All posts by mickeybarb@charter.net

LSB Stock Halt Prompted by NYSE Error

Fertilizer Stocks, News, News Briefs

LSB Industries Inc.’s shares resumed trading on Oct. 12 after a halt earlier in the day. The company explained on Oct. 13 that incorrect information had been provided by an NYSE Group Info Notice.

The company believes the distribution of the incorrect information led to a 30 percent downward adjustment to its closing stock price on Oct. 11, 2021.

NYSE reported that a stock dividend applied to all company shares (79.4 million), when in fact it was only a portion (30.4 million). NYSE issued a correction.

Poland’s Grupa Azoty and Anwil Prioritize Domestic Supplies

Ammonium Nitrate, News, News Briefs, Nitrogen, Poland, Potassium Nitrate

Poland’s Grupa Azoty SA said late last week despite “the record-breaking” gas prices, it is taking “all possible measures” not to limit production. However, the group said it is prioritizing access to fertilizers for Polish farmers, and recently decided to limit exports and re-direct its products to the domestic market, with the exception of long-term contracts.

“Exactly a year ago, the price of gas per megawatt hour was around €15; today it fluctuates around €100 (approximately $116 at current exchange rates) per megawatt hour, which means an increase of over 560 percent. In the last 10 weeks alone, the price has tripled, from around €30 to €100 per megawatt hour,” said Azoty in an Oct. 8 statement.

To these prices should also be added a significant increase in the cost of CO2 emission allowance prices, which increased by around 80 percent, from €33 to €60, the group said.

In order to keep production going, it is inevitable that gas prices and CO2emission allowance prices will be passed on in the price of fertilizers, Azoty said, adding it wants to ensure that is done “in the least painful way” for the end customer.

Fellow Polish fertilizers and chemicals producer Anwil SA said on Oct. 11 its production process was “running smoothly” and there were no restrictions on the availability of nitrogen fertilizers. The company said it was fulfilling “100 percent” of its contractual obligations. Around 70 percent of Anwil’s finished products go to the domestic market, with the balance going for export, according to the company.

However, Anwil warned that a blockade of its production site on Oct. 11 by agricultural organizations protesting rising prices for the company’s nitrogen fertilizers could lead to a production stoppage and limit the availability of fertilizers for Polish farmers. The company noted it does not sell to individual customers, but through sales contracts between the company and fertilizer distributors.

Anwil said its production facilities operate 24/7, and if the distribution of manufactured products from its storage facilities were to be blocked, the current storage capacity would be used up after approximately 12 hours.

The producer said escalating gas costs have directly translated into an increase in production costs and sales price quotations for its products, especially ammonium nitrate, saltpeter, and nitro-chalk. Anwil cited “the 200 percent” rise in gas prices between January to mid-September this year, and when compared with September 2020 and September 2021, it said the price of gas has increased “by six times.”

The company had provided no updates on its production status by press time, nor had it responded to Green Markets’ inquiries for comment.

Last week, a group of Polish farmers rallied in the town of Nowy Dwór Gdański on Oct. 7 protesting against the fast-rising price of potassium nitrate.

A farmer and board member of the local farmers’ association, Andrzej Sobocinski, cited by the Polish Press Agency (PAP), alleged that Polish nitrogen plants are not fulfilling previous contracts signed in July, August, and September, and are supplying distribution companies with potassium nitrate “at unacceptable prices.” According to the report, Sobocinski put the price today at over Pln3,000/mt (approximately $758 at current exchange rates), while the July contracts were for Pln1,200/mt, which he said were never fulfilled, reportedly referring to Grupa Azoty.

Europe’s Farmers Assess Planting Plans as Fertilizer Prices Spike

Europe, France, News, News Briefs, Nitrogen, Russia

Farmers in Europe are becoming increasingly concerned about escalating fertilizer prices as natural gas prices in the region continue to soar.

Farmers are questioning whether to curb their planting plans for winter wheat and barley crops, which are now being sown and will require fertilizer in early spring to boost yields and quality.

