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K+S Doubles 2Q EBITDA, Reiterates Higher FY EBITDA Guidance

Earnings, Germany, News, Specialty

K+S Group, Kassel, reported a more than doubling in second-quarter EBITDA from continuing operations to €111.5 million on revenue of €664.2 million, up from the year-ago €52.7 million and €590.3 million, respectively. EBITDA came in above an Aug. 3 guidance by the company of €110 million (GM Aug. 6, p. 33).

Revenue was up 13 percent on the year, beating the average analyst estimate of €638.7 million, according to a Bloomberg Consensus (range €591.0 million to €712.0 million).

K+S cited higher prices and increased sales volumes for fertilizers, as well as strong business in the Industry+ customer segment as driving the positive second-quarter performance.

“In the second quarter, we benefited from the positive development of agricultural markets and further reduced our costs,” said K+S Chairman Burkhard Lohr.

The company reiterated its forecast for full-year EBITDA that it raised on Aug. 3. It sees EBITDA from continuing operations for 2021 at between €700 million and €800 million, including the one-off gain from the REKS joint venture waste management transaction (GM Dec. 31, 2020). Full-year EBITDA in 2019 was €266.9 million.

K+S cited the sustained recovery of potash prices since the beginning of the year, the above average de-icing salt business, and its measures to streamline administration as well as the one-off gain associated with the REKS joint venture, as driving the guidance raise.

Second-quarter revenues in the Agriculture customer segment increased by 17 percent to €473.7 million, up from the previous year’s €404.6 million. Sales volumes were up 8 percent, to 1.89 million mt versus 1.75 million mt a year ago. While Europe’s sales volumes increased marginally year-over-year (+1 percent) to 0.77 million mt in the second quarter, up from 0.76 million mt, overseas sales grew 13 percent to 1.2 million mt, up from 0.99 million mt.

The company said production was running at “full speed,” with the further improvement in operating performance at its German sites and the continued ramp-up of production at the Bethune site in Saskatchewan, as planned. This ensured higher product availability for meeting the current very good demand, it said.

The company reiterated to analysts at a company earnings call on Aug. 12 that it had achieved 2 million mt/y output at Bethune and the remaining capability of up to 2.86 million mt/y would be achieved through secondary mining volumes.

“It’s more or less a linear development so you should not expect [an increment] of more than 100,000 mt annually as additional tons from Bethune,” said Lohr, adding that volume does not impact the market at all.

In response to another analyst’s question, Lohr reminded that the company had indicated it would increase shipment volumes from Bethune to the U.S. compared to 2020, and it expects to be able to ship 250,000 mt of granular potash into the U.S. market in 2022. He reiterated the company’s target is sales of 500,000 mt to the U.S., but “that probably won’t be achieved until 2023.”

Lohr described the 500,000 mt level as “should be a healthy level for the run rate” for Bethune volumes into the U.S. market, adding that the U.S. volumes would all be made via K+S’ sales and logistics networks.

The company said in May it expected to ship slightly more than 200,000 mt of potash to the U.S. this year, which if achieved, would be double the close to 100,000 mt shipped in 2020 (GM May 14, p. 28).

K+S highlighted the continued “very high” demand in all sales regions during the second quarter, with prices for potassium chloride rising sharply in important overseas markets such as Brazil and North America, and Europe also seeing “significant” price increases. The company said higher prices were likewise realized for fertilizer specialties.

The company confirmed that it is not selling any potash into India, because the current India price “is not at all the market price currently,” and also given that shipments to the country have the highest freight costs of all of K+S’ destination markets. K+S said its only sales to India are some specialties, but the amounts are small.

The company added that its sales volumes into China are decreased on prior years, given the current contract pricing level as well as high freight costs

“China is a very important destination, and that is why we cannot strip our volumes to China down to zero,” Lohr told analysts. “I would say it’s up to 200,000 mt less than in normal years.”

In a response to an analyst’s question about forward sales, K+S confirmed it does sell volumes forward, but only “small volumes.” It said it had sold 100,000- 50,000 mt forward but only for the first quarter of 2022.

