All posts by mickeybarb@charter.net

American Potash Terminates Option Agreement

News, News Briefs, Pacific N.W., Potash, Vancouver

Junior miner American Potash Corp., Vancouver, said on May 8 that it has terminated its option agreement with LiK Resources LLC, a private Houston-based exploration company, on its Green River Potash and Lithium Project, located in the Paradox Basin, Utah (GM April 21, p. 27).

The agreement, announced on April 17, stipulated that LiK must make a cash payment to the company of $3 million on or before April 28, 2023. After granting a grace period and with no certainty that these funds would be forthcoming, the company said it terminated the option agreement, and is now assessing alternatives to provide funding for further development of the project.

Fire Reported at CSBP Kwinana Facility

Australia, News, News Briefs

A fire at CSBP’s Kwinana location on May 8 was reported around 9:00 a.m. and was quickly contained and under control, according to the company. It occurred at a non-operational part of the plant that was being demolished. The building is located in the old fertilizer area in the southwest corner of the site, separate to the chemicals plants.

No injuries were reported, and cause of the fire is under investigation. The fire, however, resulted in a significant amount of smoke and temporarily disrupted the flow of liquid and dry fertilizer from the distribution site.

Nitrogen Leak Kills Two at Aurubis’ Hamburg Smelter

Germany, News, News Briefs

German copper producer Aurubis AG suffered a serious incident at its Primary Smelter Plant East in Hamburg on May 11, resulting in two worker fatalities and a third currently in “an extremely critical condition.”

The incident occurred at around 2:30 a.m. and involved a nitrogen leak while the three employees were conducting regular maintenance on a nitrogen line, the company said. The two men died of their injuries in the hospital.

Aurubis said it is working closely with the authorities as they complete a detailed investigation into the cause of the accident. The company said the incident did not endanger the neighboring area to the plant or the environment, and the site of the accident has since been released by the authorities.

OCI 1Q EBITDA Misses Estimates; Amsterdam Listing Assessed

Ammonia, Ammonium Sulfate, Calcium Ammonium Nitrate, DEF, Earnings, Methanol, News, The Netherlands, UAN, Urea

OCI Global NV posted a 65% drop in first-quarter adjusted EBITDA to $336.2 million, down from $970.1 million the previous year, and missed the average analyst estimate of $467.2 million (Bloomberg Consensus).

For the quarter, the company reported an adjusted net loss attributable to shareholders of $15.2 million versus an adjusted net profit of $354.2 million a year ago. Adjusted earnings per share were $0.072 against the prior-year $1.688.

Revenues were down 41% year-over-year, to $1.37 billion from $2.33 billion, and also missed the consensus estimate of $1.54 billion (Bloomberg).

OCI cited “significantly lower” selling prices and volumes, and $98 million realized natural gas hedging losses, partly offset by lower gas prices. The company additionally pointed to the estimated $77 million impact on adjusted EBITDA from unplanned methanol outages in Texas, of which around $30 million was due to the winter freeze in the US.

The company noted that in particular own-produced volumes in Europe were 46% lower year-over-year. It said margins in the European nitrogen segment were also impacted by high-cost inventories produced in the fourth quarter of last year and sold in the first quarter of 2023 following a sharp drop in gas prices, and restart delays post fourth-quarter 2022 turnarounds. The combined impact was $74 million during the quarter, the company said.

OCI’s total first-quarter sales volumes were 17% lower year-over-year, at 2.85 million mt, down from the year-ago 3.44 million mt.

Own-produced sales volumes were 12% lower year-over-year, amounting to 2.27 million mt, down from 2.59 million mt. The quarter’s own-produced fertilizer sales volumes fell 9% to 1.87 million mt, down from the same prior-year period’s 2.05 million.

Traded third-party sales volumes were down 33% year-over-year at 573.6 million mt, compared with 854.8 million mt a year ago.

Total own-produced volumes of Fertiglobe, OCI’s nitrogen joint venture with ADNOC, increased 9% to 1.36 million mt during the first quarter of 2023 versus the year-ago 1.25 million mt. The higher own-produced sales volumes were driven by a 6% increase in ammonia own-produced sales volumes to 236,000 mt and a 9% increase in urea own-produced sales volumes to 1.13 million mt.

