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Piney Point Disaster Averted

Featured, Florida, News

The leak at the Piney Point phosphogypsum stack made the national news over Easter Weekend, with fears that the controlled release of water earlier approved by the Florida Department of Environmental Protection (FDEP) (GM April 2, p. 29), would not be enough keep the stack from breaching and causing a “20-foot wall of water.”

By late Friday afternoon, April 2, FDEP said the situation was “evolving,” and soon thereafter some 316 local residents were evacuated. Gov. Ron DeSantis on April 3 issued an executive order declaring a state of emergency in the three counties that could be affected by the 79-acre reservoir. Luckily, the controlled discharge, as well as several pumps and vacuum trucks that were rushed to the, site appear to have worked.

The evacuation was lifted on April 6, and on April 8 FDEP said only 232 million gallons remained in the NGS-South compartment, down from the initial 480 million gallons when the leak was discovered on March 26. As of April 8, the discharge into Port Manatee was estimated to be less than 5 million gallons per day.

FDEP had stressed all along that the major problem with the water was its nutrient content, and that it was not radioactive. It said teams are now deploying nutrient reduction and removal treatments on the water onsite to address any required discharges in the future.

FDEP said on April 7 it deployed diving companies and submersible cameras in the compartment and identified a seam separation on the east wall. It said it has contracted crews to work around the clock to implement the necessary repairs to the line to contain the flow.

FDEP said it intends to hold site manager HRK Holdings fully accountable through enforcement action.

Environmental groups were not happy with state action, even before this incident. They petitioned the U.S. EPA in February to regulate phosphogypsum stacks under the Resource Conservation and Recovery Act. A decision is expected in May. The groups have also appealed a late 2020 EPA decision to allow phosphogypsum to be used in road building (GM Oct. 16, 2020). TFI has intervened in the road building case (GM March 26, p. 31), and is also challenging the groups regarding EPA regulation of phosphogypsum.

TFI Vice President of Public Affairs Kathy Mathers told Bloomberg Law that the Piney Point ponds “are not representative of modern phosphate fertilizer plant phosphogypsum stacks and pond systems,” which she said are tightly regulated and do not need the additional controls that the petitioners seek.

In the meantime, the Florida Legislature is considering a full cleanup and restoration of the site, estimating it will cost some $200 million. It is looking to fund the work using the $1.9 billion COVID-19 relief package passed in March.

One question is how to clean up a phosphogypsum stack. One possibility is to retrieve rare earth elements from the waste, according to Bloomberg columnist David Fickling, who cited a 2017 study of the Florida stacks that indicates that there are concentrations of around .2 percent of rare earth elements in the waste.

Fickling said traditional leaching and flotation techniques common to the mining industry could retrieve the elements, along with radium and uranium, for high-tech, medical, and nuclear use, respectively. He noted that in the 1980s some 20 percent of U.S. uranium supply was recovered from phosphates. Some of the remaining product could also be usable for construction or agriculture.

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, U.S. Imports, Western Canada, Western Cornbelt

Central Florida:

Central Florida DAP pricing continued to be quoted at $550/st FOB, steady from one week earlier. Truck-loaded MAP was priced at $580/st FOB at the top end, while sellers began accepting a limited number of orders at $565/st FOB, dropping the market to $565-$580/st FOB from the week-ago $580/st FOB.

U.S. Gulf:

Barge phosphate values were reported moving in divergent directions, with DAP tons firming while MAP edged lower. Loaded barges continued to draw a premium versus those loading later in the month, as traders worked to get material in place for the tail-end of the spring application season.

Prompt and loaded DAP barges reported trading at $550/st FOB early in the week shot to as high as $578/st FOB by April 8, sources reported, increasing from the week-ago $545/st FOB peak. Material slated to load later in the month was reported down to $525/st FOB, falling from the $535/st FOB prior-week low.

The MAP top end edged to $582/st FOB from the week-ago $585/st FOB ceiling, while a small number of all-April barges were reportedly trading for low as $525/st FOB. Full-April offers remained open at $535/st FOB on April 8, sources said.

DAP barges were noted stretching to a wide $525-$578/st FOB range from $535-$545/st FOB in the prior report, while MAP values slipped to $525-$582/st FOB from the week-ago $555-$585/st FOB.

