All posts by mickeybarb@charter.net

ICL Unit Launches New Product

Israel, News, News Briefs, Specialty

Agmatix, a start-up ag tech business owned by ICL, Tel Aviv, has announced the launch of its Plant Nutrition Carbon Footprint Optimizer within its new data technology platform. It said the new feature now enables ag professionals and crop consultants to better understand the carbon footprint of their crop nutritional recommendations and farm-specific nutrition strategies.

The product allows users to run several parallel simulations that can compare nutritional recommendations in relation to yields and environmental impact via their carbon footprint. The company said the feature reduces waste and increases profitability by giving users the information they need to prevent excessive fertilization.

Fertilizer Employee Killed in Accident

News, News Briefs, Northern Plains, Specialty

A 37-year-old man was dead after a workplace accident early on Feb. 1 at the Sustane Natural Fertilizer facility in Cannon Falls, Minn., according to the Cannon Falls Beacon.

The employee was pulled into a machine and was unresponsive when the Cannon Falls Police Officers arrived. The Regional Medical Examiner’s Office of Southern Minnesota and the Minnesota Occupational Safety and Health Administration (OSHA) are investigating. 

Sustane produces turkey litter-based granule fertilizers, which it markets nationally and exports to some 60 nations, according to its website.

Florida County Rejects Phosphate Mining, Manufacturing

Florida, News, News Briefs, Phosphate

Charlotte County Commissioners in Florida late last month unanimously approved a zoning change that would prohibit phosphate mining, manufacturing, and phosphogypsum stacks, according to The Daily Sun. However, a local spokesperson for The Mosaic Co. told the paper the company had no plans to set up operations in the county and that it had no significant phosphate reserves.

“The whole move by the county is an unfortunate waste of time. The overture creates more theater than addressing actual, local challenges,” Mosaic’s Jackie Barron was quoted.

NuStar Seeks to Boost NH3 Pipeline Utilization; 4Q Volumes Up 20 Percent

Ammonia, Featured, News, Texas

NuStar Energy LP, San Antonio, said on Feb. 3 it is looking to increase the utilization of its anhydrous ammonia pipeline with low-spend, high-return projects to connect and extend the system to new and current customers.

“These projects would supply ammonia for traditional uses, like the fertilizer that augments U.S. food production, as well as corn for ethanol production, across the Midwest,” said NuStar President and CEO Brad Barron. “We are also partnering with customers and potential customers to expand our utilization with ‘green’ ammonia projects, for existing applications and for visionary future opportunities like renewable electricity generation and safe, efficient transportation for hydrogen to power fuel-cell vehicles.”

The company said ammonia throughput on the pipeline was up 20 percent in fourth-quarter 2021 from year-ago levels and up 42 percent over the third-quarter. This is in line with fertilizer industry reports of a very good fall ammonia application season.

Even with recently increased volumes, the pipeline can still accommodate significant volumes. In a January presentation, NuStar said ammonia volumes had been running at 3,500 st/d, with the potential to grow this to 5,500 st/d. The pipeline is the longest and only such pipeline in the U.S. It spans some 2,000 miles and seven states from Louisiana, north along the Mississippi River to Missouri, and then northwest and east, to Nebraska and Indiana.

The company told analysts current pipeline demand is very strong, but that it is seeing green and blue ammonia interest from particular customers who have a business plan to ship their product up the NuStar system and use that ammonia as a source of hydrogen, with one potential use as fuel for fleet vehicles.

The company said those conversations have progressed quite a bit in the last few months and it hopes to provide more details in the first half as these potential customers work to make sure they have space in the pipeline to support their business models.

While NuStar expects to have more definition sooner rather than later, it expects it will still probably be a couple of years before the new service begins.

Barron told analysts that the costs will be low, as the company will not need to do anything to the pipeline, just add connections. Where those connections will be is still being vetted. “We do not have to expand capacity on the pipeline,” said Barron, “but I think we’ll see upside two ways. Just one, the additional volume for new demand, and then also given that the discussion is around guaranteed space, firm space on the line should be a premium market as well.”

