All posts by mickeybarb@charter.net

Sulfate of Potash

California, Iran, Market Watch, Pacific N.W., Specialty, Sulfate of Potash

California:

Sulfate of potash (SOP) prices reportedly strengthened to $620-$635/st FOB in California on July 1, up from $600-$615/st FOB, with the low reported for contracted tons at Stockton.

Pacific Northwest:

The SOP market was pegged at $615-$620/st FOB and $630/st DEL in the Pacific Northwest.

Iran:

The ASSC tender for the purchase of 2×40,000 mt of granular potassium sulfate closed on June 29 (GM June 25, p. 21). Offers were to be opened the same day and were to remain valid for 10 days from opening. Chinese product has featured strongly in previous ASSC tenders.

SOP Magnesia

California, Market Watch, Pacific N.W., Specialty, Sulfate of Potash Magnesia

California:

Sources reported very tight SOP Magnesia supplies in California in late June, with reference prices reportedly firming to $445-$460/st FOB, depending on grade.

Pacific Northwest:

SOP Magnesia pricing jumped to $480-$500/st FOB in the Pacific Northwest, up a full $120/st from last report, although sources said there is very limited product available in regional terminals.

Crops/Weather

California, Crops/Weather, Eastern Cornbelt, Market Watch, Pacific N.W., Western Canada, Western Cornbelt

Eastern Cornbelt:

U.S. Drought Monitor

Extremely heavy rainfall was reported in Illinois and parts of Indiana in late June. Precipitation totals for June 24-28 included 2.6 inches in Peoria, Ill., 3.56 inches in Minonk, Ill., and up to 10 inches east of Bloomington, Ill. Additional rainfall in parts of south-central Indiana pushed the monthly total to more than eight inches in some areas.

The heavy moisture was accompanied by high temperatures, with highs in Indianapolis reaching the 90s at midweek. Forecasts warned of thunderstorms in Indiana as the week progressed, with another two or more inches of rain likely in some locations. Slightly cooler weather moved in late in the week, with highs topping out in the 70s in northern Ohio.

Crops continued to be described in favorable terms, with good or excellent ratings assigned to 70-73 percent of the corn and 67-71 percent of the soybeans in the region on June 27.

Western Cornbelt:

Corn, Wheat, Soybean Index

After two rounds of severe weather over the prior weekend, Iowa Gov. Kim Reynolds on July 1 issued a disaster proclamation for Davis and Van Buren counties in southern Iowa in response to heavy rain, large hail, and damaging winds.

Parts of southeastern Nebraska and northwestern Missouri were also hit by strong thunderstorms during the last weekend in June, with rainfall totals ranging from 3-6 inches. A Flash Flood Watch was in effect for parts of southeastern Nebraska, southwestern Iowa, and northwestern Missouri through the morning of June 26.

Nebraska continued to report very favorable crop conditions, with fully 82-83 percent of the corn and soybeans in the state rated as good or excellent on June 27, compared with 57-60 percent in Iowa and Missouri. Missouri’s cotton and rice were rated as 68 percent good or excellent on that date.

California:

Much of California was under excessive heat warnings as the week began. Multiple triple-digit high temperature readings were posted on June 27-28, including a record 121 degrees in Palm Springs, 113 in Indio, 109 in Palmdale, and 107 in Sandberg.

The high heat was accompanied by pervasive drought, with nearly all of the state experiencing extreme-to-exceptional drought conditions. Monsoonal thunderstorms were in the forecast as the week advanced, bringing the potential for lightning strikes and elevated fire conditions.

Fire crews in California were battling several blazes in late June, including the Lava Fire near the Oregon border, the Tennant Fire in Siskiyou County, the Shell Fire in Kern County, and the Peak Fire in San Bernardino County. In all, 48 large fires were burning more than 1,000 square miles across 12 states as of June 29, according to the National Interagency Fire Center.

Crop conditions remained favorable in late June, despite the heat and drought. “While we do have a few growers struggling with surface and pumped irrigation water, overall most should be okay to finish the season, if the wells hold,” said one Northern California source. USDA assigned good or excellent ratings to 75 percent of California’s cotton crop on June 27, along with 90 percent of the rice.

Pacific Northwest:

Much of the Pacific Northwest continued to wilt under record-high heat during the last days June. The Weather Channel said at least 63 heat-related deaths had been reported in Oregon as of June 29, with record highs on June 27-July 1 noted at 114 degrees in Portland, 113 in Salem, 111 in Eugene, 110 in Corvalis, and 109 in Bend.