“Our first-quarter results were affected by challenging market conditions, but underlying fundamentals remain healthy for our existing nitrogen and methanol businesses,” said OCI Global CEO Ahmed El-Hoshy.

“European gas futures over the next winter and 2024 are pricing in expectations of a tighter market than current levels, implying ammonia cost support of ~$815/mt including CO2 and $650/mt excluding CO2,” he said.

This, El-Hoshy said, should result in closures of European marginal production if pricing remains below cost for a sustained period.

OCI Product Sales Volumes

‘000 mt 1Q-2023 1Q-2022 % change
Own product      
Ammonia 321.8 386.7 (17)
Urea 1,168.7 1,042.1 +12
CAN 176.6 291.4 (39)
UAN 200.1 329.4 (39)
Total fertilizer 1,867.2 2,049.8 (9)
Melamine 10.1 31.0 (67)
DEF 174.8 226.2 (23)
Total nitrogen products 2,052.1 2,307.6 (11)
Methanol1 221.6 281.5 (21)
Total own products sold 2,273.7 2,588.5 (12)
Traded third party      
Ammonia 42.8 57.2 (25)
Urea 231.7 449.8 (48)
UAN 52.4 24.3 (116)
Methanol 129.5 144.1 (10)
Ethanol and other 14.0 – nm
AS 50.9 94.1 (46)
DEF 52.3 85.1 (39)
Total traded third-party 573.6 854.8 (33)
Total own product and traded third-party 2,847.3 3,443.3 (17)

1 Including OCI’s 50% share of Natgasoline volumes

OCI said it will assess its Amsterdam stock market listing as part of a comprehensive review of all the company’s business lines to unlock value.

The review follows a request in March by activist investor Jeff Ubben, whose firm, Inclusive Capital Partners, owns 5% of OCI, for OCI to explore strategic options, including asset sales, amid shareholder concerns about the company’s stock prices.

According to a Bloomberg report on May 9, citing an interview with El-Hoshy after the statement, OCI is considering the Middle East and US as possible alternative listing venues. “A lot of our new investments are in the Middle East and the US,” the report cited El-Hoshy as saying.

Australia Pledges $1.4 B to Be Hydrogen Superpower

Australia, Hydrogen, News, News Briefs

Australia will allocate A$2 billion ($1.4 billion) to support renewable hydrogen projects, according to Bloomberg, as the major fossil fuel exporter attempts to reinvent itself as a clean energy powerhouse.

The funding, announced in the budget May 9, will provide revenue support to private developers, with the aim of having two or three hydrogen projects up and running by 2030. The $1.4 billion figure is dwarfed by comparable spending measures in the US and Europe.

Developers are flocking to tap Australia’s rich wind and solar resources and large tracts of land for green hydrogen. But while the nation has the biggest pipeline of announced green hydrogen projects in the world, so far few have reached financial close.

As countries compete for capital, investors and developers have said aggressive subsidies like the US Inflation Reduction Act – which provides $374 billion in funding for clean energy – will be needed to attract the vast investment required.

The new measures are a “great first step,” Fortescue Metals Group Ltd. said on May 10. The Australian iron ore miner has ambitions to become one of the world’s biggest green hydrogen producers and plans to reach final investment decisions on five projects around the world this year.

 

Ammonia

Ammonia, Brazil, Eastern Cornbelt, India, Market Watch, Middle East, Northern Plains, Northwestern Europe, Southeast Asia, Texas, U.S. Exports, U.S. Gulf, U.S. Imports, Western Cornbelt

US Gulf/Tampa:

Tampa ammonia continued to be called $380/mt CFR for May, down from April’s $435/mt CFR. With both inland and Gulf Coast truck prices going down and barges under pressure, sources said Tampa is likely due another drop in June.

US Imports:

July-March ammonia imports softened 11.9% year-over-year, the US Census Bureau reported, to 1.74 million st from 1.98 million st. March imports were off 18.3%, at 215,375 st compared to the year-ago 263,468 st.

US Exports:

Ammonia exports for March stood at 148,175 st, rising 452.8% from the year-ago 26,804 st. July-March exports totaled 1.04 million st, up 275.4% from the prior-year 277,411 st.

