revenue growth, it said, was driven mainly by “record-setting” production volumes, the global recovery in fertilizer prices during the year, and strong end-user demand combined with low inventories in key markets.

Fertilizer production increased 13 percent in the fourth quarter, to 2.76 million mt, up from the previous year’s 2.44 million mt, while fertilizer sales were up 21 percent, to 2.47 million mt from 2.04 million mt (GM Jan. 28, p. 25).

Fourth-quarter EBITDA in the phosphate-based fertilizers segment came in at RUB45.1 billion ($621 million), a more than three-fold increase year-over-year. The group said the higher profitability was driven by increased sales volumes on the back of high demand in global markets.

EBITDA in the quarter in the nitrogen-based fertilizer segment was RUB16.0 billion ($221 million), up more than four-fold year-over-year. PhosAgro cited the considerable increase in prices for nitrogen-based fertilizers in late 2021 amid the gas crisis in Europe for the growth.

For the full-year, PhosAgro also reported a 200 percent increase in adjusted net profit to RUB130.21 billion ($1.8 billion) on revenue of RUB420.49 billion ($5.7 billion), up from FY2020’s RUB43.37 billion and RUB253.88 billion, respectively.

EBITDA for the full year increased to RUB191.8 billion ($2.6 billion), up from RUB85.66 billion, while revenue grew 66 percent to RUB420.49 billion from the prior year RUB253.88 billion.

Full-year fertilizer production grew by 3 percent, to 10.31 million mt from the previous year’s 9.98 million mt, and fertilizer sales also increased by 3 percent to 10.26 million mt from 9.95 million mt.

Commenting on the market outlook, PhosAgro CEO Andrey Guryev noted the start of 2022 has been marked by continued high demand for phosphate-based fertilizers thanks to the early resumption of DAP/NPK purchases from India due to low carry-over stocks and higher subsidies for fertilizer purchases.

“Since the beginning of the year, India has already purchased more than 1.5 million mt of phosphate-based fertilizers for delivery during the first quarter of 2022, thus counterbalancing off-season activity in other markets,” he said.

An additional factor supporting prices is the ongoing restrictions on fertilizer exports from China in favor of supplies to the domestic market, Guryev noted.

He said urea markets are seeing a price correction in the wake of the active phase of import purchases in most major markets, while global ammonia prices remain at record highs on the back of high natural gas prices and continued import demand from Europe.

Federated Co-operative Limited – Management Brief

Management Briefs, Saskatchewan

Federated Co-operative Limited (FCL), Saskatoon, Sask., announced that CEO Scott Banda will retire in May 2022 after 20 years with the business. FCL said it experienced “significant growth and evolution” under Banda’s 12 years as CEO.

“Scott has made a lasting impact on the entire organization and on co-ops across Western Canada,” FCL said. “His focus on advancing our Vision of Building Sustainable Communities Together continues to benefit local co-ops and the over 600 communities they serve.” FCL has not yet announced Banda’s replacement.

Investigators Zero In on Winston Weaver Fire Origin; Company Donates $100K for Victim Aid

Featured, News, Southeast

Fire investigators in Winston-Salem, N.C., started combing the ruins of the Winston Weaver Co. fertilizer plant on Feb. 7, searching for clues into the origin of the Jan. 31 fire that destroyed the 65,423-square-foot facility and prompted a three-day evacuation order for some 6,500 nearby residents due to concerns about a possible explosion triggered by ammonium nitrate.

Investigators with the Winston-Salem Fire Department and the Office of the State Fire Marshal were reportedly onsite during the week. The North Carolina Department of Labor confirmed that its Division of Occupational Safety and Health (OSH) is also conducting an investigation into the cause and whether safety or health standards were violated, the Winston-Salem Journal reported.

Officials reduced the evacuation zone around the burned plant to a radius of 275 feet at 8 p.m. on Feb. 6, down from a radius of 660 feet that had been in effect since Feb. 3. An initial evacuation zone was enforced for residents and businesses within a one-mile radius of the plant and was in effect from late Jan. 31 to 8 p.m. on Feb. 3, affecting approximately 2,497 households. The smaller 275-foot evacuation zone was still in effect on Feb. 11.

