All posts by mickeybarb@charter.net

SABIC Agri-Nutrients FY2021 Profits Jump

Earnings, News, Saudi Arabia

SABIC Agri-Nutrients Co., Riyadh, reported a nearly four-fold jump in its net profit for the year ended Dec. 31, 2021, buoyed by an increase in selling prices of its products.

Net profit after Zakat and taxes for the year soared to SR5.23 billion (approximately $1.4 billion at current exchange rates), compared to SR1.29 billion a year earlier, according to a filing to the Saudi bourse, Tadawul.

Profit per share was up from SR3.11 to SR10.98, while revenues almost tripled, reaching SR9.59 billion, up from SR3.33 billion.

However, the company said profits were capped by an increase in inventory, as well as increased general and administrative expenses and Zakat provision.

SABIC-Agri-Nutrients Co., which is 50.1 percent owned by Saudi Basic Industries Corp. (SABIC), announced last week it had inked a binding agreement to acquire a 49 percent stake in Dubai-based agri-nutrient blender and distributor ETG Inputs Holdco Ltd. in a $320 million (equivalent to SAR1.2 billion) deal (GM Jan. 28, p. 1). The deal was reached with ETG Inputs Holdco’s parent, ETC Group, also based in Dubai.

Sinofert Eyes Significant FY2021 Profits Increase

China, Earnings, News

Sinofert Holdings Ltd. expects the group to record a profit attributable to owners of the company of between RMB800 million and RMB900 million (between approximately $126 million and $141 million at current exchange rates) for the year ended Dec. 31, 2021, the company said in a Jan. 28 filing to the Hong Kong Stock Exchange.

If achieved, this would mark a 24 and a 40 percent increase on the RMB644 million profit attributable to owners of the company reported for the year ended Dec. 31, 2020.

Sinofert attributed the significantly improved operating result for FY2021 to the rise in market prices for fertilizers, the deepening business collaboration with Switzerland-based and Chinese-owned Syngenta Group Co. Ltd., the controlling shareholder of the company, and maintaining “professional and lean” operations.

Sinofert expects to publish its FY2021 annual results in March.

BHP Unification Scheme Takes Effect

Australia, News, News Briefs

BHP Ltd., Melbourne, said the unification of its corporate structure became effective at 9 p.m. (GMT) on Jan. 28, and the entire issued and to-be-issued share capital of Plc will be owned by BHP Group Ltd.

The mining group secured U.K. Court sanction on Jan. 25 for the Plc scheme of arrangement to effect unification (GM Jan. 28, p. 31), after it won shareholder approval for the unification on Jan. 20 (GM Jan. 21, p. 27).

BHP first announced its intention to unify the DLC structure last August (GM Aug. 20, 2021), and secured Board final approval for the single listing in December (GM Dec. 3, 2021).

The unification could facilitate the mining major’s return to large-scale M&A activity after sitting dormant for more than a decade (GM Jan. 21, p. 1). BHP, once mining’s most aggressive dealmaker, is reported to be positioning itself for a return to large-scale M&A, and Nutrien Ltd., Saskatoon, may be a target, according to two separate Bloomberg reports last month, citing different analysts.

Pakistan’s Descon Engineering Secures Qafco Turnaround Contract

Ammonia, News, News Briefs, Pakistan, Qatar, Urea

Pakistan’s Descon Engineering has won a four-year term contract from Qatar Fertiliser Co. (Qafco) to undertake the turnaround of its six ammonia and urea plants at Mesaieed, Qatar.

According to the Lahore-based engineering firm, this is the first time Qafco has awarded the turnaround contract for all six plants to a single contractor.

The estimated man hours for the first turnaround are 222,000, Descon said on its website. It has not disclosed the value of the contract.

Qafco’s six ammonia and urea plants have total production capacity of 3.8 million mt/y for ammonia and 5.6 million mt/y for urea, according to the producer’s website. The company also operates four granular urea units with a combined capacity of 12,900 mt/d. Qafco also operates two urea formaldehyde (UFC) units, as well as a melamine plant at Mesaieed.

K+S Raises FY2021 EBITDA Guidance; Cash Flow Above Expectations

Earnings, Germany, News

K+S Group, Kassel, said on Feb. 4 full-year 2021 earnings and cash flow exceeded the previous outlook and expectations, mainly on higher average prices in the Agriculture customer segment in the fourth quarter and a better-than-expected one-off effect from the REKS waste management joint venture transaction.

The company said full-year EBITDA of continuing operations comes to about €960 million (approximately $1.09 billion at current exchange rates) based on preliminary figures, and compares with €266.9 million for FY2020.

This latest outlook beats the previous guidance of €830 million (GM Dec. 3, 2021) and Vara consensus expectations of €863 million, both of which include the REKS transaction.