U.S. Imports:

Imports of DAP were up 102.1 percent for February, to 105,389 st from the year-ago 52,156 st. July-February totals firmed 13.4 percent, to 754,436 st from the prior-year 665,390 st.

MAP/Other imports fell 52.7 percent for the July-February period, to 566,270 st from the year-ago 1.20 million st. February imports climbed 54.3 percent, however, to 70,434 st from the year-ago 45,633 st.

U.S. Exports:

DAP exports for February stood at 54,198 st, off 49.7 percent from the year-ago 107,706 st. July-February exports fell 32.7 percent, to 521,289 st from 775,014 st.

MAP/Other exports totaled 182,696 st in February, a 20.6 percent decrease from 230,190 st in February 2020. Exports were noted at 1.48 million st in July-February, down 16.4 percent from the year-ago 1.77 million st.

A lack of spot availability continued to hamstring new Gulf export activity, sources said.

Recent business included a 7,000 mt DAP cargo priced at $580/mt FOB. Indications for the next round of business were reported in the $585-$590/mt FOB range. With no new transactions reported, however, the Gulf phosphate export markets continued to be quoted at the last-done $580/mt FOB.

Eastern Cornbelt:

DAP pricing was quoted at $585-$605/st FOB in the Eastern Cornbelt, up some $10-$20/st, with the low reported out of spot Illinois River terminals. Sources said the Cincinnati DAP market had firmed to $595-$605/st FOB on reports of tight supply.

MAP was pegged at $615-$635/st FOB in the region, with the low at Ottawa, Ill. Sources quoted the Cincinnati MAP market at $620-$625/st FOB in early April.

Western Cornbelt:

DAP pricing was unchanged at $570-$585/st FOB in the Western Cornbelt, with the low reported at St. Louis and the upper end at Dubuque, Iowa. MAP was pegged at $615-$630/st FOB in the region, with the St. Louis market quoted at $615-$625/st FOB in early April.

“Dry application is still going hard and most likely will not all get done before the planters roll,” said one Iowa contact at midweek.

The Catoosa/Inola market remained at $575-$585/st FOB for DAP and $625-$640/st FOB for MAP, with the St. Paul market quoted at $585-$590/st FOB for DAP and $625-$645/st FOB for MAP.

California:

The MAP market remained at a firm $690/st FOB or DEL in California in early April.

Pacific Northwest:

MAP pricing remained at $677/st FOB Aurora; $680/st DEL in Washington, Oregon, and northern Idaho; $670/st DEL in southern Idaho and Utah; and $660/st DEL in Montana.

Western Canada:

The MAP market in Western Canada was quoted at C$945-$955/mt FOB and C$950-$960/mt DEL in early April, up slightly from last report.

Saudi Arabia:

Phosphates loading from Saudi Arabia were noted firming to $500-$560/mt FOB, with most business expected to land toward the top of the range.

China:

The DAP market in China continues to soften. Sources now put the price at $530-$540/mt FOB, down from the upper-$550s/mt FOB from last week.

One trader said the producers may have allowed the price to come down without much of a fight to help establish a new floor. Sources said stronger prices from other phosphate producers, such as Saudi Arabia, and an ability for producers to shift from DAP to MAP or NPK production without much hassle, allows the producers to prevent too large of a surplus of DAP.

India:

More information came in on reports that an Indian buyer picked up a cargo of DAP from Saudi Arabia at $515/mt CFR. Soon after the amount was made public, rumors circulated that the producer denied that price level. This week, more sources stepped forward to confirm that the price was closer to $540/mt CFR.

Even at that level, said sources, the Indian buyer got a good deal when compared with the Chinese price and to where the Saudi price is moving.

The government announced limited new maximum retail prices (MRP) for DAP, effective April 1. The new MRP for IFFCO is 38,000 rupees/mt, or about $511/mt CFR. The company announced this week that it would sell the DAP it has on hand at the old price of 24,000 rupees/mt. In a statement reported by Bloomberg, IFFCO said any new material at the new rates will not be offered to farmers. It added that the new product it produces will be sent to storage for later sales and possibly lower levels.

