All posts by mickeybarb@charter.net

Georgia Opens New Black Sea Fertilizer Transhipment Terminal

Black Sea, News, News Briefs

A new fertilizer storage and transhipment terminal has been officially opened in the Georgian Black Sea port of Batumi, Batumi Sea Port Co. reported on June 14.

The new “Batumi Multimodal Fertilizer Terminal” is a joint venture between Trammo Inc., the Georgian government, and U.K.-headquartered international logistics company Wondernet Express Investment Group LLC.

The new facility has been designed to handle fertilizer, particularly urea, coming from Central Asian countries to the Caspian Sea port of Baku in Azerbaijan, from which product will be transported by rail to the new Batumi multimodal fertilizer terminal.

The project is aimed at shaping the logistics corridor – known as the Trans-Caspian International Transport Corridor (the “Middle Corridor”) – from Central Asian countries to Black Sea ports via Azerbaijan and Georgia. The project’s participants believe the corridor will become the shortest and most efficient route for products from Central Asia to the Black Sea.

The multimodal terminal has transhipment capacity for up to 1.5 million mt/y, according to the Batumi Sea Port Co., and has storage capacity for around 65,000 mt of dry fertilizers.

Construction began in July 2019, and according to the port company, investments in the project have totaled $25 million.

Last week, Baku International Sea Trade Port announced the start of construction on a fertilizer terminal at its new facility in Alat on the Caspian Sea (GM June 11, p. 30).The terminal, which is planned to be built with 2.5 million mt/y handling capacity, is being jointly financed by the government of Azerbaijan and the Port of Baku, and is expected to be commissioned by the end of 2022, according to a Port of Baku press release.

Baku International Sea Trade Port, Trammo, and Wondernet Express Investment Group are reported to have signed a Memorandum of Understanding (MOU) on June 11 to facilitate fertilizer transit via the “Middle Corridor,” according to a report by Azerbaijan’s Trend, citing a Twitter message by Baku port.

According to the report, the parties intend to expand cooperation in the field of transport, logistics, and information exchange to accelerate the export of urea, sulfur, and other minerals from Central Asian countries in order to “further increase the potential of the ‘Middle Corridor.’”

It was also agreed to establish a digital connection between the Port of Baku fertilizer terminal under construction and the Batumi Multimodal Fertilizer Terminal, for “accurate transmission of cargo and wagon data.”

As reported by Green Markets on June 11, citing the Baku International Sea Trade Port press release, Turkmenistan, Uzbekistan, and Kazakhstan have production capacity for various fertilizers, including urea, sulfur, and potassium carbonate that exceeds 6.6 million mt annually. All three countries have invested heavily in the construction of fertilizer production facilities to increase potential export volumes.

According to the Port of Baku Director-General Taleh Ziyadov, the volume of Central Asian – primarily Turkmen – fertilizers transhipped via the port of Baku has increased more than 13-fold between 2018 and 2020, from 48,339 mt to 630,000 mt. In the first five months of 2021, the port handled more than 450,000 mt of fertilizers, according to Ziyadov.

IFFCO, Brazil’s OCB Ink MOU for Nano Urea Plant in Brazil

Brazil, India, News, News Briefs, Specialty, Urea

Indian Farmers Fertiliser Cooperative Ltd. (IFFCO) announced that it has signed a Memorandum of Understanding (MOU) with the Organization of Brazilian Cooperatives (OCB), Brazil’s national confederation of cooperatives, for setting up a Nano Urea fertilizer plant in the Latin American country with mutual collaboration.

The Indian cooperative said the purpose of the MOU is “to express the intentions of the parties.” This MOU will remain valid for two years from June 8, 2021, the date of its execution, unless extended by mutual agreement.

IFFCO launched Nano Urea Liquid on May 31 and plans to start production of the new product in India this month. It has conducted some 11,000 farmer field trials (GM June 4, p. 32). The Indian cooperative, which is based in India’s Karnataka state, said the new product could cut conventional urea use by at least 50 percent.

“Besides setting up a Nano Urea plant in Brazil, under the MOU both parties intend to share best practices, create mutual opportunities, offer visibility, develop professional relationships, build resources and better service delivery, [innovate,] and strengthen cooperative ties between them and their members,” said IFFCO in a June 10 statement.

