All posts by mickeybarb@charter.net

Brazil Fertilizer Plan Expected in December

Brazil, News, News Briefs

Brazil’s federal government plans to release details in December of its National Fertilizer Plan, which is aimed at reducing Brazil’s dependence on imports. According to the Ministry of Agriculture, the goal is to reduce external dependence over 30 years, which today is approximately 85 percent, to 60 percent.

While the actions will not solve the current crisis, they are seen as important to mitigating the risks to the country in the future. Among the proposed actions are: tax incentives for national production, mapping of possible areas of mineral exploration, debureaucratization of the production chain, credit lines for investors in the sector, incentives for research and development of new technologies, and campaigns aimed at guiding the use of fertilizers optimally in the field.

Urea

Africa, Black Sea, Brazil, China, Eastern Cornbelt, India, Indonesia, Market Watch, Middle East, Pakistan, South Central, South Korea, Southeast, Southern Plains, U.S. Gulf, Urea, Western Cornbelt

U.S. Gulf:

Barges firmed to $800-$815/st FOB, but pricing was reported to have topped out at the $815/st mark and moved lower toward $800/st FOB as the week progressed. The week-ago range was $790-$812/st FOB.

Eastern Cornbelt:

Urea prices continued to inch higher in the Eastern Cornbelt. New terminal prices were up another $5/st from last week and included $850-$865/st FOB Cincinnati, Ohio, and other Ohio River terminals, and a firm $865/st FOB Ottawa, Ill.

Western Cornbelt:

The urea market remained at a firm $850-$875/st FOB in the Western Cornbelt, with the low reported at Caruthersville, Mo., and the high in Iowa. The St. Louis, Mo., market was unchanged at $860-$870/st FOB at midweek.

Southern Plains:

Urea pricing in the Southern Plains had reportedly firmed to $840-$880/st FOB at mid-month, up another $10/st at the top of the range and a full $100/st or more above late-October levels. The low was confirmed at Houston, Texas, with the Catoosa/Inola, Okla., market pegged in a broad range at $855-$880/st FOB, depending on supplier.

South Central:

Urea pricing in the South Central region jumped to $820-$865/st FOB at mid-month, up $15-$20/st from the prior week and more than $100/st higher than late October levels, with the low confirmed at Convent, La, and the high at Shreveport, La. Other terminal prices included $845-$850/st FOB Memphis, Tenn., and $855/st FOB Arkansas River terminals.

Southeast:

The urea market reportedly jumped to $860-$880/st FOB port terminals in the Southeast, up another $25/st from the previous week and a full $130/st higher than late-October pricing levels, with the low confirmed at Savannah, Ga., and the high at Wilmington, N.C.

India:

After giving traders and producers the weekend to consider its counterbid, IPL issued awards for about 1.6 million mt of urea, all to be shipped by Dec. 31.

Awards were issued to 13 trading houses for a total of 1.5 million mt, with 835,500 mt going to East Coast ports at $998.50/mt CFR, and 665,250 mt to the West Coast at $981.64/mt CFR. An additional 95,000 mt was awarded to producers Muntajat and SABIC at $959.06/mt FOB.

The purchase of the urea alone will cost about US$1.6 billion. Once the subsidy that ensures farmers only pay about $72/mt is paid, the cost to the Indian treasury will be about $3.1 billion at a time when there are already reports of reduced income because of COVID-related shutdowns.

The urea will come from a wide range of non-traditional sources. Cargoes are slated to come from Nigeria, Baltic ports, Indonesia, and North Africa. Traditional sources from the Arab Gulf are also included. In some cases, the high price paid by India and a softening freight market make these unusual deals possible.

Sources said some shipments to India will be done at the expense of other buyers, such as Brazil.

