All posts by mickeybarb@charter.net

OCP Ready for Tougher Cadmium Rules; New Patent Issued in U.S.

Morocco, News, News Briefs, Phosphate

The U.S. Patent and Trademark Office (USPTO) issued a new patent to Morocco’s OCP SA for a “Method for manufacturing an ammonium phosphate fertilizer having low cadmium content.” Inventors were listed as Morocco’s Mehdi Khouloud, Abdelaali Kossir, and Kamal Samrane.

The patent comes as the European Union prepares for more restrictive cadmium limits on phosphate fertilizers (GM Jan. 11, 2019). Speaking to reporters in January 2019, Morocco’s Energy, Mines, and Sustainable Development Minister Aziz Rabbah, said the impact “will not be huge.” He added, “Enormous effort will be deployed to address E.U. concerns.”

According to a comment paper by OCP in 2016, a 60 mg/ kg P2O5 cadmium limit, which was adopted by the E.U., would likely exclude some 20 percent of current total E.U. imports of phosphate rock and fertilizer products (GM Oct. 7, 2016). Its own exports would be cut by at least 25 percent, and supplies from other North African countries would be similarly impacted, while supplies from Senegal and Togo would be almost entirely excluded, the producer said.

In a ratings report last October, Fitch Ratings said its understanding from OCP management was that the company was already able to fully comply with all aspects of the new regulations, which will start in 2022, saying OCP has been investing in developing cost-effective ways to address the changes while focusing on selective mining with lower cadmium content. Fitch believes OCP’s low production costs will be able to absorb any potential production cost increase without affecting the competiveness of its operations.

Russia’s PhosAgro, which reports low cadmium levels in its phosphates, has been very supportive of the new E.U. rules.

Haldor Topsoe, Aquamarine Plan Green Ammonia Project for Germany

Ammonia, Featured, Germany, News, Northeast, Scandinavia

Haldor Topsoe, Copenhagen, and AQM Capital LLC (Aquamarine), New York, said on March 18 they have entered into a Memorandum of Understanding with the purpose of building a green ammonia facility. It is planned to include a 100 megawatt SOEC electrolysis unit to produce green hydrogen to be converted into green ammonia.

Aquamarine is developing a large-scale green ammonia facility to be constructed in multiple stages. In the first stage of the project, the proposed facility will use Topsoe’s proprietary solid oxide electrolyzer cells (SOEC) to produce green hydrogen from 100 megawatt of renewable electricity. The hydrogen will be further processed into 300 mt/d of green ammonia, also using Topsoe technology.

Aquamarine will seek relevant permits for the project, which will be located in northern Germany close to existing offshore wind farms, where the product can be sold to the marine shipping industry. Subject to a final investment decision, the facility is expected to be commissioned in 2024.

Topsoe is already engaged in several projects to produce green hydrogen, green ammonia, eMethanol, and green fuels, including the giant NEOM project in Saudi Arabia (GM July 10, 2020), announced in July 2020, which includes the world’s largest ammonia loop (1.2 million mt/y) delivered by Topsoe.

Ammonia

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

U.S. Gulf/Tampa:

Tampa ammonia for March continued to be called $445/mt CFR. However, a new NOLA barge trade was reported at $500/st, up from $475/st FOB. The production situation continues to improve, with all major NOLA plants believed to now be back in production, including IPL’s Waggaman, La., plant, which was due back up March 15 after a lengthy turnaround.

Despite these improvements, other players argued that the “big freeze” in February had a long-lasting impact. There are unconfirmed reports that CF’s Woodward, Okla., plant was offline. CF initially acknowledged that its Oklahoma plants were impacted by the weather, but the company said it does not comment on day-to-day plant operations. In the wake of the freeze, the company said the industry could see the loss of several hundred thousand tons of both ammonia and upgraded products (GM Feb. 19, p. 38).

In addition, sources continue to cite outages in Trinidad and good demand both domestically and internationally. These factors, sources said, could push the Tampa April price up beyond the current $445/mt CFR to over the $500/mt CFR mark. There have been reports that new trades into the U.S. Gulf are now priced in the $525-$530/mt CFR range, which would be in line with earlier barge trades of $475/st FOB.