The scope of the MOU with OCB can be further expanded into mutually acceptable fields and areas of interest with the mutual consent of the parties, according to the statement.

Casale Selected to Provide Technology for New Uzbek Ammonia Plant

Ammonia, Asia, Europe, News, News Briefs

Casale SA, Lugano, reported that it has been selected by Singapore-based Enter Engineering Pte. to provide the technology and design of a new 495,000 mt/y ammonia plant to be set up in Yangiyer, near Samarkand in Uzbekistan’s Sirdarya region.

Enter Engineering is one of the largest EPC contractors in the Uzbek market.

The ammonia plant will be part of large fertilizer complex that will produces 900,000 mt/y of complex fertilizers. It is expected to become fully operational in 2023.

Cyprus’ Ferkensco Management is implementing the two projects, and last week was reported to have signed two cooperation agreements with Russia’s Gazprombank to finance the construction of the two plants (GM June 11, p. 30).

Casale said it will have the opportunity to participate in the future development of the ammonia project, according to a June 16 company news release announcing the new contract, but the company provided no further details.

Casale Secures Boilers Contract at Fertiberia Palos Ammonia Plant

Europe, News, News Briefs

Casale SA reported it has also been awarded by Spanish fertilizer and industrial chemicals producer Fertiberia Group SA the contract for three high-pressure process boilers (RG boilers) to replace the existing units placed downstream the secondary reformer in Fertiberia’s ammonia plant at Palos de La Frontera, 13 km from Huelva.

The new boilers will feature the Casale-Schmidtsche Schack design

The Palos ammonia plant was built in the early 1970s under license by MW Kellogg license.

“The old boilers are based on the traditional design featuring vertical layout and bayonet-type tubes with water flowing inside the tubes and the hot gas shell side for the first two boilers (101-C A/B) and process gas in the tubes for the second boiler (102-C),” said Casale in a June 9 news release. “This configuration – widely used in the industry so far – has some inherent design weaknesses which determine serious reliability issues during operation.”

The Swiss industrial equipment and technology supplier cited these design weaknesses as in particular being overheating, vibration due to high velocity, sludge deposition, and erosion and corrosion of the tubes, that can lead to damages to the tube bundles – which in turn, it said, are the main cause of costly unexpected shutdowns in ammonia plants and frequent replacement of the tube bundle.

Casale said the new boilers for Fertiberia will be designed to meet the future conditions when the plant will be operated with the addition of green hydrogen.

Fertiberia plans to construct four green-hydrogen plants at three of its production sites to produce green ammonia, including at Palos de La Frontera, in partnership with Spanish energy company Iberdrola, under deals signed in July and October last year (GM July 31, 2020; Oct. 30, 2020). The green hydrogen plant at the Palos site is earmarked for building between 2023 and 2027.

BF Mineração Bags Exploration Rights for Miriri Phosphates Project

Brazil, News, News Briefs, Phosphate

Brazil’s BF Mineração Ltda. has won the auction for the exploration rights for the Miriri phosphates project in the country’s northeastern states of Pernambuco and Paraíba, paying R$51,000 (approximately US$10,112 at current exchange rates), according to a report by Brazilian weekly news magazine Istoé Dinheiro.

The project auction was part of Brazil’s Ministry of the Economy’s Investment Partnership Program (PPI), and according to the report, BF Mineração’s offer represented a 70 percent increase over the minimum bid.

The Miriri phosphate deposit is divided into two blocks over a total area of 7,752.84 hectares. The deposit contains an estimated 114.7 million tons of phosphate ore with an average content of 4.19 percent P2O5, according to the PPI website, citing Brazil’s national research and mineral resources company, CPRM. PPI put the required investment at R$190.5 million.

Michigan Potash Hopes to Break Ground by Year’s End; Financing Still in Works

Featured, News, Potash, U.S.

With global demand for potash hitting an all-time high and doubling the Cornbelt price to $500/st within a year, the need for the U.S. to boost its own production of potash has become more urgent, said Ted Pagano, Founder and CEO of Michigan Potash & Salt Co., Denver, which is seeking to secure nearly $1 billion in financing for the first U.S. potash development in more than 30 years.

