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PrairieFood – Management Brief

Management Briefs

PrairieFood, a Lawrence, Kan., developer of technology to convert waste biomass into micro-carbon products for agriculture and other sectors, announced the appointment of Jason Tatge as CEO, replacing Robert K. Herrington, the company’s co-founder, who will now assume the role of Chairman of the Board.

PrairieFood said Tatge has led his two startups, Farms Technology and Farm Mobile, to profitability and successful exits, and has extensive experience in commodity trading, technology and data solutions, and senior management positions in large ag-related public companies.

As Chairman of the Board, Herrington will continue to provide strategic guidance and contribute to PrairieFood’s mission of transforming agriculture through innovative solutions. The company said his leadership was instrumental in the company’s success thus far, and his continued involvement ensures a seamless transition and ongoing support.

Ammonia

Ammonia, California, China, Eastern Cornbelt, India, Market Watch, Middle East, Northwestern Europe, Pacific N.W., Southeast Asia, Texas, U.S. Gulf, Western Canada, Western Cornbelt

US Gulf/Tampa:

Tampa ammonia firmed to $295/mt CFR for August, up $10/mt from July’s $285/mt CFR. Sources attributed the rise to firming international markets and steadily strengthening inland terminal prices. The new contract marks the first monthly increase since October 2022, when the Tampa price reached $1,175/mt CFR.

NOLA barge prices also adjusted to reflect a Tampa equivalent, strengthening to $268/st FOB.

Eastern Cornbelt:

Ammonia prices firmed to $465-$485/st FOB in the Eastern Cornbelt for prompt or prepay tons, up from $445-$455/st FOB last week, with the low reflecting new offers from Koch on July 24 FOB Wood River, Ill. CF reportedly followed on July 25, pushing its prices to $480/st FOB in Illinois and $485/st FOB in Indiana, with Nutrien reposting at $485/st FOB Lima, Ohio.

Western Cornbelt:

Ammonia pricing strengthened again early in the week, moving to $450/st FOB in Nebraska, $460-$470/st FOB in Iowa, and $475/st FOB Palmyra, Mo., for prompt or prepay tons. Those levels were up from last week’s $410-$435/st FOB range and reflect a $60/st increase from the first round of fall prepay prices offered in the Western Cornbelt earlier in July.

The latest ammonia offers in the Southern Plains were quoted at $385-$410/st FOB production points, with the low at Pryor, Okla., and the high reported at Verdigris, Okla.

California:

Ammonia remained at $580/st DEL in California, with aqua ammonia referenced at $159/st FOB Stockton and $169/st FOB Sycamore.

Pacific Northwest:

The latest ammonia offers in the Pacific Northwest were quoted at $445-$460/st FOB, up from the prior $415/st FOB level. Aqua ammonia was reported at $120/st FOB in late July.

Western Canada:

Ammonia pricing reportedly jumped to C$810-$1,025/mt DEL for fall tons in Western Canada, up from a previous low of C$510/mt DEL for July fill shipments. Sources reported limited offers, with some suppliers currently sold out.

India:

Trammo sold a cargo into India at $350/mt CFR, sources reported, a $30/mt drop from previous business secured under the FACT tender call.

The bulk of the ammonia currently arriving in the country is purchased under long-term contracts, while smaller spot quantities are concluded at significantly higher prices. Sources put the contract price at $295-$310/mt CFR.

India is running tight on ammonia, sources said, and buyers are looking for product wherever they can. Part of the problem buyers are facing is a lack of Iranian material. Sources said there are currently no indications of India-bound vessels being loaded in Iran. Traders attributed the lack of product to Iranians favoring urea production over ammonia.

Middle East: 

Last week’s $380/mt CFR ammonia sale to India led to a $320-$340/mt FOB netback. While producers argued that price should still hold, a new sale into India at $350/mt CFR puts the current estimated netback at $290-$300/mt FOB.

Even at that level, sources said the ammonia price is too high for other markets, such as Southeast Asia. Buyers in Asia are reportedly holding back on purchases in protest of the higher prices.

For now, producers can hold firm to their pricing ideas. The contracts they are covering, along with the occasional spot cargo, have filled their order books well into August. By the end of August, however, demand is expected to come off, leading to a buildup of reserves that could push prices down.

Northwest Europe:  

While no new spot deals were confirmed, sources reported discussions focused at $350-$370/mt CFR, a $30/mt increase over previous business.

Demand is expected to remain strong as ammonia plants in Europe close. It remains cheaper for many producers to import ammonia rather than make it themselves. Part of the push for higher prices also stems from uncertainty surrounding future gas prices. While gas prices remain in flux, the market does not seem to fear the possibility of inadequate near-term supply, however.

