All posts by mickeybarb@charter.net

Maire Tecnimont’s NextChem & Greece’s Mytilineos to Conduct Green Hydrogen Feasibility Study

Europe, Hydrogen, News, News Briefs

Italian engineering group Maire Tecnimont SpA this week also announced that its subsidiary, NextChem, and the renewable and storage development business unit (RSD BU) of Greece-based industrial conglomerate Mytilineos SA, have signed an agreement to develop engineering activities for the implementation of a green hydrogen plant via electrolysis in Italy.

The proposed project will convert renewable energy from one of RSD BU’s solar plants into green hydrogen. NextChem, which is Maire Tecnimont’s subsidiary operating in the field of green chemistry and technologies for energy transition, will act as the engineering partner for the project.

Under the agreement, RSD BU will leverage NextChem’s and Maire Tecnimont Group’s know-how and engineering expertise in hydrogen technologies to grow in the hydrogen business.

Waggaman Woes Weigh on Incitec Pivot 1H; NPAT Down 44 Percent

Ammonia, Ammonium Nitrate, Australia, Earnings, News, Urea

Incitec Pivot Ltd. (IPL), Southbank, Victoria, reported a 44 percent decline in net profits after tax (NPAT) to A$36.4 million on revenue of A$1.72 billion for its first fiscal half-year ended March 31, 2021. This compares to the prior year A$64.6 million and A$1.85 billion, respectively. EBIT was down 31 percent, to A$110.2 million from A$159.2 million.

The company cited a A$59 million impact on NPAT from a reduction in production volumes due to three planned plant turnarounds, delayed due to COVID-19, combined with a A$14 million impact from unplanned outages.

Most notably, the Waggaman, La., ammonia plant was offline for a total of 14.5 weeks in the fiscal first half, with the downtime resulting from a combination of planned major turnaround activity and other unplanned outages (GM May 14, p. 1; April 9, p. 1; Feb. 19, p. 33). Waggaman has a nameplate capacity of 800,000 mt/y.

Dyno Nobel Americas (DNA) reported EBIT of A$31 million, down 72 percent from the year-ago A$113 million, primarily due to the Waggaman turnaround and unplanned outages. DNA revenues were off 13 percent, to A$671.1 million from A$768.8 million. In U.S. dollars, DNA’s EBIT was 69 percent off, at US$23.1 million on revenue of US$503.5 million, down from 1H FY2020’s US$74.9 million and US$513.7 million, respectively.

“Our first-half result was impacted by the COVID-delayed scheduled turnarounds, as well as some unplanned manufacturing outages,” said IPL Managing Director and CEO Jeanne Johns. “Our underlying explosives and fertilisers business performance was strong, reflecting the continued uptake of our premium technology offering, as well as the resilience of our end markets. While the Waggaman plant has demonstrated it’s capable of very good production runs, the recent issues at our plant are clearly disappointing, and our expert taskforce is working hard to get the plant back up and running at nameplate.”

The company said the plant issues have been resolved with the exception of the Waggaman plant.

Waggaman posted a US$18.2 million loss in 1H FY2021 versus a positive EBIT of US$17.9 million for the prior year period. The plant started its first major turnaround since the plant was commissioned in 2016 with several known maintenance issues, but pre-turnaround, the plant had interruptions to production that resulted in four weeks of total downtime, the most consequential of which IPL said was caused by the failure of the regional power grid in the New Orleans area from a late-season hurricane.

Waggaman has been on- and offline ever since. The most recent restart process was stopped on May 8. In its earnings statement dated May 17, IPL said based on current information, repairs and restart are expected now to take three weeks. Earlier this month, the expectation had been two-to-three weeks.

The plant produced 166,900 mt of ammonia in the fiscal first-half, 54 percent less than the year-ago 363,100 mt. However, IPL reported that ammonia sales at 238,800 mt (1H FY2020: 357,600 mt) were above production levels as the business procured product during the plant downtime in order to ensure continuity of supply to its customers.

