All posts by mickeybarb@charter.net

Heartland Co-op – Management Brief

Management Briefs

Dave Coppess, Executive Vice President of Heartland Co-op in Iowa, announced his retirement in December 2020. Coppess worked for decades in the ag retail, fertilizer, and ag chemicals industry, serving in multiple management roles with Heartland.

In the early 1990s he worked for Farmland Industries as National Accounts Sales Manager and Marketing Manager for Ag Chemicals. He also served as chairman of the Agricultural Retailers Association (ARA) and received ARA’s 2009 ARA Distinguished Service Award (GM Dec. 7, 2009). Recent awards included the Career Conservation Achievement Award, which was presented to Coppess by the Iowa Agriculture Water Alliance (IAWA) in November 2020 for his work in improving conservation and water quality in Iowa.

Coppess also served as chair of the Agriculture’s Clean Water Alliance (ACWA), where he worked to expand water quality monitoring and programming in Iowa and helped Heartland become one of the first ag retailers in the nation to partner with the National Resources Conservation Service (NRCS) to enroll CCAs in conservation planning training.

LSB 4Q Ag Volumes Up 64 Percent, Adjusted EBITDA 44 Percent

Ammonia, Ammonium Nitrate, Earnings, Sulfuric Acid, UAN

LSB Industries Inc. reported a 64 percent increase in fourth-quarter Ag segment sales volumes, to 233,942 st from the year-ago 142,488 st. UAN volumes were up 105 percent. However, prices were off from year-ago levels.

“We delivered fourth-quarter 2020 results largely in-line with our expectations headed into the period,” said Mark Behrman, LSB President and CEO. “Our substantial year-over-year increase in production volume more than offset the continued pricing headwinds on fertilizer sales and the pandemic-related impact on industrial and mining demand that we experienced during the quarter. Despite the challenges we faced across our end markets, we still generated a 44 percent year-over-year increase in adjusted EBITDA for the period.

“The fourth quarter capped off our best year of operating performance across our three facilities in our company’s history,” he added. “We delivered record production volumes for ammonia (827,000 st) and UAN (501,000 st) for full year 2020, reflecting a return on the investments we’ve made in plant reliability and product upgrading capabilities over the last several years as well as our focus on continuous improvement in our manufacturing operations.

“We also benefitted from the absence of any turnaround activity in 2020 as compared to 2019. Overall, we were pleased with the performance of our plants in 2020 and believe that we will generate further improvement in operating rates and production volumes in 2021.

“Favorable dynamics for U.S. agriculture have translated into higher prices for a variety of crops, including corn, wheat and cotton, which has prompted an increase in demand and selling prices for fertilizers,” Behrman continued. “In fact, since mid-January we have seen a significant increase in selling prices for all the nitrogen fertilizers we sell. We expect that the benefit of these higher selling prices will have some impact on our first quarter financial results and be fully reflected in our second quarter.

“Regarding our industrial business, we have seen a steady rebound in demand since the lows experienced in the early part of the pandemic. However, many sectors are not yet operating at pre-pandemic levels, and while we don’t expect that to significantly impact our industrial sales volumes due to our strong sales efforts, it is still putting selling price pressure on certain of our products,” he said. “We are hopeful that as COVID-19 vaccines are increasingly distributed, overall demand in the marketplace will get back to pre-pandemic levels putting less pressure on selling prices on certain products.

“Regarding our outlook for 2021, we expect to deliver year-over-year improvement in production and sales volumes which we believe will translate into improved adjusted EBITDA and cash flow for the year. We believe that with the strengthening of fertilizer market dynamics, our anticipated improvement in our financial performance and the current favorable credit market environment, we will have an opportunity to refinance our existing debt at more favorable terms, which would provide us with greater financial flexibility to pursue growth initiatives,” Behrman concluded.

LSB posted a fourth-quarter net loss of $21.7 million on net sales of $88.9 million, an improvement over the year-ago loss of $27.7 million and $73.9 million, respectively. Adjusted EBITDA was $10.4 million, up from the year-ago $7.2 million.

The company reported a full-year net loss of $61.9 million on sales of $351.3 million versus the year-ago loss of $63.4 million and $365.1 million, respectively. Adjusted EBITDA was $65.5 million, down from the year-ago $69.3 million.