Pagano told Green Markets that The Mosaic Co.’s recent decision to immediately shut down a potash mine in Saskatchewan and the European Union’s plan to ramp up sanctions on Belarus are accelerating the need to get the company’s U.S. potash project constructed and running. He said the developments in Belarus and Saskatchewan threaten to disrupt global supplies of potash, a required nutrient for healthy crops.

Pagano said he hopes to get the needed capital for Michigan Potash’s three-year project finalized and its ground broken by the end of this year, if not sooner, at Evart, Mich., which he said is the site of one of the world’s highest-grade potash reserves.

Michigan Potash is now engaged in the comprehensive due diligence financing process to establish assets, liabilities, and commercial potential. The project has been in the works for about a decade (GM Nov. 18, 2013) and would be the nation’s largest potash plant, Pagano said. The company has been involved in an administrative review process with Michigan officials.

The U.S. imports 96 percent of its potash from Belarus, Russia, and Canada, while four entities control 80 percent of the global supply, including Mosaic and Nutrien Ltd., Pagano noted. The U.S. Department of Interior added potash to the nation’s critical minerals list in 2018, declaring it critical for the nation’s economy and food security.

Mosaic announced on June 4 that it had immediately closed two potash shafts at Esterhazy, Sask. (GM June 4, p. 1), shutting them down nine months earlier than planned due to a recent acceleration of brine flooding. Mosaic anticipates its potash production will be slashed by 1 million mt from July 2021 to March 2022 as a result.

With the European Union increasing sanctions on Belarus, a land-locked country in Eastern Europe, as tensions heighten, global potash prices are escalating, further harming growers. Pagano noted that Belarussian potash exports previously have been routed through Lithuania, but now may be forced through Saint Petersburg, Russia.

The latest spike in potash consumption comes off a large downtown in demand that lasted five or six years, said Pagano. “The industry idled or shuttered 11 million tons.”

Michigan Potash has selected Barton Malow Co., Southfield, Mich., the largest union trade employer in Michigan, as its Engineering, Procurement and Construction (EPC) general contractor for the project. An estimated 300 union workers would be needed to construct the project, making it one of the nation’s largest union-supported infrastructure projects. Once it’s completed, about 150 full-time workers would be employed at the industrial complex.

“There’s an absolute need for this. As long as the rock remains in the ground, we will continue to advocate for its necessity. We will continue to advocate for this project as long as it takes. We still have T’s to cross and I’s to dot,” Pagano said.

Grains Plunge Most Since 2009

News, News Briefs, U.S.

Crop futures plunged Thursday June 17 across the board, with grains notching the worst rout in a dozen years, according to Bloomberg.

Soybeans wiped out this year’s gain and grains lost more ground as better weather and uncertainty over U.S. biofuel policy erodes bullish sentiment. Corn, soybean oil, and canola futures all dropped by the exchange limit, and lean hog futures plunged the most in almost seven months.

A stretch of better weather across America’s farmlands, concern about Biden administration biofuel rules, and fear of slowing U.S. hog exports are sending prices lower and raising questions on whether the recent rally to multiyear highs has peaked. Rainfall over the next few weeks could answer that question.

“Grains are in a weather market right now and will be through July,” Sal Gilbertie, President of Teucrium Trading, told Bloomberg. “The market has pulled back because timely and much needed rains are in the forecast for the U.S. grain belt. If rains appear we may have seen at least a short-term price top, but if it does not rain enough or in the right spots the market is likely just consolidating.”

Prices for soybeans had surged as much as 27 percent through mid-May, topping their highest since 2012 in Chicago. The gains were part of a sweeping rally across agricultural markets, driven by soaring Chinese imports, rising demand for crop-based fuels, and bad weather in global grain-growing regions.

Now, with U.S drought concerns still in sharp focus even as much needed precipitation aids growing corn, wheat, and soy, market variability is becoming the norm.

“The volatility we are seeing now is all about weather,” said Stephen Nicholson, a senior analyst for grains and oilseeds at Rabobank. “Over the last few weeks you just get whiplash from day to day.”

The recent slide across agricultural commodity markets could eventually trickle to store shelves, helping cool global food inflation worries.