In the meantime, there has been some contention over the legitimacy of the $470/mt CFR trade reported for the U.S. before Tampa was traded for March (GM Feb. 26, p. 2). The vessel in question did not actually make it to the U.S. Gulf, although the parties involved reported that another vessel loaded with a like quantity at a similar price was swapped.

Eastern Cornbelt:

Ammonia prices continued to range from $570-$650/st FOB in the Eastern Cornbelt, with the low at Kingston Mines, Ill., and the high at Mount Vernon, Ind. Other terminal prices include $580/st FOB Huntington, Ind.; $590/st FOB Illinois terminals at Albany, Peru, and Seneca; $600/st FOB Cowden, Ill., and Terra Haute, Ind.; $610/st FOB Trilla, Ill.; $620/st FOB Frankfort, Ind.; and $650/st FOB Henderson, Ky.

Western Cornbelt:

Sources said ammonia was starting to move on preplant corn in parts of Missouri before the wet weather moved in, but all activity ground to a halt during the week. Ammonia prices continued to range from $570/st FOB Palmyra, Mo., to $580-$615/st FOB terminals in Nebraska and Iowa, depending on location.

With demand now delayed because of the wet conditions, sources said they expect ammonia inventories to be recharged before the next big push. Most major plants that were offline in the New Orleans area in late February have now returned to production.

California:

Anhydrous ammonia postings in California remained at the March 1 reference of $572/st DEL from Calamco, up from the company’s last reference price of $379/st DEL. Calamco’s aqua ammonia posting in California firmed on March 1 to $157/st FOB, up from $109/st FOB. Industry sources had been expecting a significant price jump from Calamco ahead of the spring season, as the last postings had been in effect since June 2020.

Pacific Northwest:

Anhydrous ammonia pricing in the Pacific Northwest was quoted at $600-$620/st DEL, depending on location, up significantly from the $475-$488/st DEL range reported in late February. The aqua ammonia market was pegged at $150-$160/st FOB in the region.

Western Canada:

Limited spring pricing for anhydrous ammonia in Western Canada was reported at C$940-$980/mt DEL in mid-March, up from C$875/mt DEL at last report and C$805-$815/mt in early February, and reflecting an increase of more than C$200/mt since the start of the year.

Black Sea:

Ammonia prices jumped as supplies remain tight. Sources reported 10,000 mt sold to Trammo at $430/mt FOB. The deal represents a $30/mt increase in just one week, and traders said there is nothing on the horizon to slow down the price hikes. Next-week deals are expected to be done at least at the $450/mt FOB level.

Technical issues as some facilities will keep supplies limited. Sources said Togliatti will only have about 40,000 mt to offer in April. This will almost ensure steady price increases in the area.

Middle East:

The lack of any excess material has shut down the spot market. Sources said producers are doing all they can to keep up with their contracted business.

The formula-based deals are showing growing strength. Producers said the material going to India under such deals now has a netback of $390-$410/mt FOB. Nailing down these claims is difficult, but international traders said the price fits with the way the market is moving.

North Africa:

Bloomberg reported that the FERTIAL plant in Annaba in Algeria has shipped its first 15,000 mt of ammonia to Europe after restarting in February. The plant was closed for two years, but restarted earlier this year.

A 6.0 magnitude earthquake in the area earlier this week reportedly may cause some power outages, but no damage was reported to buildings.

Egypt sold ammonia cargos at various prices. A cargo of 25,000 mt reportedly was sold for delivery to the U.S. at $435/mt FOB. Another cargo, reportedly for Jordan, went for $515/mt FOB. The sale came after the earlier U.S.-bound material. Sources noted the price difference reflects the volatile nature of the current market.

India:

Buyers are looking for spot tons, but failing to find any. Sources said the usual suppliers in Malaysia and Indonesia are sold out. Arab Gulf suppliers said they only have material for their long-term customers.

Southeast Asia:

Phosphate producers in Asia are complaining of the high prices they have to pay for their inputs. One ammonia trader noted that every 10 years or so ammonia spikes and the buyers complain, forgetting the intervening years when most ammonia producers are running close to break-even prices.

The latest price paid into China is reportedly $500/mt CFR for a small cargo from Ma’aden.