Sector Net Sales $/M 4Q-20 4Q-19 Percentage Change
Agricultural 41.6 32.8 27
Industrial 35.9 34.1 5
Mining 11.4 7.0 64
Total 88.9 73.9 20
Ag Product Sold (000 st) 4Q-20 4Q-19 Percentage Change
UAN 131.7 64.3 105
HDAN 71.0 58.6 21
Ammonia       28.3 17.1 66
Other 3.0 2.5 19
Total 233.9 142.5 64
Avg Selling Price $/st 4Q-20 4Q-19 Percentage Change
UAN 132 161 (18)
HDAN 159 201 (21)
Ammonia       210 253 (17)
Industrial Sold (000 st) 4Q-20 4Q-19 Percentage Change
Ammonia       68.5 64.9 6
Nitric Acid* 29.3 29.6 (1)
Other 14.4 9.8 46
Total 112.1 104.3 7
Mining Sold (000 st) 4Q-20 4Q-19 Percentage Change
LDAN/HDAN/AN Sol. 45 29 55
Other Factors 4Q-20 4Q-19 Percentage Change
Avg Nat Gas Cost mmBtu 2.46 2.47 0
Tampa NH3 $/mt 239 255 (6)

2021 Outlook Versus 2020

Sales Volumes st 2020 Outlook 2019 Actual  
Agriculture        
UAN       480,000-500,000 499,000  
HDAN 280,000-300,000 293,000  
Ammonia 70,000-90,000 97,000  
Industrial, Mining, Other 2020 Outlook 2019 Actual  
Ammonia       240,000-260,000 269,000  
AN, Nitric, and Other . 400,000-420,000 303,000  
Sulfuric Acid 145,000-165,000 146,000  

Ammonia

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

U.S. Gulf/Tampa:

As Green Markets went to press, the February price for Tampa ammonia stood at $330/mt CFR, with nothing reported for March. New trades were putting pressure on Tampa to go up.

Earlier in the week, Nutrien confirmed a purchase of 25,000 mt of ammonia from Fertiglobe out of Algeria, which will be loaded in late March or early April to be delivered to the U.S. The company said the purchase reflects a delivered cost of $470/mt, which is up from the last done business of $400/mt.

NOLA barges were last reported at $360/st FOB, a Tampa equivalent of $397/mt. Sellers were suggesting the Tampa price should go up somewhere between $70-$120/mt for March.

In the meantime, most ammonia plants hit by the cold wave at mid-month were reported to be making their way back up in late February. There were unconfirmed reports that the OCI Beaumont plant was still down, but that Iowa Fertilizer Co. in Wever was in start-up. Two major NOLA plants, Freeport and Waggaman, remained down for mechanical and turnaround issues, respectively.

Yara’s Tringen II plant in Trinidad, which had gone down due to mechanical issues, returned to production the week of Feb. 15.

Eastern Cornbelt:

Most producers continued to withhold new pricing for ammonia after pulling offers during the previous week because of weather-related plant shutdowns across the Midwest and Southern Plains.

Sources on Feb. 25 said both CF and Koch were offering no spring ammonia pricing, with the last offers quoted in the $470-$500/st FOB range in the Eastern Cornbelt at mid-month. There were rumors of new spring offers at the $550/st level FOB Lima, Ohio, as the week progressed, however.

Western Cornbelt:

While the last spring ammonia offers were reported in the $470-$490/st FOB range out of CF and Koch terminals in the Western Cornbelt, sources said both producers had withdrawn offers. There were reports that Wever, Iowa, was offering spring tons at the $600/st FOB level as the week progressed, however. In the Northern Plains market, spring ammonia was reported at $530-$550/st FOB.

California:

The ammonia market in California remained at $379/st DEL, with aqua ammonia posted at $109/st FOB. Sources said they expect a “significant increase” in March.

Pacific Northwest:

Anhydrous ammonia pricing in the Pacific Northwest was steady at $455/st FOB Ritzville and Kennewick, Wash., with delivered tons quoted at $475-$488/st DEL, depending on location and supplier. The aqua ammonia market was pegged at $108-$130/st FOB in the region.

Western Canada:

Limited spring pricing for anhydrous ammonia in Western Canada was reported at C$875/mt DEL in late February, up from C$805-$815/mt early in the month and C$730-$760/mt in mid-January.