NuStar looked to expand the pipeline to an Archer Daniels Midland facility in Decatur, Ill., in 2015 (GM Nov. 23, 2015), but the project was never completed.

Borealis Receives Binding Offer for Nitrogen Business from EuroChem

Europe, Featured, News, Nitrogen

Polyolefins and fertilizers major Borealis AG, Vienna, said on Feb. 3 it has received a binding offer from EuroChem Group AG, Zug, Switzerland, for the acquisition of Borealis’ nitrogen business, including fertilizer, melamine, and technical nitrogen products. The offer values the business on an enterprise value basis at €455 million (approximately $514 million at current exchange rates).

EuroChem confirmed that it has begun exclusive negotiations to acquire Borealis’ nitrogen business after submitting a binding offer.

The transaction would significantly enhance EuroChem’s nitrogen business in Europe, adding five production plants in Austria, Germany, and France, as well as adding a comprehensive sales and distribution network utilizing the Danube River.

Borealis owns three fertilizer production plants in France, and one each in Germany and Austria.

Borealis’ nitrogen business distributes about 4 million mt/y of products (including about 0.8 million mt/y of liquid technical nitrogen and about 0.15 million mt/y of melamine, according to EuroChem) in Western, Central, and Southeast Europe through the Borealis LAT distribution network. LAT has more than 50 distribution centers. Borealis said it is Europe’s leading fertilizer wholesaler.

Borealis’ fertilizer portfolio includes nitrogen, NP and NPK fertilizers, and a range of technical nitrogen products, from ammonia and ammonium nitrate to nitric acid and urea solutions. In 2020, the business posted sales of 3.9 million mt, and revenues of €908 million.

It could not be confirmed by Green Markets’ by press time, if Borealis’ share in the Rosier fertilizer production sites in The Netherlands and Belgium is excluded from the sales process with EuroChem. Borealis had said in February 2021 its share in the Rosier fertilizer production sites were not being considered at that time in any potential sales process (GM Feb. 5, 2021).

The deal remains subject to standard consultation procedures with Borealis’ employees, as well as certain closing and regulatory approvals. The transaction is expected to close in the second half of 2022.

Borealis and its majority owner, Austrian oil and gas company OMV AG, which owns a 75 percent stake in Borealis, in February 2021 announced the decision to start a process to divest the nitrogen business unit (GM Feb. 5, 2021). But even before the decision-to-sell announcement, there had been on-and-off speculation for some time that a sale of the nitrogen business was being considered.

The €455-million offer for Borealis’ nitrogen business is lower than earlier estimates for the business. When a possible sale was first explored three years ago, some estimates put the nitrogen unit’s value as high as $1 billion. But very high gas prices have weighed on the unit’s results, OMV Chairman and CEO Alfred Stern told Bloomberg News in an interview this week. “But for us, it was a clear strategic decision. We want to focus on developing out other chemicals.”

OMV took a €1.7 billion (approximately $1.92 billion at current exchange rates) writedown on its exploration and production assets, and on ADNOC refining and Borealis’ nitrogen business fertilizer business in its fourth-quarter 2021 earnings published on Feb. 3. It had warned last month about the write-down due to surging input costs during the quarter (GM Jan. 14, p. 31).

Borealis revealed in late September that it was reducing its production of ammonia in Europe amid soaring natural gas prices (GM Sept. 24, 2021). The company has ammonia plants in Austria, France, and The Netherlands.

As a privately-run company, Borealis does not disclose publicly the individual financial results of its business units.

Prior to the sale announcement in February 2021, Borealis earlier had been considering potential partnerships with fertilizer companies to increase its global reach beyond Europe (GM March 1, 2019). In an attempt to strengthen the business, the company had established a separate international Fertilizer & Melamine business unit in October 2018 (GM Sept. 28, 2018).