A different price of 34,000 rupees/mt, or about $464/mt, was set for Mangalore Chemical, Zuari Agro, and Paradeep Phosphates. This price is only valid in the state of Karnataka.

Brazil:

Prices for MAP represented a wider range at Paranagua, with more players in the mix. Sources said Chinese MAP was being offered at $610-$620/mt CFR, Russian MAP was quoted at $630/mt CFR, and Moroccan product was at $640/mt CFR. At least one deal was reported inland for a port-equivalent price of $642/mt CFR.

Even with the multiple sources of material available, sources said the amount of MAP available at the ports is limited, which accounted for the rise at the upper end of the range since last week.

The Rondonopolis price dropped slightly at the top of the range, to $715-$763/mt FOB ex-warehouse. Sorriso also showed a slight softening at $715-$750/mt FOB.The barter rate for 1 mt of MAP remained at 37 bags of soy and 100 bags of corn at Rondonopolis. The rate at Southern Goias was put at 37.2 bags of soy and 66.2 bags of corn.

Phosphoric Acid

California, Eastern Cornbelt, India, Market Watch, Pacific N.W., Phosphoric Acid, U.S. Exports, Western Cornbelt

U.S. Exports:

Phosphoric acid exports totaled 3,138 st in February, a 92.6 percent decrease from the year-ago 42,602 st. July-February exports stood at 109,809 st, off 47.9 percent from the year-ago 210,612 st.

Eastern Cornbelt:

Phos acid pricing was pegged at a firm $13.45/unit rail-DEL in Illinois and $13.60/unit rail-DEL in Ohio for April shipment.

Western Cornbelt:

The phos acid market was quoted at a firm $13.35/unit rail-DEL in Nebraska, Missouri, and Iowa for April tons.

California:

Phos acid prices moved up $0.50/unit on April 1. New postings include $14.00/unit rail-DEL in California, with MGA referenced at the $14.20/unit level FOB Lathrop and El Centro.

Pacific Northwest:

April phos acid postings firmed to $13.50/unit FOB Pocatello, Idaho, and $14.00/unit rail-DEL in the Pacific Northwest, up $0.50/unit from March.

India:

Sources reported no progress in second-quarter price talks, and repeated rumors that OCP would be seeking a $100/mt increase, to $900/mt CFR.

As the week closed, however, new rumors arose that OCP might be looking at a new price of $1,000/mt CFR. One trader said given the way prices for most products are going, OCP might just be able to secure a deal closer to the higher number.

Ammonium Polyphosphate

Ammonium Polyphosphate, California, Eastern Cornbelt, Market Watch, Pacific N.W., Western Canada, Western Cornbelt

Eastern Cornbelt:

10-34-0 was quoted at $560-$590/st FOB in the Eastern Cornbelt.

Western Cornbelt:

The 10-34-0 market remained at $565-$595/st FOB in the Western Cornbelt.

California:

The10-34-0 market was quoted at a firm $611-$617/st FOB in California, up from a low of $592/st FOB in March. 11-37-0 was reported at $680-$685/st FOB for April tons, up some $25/st from March.

Pacific Northwest:

The 10-34-0 market in the Pacific Northwest was quoted at $595-$605/st FOB, up from $575-$585/st FOB in March. 11-37-0 prices firmed roughly $20-$25/st, to $645-$655/st FOB in the region, with delivered tons pegged at the $630/st level within a limited freight zone in Idaho.

Western Canada:

10-34-0 remained at C$840-$850/mt DEL in Western Canada.

Muriate of Potash

Belarus, Brazil, California, China, Eastern Cornbelt, India, Market Watch, Potash Muriate, U.S. Gulf, U.S. Imports, Western Canada, Western Cornbelt

U.S. Gulf:

NOLA potash barge trades continued to be reported in the $310-$318/st FOB range.

U.S. Imports:

Potash imports for February firmed 9.3 percent, to 1.23 million st from the prior-year 1.13 million st. July-February totals stood at 8.84 million st, up 12.3 percent from the year-ago 7.87 million st.

Eastern Cornbelt:

Potash remained at $355-$375/st FOB in the Eastern Cornbelt, depending on location, with the Cincinnati market quoted in the $360-$365/st FOB range in early April.