Black Sea:

Netbacks from sales to Turkey and Africa has moved the ammonia price into the $360s/mt FOB, according to sources. The deals come on the heels of the $430/mt FOB Algeria deal that cemented higher prices in most major markets.

Middle East:

The lack of any extra tons means producers are not even entertaining bids for spot tons. Producers are holding on to whatever product they have so that they can honor their contracts.

The absence of any spot deals, however, has not prevented traders from speculating where the market would be if tons were available. Sources said the range that buyers would have to look at for bids would be $370-$400/mt FOB, with an emphasis on the upper end.

North Africa:

The Nutrien purchase from Algeria at an estimated $430/mt FOB for delivery to the U.S. at $470/mt CFR led sources to speculate that as long as buyers are willing to pay at that level, the Algerian plants will remain a solid source of product.

Availability of ammonia from Algeria has been hit-or-miss in the past, with some buyers having to keep moving west until they get to the Caribbean to secure tons for their customers. The higher prices now being enjoyed by producers are providing plenty of incentive for producers to keep plants well maintained and operating.

Major buyer OCP in Morocco is said to have stepped away from the spot market in light of the ever-rising ammonia prices. Reportedly, the phosphate giant has enough material on contract to ensure steady operations. One trader noted that higher DAP and MAP prices are making it easier for OCP to accept the higher costs for the ammonia it needs.

Northwest Europe:

Rising prices in the Black Sea and North Africa are putting pressure on ammonia prices in Antwerp to go up. The final push is coming from reports that prices from Baltic suppliers could hit $400/mt FOB in March. If that happens, sources said they expect to see the Northwest Europe price to hit $430/mt C&F.

For now, however, prices remain much lower at the previous level of $405/mt C&F. Sources said the scarcity of product in the spot market is currently the only thing preventing higher prices immediately. Much of the business moving in and out of Antwerp is contract tons.

Sources said at least one bidder into the Baltic market is seriously talking about $400/mt FOB from the area. Producers appear ready to accept the bid, assuming they have the product at the time the buyer wants it. That final point may be a deal killer if the buyer wants immediate shipment instead of waiting a few weeks for the product.

India:

No new spot deals have been reported. There are reports, however, of at least one tender slated to close soon for 40,000 mt to be divided into four monthly shipments starting in March.

If tons are offered and if awards are made, sources said the buyer will have to accept a much higher ammonia price than the last public price of just under $320/mt C&F. Sources said the price for a spot cargo from the Arab Gulf would have to be just under $400/mt FOB, meaning the landed price in India would be closer to $450/mt CFR.

Russia:

The final 2020 export numbers were released by the Russian government this week. According to Trade Data Monitor, Russia exported 4.2 million mt to buyers around the world. This number is down 11 percent from 2019, when the country exported 4.6 million mt.

The main buyers of Russian ammonia included Ukraine at 817,000 mt, Estonia at 795,000 mt, Morocco at 496,000 mt, and Turkey at 415,000 mt. Those four, out of a total of 15 buyers, accounted for more than half of the purchases.

Indonesia:

Exports in 2020 were down about 10 percent, to 1.6 million mt from 1.8 million mt in 2019, according to Trade Data Monitor.The main buyers of the Indonesian ammonia were China at 498,000 mt and South Korea at 472,000 mt.

Turkey:

Ammonia imports were up about 18 percent in 2020, to 1.2 million mt from 1 million mt in 2019. The main supplier was Russia, followed by Algeria. While the Turkish government reported 722,000 mt of Russian imports, Russia reported just 415,000 mt going to Turkey. Sources said often the differences can be written off to when and how the information is recorded by the respective government offices.

Urea

Brazil, California, China, Eastern Cornbelt, India, Indonesia, Malaysia, Market Watch, Middle East, Nepal, Pacific N.W., U.S. Gulf, Urea, Western Cornbelt

U.S. Gulf:

The NOLA granular urea barge market continued to strengthen at $346-$359/st FOB, up from the week-ago $324-$356/st FOB. CF indicated in its recent earnings call that it was in the urea market to assure that it would be well-stocked for the season. Others noted its presence during the week.

Eastern Cornbelt:

Urea was quoted at $385-$410/st FOB in the Eastern Cornbelt in late February, depending on location, with the low confirmed at Cincinnati, Ohio, for early-week offers.