Agriculture customer segment

  2Q-2021 2Q-2020 % change 1H-2021 1H-2020 % change
Revenues € million 473.7 404.6 17 942.7 858.3 10
Europe € million 202.1 195.6 3 452.7 459.2 (1)
Overseas US$ 327.5 230.2 42 590.6 448.0 32
             
Revenues € million 473.7 404.6 17 942.7 858.3 10
Potassium chloride 278.1 232.8 20 530.6 478.7 11
Fertilizer specialties 195.6 171.8 14 412.1 379.6 9
             
Sales volumes million mt 1.89 1.75 8 3.90 3.65 7
Europe 0.77 0.76 1 1.74 1.69 3
Overseas 1.12 0.99 13 2.16 1.96 10
Potassium chloride 1.21 1.15 5 2.45 2.37 3
Fertilizer specialties 0.68 0.60 14 1.45 1.28 13

The company sees demand in the Agriculture customer segment to be “very favorable” this year, and expects the record global potash sales volume of 2020 of about 76.2 million mt (including just under 5 million mt of potassium sulfate and potash grades with lower recycled content) can be achieved in 2021. The company’s previous expectation for 2021 was 74-76 million mt.

“Following the fact that the production volume available worldwide already required the consumption of inventories in 2020 to meet the high demand, we consider a further increase in global sales volume in 2021 to be hardly possible,” said K+S.

The company expects demand for fertilizer specialty potassium sulfate to increase “slightly.”

Highlighting the significant increase in potassium chloride prices in all sales regions in the first half of this year, which the company said will have a positive impact on its earnings in the second half of 2021 in particular.

“We are very happy with the current price development,” Lohr told analysts at a company earnings call.

K+S now expects the average overseas price for potassium chloride to be “strongly higher” in 2021 than a year ago (the company’s previous expectation was “significantly higher”). It expects the price of potassium chloride in Europe to be “moderately higher,” and for fertilizer specialties, it expects “a slight increase” on average for the year. The average price for the Agriculture customer segment in 2020 was €233.1/mt

K+S average prices

  2Q-2021 2Q-2020 1H-2021 1H-2020
Average price €/mt 250.0 230.9 241.8 235.2
Europe €/mt 263.8 258.5 260.7 272.4
Overseas US$/mt 292.8 231.1 273.3 228.1

The company expects the sales volumes for all products in the Agriculture customer segment to exceed a total of 7.5 million mt this year, due in particular to the further ramp-up of production at the Bethune operation in Saskatchewan. This compares to 2020’s 7.30 million mt total.

K+S’ Industry+ customer segment, posted a 3 percent increase in second-quarter revenue, to €190.5 million, up from the prior year €185.7 million. Sales volumes increased by 22 percent on the year, reaching 1.53 million mt, up from 1.25 million mt. Of these sales, sales of de-icing salt increased by 31 percent, to 0.29 million mt versus the year-ago 0.22 million mt.

The company said demand for de-icing salt remained strong into April due to wintry weather conditions, while revenues from industrial and chemical salts increased in response to the economic situation. Revenues from consumer products “normalized” compared with the strong prior-year quarter, it said.

For the first half of 2021, K+S posted a 56 percent rise in EBITDA, to €237.4 million on revenue of €1.4 billion, up from the previous year’s €152 million and €1.24 billion, respectively.

K+S reported a cash inflow of around €2.6 billion in the second-quarter following the completion of the sale of the Americas operating unit on April 30 (GM May 7, p. 44). The company said it realized a book gain of €742 million on the disposal of the business. As a result of the sale, K+S’ financial liabilities were reduced by around €1.7 billion, enabling the termination in May of the KfW credit  line for €350 million agreed in August 2020 (GM May 21, p. 34).

The company expects an additional €30 million to €40 million negative effect this year from both higher energy and higher freight costs.

As previously reported by the company, K+S now expects the completion of the antitrust review of the REKS jv in the fourth quarter of this year, later than the previous expectation of this summer.