Concerns remained about possible flare-ups as the excavation process continues. Local authorities reported earlier that 500 tons of ammonium nitrate, as well as a reported 5,000 tons of finished fertilizer products, were stored in the facility at the time of the fire. An additional 90 tons of ammonium nitrate was also onsite in a railcar.

Efforts to contact Winston Weaver or its parent, Meherrin Fertilizer Inc., for comment were unsuccessful.

According to local news outlets, Winston Weaver has donated $50,000 to the nonprofit group Love out Loud to reimburse individuals and families who were forced to evacuate to hotels because of the fire. The company has also given $25,000 to Second Harvest Food Bank and has earmarked an additional $25,000 to help residents impacted by the fire.

At a press conference on Feb. 9, Winston-Salem Fire Chief Trey Mayo said investigators “have an idea of where we believe the fire began,” but he provided no further details, saying he did not want to “corrupt” the ongoing investigation. He pushed back, however, on reports that the fire started at a loading dock at the site and was observed by an employee who reported the fire.

“I do not believe the fire began in the loading dock area,” he said. “Smoke may have been coming from the loading dock when the employee reported it. I don’t know yet what that correlation is between where we believe the fire began and the location of the loading dock. And I do not know specifics about how close the employee who reported the fire was to where the fire was burning at the time of report.”

Mayo also downplayed reports that an earlier fire call to the Winston Weaver plant on Dec. 26, 2021, was related to the Jan. 31 fire. The Winston-Salem Journal, citing a Winston-Salem Fire Department incident report that the newspaper obtained through a public records request, said fire crews were called to the facility in December to deal with a smoldering pile of “fertilizer material.”

Firefighters determined that an overheated bearing in a piece of electrical equipment dropped “hot materials into the pile.” They flooded the area with water, according to the report, and “at no point did the pile produce any flames or fire damage.”

In response to questions from reporters, Mayo on Feb. 9 said the Dec. 26 incident was “remote” from where investigators believe the Jan. 31 fire started. “They are a pretty good distance away in the plant, so we do not believe that those two incidents are related,” he said.

WGHP, the local Fox-affiliated television station, reported that a lawsuit was filed against Winston Weaver on Feb. 3 by local attorney Kathleen Q. DuBois alleging that the company was negligent in operational procedures and failed to follow safety precautions. The lawsuit further alleges that the fire and evacuation led DuBois to face property losses and negative health effects.

According to WGHP, the lawsuit calls for a temporary restraining order to make sure all company documents, video, and materials related to the fire are preserved. An additional unnamed defendant, referred to as John Doe, is also named in the lawsuit and is reportedly a stand-in representing one or more employees who may have been responsible for the incident, WGHP reported.

Crumley Roberts, the Asheboro, N.C., law firm where DuBois is employed, said DuBois plans to donate any recovery from the lawsuit to victims’ aid funds that may be established in the coming weeks, WGHP reported.

Ammonia

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

U.S. Gulf/Tampa:

Tampa anhydrous ammonia for February remained at $1,135/mt CFR.

Correction: Text in the U.S. Gulf/Tampa ammonia section last week should have read: Market players said the jury is still out for March, noting that the $20/mt increase for February was relatively small compared to the leaps posted in prior months.

U.S. Imports:

December ammonia imports were off 22.2 percent, according to U.S. Census Bureau data, to 156,534 st from 201,272 st in the prior year. Imports firmed 11.0 percent for July-December, however, to 1.27 million st from the year-ago 1.14 million st.

U.S. Exports:

Ammonia exports were off 46.0 percent in July-December, to 187,946 st from the year-ago 348,136 st. Exports were noted at 7,529 st for December, falling 89.2 percent from December 2020 exports of 69,416 st.

Eastern Cornbelt:

The ammonia market was unchanged 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 remained in the $1,375-$1,385/st FOB range.

