All posts by mickeybarb@charter.net

Russia Antimonopoly Service to Investigate Mineral Fertilizer Pricing

News, News Briefs, Russia

Russia’s Federal Antimonopoly Service (FAS) plans to examine the grounds for pricing of mineral fertilizers to the domestic market, the service said in a statement on Feb. 25.

FAS has sent inquiries to domestic agricultural companies and plans to hold meetings with the country’s largest fertilizer producers on the situation with regard to supplies of product for the needs of Russian consumers, according to the statement. It said it is forming an interdepartmental working group.

The analysis will be completed in the near future, and FAS will take “adequate response measures” if there are signs of overpricing, the service said.

It stated that meeting the domestic demand for mineral fertilizers “is a priority,” since it directly affects Russia’s food security.

Tessenderlo Confirms E. Europe/CIS Ammonium Thiosulfate Investment Under Consideration

Amthio, Belarus, Eastern Europe, Europe, News, News Briefs, Specialty

Belgium’s Tessenderlo Group this week confirmed to Green Markets that it is considering whether there is a need to construct a plant for the production of Thio-Sul® (ammonium thiosulfate) for distribution in Eastern European and CIS countries, and is evaluating whether Grodno, in western Belarus, would be a good location for such a plant.

Various articles recently have been published reporting that Tessenderlo was mulling investing in an ammonium thiosulfate production facility in Belarus (GM Feb. 19, p. 37).

In its statement, the group said the mulled investment forms part of its current evaluation of the long-term evolution of the fertilizer market in various Eastern European and CIS countries, including Belarus.

“The analysis we are making is in line with the execution of the group’s strategy to support the increased long-term demand from the market for liquid fertilizer solutions, which offer complementary sulfur nutrition and reduce nitrogen losses,” the statement read.

“The strategy is to support local agriculture and improve food security standards, as well as provide a response to environmental challenges. Today, the liquid fertilizer Thio-Sul is typically used in blends with UAN for broad-acre crops as well as arboricultural and vegetable crop cultivation,” it continued.

Tessenderlo said at present, a potential investment case, which it emphasized would take “some years to be realized,” and which it confirmed will involve the production of Thio-Sul, is being considered in Grodno/Belarus for various reasons.

It outlined these reasons as Grodno being located near important agricultural markets where there is already a sizeable and growing consumption of UAN as liquid nitrogen fertilizer.

Thanks to its geographical location, Grodno is also an ideal hub for deliveries to Eastern-EU and CIS countries, as well as into overseas markets.

Additionally, the group said local companies in Grodno already produce ammonia, which means that “this hazardous product” does not need to be transported, thus substantially reducing the risks of supply operations. It added that this is also the local experience in regard to operating chemical facilities, as well as local universities offering agriculture specializations.

Tessenderlo said in any case, it is looking to make “a major investment in a location in the broader Eastern-European/CIS region in order to support a sustainable growth and qualitative productivity increase of agriculture in that region.”

The group said it will make a definitive statement accordingly once a final decision has been taken on this matter.

According to a report by Russia’s Fertilizer Daily earlier this month, a production capacity of 100,000 mt/y ammonium thiosulfate is being assessed with Grodno Azot supplying the ammonia. The report did not cite its sources.

Green NH3 Project Proposed for Denmark; Agriculture, Shipping Companies Collaborate

Ammonia, Featured, News, Scandinavia

Copenhagen Infrastructure Partners, a Danish fund management company focused on renewable energy infrastructure, on Feb. 23 unveiled plans for the establishment of Europe’s largest production facility of CO2-free green ammonia. The project will be located in the town of Esbjerg on Denmark’s West Coast, where the Power-to-X-facility will convert power from offshore wind turbines to green ammonia.

The projected cost is US$1.21 billion with ammonia capacity of 650,000 mt/y, with 600,000 mt going to agriculture and 50,000 mt to the shipping industry, according to the Business Recorder. A final investment decision is expected in 2023, with completion eyed for 2026.

This will be used by the agriculture sector as CO2-free green fertilizer and by the shipping industry as CO2-free green fuel. The excess heat will be used to provide heating for around one third of the local households in Esbjerg. The facility will consist of 1GW electrolysis. Ultimately, this is expected to reduce CO2-emissions by about 1.5 million tons CO2 yearly – or the equivalent to removing 730,000 cars from the roads permanently.

Major collaboration has come from both the ag and shipping industries, with participants from each segment signing a Memorandum of Understanding committing themselves to work toward realizing the establishment of the facility. The signers include Arla, Scandinavia’s largest producer of dairy products; Danish Crown, Europe’s largest pork producer; and DLG, Europe’s largest farm supply company. Major shipping companies A.P. Moller – Maersk and DFDS also signed.