Awards to Traders
Awarded Company Quantity (mt) Discharge Coast Source
Ameropa 209,000 East Coast Oman-Saudi Arabia-Baltic-Black Sea-Southeast Asia
188,600 West Coast
Samsung 92,000 East Coast Egypt-Black Sea-Baltic-Indonesia
142,000 West Coast
Fertiglobe 180,000 East Coast UAE-Egypt
Dreymoor 50,000 East Coast Baltic
50,000 West Coast
Koch 49,500 East Coast Egypt-Nigeria
50,000 West Coast
Keytrade 97,500 West Coast Egypt-Nigeria
Swiss Singapore 45,000 East Coast Arab Gulf
45,000 West Coast
OCI/Continental 85,000 East Coast Egypt-Algeria
Midgulf 50,000 East Coast Saudi Arabia
OQ Trading 47,150 West Coast Oman
Transglobe 45,000 East Coast
EuroChem 45,000 West Coast Black Sea
Amber 30,000 East Coast

Producer Muntajat received an award for 45,000 mt and SABIC received one for 50,000 mt. The purchase will give Indian buyers some breathing room. In the run-up to the tender, India was about 3 million mt behind in its urea purchases. The 1.6 million mt to be delivered in January 2022 will take the deficit down to 1.5-2 million mt.

The next tender will most likely be helped by NFL, which was recently given permission to import urea. Sources said the NFL permission, however, is expected to end with the fiscal year in March 2022. Therefore, said one trader, it needs to move quickly to take advantage of the import opportunity.

Sources said the next tender will most likely be called by Dec. 15, but others said the call could wait until the first week of January, saying the later date gives more time between tenders and allows the market to cool off. The rest of the industry, however, responded that the longer the tender is delayed, the greater the desperation grows to fill a growing deficit of urea in India.

Besides, said traders, there is no evidence that urea prices are looking to calm down as long as China remains out of the global market and as long as the governments in Russia and Egypt argue for restrictions on exports to support local market demand.

A tender by RCF to settle a long-term contract of 1 million mt/y for three years closed on Nov. 17 with only two participants. The tender rules allowed only producers with production capacity of 2 million mt/y, which limited the number of companies that could participate. Muntajat and Fertiglobe were the only two producers who submitted offers. Sources said they offered 500,000 mt each instead of the 1 million mt that RCF wanted.

Sources said no pricing ideas were released by RCF. The general consensus is that the producers were offering the tons on a formula basis that would allow for price adjustments with each cargo shipped. The RCF tender was seen as a move to ease the fiscal pressures caused by a steady flow of public tenders.

Middle East:

Two producers – Muntajat and SABIC – settled with RCF for a total of 95,000 mt at $959.06/mt FOB. The estimated netback from the Arab Gulf tons being sold through traders into India shows a price in the low-$950s/mt FOB.

The new range of $950-$959/mt FOB showed a slight movement up in pricing from the previous week, but a dramatic jump from the Nov. 1 RCF tender that was only for producers and was settled at $923/mt FOB.

Egyptian producers kept pushing up their prices. Sources reported that Abu Qir sold 50,000 mt to be used in the IPL tender at $930/mt FOB. KIMA also reported a sale of 6,000 mt at $945/mt FOB.

Reportedly, producers are now telling potential buyers that December tonnage is limited. They are also pushing for $965-$970/mt FOB. Traders said they would be surprised if the producers do not achieve those levels next week.

China:

Some industrial grade and standard prilled urea was allowed to be shipped out of China. Sources said the 18,700 mt was already in a bonded warehouse when the deadline to block exports arrived on Oct 15. Reportedly the tons are headed for South Korea, which is facing a severe shortage of urea necessary for its emissions control program.

Rumors that the move might lead to a further easing of the export ban started circulating right away. However, most traders said the rumors were based more on the hopes of buyers than any concrete information. The general consensus among global traders is that China will maintain its restrictions on urea exports through the first quarter of 2022.

The estimated price to China, based on the East Coast price into India, would be $960-$970/mt FOB. However, to be clear, no actual sales took place at that level.

Indonesia:

Sources reported a few small deals that reflect a price in the low-$950s/mt FOB. Some of the sales of Indonesian product into the Indian tender may be covered under these deals, and traders said some could also be early purchases when the price was closer to $500/mt FOB.

There were a number of delays in moving out tons purchased several months ago for October and November shipping. These tons now seem to be part of the urea going to India at much higher prices.

Reports circulating around the world that Indonesia sold a cargo for $1,000/mt FOB were dismissed by traders in the area. The deal, they said, came out of Malaysia and was an outlier to the general market.

No new exports are expected for the rest of the year. Sources said the export permits have all been used up for 2021, and even if producers asked for additional permits for December, the government would be reluctant to issue them. Sources said the focus of the government overseers is first to the domestic market.

