All posts by thoughton8@bloomberg.net

Fertilizers Europe to Appeal Anti-Dumping Decision

Europe, News, News Briefs, Russia

Brussels-based Fertilizers Europe plans to file an appeal to the European Court of Justice challenging the EU General Court’s judgement that annulled the existing EU anti-dumping measures on ammonium nitrate (AN) imports originating from Russia, the industry group said in a July 19 statement.

The EU General Court issued its judgement on July 5 (GM July 7, p. 24) after studying a suit filed by AO Nevinnomyssky Azot and AO Novomoskovskaya Azot, both subsidiaries of EuroChem Group AG. The Court’s decision overturned the European Commission’s December 2020 ruling to extend the anti-dumping duty on Russian AN for five years (GM Dec. 18, 2020).

Following its judgement, the EU General Court ordered the Commission to bear its own costs and to pay the costs incurred by Nevinnomyssky Azot and Novomoskovskaya Azot. Fertilizers Europe was also ordered to pay its own costs.

Egypt Kuwait Holding Opens New Sulacid Unit

Egypt, News, News Briefs, Sulfuric Acid

Giza, Egypt-based Egypt Kuwait Holding Co. (EKH), through its wholly owned subsidiary Sprea Misr, has opened a new sulfuric acid plant with a capacity of 165,000 mt/y. Some 80% of the acid output will be directed to Alexandria Fertilizers Co. (AlexFert), in which EKH owns a 69% stake, the company said in a July 16 media statement.

Based on Egypt’s Mediterranean coast at Alexandria, AlexFert has a production capacity of 1,750 mt/d for urea and 720 mt/d for ammonium sulfate, according to the company’s website.

The new sulfuric acid plant is part of a $46 million investment program by EKH, which has also resulted in six new production lines at Sprea Misr’s petrochemical production facilities. All of the additional output from the new lines, which include novolac and formica resins and dry and liquid glue, will be directed to the export market, EKH said.

Canpotex Halts New Sales as Port Strike Resumes; Nutrien Curtails Production at Rocanville

Canada, Featured, News, Potash, Saskatchewan, Vancouver

Canpotex on July 19 reported that it is withdrawing all offers for new sales following the resumption of strike activity by the International Longshore and Warehouse Union (ILWU) Canada at the Port of Vancouver and the continued loss of export capacity at Neptune Terminals, which handles approximately 70% of all Canpotex potash exports.

ILWU dockworkers returned to the picket line late on July 18 after a tentative deal was rejected by union leadership (GM July 14, p. 1). Canpotex stressed that it will not make any new offers “until there is greater clarity on supply chain predictability through the Port of Vancouver.”

Nutrien Ltd. also confirmed this week that it is curtailing production at its Rocanville potash mine in Saskatchewan due to the strike, Bloomberg reported on July 19. Nutrien spokesman BJ Arnold told Bloomberg the company will focus on “capital projects and site maintenance” at Rocanville while production is down.

“We urge the parties and the federal government to take immediate action to resolve this strike before further damage is done to Canada’s reputation as a reliable, global potash supplier,” Arnold said by email.

The news follows Nutrien’s announcement on July 11 that it was curtailing production at its Cory mine in response to the strike. According to Nutrien’s 2022 Fact Book, Rocanville is the largest of Nutrien’s six potash mines in Saskatchewan, with a nameplate capacity of 6.5 million mt/y and a 2022 operational capability of 5.2 million mt/y. Cory’s nameplate capacity is 3 million mt/y with an operational capability of 2.1 million mt/y in 2022.

A tentative agreement was reached on July 13 between the British Columbia Maritime Employers Association (BCMEA) and the ILWU, which represents roughly 7,400 dockworkers who walked off the job on July 1 (GM July 7, p. 1). The BCMEA ratified the agreement on July 13 and issued a statement saying the ports of Vancouver and Prince Rupert would reopen “as soon as possible.”

The agreement, which was reached with the help of a federal mediator, was applauded by industry and ag groups, including Fertilizer Canada, which issued a statement on July 14 saying it appreciated the efforts of the federal government and Labor Minister Seamus O’Regan “to end the strike and get goods flowing through the West Coast.”

Hopes for a quick resolution and a return to normal operations were dashed on July 18, however, when the ILWU announced that its Longshore Caucus had voted down the recommended terms of settlement before putting them to a full member vote, and that its Longshore Division would be back on the picket line later that day. The ILWU said the terms were not sufficient to “protect our jobs” into the future.