Western Cornbelt:

Ammonia pricing was steady 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.

California:

The anhydrous ammonia market firmed to $1,185/st DEL in California on Feb. 1, up $100/st from the previous Calamco posting. The aqua ammonia market was quoted at $306-$316/st FOB in the state as of Feb. 1, up from the prior low of $281/st FOB.

Pacific Northwest:

The ammonia market remained at $1,350-$1,400/st DEL in the Pacific Northwest, with the low reported in Washington for prompt truck tons and the high for spring pricing offers.

The aqua ammonia market was unchanged at $342/st FOB for spring tons in the region.

Western Canada:

The ammonia market in Western Canada was steady at C$2,000-$2,100/mt DEL for the last reported spring pricing offers, depending on location and supplier.

Black Sea:

No spot business was done this week, but sources said some extra tons may be available out of Yuzhnyy later in February. Reportedly, Rassosh will have 10,000-20,000 mt for export.

Once the Rassosh material is made available, sources expect to see prices fall from the current $1,110-$1,120/mt FOB. How far down is the question. Using calculations from potential deals in Europe, the price could go as low as $800/mt FOB. However, the most likely scenario, said one trader, is that the price will be a bit above or below $1,000/mt FOB. Another trader said the drop could as low as $900/mt FOB.

Sources reported there is still some concern about market conditions because of the tensions between Ukraine and Russia. The presence of Russian naval vessels in the Black Sea could hamper some trade, Ukrainian officials told the press. Any land action could also stop the flow of ammonia to Yuzhnyy.

For now, sources in Europe are wary of the situation but plan to move out tons already under contract, and to be prepared to take the product from Rossosh when it is available.

Middle East:

Availability in the area has taken a hit. Sources reported a shutdown at Muntajat in Qatar. At the same time, Ma’aden announced it would not be shipping any ammonia from its new facility until the third quarter.

No details of the Muntajat shutdown were available, sources said. The first indication of a problem, said one trader, came when Muntajat offered for lease a chartered vessel that was scheduled to load a cargo later this month.

The cutback may not be serious. Sources said if the company expected output to be reduced for a long time it would be trying to arrange swaps with other producers to ensure all contracts get covered. So far there is no indication that swaps are under discussion.

The Ma’aden situation means vessels chartered by the company will be offered to other users. Sources noted that the issues with production in the area have left the region long on transportation. The situation was expected to be corrected when Ma’aden came online. However, the longer it takes for Ma’aden to start exporting means vessels charted by Ma’aden will be offered to other producers or buyers.

The lack of any spot business left the public price steady at $900/mt FOB. However, the contract price is said to be closer to $850-$860/mt FOB.

India:

Demand seems to have slowed down to just taking what was contracted instead of looking for additional product. Sources said the lack of inquiries from the industrial and fertilizer sectors is an indication that supplies are sufficient for now.

That may change soon if DAP producers follow the urging of the Indian government to step up DAP production. The imported ammonia is meeting the current needs, said sources, but increasing production will require more ammonia. Buyers will have to step into the spot market to fill those needs.

Northwest Europe:

The price of $1,180-$1,250/mt C&F has not yet moved. Sources said the lower gas prices in Europe and the potential of lower prices in Yuzhnyy should soon be enough to finish what the dip in February Baltic prices started, and push the price down.

The lower gas prices in Europe have now changed the calculations about running plants. Sources said the cost of producing ammonia has now dropped to about $900/mt from $1,000/mt just a week ago. The lower price will encourage producers to stay online, and for buyers to continue to push against suppliers in the Baltic and Black Seas.

Brazil:

Ammonia imports for January 2022 were reported at 24,000 mt, according to Trade Data Monitor. This amount is down 54 percent from the 53,000 mt imported in January 2021. The sole source of ammonia in January was Trinidad.

The January 2022 imports were not much different from imports during the previous three months. October, November, and December showed imports of 33,000 mt, 27,000 mt, and 30,000 mt, respectively.