The General Secretary of French wheat growers’ group AGPB, Philippe Heusele, said members are concerned not only about the price, but whether there will be enough supply of nitrogen fertilizer for next spring, according to a Bloomberg report late this week. He said members are questioning whether to plant 100 percent of what was foreseen before winter or not.

Bloomberg reported that French corn growers also might limit plantings next year in favor of less nitrogen-intensive crops, citing the Chair of the Grains Council at Crops Office FranceAgriMer, part of France’s Ministry of Agriculture, Benoit Pietrement.

In Russia, sugar-beet growers are also planning cutbacks due to rising production costs.

Most fertilizer is not applied until the spring, “giving markets time to turn lower and lessen the impact on food output,” Paris-based consultant Agritel said in a note, cited by Bloomberg.

“For now, Paris wheat futures are trading at an eight-year high amid shrinking global stockpiles,”Agritel wrote. “The unprecedented fertilizer situation is also supporting next season’s prices. A risk premium is already integrated.”

OCI, ADNOC Plan to Raise Up to $827 M in Fertiglobe IPO

ADNOC - Abu Dhabi, Europe, Fertilizer Stocks, News, News Briefs

OCI NV, Amsterdam, and Abu Dhabi National Oil Co.(ADNOC) plan to raise between $765-$827 million through the listing of their Middle Eastern fertilizer joint venture, Fertiglobe.

The companies have set a price range of between AED2.45-2.65 per share for Fertiglobe’s listing, implying a total valuation of between $5.5 billion to $6 billion, OCI said in an Oct. 11 statement. The offering will include about 1.15 billion shares – or, as previously announced, 13.8 percent of the joint-venture company.

The final price offer is expected to be announced on Oct. 20, and admission of the shares to trading on the Abu Dhabi bourse on Oct. 27.

Inclusive Capital Partners LP, Singapore’s sovereign wealth fund GIC Pte., and Abu Dhabi Pension Fund have committed a combined investment of about $231 million, entering into cornerstone investment agreements on Oct. 12 in the IPO.

U.S. activist investor and Inclusive Capital Partners’ Founder and Managing Partner Jeff Urban will join Fertiglobe as an independent board member after the listing, OCI said.

The IPO could benefit from the rebound in global fertilizers prices over the past 12 months, as well as Fertiglobe’s advantage of locked-in cheap gas supplies, as soaring natural gas prices in Europe have forced some fertilizer companies to curtail ammonia output in recent weeks (GM Oct. 8, p. 1).

OCI and ADNOC announced their decision early this month to proceed with the IPO and listing. OCI intends to indirectly continue own more than 50 percent of Fertiglobe’s share capital post IPO, while ADNOC is expected to indirectly own at least 36.2 percent post IPO. OCI currently owns a 58 percent stake, while ADNOC has a 42 percent holding.

Fertiglobe this week increased its dividend guidance due to “the strong market environment.” It increased dividend guidance from last month’s “at least $150 million” to at least $200 million for the second half of 2021, payable in April 2022, and from “at least $315 million” to at least $400 million for FY2022 (GM Sept. 24, p. 31).

Fertiglobe, Scatec, Egypt Fund Partner on Green NH3 Plant; ADNOC Pulls Refinery Plan

Egypt, Green Ammonia, Middle East, News, News Briefs, Scandinavia

Fertiglobe this week signed an agreement with Norway-based renewable power producer Scatec ASA and the Sovereign Fund of Egypt to develop a 50-100 MW electrolysis plant at EBIC at Ain Sokhna, Egypt, to produce up to 90,000 mt/y of green ammonia.

Under the agreement, Scatec will build, operate, and majority own the facility, and EBIC will use green hydrogen as a supplementary feedstock for the production of up to 90,000 mt/y under a long term offtake agreement, OCI said on Oct. 13, announcing the deal.

The final investment decision is expected in 2022, and startup is targeted for 2024.