Western Cornbelt:

Urea was pegged at $380-$410/st FOB in the Western Cornbelt, with the low reported at St. Louis, Mo., and reflecting a $5/st increase from the previous week. The Port Neal, Iowa., market was quoted at $390-$410/st FOB, with St. Paul, Minn., pricing reported at $390-$395/st FOB for river-open tons and $400/st FOB or higher for spring shipment.

The Catoosa/Inola, Okla., urea market was reported at $385-$390/st FOB at midweek, up $5/st from last report.

California:

Urea pricing at California port terminals was pegged at $450-$480/st FOB, up from $400/st FOB at the end of January, with the low end confirmed for some immediate pull offers. Rail-DEL pricing was reported at the $480/st level or higher in the state.

Pacific Northwest:

The urea market remained at $450/st FOB Rivergate, Ore., and $455/st FOB Aurora, Ore. Delivered urea was pegged at $455-$485/st in the region, with the low confirmed in Montana and the high in Washington. The delivered market in Idaho remained at the $470/st level in late February.

Western Canada:

Urea pricing in Western Canada had reportedly firmed to C$615-$645/mt DEL, depending on time of shipment, up C$20/mt at the low end of the range. The market FOB Saskatchewan warehouses was reported at C$600-$615/mt for March tons, with spring offers firming to C$610-$640/mt FOB.

“It has been quiet as of late, assuming everyone is just evaluating how much more they need to buy before spring,” said one regional contact. Added another source: “The market had a lot of buying activity all through January and the first half of February. It’s slowed down, but we’re still seeing some activity.”

China:

Sources reported a prilled urea sale of 20,000 mt at $348-$350/mt FOB. Valency was identified as the international trader handling the deal. Reportedly, the order had to be assembled from a number of domestic traders to reach the desired volume.

The difficulty arranging a cargo of this size was not surprising, most sources said. Chinese producers are just coming off the Lunar New Year holiday. Prior to the holiday break that started on Feb. 7, production was down because of COVID-related issues.

Sources said some plants and terminal facilities were affected by orders to reduce staff. In other cases, hot spots that did occur caused issues moving the urea from factory to terminal.

As the country came out of the holiday break this week, sources said the government sent notices to the producers to immediately increase production. One trader said the production rate has now moved up to a nine-month high. Another trader said the increase has taken production levels to 100,000 mt/month.

The concern for the government was that there needs to be enough product in the pipeline for the domestic market. However, sources said with the increase in production, some producers might also be able to participate in the Indian urea tender once it is called without hurting their commitment to fill domestic distribution centers.

Granular urea remains in the $360s/mt FOB, but only because of deals done several weeks ago. No new spot business has occurred to formally shift the price. Traders said current discussions are centering on the upper-$360s/mt FOB without too much pushback from producers.

India:

The urea world is waiting for the next Indian tender. Sources said for now, the government seems to be balancing the needs of the farmers against what is being reported as ever-rising prices from major suppliers.

Indonesia:

PIM offered urea for April shipment at $354.90/mt FOB for prills and $366.90/mt FOB for granular. Sources noted that these are the same prices Kaltim settled on earlier this month.So far, there have been no takers.

Sources said there is a growing reluctance by traders and end-users to keep paying higher prices for urea. Many of the NPK buyers, for example, are abandoning urea in favor of ammonium sulfate to get their nitrogen content. Sources said while buyers have been willing to pay a premium for Indonesian urea in the past, the current high prices make buyers reluctant to commit to deals too far into the future, in the hope that the ceiling has be hit and prices will start coming off.

Exports from Indonesia in 2020 were reported at 2.4 million mt, up about 28 percent from 1.9 million mt in 2019, according to Trade Data Monitor. The top five buyers of Indonesian urea in 2020 were India at 825,000 mt, the Philippines at 533,000 mt, Mexico at 280,000 mt, South Korea at 117,000 mt, and Malaysia at 100,000 mt. Ten other buyers took cargoes ranging from 87,000 mt to 18,000 mt each.

Middle East:

Sources reported no new spot urea deals as producers focused on fulfilling previous orders and their long-term contracts. There are reports that some deals may have been done at $380/mt FOB, but, said one source, those rumors appear to be coming from producers with no details about the buyer or the shipping time.