IPL reported Waggaman has produced 205,000 mt of ammonia in FY2021 to date. It said while it is not aware of “anything specific” that would result in plant downtime in the last four months of the company’s fiscal year (which ends Sept. 30), its team is focused on reducing risks that could cause a plant trip and further downtime.

As previously announced, an outage of up to three weeks is expected during FY2022 or FY2023 to allow for the installation of a new ammonia cooler. The company said Waggaman will be impacted by an increased annual depreciation charge of US$16 million starting from April 1, 2021, as a result of total turnaround costs.

DNA’s Agriculture & Industrial Chemicals (AG & IC) reported a US$2.5 million loss for 1H FY2021, versus the year-ago positive US$1.4 million EBIT. Revenue was down 10 percent, at US$51.8 million.

IPL said AG & IC earnings were negatively impacted by US$5 million in the reporting period as a result of the planned turnaround of the St Helens, Ore., plant, while higher input costs into the Cheyenne, Wyo., operation for ammonia offset higher realized product prices.

Cheyenne operations were impacted by an unplanned outage in 1H FY2021 caused by a bearing failure on the reciprocal compressor, resulting in a 6 percent year-over-year decline in nitric acid production and a 7 percent fall in ammonia production.

An unplanned outage at the Louisiana, Mo., plant caused by a blade failure in the axial compressor resulted in a 37 percent reduction in nitric acid production there compared with a year ago.

Urea and ammonia production from the St Helens plant decreased 33 percent and 32 percent, respectively, in the first fiscal half, mainly due to a planned turnaround.

IPL plans a major turnaround at the Cheyenne plant, currently for 2H FY2022, which is expected to last seven weeks.

There were also planned turnarounds in the reporting period at the Mt. Isa, Queensland, and Phosphate Hill, Queensland, plants, completed in October 2020, as well as the six-week planned turnaround at St. Helens completed in November 2020.

IPL reported that production rates in Australia were largely in line with expectations.

Higher commodity prices, partially offset by a strengthening Australian dollar against the U.S. dollar, had a net favorable earnings impact of A$25 million.

IPL’sFertilisers Asia Pacific segment swung back to the black in 1H FY2021, posting an EBIT of A$20.2 million, versus the year-ago A$9.9 million loss. The company cited its Response Plan savings as the main driver for the improvement, as well as rain boosting agricultural output and demand for fertilizer.

“As we progress our strategy to become a soil health company, good rainfall events across eastern Australia position us well to deliver for the agricultural sector in the second half,” said Johns.

IPL Fertilisers Asia Pacific revenue increased 2 percent to A$628.3 million, up from the prior year A$616.5 million.

Positive contributions to the EBIT result included a A$6 million net increase from manufacturing performance. This was largely due to higher production volume at the Phosphate Hill operation, excluding a planned shutdown of ammonia production at the site.

As of March 31, Phosphate Hill had 55,000 mt of additional manufactured ammonium phosphate product on hand, which IPL said represents a A$6 million earnings impact based on prior-year commodity prices. The company expects the sale of the product on hand at current market prices to realize a profit in excess of A$25 million in total in 2H FY2021.

There was also a A$39 million net increase due to higher global fertilizer prices in the reporting period, which was partially offset by unfavorable movements in exchange rates.

Planned plant shutdowns caused an A$8 million reduction in EBIT. The aforementioned planned shutdown of ammonia production at Phosphate Hill negatively impacted EBIT by A$13 million compared to a year-ago. This was partially offset by higher year-over-year production of urea at Gibson Island in Brisbane due to the 1H FY2020 results, including the impact of a turnaround at the site completed in March 2020 (GM Nov. 13, 2020).

First fiscal half ammonium phosphate production at Phosphate Hill decreased 6 percent year-over-year to 428,500 mt, mainly due to the ammonia plant shutdown. Ammonium phosphates sold amounted to 413,000 mt, down from the prior year 448,000 mt.

IPL expects Phosphate Hill production of ammonium phosphates for 2H FY2021 to be in line with 2H FY2020. It plans a major turnaround of the plant in 2H FY2022, which is anticipated to last seven weeks.