Soybean futures in Chicago declined 6.7 percent to $12.5275 a bushel, the lowest since late December. The contract is down 4.4 percent for the year. Corn fell by the exchange limit, dropping 7 percent to $5.325 a bushel, the lowest since March.

A Bloomberg spot index of grains fell 5.9 percent on Thursday, its biggest decline since January 2009.

Corn, soy oil, and canola – all used as ingredients in biofuels – tumbled as the Biden administration prepares targets for “green” fuel blending with gasoline that the industry fears could be less than initially expected as oil refiners seek relief from compliance costs.

Still, with the proposed rules not yet released and several months left in the U.S. growing season, analysts said it’s too early to tell if the market has peaked.

Large crop traders expect markets to stay elevated for a few more years, driven partly by continued grains buying from China. On June 30, a U.S. Department of Agriculture report on soybean and corn plantings will be closely watched to see if high prices lured farmers to expand acreage.

Ammonia

Ammonia, Black Sea, Eastern Canada, Eastern Cornbelt, Great Lakes, India, Market Watch, Middle East, North Africa, Northern Plains, Northwestern Europe, Southeast Asia, Tampa, U.S. Exports, U.S. Gulf, U.S. Imports, Western Cornbelt

U.S. Gulf/Tampa:

June Tampa ammonia prices continued to be called $535/mt CFR.

The July price for Tampa may be a bit more contentious than earlier expected, as some players argue that international prices are much higher, particularly with trades into Southeast Asia. As a result, they said this should mean an uptick at Tampa. However, others claim inventories in the U.S. Gulf and Trinidad are now longer than in the recent past and there is no need for a price increase.

Sources reported that the Waggaman, La., ammonia plant returned to production earlier this month after its last turnaround. The plant, which has been outage-plagued during the first half of 2021, was reported to be producing at normal levels once again.

In the meantime, as previously reported (GM May 7, p. 41), Nutrien’s Borger, Texas, nitrogen facility (ammonia and urea) is in the midst of a major 65-day planned turnaround that began on May 3. The company said it will continue to ship inventory per its supply/demand plan.

Nutrien’s Redwater, Alta., facility is expecting a planned turnaround stretching from late July into early October. The company initially indicated it would be a 68-day turnaround starting on July 23.

U.S. Imports:

April ammonia imports totaled 275,401 st, according to the Department of Commerce, down 3.8 percent from the year-ago 286,172 st. Imports totaled 2.13 million st in the July-April period, a 9.1 percent year-over-year decline from 2.34 million st.

U.S. Exports:

July-April exports totaled 464,265 st, up 6.6 percent from the year-ago 435,603 st. April exports were 11,285 st, up 73.6 percent from 6,501 st in the prior year.

Eastern Cornbelt:

Prompt ammonia prices in mid-June ranged from $615-$625/st FOB in Illinois and Indiana, depending on location, with the upper end of the regional range reported at $630-$635/st FOB Lima, Ohio. Sources said sidedress demand for ammonia remains strong in Ohio.

“Ammonia remains very snug in the Midwest,” said one industry source. “Customers are looking for summer fill tons but not getting quotes from the producers due to tightness in supply. Tampa ammonia will likely be higher than last month.”

Western Cornbelt:

The ammonia market remained at $600-$620/st FOB terminals in Iowa and Nebraska, depending on location, with pricing at Palmyra, Mo., steady at the $615/st FOB level. The last delivered offers into Missouri were reported at $585-$590/st for tons from Oklahoma.

Northern Plains:

With drought conditions stressing crops and limiting sidedress demand, ammonia prices appeared to be slipping in the Northern Plains. The market was pegged at $575-$600/st FOB and $645/st DEL in the region, down from the last reported $640-$650/st FOB and $685/st DEL. The low end of the FOB range was reported in Grand Forks, N.D.

Sources reported no activity on ammonia fill. “I’m not sure if there will be an official ammonia program up here with the lack of demand due to weather,” said one contact.

Great Lakes:

Ammonia pricing was pegged at $570-$635/st FOB in the Great Lakes region, with the low quoted by Michigan sources for tons pulled from Courtright, Ont., and the high FOB Lima, Ohio. The market FOB Huntington, Ind., was reported at the $615-$625/st FOB level in mid-June.

