All posts by mickeybarb@charter.net

Corteva Withdraws New Dicamba Product

News, News Briefs

Corteva AgriScience, Wilmington, Del., recently confirmed that it is withdrawing its application for approval of a new dicamba configuration with the U.S. Environmental Protection Agency (EPA). The announcement follows Corteva’s decision in late February that it was discontinuing sales of its dicamba herbicide FeXapan® in the U.S. and Canada (GM March 12, p. 32).

Corteva’s newer dicamba configuration, which used dicamba choline salt, was supposed to exhibit low volatility and minimal drift. Crop damage from dicamba drift has resulted in thousands of farmer complaints, with dicamba manufacturer Bayer agreeing last June to pay up to $400 million to resolve the multi-district litigation involving crop damage claims for the 2015-2020 crop years (GM June 26, 2020).

Corteva’s FeXapan’s registration was canceled last June for the 2020 growing season, along with Bayer’s XtendiMax and BASF’s Engenia dicamba herbicides (GM June 5, 2020). In October EPA announced its approval of new five-year registrations for XtendiMax and Engenia, but not for FeXapan (GM Oct. 30, 2020). Corteva said in February that it will focus instead on its Enlist® weed control portfolio.

Corteva Launches Carbon Program

News, News Briefs

Corteva Agriscience, Wilmington, Del., on April 8 announced the creation of a new Carbon and Ecosystems Services portfolio to develop innovative products and services. The company said the portfolio is part of Corteva’s Digital Business Platform, and will provide farmers with simple and clear access to incentives and initiatives related to sustainable agriculture practices.

Under the program, Corteva Carbon Specialists will work with farmers and industry collaborators across the food and agriculture system to uncover carbon market opportunities, such as providing access to new markets for the sale of carbon credits, and allowing farmers to earn an estimated $5-$20 per acre per year by introducing cover crops and/or reducing tillage.

Corteva said the introductory launch of the Carbon Initiative will be targeted to rowcrop farmers in Illinois, Indiana, and Iowa this year, with the intent to expand to new geographies and crops for the 2022 growing season.

“We recognize the urgency of addressing climate change to ensure farmers will be able to produce a healthy food supply for generations to come,” said Anne Alonzo, Senior Vice President, External Affairs and Chief Sustainability Officer. “There is increased understanding that sustainable climate change mitigation is not only critical for our environment, but also for ensuring the ongoing health of the farming sector globally. Corteva Agriscience is dedicated to providing our customers with best-in-class solutions to address environmental issues while strengthening their businesses.”

Additionally, Corteva reported that it has created the 2021 Climate Positive Leaders Program, which will recognize “early adopter” farmers and ranchers who have successfully implemented climate positive agriculture practices. The nomination-based program is open to farmers in the U.S., Canada, Brazil, Argentina, Germany, France, Australia, and Kenya. A panel of judges will review the applications, with winners and runners-up announced later this year. Nominations are open now until June 19, 2021.

WVR to Use Honeywell Tech for Carbon Sequestration

News, News Briefs

Honeywell on April 12 announced that Wabash Valley Resources LLC (WVR) has selected a range of Honeywell UOP technologies to capture and sequester up to 1.65 million tons of carbon dioxide (CO2) annually and to produce clean hydrogen energy from a repurposed gasification plant in West Terre Haute, Ind. The project is expected to be one of the largest carbon sequestration initiatives in the U.S. to date.

“By implementing Honeywell UOP’s proven technologies for the capture of CO2 and hydrogen purification, we will significantly reduce greenhouse gas emissions,” said Dan Williams, Managing Director of WVR “This project will allow for market access to clean hydrogen, as well as support the domestic growth of the hydrogen economy.”

Honeywell said UOP will provide technology licenses, basic engineering, and specialty equipment, including a modular MOLSIV™ molecular sieve dehydration unit, modular Ortloff CO2 Fractionation unit, and Polybed™ pressure swing adsorption (PSA) unit to sequester carbon dioxide and process synthesis gas from the gasification unit.

The Ortloff CO2 Fractionation technology will produce a high-purity liquid CO2 stream while separating a hydrogen-rich stream that will be purified by the PSA unit. The CO2 stream will be sent for permanent geological storage, while the hydrogen stream can fuel a hydrogen turbine to generate electrical power. The hydrogen stream can also be used in chemical synthesis or marketed as a clean transportation fuel.