Western Cornbelt:

The potash market remained at $355-$375/st FOB in the Western Cornbelt, with the low at St. Louis and Caruthersville and the high reported in Iowa.

California:

Sources said the California potash market had edged up to $505/st FOB for 60 percent MOP and $515/st FOB for 62 percent, up from the last reported range of $455-$465/st FOB.

Pacific Northwest:

Potash pricing firmed to $435-$445/st FOB and $440-$450/st rail-DEL in the Pacific Northwest, depending on grade and location. Potash postings from Intrepid FOB Moab and Wendover, Utah, were steady at $425/st FOB for 60 percent white standard and $430/st FOB for 60 percent white granular.

Western Canada:

Potash pricing was steady at C$530-$540/mt FOB Saskatchewan mines for Q2 truck offers.

India/China:

Belarusian Potash Co. (BPC) and Indian Potash Ltd. (IPL), India’s biggest potash importer, have agreed to a new contract price of $280/mt CFR with 180 days’ credit, a $33/mt increase, or 13 percent, from the original level in late January (GM Jan. 29, p. 17), and $50/mt above last year’s contract.

The new price was set on April 5, according to a statement on BPC’s website. “This settlement was made possible thanks to the weighted approach to business and common aspiration towards balanced and sensible development of the potash market demonstrated by the parties to this agreement,” the Belarusian supplier said.

BPC agreed in January to ship 800,000 mt to India at $247/mt CFR, prompting criticism from other major suppliers who believed the new price was not reflective of prevailing market trends (GM Feb. 5, p. 16). Both Canpotex and Nutrien said their position was not to follow the price level for potential sales into India, and K+S said it would refrain from deliveries to India until further notice.

ICL on April 5 also announced that it had settled a new annual contract with IPL to supply an aggregate 600,000 mt of potash, with mutual options for an additional 50,000 mt, at the new price of $280/mt. ICL said the tons will be supplied through December 2021, and the contract is part of the five-year supply agreements signed in December 2018 between ICL and IPL (GM Jan. 4, 2019).

Other major suppliers are now expected to settle contracts at the new price with all Indian buyers, according to Bloomberg, citing BMO Capital Markets analyst Joel Jackson.

IPL, however, has said it will say no to further potash hikes above $280/mt CFR as local demand for the nutrient is set to decline, according to a Bloomberg report on April 9. The report cited IPL Managing Director P.S. Gahlaut as saying in a phone interview that domestic potash consumption may fall 20 percent this year due to high prices. The Indian company accounts for around half of the country’s potash imports.

Gahlaut said the contract price increase agreed to with BPC followed IPL’s deal with ICL to buy 600,000 mt, according to the report. He explained that the BPC price had been revised as per a contract clause. That clause says if IPL buys at a higher price from any other supplier, it will increase the rate of earlier contracts, he said. The clause also provides for the reverse situation.

Gahlaut said no one was willing to match the Indian company’s previous purchase price with BPC of $247/mt CFR.

Shares of potash producers rallied on the unusual contract price re-negotiation. India is thought never to have previously changed the price of its annual supply deals with suppliers. Typically, the first supplier to reach a new contract price with India or China sets the price for other suppliers and buyers to follow.

Bloomberg cited Nutrien President and CEO Chuck Magro as saying the new contract confirms that the price announced in January “was in no way reflective of the market-based pricing in the current key offshore potash markets.” The new price increase is “a clear indicator of a tightening potash market,” he said.

The question now is whether BPC will review its contract price with China. Russia’s VTB Capital analyst Elena Sakhnova said, “it is quite possible,” according to a Bloomberg report.

BPC settled a new contract price at $247/mt CFR, with the Consortium of Chinese Buyers (Sinochem, CNAMPGC, CNOOC) in February for seaborne potash deliveries, marking a $27/mt increase, or 12 percent, on 2020’s contract price of $220/mt CFR (GM Feb. 12, p. 16). BPC said the new price covered a delivery period through Dec. 31, 2021.

While Uralkali was reported to have said the new price between BPC and China was “fair for this part of the year” (GM Feb. 12, p. 17), Canpotex saw the new price as “significantly below current market levels for potash in key offshore markets.”