CIP said ammonia production contributes to roughly 1.4 percent of global CO2 emissions. It estimates the facility in Esbjerg has the capacity to replace all imported fertilizers in Denmark, which are produced on fossil fuels.

“There is a very real sense of urgency in curbing shipping’s emissions, and we must develop scalable carbon neutral fuels,” said CEO of Fleet & Strategic Brands, A.P. Moller – Maersk Henriette Hallberg Thygesen. “Therefore, we welcome this project as an important development of green ammonia supply in the future. At A.P. Moller – Maersk we have announced that we will have our first carbon neutral vessel on the water by 2023 – seven years ahead of schedule.

“This vessel will be running on carbon neutral methanol. Nevertheless, we consider green ammonia as a promising option for marine fuels and a dual fuel engine for ammonia is under development. We are optimistic that ammonia, along with methanol and alcohol-lignin blends, will be powering Maersk-vessels in the future,” Thygesen continued.

A.P. Moller – Maersk has announced that all newly constructed vessels owned by the company must be able to use carbon-neutral fuels. The company said half of its largest 200 customers have set science-based or zero-carbon targets for their supply chains, or are in the process of doing so. The firm wants to have net-zero emissions from its operations by 2050, and helped found a research center focused on decarbonizing the industry.

BayoTech Expects to Commission at Least 10 Units in 2021

News, News Briefs, Nitrogen, Southwest

Fresh off a new $157 million equity investment in January (GM Jan. 8, p. 1), hydrogen and nitrogen technology provider BayoTech Inc., Albuquerque, expects to start commissioning at least 10 of its small modular hydrogen units in 2021.

“We’ll start commissioning our hydrogen units around the world this year,” CEO Mo Vargas told the Albuquerque Journal. “We’ll fill out customer orders for at least 10 units. We now have the capital to do it, so that’s not an issue anymore.”

BayoTech said it signed 15 commercial agreements with customers last year and got $1 billion more in project proposals in the pipeline across the globe.

At some point, BayoTech expects to deploy an on-site hydrogen generator to one of Nutrien’s nitrogen fertilizer plants (GM April 24, 2020). Nutrien is to operate the unit for supplemental hydrogen, while BayoTech will perform maintenance and 24/7 remote monitoring.

Yara, Port Authority Join Ammonia-Fueled Tanker Joint Development Project

Ammonia, News, News Briefs, Scandinavia

Yara International ASA, Oslo, and Maritime and Port Authority of Singapore (MPA) have joined the Ammonia-fueled Tanker Joint Development Project (JDP). Other partners includeMISC Berhad, Lloyd’s Register, Samsung Heavy Industries, and MAN Energy Solutions.

JDP’s goal is to develop ammonia propulsion ships to support the maritime industry’s drive to decarbonization. JDP also announced a name for the expanded coalition – The Castor Initiative.

“Supporting the enabling role of ammonia in the energy transition, we recognize the need for value chain collaboration to make zero emission shipping by using ammonia as a fuel a reality,” said Magnus Ankarstrand, EVP Clean Ammonia, Yara.

“Decarbonization remains a key priority for the maritime sector, not just in Singapore but globally,” said MPA Chief Executive Ms. Quah Ley Hoon. “As a transshipment and bunkering hub, we are committed to meet IMO2030/2050 decarbonization goals. We are also looking forward to collaborating with like-minded industry partners to support the development and trials of alternative future marine fuels such as ammonia.”

JDP said the addition of the new members means that the alliance will now have complete representation from all areas of the maritime ecosystem. It said the experience and expertise of each partner will be central to the success of the initiative, from conception to project realization.

The announcement follows a key project milestone in September 2020, when Lloyd’s awarded Approval in Principle to Samsung Heavy Industries for its ammonia-fueled tanker design with the aim of commercializing these developments by 2024.

JDP said to meet the International Maritime Organization’s (IMO) 2050 ambitions on halving greenhouse gas (GHG) emissions from 2008 levels, zero-carbon vessels need to enter the world fleet by 2030.

While ammonia is one of the fuels being considered by maritime stakeholders, JDP said the partners recognize that the shipping industry will need to explore multiple decarbonization pathways, and hope their collaboration will spur others in the maritime industry to join forces on addressing this global challenge.