Buyers in South Korea and Taiwan are getting what they can under their contracts. Sources said some of them have had to look around for spot tons to make up for occasional short orders. Reportedly, a Taiwan buyer is about to receive a cargo from Iran, while South Korean buyers are taking all they can from Arab producers.

Northwest Europe:

Price increases from Black Sea and Baltic suppliers are affecting the Northwest Europe ammonia price. Sources said the level is now around $500/mt C&F.

The tightness comes from steady demand in Europe and local plants not operating as well as they should. It seems that the major ammonia producers are not able to cover the general needs in Europe, leaving buyers to scramble for tons from whatever source is available.

The search for ammonia has led to buyers tapping into the dwindling reserves at Antwerp and is driving up prices at Baltic ports. Sources said a spot deal was out of the Baltic at $470/mt FOB for about 25,000 mt. Sources speculated that the material is bound for the U.S. The price reflects a $90/mt jump in just one week.

Urea

Black Sea, Brazil, California, China, Eastern Cornbelt, India, Indonesia, Market Watch, Middle East, U.S. Gulf, Urea, Western Canada, Western Cornbelt

U.S. Gulf:

Granular barges were reported to be trading at $375-$400/st FOB, averaging slightly higher than the week-ago $370-$401/st FOB, according to sources. All April barges were reported at lower numbers, with sources quoting $363-$375/st FOB.

Eastern Cornbelt:

The urea market remained at $425-$435/st FOB in the Eastern Cornbelt, with the low reported at East Dubuque, Ill., and the high out of spot Illinois and Ohio River terminals. Pricing at Cincinnati, Ohio, was pegged at $430-$435/st FOB at mid-month.

Western Cornbelt:

Urea pricing was pegged at $420-$425/st FOB St. Louis, Mo.; $420-$430/st FOB St. Paul, Minn., for river-open; $425-$430/st FOB Catoosa/Inola, Okla.; $430/st FOB Caruthersville, Mo.; $430-$440/st FOB Port Neal, Iowa; and $475-$495/st DEL in North Dakota, depending on time of shipment.

California:

Urea pricing at California port terminals was moving up, with sources reporting new offers at $520/st FOB Stockton, up from $450-$480/st FOB in late February and $400/st FOB at the end of January. No current rail-DEL prices were confirmed at mid-month.

Pacific Northwest:

The urea market was quoted at $475/st FOB Rivergate, Ore., and $480/st FOB Aurora, Ore., up $25/st from last report, with delivered tons pegged at the $490/st level in Idaho.

Western Canada:

The urea market in Western Canada was quoted at C$650-$690/mt DEL for spring tons, up some C$35-$45/mt from last report, depending on location and supplier. The market FOB Saskatchewan warehouses was reported at C$675-$690/mt, up a full C$50-$75/mt from late February.

India:

Rashtriya Chemicals will close a urea tender on March 22. The move sent the global urea market into a tizzy, with Chinese traders pulling back offers for export tons and Arab Gulf producers digging in their heels on pricing.

The Indian buyer will be facing not only record-high prices, but also soaring freight rates. By the end of the week, international traders had shifted their expectations of the offering prices in the tender from the upper-$360s/mt CFR to the upper-$370s/mt CFR, with some even predicting the low-$380s/mt CFR.

Even as international traders exchange tales of higher delivered prices into India, the big fear seems to be of a player putting in an exceptionally low price. Sources said anything under $360/mt CFR is not workable from any source, adding that even the mid-$360s/mt CFR would be difficult to match.

The current Chinese price is pegged in the low-$340s/mt FOB for prills and about $360/mt FOB for granular. Freight from China to India’s East Coast ports has jumped to $30/mt, setting prices for offers of Chinese product in the $370s/mt CFR.

At the same time, the Arab Gulf producers are holding to their price of $365/mt FOB with freight now at about $20/mt, for a suggested landed price of $385/mt CFR. Sources suggested the only material offered from the Arab Gulf might be directly from the producers on an FOB basis to leave the shipping issue in the hands of the Indian buyer.

Industry watchers are unified in their understanding that RCF will need to buy 1-1.5 million mt of urea to ensure a proper kick-off of the 2021 season. Sources said the most likely breakdown of supply will be about 700,000 mt from China; 300,000 mt from the Arab Gulf, and 200,000 mt from other sources.