Southeast Asia:         

Industrial buyers are holding back on orders until the Arab Gulf price comes down, said sources. The recent $350/mt CFR deal into India is still too high for buyers to sign deals.

Price relief could be on the horizon for the regional market. The Pilbara plant in Australia remains slated to return to full production by the end of the month. At the same time, the Kaltim 3 and Kaltim 5 facilities in Indonesia are slowly coming back online. The Indonesian plants are expected to focus more on urea for August and September, however, keeping the amount of available ammonia at a minimum.

Thailand imported 189,000 mt of ammonia in January-June, Trade Data Monitor reported, an 18% increase from 160,000 mt in first-half 2022. Malaysia supplied 118,000 mt, while China sent 28,000 mt.

June imports were counted at 41,000 mt, up 34% from the year-ago 31,000 mt. April-June imports were 92,000 mt, however, down 21% from 117,000 mt in second-quarter 2022.

China:

Increased domestic demand and soft prices in Asia limited ammonia exports in June and the second quarter. June exports totaled 1,500 mt, Trade Data Monitor reported, down from 8,000 mt in June 2022. Second-quarter exports were pegged at 8,000 mt, off 50% from 16,000 mt in April-June 2022 and down significantly from the 126,000 mt shipped in the first quarter.

Stronger demand from Chinese industries was reflected in increased imports, however. China imported 391,000 mt in January-June, up 170% from the year-ago 145,000 mt. Indonesia sent 237,000 mt, followed by Saudi Arabia with 94,000 mt. June imports firmed to 74,000 mt from 45,000 mt in the prior year, while second-quarter imports lifted to 285,000 mt from 66,000 mt in April-June 2022.

Urea

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

US Gulf:

NOLA urea barge prices remained volatile, ramping up as the week progressed. Trades firmed from a low of $355-$360/st for August-September business early in the week, climbing to $390-$410/st FOB at midweek and topping out on July 27 at $425/st FOB for August and $415-$420/st FOB for September.

The range jumped from the previous $335-$365/st FOB, with sources describing a market that is “on fire” in the wake of a new India tender and rapidly firming prices in China, Brazil, and the Middle East.

Eastern Cornbelt:

Urea prices jumped to a broad $425-$460/st FOB in the Eastern Cornbelt on firming NOLA barge values, up from last week’s $395-$420/st FOB. Sources pegged the Cincinnati, Ohio, urea market in the $440-$460/st FOB range for the week.

Western Cornbelt:

Urea moved to $430-$460/st FOB in the Western Cornbelt, up significantly from last week’s $370-$400/st FOB range in the wake of stronger NOLA barge pricing, with the St. Louis, Mo., market reported at $430-$455/st FOB.

The Northern Plains urea market jumped to $475-$485/st FOB St. Paul, Minn., with the Catoosa/Inola, Okla., market pegged at $475-$480/st FOB for very tight supply.

California:

Granular urea was steady at $550/st FOB Stockton, Calif., with prilled urea available at the $620/st level FOB San Diego. Railed tons were reportedly being priced above the $500/st DEL level in the state.

Pacific Northwest:

Urea prices were quoted at $485-$490/st FOB in the Pacific Northwest, up $35/st from last report. Delivered pricing took a bigger jump, firming to a broad $470-$530/st range in the region, with the low reported in Montana.

Western Canada:

The latest urea offers were quoted at C$635/mt FOB and C$665-$680/mt DEL in Western Canada for September-October shipment, up from the prior C$530-$535/mt FOB and C$535-$568/mt DEL ranges for July-August tons.

“Urea offers are scarce right now,” said one contact. “Local manufacturers have a strong book on through September and into October.”

India: 

Indian Potash Ltd. (IPL) called a tender during the week. Set to close on Aug. 9, the tender carried a shipping deadline of Sept. 26. Sources speculated that IPL will be looking to secure at least 1.5 million mt of urea.

Normally, a tender will close one week after the call. The roughly two-week gap in this tender was most likely granted to help traders secure the tonnage for offers, sources said. Others speculated the longer period could have been announced in the hope of cooling off the market, however, which became red hot just as the tender announcement was made.

If the latter is true, said one trader, then IPL failed. If the former is accurate, sources said the move might work.

Because clearing tons for export can be time-consuming, the longer period before offers are due, along with the almost two-month shipping period, appears designed to make it as easy as possible for traders to offer tons from China to play off of Arab Gulf producers. Even with the extra time, sources said traders are unlikely to offer multiple cargoes from China out of concern that export clearances might not be completed for large orders. Instead, most are expected to offer one or two cargoes of Chinese product.