Sources continued to report sidedress applications taking place in the region at mid-month. “We saw great spring volumes, especially early,” commented one Michigan source. “We are well into sidedress now for ammonia and UAN.”

Eastern Canada:

The last offers for anhydrous ammonia in Eastern Canada were quoted at C$770-$775/mt FOB Courtright, Ont.

Black Sea:

Reported ammonia sales out of Yuzhnyy showed continued price increases as demand remains strong in the global market. Sources said a sale by Ostchem at $530/mt FOB to Trafigura created a new price level.

The latest deal, said one trader, will most likely be the floor for pricing in the coming weeks as demand in Asia remains strong. Sources suspect the Trafigura tons will go to India, which has been short of ammonia because its usual sources have had limited supplies. Deals going into next week are expected to move closer to $550/mt FOB as the limited tonnage available for spot deals gets snapped up.

Middle East:

Ammonia availability from Arab Gulf producers remains limited. Sources said the lack of extra tons means no spot deals have been done. Even some contract arrangements have had to be renegotiated due to limited tonnage.

Sources said supplies are so limited that even high bids have not been able to shake loose extra tonnage for shipment in June or July. Without new spot deals, the public price remains at $610/mt FOB.

Iranian exports of ammonia for January-May this year were up 142 percent, according to Trade Data Monitor, to 251,000 mt from 104,000 mt for the same period last year. The main buyer this year was India at 157,000 mt.

May exports for 2021 were reported at 62,000 mt against 41,000 mt for May 2020, representing a 52 percent increase. Again, the main buyer was India, taking 60,000 mt for the month.

India:

Sources reported an ammonia sale at $670/mt CFR, but without strong confirmation. The price fits with the sale by Ostchem to Trafigura out of Yuzhnyy, and many in the industry think this is where the product is coming from.

When the price moved to $650/mt CFR earlier this month, sources said $670/mt CFR and up were likely. The earlier price, which at the time sent shockwaves through the market, is now seen as too low to be repeated.

Southeast Asia:

Ammonia buyers are looking far and wide for tons, and seem to be willing to pay dearly for the material.Sources reported that Koch was able to sell 40,000 mt from Trinidad to South Korea at $675/mt CFR. The price, sources said, will move up the Trinidad netback and possibly influence higher prices in Tampa.

Part of the desperation of buyers comes not just from strong demand, but also due to disruptions in production for traditional suppliers. SABIC said its facility is still down, with no indications when production will restart. PAU is Indonesia is down with unspecified production issues. Malaysian plants are slowly coming back online, but first have to cover backlogged orders before addressing current needs.

Source reported that a cargo from Malaysia was sold to a Chinese buyer at $640/mt FOB, with the deal being handled by Trammo.

North Africa:

Phosphate giant OCP reportedly is operating at full capacity, keeping up its strong demand for more ammonia. The demand from Morocco is keeping producers in Libya and Algeria happy, as well as producers in the Caribbean and the Black and Baltic Seas.

Northwest Europe:

June prices from Baltic suppliers remain the oddity in the ammonia market. Sources said the $435/mt FOB price successfully negotiated for the month of June is likely to be blown away in July. Talks have not yet started, but sources said the higher prices in the Black Sea, Caribbean, and Arab Gulf all point to higher Baltic prices.

The Antwerp price remains steady at $520-$530/mt C&F, but is expected to move once the July Baltic price is set.

Urea

Black Sea, Eastern Canada, Eastern Cornbelt, Great Lakes, India, Market Watch, Middle East, North Africa, Northern Plains, Northwestern Europe, Southeast Asia, U.S. Exports, U.S. Gulf, U.S. Imports, Urea, Western Cornbelt

U.S. Gulf:

Loaded granular urea barges were quoted as high as $455-$465/st FOB, with other June and July cargoes dipping to as low as $430/st FOB, according to sources, versus the week-ago $405-$450/st FOB range.

U.S. Imports:

April urea imports totaled 1.051 million st, rising 0.3 percent from 1.049 million st in the prior year. July-April imports were up 8.3 percent, to 4.11 million st from the year-ago 3.80 million st.