The Gibson Island plant produced 241,800 mt of urea equivalent product, up 54 percent over the prior-year period’s 156,900 mt. Product sold (subject to urea price movement) totaled 126,000 mt, up from the year-ago 110,000 mt.

Overall, Fertilisers Asia Pacific sales volumes were down marginally in the fiscal first half at 1.257 million mt, versus the year-ago 1.262 million mt. IPL said while agronomic conditions have been generally favorable, 1H FY2021 distribution volumes were negatively impacted by product supply constraints out of China, while flooding in Queensland and New South Wales delayed some sales that would have normally occurred in March.

The company highlighted the significantly higher global fertilizer prices in the reporting period, with realized ammonium phosphate prices improving more than 45 percent compared with a year-ago.

IPL said increased soil moisture levels in most districts on Australia’s East Coast, coupled with an outlook from the country’s Bureau of Meteorology for average rainfall, is expected to drive demand for fertilizer through the winter cropping season.

IPL’s Dyno Nobel Asia Pacific (DNAP) segment reported an essentially flat fiscal first half EBIT of A$70.2 million, versus the year-ago A$71.1 million. Revenue fell 7 percent to A$455.8 million, down from A$491.9 million.

Ammonium nitrate manufactured at the Moranbah, Queensland, plant increased 4 percent to 183,000 mt, up from the prior year 175,800 mt, while DNAP volumes of AN sold fell 15 percent, to 319,900 mt, down from 377,500 mt.

The Moranbah plant began a scheduled major turnaround early this month. Nitric acid and ammonium nitrate production are due to recommence in the first half of June, with ammonia production to return to full rates during the second half of June. IPL expects lower second-half FY2021 production at the plant due to the turnaround. The earnings impact is expected to be approximately A$15 million.

IPL did not issue formal guidance for its fiscal second-half, but said it expects stronger-than-normal weighting to 2H FY2021 earnings and cash flow on plant reliability improvement and favorable prevailing fertilizer market conditions relative to the prior year. The company also has unsold manufactured ammonium phosphate product on hand, to realize in excess of A$25 million in profit in the 2H at current market prices, and has just one planned turnaround in 2H FY2021 versus three completed in 1H FY2021 (+A$44 million).

The company said it will pay an interim dividend of one Australian cent per share, 100 percent franked, representing a 53 percent payout ratio of NPAT. It did not pay an interim dividend last year.

Ammonia

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

U.S. Gulf/Tampa:

Tampa ammonia prices for May continued to be called $545/mt CFR, with the last done NOLA barges at $545/st FOB.

June pricing may be contentious – buyers think it is time for a drop, but outages could be a factor. Incitec Pivot’s Waggaman, La., ammonia plant, which has been up and down since hurricane season, continued to be down last week (see Incitec Pivot earnings story).

Nutrien reported that its Geismar, La., plant was expected to be down ten days due to heavy rain. In the meantime, the company brought back up two idled Trinidad plants, but gas curtailments and planned turnarounds are expected to impact production levels. Nutrien also has its Borger, Texas, plant down for a 65-day turnaround.

Eastern Cornbelt:

The ammonia market was unchanged at $615-$665/st FOB in the Eastern Cornbelt, with the low confirmed at Kingston Mines, Ill., and Huntington, Ind., and the high at Lima, Ohio. Other spot offers ranged from $625-$650/st FOB in Illinois and Indiana in mid-May.

Western Cornbelt:

The ammonia market was steady at $600-$625/st FOB in the Western Cornbelt, depending on location, with continued reports of delivered offers for as low as $585-$590/st into Missouri for limited tons from production points in Oklahoma.

California:

Anhydrous ammonia was unchanged at $626/st DEL in California, with aqua ammonia referenced at $172/st FOB.

Pacific Northwest:

Ammonia prices were unchanged at $650-$665/st FOB in the Pacific Northwest, depending on location, with delivered tons quoted at $675-$680/st in the region. Aqua ammonia in the region remained at $155-$160/st FOB and $170/st DEL.