Eastern Cornbelt:

With demand at a lull between preplant and sidedress applications, ammonia prices dropped to $500-$550/st FOB in the Eastern Cornbelt, with the low reported on a spot basis in Illinois and Indiana.

Western Cornbelt:

Ammonia pricing slipped to $465-$500/st FOB in the Western Cornbelt, with the low reported in Nebraska and the high at Palmyra, Mo. Most Iowa terminals were quoted at the $475-$485/st FOB mark for new business.

In the Southern Plains, new offers out of production points in Oklahoma slipped to $450-$490/st FOB, depending on location.Truck pricing for ammonia out of Gulf Coast terminals in Louisiana dropped to $335-$350/st FOB, well below the prior $400-$435/st FOB range.

Northern Plains:

Ammonia prices were falling in the Northern Plains. The terminal market was quoted at $490-$525/st FOB, down from the prior $550-$625/st FOB range, with the low confirmed at Velva, N.D. Delivered ammonia was also lower at $525-$570/st in the region, down from $610-$630/st.

Northwest Europe:      

After a deal reported earlier in the month briefly boosted the price above $400/mt CFR, prices have reverted to the upper $300s/mt CFR.

Sources said the pricing blip came because a French buyer wanted prompt delivery of a cargo. The buyer received offers that would have placed the market at $390/mt CFR, but would have had to wait until late-May or early June for the cargo. At the time of the deal, traders described the price shift as temporary.

Sources talked of small deals being closed at $370-$380/mt CFR, with buyers pushing for $350-$360/mt CFR. Players expect prices to continue to edge downward.

Sources reported that Russian ammonia from the Baltic Sea is helping to push down pricing ideas in Europe.

EuroChem reportedly chartered three vessels to handle ammonia out of a port near St. Petersburg. The port does not have any ammonia storage capacity, nor does it have a sophisticated process of moving ammonia to the vessels.

The plan is reportedly for one of the ships to load the ammonia directly from railcars sitting at the port, allowing the ship to serve as a floating ammonia storage tank. The other two chartered vessels would then take material from the storage ship.

The loading is expected to begin sometime in early June, and sources said the process will be slower than loading the product from dedicated ammonia facilities. The tonnage is expected to be offered to buyers in Antwerp and possibly North Africa, specifically Morocco.

The Russian ammonia is expected to apply additional downward pressure on prices already in decline.

Middle East:

Sources said the Middle Eastern market is stabilizing. Prices remain in the upper $240s/mt FOB, while producers show a steady offtake of product.

The Saudis are reportedly showing a balance between their supplies and demand. Qatar and Oman were each said to have an additional cargo available for late-May shipment, but neither appeared too concerned about making a sale. Traders said the spot tons from these two countries might ease the price down a bit more, but no one is expecting a crash in Arab Gulf pricing.

India:     

Buyers continue to push for sub-$300/mt CFR prices, and seem to be willing to wait until sellers agree. Sources reported no new major business that would shift the price from its current $300-$310/mt CFR level.

Southeast Asia:     

The region’s price softening is beginning to cause a slight shortage of available tonnage. As prices move to sub-$300/mt CFR levels, suppliers from China and Indonesia will find providing product difficult, sources said, citing a current ammonia production price of approximately $300/mt in those two countries.

Indonesia exported 377,000 mt of ammonia in January-March, according to Trade Data Monitor,off about21% from first-quarter 2022. March exports were reported at 120,000 mt, down from the year-ago 163,000 mt. China purchased 66,000 mt, South Korea took 24,000 mt, and Taiwan bought 19,000 mt.

Indonesia’s March exports were largely focused on Asian buyers. Due to the war in Ukraine and the subsequent loss of ammonia exported from the Black Sea, buyers in North Africa and Europe reached halfway around the world for their ammonia needs in March 2022, with Tunisia taking 24,000 mt and Belgium buying 25,000 mt. These counties did not buy any Indonesian ammonia in 2021, nor have they purchased any tons in January-March of this year.

The lack of sales outside of Asia indicated that buyers West of Suez have been able to find the ammonia they need at affordable prices, despite the continued lack of product shipping from the Black Sea or Baltic regions.