Many feel comfortable that the Chinese number could be met. However, getting product from the Arab Gulf will require the producers to drop their prices to meet the Chinese level. The “other” sources, however, are more of a question mark.

The current asking price in the Black Sea is at $360/mt FOB, with freight to India pegged at $80/mt FOB. Likewise, the Egyptian price is steadying at $400/mt FOB. At these levels, both the Black Sea and Egypt are out as possible suppliers.

Sources noted the Kaltim sale at $361/mt FOB for 40,000 mt this week as a possible contender for the Indian market. The material is to be loaded in April, and the freight rates could make such a deal possible. One trader noted, however, that strong demand in Australia could also pull at the Indonesia product.

Sources said financing the tender does not appear to be an issue. Initially, traders figured the tender would be called later in the month so that the awards would be issued when the new fiscal year starts on April 1. As things stand, the awards will be made before March ends. One trader noted, however, that the final contracts for the awarded tons may not occur until after April 1, and therefore on the next budget.

China:

As soon as RCF called its urea tender, sources said Chinese traders looking for export opportunities withdrew their product from consideration. New talks had to start with the idea of selling large quantities to India in a way that will prop up prices.

Prices had dipped in the first week of March into the $330s/mt FOB for prilled and the $340s/mt FOB for granular. Right after the tender was called, granular jumped to the upper-$350s/mt FOB and prills to the low-$340/mt FOB. Sources said the traders holding on to the Chinese product seem determined to keep prices at these levels.

Sources reported about 10 panamax vessels lined up for loading at Chinese ports in the next few weeks. In some cases, the lineup is creating minor congestion that could cause some problems with timely loadings of urea. In other cases, sources said the port facilities are facing labor shortages.

Government-ordered restrictions on the number of people allowed into a workplace remain in place to prevent new large-scale outbreaks of COVID-19. Some ports reportedly are on the edges of so-call virus hot spots, causing workers to stay at home until the all-clear is issued by the government.

Sources said the Indian buyer will try to place pressure on Chinese producers to lower their prices because of the higher freight rates currently in place. At the present prices, India could be facing offers in the $370s/mt CFR, which would be at record levels.

The buyers could argue, said one trader, that with the end of the Chinese domestic season, the producers have no other place to go to place their tons, especially now that the plants are running at higher production rates. Sources noted, however, that strong demand in Brazil and Australia, along with limited material from other sources, could allow the Chinese producers to hold firm on their pricing ideas.

Middle East:

Arab Gulf producers are holding to pricing ideas centered on $365/mt FOB, despite pressure to come down to levels that would be in line with those from China.

Sources speculated that Chinese prilled urea going into the Indian tender could be in the $370s/mt CFR. The landed price of Arab Gulf material would be closer to $385/mt FOB, given the current estimates of freight at around $20/mt.

Some producers might offer discounts to trading houses with whom they have long-term offtake agreements, but few think the producers will drop their price into the $350s/mt FOB to be competitive with China. Others think it might happen.

Some producers are expected to offer tons only on an FOB basis, leaving the issue of finding cheap freight to the Indian buyer.

Producers have told traders they are under no pressure to lower their prices. Brazil and Australia are both hot markets for urea, giving them customers who are willing to pay at the current market.

Some producers have already stepped up to cover sales to regional buyers. Oman has reportedly sold three cargoes totaling 120,000 mt to a Turkish buyer for shipment in late March. Iran has also reportedly stepped in with a sale into Turkey at $380-$385/mt CFR, which could make it more difficult for Egyptian material to enter that market.

Egyptian producers continue to make sales at $400/mt FOB. Sources reported a sale by Fertiglobe of 6,000-10,000 mt at $400/mt FOB for April loading. Producers appear to be happy the price has not gone down, but neither has it moved up. Recent sales by Egyptian producers for April shipments have all been at $400/mt FOB despite their efforts to move the price up.

Sources said for now the price is holding because European buyers have been willing to pay top dollar for small cargoes of material to ensure they have full inventories for the spring application season. Once the European demand drops, however, sources said they expect to see Egyptian prices fall to better accommodate Indian demands for lower prices, or to be competitive in Brazil against suppliers with cheaper freight rates.