Historic highs in Washington during the same period included 116 in Walla Walla, 114 in Wenatchee, 109 in Spokane, and 108 in Seattle. Scorching heat across most of Idaho prompted a heat advisory across the state that was expected to last through the July 4 weekend, with triple-digit readings posted in Boise for six consecutive days.

Montana was also baking under record high temperatures in late June as frequent dry thunderstorms contributed to worsening wildfire concerns in the region. Oregon Gov. Kate Brown on June 30 declared a state of emergency as the Wrentham Market Fire near Dufur – one of many wildfires in the region – exploded to 10,000 acres in just one day.

Drought conditions continued to cover virtually the entire Pacific Northwest in late June, with a wide band of extreme-to-exceptional drought extending across central Oregon and western Washington. This was taking a toll on crop conditions. As of June 27, just 7 percent of Washington’s barley crop and none of its spring wheat fell in the good or excellent categories, with poor or very poor ratings assigned to 61-70 percent of the acreage in the state.

Conditions were better in Idaho and Montana, where 21 percent of the spring wheat and 35-44 percent of the barley was rated as good or excellent in late June. Good or excellent ratings were also assigned to 44 percent of Montana’s winter wheat crop, compared with 37 percent in Idaho, 18 percent in Washington, and just 11 percent in Oregon.

Western Canada:

Sweltering temperatures continued to blanket much of Western Canada in late June, with numerous heat records posted for three consecutive days. Temperatures in Lytton, B.C., soared to 115.9 degrees on June 27 before climbing even higher, to 118.2 degrees on June 28 and 121.3 degrees on June 29.

Local reports said at least 37 other locations in British Columbia, Alberta, and the Northwest Territories tied or set new heat records during the week. Among these was 103.6 degrees in Victoria, B.C., and 100 degrees in Banff, Alta., on June 28.

The blistering heat also contributed to a rash of wildfires in British Columbia and Alberta in late June, and was starting to take a toll on small grains and canola crops in the region. Doubts about the quality and quantity of this year’s crop pushed canola and spring wheat prices to record highs during the week.

“Things are pretty spotty, but overall we need rain,” said one regional contact at midweek. “We are in the middle of a heatwave that won’t help crops. This certainly is not helping fertilizer movement.”

Transportation

Arkansas River, Illinois River, Market Watch, Mississippi RIver, Ohio River, Transportation, U.S. Gulf

U.S. Gulf:

Handysize Shipping Index

Tropical Storm Danny made landfall north of Hilton Head, S.C., on June 28, bringing heavy rains to Georgia and South Carolina. Danny was quickly downgraded to Post-Tropical Cyclone status, where it held court over northwestern Georgia on June 29.

Tropical Storm Elsa became the Atlantic Hurricane Season’s fifth named storm on July 1 after forming north of French Guiana. Early forecasts predicted Elsa strengthening into a Category 1 hurricane on July 3, followed by a push through the Caribbean and a potential northern turn toward Florida.

Tows moving through the U.S. Gulf, including the East and West Canals, continued to see navigational slowdowns due to inclement weather, including rains, high winds, and rough seas. The slowdowns were projected to continue through at least the end of the week.

Port Allen Lock movements saw ongoing restrictions due to unrepaired guidewall damage. Westbound tows locking with two or more barges were required to utilize an assist vessel, while boats traveling eastbound were obligated to use assistance on tows measuring over 650 feet. Minimal delays were noted for the week, despite the restrictions.

Unassisted tows passing through Algiers Lock also faced towing limitations. Size curbs resulted in tows being capped at four standard barges or two 30,000 mt tankers per trip, although longer crossings were permitted with the use of an assist vessel. Delays were typically noted at 5-10 hours, with intermittent stoppages as high as 25 hours.

Bayou Chene remained shut to overnight navigation, the result of ongoing construction and dive operations previously scheduled to conclude in mid-June. Travel was completely unavailable nightly between 7:00 p.m. and 7:00 a.m., producing 6-12 hour delays, while travel during non-work hours required an accompanying assistance vessel.

Bayou Sorrel Lock delays were counted up to nine hours for the week, while boats passing Industrial Lock waited 5-11 hours. Brazos Lock travel carried wait times up to 5.5 hours, according to Corps data.

Mississippi River:

Weekend rains caused depth increases in the St. Louis area, precipitating a shift to both daylight-only transport through the St. Louis harbor and reduced tow lengths on southbound movements between St. Louis and Cairo, Ill.