An affiliate of Phibro LLC, WVR acquired the West Terra Haute gasification plant in 2016, with plans to convert it to a hydrogen production plant and carbon capture and sequestration project. The project was recently selected to receive funding from the Department of Energy (DOE) as part of the Carbon Storage Program.

A recent study by the Fuel Cell and Hydrogen Energy Association estimates the hydrogen economy can generate as much as $140 billion per year in revenue and create 700,000 U.S. jobs by 2030. At projected growth rates, this could grow to $750 billion per year in revenue and 3.4 million jobs by 2050.

Corteva Inc. – Management Brief

Management Briefs

Corteva Inc., Wilmington, Del., announced that it has appointed Dave Anderson as its new Executive Vice President (EVP) and Chief Financial Officer (CFO), effective April 12, 2021. Anderson succeeds Gregory R. Friedman, who is retiring from Corteva.

Anderson previously served as CFO at Honeywell from 2004-2014. His most recent position was as Interim CFO at Criteo S.A., which he joined after serving as CFO and Chief Operating Officer at Nielsen Holdings plc. Prior to that he served as EVP and CFO of Alexion Pharmaceuticals, which he joined following his tenure at Honeywell.

Before Honeywell, Anderson served as CFO for ITT Inc., Newport News Shipbuilding Inc., and RJR Nabisco Inc. He also held various senior finance roles at the Quaker Oats Company, Kraft Food Inc., and FMC Corp. Anderson is currently a board member of American Electric Power and a previous board member of Cardinal Health.

“Dave brings a track record leading world-class finance functions at both established companies and startups, and I look forward to capitalizing on his expertise as we take our strong organization to the next level, supporting our accelerated growth and innovation investments while maximizing productivity and returns,” said Corteva CEO James C. Collins.

Kalium Reports Commissioning Underway at Beyondie SOP Project

Australia, News, News Briefs, Specialty, Sulfate of Potash

Sulfate of potash (SOP) junior Kalium Lakes Ltd., Balcatta, Western Australia, recently reported it had completed its first major commissioning activity for its Beyondie SOP project, located 160 km southeast of Newman, in Western Australia.

Kalium is the second Australian SOP junior to start commissioning; late last month Salt Lake Potash (SO4) reported that it had begun commissioning of the process plant at its Lake Way SOP project near Wiluna, in Western Australia (GM March 26, p. 36).

Kalium’s commissioning activity involved the introduction of gas all the way to the delivery station near the SOP processing plant. From the delivery station, gas will be supplied through low pressure pipelines to the power station, boiler, and other process plant equipment. Commissioning of the power plant is also well advanced.

Kalium reported that overall, the Beyondie SOP project was 83 percent complete as of mid-March.

To date, over 87,000 mt of equivalent SOP has been pumped from the bore fields and trenches into the primary evaporation ponds at Beyondie. Harvesting of the potassium salts is due to start in May, and will provide the necessary feedstock for commissioning and subsequent production ramp up of the SOP purification plant, the company said.

First commercial production and inaugural sales remain on target for September 2021.

Kalium last month reported a “debottlenecking” style review of the design of the SOP purification plant, combined with performance to date from the brine supply and evaporation ponds, indicating that steady state production of at least 100,000 mt/y of SOP is achievable by mid-2022.

SO4 plans an output of 245,000 mt/y of SOP at full production from its Lake Way SOP project and is targeting full load commissioning and SOP production at Lake Way – and sales – in the June quarter.

All of the SOP fertilizer currently used in Australia is imported, with Germany’s K+S supplying around 60 percent of the import volume.

Strike Energy Reports Start of Pre-Feed Work on Western Australia Ammonia, Urea Project

Ammonia, Australia, Featured, News, Urea

Thebarton, South Australia-based Strike Energy Ltd. reported that French engineering group Technip Energies has begun the pre-FEED scope work on Strike’s Project Haber ammonia and urea fertilizer project in Geraldton, Western Australia, after completing the project feasibility studies.

Thebarton, South Australia-based Strike Energy Ltd. reported that French engineering group Technip Energies has begun the pre-FEED scope work on Strike’s Project Haber ammonia and urea fertilizer project in Geraldton, Western Australia, after completing the project feasibility studies.

Strike in January announced the launch of the project at Narngulu Industrial Estate, adjacent to Geraldton Port, which includes a 1.4 million mt/y urea plant and an 800,000 mt/y ammonia plant (GM Jan. 15, p. 1). The project would use gas from the company’s Greater Erregulla development in the Perth Basin via a 120-km pipeline.