The Kaltim V plant is slated to go down for 30 days at the end of the month.

Black Sea:

About three cargoes are coming out of the Black Sea for the Indian tender, with some from the far eastern shores of Georgia. Reportedly, one trader is looking for a vessel to pick up material in Poti for India’s West Coast.

Sources said the freight from Yuzhnyy to West Coast India is about $50/mt, leaving the netback at $930-$932/mt FOB. Some material may come from Yuzhnyy, because the higher price for the product and stabilizing freight rates makes moving some tons out of Yuzhnyy possible.

Pakistan:

The TCP tender for 100,000 mt closed on Nov. 22. Sources said the buyer will face prices above $1,000/mt CFR.

Fulfilling the tender may be a problem, said traders. The tender documents call for shipment within 20 days of the issuance of a letter of credit. Nailing down 50,000 mt for the first lot in the tender by the end of November – assuming a rapid LC issuance – would be difficult.

South Korea:

January-October 2021 urea imports were reported at 751,000 mt, up 5 percent from the 713,000 mt imported during the same period in 2020, according to Trade Data Monitor. The single largest supplier was China at 607,000 mt.

October 2021 imports were reported at 48,000 mt, down 27 percent from 66,000 mt in October 2020. Only August showed a lower import number so far this year.

Lower numbers of tons from China will show up in the November trade tables. China began restricting urea exports on Oct. 15, and only material with cleared paperwork by that date was allowed out. In the past week, however, China has allowed some industrial grade urea to be exported to deal with a shortage of product in South Korea for its emissions control program.

Brazil:

Urea prices at Paranagua remain relatively stable at $850-$900/mt CFR, despite the price increases seen around the globe. Sources said the closing of the Indian tender with its take of 1.6 million mt, some of which may have been initially pledged to Brazilian buyers, will eventually have an impact on the Brazilian market. For now, sources said the already high price is making any kind of deal difficult to make.

Prices in Rondonopolis have strengthened a bit as news of the high prices paid by India filter inland. Sources now put the local market at $1,000-$1,096/mt FOB ex-warehouse. Any deals being closed are only coming when the buyer needs the product immediately. No one seems to be in the mood for taking any serious forward position.

The barter rate for 1 mt of urea remained steady at 125 bags of corn.

Ethiopia:

The EABC granular urea tender for 800,000 mt closed Nov. 19 with no offers. The tender called for multiple cargoes to be shipped through 2022. The tender was called after an Oct. 29 tender closed with only one offer, which was later disqualified.

Sources said many international traders are hesitant to participate in the Ethiopian tenders because of past issues securing financing.

IPL Beats Estimates; Waggaman EBIT Off 89 Percent, Fert Asia Pacific Up Ten-Fold

Ammonia, Ammonium Nitrate, Australia, Earnings, News

Incitec Pivot Ltd. (IPL), Southbank, Australia, reported a 91 percent increase in net profit after tax (NPAT) to A$358.6 million, excluding individually significant items (IMIs), for the year ended Sept. 30, 2021, beating the average analyst estimate of A$295.8 million, according to a Bloomberg Consensus (range A$196.0 million to A$391.0 million).

Statutory FY2021 NPAT including IMIs was up 21 percent, at A$149.1 million. EBIT before IMIs increased by 51 percent, to A$566.4 million, while revenues grew 10 percent year-over-year, to A$4.35 billion.

IMIs totaled A$209.5 million after tax and included an A$79.4 million after tax (gross: A$107.4 million) non-cash impairment of the Cheyenne, Wyo., manufacturing assets and an A$58.4 million after tax (gross: A$83.5 million) cash cost for the planned closure of the Gibson Island, Brisbane, manufacturing plant at the end of calendar 2022, and an A$71.7 after tax (gross: A$102.5 million) non-cash impairment of the Gibson Island assets. The plans for the Gibson Island closure were announced last week (GM Nov. 12, p. 1).

While the forecast costs of the closure of the Gibson Island plant have been included as an IMI in the FY2021 results, the majority of the cash costs associated with the closure are expected to be incurred in FY2023, the company said.

