All posts by mickeybarb@charter.net

Tessenderlo Reported to Be Mulling Belarus Ammonium Thiosulfate Investment

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

Belgium’s Tessenderlo Group is reportedly looking at setting up a facility in Belarus to produce ammonium thiosulfate, according to a report by Russia’s Fertilizer Daily. The report did not cite any sources, and Tessenderlo had not responded to Green Markets’ inquiries by press time.

According to the report, the production facility would be located in the Belarus free economic zone Grodnoinvest, and Grodno Azot would supply the plant with ammonia. A production capacity of 100,000 mt/y of ammonium thiosulfate is reported to be being proposed.

A final investment decision is reportedly proposed for this spring.

Reports by Belarusian media outlets, citing representatives of the Belarusian nitrogen company, were circulating in early 2019 of ongoing negotiations between Grodno Azot and Tessenderlo Kerley International (TKI) to discuss business cooperation and opportunities for cooperation with other Belarusian petrochemical companies. However, little has been reported since.

Emmerson Looks at Phased Development, Expansion Projects, Including SOP

Morocco, News, News Briefs, Potash, Specialty, Sulfate of Potash

Potash junior Emmerson plc, Isle of Man, this week said it is assessing a conceptual, staged, development for its 100 percent-owned Khemisset Potash Project in northern Morocco, aimed at reducing upfront capital costs and incorporating expansion options into the development plan of the project.

Emmerson recently received the mining license (ML) for the Khemisset project from the Moroccan Ministry of Energy, Mines, and the Environment, providing the company with the exclusive right to develop and mine the potash deposit, within the perimeter of the ML, in the Khemisset basin (GM Feb. 12, p. 37).

The key elements now being assessed are: to increase potash production by up to 50 percent; to incorporate potassium sulfate (SOP) as part of the larger project development; to increase salt sales to up to 4 million mt/y; and to increase the mine life, the company said.

“Khemisset is a project of enormous potential, and we see several opportunities to improve upon the mine plan presented in the 2020 feasibility study,” said Emmerson CEO Graham Clarke.

The existing project plant proposes potash production of up to 800,000 mt/y, with a current 19-year mine plan. However, the plan is based on only 43 percent of the total mineral resource estimate of 537 million mt with an average grade of 9.24 percent K2O (GM June 5, 2020).

The company previously has presented a scoping study for an SOP project, which indicated a project that could deliver an additional US$70m of EBITDA for the company for minimal capital expenditure, said Emmerson. The scoping study to assess the viability of converting 25 percent of its potash to produce 240,000 mt/y of SOP was completed in November 2019 (GM Dec. 6, 2019).

“The SOP market, especially our target U.S. sales market, continues to show strength in pricing, which drives a strategy to accelerate the development of that project, which provides increased cash flow generation, but also diversity of end-product,” said Clarke.

“We have also previously discussed the potential to increase our salt sales and our ongoing investigations into the global de-icing salt market and, in particular, the U.S. market gives us a high level of confidence in our ability to upscale our salt production significantly,” said the CEO.

During the project feasibility study, completed last June, the company confirmed its ability to manufacture significant quantities of de-icing salt and designed the project to produce 1 million mt/y for sale into the U.S. market (GM June 5, 2020).

“Following the completion of the feasibility study, Emmerson has continued to assess the market opportunity for de-icing salt and has concluded that there is likely to be a much larger market opportunity for this product,” said Clarke.

The potash junior said it will examine the technical and economic viability of initially constructing a project that mines at approximately half the rate assumed in the feasibility study. Following this phase 1 development, the project will then run through several expansion phases, the company said.

The earlier-than-expected receipt of the ML for Khemisset puts the company in the position to commence construction during 2021, and ahead of the anticipated initiation of construction by the end of 2021, “finance permitting,” Emmerson said.

Uralkali Buys 12.7 Percent of Own Shares

Fertilizer Stocks, News, News Briefs, Russia

Uralkali, Moscow, has purchased 12.7 percent of its own shares from shareholder Rinsoco Trading, reducing the latter’s stake in the potash company from 18.5 percent to 5.8 percent, according to a Feb. 10 Interfax report citing Uralkali.

The purchase was made by Uralkali Invest LLC, according to the report.