Borealis came under the control of OMV in late October 2020, when the Austrian oil and gas company upped its stake to 75 percent from the previous 36 percent, acquiring the additional 39 percent interest from Abu Dhabi’s sovereign wealth fund, Mubadala Investment Co., for $4.68 billion (GM Nov. 6, 2020). Mubadala retained a 25 percent interest in Borealis and also owns a 24.9 percent interest in OMV.

Following the nitrogen business divestment, Borealis will continue to focus on its core activities in polyolefins and base chemicals, thus extending OMV’s value chain towards higher value chemical products and the transformation towards a circular economy, the Austrian oil and gas company said.

India, Belarus Could Trade in Rupees; Potash Exports Via Russia Discussed

Belarus, Featured, India, News, Potash

India could buy 1 million mt of potash from Belarus in 2022 by paying with rupees, according to a Reuters report this week, citing two unidentified Indian officials.

India has suggested that Belarus potash marketing/exporting company Belarusian Potash Co. (BPC) could open a rupee account with a state-run Indian bank for potash sales as sanctions imposed by the U.S. and European Union (E.U.) restrict Belarus’ potash trade in U.S. dollars and euros.

The deal could be sealed later this month, according to the report.

Potash shipments under BPC and India’s 2021 supply contracts – as with the BPC’s 2021 supply contracts with China – were not subject to the sanctions implemented by the E.U. on Belaruskali/BPC on June 25 last year (GM June 25, 2021).

But according to the Reuters report, citing the two Indian officials, about 150,000 mt of potash shipments from Belarus have been stuck because of payment issues. However, this could not be verified by Green Markets atpress time, or whether the shipments concerned were contract shipments.

India’s biggest potash importer, Indian Potash Ltd. (IPL), and BPC agreed to the supply of 800,000 mt of potash for delivery to India through the end of December 2021 under last year’s annual supply contract, concluded in late January 2021 (GM Jan. 29, 2021).

The deal was concluded at $247/mt CFR with 180 days’ credit, a price level considered to be “low-ball” by most of the other major potash producers, who believed the price was not reflective of prevailing market conditions (GM Feb. 5, 2021). A new contract price of $280/mt CFR with 180 days’ credit was negotiated between the two companies in early April following ICL Group’s settlement of a new annual contract with IPL at that price level (GM April 9, 2021).

India imported a total of 852,007 million mt of potash from Belarus in the 11 months to the end of November 2021, accounting for some 29 percent of India’s total potash imports of 2.97 million mt in that period, according to Trade Data Monitor. This is up on India’s imports from Belarus in the same prior-year period – some 703,014 million mt, about 15 percent of India’s total potash imports of 4.72 million mt.

Higher global prices capped India’s potash imports in 2021.

However, it is unclear how Lithuania’s decision to halt the transit of Belarusian potash on its state-owned railway Lietuvos Geležinkeliai’s (LTG) from Feb. 1 – effectively blocking the export shipment of most of Belarus’ potash (GM Jan. 14, p. 1) – will affect or delay Belarus’ potential new potash exports to India.

Most of Belarus’ potash exports – some 10.7 million mt out of a total of 11.8 million mt in 2020 – hitherto were railed via Lithuania’s LTG rail system for onward shipment from the port of Klaipėda.

The Lithuanian government’s decision last month to end the railway contract between LTG and Belaruskali was taken due to “national security concerns.”

Belarus claimed this week that it has started to re-direct its potash shipments to Russian ports for onward export, according to a Bloomberg report, citing Interfax, which in turn cited Belarus Prime Minister Roman Golovchenko.  

Golovchenko provided no details on which Russian ports were being used for the Belarus potash shipments or on the volumes involved. But he said due to the longer land transit distances involved, Belarus has lost some margin given the higher transportation costs.

However, the Belarus claim has been refuted by Kremlin spokesperson Dmitry Pesov, as cited by a subsequent Interfax report on Feb. 2.