Brazil:   

January-April ammonia imports totaled 97,000 mt, Trade Data Monitor reported, down 21% from the prior-year 123,000 mt. April imports were pegged at 15,000 mt, compared to 17,000 mt in April 2022. The market’s largest March suppliers were Trinidad and Tobago with 10,000 mt, followed by Colombia with 5,000 mt.

Brazilian ammonia exports were counted at 33,000 mt in January-April, off from 34,000 mt recorded in the same period of 2022. April exports consisted of 20 mt to Uruguay, falling from 15,000 mt exported in April 2022. Sources said they expect to see Brazil continue to export limited amounts of ammonia to regional buyers.

Urea

Bangladesh, Black Sea, Brazil, China, Eastern Canada, Eastern Cornbelt, India, Indonesia, Market Watch, Middle East, Northeast, Northern Plains, U.S. Exports, U.S. Gulf, U.S. Imports, Urea, Western Cornbelt

US Gulf:

Prompt urea barges continued to post a large premium, and were put as high as $440-$450/st FOB. Barges sailing in late-May or first-week June were reported as low as $300/st FOB, however.

US Imports:

March urea imports fell 18.3%, to 618,880 st from the year-ago 757,614 st. Imports stood at 3.23 million st in the July-March fertilizer year-to-date, off 26.6% from 4.40 million st.

July-March imports from Qatar totaled 908,188 st, while Russia followed with 556,576 st. Saudi Arabia added 467,898 st, ahead of 405,217 st from Oman.

US Exports:

March urea exports fell 24.8%, to 124,280 st from 165,187 st in March 2022. July-March exports moved up 143.6%, however, to 1.23 million st from 506,375 st in the prior year.

Eastern Cornbelt:

Urea remained at $495-$520/st FOB in the Eastern Cornbelt, with the low confirmed at Cincinnati, Ohio.

Western Cornbelt:

Urea pricing was steady at $480-$520/st FOB in the Western Cornbelt, with the low confirmed at St. Louis, Mo.

Northern Plains:

Urea was quoted at $500/st FOB St. Paul, Minn., and $540/st FOB Carrington and Alton, N.D. Delivered urea pricing ranged broadly at $535-$600/st in the Northern Plains, depending on location and point of origin, with the low confirmed for tons shipping into North Dakota from Western Canada.

Northeast:

Urea pricing in the Northeast was quoted at $470/st FOB Fairless Hills, Pa., $480-$490/st FOB Baltimore, Md., and up to $510-$520/st FOB East Liverpool, Ohio. Those levels were up from the previous $460-$490/st FOB range, depending on location.

Eastern Canada:

Eastern Canada urea was quoted in a broad range at C$675-$875/mt FOB in mid-May, depending on location and supplier.

India:     

The last of the tons from the IPL tender are reportedly being rounded up and loaded to vessels in order to meet the June 1 shipping deadline. A new tender is still expected to be called in late May or early June.

Indonesia:     

Prices remain at $330-$335/mt FOB following last week’s selling tender. The price was temporarily bumped higher when Malaysia’s Petronas needed a cargo to cover product lost due to an unexpected plant shutdown. The tons sold in the last Indonesian sale are reportedly headed for the Philippines, as replacement for tons that were meant to come from the stricken Petronas facility.

Trade Data Monitor put January-March urea exports at 107,000 mt, a 47% decrease from 203,000 mt recorded in first-quarter 2022.

March was the first month of 2023 that Indonesia exported urea, sending 107,000 mt offshore, down 46% from 198,000 mt in the previous March. The tons were sent to traditional regional buyers. Australia and Vietnam accounted for about 35,000 mt each, while the Philippines bought 27,000 mt.

Middle East: 

Producers were mostly busy filling orders for the IPL/India tender, along with a few long-term contract sales. There has been limited spot buying interest from the area due to a relative balance in the region’s supply and demand.

Sources said the price remains in the low-$330s/mt FOB. However, the few buyers who have approached producers were said to push for prices in the $320s/mt FOB. Deals were rumored to have been done in the $320s/mt FOB, but without confirmation.