“Our position since day one has been to protect our jurisdiction and this position has not changed,” the ILWU said in a July 18 statement. With the record profits that the BCMEA’s member companies have earned over the last few years, the employers have not addressed the cost-of-living issues that our workers have faced over the last couple of years, as all workers have. The term of the collective agreement that was given with today’s uncertain times is far too long. We must be able to readdress the uncertainty in the world’s financial markets for our members.”

Shortly after returning to the picket line on July 18, however, ILWU workers were back on the job on July 19 after the Canada Industrial Relations Board declared the resumed strike “illegal,” citing the lack of a 72-hour strike notice. The ILWU then issued a strike notice saying workers would return to the picket line at 9 a.m. on July 22, but rescinded the notice later on July 19.

No new strike notice was issued on July 20, leaving some to conclude that the ILWU and BCMEA were back at the negotiating table. Later that day, news reports said that a second tentative deal had been reached.

The Greater Vancouver Board of Trade this week estimated the strike’s current cost at C$10 billion, with backlogs that could take months to clear. Green Markets Research Director Alexis Maxwell said the impact of the strike could cause potash segment shipments to fall 33% in 3Q from a year ago.

Black Sea Grain Deal Collapses After Russia Pulls Out

Black Sea, Eastern Europe, Featured, News, Russia, Ukraine

The Ukraine/Black Sea grain-export deal has ended almost a year after its inception following Russia’s decision on July 17 to terminate its participation in the agreement, further heightening uncertainty over global food supplies. 

The pact, brokered between Ukraine and Russia in July 2022 by the United Nations (UN) and Turkey, allowed shipments of grains and other foodstuffs from Ukraine out of its Black Sea ports of Yuzhny, Odesa, and Chornomorsk to the Bosporus, without being attacked by the Russian naval blockade in the Black Sea.

Kremlin spokesperson Dmitry Peskov told reporters on July 17 that the arrangement had ceased to be in force “as of today,” and that Russia had notified Turkey and the UN that it won’t extend the deal, Interfax reported.

Moscow’s decision was not totally unexpected as it has long threatened to exit the deal (GM June 2, p. 1), last agreeing to a two-month extension in May that was due to expire on July 17 (GM May 19, p. 29). Russia also briefly paused its participation in the pact last October following an attack on it ships, although it was resumed a few days later.

Moscow has complained that parts of the Black Sea deal related to the facilitation of export shipments of Russian foodstuffs and ammonia and other fertilizer products have not been implemented.

The news of the deal’s collapse came after Russia on July 17 said Ukrainian drones damaged a key bridge linking Russia to Crimea, though Moscow later said the termination of its participation in the grain deal was unconnected to the attack.

Moscow is now cautioning against any shipments without its “security guarantees.” According to a UK Financial Times report, Russia earlier this week warned it would treat grain ships as “military targets.”

Russia has unleashed heavy drone and missile attacks since pulling out of the deal, damaging critical port infrastructure in southern Ukraine on July 20, including grain and oil terminals in Odesa and nearby Chornomorsk, destroying some 60,000 mt of grain, according to the Associated Press, citing Ukraine’s Agriculture Ministry.

Moscow has been urging all parties to the grain deal to unblock the transit of Russian ammonia so it can be exported via the ammonia pipeline that runs from Togliatti in Russia to the Ukrainian Black Sea port of Pivdennyi, formerly known as Yuzhny. Moscow is also demanding that Russia’s Agricultural Bank regain access to the international “SWIFT” payment network, which was prohibited under European Union and US sanctions.

For its part, Kyiv has said it would consider allowing Russian ammonia to transit its territory for export on the condition that the Black Sea grain deal is expanded to include more Ukrainian ports and a wider range of commodities. This week, Ukrainian President Volodymyr Zelenskyy was in talks with UN Secretary-General António Guterres to discuss restoring grain supply through the Black Sea.

World leaders have condemned Moscow for backing out of the deal, saying it threatens world food security and will lead to a further hike in prices. Additionally, the damage to Ukraine ports could take up to a year to repair even if the deal is renewed, according to Rabobank Agricultural Analyst Carlos Mera, as cited by the Financial Times.

The pact has ensured the safe passage of more than 32 million mt of crop exports from Ukraine via the Black Sea since it was signed in July 2022, helping to ease global food prices after they soared to record levels when Russia’s invasion of Ukraine forced a halt to all exports from Ukraine’s main Black Sea ports.

But the export corridor has faced repeated disruptions in recent months. Ahead of its withdrawal from the deal, Russia blocked one of the three open ports, and ship inspection times have gotten progressively longer, with fewer than one cleared per day in the first half of July.