Ammonia

Ammonia, Black Sea, California, Eastern Cornbelt, India, Market Watch, Middle East, Northwestern Europe, Pacific N.W., Southeast Asia, Tampa, U.S. Gulf, Western Canada, Western Cornbelt

U.S. Gulf/Tampa:

August Tampa ammonia prices continued at $625/mt CFR.

Eastern Cornbelt:

Ammonia prices were quoted in the $645-$670/st range FOB Eastern Cornbelt terminals for prompt or fall prepay, with the low reported at Lima, Ohio, and the high out of Indiana terminals. Most Illinois terminals remained at the $665/st FOB level for fall prepay offers.

Western Cornbelt:

Ammonia pricing remained at $645-$665/st FOB for prompt or prepay in the Western Cornbelt, depending on location and supplier. CF was reportedly referenced at the high end of the range at Palmyra, Mo., and in Iowa and Nebraska.

California:

Anhydrous ammonia was unchanged at $626/st DEL in California, with aqua ammonia referenced at $172/st FOB. An increase is planned for Sept. 1, however, with anhydrous moving on that date to $710/st DEL and aqua firming to $187/st FOB port terminals and $197/st FOB inland.

Pacific Northwest:

Ammonia prices were higher in the Pacific Northwest. Sources quoted the market at $695/st FOB regional terminals and $730-$760/st DEL, depending on location, up from the last reported $635/st FOB and $675/st DEL levels.

Aqua prices have also firmed in the region, to $177/st FOB from the earlier $168/st FOB.

Western Canada:

Ammonia pricing in Western Canada was quoted at C$990-$1,045/mt DEL for fall tons, depending on location, up another C$25-$30/mt from last report.

Nutrien’s Redwater, Alta., nitrogen facility began a planned maintenance outage in late July at its larger ammonia and urea plants. The project is slated to be completed in early October.

Black Sea:

Sources said Ma’aden is in talks with Ostchem for late-August or early September ammonia shipments. The move fits in with reports that Ma’aden remains in a difficult position filling its own contracts.

No new deals were reported this week. However, sources repeated information from last week that talks are taking place for shipments later in the month and into September.

Middle East:

The lack of any loose tons in the area has shut down the spot market, leaving no change in official pricing.

As the week closed, rumors began to circulate that Ma’aden was back online Aug. 12. However, sources said the most likely scenario is that the troubled facility might be beginning test runs to see if it could sustain production. The company has been saying for the past few weeks that it intends to have the plant running this month.

India:

Buyers are at the point where they need to get serious about placing orders for their September and October needs. However, they are running into vast shortages of ammonia for export from the Arab Gulf to Southeast Asia.

The buyers are said to be holding off on making any quick deals because of rumors that Ma’aden is coming back online. Even if the Saudi plant restarts, sources said it will be a while before any extra tons are found from the area for a spot deal. One trader said larger buyers might find some break in their formula-based deals, but not much.

Northwest Europe:

The region was quiet this week, with steady movement and nothing to shake the market. Sources reported some inquiries, but nothing out of the usual.

Southeast Asia:

Demand in the area remains strong, with production from the regional suppliers holding up. Sources said the second half of August may even see some excess material that will allow for spot deals of limited tonnage to take place.

Buyers and sellers in the region are watching the Arab Gulf closely – especially the rumors that Ma’aden might soon restart. If the Saudi plant does successfully go back online, sources said the strength in pricing from Southeast Asia could falter.

Urea

Black Sea, Brazil, California, China, Eastern Cornbelt, India, Indonesia, Market Watch, Middle East, Pacific N.W., U.S. Gulf, Urea, Western Canada, Western Cornbelt

U.S. Gulf:

NOLA granular urea rebounded to $420-$430/st FOB, up from the week-ago $400-$417/st FOB. Reasons given for the uptick included expectations for another Indian tender and that there would be no Chinese exports in the near term.

Eastern Cornbelt:

Urea prices continued to fall in the $453-$470/st FOB range in the Eastern Cornbelt, with the low reported at East Dubuque, Ill., for August-September tons. The Cincinnati, Ohio, market was pegged in the $460-$470/st FOB range at midweek.