FY2021 was also a heavy period for turnarounds, with the impact of COVID-19 causing some activity to be deferred from FY2020 to FY2021. The four turnarounds undertaken during the year (Mt. Isa, and Moranbah, Queensland; St. Helens, Ore.; and Waggaman, La.) had a negative impact on earnings of A$122 million. The results were also impacted by an A$79 million hit from unplanned outages, primarily in North America.

“The strong full-year results reflect the strength of the second half, with strong pull through from technology in explosives and a recovery in our end markets, as well as our Fertilisers business capturing the upswing in commodities prices,” said IPL Managing Director and CEO Jeanne Johns.

Selected financials for year ended Sept. 30

A$ million 2021 2020 % change
Revenue 4,348.5 3,942.2 +10
EBIT excluding IMIs 566.4 374.5 +51
NPAT excluding IMIs 358.6 188.2 +91
IMIs after tax (209.5) (64.8) (223)
Statutory NPAT 149.1 123.4 +21
Cents per share 18.5 10.9  

IPL’s Dyno Nobel Americas (DNA) reported an 18 percent fall in FY2021 EBIT, down to US$189.9 million from the year-ago US$230.8 million. Revenue increased 5 percent, to US$1.59 million from US$1.51 million the previous year.

The business segment’s EBIT took a big hit from an extended turnaround and unplanned outages at its Waggaman operation during the fiscal year. Waggaman’s EBIT was just US$3.6 million in FY2021, versus the prior year US$32.4 million.

As previously reported, the FY2021 turnaround of the ammonia plant impacted earnings by US$58 million, while the outage related to the shutdown ahead of Hurricane Ida and a minor hurricane-related outage earlier in the year was US$21 million. Excluding the impact of the planned turnaround and adverse weather events, additional unplanned outages had a negative earnings impact of US$19 million.

Waggaman produced 437,200 mt of ammonia in FY2021 (FY2020: 729,000 mt), 40 percent less year-over-year, while sales of ammonia from the plant were 23 percent lower on the year, at 563,500 mt (FY2020: 730,000 mt). The company replaced shortfalls in produced ammonia by third-party supplies.

Post turnaround and post the outage from Hurricane Ida, the company said the plant has been operating reliably and in line with its 800,000 mt/y nameplate capacity. IPL said it expects the plant to continue to run at nameplate capacity in FY2022.

However, as previously disclosed by the company, the replacement of the cooler at the plant will be required in the next 6-18 months. An outage of up to three weeks is expected during FY2022 or FY2023 to allow for installation. The company emphasized that to date, the cooler has performed “with no signs of deterioration.”

DNA’s Agriculture & Industrial Chemicals’ (Ag & IC) EBIT jumped to US$10.9 million, up from US$1.3 million in FY2020, while revenues increased 6 percent to US$133.5 million. FY2021 earnings were negatively impacted by US$11 million due to a planned outage at the St. Helens plant, minor production issues, and additional depreciation.

Urea and ammonia production from St. Helens fell 19 percent and 16 percent, respectively, mainly due to the planned turnaround.

Regarding manufacturing performance elsewhere in the Explosives and Ag & IC businesses in FY2021, nitric acid production at the Louisiana, Mo., plant decreased 14 percent due to an unplanned outage caused by a blade failure on the axial compressor.

Cheyenne ammonia output was down 5 percent year-over-year due to an unplanned outage caused by a bearing failure on the reciprocal compressor, but nitric acid production increased by 4 percent.

The A$107.4 million before tax non-cash impairment of the Cheyenne plant noted above is related to the impact on the plant of the further structural decline in thermal coal markets. It specifically relates to the operation’s nitric acid utilization rates. IPL plans to reconfigurate the plant to reduce nitric acid production capacity in line with lower market volumes.

A planned turnaround at Cheyenne in the second half of FY2022 is expected to result in 6-8 weeks of lost production.

IPL’s Fertilisers Asia Pacific posted a big jump in EBIT in FY2021, reaching A$268.4 million, up from the year-ago A$26.2 million. Revenue increased by 26 percent, to A$1.89 billion against A$1.50 million a year earlier.

Sales volumes grew 3 percent to 3.22 million mt, up from FY2020 sales of 3.14 million mt, and, according to the company were the highest sales volumes since 2005. The company cited generally favorable agronomic conditions, with La Niña rain events increasing soil moisture and water storage levels as driving the increase.