Arab Gulf urea is expected to play an important role in the upcoming Indian urea tender because of constant reports of limited urea supplies in China. The news that Chinese producers have accelerated production could lead to a challenge to the Arab producers in India.

Egyptian producers keep securing higher prices for small lots. Helwan this week sold 5,000 mt at $395/mt FOB for late April shipment. In the latter part of the week Fertiglobe secured a deal to sell 8,000-10,000 mt for the same price, also for late April shipment.

Producers continue to push for $400/mt FOB. Traders said producers might reach that level, but that might also signal the peak of the market. One trader noted that once India calls its tender and makes its awards, a new price level will be set and the last large buyer will have its needs covered. That combination could mark a decline in prices.

The material being shipped this month and into March is pegged at $380-$390/mt FOB.

Malaysia:

The Petronas Gurun urea plant shut down as technical teams assess the situation and determine how long the closure will be. Sources said the company is estimating the plant will be down about two weeks. The facility has a rated capacity of 700,000 mt/y.

Urea exports were down slightly in 2020, to 2.1 million mt from 2.2 million mt in 2019, according to Trade Data Monitor. Of the 13 countries taking 25,000 mt or more, a bit more than half of the exported tons were bought by three countries. Thailand bought 477,000 mt, Australia took 378,000 mt, and the Philippines imported 353,000 mt.

Nepal:

The country is expected to receive 50,000 mt of urea from Bangladesh soon. The product is being sent under a government-to-government deal to ease a urea shortfall because a contractor failed to fulfil its contract with the government to supply the urea.

Initially, the deal, which was negotiated in September 2020, was to have been a loan from Bangladesh to Nepal. Over time, the two governments decided to make the swap an out-and-out purchase.

Brazil:

Sources said the port price was stable in the upper-$380s/mt CFR. Higher prices are expected, partially because of the rising urea prices in the major pricing areas, but also because of increased freight rates. Sources reported an almost $10/mt jump in freight rates for dry bulk from Baltic ports to Brazil in just one week, to a level approaching $40/mt.

Brazil Urea Prices
Terminal/City US$/mt FOB ex-warehouse
Week ending 02/19 Week Ending 02/26
Rondonopolis 475-490 529-550
Sorriso 540 520

Rondonopolis is seeing a dramatic increase in price even as limited business is concluded. Sources now put the urea price at $529-$550/mt FOB ex-warehouse, up dramatically from the previous range of $475-$490/mt FOB. Sources said the new price is reflective of the recent rise in the landed port price and in transportation issues bedeviling local traders.

Sources said delays in the soybean harvest have tied up trucks to move their product from farm to port at a time when those same trucks usually move fertilizer from the ports to the local distributors. The delay in the soybean growing regions is having a domino effect on the rest of the Brazilian markets, dramatically reducing available trucks and running up transportation costs.

Barter rates remain steady at 1 mt of urea for 60 bags of corn at Mato Grosso.

Libya:

The Libyan Norwegian Fertiliser Co. (Lifeco) recently loaded its first urea export shipment since it became a majority-owned Libyan company, according to a Libya Herald  report, citing a company statement. Lifeco said the Mare 1 vessel loaded 5,000 mt of urea.

Libya’s National Oil Corp. (NOC) in January took over Yara International’s 50 percent share in the company to become the majority shareholder (GM Jan. 8, p. 1). The transaction, effective Dec. 31, 2020, gave NOC 75 percent ownership while the Libyan Investment Authority (LIA) still holds 25 percent.

UAN

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

U.S. Gulf:

NOLA UAN barge price ideas continued to be reported at $200-$220/st ($6.25-$6.88/unit) FOB, although others suggested the next round of trades may be in the $220-$240/st FOB range.

Eastern Cornbelt:

Sources reported the Cincinnati UAN-32 market at $250-$260/st ($7.81-$8.13/unit) FOB for spring tons on Feb. 25, with that range also catching what little spring pricing was being offered out of Illinois and Indiana terminals. The UAN-28 market was pegged at $219/st ($7.82/unit) FOB Cincinnati late in the week.

“I am sure next week will bring more clarity,” said one industry contact.

Western Cornbelt:

The UAN-32 market was quoted at $245-$260/st ($7.66-$8.13/unit) FOB in the Western Cornbelt, up $10-$15/st for limited offers, with the low confirmed at St. Louis and the high in Iowa.