To date, none of the other major suppliers have announced publicly if they have settled new supply contracts with their customers in China. Green Markets Research Director Alexis Maxwell believes the Chinese contract price could now rise to $270/mt CFR.

“Chinese potash port inventory has fallen from last year’s record high, and ongoing draw-down on spring demand will lessen Chinese buyers’ negotiating power,” she said.

Scotiabank analyst Ben Isaacson was cited in a Seeking Alpha report this week as saying the new India price “sets a new reference for the Chinese potash contract,” which he believes could now reach $270-$280/mt CFR.

Belarus:

Belarus exported 2.2 million mt of potash in the first two months of 2021, up from 1.3 million mt in the same period last year and up from 1.9 million mt in 2019, according to Trade Data Monitor. The higher 2021 export volume is thought to reflect the contribution of the new Petrikov operation, and possibly lower operating rates in the early months of last year.

The Petrikov plant in Belarus’ Gomel region produced its first high-quality ton of potassium chloride concentrate on Jan. 30 last year (GM Feb. 7, 2020) and was reported to have made its first shipment of potash – a consignment of 28.64 mt – last August (GM Aug. 28, 2020).

Belaruskali previously stated that Petrikov would reach its 1.5 million mt/y design capacity within three years of start-up (GM Jan. 3, 2020).

Brazil:

The potash pricing range widened on both ends at Paranagua. Sources now put the MOP market at $325-$435/mt CFR. The lower end of the range is expected to move up as demand for MOP steps up and as the impact of the price deal between India and BPC percolates through the market.

Inland buyers are said to be looking for top-off tons before the new prices begin working their way through the marketplace. Rondonopolis is pegged at $380-$345/mt FOB ex-warehouse, representing a marginal increase at the upper end of the range.

Barter rates for 1 mt of MOP remained steady at 21 bags of soy and 58 bags of corn in Rondonopolis. The barter rate at southern Goias was reported at 22.5 bags of soy and 39 bags of corn.

Imports of MOP in March 2021 at 755,000 mt were down about 11 percent from March 2020 at 844,000 mt, according to Trade Data Monitor. The March 2021 imports were also significantly down from February imports of 998,000 mt.

The first-quarter imports were up about 47 percent in 2021 at 2.5 million mt, compared to the 1.7 million mt during the same period in 2020. In the latest quarter the main suppliers were Russia at 743,000 mt, Canada at 598,000 mt, and Belarus at 550,000 mt.

Sulfur

ADNOC - Abu Dhabi, Alberta, Brazil, China, Market Watch, Qatar, Sulfur, Tampa, U.S. Exports, U.S. Gulf, U.S. Imports, Vancouver, West Coast

Tampa:

The Tampa molten sulfur market’s two largest buyers announced updated contracts with suppliers during the week, moving the second-quarter Tampa index to $192/lt CFR, doubling the first-quarter $96/lt CFR price.

The $96/lt increase represented the Tampa market’s largest single-quarter hike since Q3 2008, when agreements jumped $165/lt to a historic high of $615.50-$618.50/lt.

A historic supply shock caused by the ongoing COVID-19 pandemic was cited as a key driver of the higher prices, as worldwide refinery shutdowns and curtailments have left production at uncomfortably low levels. It took the worldwide sulfur markets nearly a year to fully react to the tightening supply landscape, players said, pointing to smaller increases recorded through the prior 12 months.

First-quarter 2021 proved the breaking point, however, with prices in a number of international markets, including key indicators China and Brazil nearly doubling from early-January levels, leaving the Tampa index at a conspicuous discount to the rest of the world. “The [Tampa] price needed to go up to international levels,” one market player said.

Sources often bemoaned the shortage of spot availability in the U.S. market throughout the first quarter. Some pinned second-quarter hopes on Canadian suppliers, but a slate of planned turnarounds announced for Q2 turned up the heat instead.

A steady recovery in the phosphate markets, an effect of Mosaic’s successful bid for countervailing duties against imports of Moroccan and Russian phosphates, also contributed support at Tampa.

Sources noted the unusual event of Tampa now operating at a premium to offshore markets at Vancouver and the U.S. Gulf, both of which were seen topping out in the $180s/mt FOB for the week.