Pesov said the possible re-routing of Belarusian potash to Russian ports is “on the agenda” and is being discussed, but the re-routing of shipments has not begun just yet, as cited by Interfax.

“Though financing is likely outside the U.S. financial system, it is still unclear if Belarus has the ability to rail through Russia the volumes India demands,” said Green Markets Research Director Alexis Maxwell.

Belarus said it has “prepared all necessary logistical solutions” to re-orient all of its transit flows to sea ports of countries seen as “reliable partners.”

BPC last month was reported to have submitted a request to LTG for the rail company to transport Belaruskali OAO potash from Jan. 24, arguing it was necessary for it to meet its obligations to sell potash through the Lithuanian port of Klaipėda, according to a report by Warsaw, Poland-based Belsat TV, citing LTG’s website (GM Jan. 28, p. 28).

Lithuania’s Head of the Committee of National Security and Defense of the Seimas (unicameral parliament) Laurynas Kasčiūnas was cited by the report as saying the chances to by-pass the ban on the transit of Belarusian potash/fertilizers in Lithuania were “almost zero,” given that the commission would consider such a transit “a threat to national security.”

Separately, Belaruskali is seeking to get the Lithuanian government’s decision to terminate the contract between the company and LTG overturned, and last week filed a complaint with the Vilnius Regional Administrative Court.

In a retaliatory move, Belarus this week banned the rail transit of oil products, chemicals, and mineral fertilizers from Lithuania starting Feb. 7, according to a Bloomberg report, citing an unnamed Belarusian ministry. According to the report, the ban will affect the annual transit of some 1.5-1.6 million mt of goods worth more than $1 billion.

LTG’s press service confirmed to Bloomberg it ships fertilizers and oil products via Belarus.

India in Talks on MOP, DAP, Complex Ferts Deal with Russia

DAP/MAP, India, News, News Briefs, Potash, Russia

India this week was reported to be in talks with Russia for the long-term supply of potash as well as DAP and complex fertilizers, Bloomberg reported on Feb. 3, citing a Reuters report, which in turn cited unidentified sources in government and industry.

India’s Indian Potash Ltd. (IPL), Rashtriya Chemicals and Fertilizers Ltd. (RCF), National Fertilizers Ltd., Madras Fertilizers Ltd., and Fertilisers And Chemicals Travancore Ltd., were named in the report as being expected to sign a three-year deal with Russian companies, including Uralkali and PhosAgro.

However, according to some Green Markets sources, uncertainty over possible sanctions against Russia and concerns about a possible invasion of Ukraine by Russia have led to some hesitancy by traders to make arrangements with Russian urea suppliers for the IPL tender. The same hesitancy is expected to be seen for other Russian fertilizer products.

Nutrien Considers Production Boost Amid Belarus, Russia Uncertainty

Belarus, News, News Briefs, Russia, Saskatchewan

Sanctions on Belarus’ potash exports, a key revenue earner for the country, are starting to bite, with Lithuania’s decision to stop railing Belarus potash, isolating it from its key export port, Klaipėda, taking effect from Feb. 1.

A Russian troop build-up on Ukraine’s borders has stoked fears of war, and the prospect of sanctions on Russia by the U.S., the U.K., and others, particularly should Moscow send troops into Ukraine.

In an interview with Reuters, Nutrien Ltd.’s Interim President and CEO Ken Seitz said Nutrien could restart up to 4 million mt of idled potash production capacity in Canada in the coming years as it assesses the long-term outlook for sanctions against competitors.

As a first step in increasing production, he said Nutrien may raise output by 700,000 mt to 1 million mt in the second half of 2022 “at low expense.” But it would depend on if sanctions are going to be a longer-term problem for the market, Seitz said.

Canpotex, the export marketing company owned by Nutrien and The Mosaic Co. Ltd., said last week it is fully committed on volumes for potash sales through March 31, 2022, due to “continued strong demand and solid fundamentals for agricultural commodities in key offshore markets” (GM Jan. 28, p. 14).