California:

Sources reported significantly stronger UAN-32 prices in California, fueled by higher import costs. The market was quoted in a broad range at $270-$315/st ($8.44-$9.84/unit) FOB port terminals in the state, up from $245-$250/st FOB in early February and $195-$210/st FOB in mid-January. Sources said prices continue to firm rapidly, with some suggesting that new offers at $325-$330/st ($10.16-$10.31/unit) would be the market going forward.

Effective Feb. 17, IRM’s reference price for UAN-32 firmed to $270/st ($8.44/unit) FOB Stockton and $295/st ($9.22/unit) FOB Hanford, up from the company’s Jan. 26 reference of $245/st ($7.66/unit) FOB Stockton.

Pacific Northwest:

Higher UAN-32 prices were reported in the Pacific Northwest in late February. Sources quoted the market in a broad range at $265-$295/st ($8.28-$9.22/unit) FOB, up $20-$40/st from last report, depending on location and supplier, with rail-DEL tons pegged at $295-$300/st ($9.22-$9.38/unit).

Effective Feb. 16, IRM’s reference prices for UAN-32 firmed to $265/st ($8.28/unit) FOB Pasco, Wash., and Umatilla, Ore.; $270/st ($8.44/unit) FOB Central Ferry, Wash.; and $295/st ($9.22/unit) DEL from St. Helens, Ore., to points in eastern Oregon and Washington. Those levels were up $20-$25/st from the company’s Jan. 21 postings.

Western Canada:

The Western Canada UAN-28 market was pegged at C$385-$400/mt (C$13.75-$14.29/unit) DEL for spring tons, up another C$25-$30/mt from last report.

Ammonium Sulfate

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

U.S. Gulf:

New ammonium sulfate barge trades dipped a bit, to $200-$215/st FOB from the week-ago $210-$220/st FOB, although most expected the next business to be higher. IOC has posted NOLA at $240/st FOB, up from $225/st FOB.

Eastern Cornbelt:

Sources pegged the granular ammonium sulfate market at $250-$260/st FOB in the Eastern Cornbelt at midweek, up another $10-$15/st, with the low confirmed at Cincinnati. New postings from Interoceanic (IOC) on Feb. 25 included $260/st FOB Delta terminals; $265/st FOB Upper Mississippi, Illinois, and Ohio River terminals; and $290/st rail-DEL in the Northern Plains.

“Scarcity of raw material supply due to the historic freeze in Texas this past week has significantly reduced availability of key raw materials,” IOC said. “To ensure we meet commitments to our customers leading into the forecasted robust spring season, we will only be selling current month production until raw material supply stabilizes.”

Western Cornbelt:

The ammonium sulfate market was reported at $235-$260/st FOB in the Western Cornbelt, depending on location and time of shipment, but higher postings took effect as the week progressed. New prices from IOC on Feb. 25 included $260/st FOB St. Louis, $270/st FOB Houston, Texas, $275/st FOB Sioux City, Iowa, and $280/st rail-DEL in the Southern Plains.

California:

Ammonium sulfate pricing was pegged at $265-$275/st FOB for standard and $275-$300/st FOB for granular in California, depending on location and supplier. New reference prices at Lathrop were reported at $290-$300/st FOB, up $20-$25/st from last report.

Pacific Northwest:

Sources quoted the granular ammonium sulfate market in the $270-$278/st FOB range in the Pacific Northwest, with reports of delivered offers up to $295/st in late February, depending on supplier. Standard grade continued to be referenced at $240/st FOB or DEL from IRM in Oregon, Washington, Idaho, Utah, and Montana.

Western Canada:

The granular ammonium sulfate market in Western Canada was pegged at C$425-$435/mt DEL in late February, depending on location and time of shipment, with the low end of the range up C$15/mt from last report.

China:

Ammonium sulfate demand is picking up as buyers are taking a pass on higher urea prices. Blenders are especially looking for cheaper ways to get the nitrogen they need, and ammonium sulfate has long been the go-to substitute. The problem for the international NPK producers is that Chinese NPK producers are also looking at making similar substitutions.

Sources said Chinese caprolactam-grade ammonium sulfate is now priced at $145/mt FOB, up about $5/mt from the previous week. Sources reported that sellers are now saying pricing discussions need to start at $150/mt FOB.