In terms of production, ammonium phosphates output at Phosphate Hill, Queensland, decreased 2 percent, to 958,400 mt from the previous year’s 979,300 mt, mainly due to the planned shutdown at Mt. Isa, which impacted the supply of sulfur. Plant reliability for the year was 96 percent, an improvement of 3 percent over the prior year.

A planned turnaround at Phosphate Hill in the second half of FY2022 – starting in May – is expected to result in 6-8 weeks of lost production. The operation is expected to run at 90 percent of nameplate capacity through to the May turnaround, and at 100 percent nameplate capacity thereafter. Gibson Island is expected to produce at rates in line with FY2021.

The Gibson Island plant in Brisbane, Queensland, produced 498,500 mt of urea equivalent product, up 24 percent on the year-ago 400,500 mt. The company cited most of the improvement as due to FY2020 being impacted by a planned major turnaround at the plant.

IPL last week announced that it will cease manufacturing at the Gibson Island plant at the end of December 2022 due to a failure to secure “an economically viable” long-term gas supply to its plant beyond its current supply contract, “despite extensive efforts.” The current contract with Australia Pacific LNG, which started in April 2020, expires on Dec. 31, 2022.

As noted above, the company said the majority of the cash costs associated with the closure (A$58.4 million after tax) are expected to be incurred in FY2023. IPL’s Brisbane fertilizer distribution center capability will continue beyond the closure of the manufacturing operations.

The Dyno Nobel Asia Pacific (DNAP) business posted a 6 percent decline in FY2021 EBIT, to A$140.2 million, while revenue was also down 6 percent, at A$937.8 million.

IPL cited an A$15 million impact from the Moranbah plant turnaround in May and the impact of a A$12 million decrease in contract renewals, among other factors, as negatively affecting earnings. This was partly offset by a A$12 million increase from technology growth compared to a year-ago, and an A$9 million increase as a result of cost savings, mainly across the commercial business and the Moranbah plant.

Allowing for the impact of the planned turnaround, the Moranbah plant produced 346,500 mt of ammonium nitrate (AN) in FY2021 versus 371,300 mt a year-ago, while sales of AN were 10 percent lower on the year at 683,700 mt, down from 762,600 mt.

In the outlook for FY2022, IPL sees the impact from turnarounds at about A$76 million, plus a depreciation increase of about A$22 million (FY2021: A$122 million plus an A$79 million hit from unplanned outages).

IPL expects strong second-half cash generation to continue in FY2022.

“Looking ahead, as we enter FY2022 we are well positioned to benefit from the continued execution of our strategy, as we invest in and grow our two strong base businesses in explosives and fertilizers and capture the strength in commodity pricing,” said Johns.

IPL has declared a final dividend of 8.3 Australian cents per share 14 percent franked, representing a 50 percent pay-out ratio of NPAT, excluding IMIs.

Growmark Inc. – Management Brief

Eastern Cornbelt, Management Briefs

Growmark Inc., Bloomington, Ill., announced on Nov. 15 that Mark Orr will become CEO of the North American agriculture and energy cooperative effective March 1, 2022. Orr will succeed Jim Spradlin, CEO since September 2014, who retires Feb. 28, 2022. Orr currently serves as Growmark Vice President, Agronomy, a position he has held since 2014.

Spradlin announced his retirement in June after serving seven years in the CEO role, and decades in a variety of roles throughout the Growmark/FS System. Orr will work alongside Spradlin through February to ensure a smooth and successful transition.

“Mark brings a wealth of proven leadership experience to the chief executive role,” Growmark Chairman of the Board John Reifsteck said. “As we searched for the ideal candidate, the Growmark Board of Directors identified the most critical leadership attributes and experiences required to drive our enterprise business strategies for the long-term success of the Growmark/FS System. Mark demonstrates a collaborative approach to leadership along with a passion for innovation and growth that benefits our member-owners, all of our customers, and their end users.”

Orr is a graduate of Illinois State University with a bachelor’s degree in Agri-Business. His management experience includes service as a Growmark Region Vice President and as General Manager of AgView FS and Piatt County Service Co. His career in the Growmark/FS System began in 1990.

