Eastern Canada:
SOP Magnesia prices were unchanged at C$870-$980/mt FOB in the region in early January, depending on grade and location.
All posts by mickeybarb@charter.net
Potassium Thiosulfate
Eastern Cornbelt:
Potassium thiosulfate pricing remained at $700/st FOB Terre Haute, Ind., for the last reported offers.
Crops/Weather
Eastern Cornbelt:
Strong winds slammed parts of northern Illinois and northern Indiana at midweek, followed by brutally cold weather. Wind gusts up to 50 mph were reported, with temperatures falling from the 30s to the single digits on Jan. 5. Wind chills later in the week were expected to fall to the -10 range in some areas.
The arctic blast also hit central Indiana at midweek, with temperatures falling 25 degrees in a matter of hours. Highs later in the week were expected to top out in the upper teens, with wind chills in the single digits.
Northern Ohio was hit with 40-50 mph winds as well, along with several inches of lake-effect snow later in the week. The arrival of cold temperatures ended a spate of unseasonably warm weather in central Ohio, where sources reported more than four inches of rain during the last week of December.
In Michigan, 45-mph winds and 4-10 inches of snow were reported in central and southern areas of the state, with parts of the Upper Peninsula collecting up to a foot of snow. “We are still harvesting corn here in Michigan, and there are some acres of soybeans yet to go,” said one contact. “They were waiting for this freezing weather so they could get into the fields.”
Western Cornbelt:
A winter weather advisory was in effect for eastern and northern Iowa at midweek, with reports of gusty winds, blowing snow, and temperatures dropping to the low teens and single digits after highs in the upper-30s earlier in the week.
A winter storm warning was also issued in western Nebraska at midweek, with forecasts warning of 4-8 inches of snow and gusty winds. Wind chills reportedly fell to as low as -35 in locations such as Oshkosh, Lewellen, and Arthur on Jan. 5-6.
Parts of Missouri also got a shot of winter weather during the week. A winter weather advisory was issued for the Kansas City area at midweek, with up to two inches of snow reported, along with high winds that limited visibility.
Northern Plains:
Bitterly cold, snowy weather blanketed the Northern Plains during the first week of 2022. Snowfall totals in Minnesota at midweek included 4-5 inches in the Twin Cities and more than six inches in Duluth, with the entire state under either a wind chill advisory or warning as the week progressed. Lows were expected to drop to -20 in western areas of the state on Jan. 6.
North Dakota residents were bracing for wind chills down to -50 during the week, with midweek snowfall totals ranging from 2-5 inches, depending on location. South Dakota was also hit with winter weather advisories and wind chill advisories during the week due to high winds, blowing snow, and wind chills as low as -30.
Northeast:
Much of New England was under a winter storm warning late in the week, with forecasts warning of 4-6 inches of snow in many locations and up to eight inches in a few areas. The latest system arrived on the heels of an earlier storm that coated the region with freezing rain at midweek.
Wind chills in the single digits and low teens were reported across western New York and Pennsylvania at midweek. Forecasts warned of 3-8 inches of snow by Friday across western Pennsylvania and 2-6 inches in eastern locations of the state.
Maryland was also in the crosshairs, with another 2-4 inches of snow expected by Friday after a storm earlier in the week blanketed parts of the state with up to 3-5 inches of accumulation.
Eastern Canada:
Winter weather conditions were reported across Eastern Canada during the first week of the year. Strong winds lashed parts of southern Ontario at midweek, followed by lake-effect snow squalls that left more than 20 cm of accumulation in some locations.
Similar conditions were reported in southern Quebec, with 5-15 cm of snow reported along the St. Lawrence River and temperatures falling to -20 C during the week. A powerful nor’easter was in the weekend forecasts for the Maritimes, with forecasts warning of potential power outages from heavy snow, ice, and rain.
Much colder weather was on tap for the coming weekend, along with more snowfall. Some areas were preparing for up to 20-40 cm of accumulation by the weekend.