The pre-FEED work will further refine the capital cost estimate for the 1.4 million mt/y plant, which currently sits at US$1.74 billion, said Strike. In order to maximize the amount of inherent carbon consumed from the natural gas via the manufacturing process, Technip Energies has included chemical process engineering works in its scope.

Strike also reported that it had engaged Subiaco, Western Australia-based-JBS&G Stratgen to start the environmental approvals and planning process, which will be a key pre-FEED long-lead activity.

The company announced on April 16 that it has received firm commitments to raise A$75 million (before costs) though an institutional placement, and that it will also offer a non-underwritten Share Purchase Plan to eligible shareholders to raise a further A$5 million.

In terms of potential offtake interest, the project developer said more than 12 buyers have participated in the process to date, with further expressions of interest received. It said current expressions for long-term offtake vary from 3-10 years and exceed Project Haber’s proposed 1.4 million mt/y supply.

The company has also completed transportation and logistics studies that it said support Project Haber’s positioning as Western and Southeastern Australia’s lowest cost source of urea fertilizer. “Shipping advantages when compared to the main international competitors range between A$5-A$25/mt [approximately US$3.8-US$19/mt at current exchange rates] for deliveries from Geraldton to South Australia and Victoria,” Strike said.

The company reported that it is in discussions with Geraldton-based Mid-West Port Authority with regard to securing its berth and Port Access Agreement for East Coast and international deliveries of urea.

Australia’s urea demand has been growing strongly in recent years, with consumption in 2019 at around 2.1 million mt, according to IFA data. Green Markets estimates consumption reached about 2.5 million mt last year.

However, the country’s domestic urea production has almost completely ceased due to rising energy costs. Incitec Pivot Ltd. (IPL) currently is Australia’s sole urea producer, with capacity to produce 340,000 mt/y at its Gibson Island plant in Brisbane, Queensland, on Australia’s East Coast, according to Green Markets data. However, IPL has been dogged with gas supply issues to the Gibson Island production site, which also includes ammonia and ammonium sulfate production capacity.

Australian urea demand has been increasingly met by imports, with 2.4 million mt imported last year, up from 1.93 million in 2019, according to Trade Data Monitor. Three-quarters of the import volume came from Middle East producers last year, with China providing around 18 percent of the total. Australia also imports around 300,000 mt of UAN annually.

Strike’s Project Haber is one of a handful of urea production projects at various stages of development in the country.

Perdaman Industries (Chemicals and Fertilisers) plans to establish a 2.14 million mt/y granular urea project near Karratha on Western Australia’s Burrup Peninsula, a project that has been more than a decade under development. The company signed a 20-year natural gas supply agreement with Woodside Energy for the project in November 2018 (GM Nov. 21, 2018), and inked an engineering, supply of equipment and materials, construction, pre-commissioning, and commissioning contract for the execution of the urea plant in December last year with Clough Group, Perth, and Italy’s Saipem SpA (GM Dec. 31, 2020).

It is unclear whether Perdaman has reached any offtake deals for urea output from the Karratha plant. The company back in 2010 had agreed to a deal with IPL for its then proposed coal-gasification Collie urea plant, also in the state (GM Oct. 18, 2010), but nothing has been reported since.

Perdaman Group is also looking to build a new ammonia production facility in New South Wales, using gas from Australian oil and gas group Santos Ltd.’s proposed Narrabri gas project .The two companies inked an agreement in August 2019 for further study of the proposed production facility (GM Aug. 2, 2019). Perdaman is looking to establish a nearby chemical and fertilizer plant using the ammonia as feedstock. Ammonium nitrate is one of the products reportedly proposed, but urea production is not thought to be part of the plans.

Adelaide-based Leigh Creek Energy (LCK) last month made the final investment decision (FID) to proceed with Stage 1 of its Leigh Creek Energy Project (LCEP) in South Australia, some 550 kilometres north of Adelaide, where it plans to establish a 1 million mt/y urea facility utilizing in-situ gasification (ISG) technologies (GM March 19, p. 1). The Stage 1 commercial development of LCEP, which overlays the Leigh Creek coalfield, will comprise drilling of up to five initial gasification wells to provide feedstock syngas and the construction of a 5 MW power plant.

Another major Australian fertilizer project was announced in January, which proposes to include 4,000 mt/d of urea production. The project’s promoters are a little known Australian consortium that is reported to have the in-principle backing of a large Dubai water and energy company, ARJ Holding Group. The proposed A$4.1 billion project would frack gas in Western Australia’s Canning Basin 150 kilometers southeast of Broome, according to a report by Australia’s Financial Review.