“The recent changes in U.S. and Canadian supply/demand would seem to indicate that North America is running at a deficit to its needs, and the indexes are just starting to reflect that,” said one source.

“The U.S. is particularly tight because of COVID,” added another source. “Refinery rates have recovered, but are well below pre-COVID levels. Production in the U.S. is still 1.5 million mt below the peak in 2018.”

Refinery utilization inched higher for the week, the U.S. Energy Information Administration (EIA) reported. Nationwide refining capacity was noted firming to 84.0 percent for the week ending April 2, a 0.1-point increase from 83.9 percent in the prior report. The current rate also topped the year-ago 75.6 percent, while trailing the 86.3 percent five-year average.

Crude inputs were also higher, moving above the 15 million barrel/d mark for the first time since March 20, 2020. Refineries processed an average 15.044 million barrels/d during the week, a 103,000 barrel/d increase from 14.941 million barrels/d in the prior report.

U.S. Gulf:

Despite softer pricing reported out of Brazil, easing freight rates allowed U.S. Gulf export price ideas to hold around the $180/mt FOB mark for the week, sources said.

U.S. Imports:

Sulfur imports for July-February were up 4.3 percent, to 2.41 million st from the year-ago 2.31 million st. Imports fell 5.4 percent in February, however, to 248,007 st from the year-ago 262,026 st.

U.S. Exports:

Sulfur exports softened 33.9 percent in July-February, to 709,927 st from the year-ago 1.07 million st. February shipments stood at 83,878 st, falling 59.8 percent year-over-year from 208,784 st.

Brazil:

Brazil spot imports were quoted at $209/mt FOB for the week, softening from $216/mt CFR in the prior report. Sources noted second-quarter contracts at Brazil settling in the $213-$214/mt CFR range, rising from $116-$119/mt CFR in the first quarter.

Vancouver:

Last-done at Vancouver continued to be heard in the $170-$180/mt FOB range, steady from the prior report.

Alberta:

Albert sulfur netbacks took a big step up for the week, moving to $65-$110/mt FOB from the week-ago (-)$31-$110/mt FOB. The wide range encompassed both molten sulfur tons contracted into the U.S. and prilled material selling internationally through the Vancouver export market.

West Coast:

West Coast prills continued to fall in the $170-$180/mt FOB range for the week, unmoved from the prior report.

Contracts for molten sulfur loading from West Coast locations were reported settling in the $140-$155/lt FOB range for second quarter fulfillment, rising from $70-$77/lt FOB in the first quarter. Sources traced the increase to firming available prill netbacks for West Coast sellers, as well as ongoing supply tightness stemming from the COVID-19 pandemic.

China:

Sources noted the China spot market taking a breather during the week, leaving last-done at a wide $180-$200/mt CFR range.

ADNOC:

Sources noted ADNOC prill offers firming to $185/mt FOB Ruwais for April lifting, increasing from $183/mt FOB in March.

Qatar:

Qatar Petroleum marketing arm Muntajat set April solid sulfur pricing at $185/mt FOB Ras Laffan, sources said, up from $183/mt FOB in the prior period.

Sulfuric Acid

Brazil, Gulf Coast, Market Watch, Midwest, Sulfuric Acid, U.S. Exports, U.S. Gulf, U.S. Imports, West Coast

U.S. Gulf:

Gulf import price ideas were steady at $130-$135/mt CFR, sources said.

U.S. Imports:

February sulfuric acid imports totaled 256,616 st, down 25.2 percent from the year-ago 342,969 st. Imports reached 2.69 million st in the July-February period, however, a 16.5 percent increase from the prior-year 2.31 million st.

U.S. Exports:

July-February sulfuric acid exports totaled 127,330 st, off 16.7 percent from the year-ago 152,833 st. February exports were totaled 13,724 st, down 20.3 percent from 11,411 st in the prior year.

Gulf Coast:

Tons slated for Gulf Coast delivery were quoted in the $85-$110/st DEL range for 2021 agreements.

Midwest:

Sources quoted the Midwest market even with the Gulf Coast at $85-$110/st DEL.

West Coast:

West Coast contracts were quoted at $110-$130/st DEL for 2021.

Brazil:

Recent Brazil values were heard in the $135-$140/mt CFR range, unmoved from the prior report.