Cibrafértil Buys Heringer Uberaba Plant

Brazil, Featured, News

Brazil’s Fertilizantes Heringer SA has sold its Uberaba blending plant in Minas Gerais state to the Brazilian fertilizer distributor Cibrafértil Group for R$55 million (approximately US$10.25 million at current exchange rates), according to an Heringer statement. The money will be paid in three annual installments.

The Cibrafértil Group is majority owned by U.S.-based Omimex Resources Inc. with Anglo American holding a 30 percent interest.

The Uberaba plant, with production capacity of 400,000 mt/y, was believed to have been idled by Heringer back in 2019 (GM April 19, 2019).

The acquisition of the plant will increase Cibrafértil’s Brazilian production capacity by 24 percent, according to a Nasdaq report, citing a company statement. The purchase is part of Cibrafértil’s R$400 million expansion plan that aims to reach local production capacity of 2.5 million mt by 2025.

According to the Heringer statement, the Uberaba assets were offered as a guarantee for a revolving credit facility executed in Sept. 2018, for the purchase of agricultural supplies from Agro Industrial São Luiz Ltda., a company belonging to the Cibrafértil Group and CMOC Brasil Mineração, Indústria e Participações Ltda.

Accordingly, the credit held was considered non-bankruptcy, and why the sale of the plant was not part of Heringer’s ongoing Judicial Recovery plan (GM Dec. 6, 2019).

The Cibrafértil Group has agreed to write off all liens on the Uberaba assets, Heringer said.

The deal remains subject to approval by Brazil’s Administrative Council for Economic Defense.

Orica Ltd. – Management Brief

Australia, Management Briefs

The Chairman of Australian explosives maker Orica Ltd., Malcolm Broomhead, announced on Feb. 26 that Alberto Calderon will step down from his role as Managing Director and CEO, after almost six years in the role. Orica’s Group Executive and President of Australia Pacific Asia, Sanjeev Gandhi, has been appointed as Orica’s new Managing Director and CEO

Gandhi joined Orica in July 2020 after spending 26 years with German chemical company BASF SE. During his tenure with BASF, he held senior marketing, commercial, business leadership and director roles, in India, Germany, Japan, Singapore, and Hong Kong.

Most recently, Gandhi was an Executive Director of BASF SE and Head of Asia Pacific, as well as Head of Global Chemicals Segment (Intermediates & Petrochemicals) based out of Hong Kong.

Orica Warns on Fiscal 1H; China, South America, COVID-19 Cited

Australia, News, News Briefs

Australian explosives maker Orica Ltd., Melbourne, on Feb. 26 issued a trading update that points to below expectations for its earnings before interest and tax (EBIT) for first-half FY2021 (Oct. 1-March 31). The group updated on the key factors reducing EBIT in the reporting period, but did not provide specific forecasts.

Orica said the ongoing trade tension between Australia and China is impacting demand in its higher margin Australian thermal coal market. In the first half of FY2021, the group now expects demand for its products and services from affected mines to be approximately 60,000 mt of ammonium nitrate (AN) lower than the prior corresponding period (pcp).

COVID-19 also continues to be “a significant source of uncertainty” for the group. It said activity in Colombia is “significantly lower” than the pcp due to major customers’ temporary and permanent mine closures.

Continuing social unrest in Peru and strikes in Chile have also reduced demand for products and services in those countries, and COVID-19 has led to “an unfavorable but temporary shift in the product mix of customer demand in Peru,” said Orica.

The group said mining activity also remains severely disrupted by the pandemic in several other regions, including part of Europe, Africa, and Mexico, “where the virus has been widespread and its impacts more prolonged than our original expectation.” It also cited lower volumes in Indonesia due to the ongoing effects of COVID-19 and adverse weather.

On the positive side, Orica noted mining activity in Australia, the U.S., and Canada has remained largely resilient to COVID-19.

At the time of its FY2020 earnings announcement in early December, Orica had expected AN volumes, excluding Peru’s Exsa, in FY2021 to grow by approximately 1 percent on FY2020, based on its then view of mining activity (GM Dec. 4, 2020). Exsa AN volumes for FY2021 had been expected to be approximately three times that of FY2020, given a full-year of contribution.

A Bloomberg report following the trading update cited a note by Goldman Sachs analysts, led by Alex Karpos: The update suggested “much harsher near-term headwinds than we currently forecast,” they wrote. Goldman sees Orica’s fiscal first-half EBIT down A$15 million year-on-year (IH FY2020: A$308.6 million).

Orica is scheduled to report is first-half FY2021 financial results on May 13.