Strike Energy, however, has highlighted “the advantaged location” of Project Haber in Geraldtonand its position at the northern end of Western Australia’s wheat belt region, where about 30 percent of Australia’s total urea consumption occurs, according to the project developer. The company said in January that more than 260,000 mt/y of fertilizer is currently imported via Geraldton port.

Strike previously indicated that it plans to begin marketing equity participation in the project toward the end of calendar 2021, where it expects to retain around a 30 percent carried interest in Project Haber.

Strike in January announced the launch of the project at Narngulu Industrial Estate, adjacent to Geraldton Port, and which includes a 1.4 million mt/y urea plant and an 800,000 mt/y ammonia plant (GM Jan. 15, p. 1). The project would use gas from the company’s Greater Erregulla development in the Perth Basin via a 120-km pipeline.

The pre-FEED work will further refine the capital cost estimate for the 1.4 million mt/y plant, which currently sits at US$1.74 billion, said Strike. In order to maximize the amount of inherent carbon consumed from the natural gas via the manufacturing process, Technip Energies has included chemical process engineering works in its scope.

Strike also reported that it had engaged Subiaco, Western Australia-based-JBS&G Stratgen to start the environmental approvals and planning process, which will be a key pre-FID long-lead activity.

In terms of potential offtake interest, the project developer said more than 12 buyers have participated in the process to date, with further expressions of interest currently being received. It said current expressions for long-term offtake varying between three and 10 years exceed Project Haber’s proposed 1.4 million mt/y supply.

The company in partnership with GHD also has completed transportation and logistics studies that it said support Project Haber’s positioning “as not only Western Australia’s lowest cost source of urea fertilizer, but also South Eastern Australia’s.”

“Shipping advantages when compared to the main international competitors’ range between A$5-A$25/mt [approximately US$3.8-US$19/mt at current exchange rates] for deliveries from Geraldton to South Australia and Victoria,” said Strike.

The company reported that it is in discussions with Geraldton-based Mid West Port Authority with regard to securing its berth and Port Access Agreement for East Coast and international deliveries of urea.

Australia’s urea demand has been growing strongly in recent years, with consumption in 2019 at around 2.1 million mt, according to IFA data. Green Markets estimates consumption reached about 2.5 million mt last year.

However, the country’s domestic urea production has almost completely ceased due to rising input (energy) costs. Incitec Pivot Ltd. (IPL) currently is Australia’s sole urea producer, with capacity to produce 340,000 mt/y at its Gibson Island plant in Brisbane, Queensland, on Australia’s East Coast, according to Green Markets data. However, the producer has been dogged with gas supply issues to the Gibson Island production site, which also includes ammonia and ammonium sulfate production capacity.

Australian urea demand has been increasingly met by imports, with 2.4 million mt imported last year, up from 1.93 million in 2019, according to Trade Monitor Data (TDM). Three-quarters of the import volume came from Middle East producers last year, with China providing around 18 percent of the total. Australia also imports around 300,000 mt of UAN annually.

Strike’s Project Haber is one of a handful of urea production projects at various stages of development in the country.

Perdaman Industries (Chemicals and Fertilisers) plans to establish a 2.14 million mt/y granular urea project near Karratha on Western Australia’s Burrup Peninsula, a project that has been more than a decade under development. The company signed a 20-year natural gas supply agreement with Woodside Energy for the project in November 2018 (GM Nov. 21, 2018), and inked an engineering, supply of equipment and materials, construction, pre-commissioning, and commissioning contract for the execution of the urea plant was in December last year with Clough Group, Perth, and Italy’s Saipem SpA (GM Dec. 31, 2020).

It is unclear whether Perdaman has reached any offtake deals for urea output from the Karratha plant. The company back in 2010 had agreed a deal with IPL for its then proposed coal-gasification Collie urea plant, also in the state (GM Oct. 18, 2010), but nothing has been reported since.

Perdaman Group is also looking to build a new ammonia production facility in New South Wales, using gas from Australian oil and gas group Santos Ltd.’s proposed Narrabri gas project .The two companies inked a heads of agreement in August 2019 for further study of the proposed production facility (GM Aug. 2, 2019). Perdaman is looking to establish a nearby chemical and fertilizer plant using the ammonia as feedstock. Ammonium nitrate is one of the products reported to be being proposed, but urea production is not thought to be part of the plans.