Nutrien’s Schmidt Gone After Eight Months
Nutrien Ltd., Saskatoon, announced on Jan. 4 that Mayo Schmidt had left his position as President and CEO and resigned from the Board of Directors. Schmidt had only been in the position since April 2021 (GM April 23, 2021), replacing Chuck Magro, who stepped down to pursue other opportunities.
Ken Seitz, Executive Vice President and CEO of Potash, was named the company’s interim CEO, with the company noting that he has over 25 years of extensive global leadership experience in the agriculture and mining sectors and was the former President and CEO of potash supplier Canpotex Ltd.
“Nutrien has delivered exceptional results in 2021 and is well positioned to continue this strong momentum into 2022,” said Russ Girling, Nutrien Board Chairman. “Nutrien has a talented and deep executive team, and we are confident that Ken Seitz and this team will continue to build on the organization’s record financial and operating performance.”
Girling said the Board will work with an executive search firm to begin a global search to select a long-term leader that will take the company into its next phase, and that it will consider both internal and external candidates.
A Nutrien spokesperson told Bloomberg it could not comment on details of Schmidt’s departure because of legal constraints. However, the company reiterated the change will not affect Nutrien’s strategic direction.
The Nutrien job gave Schmidt his third opportunity to run a public company in Canada. The executive, who briefly played for the Miami Dolphins in the 1980s, rebuilt agricultural company Saskatchewan Wheat Pool in the early 2000s after a restructuring under a new name, Viterra Inc., before it was bought by Glencore in 2012. He later became CEO of HydroOne Ltd., an electrical utility in Ontario.
The surprise departure raises questions about Nutrien just as it enjoys the biggest rally in fertilizer for years, which has fueled higher earnings and a 55 percent rally in its shares in 2021. The company is projecting full-year adjusted EBITDA between $6.9-$7.1 billion.
Scotia Capital Inc. analysts led by Ben Isaacson called the exit “abrupt” and “bizarre.”
“Investors are likely to penalize NTR due to perceived dysfunction at the Board and senior leadership levels,” he wrote in a note, referring to Nutrien’s stock ticker. “Accordingly, we expect the stock to come under pressure near term.”
Nutrien shares were off 5.71 percent Jan. 4 to close at $71.77. Shares closed at $69.25 on Jan. 6, down 9 percent since the announcement.
And despite the run up in Nutrien stock in 2021, sources noted that its performance lagged North American peers CF Industries Holdings Inc. and The Mosaic Co.
Later in a Jan. 6 note, Isaacson suggested that a “lack of execution” ultimately prompted Schmidt’s sudden departure. “During his eight months as captain of the ship, global fertilizer markets soared to highs not seen since 2007/08.” He said this created “a unique opportunity” for Nutrien’s Board and senior leadership team to use “a tidal wave of free cash flow” in 2021/22 to meaningfully increase mid-cycle EBITDA.
“We surmise this lack of execution (timing and scale) is ultimately what led to Mr. Schmidt’s departure,” he said. However, he said the ordeal will make the company stronger, with Schmidt’s departure viewed as “net positive” for the organization over time.
RBC Capital Markets said Nutrien has a solid foundation thanks to its well-run assets and strong financials, though the sudden CEO change raised questions about its management.
RBC said it is more constructive to focus on Nutrien’s asset base across the agriculture and fertilizer sector, and its day-to-day operations should not be impacted by the CEO change.
“We received many inbounds from investors seeking answers to a second sudden CEO departure in a short eight-month period,” RBC said. “However, as is often the case with these situations, we will likely never really know the full story.
“While we do not expect more official commentary on the departures, we think the Board and interim CEO Ken Seitz could help alleviate some concerns around the changes with more details on the company’s near-term focus and search plans for a permanent CEO,” continued RBC.
RBC believes there may be a silver lining to the unexpected management changes, as the new leadership may address issues related to its long-term strategic growth strategy.