CHS Inc. – Management Brief

Management Briefs, Northern Plains

CHS Inc., St. Paul, on Nov. 16 announced the appointment of Kirstie Foster as Senior Vice President, Marketing Communications. She succeeds Linda Tank, who is retiring at the end of 2021 after 37 years with CHS.

CHS said Foster brings more than 25 years of experience leading integrated marketing communications on a global scale, advancing business growth, and fostering corporate reputations. She was most recently with Blue Cross and Blue Shield of Minnesota, where she served as Vice President of Brand, Communications, and Social Responsibility. She also spent 15 years with General Mills, where she served as Director of Corporate and Brand Communications. Foster also worked as an Account Supervisor at public relations agency Weber Shandwick.

Foster holds bachelor’s degrees in journalism and speech communications with honors from the University of St. Thomas. She serves on the Board of Directors for nonprofit organizations Hunger Solutions Minnesota and Angel Foundation.

Incitec Pivot Ltd. – Management Brief

Australia, Management Briefs

Incitec Pivot Ltd. (IPL), Southbank, Australia, announced the appointment of Chris Opperman as Interim Chief Financial Officer (CFO) effective Nov. 15, following the previously announced resignation of Nick Stratford from the company in September (GM Sept. 10, p. 26).

Stratford had been set to remain in the post until Dec. 31, 2021, while an external search for a new CFO was undertaken. Oppermanwill hold the role while the company completes its search for a new CFO.

Opperman has been with IPL for 11 years, holding key leadership positions in the finance organization. Most recently, he was CFO for the Dyno Nobel Asia Pacific business. Previous leadership roles include IPL’s Investor Relations Manager and General Manager of Group Finance.

Europe’s Gas Prices Jump Amid Delay to Russia’s Nord Stream 2 Pipeline Approval

Belarus, Europe, Featured, Germany, News, Russia

European natural gas prices surged this week after the German regulator Bundesnetzagentur suspended the certification process for the Nord Stream 2 gas pipeline, according to a bne IntelliNews report on Nov. 16, citing the regulator.

According to the report, citing a tweet by Bundesnetzagentur, the regulator decided to suspend the process until the Nord Stream 2 holding company has reorganized its legal structure to conform with German law. This will involve the transfer of the assets and people to a subsidiary.

Nord Stream 2 AG is owned by Zug, Switzerland-based Gazprom International Projects LLC, a subsidiary of Russia’s state-run gas producer Gazprom PJSC.

The regulator said it would resume work once the changes were made, adding that it would probably take the four months mandated to consider the application.

Gazprom was said to be planning to set up a fully-owned German subsidiary in a bid to secure approval from the German regulator, according to a Bloomberg report on Nov. 17, citing a person familiar with the discussions.

According to the source cited by the report, the new company, which will operate the German section of the Baltic Sea link, will be 100 percent owned by Nord Stream AG. The move is an attempt to meet European Union (E.U.) rules that require natural gas producers to be legally separate from entities transporting the gas, and have the operator registered in the E.U.

An initial decision by the German regulator is expected by Jan 8 (GM Oct. 29, p. 1). The regulator’s decision is only a provisional one, after which it is passed to the European Commission (E.C.) for comment.

A gas market analyst at Norway’s Rystad Energy AS, Zongqiang Luo, cited by Bloomberg, believes the certification can only be completed around April of next year at the earliest. The E.C. evaluation potentially could last two months after the German certification is completed, with “ample potential for an extension through to August,” said Luo. Furthermore, the Commission has no obligation to uphold the recommendation.

The prospect of the Nord Stream pipeline not coming online this Northern Hemisphere winter was weighing heavily on European gas markets at mid-week

Benchmark European gas prices – the Dutch TTF front month (currently December) – rose 10 percent on the initial news of the pipeline certification delay, hitting €87.69 a megawatt hour as of 12:20 pm (GMT) on Nov. 16. By early afternoon the next day it had reached €100.495, up nearly 7 percent on the day. However, by 4:49 pm (GMT) on Nov. 18, the front-month contract had eased back a little, to €92.7 a megawatt hour.

Adding to Europe’s gas supply woes, Belarusian President Alexander Lukashenko late last week threatened to shut down a key pipeline carrying Russian gas to the E.U. if Poland closes the border as thousands of migrants seek to cross into the European bloc (GM Nov. 12, p. 1).