Western Canada:

Ammonia pricing in Western Canada remained in a broad range at C$950-$1,050/mt DEL in mid-May, depending on location.

Black Sea:

Ammonia shipments out of Yuzhnyy are all said to be under contracts. Technical issues at Toaz are limiting the amount of ammonia available for export. Sources said some regular buyers from the area have had to look elsewhere for product, and this situation might continue for a few more weeks.

The lack of any spot business means getting a new spot price indicator is not happening. So far, talks for contracts are showing a slight softening of the price into the $430s/mt FOB. Reportedly, Trammo and Ostchem have been in extended talks. Trammo is looking for a price closer to $400/mt FOB, while Ostchem is arguing for the $450s/mt FOB. Sources said it looks as if there may be an agreement in the $430s/mt FOB.

Producers have little wiggle room in pricing. Traders said the rising price of natural gas will make any deal in the low-$400s/mt FOB difficult to pull off.

India:

The closing of the FACT tender for three lots of 7,500 mt was extended to May 20. As Green Markets went to press, details of the tender results were not released by the Indian buyer.

International traders said the recent move by the Indian government to increase the DAP subsidy could lead to stronger demand for the phosphate fertilizer. In turn, said sources, demand for ammonia might also increase.

Middle East:

Production is back up at Ma’aden following an unexpected week-long shutdown. Even with the plant running again, there is still a backlog of orders to fill. One trader said there is a lineup of at least four vessels waiting to be loaded.

The tightness in the market is evidenced by the lack of any spot deals out of the area. Traders said they were hoping that even one small lot might be sold on a spot basis to give the market an indication of where things really are.

Contracted tons out of the area have an estimated netback in the low-$500s/mt FOB. A normal gap between contract and spot tons would put a spot price in the $520s/mt FOB. At the same time, however, a sale of $580/mt FOB out of Malaysia is seen as having an Arab Gulf-equivalent price in the $530s/mt FOB.

Sources are watching the FACT/India tender closely. If the tender is not scrapped, the number of offers submitted, along with the offered prices, would give a long-awaited look at where the spot market might settle.

Northwest Europe:

Ammonia prices remain at $520-$530/mt C&F as the supply and demand balance in Europe seems to have stabilized. Likewise, the Baltic price is holding steady around $450/mt FOB. Talks on the June price are expected to start early next week.

North Africa:

Sources said OCP picked up 15,000 mt from Libya. According to OCP, they saw a temporarily low price and snapped up a bargain. According to just about everyone else, the phosphate giant moved on the product because it needed the ammonia. Reportedly Algeria is sold out for May and June.

South Korea:

April ammonia imports of 92,000 mt in South Korea were the lowest so far this year, while being up 10 percent from April 2020 imports of 83,000 mt. Year-to-date imports were reported at 472,000 mt, according to Trade Data Monitor, up slightly from 460,000 mt last year. Indonesia remains the dominant supplier of ammonia to South Korea.

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 barges reportedly moved up, firming to $363-$390/st FOB from the week-ago $355-$375/st FOB range. Loaded barges that were ready to go were put in the $385-$390/st FOB range.

While India’s quick retender for more urea was credited with boosting NOLA price ideas early in the week, sources also cited domestic demand and prospects for a good rice season.

Eastern Cornbelt:

Urea prices were quoted at $420-$440/st FOB in the Eastern Cornbelt, depending on location, with the Cincinnati, Ohio, market pegged at $425-$435/st FOB at mid-month. Pricing at East Dubuque, Ill., was reported at the $420/st FOB level for May-June tons.

Western Cornbelt:

Urea remained at $420-$440/st FOB in the Western Cornbelt, with the low reported at St. Louis, Mo., and Caruthersville, Mo., and the high at Port Neal, Iowa. The market FOB Camanche, Iowa, was pegged at the $420/st level for May-June tons, while offers at St. Paul, Minn., were reported at $425-$430/st FOB at mid-month.