Adelaide-based Leigh Creek Energy (LCK) last month made the final investment decision (FID) to proceed with Stage 1 of its Leigh Creek Energy Project (LCEP) in South Australia, some 550 kilometres north of Adelaide, where it plans to establish a 1 million mt/y urea facility utilizing in-situ gasification (ISG) technologies (GM March 19, p. 1; Jan. 22, p. 1). The Stage 1 commercial development of LCEP, which overlays the Leigh Creek coalfield, will comprise drilling of up to five initial gasification wells to provide feedstock syngas and the construction of a 5 MW power plant.

In January, another major Australian fertilizer project, which proposes to include 4,000 mt/d of urea production, also seemingly look a step forward. The project’s promoters are a little known Australian consortium that is reported to have the in-principle backing of a large Dubai water and energy company, ARJ Holding Group, and is proposing a A$4.1 billion project that would frack gas in Western Australia’s Canning Basin 150 kilometers southeast of Broome, according to a report by Australia’s Financial Review.

Strike Energy, however, has highlighted “the advantaged location” of Project Haber in Geraldtonand its position at the northern end of Western Australia’s wheat belt region, where about 30 percent of Australia’s total urea consumption occurs, according to the project developer. The company said in January currently more than 260,000 mt of fertilizer is imported via Geraldton port annually).

Strike has previously indicated it plans to begin marketing equity participation in the project toward the end of calendar 2021, where it expects to retain around a 30 percent carried interest in Project Haber.

Emmerson Updates on Phased Development at Khemisset

Morocco, News, News Briefs, Potash

Potash junior Emmerson plc, Isle of Man, has provided an update on its conceptual, staged development for the 100 percent-owned Khemisset Potash Project in northern Morocco. The company announced in February its plans for the phased development study, which is aimed at reducing upfront capital costs and incorporating expansion options into the development plan for the project (GM Feb. 19, p. 36).

Emmerson said on April 15 while its intention remains to build the full-scale project, the recent assessment undertaken to scoping study levels identifies the opportunity to start with a smaller-scale start-up operation producing 350,000 mt/y of potassium chloride. This would be followed by a series of expansion phases to increase the level of potash produced, and add in the production of de-icing salt in increasing quantities, as well as SOP.

In full production, the Khemisset project would produce 800,000 mt/y of potassium chloride, as previously indicated, 240,000 mt/y of SOP, and 4 million mt/y of de-icing salt.

Proposed phased development

   Phase 1 Phase 2 Phase 3 Phase 4 Total
Potash production ‘000 mt 350 385 – 270 1,005
Potash consumed by SOP production ‘000 mt – – (205) – (205)
Potash sold ‘000 mt 350 385 (205) 270 800
SOP production ‘000 mt – – 240 – 240
De-icing sale production ‘000 mt – 1,000 1,000 2,000 4,000
Estimated capex (including contingency) US$m US$286.9m US$140.0m US$143.7m US$130.4m US$701.0m

The potash junior put the upfront capex for the first phase of development, including contingency, at an estimated US$286.9 million, with total capex for the entire project at an estimated US$701.0 million. It said subsequent phases post phase one through to full production would likely be financed from internal cash flows.

Following securing the mining license in February for the Khemisset project (GM Feb. 12, p. 37), Emmerson anticipates initiation of construction by the end of 2021, “finance permitting.”

Ammonia

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

U.S. Gulf/Tampa:

April contracts for ammonia delivered to Tampa were priced at $545/mt CFR, with no new movement reported on the May contract front. Last-done barge levels reported from NOLA continued at $545/st FOB.

Sources remained divided on a possible landing spot for May. Expectations for a mid-April restart of the Waggaman, La., plant prompted speculation of a rollover in the upcoming contract, while some argued that a potential downturn in late-season demand could see May levels fall by $10-$20/mt. Any delays at Waggaman could mean all bets are off, others claimed.

Eastern Cornbelt:

Sources said most of the preplant ammonia business was winding down in the Eastern Cornbelt after a burst of activity in early April, with prices either unchanged or down slightly from last week. The latest offers were reported at $600/st FOB Kingston Mines, Ill.; $610/st FOB Huntington, Ind.; $625/st FOB Trilla and Wood River, Ill.; $630/st FOB Cowden, Ill.; and $650/st FOB Mt. Vernon, Ind., and Henderson, Ky.

“Logistics are bad across the system, (with) severe labor and truck shortages and long truck lines,” said one regional contact. “That said, we saw record daily volumes of ammonia and dry fertilizer go to the ground last week.”

