San Francisco-SynGest Inc. reports that the Iowa Power Fund and Iowa Office of Energy Independence are in final negotiations for a $2.5 million contract for the development and commercialization of SynGest’s bioammonia production technology in the state of Iowa. The award is subject to final contract negotiations, board approval, and contract execution. The contract would provide a grant in the amount of $2.5 million, subject to the terms of the contract. One requirement of the contract is evidence that SynGest has raised an additional $3.5 million in new cash equity for the design and engineering stage of a biomass ammonia facility to be built and operated in Iowa. The plant will use 130,000 st/y tons of corn cobs to manufacture 50,000 st/y of anhydrous ammonia to fertilize 500,000 acres of corn farmland.
All posts by traceybg@gmail.com
DOC issues countervailing duty order on China potassium salts
Washington-The Department of Commerce’s (DOC) International Trade Administration last week issued a countervailing duty order on certain potassium phosphate salts from the People’s Republic of China (PRC). The order was based on affirmative final determinations made by the DOC and the U.S. International Trade Commission (ITC) in June (GM June 7, p. 10) that the PRC was providing countervailable subsidies to producers and exporters of the subject merchandise during a specific period of investigation, and that this merchandise is likely to be sold in the U.S. at less than fair market value. The investigation determined a subsidy rate of 109.11 percent ad valorem for PRC producer/exporters, and percentage weighted-average margins of 69.58 percent and 95.4 percent. In a Federal Register notice last week, the department said it had been notified by the ITC on July 15 that an industry in the U.S. “is materially injured as a result of subsidized imports of phosphate sales from the PRC.” The notice specifies two domestic products – Dipotassium Phosphate (DKP) and Tetrapotassium Pyrophosphate (TKPP) – that are covered by the scope of the order and suffered material injury, while a third product – Monopotassium Phosphate (MKP) – was found to be outside of the order, and therefore received a negative determination by the ITC. As a result, no countervailing duty order can be issued on imports of MKP from the PRC, the notice said. Because the ITC determined that imports of DKP and TKPP from the PRC are materially injuring a U.S. industry, however, the notice said all unliquidated entries of those potassium phosphate salts from the PRC, entered or withdrawn from warehouse, are subject to the assessment of countervailing duties.
Alum treatment advised for Grand Lake St. Marys
St. Marys, Ohio-Technical experts are advising that Grand Lake St. Marys in western Ohio, which has serious algae growth and associated toxins and has been declared unsafe for swimming, can be successfully treated with alum. According to the technical report compiled for the state by Tetra Tech Inc., alum, which is popularly known as an aftershave or for treating small shaving cuts, has been used and documented to inactivate sediment phosphorus in at least 150 lakes in the world. Tetra Tech reported that most of the lakes treated have been in Minnesota, Florida, Washington, and Wisconsin. The majority were smaller than Grand Lake, but most treatments were successful if dosed properly. Dina Pierce, spokeswoman for the Ohio Environmental Protection Agency, which commissioned the Tetra Tech evaluation, said no decision has been made as yet to proceed with an alum demonstration. The report suggests closing off two lagoons to test the effectiveness of the chemical compound, which would bond with phosphorous and sink it to the bottom of the lake. Tetra Tech estimates the cost of the demonstration at between $150,000-$300,000, plus another $120,000 for a barrier to separate the treatment area from the main lake. If the tests work the entire lake could be treated in the next year, with treatments beginning as early as this fall, according to the report.
Panel refereeing Helena’s clash with N.M. officials
Mesquite, N.M.-A mixture of interested citizens, including those who live close to Helena Chemical Co.’s fertilizer warehouse here, was on hand last week for a hearing on whether Helena should be able to operate without a state air quality permit. “There were a number of concerned neighbors and community members, I am told by people who went,” New Mexico Environmental Department (NMED) spokeswoman Marissa Bardino told Green Markets. While some contended the fertilizer-mixing operation produces odors and poses a public health threat, others supported the company, which has clashed since 2008 with state regulators over operating without the permit. Although Helena has maintained that independent data shows the Mesquite plant is well within state and federal air quality standards, NMED officials have refused to allow a waiver, citing the $400,000-plus in fines and penalties assessed to Helena over the years. State Environmental Secretary Ron Curry remarked, “I continue to be baffled by the actions this company continues to take.” The denial resulted in Helena appealing to the independent seven-member New Mexico Environmental Improvement Board, which has already has conducted three days of hearings in Santa Fe, where only one member of the public attended. At the Mesquite hearing last week that attracted 50 or more people, some declared that Helena is important to local farmers and their crops, with one agriculture official urging the board to “carefully consider the collateral damage that would occur if Helena is denied what they’re asking for.” An elementary school teacher claimed Helena’s plant is responsible for groundwater contamination that caused students to suffer nosebleeds. The hearings resume next Wednesday, and one attorney close to the process told the local press that the board likely will hand down a ruling within the next 90 days.