Moreover, the volume of crop exports from Ukraine has been falling as the country’s agricultural production capacity suffers from the prolonged war. Only 2 million mt of grain were exported in June compared to a peak of 4.2 million mt last October, according to a Dow Jones report, citing UN data.

Acron Boosts 1H Fertilizer Output by 7%

Ammonia, Ammonium Nitrate, News, News Briefs, Nitrogen, NPK, Russia, UAN, Urea

Acron Group reported a 7% increase in fertilizer output for the first half of the year, to 3.67 million mt from 3.43 million mt last year. Its total commercial output, which includes apatite concentrate for sale to third parties and industrial products, reached 4.3 million mt, up 6% from the year-ago 4.05 million mt.

Acron’s six-month production of nitrogen fertilizers increased 12% year-over-year, to 2.88 million mt from 2.56 million mt. UAN output was up 64%, to 751,000 mt from 457,000 mt, and urea production rose 18%, to 975,000 mt. Those increases were mainly at the expense of ammonium nitrate, which fell 13% year-over-year, to 1.11 million mt from 1.27 million mt.

The group earlier this month reported that it had delivered more than 50,000 mt of calcium nitrate (CN) to its customers since commissioning a new unit at its Veliky Novgorod production site in northwest Russia in August 2022 (GM Aug. 12, 2022). The unit, Acron’s first for CN production, has a capacity of 100,000 mt/y capacity and produced 45,000 mt in the first half of the year.

Acron saw a marginal uptick in its complex fertilizers output in the first six months, to 1.21 million mt from 1.20 million mt in the same period last year.

Product 1H-2023 1H-2022 % change
Ammonia 1,507 1,398 +8
Nitrogen Fertilizers 2,879 2,562 +12
AN 1,108 1,274 (13)
Urea 975 830 +18
UAN 751 457 +64
CN 45 1  
Complex Fertilizers 1,212 1,201 +0.9
NPKs 1,190 1,153 +3
Bulk blends 22 49 (55)
Total Fertilizers 3,669 3.425 +7
Industrial Products 549 529 +4
Apatite Concentrate (excluding output for internal use) 82 100 (18)
Total Commercial Output  4,300 4,053 +6

Chambal Fertilisers and Chemicals Ltd. (CFCL) – Management Brief

India, Management Briefs

Chambal Fertilisers and Chemicals Ltd. (CFCL), Gadepan, India, on July 20 announced the appointment of Abhay Baijal as Managing Director, replacing Gaurav Mathur, who resigned from the position to pursue other opportunities outside of the company, CFCL announced through an exchange filing.

Baijal has more than 38 years of industry experience, starting in 1983 as an engineer with Hindustan Unilever Limited before moving to other roles with various companies, including Credit Rating Information Services of India Ltd. and Birla Home Finance Ltd. He joined CFCL in 2003 and retired as the company’s Chief Financial Officer on Jan. 31, 2023. Baifal will serve in his new role for a period of two years, starting on July 21, 2023.

DAP/MAP

Argentina, Brazil, China, DAP/MAP, Eastern Cornbelt, Florida, India, Market Watch, South Central, Southeast, Southern Plains, U.S. Exports, U.S. Gulf, Western, Western Cornbelt

Central Florida:

DAP loading from Central Florida was posted at $470/st FOB, unchanged from the prior week. MAP trucks were offered at $500/st FOB, also steady from recent weeks. North Florida MAP postings remained at $600/st FOB, sources said.

US Gulf:

Following a slow start to the week, sources reported NOLA DAP and MAP barge prices heating up toward the end of the July 14-20 trading period.

On the heels of early-week trading noted at a $445/st FOB low, DAP barges firmed to a high of $470/st FOB on July 20 for tons loading now through September, sources said, a sharp jump from the week-ago $445/st FOB ceiling. Offers quoted at $475/st FOB had yet to find a buyer on July 20, sources said.

MAP buyers scrambled to make purchases as well, driving the market from $480/st FOB early in the week to a high of $520-$530/st FOB on July 20, up $20-$60/st from last week’s $460-$470/st FOB range.

Players generally attributed the increase to low stocks in the US market. The speedy rise in pricing, described as a response to sentiments quickly turning “very hot” and “very bullish” during the week, led many sellers to reassess their positions late in the week. “Most have pulled offers,” said one trader on July 20.

US Exports:

Export prices continued at $470/mt FOB on reports of limited third-quarter availability. The price was said to reflect available netbacks on recent business out of the inland Brazil market.