However, according to BMO Capital Markets analyst Joel Jackson, as cited by the report, global operational capacity exceeds demand by over 10 million mt this year. In a normal situation, the potash market is oversupplied, he said, and believes Nutrien should hold back on any decision to expand “too much too fast.”

Moscow-based VTB Capital analyst Elena Sakhnova believes additional production from competitors will not fully replace Belaruskali/Belarusian Potash Co., which previously sold about 12.5 million mt of potash a year.

Nor does she believe Russian producers will rush to increase their output, citing speculation that Washington may grant a waiver to BPC’s U.S. buyers, essentially postponing sanctions from taking effect on April 1, according to the report.

EuroChem has no plans to accelerate ramp-up of new production, according to the report, citing a company spokesperson, while Uralkali declined to comment to the report on its plans.

U.K. CO2 Industry, CF Industries Reach New Deal

Eastern Cornbelt, News, News Briefs, United Kingdom

The U.K.’s carbon dioxide industry has come to an agreement with CF Industries Holding, Inc., Deerfield, Ill., to ensure a sustainable supply of CO2, the country’s Department for Business, Energy, and Industrial Strategy announced on Feb. 1. The existing agreement between CF and its industrial gas customers expired on Jan. 31 (GM Jan. 28, p. 29).

“The deal will enable CF Fertilisers’ Billingham plant in Teeside, northeast England, to continue to operate while global natural gas prices remain high. It means key sectors in the U.K., including food processing and nuclear power, are ensured supplies of CO2,” the business department said in a short media statement.

The new offtake and pricing deal with CF and its U.K. industrial gas customers, according to some U.K. media sources, could last until the spring. However, it is unclear if this is just conjecture on the basis that natural gas prices may ease with the onset of warmer weather.

CF has not commented publicly on the new agreement. A company spokesperson, in response to Green Markets’ inquiries,said only that “the Billingham complex remains operational and continues to sell CO2 on a contractual and spot basis.”

In its statement, the U.K. business department added: “In the longer term, the government would like to see the market take measures to improve resilience, and we are engaging on ways this could happen.”

CF first halted production of ammonia and CO2(a by-product of the ammonia production process) last September at its two U.K. manufacturing plants amid soaring natural gas prices, prompting fears of a CO2gas crisis in the U.K. last seen in 2018 (GM Sept. 17, 2021).

CF’s two U.K. plants – the other is at Ince, Cheshire – produce an estimated 60 percent of the U.K.’s commercial supply of the by-product gas.

After the government stepped in with a three-week financial bailout, CF restarted its Billingham plant on Sept. 21 (GM Sept. 24, 2021), and a subsequent fixed price agreement, brokered by the U.K. business department, was agreed to between CF and its U.K. CO2 customers on Oct. 11, running until the end of January (GM Oct. 15, 2021).

But CF has kept the Ince plant closed, and this week, once again, did not respond to GM’s enquiries about the company’s plans for the plant.

Back in early November, CF said it aimed to bring the fertilizer operations at Ince back online “in the next few weeks,” but would use brought-in ammonia (GM Nov. 5, 2021).

In addition to ammonia, CF’s two U.K. plants largely produce ammonium nitrate and NPKs.

Russia Bans AN Exports for Two Months

Ammonium Nitrate, News, News Briefs, Russia

Russia has imposed a ban on ammonium nitrate (AN) exports for two months, starting Feb. 2 until April 2, the government’s press service said on Tuesday, Feb. 1.

The move is to ensure that the country has enough product for its domestic season. Reports were circulating last week that the Russian government was mulling a temporary ban on AN exports (GM Jan. 28, p. 27).

“This is a temporary measure, and the remaining volume can be exported starting on April 2 when demand for ammonium nitrate on the domestic market passes its peak,” an Interfax report cited Russia’s First Deputy Prime Minister Andrei Belousov saying in the statement.

The temporary export ban will further exacerbate AN supply concerns, particularly among buyers in Brazil, who are the biggest offtakers of Russian AN.