Qatar led July-April imports with 1.13 million st, a 1.0 percent increase from the year-ago 1.12 million st. Saudi Arabia added 593,293 st for the period, rising 11.3 percent from last year’s 532,918 st, while Russia sent 770,563 st, up 54.2 percent from the prior year’s 499,557 st.

U.S. Exports:

Exports of urea firmed 28.7 percent in July-April, to 682,669 st from the year-ago 530,270 st. April exports fell 3.0 percent, however, to 29,647 st, from the prior year’s 30,567 st total.

Eastern Cornbelt:

Urea prices moved to $470-$490/st FOB in the Eastern Cornbelt, up another $5/st from last report, with both the low and high reported in Cincinnati, Ohio. Spot pricing in Illinois was quoted at $475/st FOB East Dubuque and $480/st FOB Ottawa at midweek.

Western Cornbelt:

Urea prices continued to climb at river and inland terminals in the Western Cornbelt, fueled by stronger NOLA values and tight supply. Terminal prices were reported at $465-$470/st FOB Port Neal, Iowa, $475/st FOB Camanche Iowa, and $475-$480/st FOB St. Louis, Mo.

Northern Plains:

The urea market was quoted at $465-$475/st FOB St. Paul, Minn., with the upper end of that range also reported out of terminals in central North Dakota. Delivered tons were pegged at $505-$515/st in North Dakota, up some $30/st at the low end of the range.

Great Lakes:

The urea market had reportedly firmed to $475-$505/st FOB in the Great Lakes region, with the low in Wisconsin and the high at Saginaw, Mich. The market FOB Webberville, Mich., was quoted solidly at the $480/st FOB level at midweek.

Northeast:

Urea prices surged to $485/st FOB Fairless Hills, Pa., at mid-month, up another $20/st from offers in early June and a full $45/st higher than late-May pricing levels.

Eastern Canada:

Despite firming prices south of the border, most Eastern Canada sources reported only minimal changes to the urea market since mid-May. The regional market was quoted at C$590-$640/mt FOB for the last business, up C$10/mt at the low end of the range, but some wholesale suppliers were out of product until resupply happens later in the summer.

India:

Once the last of the vessels was nominated from the May 25 RCF urea tender, the company turned around and called another tender. The latest tender will close on June 24 with a shipping deadline of Aug. 11.

Industry watchers had expected MMTC to call the tender. A standard practice had developed that RCF and MMTC would alternate calling urea tenders until the country achieved enough material to satisfy demand. This time, however, sources said there were some disputes between MMTC and the Department of Fertilizer that would have delayed the buying house calling the tender. Details of the dispute were not clear to sources. However, several said it involved financial issues.

The latest tender has an unusually long validity and shipping period. If past practice is followed, awards in the tender will be issued and accepted by June 30. One trader said the long validity date – through July 2 – could offer the buyer options to delay a final decision longer than usual. The longer shipping period, said one trader, could be an effort to encourage deliveries over a longer period of time to avoid congestion at the ports in the final week of the tender period.

This will be the fourth tender called so far this year. Sources said the amount of tonnage purchased is way behind expectations. In each of the previous three tenders, the buyer hoped to bring in at least 1.2 million mt. The average take was about 640,000 mt, with a strong emphasis on West Coast deliveries.

Besides the usual 8-9 million mt India has purchased in the past, it has to make up for the loss of the annual contract with OMIFCO, which accounted for about 3 million mt. The high prices and limited availability from producing states has led to fewer tons bought and a growing deficit in urea reserves.

Sources said the most likely take from this tender will be around 800,000 mt. If that is the case, said one observer, yet another tender will have to be called soon.

Pricing of the product remains an issue, largely because of the heavy subsidies offered by the government. Not only will the government pay the much higher global price for the urea, but it must also pay the subsidy required to ensure farmers do not get hit with the full impact of the higher prices.

The government guarantees farmers a price of about $72/mt for urea. The higher the price paid to import the product, the more the government pays in subsidies. Efforts to wean farmers from urea have shown limited success because all other fertilizers are not as heavily subsidized and therefore not as cheap.

Sources started the week speculating that the tender price would be around $440-$450/mt CFR. By the end of the week, however, estimates began to settle around $470-$480/mt CFR, with a few arguing for $490/mt CFR.