California:

Urea pricing was pegged in a broad range at $500-$520/st FOB port terminals for bulk tons, with unconfirmed reports of bagged product being offered at the $580/st FOB level. Sources in Northern California reported limited rail-DEL offers in the $490-$500/st range. “There’s not much available,” said one contact.

Pacific Northwest:

The urea market was steady at $475/st FOB Rivergate, Ore., and $480/st FOB Aurora, Ore., with delivered tons ranging from $490-$510/st in the Pacific Northwest, depending on location.

Western Canada:

The urea market remained at C$655-$680/mt FOB in Western Canada, depending on location, with most of the delivered price quotes falling in a narrower C$655-$660/mt range at mid-month.

India:

RCF began the week by announcing a tender to close on May 25 with a shipping deadline of June 30. The announcement kicked off a firestorm of price increases throughout the urea industry.

By the end of the week, prices had risen in the main producing markets so that levels at $382-$400/mt CFR were being cited as possibilities. Arguments were leaning heavily toward the $400/mt FOB number.

The early call broke a general rule that new tenders are not issued until the tons from the last tender are loaded and heading for India. However, the two tenders held so far this year did not draw the amount of urea that the buyers wanted.

The March 22 tender by RCF looked as if it would bring in at least 1.2 million mt. However, orders came down that the buyer should not consider tonnage from China. In the end, RCF took 802,500 mt.

The second tender brought in only 549,000 mt against expectations of awards of 1.5 million mt. In the May 4 MMTC tender, the limited tonnage came because producers would not lower their prices to meet the winning price.

After hoping to get more than 2 million mt in the first two tenders, India has only booked 1.35 million mt. The demand for urea in the country is strong enough that a new tender needed to be called before the product from the previous tender is shipped. This happened last year as well, when MMTC and RCF alternated calls for a total of six tenders between May and August.

Sources said supplies could be limited from the Arab Gulf because most of the MMTC tender was covered from that area. At the same time, Chinese producers are finding several other buyers for its product, from Southeast Asia to the Americas. In the end, they may not be as desperate to sell to India as they have been in the past.

In addition to the possibility of limited tonnage being offered, sources said more ship owners are hesitant to allow their vessels to go to India. The owners are worried that onward ports of call would require lengthy and expensive quarantines of the crew. Sources also said unions and agencies handling crew assignments seem to be pressuring the owners to skip runs into Indian ports.

The results of the RCF tender are scheduled to be released at 11:30 a.m. IST at the RCF headquarters.

China:

Urea prices in China moved up all week. Sources said the week started with prilled urea in the upper-$350s/mt FOB and granular in the upper-$360s/mt FOB, not much different from where prices were the previous week.

By the end of this week, however, sources were reporting granular in the mid-$380s/mt FOB and prills in the mid-$370s/mt FOB. These levels, so far, appear to be the asking price by producers. There are rumors that some small deals were done at these levels, but no one could name buyers or sellers.

What has been confirmed, however, is that traders are only talking about granular at $380/mt FOB, but with possible deals at $375/mt FOB, and prills in the mid-$370s/mt FOB but really in the lower-$360s/mt FOB. Sources said firm bids are coming in at $380/mt FOB for granular, with prills about $10/lower. They added that producers are rejecting these prices in favor of higher levels.

Demand for limited tons into the domestic market is also adding some extra heat to the market. Sources said the industry will have to wait until RCF issues awards for Chinese product to see how hot the market really is.

At the current level under discussion, sources said the price to India would be about $400/mt CFR. That price, said one trader, could cause RCF to limit how many tons it buys.

Middle East:

Egyptian urea moved up $30/mt in less than a week. By the end of the week, sales from two different producers were confirmed at $400/mt for July shipment.

Steady sales for June shipments moved to $375-$380/mt FOB by midweek. The movement to $400/mt FOB kept going with the July sales.

Arab Gulf prices have also moved up, but not with the same speed as Egypt. The paper market puts the Arab Gulf at $375/mt FOB for June and July. So far this week, sales have been reported at $365/mt FOB for late-May and early June shipments.