Stories spread this week of a deal at $370/mt FOB for a prilled cargo. Sources, however, dismissed the deal as one from a trader holding older material that was purchased just as the price started its steady move up earlier this year.

Black Sea:

Sources said offers are now firmly at $360/mt FOB, but no one can point to a deal done at that level. The only confirmed sales were from the previous week at $330-$335/mt FOB. The price is expected to remain firm, with some possible growth because of strong and steady demand from European buyers, which includes several Turkish firms.

Product from Yuzhnyy is said to be too expensive to be considered in the RCF/Indian tender. The combination of the current spot price and the estimated $80/mt for freight puts the product well above $400/mt CFR, against the anticipated Chinese landed price in the $370s/mt CFR.

There are reports that about 90,000 mt will be available for sale during the last half of March. Sources said some of that amount will be needed for the domestic market. No one could tell how much would be available for export once those tons are siphoned off.

Indonesia:

A selling tender of 40,000 mt of granular urea by Kaltim closed this week. The reserve price of $365/mt FOB was not met. However, within a day or two, Kaltim came to an agreement at $361/mt FOB with the lowest bidder.

Bidding Company US$/mt FOB
Eurochem 360.00
Samsung 354.00
Koch 350.80
Ameropa 349.00
Agrifert Liven 345.00
Swiss Singapore 341.03

Sources reported that besides settling with EuroChem, Kaltim also sold cargoes to Swiss Singapore and Keytrade. The final deal at $361/mt FOB could allow for the material to be competitive in the upcoming RCF/India urea tender. It could also be sold to Australia at a reasonable profit.

Sources said the acceptance of a price well below the reserve price indicates that Kaltim was more interested in moving out product than holding on to a high price. The previous tender closed at $366/mt FOB for granular product.

Brazil:

International traders said the Brazilian urea market is hot enough that traders are looking for product from any source. The current landed price at Paranagua has moved up at the upper end to $395-$413/mt CFR.

Farmers are said to be more interested in taking care of the harvest right now than making long-term deals for urea, according to sources. Even at that, however, inland buying is showing stronger prices. Rondonopolis has tightened, with its high-end price dropping a bit. Sources now peg the market at $475-$578/mt FOB ex-warehouse.

Sorriso is steady at $503-$508/mt FOB ex-warehouse. The barter rate remains steady based on strong sales price of corn at 60 bags for 1 mt of urea.

Brazil Urea Prices
Terminal/City US$/mt FOB ex-warehouse
Week ending 03/11 Week Ending 03/19
Rondonopolis 480-600 475-578
Sorriso 503-508 503-508

UAN

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

U.S. Gulf:

NOLA UAN barges continued to be put in the $280-$300/st ($8.75-$9.38/unit) FOB range. East Coast vessel business was called $330-$345/mt CFR, with $350/mt CFR now being quoted, up from $305-$330/mt CFR at last report.

Eastern Cornbelt:

The UAN-32 market in the Eastern Cornbelt was unchanged at $315-$330/st ($9.84-$10.31/unit) FOB Illinois River terminals for April-June tons, depending on location and supplier. The latest CF postings remained at $325/st ($10.16/unit) FOB Mount Vernon, $327/st ($10.22/unit) FOB Cincinnati, and $345/st ($10.78/unit) FOB Burns Harbor, Ind.

Western Cornbelt:

UAN-32 pricing in the Western Cornbelt remained at $325/st ($10.16/unit) FOB St. Louis, $330/st ($10.31/unit) FOB Port Neal, $340/st ($10.63/unit) FOB Garner, Iowa, and $345/st ($10.78/unit) FOB Hastings, Neb.

California:

The UAN-32 market had reportedly jumped to $350-$365/st ($10.94-$11.41/unit) FOB Stockton and other port terminals in the state, up from the $320-$325/st ($10.00-$10.16/unit) FOB level reported in early March and $280-$315/st ($8.44-$9.84/unit) FOB in late February. Rail-DEL offers were reported at the $385-$395/st ($12.03-$12.34/unit) level for tons pulled through June.