RCF is facing not only higher urea prices, but also higher freight rates. Sources said quotes for vessels from China to the West Coast of India are now coming in at $35/mt, up from the $18-$20/mt seen at the beginning of the year. Freight rates from the Arab Gulf to the Indian East Coast have seen a similar hike.

China:

Strong demand in the Chinese domestic market is keeping the urea price up. At the same time, sources reported rumors that the central government is considering a 30 percent export duty on urea through the month of August. This combination has essentially frozen talks with exporters.

Sources said those willing to talk about exporting product are offering up prices in the upper-$440s/mt FOB for prills. There was talk that some producers were holding off for $460/mt FOB for granular urea, but a deal quickly moved the market to $450/mt FOB and finally into the upper-$440s/mt FOB. There were also reports that deals have been done in the low- to mid-$450s/mt FOB.

Portside facilities are said to have limited tonnage available for export. Sources said the extra shipping time allotted in the RCF tender will be needed to move product from the factory to the ports to avoid issues moving the product offshore.

Getting the quantity of at least 1 million mt that India wants will require a lot of tons from China. Production in China, however, is reportedly cutting back. Sources said some plants are having difficulty getting the necessary gas or coal supplies needed to power their plants at full capacity. At the same time, the looming export duty has producers looking more to the domestic market rather than to offshore buyers.

Middle East:

The urea market remains tight, with no excess tons to help drive a spot market price. The paper market for the Arab Gulf moved up this week, from $462/mt to $465/mt FOB for July shipments. Those levels, however, are now seen as lower than expectations going into the RCF tender.

Sources said supplies from Saudi Arabia remain limited because a major ammonia and urea line remains down, with no word on when it will be back up and running.

Iranian urea exports for January-May of 2021 were up 94 percent from the same period last year, according to Trade Data Monitor, to 1.3 million mt from 648,000 mt. The main buyers were Turkey with 159,000 mt and Brazil with 69,000 mt.

May exports were down 15 percent, to 301,000 mt from 354,000 mt last year. The top three buyers were South Africa, Brazil, and Nigeria, with each taking about 66,000 mt.

Egyptian producers remained quiet as they wait for orders from the Egyptian government. Earlier this month the government said producers would be required to ensure plentiful supplies for the domestic market. Allocations based on production rates would be issued to fulfil this requirement. By the end of the week, however, sources said the allocations had not been issued.

The producers are facing problems with the delay. Sources said buyers from Europe and other areas are looking for tons. At least one deal was reported for August at $455/mt FOB. This represents a $20/mt jump in price from the last reported August deal.

July tons remain priced at $412-$415/mt FOB from deals concluded back in early May. Sources said even before the government edict, producers were sold out for July and August supplies were limited. The price moved up smartly into the $440s and $450s/mt FOB. Export prices are expected to go up even more once the tons for the domestic market are subtracted from what the producers have available to sell.

Adding to the tightness, Egyptian Fertilizer Company announced it would be taking one urea unit down for the second half of June for routine maintenance.

Sorfert of Algeria stepped in to take advantage of the hesitancy of Egyptian suppliers to sell a cargo to a European buyer at $475/mt FOB for the first half of July. The price fits in with estimations of the Egyptian and Arab Gulf markets if those producers had tons for July.

Producer AOA, also of Algeria, is reportedly sold out through August. Sources said talks for early September tons are focusing on $465/mt FOB, which could reflect a softening of the market as the third quarter ends.

Black Sea:

Sources reported a deal for 15,000 mt of urea at $420/mt FOB. No one could offer details about the deal, but all agreed the price fits in with what other producing countries are charging.

Indonesia:

Kaltim closed a granular urea tender on June 18 for 6,000-45,000 mt. The company awarded 30,000 mt to Liven at $458/mt FOB. The next highest bid came from Koch at $450/mt FOB.

At this level, offering tons into the RCF tender seems unlikely. Sources said the two most likely destinations are Australia or Mexico, with an edge to the latter. Sources said the current offers in Mexico of around $520/mt CFR would fit with the price Liven paid.

Nigeria:

Sources said urea from the new Dangote plant is flowing out in trucks to domestic buyers. At this point, sources said none of the product is expected to be used for export.