Western Cornbelt:

Ammonia prices remained at $600-$615/st FOB in the Western Cornbelt, with the low reported at Palmyra, Mo., and out of spot locations in Nebraska. Terminal pricing in Iowa ranged from $605-$615/st FOB in mid-April. In the Southern Plains, sources quoted prompt pricing at $575/st FOB Verdigris, Okla., and $600/st FOB Pryor, Okla., and Coffeyville, Kan.

Northern Plains:

The ammonia market remained in a broad range at $590-$675/st FOB regional terminals, depending on location, with the low at Murdock, Minn., and upper end reflecting reference levels at Velva, N.D. Sources continued to report limited delivered tons in the $660-$680/st range in North Dakota, with the low for offers out of Leal, N.D.

Great Lakes:

Ammonia pricing was reported at $570-$610/st FOB in the Great Lakes region, with the low quoted by Michigan sources for tons pulled from Courtright, Ont., and the high FOB Huntington, Ind. The market FOB Lima, Ohio, was pegged at the $590/st FOB level in mid-April.

“Some sellers are below market, no doubt getting out from under some prepay,” said one regional contact.

Black Sea:

Sources reported that a deal between Ostchem and Trammo for a late-April shipment was settled in the upper-$450s/mt FOB. The producer had been arguing for $470/mt FOB, while buyers were trying to hold the line at $450/mt FOB.

The strong demand for ammonia in the world, combined with tight supplies, is continuing to push prices higher. Sources said limited available tons for the rest of April and May will keep upward pressure on the market.

Russian exports of ammonia for February were reported at 316,000 mt, up 13 percent from 281,000 mt for February 2020, according to Trade Data Monitor.Exports for the first two months of the year were up 15 percent, to 634,000 mt from 550,000 mt in 2020.

Middle East:

Limited material is preventing Arab Gulf producers from offering any ammonia tons in the spot market. Sources said while the tight situation has been around for a while, the continued closure of SABIC-4 is making the situation worse for buyers.

India:

Reports are circulating that a number of companies are looking for ammonia, but the buyers are ending up empty handed.

Sources said some of the contracts that provided for ammonia deliveries are closing, with no new deals to replace them. At the same time, the spot market is virtually non-existent because of strong demand in all the major markets.

Southeast Asia:

A recent deal into China reportedly was done at $575/mt CFR. The product, sources said, came from a regional supplier rather than the Arab Gulf.The expensive purchase from a nearby supplier underscored the tight nature of the ammonia market.

Northwest Europe:

Sources said the ammonia price in Antwerp has stabilized at $520-$530/mt C&F on the heels of strong but stable prices from Black Sea and Baltic suppliers. The lack of major pricing jolts from these two regions gave European buyers a small breather from the steady increases that have been happening so far this year.

Sources said prices from Baltic ports are settling around $460-$470/mt FOB despite a strong campaign by buyers for $450/mt FOB.

Urea

Black Sea, Brazil, China, Eastern Cornbelt, Great Lakes, India, Indonesia, Market Watch, Middle East, Northeast, Northern Plains, U.S. Gulf, Urea, Western Cornbelt

U.S. Gulf:

A preference for moving and upriver barges led to falling values at NOLA for the week, sources said. April-loading barges were heard trading at $350-$370/st FOB, softening from the week-ago $405/st FOB top. Tons slated to load in first-half May were reported transacting in a $345-$349/st FOB range, down from $370/st FOB in the prior report, leaving the 30-day range at a wide $345-$370/st FOB.

Trading was reported down to $325/st FOB for the all-May loading window, while prompt business rumored up to $390/st FOB went unconfirmed on April 15.

Eastern Cornbelt:

Urea pricing was up slightly to $430-$440/st FOB in the Eastern Cornbelt, with the low reported at Ottawa, Ill., and other spot Illinois River terminals and the high out of inland locations. The Cincinnati, Ohio, market remained at $431-$435/st FOB in mid-April.

Western Cornbelt:

Urea continued to be quoted in a broad range at $425-$455/st FOB in the Western Cornbelt, with the high at Sergeant Bluff, Iowa. The St. Louis, Mo., market was reported in a wide range at $425-$440/st FOB at mid-month, depending on supplier, while pricing at Catoosa/Inola, Okla., remained at $435-$445/st FOB.

Northern Plains:

The urea market continued to be quoted at $430-$435/st FOB St. Paul, Minn., with delivered tons pegged at $485-$490/st in North Dakota.