Required engineering and development, including structuring of commercial agreements for the new facility, will start imminently.

OCI said the plant is a first step towards developing a green hydrogen hub in Ain Sokhna.

Meanwhile, ADNOC said this week it would no longer proceed with a 400,000 bpd new oil refinery at its Ruwais downstream hub, as the company proceeds with increasing its capabilities in chemicals and ammonia and seeks to become a major hydrogen player.

Incitec Pivot & Fortescue Partner for Green NH3 Study at Gibson Island

Australia, Green Ammonia, News, News Briefs

Incitec Pivot Ltd. (IPL), Southbank, Melbourne, said it will partner with global green energy company Fortescue Future Industries Pty Ltd. (FFI) on a feasibility study into industrial-scale production of green ammonia at the company’s existing Gibson Island fertilizer manufacturing facility at Brisbane, Queensland.

The study will assess whether industrial-scale manufacturing of green ammonia at Gibson Island is technically and commercially feasible on an existing brownfield site, IPL said on Oct. 11.

The building of a new water electrolysis facility at the Gibson Island site to produce around 50,000 mt/y of renewable hydrogen, which would then be converted into green ammonia for Australian and export markets, is being investigated, it said.

According to IPL, the partnership is considered one of Australia’s best near-term opportunities to produce green ammonia on an industrial scale.

“By investigating the re-purposing of Gibson Island, we can make use of the existing manufacturing plant infrastructure, our established production capabilities, and our highly skilled workforce,” said IPL Managing Director and CEO Jeanne Johns.

Preliminary results from the feasibility study are expected to be available at the end of this year.

IPL’s Gibson Island site is currently Australia’s sole urea producer. The plant has capacity to produce 340,000 mt/y of urea, according to Green Markets data. However, IPL has been dogged with gas supply issues to the Gibson Island production site, which also includes ammonia and ammonium sulfate production capacity. The company has some 200,000 mt/y of ammonium sulfate capacity at the site, Green Markets data indicates.

IPL currently has gas supply for the Gibson Island site from Australia Pacific LNG, which started in April 2020 and continues through to the end of December 2022 (GM June 7, 2019). The supply deal replaced a temporary one-year gas contract that expired on Dec. 31, 2019.

The company said that international competitive gas pricing is required to continue operations after the current gas contract expires at the end of December 2022.

IPL’s wholly-owned subsidiary, Incitec Fertilizers Pty Ltd. (IPF), in May inked a 20-year offtake agreement with junior producer Perdaman Chemicals and Fertilisers Pty Ltd. with a commitment to take up to 2.3 million mt/y of granular urea from Perdaman’s proposed urea plant at Karratha on Western Australia’s Burrup Peninsula (GM May 7, p. 1).  

But the agreement is subject, among other conditions, to the Perdaman plant being built, and first production is not expected before the first quarter of 2025.

FFI is a unit of Perth-based iron ore major Fortescue Metals Group, and is also already investigating the development of a green ammonia plant at the Bell Bay Industrial Precinct in northern Tasmania (GM Nov. 20, 2020). The company is studying the establishment of green ammonia supply chains between Australia and Japan (GM May 21, p 34).

Yara Growth Ventures Invests in Latin American Venture Capital Firm

Brazil, Latin America, News, News Briefs, Scandinavia

Yara Growth Ventures has invested in São Paulo, Brazil-based SP Venture’s new AgVentures Fund II focused on investing in leading agri-food tech start-ups across Latin America. Joining Yara Growth Ventures in the fund are the International Finance Corp. (IFC), the Inter-American Development Bank (IADB), BASF Venture Capital, Syngenta, Capria, and China’s Adisseo.

Yara said some of the key benefits to Yara of being a limited partner in SP Ventures include the opportunity to gain access to the SP Venture’s high-quality deal flow, the potential to co-invest on deals, and a more comprehensive understanding of Latin American start-ups for market intelligence purposes.

Yara Growth Ventures is Yara International ASA, Oslo’s, corporate venture capital team.