Transportation
U.S. Gulf:
Travel restrictions continued to be reported through Bayou Boeuf Lock, limiting weekday movements to 7:00 p.m. through 7:00 a.m. nightly. Access was noted returning to a 24-hour schedule on Saturdays and Sundays, however.
A Coast Guard posting reported ongoing shoaling in the Houma Navigational Canal at Mile 7. As a safety precaution, drafts were limited to 11 feet at Miles 6-10.
Floodgate construction in progress at Bayou Chene limited movements to daytime hours only, Coast Guard data indicated. Bayou Chene was accessible daily between 7:00 a.m. and 7:00 p.m., with tows limited to 600 feet. Towing widths measuring above 54 feet wide were required to utilize an assist vessel. Delay warnings were reported in the 6-12 hour range.
Atchafalaya River travel through the Morgan City area was available on a restricted basis due to an ongoing shoaling event reported at Miles 113-116 of the waterway. The Coast Guard limited drafts to 10 feet, while vessels were also capped at 600 feet of length and 70-foot widths. Tows measuring longer than 400 feet were strongly advised to travel with an assist vessel.
Algiers Lock size restrictions remained in place in early January, with caps on both tow lengths and widths effectively limiting unassisted lockages to four standard barges or two 30,000 mt tankers per turn. Larger vessels were allowed to pass when locking with an assist boat.
Belle Chasse Bridge construction activities were projected to trigger intermittent delays up to 12 hours into late 2022. The structure is located at the West Canal’s Mile 3, near Algiers Lock.
Port Allen Lock delays were posted up to 12.5 hours for the week, while intermittent Bayou Sorrel Lock waits were reported in a wide 11-36 hour range. Boats passing Industrial Lock required up to 21 hours to pass, while Algiers Lock movements were recorded up to 10.5 hours.
Navigation through Bayou Boeuf Lock was delayed up to 32 hours on Jan. 3-4. Colorado Lock transits saw sporadic wait times of 5-16 hours, and Leland Bowman Lock delays were noted peaking at nine hours on Jan. 4.
Mississippi River:
Channel reinforcement efforts at the lower Mississippi River’s Mile 642 were scheduled to kick off on Jan. 5. The work, slated to continue into late February, was expected to slow southbound travel by up to 12 hours at a stretch.
River depths at St. Louis drifted from 3.26 feet on Dec. 31 to (-)0.6 feet on Jan. 5, leading to tightened draft restrictions. On the upper river, Locks 1-18 were closed for the winter navigation season, while Locks 19-27 remained open for lockages, including Lock 25, previously scheduled to shut Jan. 1-31 for seasonal maintenance.
Lock 15 is scheduled to return to navigation on March 3, followed by Locks 5 and 7 on March 11. Lock 5A, Lock 8, and Lock 10 are projected to resume service on March 17, with Lock 4 scheduled for March 21, marking a complete return to spring navigation on the upper Mississippi.
Delays were noted at 10 hours through Lock 22 during the week.
Illinois River:
Ice formation and low river levels were expected to require raised wickets at Peoria Lock and LaGrange Lock during the week. A requirement to utilize ice couplings was also imminent, reports indicated. Peoria Lock delays were quoted up to 12 hours on Jan. 6, while wait times at LaGrange Lock topped out at around five hours.
The Corps has scheduled a Brandon Road Lock repair and maintenance project for May 9 through Sept. 8. Navigation will be capped at 70-foot widths, and available during overnight hours only May 9 through Aug. 14. Movements will be completely unavailable Aug. 15 to Sept. 4, followed by a return to overnight-only travel on Sept. 5-8. The site is scheduled to resume normal operation on Sept. 9.
Ohio River:
An underwater obstruction reportedly prohibited use of the Dashields Lock auxiliary chamber during the week, blocking the chamber’s miter gate from normal operation. Minimal delays were noted on Jan. 5, as travel remained available via the site’s main chamber.