The current price could lead to offers into India in the mid-$380s/mt CFR at current freight rates. If the urea price or the freight rates increase, sources said it is possible to see Arab Gulf product offered in the $390s/mt CFR.

Black Sea:

Reports of the shutting of the AZOT plant led to speculation of reduced availability of prilled urea from Yuzhnyy. The lack of new product for the spot market means prices held steady at around $320/mt FOB.

Sources said the upcoming RCF tender might not have many tons offered because of limited resources from the major supplying areas. There is speculation that no more than two cargoes could be offered from Yuzhnyy. If true, that would match what was awarded in the MMTC tender earlier this month.

Indonesia:

Sources said producers are holding back on issuing any new auctions until the RCF/India tender closes. One trader said the producers will most likely use the results of that tender to determine what their reserve price should be.

For now, the producers seem to be content with arranging for the loading of tonnage they sold during the past few weeks.

South Korea:

Year-to-date urea imports in South Korea are down 9.4 percent, to 353,000 mt from 390,000 mt last year, according to Trade Data Monitor. April imports were down 11 percent, to 90,000 mt from 101,000 mt in April 2020. The tonnage brought in last month fits within the average take of 89,000 mt/month so far this year.

Brazil:

Imported urea prices in Brazil moved up on the heels of the RCF tender announcement.

By the end of the week, prices had moved up $15/mt to $415/mt CFR in confirmed sales. Sources reported additional deals that took the range for Paranagua to $410-$420/mt CFR. Talks are now reportedly focusing on the upper end of the range, leaving anything under $415/mt CFR to history.

Rondonopolis also moved up, with sources reporting a $20/mt jump to $518-$520/mt FOB ex-warehouse. Sources reported some interest inland for more urea, but not in large quantities. The barter rate moved to 58 bags of corn for 1 mt of urea, compared with 65 bags last week.

UAN

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

U.S. Gulf:

The NOLA UAN barge market continued to be quoted at the $300/st ($9.38/unit) FOB mark. Good inland demand had players speculating about an uptick at NOLA. East Coast vessel business continued to be called $345-$350/mt CFR.

Eastern Cornbelt:

UAN-32 remained at $325-$345/st ($10.16-$10.78/unit) FOB in the Eastern Cornbelt, with the low at Mount Vernon, Ind., LaSalle, Ill, and Seneca, Ill., and the high at Burns Harbor, Ind.

Sources continued to quote the Cincinnati market at $332/st ($10.38/unit) for UAN-32 and $285-$290/st ($10.18-$10.36/unit) FOB for UAN-28, with reports of good sidedress demand out of Ohio River terminals during the week.

Western Cornbelt:

UAN-32 was unchanged at $325-$345/st ($10.16-$10.78/unit) FOB in the Western Cornbelt, with the high out of spot Iowa terminals and the low reported at St. Louis.

California:

The UAN-32 market in California was strengthening, with pricing reported at a firm $365-$385/st ($11.41-$12.03/unit) FOB Stockton and other port terminals, up $15-$20/st from last report. Sources reported limited rail-DEL offers at the $380-$390/st ($11.88-$12.19/unit) level.

“I don’t see the market softening anytime soon,” said one regional contact. “And if it does, summer values will still be much higher than prior year.”

Pacific Northwest:

The UAN-32 market was up slightly at $385-$395/st ($12.03-$12.34/unit) FOB in the Pacific Northwest, depending on location, with rail-DEL offers reported in the $410-$415/st ($12.81-$12.97/unit) range.

Western Canada:

The Western Canada UAN-28 market was unchanged at C$425-$430/mt (C$15.18-$15.36/unit) DEL at mid-month, with the low reported in Saskatchewan.

Ammonium Nitrate

Ammonium Nitrate, France, Market Watch, Western Cornbelt

Western Cornbelt:

Ammonium nitrate pricing remained at a firm $460/st FOB in the Western Cornbelt, where available.