Pacific Northwest:

Effective March 5, IRM’s reference prices for UAN-32 firmed to $385/st ($12.03/unit) FOB Pasco, Wash., and Umatilla, Ore.; $390/st ($12.19/unit) FOB Central Ferry, Wash.; and $430/st ($13.44/unit) DEL to points in eastern Oregon and Washington. The increase marks the company’s fourth price hike for UAN since the first of the year, with the new levels up $85-$95/st from Feb. 25, $115-$130/st from Feb. 16, and $140-$160/st from Jan. 21.

Western Canada:

The Western Canada UAN-28 market was pegged at a solid C$430/mt (C$15.36/unit) DEL for limited offers, up another C$30-$40/mt from late February, and some C$55-$75/mt higher than January pricing.

Ammonium Nitrate

Ammonium Nitrate, Market Watch, Russia, U.S. Gulf, Western Cornbelt

U.S. Gulf:

The NOLA ammonium nitrate market continued to be quoted at around the $325-$350/st FOB range.

Western Cornbelt:

Ammonium nitrate pricing in the Western Cornbelt remained at $400/st FOB in mid-March, where available.

Russia:

Acron Group this week said it had sold more than 500,000 mt of mineral fertilizers to local farmers in the 2021 sowing season, posting a 50 percent jump in ammonium nitrate sales and 30 percent higher NPK sales year-on-year, according to a company statement.

In 2020, the group sold 1.4 million mt of mineral fertilizers to the domestic market, almost double sales in the previous year.

Ammonium Sulfate

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

U.S. Gulf:

The ammonium sulfate barge market continued to be called $225-$240/st FOB.

Eastern Cornbelt:

Sources quoted the granular ammonium sulfate market at $250-$270/st FOB in the Eastern Cornbelt, with the upper end reflecting the March 1 postings from AdvanSix FOB Granite City, Ill.

Western Cornbelt:

Sources continued to report ammonium sulfate prices ranging from $245-$270/st FOB in the Western Cornbelt, with the low at Caruthersville and the higher end out of spot Iowa locations for March-June tons. The St. Louis market was pegged at $255-$265/st FOB at mid-month, while reference prices from producers remained at $260/st FOB St. Louis and $275-$280/st FOB Sioux City, Iowa.

Southeast:

AdvanSix on March 15 raised prices for new orders of bagged ammonium sulfate by $40/st FOB Chester, Va. The company said the increase was effective immediately and in response to strong demand.

California:

Ammonium sulfate pricing firmed to $298-$315/st FOB in California, with the low reflecting the March 11 reference price from IRM for WesternStandard FOB Chico. Sources pegged the market FOB Stockton and Woodland firmly at the $305/st FOB level, and Simplot was reportedly referenced at $305/st FOB Lathrop and $315/st FOB Helm, up $15/st from last report.

Pacific Northwest:

Sources quoted the granular ammonium sulfate market at $290/st FOB in Idaho, up $20/st from last report.

IRM announced another price increase for ammonium sulfate on March 11. New levels include $318/st FOB or DEL for Tranzform and WesternPremium in Oregon, Washington, Idaho, and Montana, up $20/st from IRM’s March 2 postings, and $40/st higher than Jan. 8 reference prices. WesternStandard prices also moved up $20/st on March 11, to $280/st FOB or DEL in those four states.

Western Canada:

Ammonium sulfate pricing in Western Canada was up significantly from last report, with inventories described as very tight. The market was pegged at C$480-$495/mt DEL for spring tons, up C$55-$65/mt from late February offers.

China:

Limited supplies are pushing up the price based on steady and strong demand. Sources reported a deal of 6,000 mt of caprolactam product to Universal Harvester in the Philippines for a netback of $165/mt FOB.International traders said similar small deals in the region are expected to continue pushing up prices as long as supply remains limited out of China.

Brazil:

Sources in Brazil confirmed ammonium sulfate sales at $190-$195/mt CFR at Paranagua. International traders, however, are calling the market around $210/mt CFR, claiming that older offers at that level have been accepted. Despite the disagreement, sources everywhere agree that the ammonium sulfate market in Brazil is much quieter than the urea market.

Local traders maintain that $200/mt CFR has not yet been broken, but most agree that it soon will be. Prices for August and September cargoes are in the $200s/mt CFR, and seem to be the main topic of discussion in the country.