Uralkali’s principal shareholder since late last year is Dmitry Mazepin’s Uralchem, with 81.5 percent of the equity. Uralchem upped its stake in the potash company from 46.4 percent with the purchase of a 35.1 percent stake from Rinsoco in early December, in a deal that was financed by Russia’s Sberbank (GM Dec. 4, 2020).

Rinsoco Trading is owned by Belarusian businessman Dmitry Lobyak, who is a close business associate of Mazepin.

Uralchem in November confirmed that it planned a management reshuffle for Uralkali and Uralchem, saying the management would be merged in 2021 and transferred to the head of a joint management company (GM Nov. 20, 2020). Uralkali in fact named a new CEO in late November (GM Nov. 27, 2020). However, Mazepin has refuted speculation by some Russian media that the two companies planned to merge in 2021.

The report of this latest share transaction had not been confirmed by Uralkali.

Lower Selling Prices Hit APC’s FY2020 Net Profit, Sales Volumes Up 6 Percent

Jordan, News, News Briefs, Potash

Arab Potash Co. (APC) reported a 16 percent fall in full-year 2020 net profit after tax to JD126.7 million (approximately $178.7 million at current exchange rates) on consolidated revenue of JD456.2 million, down from the year-ago JD151.7 million and JD504.6 million, respectively, according to a company filing to the Amman stock exchange on Feb.15. The results are preliminary.

APC cited lower global selling prices and increased social responsibility payments as driving the net profit decline. The 10 percent year-on-year fall in revenues was also due to the lower selling prices.

Potash output increased 5 percent last year, while sales volumes were up 6 percent on the year. The company produced 2.62 million mt of potash in 2020, up from 2.486 million mt in the previous year, while sales volumes reached 2.553 million versus 2.408 million mt in 2019.

Industry Mourns Loss of TFI’s Ford West

Featured, News, Obituary

Former TFI President Ford West, 73, passed away on Feb. 14, surrounded by his family, after a 15-year battle with prostate cancer.

“For more than thirty years, Ford West was the face of The Fertilizer Institute (TFI),” the organization said in a statement. “His tireless advocacy for TFI, its members, and the Nutrients For Life Foundation (NFLF) was unmatched, and serves as an inspiration today to all who served with him.

“Under Ford’s leadership, TFI grew its retail membership and expanded its portfolio to include 4R Nutrient Stewardship, the Nutrients for Life Foundation, and ResponsibleAg. Ford’s dedication to the fertilizer industry was eclipsed only by his profound love for his family. We extend our deepest sympathy to his wife Cathy and his three children.”

An announcement regarding TFI’s plan to memorialize Ford’s life and service to the industry will be forthcoming. In the meantime, TFI said it wants to hear your Ford West stories. You can send them to FBWestremembrance@tfi.org. TFI said it will compile your submissions and send them to the West family.

Ford joined The Fertilizer Institute (TFI) in 1979. He was named President in 2005. He was passionate about the industry, and his legacy of 34 years with TFI lives on through the Ford B. West Center for Responsible Agriculture, a training center in Owensboro, Ky., named in recognition of his efforts with ResponsibleAg. In 2013, he was recognized by the Agricultural Retailers Association with the Jack Eberspacher Lifetime Achievement Award, and in 2018 Ford was inducted into the Fertilizer Hall of Fame.

Ford began his professional career with the National Canners Association, located in Washington, D.C.

Born in Murphy, N.C. in 1947, Ford attended Mars Hill College, where he was a member of the Mars Hill football team, tri-captain of the 1969 team, active in student government, and listed in the Who’s Who Among Students in American Universities and Colleges. He joined the U.S. Air Force and received an honorable discharge in May 1974 with the rank of Staff Sergeant. He then attended North Carolina State University, where he met the love of his life, Mary Lucas (Cathy), and earned a M.S. in Food Science.

Ford is survived by his wife, two daughters, son, four grandchildren, three sisters, and a brother. A service celebrating his life will be held at a future date.

The family wishes any memorial contributions to be made to The Sidney Kimmel Comprehensive Cancer Center at Johns Hopkins or Calvary United Methodist Church in Annapolis, Md.

Compass 4Q Earnings Off; Fertilizer Volumes Up 23 Percent

Earnings, News, Specialty, U.S.

Compass Minerals, Overland Park, Kan., reported a 42 percent drop in net earnings for the fourth-quarter ending Dec. 31, 2020, to $32.3 million ($0.94 per diluted share) on sales of $421.1 million, down from the year-ago $56.1 million ($1.63 per share) and $500.3 million, respectively.