K+S said the additional non-cash one-off effect from the REKS transaction, which was completed in December (GM Dec. 31, 2021), now amounts to around €220 million, rather than the previously expected €200 million.

Higher sales of de-icing salt due to adverse weather conditions have also contributed to the EBITDA raise.

Adjusted free cash flow is expected at around €100 million, above the Vara consensus estimate of €52 million.

K+S will publish its full-year 2021 financial results on March 10.

U.S., Europe, Look Worldwide for Gas Supplies if Russia Turns Off Taps

Europe, Featured, India, Japan, LNG, Middle East, News, Russia, South Korea, U.S.

The U.S. and European allies are scouting for surplus natural gas to send to Europe in the event conflict erupts over Ukraine, according to a Bloomberg report, citing sources familiar with the matter.

Talks so far with China have been limited, according to the report, despite signals last month from that nation that at least one major supplier of liquefied natural gas (LNG) “was offering” to sell spot cargoes to the European market (GM Jan. 21, p. 1).

U.S. and European officials have also spoken to officials in Japan, South Korea, and India about diverting gas supplies to Europe, as well as to gas producers in Qatar, Nigeria, Libya, and Egypt, according to the report. However, unlike oil, the global natural gas market has little spare capacity, and it is difficult to extract more gas at short notice.

European Union (E.U.) officials have said they are discussing possible swaps of long-term gas contracts with Asian countries.

There are concerns that Europe may run short of gas should Russia invade Ukraine, a move Russian President Vladimir Putin has repeatedly denied he is planning. U.S. and European officials are concerned that Moscow may react to any retaliatory economic sanctions in the event of an invasion by turning off the gas taps to Europe, or further reducing Russian gas flows to the region.

Europe is dependent on Russia for around 40 percent of its natural gas supplies. The region’s gas prices have soared over the past 12 months amid reduced Russian gas flows to Europe (GM Jan. 14, p. 29; Jan. 7, p. 1; Dec. 31, 2021).

Chemtrade Reconfigures Operating Segments; Provides Guidance for 2021-2022

Canada, Earnings, News

Chemtrade Logistics Income Fund, Toronto, reported that it has reconfigured its operating segments due to the recent sale of two of its specialty businesses (GM Oct. 1, 2021). Sulphur Products and Performance Chemicals (SPPC) will be combined with the remaining products of the Water Solutions and Specialty Chemicals (WSSC) segment to form a new segment called Sulphur and Water Chemicals (SWC). The Electrochemicals (EC) and Corporate segments will remain unchanged.

In other news, Chemtrade said its guidance for 2021’s adjusted EBITDA at C$245-$260 million is now expected to be at or above the top of the range. 2022 guidance is $265-$295 million.

Fire Destroys Winston Weaver Plant in North Carolina; AN Inventory Prompts Three-Day Evacuation

Ammonium Nitrate, Featured, News, Southeast

A fire on Jan. 31 at the Winston Weaver fertilizer terminal on the north side of Winston-Salem, N.C., completely destroyed the facility and prompted a three-day evacuation order for residents and businesses within a one-mile radius of the plant due to concerns about a possible explosion triggered by ammonium nitrate stored at the site.

The fire was first reported by a passerby at 6:45 p.m. on Jan. 31. According to city officials, only one of the plant’s 36 employees was onsite at the time of the 911 call, and all employees were safe and accounted for.

Firefighters fought the blaze for 90 minutes before pulling back from the site after they observed what they believed was off-gassing from a railcar onsite that contained 90 tons of ammonium nitrate. The 65,423-square-foot warehouse at the facility, which was engulfed in flames, reportedly contained another 500 tons of ammonium nitrate, as well as a reported 5,000 tons of finished fertilizer products.

The City of Winston-Salem then issued one-mile evacuation zone around Weaver’s 4440 North Cherry Street address, affecting almost 6,500 residents, or 2,497 households. “Don’t wait for something to happen,” the city posted on Twitter. “Something has happened. Now is the time to get out.” Residents were reportedly alerted through a reverse 911 call, as well as from public address systems on fire trucks navigating roads within the evacuation zone.

The evacuation order also affected nearby Wake Forest University, which cancelled classes on Feb. 1 and then extended the cancellation to Feb. 2-3 after authorities continued to warn of a possible explosion as the fire burned itself out. More than 200 minimum security inmates at the Forsyth Correctional Center were evacuated as well.

“Ammonium nitrate has a history of being unpredictable in the way that it reacts to heat, the way that it responds to pressure, to shock. It is sort of an enigma, and we are giving it due regard because of its history,” said Winston-Salem Fire Chief William “Trey” Mayo at a press conference on Feb. 2. “At the beginning of this incident, there was enough ammonium nitrate on hand for this to be one of the worst explosions in U.S. history.”