France:

Yara on May 21 increased its list price for June deliveries of its 33.5 percent ammonium nitrate (YaraBelaExtran33.5) in France, effective immediately. The new price is set at €325/mt bulk CPT, and is a €20/mt hike on the previously posting for June deliveries, announced just 10 days ago (GM May 14, p. 8).

Ammonium Sulfate

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

U.S. Gulf:

Ammonium sulfate barge prices continued to be put in the $265-$275/st FOB range, though sources indicated toward the end of the week that it might be hard to find anything below $275/st FOB.

Eastern Cornbelt:

Granular ammonium sulfate was quoted at $300-$320/st FOB in the Eastern Cornbelt, with the low at Cincinnati. Pricing out of East Dubuque was confirmed at the $305/st FOB level for May-June offers, while the last postings from Interoceanic (IOC) included $310/st FOB Upper Mississippi and Illinois River terminals and $315/st FOB Ohio River terminals.

Western Cornbelt:

The ammonium sulfate market was pegged at $300-$330/st FOB in the Western Cornbelt, with the low at St. Louis and the high at Sioux City, Iowa. May-June offers FOB Camanche were quoted at the $305/st level early in the week.

California:

Premium grade ammonium sulfate prices in California were up $20/st, to $325-$335/st FOB, depending on location. IRM’s postings for WesternStandard were up $20/st as well, to $318/st FOB Chico and Woodland, Calif.

Pacific Northwest:

Ammonium sulfate pricing in the Pacific Northwest ranged broadly at $338-$365/st FOB or DEL for granular, up significantly at the top end of the range, with standard grade quoted at $300-$305/st FOB or DEL and reflecting a $10-$15/st increase from last report.

Western Canada:

Ammonium sulfate prices continued to firm in Western Canada amid reports of tight supply. Sources quoted new offers in the C$515-$530/mt DEL range, with inventories described as “limited at best.”

China:

Prices are in the upper-$150s/mt FOB for caprolactam-grade ammonium sulfate and are expected to move up as the price of urea goes up.

Sources said a firming urea price means more opportunities for ammonium sulfate sellers. Higher urea prices often prompt NPK producers, in particular, to drop urea as their source of nitrogen in favor of ammonium sulfate. In addition to getting their nitrogen content for less, the product can advertise the addition of sulfur in the blend.

Brazil:

Paranagua moved up smartly to $225-$235/mt CFR for granular ammonium sulfate. The $25/mt lead came as inland buyers were nervous about higher urea prices and looked for alternative nitrogen supplies.

The Rondonopolis price shifted mildly to $310-$345/mt FOB ex-warehouse. Likewise, the corn barter ratio shifted slightly, from 39 bags to 38 bags for 1 mt of ammonium sulfate.

DAP/MAP

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 postings firmed to $590/st FOB, up $10/st from the week-ago $580/st FOB. MAP moved up as well, to $615/st FOB from last week’s $605/st FOB.

U.S. Gulf:

Barge DAP and MAP prices at NOLA continued to press higher for the week, sources reported, although prompt availability was tightening.

DAP loading in a wide May-September window was reported firming to a $585/st FOB high, up from the prior $580/st FOB ceiling, while the bottom of the range lifted to a reported $577/st FOB from the week-ago $570/st FOB.

Despite the wide loading window, many sources described prompt availability as limited and expected most material to load in the July-August window.

MAP also moved up, with players quoting May-September trades at $610/st FOB, rising from $600-$610/st FOB at last report. Sources noted open interest in the $610-$620/st FOB range for forward loading, although tight supply limited trades at that level, players said.

DAP barges were reported in the $577-$585/st FOB range for the week, firming from $570-$580/st FOB in the prior report. Sources quoted MAP trading at $610/st FOB, climbing from $600-$610/st FOB at last report.

U.S. Exports:

Nothing new was done on the week’s Gulf spot export market, with the last reported business consisting of a 6,000-7,000 mt cargo set for May loading and priced at $583/mt FOB. An additional small-lot DAP cargo that traded around the same time carried $595/mt FOB pricing, but was excluded from the Green Markets range due to the load’s diminutive size.