However, full-year earnings were off only 5 percent, to $59.5 million ($1.72 per share) on sales of $1.37 billion from 2019’s $62.5 million ($1.81 per share) and $1.49 billion, respectively.

Compass pointed to higher costs associated with its Plant Nutrition North America segment and revenue and expense impacts associated with COVID-19. In addition, it cited the continued devaluation of the Brazilian real with respect to its South American business and weak winter weather with respect to Salt.

The North American fertilizer segment saw a 47 percent drop in fourth-quarter operating earnings to $7.9 million on sales of $88.7 million, down from the year-ago $14.8 million and $76.5 million, respectively. However, fertilizer sales volumes were up 23 percent to 144,000 st from the year-ago 117,000 st, though prices were off 6 percent, with the average selling price at $617/st, down from $655/st.

Full-year fertilizer volumes were up 21 percent, to 383,000 st from 2019’s 317,000 st. Average price dropped to $626/st from $651/st. The company reported the average sulfate of potash (SOP) price as $566/st.

Full-year North American fertilizer operating earnings were $12.1 million on sales of $239.6 million, down from $22.5 million and $206.2 million, respectively.

Going forward, Compass expects first-half North American fertilizer revenue of $90-$110 million, with EBITDA of $20-$30 million. Full-year volume guidance is 350-380,000 st.

Plant Nutrients North America 4Q-20 4Q-19 2020 2019
Sales ($/M) 88.7 76.5 239.6 206.2
Operating Earnings ($/M) 7.9 14.8 12.1 22.5
EBITDA ($/M) 17.6 25.9 52.5 67.1
Sales Volumes (000 st) 144 117 383 317
Avg Sales Price ($/st) 617 655 626 651
Plant Nutrients South America 4Q-20 4Q-19 2020 2019
Sales ($/M) 101.4 110.3 344.1 385.1
Operating Earnings ($/M) 16.1 18.5 40.3 40.0
EBITDA ($/M) 20.7 24.2 59.1 63.1
Ag Sales Volumes (000 st) 142 125 485 452
Chem Sales Volumes (000 st)    82 92 339 338
Total Sales Volumes (000 st) 224 217 824 790
Avg Ag Sales Prices ($/st) 594 708 562 655
Avg Chem Prices ($/st) 208 243 212 264
Avg Sales Price ($/st) 453 510 418 488

Compass Minerals Readies South American Business for Sale, Separates into Two Units

News, News Briefs, South America, Southern Plains, Specialty

Compass Minerals, Overland Park, Kan., said on Feb. 16 it has initiated a strategic separation of its Plant Nutrition South America assets into two businesses, chemicals and specialty plant nutrition, with the intention of enabling a targeted and efficient sales process to unlock maximum value for each set of assets. It said both processes are currently underway.

Compass announced in February 2020 that it was eyeing strategic options for the South American unit (GM Feb. 14, 2020). However, while plans remained on the table, they slowed with the onset of COVID-19.

The company said should the transactions be completed, it expects to use the proceeds to reduce leverage, further enhance liquidity, and continue to focus on meeting customer demand for the company’s essential products.

MaxYield, NEW Cooperative Launch Merger Study

Featured, News, Western Cornbelt

Another regional cooperative merger is under consideration in the Midwest. MaxYield Cooperative in West Bend, Iowa, has entered into a unification study with NEW Cooperative in Fort Dodge, Iowa, according to a Feb. 16 letter sent to Class A voting members of MaxYield.

The letter stated that the Boards of Directors of both co-ops recently met to exchange information about each organization and discuss the potential advantages and disadvantages of a fully combined operation. MaxYield said its board unanimously supports the merger study.

“While we believe that MaxYield is a successful member responsive organization, we must look forward and prepare for the future,” said MaxYield CEO Keith Heim and Board Chairman Howard Haas. “We are proud of MaxYield’s accomplishments and financial strength. However, it is the job of the elected Board of Directors and management to explore all opportunities to improve upon our support of our members and their production operations.”

MaxYield offers grain, seed, agronomy, energy, and feed products and services from more than 20 Iowa locations. NEW Cooperative operates agronomy, grain, energy, precision ag, and feed divisions from more than 40 locations in Iowa. The traditional trade areas of both co-ops are contiguous, according to the letter.