Mayo said 90 firefighters and approximately 150 personnel from other agencies responded to the blaze, including hazmat teams to monitor air quality. The 8.46-acre site belched thick smoke throughout Feb. 1-2 as authorities used an unmanned ladder truck to pump water on the site and employed drones and helicopters to monitor the smoldering fire. Representatives from some 25 local, state, and federal agencies were reportedly onsite to monitor events.

While an initial estimate suggested the evacuation order would be reevaluated in 36-48 hours, Mayo on Feb. 2 said the city would maintain a “firm stance” on the one-mile evacuation radius for an “undetermined time.” North Carolina Gov. Roy Cooper was also on hand for a press briefing on Feb. 2.

A weather change on Feb. 2-3 brought rain and colder temperatures to the Winston-Salem area, however, which helped extinguish the flames and lower the danger of a potential explosion. At midday on Feb. 3, Mayo told reporters that the risk of an explosion had “greatly diminished,” and firefighters working in groups of 12 and wearing protective gear were beginning to work at the site.

Helmet-cam footage from one of the firefighters showed charred rubble, twisted wreckage, and an utterly gutted facility, with little evidence of any remaining fertilizer products. Mayo said discussions were underway on how to safely remove the railcar, but crews were able to inspect the car and observed that the ammonium nitrate inside was “dry, white, and granular, as we expect it to be,” he said.

At 4:44 p.m. on Feb. 3, the city announced that the evacuation order would be reduced to a radius of 660 feet as of 8 p.m. that evening. With no houses located within the reduced zone, the Winston-Salem Journal reported that all residents would be allowed to return to their homes.

Winston Weaver is owned by Meherrin Fertilizer Inc., Four Oaks, N.C. Meherrin’s website lists the Winston Weaver facility as one of approximately two dozen terminals operated by the company in the Eastern U.S. The website describes Winston Weaver as a manufacturer of Weaver Ammoniated Fertilizer and a handler of potash, DAP, K-Mag, and blended fertilizer.

Winston Weaver’s website said the company was founded in 1929 and the plant was built in 1939, officially opening for business in January 1940. The list of bagged fertilizer products sold under the Weaver brand include 34-0-0 for lawn and gardens, 27-4-7 slow-release fertilizer, pelletized limestone, and “all purpose” plant food products sold in 8-8-8, 10-10-10, 13-13-13, and 17-17-17 blends. Local news reports said the company is a bagged fertilizer supplier for Lowe’s home-improvement stores throughout the Southeast.

The cause of the fire remains under investigation. Attempts by Green Markets to reach Meherrin Fertilizer or Winston Weaver for comment were unsuccessful. The Winston-Salem Journal reported that the facility passed a fire inspection as recently as December 2021, with no hazards or violations reported. Mayo said the building was not equipped with fire sprinklers.

Winston Weaver announced that it is contributing $100,000 to help the city recover from the fire. Company representative Andrew Carroll spoke with reporters on Feb. 1, confirming the safety of all 36 employees and the company’s commitment to their security. “We’re going to continue to take care of them,” he said.

“In the next few days, we’re going to stay here and work with the EMS first responders, working closely every hour,” he added. “We have people on the grounds here with EMS, trying to explain exactly what’s where in the plant and just be as much help and provide as much information as we can. We will continue to work with the community and the people who have been displaced. That’s our number one goal, which is to take those who have been displaced and get them back in their homes as fast as possible.”

Carroll spoke with reporters again on Feb. 3. “We met with all 36 employees today, and we’re going to pay those employees for a month,” he said, noting that some had been with the company for more than 30 years. “And we’re helping them get jobs. Some of them have already been placed in jobs with other industries similar to Winston Weaver. We’re just going to work with them and do the best we can to support them.”

Carroll also expressed gratitude to the company’s customers, suppliers, and competitors for offers of help and support. “The support that we felt from our customers, our suppliers, and even our competition has really showed us how much of a family-owned business this feels like, and how much support that we do have in the community,” he said.

The Fertilizer Institute (TFI), which was hosting its Annual Business Conference in Orlando, Fla., when news of the fire broke, issued a statement on Feb. 2 saying its “thoughts and prayers are with the citizens and first responders” in Winston-Salem.

Kathy Mathers, TFI Vice President, Public Affairs, told Green Markets that the trade association had been “facilitating the sharing of industry technical expertise on ammonium nitrate with local emergency responders” in Winston-Salem. “We are fortunate to have members who have been quite generous in this regard,” she said.

“Different members of our team have been in almost constant contact with the folks at Weaver to help share any and all information that may be helpful,” added Jason Troendle, TFI’s Director, Market Intelligence and Research.

The August 2020 explosion in Beirut, Lebanon, and the deadly 2013 ammonium nitrate explosion in West, Texas, were front and center in the minds of emergency responders in Winston-Salem.