Western Cornbelt:

The urea market was quoted at $453-$470/st FOB in the Western Cornbelt, with the low reported at Camanche, Iowa. The urea market was quoted at $453-$470/st FOB in the Western Cornbelt, with the low reported at Camanche, Iowa. Sources pegged the St. Louis, Mo., market in the $460-$465/st FOB range, with the same level reported at St. Paul, Minn., and Catoosa/Inola, Okla.

California:

Sources quoted the urea market in a broad range at $545-$600/st FOB in California in early August, with the low reported at Stockton and the high reflecting smaller one-off sales to retailers. There were also reports of rail-DEL offers in the $530-$550/st range, although no actual business was confirmed at that level.

Pacific Northwest:

Urea continued to be posted at $525/st FOB Rivergate, Ore., and $530/st FOB Aurora, Ore. Rail-DEL pricing remained at $525-$528/st in the Pacific Northwest.

Western Canada:

Urea prices were down slightly in Western Canada, to C$630-$655/mt FOB and C$650-$665/mt DEL, depending on location and time of shipment.

India:

Reports out of India indicate RCF has been given the green light to prepare for another urea tender. Supposedly, the Department of Fertilizers has authorized the next tender for September shipments of urea.

Sources said RCF may hold off calling the tender until vessels are named for all the urea awarded in the previous tender. So far, vessels for 575,000 mt of Chinese urea have been nominated, but sources said no ships have been named for the cargoes slated to come out of the Arab Gulf. Traders said they expect to see nominations early next week.

The next tender will have some interesting dynamics to deal with. Sources said the ban on exports from Chinese state-run companies could have an impact on the amount of urea coming from that country. At the same time, the Ma’aden facility in Saudi Arabia, while rumored to be restarting this week, is not expected to be at full capacity in time to provide strong support for offers into the upcoming tender.

Another issue facing shipments to India is that the lineup for vessels into Chinese ports remains problematic. The Chinese government is limiting the number of foreign vessels allowed into its ports. Especially hurt, said traders, are the northern ports, where much of the exported urea originates.

There is hope that the situation will smooth out by the end of the month in time to handle any sales from China to India. However, how the port situations are handled will largely depend on how well China deals with the COVID-19 variants.

China:

There is lots of discussion about much lower urea prices in China, but few examples of done deals.

Sources reported some small sales to Asian regional buyers that reflected a netback for prilled urea at $452-$455/mt FOB. There were also unconfirmed reports that deals might have been done in the upper-$440s/mt FOB, with one trader saying a bid of $445/mt FOB will get a closed deal. On top of these rumors, sources said the export price should be $435/mt FOB based on what domestic buyers are paying.

No sales of granular product were reported this week, but that did not stop industry players from speculating on what the price should be. Many are arguing that the price to export granular needs to be at parity with prilled in the upper-$440s/mt FOB.

Nailing down the price of Chinese urea is not easy. The government reminded state-owned producers they are banned from making any new offshore sales. At the same time, there was talk that some domestic traders might try to get their hands on product from these producers on the pretext of offering it to domestic distributors, but then turn around and offer the material to international traders for India.

International traders said such a move could happen, but most likely not on a scale that would affect the price into India.

Producers with existing export contracts are having issues getting their tons out. Sources said there are still delays of non-Chinese vessels being allowed to dock and load their cargo. COVID-19 related restrictions on the number of foreign vessels allowed into Chinese ports is slowing much of the export business currently in hand.

Sources said new nominations for vessels into China will take the potential delays into account. Traders speculated that it could take another 10-14 days for the situation to smooth out and for the sense of uncertainty to fade.

Middle East:

Urea offers have reportedly dropped to the low-$460s/mt FOB, but with no deals confirmed. If any arrangement is made in this area, that would drop the price about $20/mt from what was paid in the previous Indian tender.