The Corps also added daylight-only restrictions through the bridge at Thebes, Ill. The restrictions were predicted to remain in place through the start of July. The river gauge at St. Louis measured levels at an action stage 28.2 feet and falling on June 30.

The Corps announced a pair of Lock 27 shutdowns, set to interrupt travel between July 6 and Aug. 19. The site’s secondary lock chamber will close on July 6-27 for repairs to the lower bullnose, while the main chamber will shut Aug 2-19 for upper bullnose repair.

Access to the channel beneath the I-74 Bridge at Davenport, Iowa, was restricted from 7:00 a.m. to 5:00 p.m. on June 27 and June 29, with lengthy wait times expected. The upper river’s Lock 2 is scheduled to see a partial traffic closure in July for miter gate installation, resulting in daily 4-12 hour navigation stoppages.

Waits were noted up to 5.5 hours at Lock 15, while boats passing Lock 27 were delayed up to 13 hours.

Illinois River:

Persistent rains in the Illinois River Basin prompted a sharp reduction in commercial traffic early in the week. High water and fast flows impacted travel between Starved Rock and Lockport Lock, with heavy flows also noted in the Brandon Road Lock area.

Repairs announced for the Beardstown Railroad Drawbridge were expected to impact travel on July 12-13, closing the area to navigation daily between 8:00 a.m. and 2:00 p.m.

Wickets were lowered at Peoria Lock and LaGrange Lock due to the rising water levels, allowing tows to transit both sites through their nonlocking navigational passes.

Ohio River:

Emergency repairs reportedly shut the Ohio River’s Belleville Lock main chamber between June 28 and July 3. Transit remained available through the secondary chamber, with delays posted up to six hours.

Main chamber work at Meldahl Lock concluded on schedule on June 29, ending a round of miter gate machinery repair and maintenance that kicked off on May 11. Traffic passed through the site’s 600-foot secondary chamber while work was underway, producing lengthy delays. Lingering waits were reported up to 30 hours on June 30.

The auxiliary chamber at Markland Lock is tentatively scheduled to remain offline through Oct. 29 due to structural damage to the miter gate. Tows have been able to pass through the site’s main chamber with minimal delays reported.

Main chamber work at Cannelton Lock that began on June 21 has required detours through the site’s auxiliary chamber. The project is scheduled to end on Nov. 19, with delays expected to slowly ramp up as the operation wears on.

The Montgomery Lock main chamber is scheduled to shut from July 26 through Aug. 24, during which vessel traffic will detour through the auxiliary chamber. The site’s main chamber is scheduled to undergo a second outage between Oct. 18 and Dec. 17.

The primary chamber at Braddock Lock will close to navigation from Sept. 13 through Oct. 15, with boats passing through the secondary chamber instead. The Willow Lock main chamber will be taken offline on Oct. 1-31, with delays anticipated.

The Tennessee River’s Wilson Lock was closed to daytime travel on June 28-July 1 for inspections, blocking movements from 6:00 a.m. to 4:00 p.m. daily. Kentucky Lock wait times were posted at 16-31 hours for the week.

Bio-acoustic fish fence (BAFF) repairs remained in progress at the Cumberland River’s Cheatham Lock, blocking navigation between June 28 and July 1. Following a break to clear waiting vessels, the lock was scheduled to close once more on July 12-22 in order to complete the project.

Arkansas River:

A full shutdown for dewatering and repairs is scheduled at David D. Terry Lock from Aug. 27 through Sept. 9, closing the river at that site. Intermittent navigation stoppages were expected ahead of the closure on Aug. 16-26 as contractors work to prepare for the operation.

K+S Makes Debt Paydown Through Bonds Buy-Back

Germany, News, News Briefs

K+S Group, Kassel, has reduced its financial liabilities by €560 million (approximately $665 million at current exchange rates) following the successful completion of a buy-back of bonds, the company said in a June 29 statement.

In total, K+S bonds with a par value of €560 million were tendered for buy-back, with the offer period expiring on June 28. Settlement was on June 30, as planned. The company originally had planned to repurchase €450 million-worth of bonds, and it used some of the proceeds generated by the sale of its Americas operating unit for the buy-back, according to the Bloomberg report.