The co-ops said management and employees in operational areas of the companies will be meeting over the next several weeks to explore the potential value of a combined organization.

Itafos Ends Force Majeure on SPA Shipments

Canada, Featured, News, SPA, Sulfuric Acid

Toronto-based Itafos notified customers late on Feb. 18 that a previously announced force majeure event on super phosphoric acid (SPA) shipments from its Itafos Conda operation in Idaho has now ended.

“During the month of December 2020 and early January 2021, Itafos shipped all SPA orders which were initially contracted for shipment in October and November 2020. In January 2021, Itafos resumed shipping based on a revised schedule,” the company said. “We appreciate all the efforts and understanding from our customers during this disruption.”

Itafos alerted customers of the force majeure in early December (GM Dec. 18, 2020), noting that a “disruption of exceptional scale and duration in sulfuric acid supply” had occurred from Rio Tinto’s Kennecott mine in Utah, Itafos’ primary supplier. Although Rio Tinto resumed regular shipments of sulfuric acid on Oct. 30, 2020, after an extended smelter shutdown at Kennecott, Itafos said the lengthy disruption “significantly impacted” its ability to maintain overall production rates at the Conda facility.

Itafos reported in December that it had tried to mitigate the shortfall by procuring replacement sulfuric acid volumes from other third-party suppliers and scheduling maintenance activities during times of lower throughput. The backlog in SPA shipments to Itafos customers, however, forced the company to state that it would not be able to satisfy all contracted SPA quantities during the 2020/21 acid year.

USDA Projects 92 M Corn Acres, 90 M Soybean Acres; Combined Total Would be U.S. Record

Featured, News, U.S.

The U.S. Department of Agriculture (USDA) on Feb. 18 said U.S. corn growers will likely plant 92 million acres of corn and 90 million acres of soybeans this spring. The corn estimate reflects an increase of 1.2 million acres, or 1.3 percent, from last year, while the soybean estimate is up a full 6.9 million acres, or 8.3 percent. USDA said both crops are buoyed by high prices and an expected return to normal planting weather.

“In 2019 and 2020, the area under prevent plant was above average, and simply going back to normal planting weather would increase total planted acres by several million acres,” said Chief Economist Seth Meyer at USDA’s 2021 Agricultural Outlook Forum. The 2020/21 U.S. season average prices for both corn and soybeans are projected at seven-year highs, he said.

At 182 million acres, the combined acreage of both crops would set a new record in the U.S. “We expect grain and oilseed prices to remain at these higher levels, reflecting tight global supplies and strong international demand,” Meyer said. “With a tightening stocks-to-use ratio, increased price volatility is likely as fundamentals are revealed.”

Corn and soybean stocks-to-use ratios are the lowest since 2013/14, Meyer said, and there is no reduction expected in the demand from China or other major importers. Demand from China is expected to push U.S. agricultural exports to a record $157 billion in the 2021 fiscal year, USDA said, up 3.3 percent from the previous forecast.

Combined exports of corn and soybeans reached a record in the fourth quarter, fueled by increased purchases from China as the country’s hog herd recovers from African Swine Fever. The value of U.S. farm exports to China will touch a record $31.5 billion in the federal fiscal year ending Sept. 30, USDA said.

“We see new opportunities around the globe, and we expect better sales almost everywhere we turn,” Jason Hafemeister, a USDA trade official, said on Feb. 18. “Look at China just blowing off the chart.” China will remain the largest U.S. agricultural market this year, he said, followed by Canada and Mexico.

The corn acreage projection was slightly below trade expectations, while the soybean acreage forecast was a bit above. Corn futures traded in Chicago fell as much as 0.8 percent after the forecast, to $5.4650/bushel, while soybeans fell as much as 1 percent, to $13.7125/bushel.

In addition to reductions in prevented planting acres, USDA said the increase in corn and soybean acreage will also come from a smaller cotton crop and lower expected spring wheat and durum acreage in the Northern Plains. Cotton area is projected at 12 million acres this year, slightly lower than last year, Meyer said.

U.S. winter wheat acreage, however, is projected at 32 million acres, a five percent rise over last year and the first increase since the 2013/14 season. Total wheat area is projected to expand 651,000 acres, to 45 million acres, USDA said.