Reports are circulating that international traders who were supposed to supply product under arrangements inked last September are now defaulting on that deal because of a lack of product. One trader said in some cases the issue was the inability to secure a freight rate that allowed for delivery under the original terms of the contract.

Like other commodities, importers of ammonium sulfate are facing the double whammy of higher product prices and rapidly rising freight rates.

Fertilizer Prices Take Toll on Acron’s FY2020; Shifts Dividend Payouts

Earnings, News, Russia

Acron Group, Moscow, reported an 85 percent drop in net profit for FY2020, down to RUB3.84 billion ($53 million) on revenue of RUB119.9 billion ($1.66 billion), versus the prior-year RUB24.79 billion ($383 million) and RUB114.8 billion ($1.77 billion), respectively.

EBITDA came in 1 percent lower on the year at RUB35.3 billion ($489 million), down from RUB35.7 billion ($552 million). Revenues increased 4 percent, boosted by an 11 percent surge in the average U.S. dollar exchange rate.

“Early 2020 was challenging, as global prices for mineral fertilizer prices dropped to multi-year lows, and the situation was aggravated by the COVID-19 pandemic in spring,” said Acron Group Chairman Alexander Popov.

He cited non-monetary items, such as exchange rate differences, as also contributing to the fall in net income. The group reported a net exchange loss of RUB10.74 billion in 2020, driven by a revaluation of assets, loans, and liabilities, against a RUB7.01 billion exchange profit a year earlier.

Acron Group’s output of key products increased 7 percent last year, reaching 7.98 million mt, while sales of key products were up 3 percent, to 7.81 million mt.

Popov reported that in response to weak UAN prices, Acron shifted its production structure towards products with a greater margin, including granular urea and ammonium nitrate. He said the group also increased its sales last year to growing markets in Latin America, and its priority Russian market.

“In early 2021, the mineral fertilizer markets showed significant improvement, with global prices actively recovering from multi-year lows amid strong demand in various regions,” said Popov.

“However, we remain cautiously optimistic and focused on controlling the group’s debt burden,” he said.

Acron Group’s net debt in dollar equivalent stood at $1.348 billion as of Dec.31, 2020, an 11 percent increase on the end-2019 position of $1.215 billion. At the end of the current reporting period, the net debt/EBITDA ratio in dollar equivalent was 2.8 against 2.2 a year earlier.

The group plans to shift its main dividend payments to shareholders towards the end of 2021, which it said would, combined with limiting capex, allow it to reduce the group’s debt burden.

“We still have the goal of paying out at least $200 million per calendar year in dividends, but in 2021 we expect the board to issue recommendations regarding the allocation of the major portion of the amount towards the end of the year,” said Popov.

Capex is planned at approximately $210 million in 2021, down 16 percent on last year’s capital investments totalling $249 million.

Acron Group: Urea 6+ on Track; New N Projects Launched

Featured, News, Russia, Urea

Acron Group, Moscow, has confirmed its Urea 6+ urea project is still expected to come on stream in the second quarter of the year, the group said in its earnings statement on March 19 (GM Jan. 29, p. 34).

The completion of the upgrade will increase the urea unit’s production capacity by 520,000 mt/y, and will increase Acron Group’s annual urea production capability by over half a million mt to 1.9 million mt, making it the largest urea producer not only in Russia, but also in Europe.

The group said it has launched three additional projects to support future growth. At the Veliky Novgorod site in northwest Russia, it is building a calcium nitrate production facility – its first – with 100,000 mt/y capacity, and is upgrading the Ammonia-3 unit at the site to increase its capacity by 200,000 mt/y. These projects are scheduled for commissioning in 2022 and 2023, respectively.

At its Dorogobuzh site in Russia’s Smolensk region, Acron is building a nitric acid unit and increasing capacity at the existing ammonium nitrate (AN) units to boost AN output by 180,000 mt/y. The project is expected to come on stream in late 2021.