K+S on April 30 completed the sale of its Americas salt business consolidated in the Operating Unit Americas to the U.S’.-based Stone Canyon Industries Holdings LLC (SCIH), Mark Demetree and partners, securing net proceeds equivalent to around €2.6 billion (GM May 7, p. 44 ). K+S said the sale proceeds would be used to reduce company debt.

“With the successful buy-back of the bonds, we are reducing our debt while further optimizing our balance sheet structure,” said K+S CFO Thorsten Boeckers. “Furthermore, this will reduce our interest costs for the next few years and minimize negative interest on the proceeds generated by the sale of the Americas [unit].”

Ammonia

Ammonia, Black Sea, Eastern Cornbelt, India, Market Watch, Middle East, Northwestern Europe, South Central, Southeast Asia, Southern Plains, Tampa, U.S. Gulf, Western Cornbelt

U.S. Gulf/Tampa:

July Tampa ammonia prices shot up $50/mt, to $585/mt CFR from June’s $535/mt CFR, with players citing the recent run-up in international prices, particularly in Asia.

Just a week earlier some players had argued that a major uptick was not necessary, as supplies in NOLA and Trinidad were plentiful. However, Trinidad tons were reaching as far as South Korea.

Eastern Cornbelt:

Prompt ammonia continued to be quoted at $615-$625/st FOB in Illinois and Indiana, and $615/st FOB Lima, Ohio. Sources said CF was offering limited ammonia fill tons for as low as $565/st FOB in Illinois and $570/st FOB in Indiana early in the week, but the program reportedly closed on June 24.

Western Cornbelt:

The ammonia market remained at $600-$620/st FOB terminals in Iowa, Nebraska, and Missouri for the last prompt offers. Sources reported Q4 ammonia fill offers circulating at $640/st FOB Nebraska locations and $650/st FOB Fort Dodge, Iowa.

Southern Plains:

Sources said ammonia fill offers were circulating for as low as $500/st FOB Enid, Okla., before firming to $560/st FOB for July-September shipment. Limited fill offers were also reported at $560/st FOB Verdigris and Woodward, Okla.

South Central:

The ammonia market was pegged in the $540-$590/st FOB range out of terminals in the South Central region, down from last report, with the high quoted at Donaldsonville, La., for limited truck tons.

Black Sea:

The Black Sea ammonia market experienced a quiet and stable week. Sources reported no new deals to move the price off the $530/mt FOB mark. In fact, one deal to Turkey at $570/mt CFR is said to confirm the $530/mt FOB level.

Rumors throughout the week were focused on higher prices, however. Sources pointed to anticipated strong demand in India and the Far East for August deliveries to back up their ideas of higher prices. So far, the near-term goal is $550/mt FOB, with some arguing $570/mt FOB is attainable.

Middle East:

Arab Gulf producers remain short on product. Buyers are also well aware of the shortage from the area, and are looking elsewhere for spot tons.

The lack of any spot business keeps the public price at $610/mt FOB. However, sources said India still needs product for July and August, and some public tenders may be called soon. These tenders would give the world a public view of where people see the Arab Gulf market and help move the price off its current mark.

India:

Rumors are running strong that buyers still need tons for July and August deliveries. Buyers such as FACT have been hesitant to call tenders or declare their needs too openly because of the tightness in the ammonia market.

Indian buyers usually depend on Arab Gulf suppliers for their product. However, the growing shortness of material in the Arab Gulf has led buyers to look elsewhere. The need to go farther afield has also meant incurring higher freight rates, as well as paying a higher price for the actual product as global demand strengthens.

Sources said the buying orders for July and August could show dramatically higher prices offered to the Indian buyers. One trader noted that the Indians will have no choice but to pay up or cut back on the output of the domestic facilities requiring ammonia.

Northwest Europe:

Buyers from Baltic suppliers will most likely have to step up and accept higher ammonia prices for July tons, according to sources. The $50/mt increase in the Tampa price, combined with the steady upward movement from the Black Sea, have the Baltic buyers surrounded with pressure to accept higher rates.

Sources said talks are taking place, and so far everyone is being very tight lipped. One trader said no matter how quiet everyone is, he expects to see a significant jump in the price from the current June level of $435/mt FOB.

European importers are also being quiet about their prices. Sources said the current $520-$530/mt C&F level is no longer sustainable and must soon follow the higher prices from the Caribbean to the Black Sea.

Southeast Asia:

Demand from the area, led by China, continues to put pressure on suppliers from as far away as Yuzhnyy. Sources said agents of end users are desperately searching for any discounts on material for August deliveries.