The paper market for the Arab Gulf shows prices lower than what was achieved in July. August pricing is pegged at $460-$470/mt FOB, with some arguing for the low-$470s/mt FOB. September prices are in the $460s, with October dropping to near $450/mt FOB. All in all, sources said the anticipation of the return of Ma’aden to production is influencing predictions of softer prices.

Rumors are circulating that the Ma’aden plant has restarted, but sources said they have not seen any confirmation from the Saudi company. Speculation is that the plant is in its initial test stage to see if it can sustain full production.

The re-emergence of the Ma’aden plant will ease upward pressure on urea prices going into the next Indian tender. Sources said if the plant does begin serious production by the end of the month, some of its output could easily be in play in the tender.

There are unconfirmed reports of small lots being sold out of Egypt in the $470s/mt FOB. The sales just confirm the stability of pricing from that country. Sources in Egypt said they have seen nothing to justify shifting the published price of $465-$472/mt FOB.

Black Sea:

Sources reported small urea deals out of Yuzhnyy in the $440s/mt FOB. The pricing matches with the softening of urea markets elsewhere in the world.

Reportedly, Toros in Turkey scrapped its tender from last week because the offering prices were too high. The company has now sent out inquiries looking for 30,000 mt of granular urea for September delivery.

Indonesia:

Sources said the next big urea sale will not happen until the end of the month. Kaltim will be busy shipping the 84,000 mt it awarded to three traders last week, and other producers will be looking to the domestic market.

If the price in the late August sale is low enough, sources said Indonesian urea could play a major role in the expected Indian tender. The expected reduction of available Chinese tons, plus a tight Arab Gulf market, leaves only Indonesia as a possible large-scale supplier to India.

Brazil:

Urea pricing ideas in Brazil are all over the place. International traders outside of Brazil are calling the Paranagua market in the upper-$460s/mt CFR. At the same time, however, traders in Brazil said the price range is $475-$490/mt CFR.

Sources said the higher estimates from the Brazilians are in reaction to reports of delays that vessels are facing getting into ports and getting their cargoes unloaded. The demurrage costs are affecting the landed price and giving the Brazilian urea market players large headaches.Sources also said much of the discussion of sub-$470/mt CFR pricing is just talk.

What is clear is that all eyes are on the next Indian tender. Brazilian buyers watched how the price dropped following the last tender when so many Chinese tons were supplied. The uncertainty of how many Chinese tons will be available the next time are making some buyers anxious that there could be a rebound in prices next month.

In Rondonopolis, the price range tightened as buyers looked to the future. Sources pegged the market at $600-$652/mt FOB ex-warehouse, reflecting a slight dip at the upper end and an increase at the lower end of the range.

The barter rate in Sorriso was put at 75 bags of corn for 1 mt of urea. Sources said no one was quoting barter rates in Rondonopolis.

UAN

California, Eastern Cornbelt, Market Watch, Pacific N.W., U.S. Gulf, UAN, Western Canada, Western Cornbelt

U.S. Gulf:

NOLA UAN barges were reported in a broader range at $300-$310/st ($9.38-$9.69/unit) FOB, down from a flat $310/st FOB last week.

Eastern Cornbelt:

Sources continued to report very limited pricing for UAN in the Eastern Cornbelt, with reports of a few spot offers falling in the $348-$356/st ($10.88-$11.13/unit) FOB range, depending on location.

Western Cornbelt:

A limited number of UAN-32 prices were pegged in the $345-$355/st ($10.78-$11.09/unit) FOB range in the Western Cornbelt, but sources reported few offers on the table during the week.

California:

The UAN-32 market had reportedly inched up to $365-$385/st ($11.41-$12.03/unit) FOB terminals for post-fill offers, with rail-DEL pricing quoted at the $380-$385/st ($11.88-$12.03/unit) level.

Pacific Northwest:

The UAN-32 market in the Pacific Northwest was steady at $385/st ($12.03/unit) FOB for prompt tons and $365-$395/st ($11.41-$12.34/unit) rail-DEL for the last fill offers.

Western Canada:

The UAN-28 market in Western Canada was reported at C$420-$430/mt (C$15.00-$15.36/unit) DEL in early August, up slightly at the low end of the range.