ICL Bouby Polysulfate Secures Further Organic Certification

Israel, News, News Briefs, Polyhalite, Specialty, United Kingdom

ICL Boulby has secured certification approval for polyhalite multinutrient fertilizers produced at the Boulby mine in northeast England for use in organic farming from Control Union (U.K.).

ICL Boulby said the certification from the Control Union organization confirms that both the standard and granular grades of polyhalite – marketed as polysulfate standard and granular product – comply with both European and U.S. regulations, and can also be accepted in other parts of the world.

The company already has secured organic certifications for its Boulby polysulfate product from a number of other organizations, including OMRI-listing for polysulfate standard and granular grades for organic use in U.S. and Canada. Boulby products are also compliant with the European Union’s Regulation (EC) 889/2008 governing organic production.

Boulby polysulfate and polysulfate granular are allowed inputs for organic farming under the Japanese Agriculture Standard. Brazil and Poland are among several other countries where polysulfate is also approved as an input for organic farming.

ICL Boulby reported that shipments of polysulfate from Boulby in recent weeks have included loading 33,000 mt of granular polysulfate destined for Brazil on the MV Discovery, and granular and standard grades for the U.S. on the 28,000 dwt MV Orient Accord.

Other shipments have included coaster vessels for both the U.K and Europe, while the latest shipment included a loading a 36,000 dwt vessel for China, the company said.

Polyhalite-based fertilizers are railed from the Boulby mine to ICL Boulby’s Teesdock terminal for shipment.

PhosAgro Mulls LNG Plant to Power Murmansk Complex

News, News Briefs, Russia

PhosAgro, Moscow, plans to build an LNG plant in Russia’s northwest Russian Murmansk region to supply heat to its production complex there, according to Russia’s RBC newspaper, citing the Russian fertilizer group.

The Russian fertilizer group also intends to switch its mining machinery to run on LNG rather than fuel oil, according to the report.

RBC estimates PhosAgro would need to build a 20,000 mt/y LNG plant at a cost of RUB2 billion (approximately $27.8 million at current exchange rates) to fully cover its needs.

According to the report, the Russian fertilizer group is still studying the economic feasibility of the project, and is yet to take a final investment decision. Some three years ago, PhosAgro partially converted its Rasvumchorrsky mine to run on LNG.

Kalium Lakes Raises A$50 M for Expansion

Australia, News, News Briefs, Specialty, Sulfate of Potash

Kalium Lakes Ltd., Balcatta, Western Australia, announced on Oct. 14 that it has successfully completed a book build to raise A$50 million through a two-tranche placement of new fully paid ordinary shares.

“We are exceptionally pleased with the outcome of the capital raising and we are grateful for the support of our existing shareholders and welcome new institutional shareholders to our register,” said CEO Rudolph van Niekerk. “This is a very exciting time for Kalium Lakes, especially having regard to the production of first SOP and subsequent ramp-up to 90,000 mt/y production expected to be achieved by March 2022.

“The funds raised will enable the company to expand Beyondie from 90,000 mt/y to 120,000 mt/y, which is well timed given the rising SOP price and several potential upside opportunities with COVID-19 impacts normalizing” van Niekerk said.

The company became Australia’s first SOP producer, producing its first batch of standard SOP on Oct. 4 (GM Oct. 8, p. 1).

The company said the offer, which was announced on Oct. 13, was significantly oversubscribed, receiving strong demand from existing shareholders as well as new institutional investors who will be introduced to the company’s share register. The offer comprises 278 million new shares to be issued at $0.18 per share. The shares were at an 18.2 percent discount to the last closing price of A$0.22 per share on Monday, Oct. 11.

On Oct. 12, Kalium reported that its shares were temporarily placed in trading halt at its request pending the release of an announcement.

Kalium also announced on Oct. 13 that it has restructured its existing debt with two senior lenders – KfW IPEX-Bank and the State of Western Australia. This also includes the provision of an additional liquidity facility for an aggregate of A$20 million.