Chinese ammonia imports were up 8.6 percent for the first five months of the year, to 472,000 mt from 401,000 mt during the same period last year, according to Trade Data Monitor. May 2021 imports were down about 30 percent, however, to 54,000 mt from 77,000 mt last year.

Leaky Florida Plant a Public Health Threat, Allege Enviro Groups in Federal Lawsuit

Florida, News, News Briefs, Phosphate

A former Piney Point phosphate plant in Florida that was leaking in late March/early April (GM April 16, p. 1), sending wastewater into Tampa Bay, should be declared an “imminent and substantial endangerment” to public health and the environment, conservation groups said on June 24 in a federal lawsuit, according to Bloomberg Law.

A breach in the 480-million-gallon reservoir at the site forced the state to divert 215 million gallons of wastewater to avoid a catastrophic flood in nearby communities. Florida will spend up to $100 million to start closing the plant, according to a state budget that Gov. Ron DeSantis (R) signed earlier this month.

Pollutants in the discharges are contributing to a growing algae bloom in Tampa Bay and neighboring waterways, according to the lawsuit filed by the Center for Biological Diversity, Tampa Bay Waterkeeper, Suncoast Waterkeeper, ManaSota-88, and Our Children’s Earth Foundation.

The suit was filed “to ensure Piney Point is operated and closed in a manner that complies with the Resource Conservation and Recovery Act and abates the present imminent and substantial endangerment to human health and the environment, including endangered species such as manatees and sea turtles,” the plaintiffs said in the suit.

DeSantis, the acting secretary of Florida’s Department of Environmental Protection, the Manatee County Port Authority, and the site’s owner, HRK Holdings LLC, are all named as defendants.

Neither DeSantis’ office nor an HRK Holdings spokesman immediately responded to a request for comment.

A class action lawsuit was already filed against property owner HRK Holdings in April in the Twelfth Judicial Circuit of Florida in Manatee County Circuit Court (GM April 30, p. 30).

Karnalyte Resources Inc. – Management Brief

Management Briefs

Karnalyte Resources Inc.’s Board of Directors has decided to expand its composition to five directors. Those standing for election at the June 29, 2021, shareholder meeting include:

Vishvesh Nanavaty, Gujarat State Fertilizer and Chemicals Ltd. (GSFC) Executive Vice President of Finance and CFO; Dilip Pathakjee, GSFC Vice President of Materials Management; Gerald Scherman, former Senior Vice President and CFO of AREVA Resources Canada Inc. (now Orano Canada Inc.); D.C. Anjaria, former Citibank Vice President; and Derek Hoffman, attorney with Hoffman Group.

Nutrien Boosts K Production Again; to Set New Annual Sales Record; Increases EPS Guidance

Featured, News, Potash, Saskatchewan

Nutrien Ltd., Saskatoon, on June 22 said in response to continued tightening in global potash market conditions, it plans to produce another 500,000 mt of potash, which is in addition to the 500,000 mt increase announced on June 7, 2021 (GM June 11, p. 1).

As a result, it now expects to produce 1 million mt of incremental potash in 2021 compared to expectations earlier this year. The majority of the increased production is expected to occur in the fourth quarter, with some of these additional mt expected to be sold in early 2022.

The Nutrien increases soon followed The Mosaic Co.’s announcement that it would be cutting production by 1 million mt through March 2021 due to the earlier-than-expected idling of the K1 and K2 shafts at Esterhazy (GM June 4, p. 1). News of the latest 500,000 mt increase came as the European Union was advancing sanctions on Belarusian potash (see related story).

Nutrien said the updated guidance for potash sales volumes in 2021 is 13.3-13.8 million mt, which would exceed the company’s previous record-high for annual sales volumes of 13 million mt set in 2018.

In addition, Nutrien increased its first-half 2021 earnings per share (EPS) guidance given the strength in global fertilizer markets and strong operational results. First-half 2021 adjusted net EPS is expected to be $2.30-$2.50, up from the previous guidance of $2.00-$2.20.

“The quality and breadth of our integrated network, combined with unparalleled expertise in potash mining and an exceptional transportation and logistics system, helps ensure our customers have the crop inputs they need to feed a growing world and drives tremendous shareholder value,” said Nutrien President and CEO Mayo Schmidt.

“With continued strength in global agriculture and crop input markets, we are raising guidance and expanding our potash production by a total of 1 million mt to ensure farmers get the potash they need,” he added.