“The quantity of ammonium nitrate they had on hand (in Texas) was 240 tons. When this fire began last night, we had 600 tons on site,” Mayo said. “So, if that doesn’t convey the gravity of this situation and how serious folks need to take it, I don’t know how else to verbalize that.”

Ammonia

Ammonia, Black Sea, Eastern Cornbelt, India, Indonesia, Market Watch, Middle East, Northwestern Europe, South Central, Southern Plains, Tampa, Turkey, U.S. Gulf, Western Cornbelt

U.S. Gulf/Tampa:

Tampa anhydrous ammonia for February continued at $1,135/mt CFR. Market players said the jury is still out for February, noting that the $20/mt increase for January was relatively small compared to the leaps posted in prior months.

Eastern Cornbelt:

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

Western Cornbelt:

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

Southern Plains:

The ammonia market was quoted at $1,250-$1,300/st FOB production points in the region for prompt or prepay, with the low at Verdigris and Pryor, Okla., and the upper end reported at Coffeyville, Kan. The last offers FOB Enid, Okla., were pegged at $1,275/st FOB for 1Q and spring tons, while prompt truck tons at Beaumont, Texas, remained at $1,050/st FOB.

South Central:

The ammonia market remained at $1,000-$1,050/st FOB Gulf Coast terminals for truck offers, depending on location. No prompt or forward prices were reportedly being offered at El Dorado, Ark., Midway, Tenn., or Cherokee, Ala.

Black Sea:

Sources said the minor increase in pricing in Tampa and the slight drop in the Baltic price have buyers looking to push the price below the current low-end of the range of $1,100/mt FOB. However, the lack of any spot material in the area ruled out any price testing.

Limited tons out of Yuzhnyy are expected for a while. Traders said the pipeline that normally feeds material to the port is now running at a slower rate than last month. The ammonia arriving at the port facilities is reportedly already spoken for.

Northwest Europe:

Baltic suppliers have settled on a February price of $1,115/mt FOB, down about $25/mt from the January price. Sources said the price drop is such a small percentage of the total cost that the best they can figure is that maybe ammonia prices have reached their peak and may be ready for a drop – or at least a plateau.

News of additional tons of varying amounts from Europe and North Africa gave buyers support in their efforts to stem ever-rising prices. However, gas prices remain high in Europe, leaving the production cost of ammonia around $1,100/mt. Until natural gas prices dramatically drop, further reductions in ammonia prices will be difficult to achieve, said sources.

The move in the Baltics has not yet affected the Northwest Europe price. Sources expect the current $1,180-$1,250/mt C&F price to come off at least $25/mt in the next week or so.

Middle East:

Supplies of ammonia out of the Arab Gulf remain tight, with no opportunities for spot deals to move the price off the $900/mt FOB level achieved several weeks ago. One trader noted, however, that occasionally a few small lots of about 5,000 mt are made available but quickly snapped up, with both sides remaining quiet about the final price.

The material being shipped out of the region is tied to contracts and formula-based prices. Based on the current estimate for contract tons into India, sources said the price from the Arab producers would be about $850/mt FOB. However, that rate is only available for the contract holders.

Reports circulated this week that Ma’aden was currently in the commissioning phase of its new plant. Production for export is expected to begin in late March. If the plant faces no further delays, sources figured the first full cargo might be shipped out in early April.

The facility has a rated production capacity of 600,000 mt/y. The presence of this new product will ease pressure on the regional producers to fulfill existing contracts and to reach out to some spot buyers.

India:

Demand from India seems to have eased off. Sources said reduced demand for ammonia from the country was expected after reports circulated that the DAP producers will be taking a series of maintenance turnarounds in the next couple of months.

Indonesia:

Exports of ammonia for 2021 were reported at 1.8 million mt, up 9.5 percent from 2020 exports of 1.6 million mt, according to Trade Data Monitor.

The main buyers in 2021 were South Korea with 571,000 mt, accounting for 32 percent of Indonesian exports; China with 334,000 mt, for 19 percent of the sales; and Taiwan with 309,000 mt, for 17.5 percent of Indonesian exports. The Chinese sales were down from 2020, when 498,000 mt, or 31 percent of Indonesian exports, went to China.

December 2021 exports were up 11 percent, to 136,000 mt from December 2020 sales of 123,000 mt. The December exports represented a bounce back from November 2021 sales of 98,000 mt, reaching a level closer to the monthly export rate of 147,000 mt.

Turkey:

Imports of ammonia for 2021 were reported at 839,000 mt, down about 31 percent from 2020 imports of 1.2 million mt, according to Trade Data Monitor.Russia was the dominant supplier with 525,000 mt, representing about 62 percent of the ammonia imports. In a distant second was Algeria with 78,000 mt.

December 2021 imports were down 22.5 percent, to 78,000 mt from December 2020 imports of 101,000 mt.