Ammonium Sulfate

Ammonium Sulfate, Brazil, California, China, Eastern Cornbelt, Market Watch, Pacific N.W., U.S. Gulf, Western Canada, Western Cornbelt

U.S. Gulf:

NOLA barges were put at $320-$332/st FOB, up considerably from the week-ago $295-$300/st FOB. Sources said availability for river close barges was very tight. Some sources believed prices could move up to IOC’s $340/st FOB posting for PCI product.

Eastern Cornbelt:

The ammonium sulfate market was pegged at $335-$370/st FOB in the Eastern Cornbelt, with the low at Cincinnati. AdvanSix on Aug. 11 reported that its granular ammonium sulfate price in the Midwest and Plains regions is now $370/st FOB river terminals, up $40/st from the company’s June 28 postings. The company said inland warehouses will continue to be priced at traditional spreads to the river.

AdvanSix also announced that it is raising the price of granular ammonium sulfate to $315/st FOB Hopewell, Va., effective Aug. 18. The new posting reflects a $15/st increase from the previous price at Hopewell.

Western Cornbelt:

Ammonium sulfate prices were quoted at $325-$370/st FOB in the Western Cornbelt, with the low reported at St. Louis. Sources reported reference prices as high as $385-$395/st FOB Sioux City, Iowa, although no actual business was confirmed at those levels.

California:

Granular ammonium sulfate prices were higher in California. The market was quoted at $365/st FOB Stockton in early August, reflecting a $40/st increase from last report. Postings for standard grade remained as low as $318/st FOB Chico and Woodland.

Pacific Northwest:

The ammonium sulfate market was moving up in the Pacific Northwest. IRM’s ammonium sulfate postings in Oregon, Washington, Idaho, Utah, and Montana firmed $20/st on July 30, to $383/st FOB or DEL for Tranzform and WesternPremium, and $350/st FOB or DEL for WesternStandard.

Western Canada:

Ammonium sulfate prices were pegged at C$505-$510/mt DEL in Western Canada, also up slightly at the lower end of the range.

China:

Sales to buyers in Southeast Asia showed a netback of $200-$205/mt FOB for caprolactam-grade ammonium sulfate, meeting producers’ expectations of last week. Now producers are pushing for $212-$215/mt FOB, a level international traders said is not sustainable.

The move up in pricing is being attributed to steady demand for the product and increased production costs. Buyers are still looking at ammonium sulfate as a substitute for urea in NPK production. As the urea price goes down, however, sources expect to see a similar downward push on amsul prices.

Brazil:

The ammonium sulfate market in Brazil is quiet. Sources reported the Paranagua price at $315-$345/mt CFR for granular amsul, showing a drop in the lower end, but a sustained higher end price.

Industry sources were hard pressed to explain the price drop, especially given the steady demand for product and higher inland prices.

Rondonopolis pricing was reported at $410-$470/mt FOB ex-warehouse, reflecting a $10-$13/mt increase. Demand for amsul remains steady, because urea prices remain high enough to encourage the use of a substitute in NPK production.

DAP/MAP

Bangladesh, Brazil, California, Central Florida, China, DAP/MAP, Eastern Cornbelt, India, Market Watch, Pacific N.W., Saudi Arabia, U.S. Exports, U.S. Gulf, Western Canada, Western Cornbelt

Central Florida:

Central Florida DAP truck postings continued at $620/st FOB for the week. Truck-loaded MAP was posted at $655/st FOB, also unchanged from the prior report.

U.S. Gulf:

The NOLA DAP and MAP markets remained mostly quiet for the week, with DAP values softening week-over-week while MAP barges held firm.

Nearby DAP transactions were quoted moving down to a $595-$600/st FOB low for imported tons, falling from $600-$605/st FOB in the prior report. While there were reports of domestic material offered at the week-ago high of $615/st FOB, no actual trading at that level was confirmed for the week.

MAP values continued at prior-week levels, with imports cited in the $640-$645/st FOB range and domestic barge sales and offers continuing to be reported at the $650/st FOB level.