As soon as the tender call was made, some traders began speculating that prices could come in at $380/mt CFR, or about $100/mt above the last tender. A $400/mt FOB sale by SABIC made on the heels of the tender, along with subsequent statements from Chinese producers targeting similar prices, pushed pricing expectations even higher, however.

International traders looked at the $400-$415/mt CFR being traded into Brazil, noting that sales into the Latin American country are often a good indicator of where the Indian price might go.

The initial $380/mt CFR pricing idea might still be achieved with some aggressive negotiating, some speculated. Even if the netback is significantly lower than the prices achieved this week, they would still be substantially higher than what was received under the last tender, sources said.

IPL is facing another problem, as sources reported that Bangladesh is also close to finalizing a urea tender of its own. While one trader said that Bangladesh will likely settle its tender as a government-to-government deal with China, this could absorb a lot of urea from China that otherwise would have been offered into India, leaving fewer tons for traders.

Black Sea:

Sources reported Russian material being shopped around at $280/mt FOB. It was unclear if the cargo was being considered for the Indian tender, or whether the holder was looking for an immediate sale. By the end of the week, however, sources pegged the market at $330-$378/mt FOB for prilled urea, reflecting the rise in prices seen from other major urea producing regions.

Players reported at least 120,000 mt coming out of Uzbekistan via Georgia’s Port of Poti that might end up in the Indian tender offerings, estimating the price at $330/mt FOB. The cost of moving the urea from the far-eastern Black Sea port to India’s West Coast could leave the product right at the tender’s estimated $380/mt CFR price level, sources said.

Indonesia:

Traders reported receiving letters from Pupuk Holdings advising they prepare paperwork for bid bonds and possible submissions for a selling tender. No dates were discussed, but sources noted more indications that some form of a urea selling tender will arrive soon.

Pupuk will most likely hold off calling its tender until the IPL tender closes, sources said. One trader said Pupuk would want to know where traders and producers currently see the market, rather than come in with a price that might end up being too low. Speculation is growing that prices out of Indonesia could land around $450/mt FOB if Arab Gulf and Chinese prices hold at $400/mt FOB.

In the meantime, Indonesian producers are not selling any urea. Pupuk Holdings reportedly remains under investigation by the national government due to its pricing policies, leaving the company skittish about making new sales.

At the same time, however, warehouses are filling due to the lack of export business. The domestic market is done for now, leaving offshore buyers as the only escape valve for the country’s building reserves. International buyers are expected to have a short window of opportunity. Domestic demand will pick up again in late September, sources said.

Thailand:      

Urea imports remained strong, with Saudi Arabia leading the way. Saudi suppliers have traditionally offered Thai buyers substantial discounts, sources said.

Trade Data Monitor reported January-June imports at 1.2 million mt, up 31% from the year-ago 948,000 mt. Saudi Arabia supplied 489,000 mt, Malaysia sent 304,000 mt, and Qatar added 225,000 mt.

June imports were 307,000 mt, up slightly from 300,000 mt on record for June 2022. Second-quarter imports were pegged at 846,000 mt, up from 700,000 mt received in April-June 2022.

Middle East: 

Urea prices exploded across the region. SABIC reported a 40,000 mt granular urea sale at $400/mt FOB. At the same time, the price out of Egypt climbed from $436/mt FOB at the beginning of the week to $467/mt FOB on July 27.

All of the Arab Gulf producers are now following Saudi Arabia’s lead by pricing their material at $400/mt FOB, sources said. One trader noted that even at $400/mt FOB, the price is a bargain for European buyers. Once the freight differential between the Arab Gulf and Egypt is calculated and the European duty of 6% is tacked on, Arab Gulf material is still cheaper than the most recent Egyptian price.

The issue is whether tons are available. Sources said producers all claim they are sold out well into August and are unwilling to discuss lowering their prices. The market’s tightness has raised questions as to how many tons Arab Gulf suppliers will be able to offer to traders for the IPL tender.

Iran has reportedly withdrawn its earlier $320/mt FOB offers. With the Arab Gulf at $400/mt FOB, sources expect the new Iranian price to fall closer to $380/mt FOB.

Sources reported at least one ship of Iranian urea heading to China, and speculated the tons will be re-exported rather than sold into the Chinese market. India is the most likely destination, but smaller lots could be created for Southeast Asian buyers as well.

Egyptian producers continue to search for a price ceiling. The week opened with a deal at $436/mt FOB, $25/mt above the prior week’s high. Prices moved up throughout the week as small lots of 4,000-6,000 mt found buyers in Europe. The price reached $467/mt FOB late on July 27, with producers now looking at $500/mt FOB as a possibility.