China:   

Sources said that producers continue to offer $335-$338/mt FOB for granular, and are willing to accept $10/mt less for prills, citing reports that at least one roughly 30,000 mt granular cargo was offered at that level. Buyers, however, are pushing for lower prices, and no deal has been done so far.

Brazil:   

The landed price was pegged at $320-$335/mt CFR, down from the previous $340-$345/mt CFR. Sources said that bidders have become more aggressive in what they see as a softening market. There were reports of bids coming in at $295-$305/mt CFR, but without luck so far.

The Rondonopolis price was reported at $460-$470/mt FOB ex-warehouse, also showing a drop from the previous week. Limited business by local distributors was put off to the usual seasonal slump in urea sales for this time of the year. Some have also pointed to the global slide in urea prices as an extra bargaining tool for lower prices.

January-April urea imports were logged at 1.8 million mt, according to Trade Data Monitor, a9% decrease from the year-ago 2 million mt. April imports stood at 451,000 mt, up from 371,000 mt received in April 2022. Qatar topped the March import list with 130,000 mt, followed by 84,000 mt from Venezuela and 53,000 mt from Russia.

Bangladesh:

State-run Chittagong Urea Fertilizer Ltd. (CUFL) suspended production on May 5 due to non-availability of natural gas supply, according to Bangladesh news portal Risingbd. The plant previously restarted ammonia and urea production on March 23, following a four-month outage due to fire (GM March 31, p. 5).

Black Sea:

Prices remained stable. Prilled urea was pegged at $300-$305/mt FOB.

UAN

Eastern Canada, Eastern Cornbelt, Market Watch, Northeast, Northern Plains, U.S. Exports, U.S. Gulf, U.S. Imports, UAN, Western Cornbelt

US Gulf:

UAN barge prices continued at $270-$280/st ($8.44-$8.75/unit) FOB.

US Imports:

UAN imports for March firmed 198.7% year-over-year, to 290,062 st from 97,094 st. Imports totaled 2.17 million st for July-March, up 48.2% from 1.46 million st in the year-ago period.

Russian cargoes totaled 1.58 million for July-March. Canada followed with 330,458 st, and Trinidad and Tobago sent 217,566 st.

US Exports:

UAN exports lifted 438.1% in July-March, to 1.96 million st from the year-ago 364,208 st. March cargoes were counted at 119,891 st, up 234.5% compared to 35,842 st reported one year earlier.

Eastern Cornbelt:

UAN prices were under pressure at some Eastern Cornbelt terminals. The latest UAN-32 offers slipped to $300-$305/st ($9.38-$9.53/unit) FOB Cincinnati and Mount Vernon, Ind., down roughly $5-$20/st. UAN-28 offers at Cincinnati remained in the $258-$280/st ($9.21-$10.00/unit) FOB range at mid-month.

Western Cornbelt:

UAN-32 dropped to $300-$320/st ($9.38-$10.00/unit) FOB in the Western Cornbelt, down from the prior $310-$335/st ($9.69-$10.47/unit) FOB range, with the low confirmed at St. Louis. The latest offers FOB Muscatine, Iowa, were quoted at the $310/st ($9.69/unit) level.

Northern Plains:

The last UAN-32 offers remained at $355/st ($11.09/unit) FOB Winona, Minn. UAN-28 in North Dakota was steady at $280/st ($10.00/unit) FOB Casselton and $300/st ($10.71/unit) FOB Harvey for prompt tons, with delivered pricing quoted at $330-$335/st ($11.79-$11.96/unit) in North Dakota.

Northeast:

UAN-32 pricing in the Northeast was steady at $320/st ($10.00/unit) FOB Baltimore and Fairless Hills for May-June tons. The latest offers out of terminals in upstate New York were reported at the $385/st ($12.03/unit) FOB level, down $10/st from last report.

The latest Baltimore prices for 27-0-0-3S and 28-0-0-5S remained at $301/st FOB and $335/st FOB, respectively, with delivered pricing in Pennsylvania quoted at $325/st for 27-0-0-3S and $346/st for 28-0-0-5S.

Eastern Canada:

UAN-28 remained in the C$540-$680/mt (C$19.29-$24.29/unit) FOB range in Eastern Canada, depending on location and supplier, with UAN-32 offers pegged at the C$617/mt (C$19.28/unit) FOB level in Ontario.