Great Lakes:

The urea market was quoted at $445-$470/st FOB in the Great Lakes region, up another $5-$8/st from last report, with the low reported at Burns Harbor, Ind., and the high at Saginaw, Mich. Sources also reported mid-April prompt offers at $455/st FOB Maumee, Ohio, $460/st FOB Essexville, Mich., and $463/st FOB Webberville, Mich.

Northeast:

Urea prices were quoted at a firm $445/st FOB Fairless Hills, Pa., for April-June tons, up $15/st from last report.

China:

Urea prices out of China slipped all week. Coming out of the weekend, sources put granular urea in the mid-$330s/mt FOB and prills in the upper-$320s/mt FOB. By midweek, however, granular had dropped into the $320s/mt FOB and prills were languishing at $320/mt FOB.

As the week closed, sources reported a granular deal at sub-$320/mt FOB for 45,000 mt to be loaded the last week of April or the first week of May. Sources said the deal appears to have been brokered by a domestic trader, leaving some to wonder about the netback price.

International traders had been talking all week about the steady decline in Chinese prices. Some had predicted the granular price could go below $320/mt FOB under the right circumstances. They noted that producers could easily provide support for higher prices by cutting back on production. The best estimates now are that the industry is running at about 65 percent of its rated capacity, a slight decrease from 70 percent at the end of March.

There is excess material available, partly because RCF did not take as many tons in its tender as expected. Sources said the pending MMTC tender could easily take 1.5 million mt, with the bulk coming from China.

Industry watchers are putting a lot of credence to the rumors that MMTC will call its urea tender soon. Sources noted that by calling the tender as early as next week, awards could be issued before the international Labor Day holidays. They also noted that the bulk of the loadings could be completed before China enters its June domestic season.

India:

The main topic of discussion was the rumor that MMTC might call a urea tender next week. The move, if it happens, would occur while cargoes are still being loaded for the RCF tender. Traditionally, a new tender is not called until after the ship-by date has passed.

The fact that there might be a call before the RCF shipment deadline of April 28 led some industry sources to speculate that Indian demand is expected to be much stronger than earlier anticipated.

When RCF reduced its take in the last tender from 1.2 million mt to about 800,000 mt, sources said the next tender would have to make up the difference to satisfy demand. Sources said the MMTC tender could take 1.5 million mt if the price is right.

Sources said RCF reduced its take largely because of the unusually high price they were forced to pay. Reportedly, Indian buyers were hoping that by taking fewer tons, reserves would build and force prices down. So far, at least in the Asian markets, prices have shown a steady drop.

The lack of business in the Middle East has made nailing down new prices difficult, but sources said the expected prices out of the Arab Gulf and Egypt will be lower than the prices of just a month ago.

Another factor in calling the tender sooner than expected, said one trader, is that the tender can close with awards issued before the international Labor Day holiday on May 1. Any tender called in the last week of the month would face potential delays in finalizing awards and letters of credit because of the holiday break. Meanwhile, waiting until after May 1 would delay the shipment of awarded tons until Chinese domestic demand kicks in, causing more competition and possibly higher prices.

Last year, the second tender of the year was also by MMTC, following an RCF tender. At the time, the awarded prices were about $25/mt lower than the first tender, with the $227-$232/mt CFR prices ultimately reflecting the lowest of the year. While sources do not expect to see the lowest prices of the year in the upcoming tender, they do expect to see lower prices than the $380/mt CFR paid by RCF last month.

Middle East:

Arab Gulf producers appear in no mood to lower prices. Sources said the price for the limited tons available in the Gulf remains in the upper-$340s/mt FOB.

A sale by Fertiglobe of 30,000 mt of granular urea at $345/mt FOB helped create an anchor at a time when pressure for lower prices is growing. Sources said the cargo is for shipment later this month or early May and is most likely bound for Australia. Even with that sale, sources said a cargo from another source is under discussion in the upper-$330s/mt FOB. The rumor adds fuel to arguments that the market is softening.

Sources said supplies for spot deals are limited. Part of the temporary shortage comes because of the continued shutdown at SABIC-4. One trader reportedly had to go to Indonesia to cover a contracted sale to a Southeast Asian buyer. The limited tonnage available for spot business has not kept market sources from speculating where the price should move to and what the future might look like, however.

Speculators said the paper market price for May and June shows a decided drop to the low-$320s/mt FOB. This price fits in with the pricing trend in China. In recent years, prices of China and Arab Gulf urea have run close to each other. Right now, the Chinese price has come off into the $320s/mt FOB, while the Arab Gulf price has not moved. Sources said a correction is coming.