The nearby DAP market was reported trading in the $595-$605/st FOB range, softening from $600-$615/st FOB in the prior report. MAP values rolled over at $640-$650/st FOB, unchanged from the previous week.

U.S. Exports:

Sources reported no new spot export transactions out of the Gulf for the week. Recent business included a 10,000 mt DAP load priced at $660/mt FOB, while the last reported MAP business was quoted at $685/mt FOB for a 5,000 mt deal. Final destinations for both trades were reported in the Latin American markets, with shipping expected to conclude by early August.

Lacking in new data points, the Gulf DAP export market continued to be quoted at $660/mt FOB, with MAP unchanged at $685/mt FOB.

Eastern Cornbelt:

DAP pricing was unchanged at $640-$655/st FOB in the Eastern Cornbelt, with the low reported in Illinois. MAP was quoted in a broad range at $675-$695/st FOB, depending on location. The Cincinnati market remained at $645-$650/st FOB for DAP and $680-$690/st FOB for MAP.

Western Cornbelt:

DAP pricing was steady at $640-$650/st FOB in the Western Cornbelt, with the lower end confirmed at St. Louis, Camanche, and Dubuque, Iowa, and the high at Caruthersville, Mo. MAP was quoted in the $675-$695/st FOB range in the region, depending on location, with the St. Louis MAP market pegged at $675-690/st FOB.

California:

MAP pricing in California was steady at $750/st rail-DEL and FOB French Camp, Helm, Richvale, Dixon, and El Centro in early August.

Pacific Northwest:

The MAP market remained at $740/st DEL in Washington, Oregon, and Nevada, and $730/st DEL in Idaho, Utah, and Montana, with the FOB warehouse market pegged at $735-$737/st in the Pacific Northwest in early August.

Western Canada:

MAP prices in early-August were quoted at C$980-$1,025/mt FOB and C$1,005-$1,030/mt DEL in Western Canada, depending on location.

Saudi Arabia:

Saudi Arabia phosphate pricing firmed to $610-$615/mt FOB, up from $605-$615/mt FOB at last report.

China:

Industry watchers reported a DAP sale to Pakistan at $650/mt CFR. The estimated netback to China at that price is $610-$615/mt FOB. This matches up with producers asking $615-$620/mt FOB.

Sources said the higher price demanded by the Chinese producers might be acceptable to many buyers if they had the product. Reportedly, most of the DAP flowing out of China is heading to Bangladesh to cover 400,000 mt in awards from a tender held earlier this year.

One trader noted that the awarded CFR/bagged prices in the tender are well below the current bulk FOB price out of China. Still, the tonnage is flowing out to Bangladesh, leaving other potential buyers on the wayside.

Bangladesh:

Sources said BCIC is absorbing all the DAP from China. So far, sources reported that 400,000 mt has either been shipped or is booked to be shipped.

Traders noted that the current price out of China is higher than the awarded bagged-CFR price into Bangladesh. One trader suggested the government is making up the difference in subsidies directly to the importing traders to ensure a full supply of DAP for the season.

India:

The country needs DAP, but is facing a lack of supplies. Even when Indian buyers are willing to meet the higher prices out of China, sources said they are told there are no tons available for at least another month or two.

Brazil:

Paranagua MAP prices came down to $725-$760/mt CFR. The $10-$20/mt drop was attributed to continued confusion about what is happening in the domestic and global markets.

Demand for MAP remains steady inland, but supplies remain lean. At the same time, sources earlier this month said prices have reached their peak and are set for a downward correction. The current pricing ideas would seem to verify that earlier prediction.

At the same time, however, Rondonopolis showed a move up. The price had been hovering at $850/mt FOB ex-warehouse, but sources this week said the range had shifted to $850-$910/mt FOB ex-warehouse. No one could explain the move up other than the steady demand for product and limited amount of MAP coming into the ports.

The barter rate for 1 mt of MAP in Sorriso was reported at 42 bags of soy or 100 bags of corn. Sources said they were unable to discuss a barter rate in Rondonopolis at this time.