Eastern Cornbelt:

DAP and MAP prices were moving up in the Eastern Cornbelt, fueled by firming NOLA barge values and tightening supply. DAP moved to $520-$530/st FOB Cincinnati and other regional warehouses, up from last week’s $505-$520/st range.

MAP strengthened even more, to $540-$580/st FOB from last week’s $530-$550/st, with both the high and low reported at Cincinnati as the week progressed.

Western Cornbelt:

DAP was pegged at $495-$525/st FOB in the Western Cornbelt, with the lower end of the range confirmed at St. Louis. MAP pricing firmed to $520-$565/st FOB in the region, up $15/st from last week’s high, with both the high and low reported at St. Louis during the week.

Southern Plains:

DAP was quoted at $515/st FOB Houston and $510-$530/st FOB Catoosa/Inola, with the higher end confirmed late in the week. MAP pricing moved to $535-$560/st FOB Catoosa/Inola and a solid $545/st FOB Houston, with some suggesting that additional near-term increases are likely based on rapidly strengthening NOLA MAP prices.

South Central:

DAP prices firmed to a broad $520-$580/st FOB in the South Central region, depending on location and timing, with the high reported later in the week following a rise in NOLA barge prices.

Southeast:

MAP postings from Nutrien were steady at the $600/st level FOB Aurora, N.C., and White Springs, Fla.

Western US:

MAP prices moved up in California and the Pacific Northwest during the week. MAP pricing in California firmed to $640/st FOB or DEL, up from $625/mt, while MAP in the Pacific Northwest moved to $620-$630/st FOB or DEL, up from $600-$610/st at last report.

China:

Sources said the export price for DAP moved to $420-$430/mt FOB on recent sales to India. The softer prices came as domestic demand tightened to just a few small bids, leaving most of the DAP production available for export.

DAP export availability remains limited, however, as producers are unsure about shifting government policy. Rumors suggest the government may make it easier for producers to ship their DAP while domestic demand is low. No official statements have been made, however, and export inspectors seem uninterested in moving any faster with their paperwork.

MAP inventory in Chinese warehouses is at its lowest point in years. Chinese media reported only 26,000 mt ready for export as of last week.

India: 

Earlier reports of a 50,000 mt DAP purchase by CIL at or near $435/mt CFR put estimated netbacks to China in the upper-$420s/mt FOB. This week, however, sources said the price was more likely $420-$430/mt CFR, for a sub-$420s/mt FOB netback to China.

For discussion purposes, sources said the lack of confirmed sub-$430/mt CFR deals left the public price at $430-$435/mt CFR. Lower prices are expected, however, as Indian buyers continue to pressure DAP suppliers and play them against each other.

Brazil:

MAP jumped $15-$20/mt from last week’s price, to $470-$475/mt CFR. Sources attributed the increase to limited availability in the Brazilian market.

Prices moved up in Rondonopolis to $595-$630/mt FOB ex-warehouse, as limited tons were sought by buyers for their soybean crops. Some buyers stepped up purchases following reports that upcoming rains could cause logistics problems, potentially delaying deliveries.

Argentina:     

January-May MAP imports in Argentina totaled 134,000 mt, Trade Data Monitor reported, off 47% from the year-ago 254,000 mt. May MAP imports were 30,000 mt, down from 156,000 mt in May 2022. Morocco supplied 68% of the May market, sending 20,000 mt.

TSP

Brazil, Eastern Cornbelt, Market Watch, South Central, Triple Superphosphate, U.S. Gulf, Western Cornbelt

US Gulf:

While offer levels were noted moving up in line with the rest of the NOLA phosphate market, no new TSP barge trades were reported, leaving prices unchanged from the prior week’s $380-$385/st FOB.

Eastern Cornbelt:

TSP remained at $475-$480/st FOB Cincinnati for the latest offers.

Western Cornbelt:

TSP pricing was steady at $450/st FOB St. Louis.

South Central:

The TSP market slipped to $440-$445/st FOB Memphis for the latest offers.

Brazil:

A number of buyers unable to purchase SSP have reportedly shifted to TSP, lifting the market to $375-$390/mt CFR. Buying interest in Rondonopolis shifted the TSP price to $500-$505/mt FOB ex-warehouse.

SSP

Brazil, Market Watch, SSP

Brazil:

A lack of material left importers with nothing to test SSP prices, leaving the market at $195-$220/mt CFR. The import market’s stagnation was repeated in Rondonopolis, where a lack of product left the price at $335-$395/mt FOB ex-warehouse.