Egyptian producers remain steadfast that the price of their product should not be falling below the public price of $400/mt FOB. However, no one is willing to pay that level. In fact, sources said no one is willing to pay more than $350/mt FOB at this time.

Sources are quoting prices of $340-$350/mt FOB as the basis for the current round of talks between buyers and producers. The low end of the talks appears to be coming for clients in Latin America, while the higher end seems to be tied to potential sales into Europe.

The paper market for Egypt shows not only a move into the $340s/mt FOB, but a further drop. The May price is pegged at $340/mt FOB, while the June estimated price is $332/mt FOB.

Arab Gulf producers appear to be in no mood to lower prices. Sources said prices for the limited tons available in the Gulf remain in the upper-$340s/mt FOB.

Sources said the lack of material means producers are barely able to cover the contracts they have – for now. Reportedly, one trader even had to go to Indonesia to cover a contracted sale to a Southeast Asian buyer. The lack of any spare material means the region is closed to spot deals and any price adjustments.

The lack of spot deals, however, has not prevented market sources from speculating where the price should be and what the future might look like.

Speculators said the paper market price for May and June shows a decided drop to the low-$320s/mt FOB. This price fits in with the pricing trend in China. In recent years, prices of China and the Arab Gulf urea have run close to each other. Right now, the Chinese price has come off into the $320s/mt FOB, while the Arab Gulf price has not moved. Sources said a correction is coming.

Egyptian producers remain steadfast that the price of their product should not be falling below the public price of $400/mt FOB. However, no one is willing to pay that level. In fact, sources said no one is willing to pay more than $350/mt FOB at this time.

Sources are quoting prices of $340-$350/mt FOB as the basis for the current round of talks between buyers and producers. The low end of the talks appears to be coming for clients in Latin America, while the higher end seems to be tied to potential sales into Europe.

The paper market for Egypt shows not only a move into the $340s/mt FOB, but a further drop. The May price is pegged at $340/mt FOB, while the June estimated price is $332/mt FOB.

Indonesia:

Kaltim closed its tender for 6,000-25,000 mt of prilled urea this week with only four offers. Two additional companies sent regrets.

Samsung met the reserve price of $335/mt FOB. Sources said the Korean company will be taking 12,000 mt of the offered tons. Reportedly, it will be used to supplement material lacking from the Arab Gulf for an order to Thailand.

Sources said Kaltim and another trader closed a deal for 6,000 mt of the offered tons at the same price paid by Samsung. Shipment of the material is slated for early May.

Kaltim Prilled Urea Tender
Offering Company US$/mt FOB
Samsung 335.00
Heartychem 331.00
Agrifert Liven 320.00
Ameropa 310.00

Sources said the Heartychem and Liven offers were more realistic bids, given the current market. However, said one trader, Samsung apparently needed the product desperately and was willing to meet the reserve price.

Black Sea:

No new spot deals out of Yuzhnyy were reported. Sources said talks are focusing in the $320s/mt FOB, however, reflecting the softness in pricing in other major producing areas of the world.

Urea exports from Russia were up 9 percent in February, to 488,000 mt compared with 447,000 mt in February 2020, according to Trade Data Monitor. Year-to-date exports were down about 13 percent, however, to 929,000 mt from 1.1 million mt in January-February 2020

Brazil:

Sources described softening urea prices in Brazil. Traders said the market dropped $25-$30/mt in just one week, to $345-$360/mt FOB at Paranagua. At least one deal was confirmed at $350/mt CFR, which is still lower than anything from the previous week.

Industry watchers said the lower prices are coming as local buyers are keeping a keen eye on prices out of China and Egypt. While no new business from Egypt has yet been confirmed, the weakening paper market and the willingness of producers to discuss lower prices is giving hope to Brazilian buyers.

Inland buying appears to be done as most farmers have their future deals locked up. Even buying top-off tons has stalled as more buyers see lower prices in the international market and hope that the savings will be passed on.

Rondonopolis showed a tightening of the range to $505-$530/mt FOB ex-warehouse, while Sorriso is holding even, topping off in the low-$530s/mt FOB ex-warehouse. The barter rate for 1 mt of urea in Rondonopolis remains at 71 bags of corn.

Brazil Urea Prices
Terminal/City US$/mt FOB ex-warehouse
Week ending 4/09 Week Ending 04/16
Rondonopolis 475-540 505-530
Sorriso 480-533 480-533