Many small cargoes sold in the past few weeks are being assembled into a large vessel for sale to a Latin American buyer, according to reports. Argentina was named as one possible destination.

Egyptian prices are not expected to soften. The government’s request to reduce urea production, an effort to save on natural gas, is beginning to have an impact, said sources in Egypt.

Producers were asked to cut their weekly output by at least 30% to divert natural gas from industrial use to the production of electricity for consumers. The government cited a need to help keep the power grid operating, as extreme temperatures have driven people indoors.

China:

Immediately after SABIC closed a deal at $400/mt FOB, Chinese producers tossed out their old price ideas, informing traders that their price was also $400/mt FOB. So far, deals have not been made at this level. Buyers were reportedly looking at business done just one week ago in the $340s/mt FOB for granular urea and the upper-$330s/mt FOB for prilled product, and trying to understand what just happened.

The end of China’s domestic season and steady levels of urea production are building up reserves that could be offered in the IPL tender, sources said. The longer period to prepare offers and ship the product seemed designed to take into account China’s laborious process of clearing urea for export.

Chinese traders were reportedly working the phones to secure cargoes from producers and then offer those tons to international traders for the Indian tender. Sources speculated that some producers might be willing to accept less than the current desired price of $400/mt FOB. Even if pricing drops to cover an Indian price of $380/mt CFR, that level will be higher than the current market, and significantly higher than China’s netback from the previous tender.

Sources expect to see traders offering only one or two cargoes each of Chinese material into the Indian tender, rather than face the possibility of a larger order not making the shipping deadline due to the export review process.

At the same time Chinese urea is being considered for export to India, foreign urea is reportedly sitting in warehouses being prepped for re-export, sources said. In addition, cargoes from Russia and Iran were also rumored to be on the way to Chinese ports for re-export deals.

January-June urea exports totaled 1 million mt, according to Trade Data Monitor, a 39% year-over-year increase from 724,000 mt. South Korea and India topped the list of buyers, taking 176,000 mt and 166,000 mt, respectively.

China exported 224,000 mt in June, a 24% increase from the 186,000 mt shipped in June 2022. Second-quarter exports came in at 483,000 mt, up 15% from 421,000 mt in April-June 2022.

Brazil:

Urea prices rallied to $400-$420/mt CFR following the July 25 Indian tender announcement, lifting from last week’s $370-$385/mt. Noting both increased demand from importers and a lack of offers from suppliers, players expected a lift to $430-$440/mt CFR soon.

Following early-week lows at $510-$535/mt FOB ex-warehouse, prices at Rondonopolis surged to a record-high $550-$595/mt FOB ex-warehouse in the wake of India’s urea tender announcement. With rising production costs running up against demand for the safrinha, farmers could respond by planting 25-50% fewer acres, sources said.

UAN

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

US Gulf:

NOLA UAN barge prices firmed to $220-$225/st ($6.88-$7.03/unit) FOB in the wake of stronger inland fill and prepay prices announced during the week, up from the prior $190-$195/st FOB range.

Eastern Cornbelt:

CF launched a second round of UAN-32 fill and prepay prices early in the week after closing its first fill program on July 14. New postings for 4Q shipment reportedly included $260/st ($8.13/unit) FOB Cincinnati, Mount Vernon, Ind., and Peru, Ill., up $30-$35/st from the earlier fill levels.

Ohio sources pegged the latest UAN-28 offers at $228-$236/st ($8.14-$8.43/unit) FOB for November-December shipment, depending on location.

Western Cornbelt:

CF’s second round of prompt and prepay prices for UAN-32 pushed new offers to $255/st ($7.97/unit) FOB St. Louis, Port Neal, Iowa, and Nebraska terminals for 4Q shipment.

The latest offers in the Southern Plains included Verdigris pricing at $240/st ($7.50/unit) FOB for prompt and $230/st ($7.19/unit) FOB for October-December, with the Woodward, Okla., market moving to $235/st ($7.34/unit) FOB for October-November.

California:

After reports of a brief fill offer at the $270/st ($8.44/unit) FOB level at mid-month, UAN-32 prices moved back up to $300-$310/st ($9.38-$9.69/unit) FOB Stockton. Some California UAN terminals were reportedly sold out in late July. Rail-DEL offers in Northern California remained at the $310/st ($9.69/unit) level on a spot basis.

Pacific Northwest:

After a mid-July fill offer at the $275/st ($8.59/unit) FOB level, new UAN-32 offers edged up to $300/st ($9.38/unit) FOB Kennewick, Wash., during the week. Rail-DEL pricing in the Pacific Northwest remained in the $318-$327/st ($9.94-$10.22/unit) range for the last offers.