The Corps has proposed a main chamber repair shutdown at Hannibal Lock, tentatively set to run from July 5 through Oct. 8 and anticipated to relegate traffic to secondary-chamber use only. A Cannelton Lock closure has also been proposed between July 5 and Nov. 11, and is expected to force movements through the smaller secondary chamber.
Wilson Lock delays on the Tennessee River were quoted up to 22 hours for the week. Boats passing Kentucky Lock waited up to six hours to pass, Corps data indicated.
Bio-acoustic fish fence maintenance was expected to block movements through the Cumberland River’s Barkley Lock between 6:00 a.m. and 6:00 p.m. daily on Jan. 15-30. Extensive delays were predicted. Proposed maintenance at Cheatham Lock will limit navigation from May 16 through Aug. 4.
On the Allegheny River, Lock 6 continued to be closed to navigation due to a damaged miter gate anchorage.
EuroChem IPO Not Expected in 2022
EuroChem AG has no plans for an initial public offering (IPO) in 2022, according to an Interfax report citing Russian billionaire Andrey Melnichenko, who controls the company. He explained that it is more profitable to raise capital in other ways.
The Zug, Switzerland-based company has held preliminary discussions with potential advisers about listing as soon as 2022, sources told Bloomberg earlier this month (GM Dec. 10, p. 33). The company declined to comment at the time.
Tessenderlo to Build Plant in Ohio, Acquires European Port Assets
Tessenderlo Group, Brussels, has announced that its subsidiary, Tessenderlo Kerley Inc. (TKI), plans to construct a liquid fertilizer plant in Defiance, Ohio, serving the eastern Great Lakes region. The facility will focus on the company’s sulfur-based crop nutrition brands – Thio-Sul, KTS, and K-Row 23 – as well as sulfite chemistries for the industrial markets. The plant is expected to become operational in the first quarter of 2024.
“Our investment in this new manufacturing facility will service the local community and support the increased demand in the region,” said Russell Sides, TKI Executive Vice President. “This strategic venture not only combines excellence in process technology, but also diversifies our local market position, and strengthens our sustainability goals by bringing us closer to our customers.”
In other news, Tessenderlo Group has agreed to acquire the assets of B.V. Fleuren Tankopslag, a tank storage and transshipment company for liquid products located in the Port of Cuijk (the Netherlands). The acquisition is expected to be completed by May 1, 2022, at the latest. The company said the transaction will have no material impact on the results of Tessenderlo Group.
Once the deal is completed, the Fleuren Tankopslag operations will be integrated within its Tessenderlo Kerley International business unit, which supplies value-added liquid, soluble, and solid plant nutrition products. The company said the acquisition will further strengthen Tessenderlo Kerley International’s position in the Western European liquid fertilizer market.
It said while securing the longer-term business of Fleuren’s incumbent customers, it will also provide additional storage for Tessenderlo Kerley International’s portfolio of liquid fertilizers, including Thio-Sul, KTS, and ammonium polyphosphates.
In addition, its location by the Maas River and its close connection to the new Tessenderlo Kerley International plant that is due to be constructed in Geleen, the Netherlands (GM March 26, p. 33), will allow for easier and more sustainable connections for transport of Thio-Sul via waterways into the Netherlands, Germany, and France.
Construction works on the Geleen plant are planned to start in April 2022 and the factory is scheduled to be operational in the second quarter of 2023.
EuroChem Buys Majority Stake in Fertilizantes Heringer
EuroChem Group AG, Zug, Switzerland, has announced the signing by one of its subsidiaries of an agreement to purchase a controlling 51.48 percent share in Brazilian fertilizer distributor Fertilizantes Heringer SA, Viana, further strengthening the group’s production and distribution capabilities in Brazil.
Fertilizer Heringer has 14 storage, blending, and distribution units in the southeast, midwest, south, and northeast regions. It is the country’s fourth-largest distributor in terms of installed capacity, at more than 4 million mt/y.