DAP/MAP

Brazil, California, Central Florida, China, DAP/MAP, Eastern Cornbelt, India, Market Watch, Saudi Arabia, Southeast, U.S. Exports, U.S. Gulf, Western Canada, Western Cornbelt

Central Florida:

DAP trucks loading from Central Florida were quoted at $550/st FOB for the week, up from $540/st FOB at last report. MAP continued to display a premium to DAP at $565-$580/st FOB, rising from $555-$570/st FOB noted previously.

U.S. Gulf:

Market players described a largely sideways market amid a quiet week of trading, with DAP prices edging higher while MAP barges remained mostly unchanged.

Sources generally quoted a $542-$545/st FOB high for NOLA DAP barges, lifting from the week-ago $540/st FOB ceiling, while the bottom of the range pushed $5/st above the prior $530/st FOB to $535/st FOB. Offers for domestic material were quoted at $545/st FOB.

Most sources noted MAP ideas up to $590/st FOB, steady from one week earlier, while offers were reported as low as $575/st FOB. March offers noted up to $595/st FOB were reportedly not attracting much interest on March 18.

NOLA DAP barges were reported firming to $535-$545/st FOB, up from the week-ago $530-$540/st FOB. MAP barges were quoted at $575-$590/st FOB NOLA, unmoved from the prior week.

U.S. Exports:

Sources described a quiet week on the Gulf export market. Recent spot business included a 7,000 mt DAP load selling into Latin America and priced at $580/mt FOB, slated to ship at the end of March.

Lacking in fresh data points, the Gulf DAP and MAP export markets continued to be quoted at $580/mt FOB, steady from the prior report.

Eastern Cornbelt:

DAP was quoted at $565-$585/st FOB in the Eastern Cornbelt, with the low reported at Cincinnati and out of spot Illinois terminals. MAP was steady at $610-$635/st FOB in the region, with the low at Cincinnati. Most Illinois terminals were pegged in the $620-$625/st FOB range at mid-month.

Western Cornbelt:

DAP pricing firmed slightly to $565-$585/st FOB in the Western Cornbelt, up another $5/st from last report, with the low reported at St. Louis and the upper end at Dubuque, Iowa. The market FOB Catoosa/Inola was pegged at $570-$580/st FOB, with pricing at St. Paul reported at $570-$585/st FOB.

MAP was quoted at $620-$645/st FOB in the region, with the low confirmed at St. Louis and Dubuque. Sources pegged the St. Paul MAP market at $625-$645/st FOB, with pricing at Catoosa/Inola quoted at $625-$640/st FOB at mid-month.

Southeast:

Nutrien reported that its reference price for DAP and MAP moved to $570/st FOB Aurora, N.C., up $10/st from last week, but the company said it was not accepting new orders until further notice.

California:

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

Pacific Northwest:

MAP pricing remained at $677/st FOB Aurora, Ore.; $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 had reportedly firmed to C$945-$960/mt DEL and C$935-$950/mt FOB in mid-March, up from earlier river-open offers that were reported as low as C$895-$905/mt in late February.

Saudi Arabia:

Recent phosphate cargoes loading from Saudi Arabia were heard firming to the $450-$560/mt FOB range, increasing from $450-$530/mt FOB noted previously.

China:

Sources said DAP prices are softening, with offers now around $560/mt FOB and bids in the mid-$550s/mt FOB. Sources reported that some small deals were done this week in the mid-$560s/mt FOB.

The softness in the market has given buyers hope that further declines are coming. Sources said many are now holding off on signing any major deals on the assumption that prices will continue to fall.

Producers, on the other hand, continue to note that DAP is not as plentiful as the buyers believe. Many of the plants are continuing their shift from DAP production to MAP and NPKs.

India:

Buyers are pushing for lower DAP prices. Reportedly, they are bidding Chinese producers at $550/mt FOB, but so far without success.International traders said buyers and producers appear to be moving closer together, however, which could soon result in some major tons being secured by India.

Brazil:

Suppliers continue to push for higher prices, even as buyers strongly resist. Sources put the MAP price at Paranagua at $610-$630/mt CFR, representing a slight retreat on prices in a rising market.

The Rondonopolis price has tightened as supply and demand expectations come closer to a common view. Sources now put the price at $728-$768/mt FOB ex-warehouse from last week’s wider range of $700-$800/mt FOB.The barter rate for 1 mt of MAP remained at 75 bags of corn or 31 bags of soybeans.