Brazil:

All eyes in Brazil remain on the India tender. Sources are looking for guidance on how far prices will go up and how many tons will be pulled out of the market to satisfy Indian demand.

Throughout the week, buyers were focusing on the upper level of a range that rolled over from last week. Even as traders talked about good liquidity, the uncertainty generated by the India tender made everyone nervous. As the week ended, sources reported a deal closing at $515/mt CFR at Paranagua.

The move came as traders were abandoning the lower end of the old range and focusing more on the $475/mt CFR end. Now, the once top of the range has become the floor, putting the upper end at $515/mt CFR.

Rondonopolis buyers were also looking at sufficient supplies, but hesitant buyers. The uncertainty of the inland market was reflected in higher prices at $540-$616/mt FOB ex-warehouse. Some of the buying seemed to be exploratory missions – looking to see what could be achieved – rather than efforts to secure long-term agreements.

UAN

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

U.S. Gulf:

The physical NOLA barge market remained flat at $300/st ($9.38/unit) FOB, although some suggested that NOLA prices may now be under pressure.

U.S. Imports:

April UAN imports totaled 229,393 st, falling 6.3 percent from the prior-year 244,769 st. July-April volumes were 2.10 million st, 14.3 percent below the year-ago 2.44 million st.

Russia led July-April imports at 843,812 st, a 31.2 percent decline from the year-ago 1.23 million st. Trinidad and Tobago followed with 792,817 st, down 1.9 percent from the prior-year 807,983 st, while Canada’s 345,784 st was off 5.0 percent from the year-ago 363,794 st.

U.S. Exports:

April UAN exports slipped 0.8 percent, to 17,520 st from the prior-year 17,663 st. Imports for the July-April period fell 15.6 percent, to 608,174 st from 720,807 st.

Eastern Cornbelt:

The UAN-32 market was quoted in a broad range at $337-$370/st ($10.53-$11.56/unit) FOB in the Eastern Cornbelt, with the low confirmed at Peru, Ill, and the high at Terre Haute, Ind. The market FOB Cincinnati and Mount Vernon, Ind., remained in the $350-$355/st ($10.94-$11.09/unit) range, with UAN-28 pricing at $310-$312/st ($11.07-$11.14/unit) FOB Cincinnati.

Western Cornbelt:

The UAN-32 market was unchanged at $345-$355/st ($10.78-$11.09/unit) FOB in the Western Cornbelt, with pricing at St. Louis and Port Neal pegged firmly at the $350/st ($10.94/unit) FOB level in mid-June.

Northern Plains:

UAN-32 pricing had reportedly firmed to $370/st ($11.56/unit) FOB Winona, Minn., in mid-June, up $17/st from last report. The UAN-28 market in central North Dakota was up as well, to $375/st ($13.39/unit) FOB from the earlier $355/st ($12.68/unit) FOB level.

Great Lakes:

The UAN-28 market was quoted in a wide range at $305-$350/st ($10.89-$12.50/unit) FOB in the Great Lakes region, with the low confirmed at Courtright and the high at Muskegon, Mich. Other Michigan terminals were reported at $330/st ($11.79/unit) FOB Bay City, $340/st $12.14/unit) FOB Coldwater, Elk Rapids, and Burns Harbor, and $345/st ($12.32/unit) FOB Schoolcraft.

Northeast:

The UAN-32 market remained at $325-$340/st ($10.16-$10.63/unit) FOB Baltimore, Md., and Fairless Hills for June-July tons. Pricing out of terminals in upstate New York was steady at $375/st ($11.72/unit) FOB in mid-June.

Eastern Canada:

The low end of the UAN market in Eastern Canada was pegged at C$451/mt (C$14.09/unit) FOB for UAN-32 and C$395/mt (C$14.11/unit) FOB for UAN-28, with the high reported at C$445/mt (C$15.89/unit) FOB for UAN-28 on a spot basis, up C$20/mt from last report. As with urea, sources reported limited supply until later this summer.

France:

Sources said UAN prices have moved up sharply in France amid supply shortages due to the absence of tons from Belarus’ Grodno Azot because of sanction restrictions. Russian product was reportedly sold at €305/mt FCA Rouen this week.