The transaction price was R$554.6 million (US$97.4 million), or about R$20 per share (US$3.51). Half will be due at the closing date. Once the deal is complete, tagalong rights for the remaining shareholders will come into play, and EuroChem will tender to buy their shares at the same price.
EuroChem said it may consider delisting the company as part of the tagalong offer. At last report, Nutrien Ltd. and OCP SA both owned about 10 percent of Heringer. The Heringer family controlled the 51.48 percent sold to EuroChem.
The transaction is EuroChem’s third in Brazil in the past five years. In 2020, it bought the remaining stake in Fertilizantes Tocantins (FTO) (GM Aug. 21, 2020), which distributes about 4 million mt/y of fertilizer in the country. In August, it announced the purchase of the Serra do Salitre project (GM Aug. 6, p. 1, Sept. 10, p. 1) in Minas Gerais, which will add about 1 million mt/y of phosphate production by 2024.
“This acquisition, following antitrust approval, will enable EuroChem to better serve the total market of Brazil – from north to south – even more reliably, while providing more outlets for our full product line of standard and premium fertilizers,” said EuroChem Group Global Head of Sales and Distribution Charles Bendaña.
“It will also help the EuroChem Group to achieve higher efficiency in our shipping and logistics programs in order to provide reduced costs to our customers in Brazil, as well as increased netbacks to our global production facilities,” he continued. “Taken with the recent full acquisition of Fertilizantes Tocantins SA and the ongoing purchase of the Serra do Salitre phosphates project, this move will help anchor the group as a leader both locally and abroad.”
“With Heringer joining a South America distribution base that already includes EuroChem Fertilizantes Tocantins in Brazil and EuroChem Emerger Fertilizantes in Argentina, this deal, once approved, will cement EuroChem’s reputation as the crop nutrient supplier of choice across great swathes of the continent,” said Lieven Cooreman, EuroChem FTO CEO and Head of EuroChem’s Commercial Division in South America. “This naturally gives our customers added confidence in our ability to cater to any crop on any farm in a timely manner.”
SABIC Agri-Nutrients Co. – Management Brief
SABIC Agri-Nutrients Co., Riyadh, announced its first CEO, replacing the “Company President” position, as part of its new management organizational structure, the company said in a Dec. 20 filing to Saudi Arabia’s Tadawul.
Abdulrahman Shamsaddin has been appointed CEO and will take up the position on Jan. 1, 2022. Shamsaddin has held several leadership position at SABIC, the last of which was as Executive Vice President for Shared Services.
Fahd bin Misfer Al-Battar, SABIC Agri-Nutrients Co. President since May 1, 2021 (GM March 19, p. 27) has been appointed Chief Operations Officer.
SABIC owns a 50.1 percent stake in SABIC Agri-Nutrients Co.
K+S Secures Permit Through 2027
K+S Group has secured the discharge permit from the Kassel Regional Council until the end of 2027, providing further security for the production of mineral fertilizers and high-purity salt products at its Werra and Neuhof-Ellers production sites. The current permit expires at the end of 2021.
Under the new discharge permit, the maximum annual discharge of saline wastewater permitted is reduced to 5 million cubic meters, down from the permitted 6.7 million cubic meters in 2021.
In addition, a limit value for chloride of 2,000 milligrams per litre (mg/l) will apply at the Gerstungen gauging station from Jan. 1, 2022; in 2023, this limit drops to 1,820 mg/l. For the years 2024 and 2025, the maximum permitted salt concentration is 1,700 mg/l. In 2021, the limit was 2,400 mg/l.
K+S said the new permit follows the target values set in mid-November by the Weser River Basin Community (FGG Weser) for the river management period from 2022 to 2027, and therefore is limited until the end of this period.
The company added that the goal of no longer discharging process water from potash production into the Werra River from 2028 onwards remains unchanged.
It sees in particular storage and tailings pile-covering as the two key components for ensuring environmentally compatible disposal in the Werra-Fulda potash district in the long-term, and for continuously contributing to an improvement in the water quality of the Werra and Weser Rivers.