One trader noted that while demand is strong, limitations in output are also helping prop up the price. Some plants are still experiencing limitations because of restrictions either on production levels or on transportation due to COVID-19.

Brazil:

Granular ammonium sulfate prices in Brazil have started to move up in sync with the global situation. Sources reported a $10/mt jump at the ports, to $190-$195/mt CFR.

Rondonopolis has also seen a slight uptick in pricing, with sources now putting the local market price at $282-$315/mt FOB ex-warehouse. The driving force for the increase is coming from the hike in the landed price, rather than from competition in the local market. As the urea price moves up, however, sources said more blenders will look more closely at ammonium sulfate.

Indonesia:

Ammonium sulfate imports in 2020 were at 987,000 mt, down about 8 percent from 1.1 million in 2019. The main supplier to Indonesia was China at 948,000 mt.

DAP/MAP

Bangladesh, Brazil, California, Central Florida, China, DAP/MAP, Eastern Cornbelt, India, Indonesia, Market Watch, Nepal, Pacific N.W., Russia, Saudi Arabia, U.S. Exports, U.S. Gulf, Western Canada, Western Cornbelt

Central Florida:

Nothing new was reported in the Central Florida phosphate market. DAP trucks were quoted at $530/st FOB, unmoved from one week earlier, while sources noted truck-loaded MAP values steady at $545-$560/st FOB.

U.S. Gulf:

Players described divided sentiment on the week’s NOLA barge phosphate markets, with DAP edging lower amid a quiet week of trading, while MAP added to its week-ago top end.

The nearby DAP low was noted slipping to $518/st FOB from the prior week’s $520/st FOB floor, based on reported trading of imports due into NOLA in March, while domestic barges set the week’s high at $525/st FOB, softening from last week’s $528/st FOB ceiling.

MAP barges held firm at the prior $555/st FOB floor based on reported offers, although most nearby trading was expected to draw values at $560/st FOB or above. Sources described recent sales topping out at $565/st FOB.

Players attributed the continued slow market to lingering uncertainty regarding the weather. Temperatures improved markedly in much of the country from the prior week’s widespread freeze, giving some traders hope that more favorable conditions were on the horizon. “The market remains very quiet,” said one source, “but if the weather holds, this could be the calm before the storm.”

DAP barges were reported trading at $518-$525/st FOB for the week, dipping from $520-$528/st FOB at last report. Sources quoted MAP barges at $555-$565/st FOB, up from $555-$562.50/st FOB in the prior report.

U.S. Exports:

Mosaic reported a 7,000 mt DAP cargo selling into a single destination in northern Latin America. The material was priced at $580/mt FOB, with loading scheduled for late March.

The Gulf export phosphate markets were seen climbing to $580/mt FOB based on reported sales, a $50/mt FOB increase from the previous $530/mt FOB level.

Eastern Cornbelt:

DAP remained at $565-$585/st FOB in the Eastern Cornbelt, with the Cincinnati market quoted at the $580/st FOB level. MAP was reported at $610-$635/st FOB in the region, down $15/st at the upper end of the range, with the low confirmed at Cincinnati and the high inland.

Western Cornbelt:

DAP was reported at $550-$570/st FOB in the Western Cornbelt, down $10-$20/st from last report, with the St. Louis market pegged at $550-$565/st FOB. MAP was quoted at $600-$635/st FOB in the region in late February, with the low again reported at St. Louis.

The St. Paul market had reportedly slipped to $565-$575/st FOB for DAP and $630-$650/st FOB for MAP, while pricing at Catoosa/Inola was pegged at $560-$570/st FOB for DAP and $625-$630/st FOB for MAP.

California:

The MAP market was quoted at a solid $690/st FOB or DEL in California following multiple increases that took place earlier in the month.

Pacific Northwest:

MAP pricing in late February was reported at a firm $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:

While sources continued to report some limited river-open MAP prices circulating for as low as C$895-$905/mt DEL in Western Canada, most quoted spring tons firmly in the C$950-$960/mt DEL range for new offers. Sources reported FOB warehouse pricing in roughly the same range in early February, depending on location.

Saudi Arabia:

Most-recent Saudi Arabia phosphate pricing continued to be heard in the $425-$515/mt FOB range, steady from one week earlier.