Western Canada:

UAN-28 in Western Canada was reported at C$365-$425/mt (C$13.06-$15.18/unit) DEL, depending on location and time of shipment, up from earlier fill offers in the C$340-$355/mt (C$12.14-$12.69/unit) DEL range for July-August.

Ammonium Sulfate

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

US Gulf:

The NOLA ammonium sulfate barge market firmed to $220/st FOB for confirmed new business, up from last week’s $200-$220/st range, with new offers reported at $230-$240/st FOB as the week progressed. The increase followed a July 24 Midwest reset from AdvanSix after earlier fill program offers were pulled.

Eastern Cornbelt:

Granular ammonium sulfate moved up to $290-$310/st FOB in the Eastern Cornbelt following a price increase from AdvanSix on July 24, with the low confirmed at river terminals and the high inland. IOC’s latest postings included $290/st FOB Illinois and Ohio River terminals.

Western Cornbelt:

The granular ammonium sulfate market was pegged at $285-$300/st FOB in the Western Cornbelt, with the low reflecting updated pricing from IOC FOB St. Louis.

IOC’s other postings included $285/st FOB Houston, Texas, $290/st FOB Upper Mississippi River terminals, and $300/st FOB Omaha, Neb., Sioux City, Iowa, Casselton, N.D., and on a rail-DEL basis in the Northern Plains.

California:

The ammonium sulfate market was unchanged at $430-$465/st FOB in California, depending on grade, with rail-DEL offers in Northern California reported at $410-$420/st on a spot basis. A downward adjustment is expected in the near term for a new round of summer postings.

Pacific Northwest:

The ammonium sulfate market was pegged at $260-$300/st FOB or DEL in the Pacific Northwest, with the low confirmed for standard and the high for premium or granular tons. Earlier granular fill offers at the $280/st DEL level are now reportedly off the table.

Western Canada:

Ammonium sulfate prices slipped to a broad C$355-$430/mt DEL in Western Canada for July-August tons, with the low for standard and the high for granular, down from the prior C$450-$460/mt DELrange for granular product.

China:

The price for caprolactam-grade amsul moved up to $130-$135/mt FOB. Producers are now calling the market $160/mt FOB, while one supplier in northern China was noted offering granular amsul at $200/mt FOB, a dramatic break from the usual $20/mt spread between caprolactam-grade and granular ammonium sulfate.

Sources attributed the firming price – and the subsequent call for further increases ­– to unanticipated August demand from Chinese buyers. The stepped-up demand allowed producers to look to the domestic market instead of working with international traders to line up enough tons for a large vessel.

Even at $160/mt FOB, amsul is a bargain for nitrogen buyers versus the market for urea, sources said. Based on the nitrogen content from $400/mt FOB urea, traders calculated the price of amsul around $182/mt FOB.

Ammonium sulfate exports firmed significantly in the first half of the year, Trade Data Monitor reported, totaling 5.8 million mt, up 22% from the 4.8 million mt shipped in January-June 2022. The top two buyers were Brazil at 1.2 million mt, and Myanmar with 839,000 mt.

June exports firmed 38%, to 1.1 million mt from 824,000 mt in June 2022. Second-quarter exports were pegged at 3 million mt, up 24% from last year’s 2.4 million mt.

Brazil:

Ammonium sulfate prices in Brazil increased to $200-$220/mt CFR from the week-ago $190-$195/mt CFR, a roughly 9% increase. Sources expect the market to firm to $235-$245/mt CFR in the next round of business, which would reflect current FOB levels at China.

In Rondonopolis, ammonium sulfate followed the urea market higher, jumping to $340-$350/mt FOB ex-warehouse.

Ammonium Thiosulfate

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

Eastern Cornbelt:

The ammonium thiosulfate market dropped significantly in the Eastern Cornbelt, with fill pricing reported at $245/st FOB Terre Haute, Ind., down from the last prompt spring offers at $390/st FOB.

Western Cornbelt:

The ammonium thiosulfate market dropped to $225/st FOB Waterloo, Iowa, for new fill offers, down sharply from the last prompt price of $300/st FOB.

California:

Ammonium thiosulfate remained at $430-$440/st FOB in California for the last reported offers.

Pacific Northwest:

Ammonium thiosulfate pricing was unchanged at $375-$377/st FOB and $367-$370/st rail-DEL for the last confirmed pricing in the Pacific Northwest.

Western Canada:

The ammonium thiosulfate market in Western Canada fell to C$355/mt DEL in Saskatchewan for the latest offers, well below the prior C$450/mt DEL level.