Based on reported business, the Gulf export phosphate markets continued to be quoted at $583/mt FOB, unchanged from the prior week.

Eastern Cornbelt:

DAP was quoted at $620-$630/st FOB in the Eastern Cornbelt, with the lower end of the range confirmed at Cincinnati. MAP pricing had reportedly strengthened to $650-$660/st FOB in the region, up $10/st at the low end of the range.

Western Cornbelt:

Phosphate prices continued to climb in the Western Cornbelt. DAP was pegged at $610-$625/st FOB in the Western Cornbelt, up another $5/st from last report. MAP was quoted in the $645-$660/st FOB range, some $15-$20/st higher than the previous week, with the low at St. Louis, Mo., and the upper end at Dubuque, Iowa.

Sources reported the Catoosa/Inola, Okla., market at $620/st FOB for DAP and a firm $650/st FOB for MAP, while pricing FOB St. Paul, Minn., was reported at $625/st for DAP and $650-$660/st for MAP.

California:

Sources reported firming phosphate prices in California. MAP prices were up $25/st following two recent back-to-back producer price hikes, with levels now quoted at a firm $715/st FOB or DEL in California

Pacific Northwest:

MAP prices were up $25/st from last report in the Pacific Northwest, to $702/st FOB Aurora, $705/st DEL in Washington, Oregon and Nevada, and $695/st DEL in Idaho, Utah, and Montana.

Western Canada:

The MAP market in Western Canada was quoted at C$930-$955/mt FOB and $950-$960/mt DEL in mid-May, depending on location.

Saudi Arabia:

Saudi Arabia DAP continued to be heard in the $545-$565/mt FOB range for the week.

China:

Prices in China are on a rebound as DAP producers are now asking $550/mt FOB. The rebound came as the Indian government announced it would increase the subsidy to DAP and as phosphate demand picked up in the Americas. Sources said deals were done this week in the upper-$540s/mt FOB.

Traders said producers are confident they will be able to move the price into the $550s/mt FOB soon.

India:

For now, the imported DAP price in India remains in the $560s/mt CFR. However, rising prices from China and an anticipated increase in demand could move the price up to $600/mt CFR.

The increased demand for DAP is expected following an announcement from the Indian government that it is increasing the subsidy for a 45 kg bag of DAP from Rs500 (US$6.84) to Rs1,200 (US$16.43).

The subsidy will account for half the market price of DAP at the distribution centers, which is currently Rs2,400/bag, and drops the price to farmers down to 2019 levels of Rs1,200/bag.

Under pressure from the central government, companies first sold all their old DAP at the Rs1,200 level instead of adjusting it to match current market rates. That product was soon sold out and replaced with newer and more expensive domestic and imported DAP.

The government explained that if it did not raise the subsidy, farmers would be paying Rs1,900, which would cause a hardship on the farmers. The subsidy of Rs1,200 is only for this season, however. The government was clear to point out that it does not want to continue to subsidize DAP and other phosphates at such a high level in the future.

International traders said increasing the subsidy is a typical action taken by an Indian government looking to gain favor with the farming community. One trader said Prime Minister Narendra Modi’s popularity ratings are dropping because of the current COVID-19 situation in India, and what many farmer organizations criticized as the mishandling of agricultural reform programs last year.

Brazil:

Prices for MAP in Brazil have moved up, reflecting a general global increase in phosphates. Sources put the Paranagua market at $620-$645/mt CFR, up $25/mt.

Sources said OCP started selling product this week at $620-$625/mt CFR, but quickly shifted into the low-$630s/mt CFR.

Rondonopolis is now pegged at $700-$735/mt FOB ex-warehouse, up $10/mt from last week at the higher end of the range. Higher prices are expected, said sources, because supplies of MAP remain tight and demand is steady.

Inland distributors described MAP supplies as limited-to-nonexistent. Imports from early May to mid-June total 197,000 mt, according to shipping and port reports.

The barter rate for 1 mt of MAP remains at 37 bags of soybeans.