Ammonium Nitrate

Ammonium Nitrate, Brazil, Market Watch, U.S. Exports, U.S. Imports, Western Cornbelt

US Imports:

Ammonium nitrate imports for July-March fell 14.9%, to 219,422 st from the year-ago 257,942 st. March imports were down 58.0%, to 15,408 st from the prior-year 36,687 st.

US Exports:

March ammonium nitrate exports were noted at 37,273 st, a 12.9% increase from the year-ago 33,016 st. July-March volumes were up 30.1%, firming to 421,185 from the prior 323,672 st.

Western Cornbelt:

Ammonium nitrate pricing was unchanged at $470/st FOB Lamar, Mo., and $490/st FOB St. Joseph, Mo.

Brazil:   

Imports of ammonium nitrate were noted at 244,000 mt in January-April, Trade Data Monitor reported, up significantly from 72,000 mt received through the same period of 2022.

Russia limited its exports in the year-ago period, allowing buyers dependent on Russian product, such as Brazil, to either go without or buy what few tons they could from other suppliers. April imports – all from Russia ­– totaled 58,000 mt, a dramatic increase from 6,000 mt in April 2022.

Ammonium Sulfate

Ammonium Sulfate, Brazil, China, Eastern Canada, Eastern Cornbelt, Market Watch, Northeast, Northern Plains, U.S. Exports, U.S. Gulf, U.S. Imports, Western Cornbelt

US Gulf:

NOLA ammonium sulfate barges remained firm at $325-$330/st FOB.

US Imports:

Ammonium sulfate imports totaled 77,049 st for March, off 22.2% from the year-ago 99,036 st. July-March volumes were 518,296 st, falling 21.0% from 655,677 st in the year-ago.

Imports from Canada were counted at 303,781 st for July-March. Belgium sent 150,417 st, followed by 47,455 st from South Korea.

US Exports:

Amsul exports rose 28.5% in July-March, to 602,510 st from the year-ago 468,956 st. Shipments totaled 33,237 st for March, however, off 34.5% from 50,726 st.

Eastern Cornbelt:

Ammonium sulfate prices were inching up in the Eastern Cornbelt on reports of tightening supply. New prices ranged from $385-$405/st FOB in the region, up from last week’s $375-$400/st FOB range.

Western Cornbelt:

Granular ammonium sulfate remained at $375-$400/st FOB in the Western Cornbelt, with the low at St. Louis and the high reported in Iowa.

Northern Plains:

Strong demand and tight supply pushed granular ammonium sulfate pricing up to $400-$410/st FOB in North Dakota and $450-$480/st DEL in the Northern Plains, depending on location. Those levels were up sharply from the previous $370-$385/st FOB and $380-$400/st DEL levels.

Northeast:

The ammonium sulfate market was unchanged at $400-$410/st FOB and $450-$470/st DEL in the Northeast, depending on location.

Eastern Canada:

Ammonium sulfate was quoted at C$720-$825/mt FOB in Eastern Canada, up from the prior low of C$690/mt FOB.

China:   

Sources reported prices moving up on a large sale to the Philippines and multiple small-lot deals to other regional buyers. Sources noted an early-week deal in the mid-$130s/mt FOB, while another deal was reported later in the week in the upper-$130s/mt, leaving the price at $133-$139/mt FOB for caprolactam-grade ammonium sulfate.

Among the reported sales, sources said that Taiwan purchased 20,000 mt, while several regional buyers combined to take an additional 25,000-30,000 mt.

Brazil:

A general lack of interest in nitrogen products has moved the landed price to a flat $180/mt FOB. The Rondonopolis price shared the same malaise, dropping $10/mt to $285-$320/mt FOB ex-warehouse. Even with limited demand, sources said that buyers looking for prompt deliveries are often left empty-handed.

January-April ammonium sulfate imports softened 37%, Trade Data Monitor reported,to 1.0 million mt from the year-ago 1.6 million mt. April imports were 245,000 mt, off 20% from 308,000 mt recorded in April. China supplied 93% of the product, sending 229,000 mt.