China:

Small DAP sales to Thailand and the Philippines reported netbacks to China of $510-$515/mt FOB. The dearth of material for export and steady demand from around the globe now has producers asking $520-$550/mt FOB, depending on how many tons are being discussed.

As with nitrogen producers, the Chinese government sent the same notice to the phosphate producers to step up production to ensure plenty of phosphates and NPKs for the domestic market before they entertain exporting any material.

For now, producers have an incentive to focus on the domestic market. Sources said the domestic price offers a dramatically better return than the few tons that can be shipped offshore. Sources said the extra costs related to getting the product from the plant to an export terminal are high enough to cause producers to think twice about shipping their material to another country.

Sources noted that some plants are facing reduced output issues because of limitations imposed to battle COVID-19. Even if a plant is seen as COVID-free, the virus continues to disrupt the transportation system necessary to move the material.

India:

Tenders that traders initially thought might help set new public DAP pricing levels now do not look so promising.

A DAP tender for 50,000 mt by RCF closed with no offers on Feb. 22 after being re-set from Feb. 15. The company has not announced what it will do, but has removed the tender from its website. If it were planning to extend the tender, it would have posted a corrigendum to the original documents as it did when it earlier extended the closing.

Another tender for 350,000 mt of DAP is still scheduled to close on March 12, but NFL has made some changes to the tender. The company is now looking for 350,000-800,000 mt to be delivered in various lots between May 2021 and March 2022.

Reportedly, NFL may be in the process of scrapping the tender in favor of a negotiated deal with SABIC and PhosAgro. The tender is still on the company’s website, leading one observer to note that maybe the arrangement with the DAP producers is not yet a done deal.

According to sources, the two producers will supply up to 800,000 mt of DAP during the May-March period. However, the arrangement so far only includes a commitment for the tonnage. Nothing was said about pricing. Sources said the normal practice is to settle on a price, based on published numbers, about one month before the vessel departs for India.

Bangladesh:

A tender for 800,000 mt is expected to be called soon. The tender would be about twice what BCIC usually calls for in a tender, said sources. The tender is for a series of deliveries to take place over multiple months.

Sources said the fertilizer buying arm of the government is still looking to see if it can afford such a large order. In the past China has been the main supplier of DAP to Bangladesh. The current price in China of $510-$515/mt FOB could lead to a landed price closer to $600/mt once bagging and transportation is counted in.

Nepal:

A tender for 25,000 mt of DAP closes March 5. The product is to be bagged and delivered to a Nepalese inland warehouse. Landed costs of the product could be about $600/mt CFR bagged, based on the current price trend in China

Indonesia:

A tender was closed this week for 55,000 mt of DAP. No results have been announced.

Imports of DAP in 2020 were recorded at 352,000 mt, according to Trade Data Monitor, up 14 percent from 309,000 mt in 2019. The main supplier in 2020 was China at 275,000 mt. Vietnam supplied an additional 76,000 mt.

Russia:

Russian exports of DAP in 2020 slipped to 1.5 million mt from 1.6 million mt in 2019, according to Trade Data Monitor. The top two buyers were India at 295,000 mt and the U.S. at 131,000 mt. No other country exceeded 100,000 mt. All told, 26 countries each bought between 10,000 mt and 94,000 mt from Russia.

Brazil:

Last-done MAP imports at Brazil were generally quoted at $600-$610/mt CFR, with most sources writing off rumored sub-$600/mt CFR transactions as no longer available. The market was previously reported in the $570-$600/mt CFR range.

On the heels of a PhosAgro deal last week at $600/mt CFR, sources in Brazil now report the market at $600-$610/mt FOB.

Demand is expected to remain strong through the second quarter, possibly firming the price into the $600s/mt CFR. Sources said that while the price is expected to keep moving up, the rate of the increase is expected to slow compared with earlier price jumps.

Rondonopolis has moved up to $710-$721/mt FOB ex-warehouse, according to local sources. The move reflects the general issue buyers have inland.

The NPK producers are complaining of limited tons of MAP – along with limited urea and MOP – for their factories. Part of the shortage is caused by a lack of trucks to move MAP from the ports to inland distribution centers because a delayed crop harvest is tying up the trucks.

The barter rates remain steady for 1 mt of MAP for 75 bags of corn and 31 bags of soybeans.