Ag Producers Co-op to Join Skyland Grain JV

Featured, News, Southern Plains

Two Southern Plains cooperatives – Skyland Grain LLC in Ulysses, Kan., and Ag Producers Co-op in Bushland, Texas – announced on Feb. 4 that they have signed an agreement for Ag Producers to join the Skyland joint venture, effective April 1, 2021. A statement from the two companies said the agreement will build scale and diversification in services and geography.

“Skyland Grain is a unique and evolved cooperative partnership that allows us to provide our member-owners with greater risk management and the benefits of size,” said Gregg Allen, CEO of Ag Producers. “Culturally, we also fit well together.”

Terms of the deal were not disclosed. Both companies have expanded in recent years through multiple mergers. Skyland was established in 2004 with the merger of Johnson Cooperative Grain Co. and ADM Grain Co. Other companies joined in the years that followed, including Syracuse Cooperative Exchange in 2010, The Cairo Cooperative Exchange in 2015, and United Prairie Ag LLC in 2019 (GM Aug. 23, 2019).

“Skyland Grain and Ag Producers Co-op are both strong and progressive companies. This relationship will offer outstanding opportunities to all of our farmer-owners across Kansas, Colorado, Oklahoma, and West Texas,” said David Cron, CEO of Skyland Grain. “Together, we create a stable and progressive future for our members.

Skyland currently operates agronomy, grain, energy, and finance divisions from 42 locations across Kansas, Oklahoma, and Colorado. The company has a total licensed grain storage capacity of more than 100 million bushels. Its full-service agronomy department provides bulk ammonia and both liquid and dry fertilizer, as well as chemicals, seed, and custom application services.

Ag Producers operates grain, cotton, agronomy, fuel, and retail store businesses from 22 Texas locations, with a total licensed grain storage capacity of more than 68 million bushels and three cotton gins. The company’s footprint has grown through mergers and acquisitions, including Sunray Co-op, Olton Grain Co-op, Olton Co-op Gin, United Farm Industries Inc., Hart Producers Co-op Gin, Bushland Grain Co-op, and Dalhart Consumers Fuel Association. More recently the company acquired AGCO in Spearman, Texas, in 2015, followed by Robinson Grain in Panhandle, Texas, in 2016.

Production Returning After “Deep Freeze;” Tight Nitrogen Supplies Predicted

Featured, News, Nitrogen, Urea

Most major fertilizer plants hit by the mid-February deep freeze were believed to be in the process of coming back up this week (GM Feb. 19, p. 1).

OCI NV CEO Ahmed El-Hoshy told analysts on Feb. 25 that the recent outages may have cost the industry some 150,000 mt of urea. He said the U.S. was already behind on urea imports and had needed another 1.4 million mt by June in order to meet spring season demand. Despite the recent uptick in U.S. urea prices, he said the U.S. continues to trade at a discount compared to Arab Gulf values.

El-Hoshy said OCI plants in both Iowa and Texas had some downtime during the period. “But the impact of the stoppages has been much more than offset by pre-existing gas hedges as we went into the month of February 100 percent hedged in the U.S….,” he said.

CVR Partners also told analysts at its earnings call that the loss of production should significantly tighten nitrogen fertilizer inventories in advance of spring. CEO Mark Pytosh said it had no major disruptions at its Coffeyville, Kan., plant since it uses petroleum coke as a feedstock. However, he said CVR was “opportunistic” at the East Dubuque, Ill., nitrogen plant, saying it made more sense to take the plant down and sell pre-purchased gas.

Nutrien Ltd. said its Borger, Texas, nitrogen plant, which went down due to a loss of gas supply, was in the process of restarting. The same was true for its Fort Saskatchewan, Alta., plant, which pulled forward a turnaround in order to address the freeze issue.

Nutrien said there was no impact at Aurora, N.C., or White Springs, Fla., and minimal impact to phosphate operations. Potash mining operations were at full production.

LSB Industries said its Pryor, Okla., nitrogen plant began a phased restart on Feb. 21. The company also reported that its El Dorado, Ark., facility was ramping up to full production after its primary natural gas supplier asserted a claim of force majeure on Feb. 17 and materially restricted supply to the plant. The company said its Cherokee, Ala., plant was not materially impacted by weather and operated at targeted levels throughout February.

After indicating it had some outages in Louisiana during the cold weather, The Mosaic Co. said all of its plants were up and running.

In the meantime, two major NOLA area ammonia plants were still offline due to other reasons – Yara’s Freeport plant with mechanical issues, and Incitec Pivot Ltd.’s Waggaman, La., plant, where a major turnaround that started in January is stretching into mid-March.