About 20 percent of Russian gas flowing to the European bloc crossed Belarusian territory this year, mainly via the Yamal-Europe pipeline, according to a Bloomberg report.

However, Russian President Vladimir Putin said in an interview on Russian television this past weekend that he would talk to Lukashenko about gas flows to Europe, and that any interruption in gas supplies would threaten the countries’ relationship as transit partners, according to a Bloomberg report.

Gas pipelines crossing Belarus are owned by Gazprom, but according to the report, Putin said theoretically Lukashenko, as president of a transit country, can probably give instructions to cut supplies to Europe – although this would be a violation of the transit contract.

Gas shipments from Gazprom, which is Europe’s biggest supplier, have recovered from their low level at the start of November, but are far below last year’s levels. Late last month, Putin ordered Gazprom to start refilling European gas storage facilities in November (GM Oct. 29, p. 1).

Early this week, the E.U. approved new sanctions powers on the Belarus regime over the migrant crisis. The powers enable the E.U. to target individuals and entities such as airlines and travel agencies that are involved in attempts to facilitate illegal crossing of migrants into the European bloc.

Late this week, there were signs Belarus was moving to de-escalate the migrant crisis on the Belarus/Polish border, providing shelter for some of the migrants stuck at the border and apparently pushing for a diplomatic solution via Germany’s outgoing Chancellor Angela Merkel.

Russia Mulls Regulating Domestic Fertilizer Prices; Price Freeze Extended

News, News Briefs, Russia

Russia’s Agriculture Ministry is reportedly proposing to develop a regulatory legal act that would create an indicator of availability of fertilizers on the domestic market, according to a report by Russia’s Iz.ru, citing a government document.

According to the report, if fertilizer availability drops below a target level, the Agriculture Ministry proposes freezing domestic prices. The proposal is aimed as a long-term measure to combat food price inflation.

Russian growers in recent months have enjoyed a freeze on fertilizer prices courtesy of the country’s biggest fertilizer producers. In October, the largest producers made a voluntary decision to extend a freeze on domestic prices through Dec. 31, (GM Nov. 5, p. 37).

Late this week, Russian producers agreed to extend the price cap for the domestic market until the end of May, according to a Tass report, citing Russia’s Deputy Minister of Industries and Trade, Mikhail Ivanov. Prices were fixed in July, initially until the end of October.

Mitsui, GS Energy Join Ta’ziz Blue Ammonia Project

ADNOC - Abu Dhabi, Blue Ammonia, Japan, News, News Briefs

Japan’s Mitsui & Co. Ltd. (Mitsui) and the Republic of Korea’s GS Energy Corp. have agreed to partner with Ta’ziz, a joint venture between Abu Dhabi National Oil Co. (ADNOC) and Abu Dhabi Holding Co. (ADQ), and Fertiglobe to develop the world-scale 1 million mt/y blue ammonia production project at the Ta’ziz Industrial Chemicals Zone in Ruwais, Abu Dhabi.

In addition to becoming partners, Mitsui and GS Energy will, upon equity participation and supply commencement, off-take “significant volumes” of blue ammonia to “meet growing demand in the energy and industrial sectors in Japan and Korea, respectively,” said ADNOC and ADQ.

The agreements with Mitsui and GS Energy – which remain subject to relevant regulatory and company approvals – follow ADNOC and Fertiglobe’s recent sales of low-carbon blue ammonia demonstration cargoes to customers in Japan and Korea, ADNOC and ADQ said.

Fertiglobe joined the project as a partner in June (GM June 25, p. 33).

Uralkali Launches Pilot Project to Use Renewable Energy Sources

News, News Briefs, Russia

Uralkali PJSC, Moscow, said it has launched another pilot project to use electricity from renewable energy sources.

Through its partnership with PJSC Fortum, which is a part of Fortum Corp., a leading electricity supplier and developer of intellectual solutions in energy efficiency, Uralkali will use electricity generated by solar power plants located in Russia’s Bashkortostan Republic and Orenburg region for its industrial facilities.

Uralkali said it is currently developing its own climate strategy aimed at reducing the company’s carbon footprint and greenhouse gas emissions. It said the solar power project will help the company to gain “unique experience in using sustainable sources of energy for the production of potash fertilizers.”

In October, the company purchased a small amount of hydropower as part of a similar pilot.