Management Briefs – July 26, 2010
Jeremy Painter has joined The Mosaic Co. as strategic account manager – East region. He joins Mosaic from John Deere, where he most recently served as a strategic account manager for national accounts. Painter has a Bachelor’s degree in Ag Economics from the University of Missouri and a Master’s degree from Indiana University – Purdue University.
Painter will be working with David Specketer over the next few months during a transitional period. Specketer has managed key accounts for Mosaic and legacy companies for over 35 years, and will be retiring in November.
Mark Newman will be joining Mosaic as account manager, reporting to David Lee. Newman will be based out of Amarillo, Texas, covering the states of Texas, New Mexico, Colorado, and Kansas. In addition, he will coordinate the growth strategy out of Mosaic’s Houston warehouse. Newman has a Bachelor’s degree in Agronomy from Texas A&M and comes to Mosaic from Liphatech, where he most recently served as a Southern district salesman.
Cody Hurdt has joined Mosaic as a technical sales manager. He will work out of his home in Lubbock, Texas, and will cover Texas, Oklahoma, New Mexico, and Colorado. He will focus on sales of the Premium Products, MicroEssentialsSZ and K-Mag, and will work closely with Mark Newman, the new Mosaic account manager in Texas. Hurdt gradated with an Agronomy degree from Texas A&M University. Late in his career, he earned a Master’s degree in Agricultural Economics from Purdue University, and an MBA from Indiana University. His career includes stints at Pioneer Hi-Bred International, a DuPont business, and most recently, John Deere.
Market Watch
AMMONIA
U.S. Gulf/Tampa: Tampa price ideas keep going up with each new higher price heard from the Black Sea. As a result, sources last week were speculating that the Tampa number for August business could go up $25-$30/mt over the $355/mt achieved for July. And the final word on that Tampa number should come any minute.
Eastern Cornbelt: Most sources tagged the ammonia market at $470-$480/st on the low end FOB Illinois terminals for prompt tons, with suppliers referencing the $500/st FOB level for either prompt or fall prepay tons as the week advanced. One contact reported selling tons in the Illinois market at mid-month for $475/st FOB for fall delivery.
On July 20, a regional supplier moved its ammonia postings up to $500/st FOB Illinois terminals at Albany, Kingston Mines, Peru, and Seneca, and $480/st FOB Cowden, Ill., and Indiana terminals at Frankfort, Huntington, and Terra Haute. Those postings reflected a $55-$70/st increase from the company’s July 14 reference levels.
Western Cornbelt: Ammonia pricing was moving up rapidly, and covered a broad range depending on location and time of delivery. One source reported that terminals and shipping points near his location had moved to a “call for quote” basis as the week advanced. He said retailers who did not commit to fall prepay tons earlier were now making the move as the market firmed, and hoping to cost average to better position themselves for the fall.
Most sources pegged the regional ammonia market in the $440-$480/st FOB range, up some $55/st from the previous week. Iowa sources quoted fall prepay offers in the $475-$510/st FOB range. Effective July 21, Agrium’s ammonia postings firmed to $495/st FOB Hoag, Neb.; $500/st FOB Greenwood, Neb.; and $505/st FOB Mankato, Minn., and Iowa terminals at Early, Garner, and Whiting.
For the July 20-23 order and shipping period, ammonia postings from another supplier moved up significantly, to $425/st FOB Aurora and Fremont, Neb.; $475/st FOB Palmyra, Mo., and Grand Forks and Velva, N.D.; $480/st FOB Garner and Spencer, Iowa; and $500/st FOB Glenwood and Pine Bend, Minn. Those postings were up some $40-$80/st from the company’s July 14-16 ammonia postings, depending on location.
Southern Plains: Early in the week, sources said ammonia pricing had firmed to $385-$390/st FOB regional production points, which represented a sizable increase from last report. By midweek, however, the market had reportedly moved to $395-$440/st FOB, depending on location, with limited tons available at the low end of that range.
Kansas sources quoted the pipeline terminal market at $450/st FOB or higher as the week progressed, which one described as “obscenely high priced.” Effective July 21, Agrium’s ammonia postings firmed to $480/st FOB Mocane, Okla., $485/st FOB Conway, Kan., and $490/st FOB Clay Center, Kan.
South Central: Ammonia postings out of the terminal had reportedly firmed to $500/st FOB Henderson, Ky., for either prompt or fall prepay tons. Sources quoted the market in the $470-$480/st FOB range on the low end, with no new sales to test those numbers. One source said the last tons sold to the ag market out of the Memphis market were at the $390/st FOB level.
Black Sea: The lack of material in the area has had the upside of moving the price closer to the break-even point for Ukrainian producers.
Sources report that a cargo bound for Turkey was sold last week at $325/mt FOB, and producers are now looking at $330/mt FOB.
The price – if it holds – would make it easier for the Ukrainians to re-open their plants.
So far, the Ukrainian plants have been down for extended maintenance. Sources said as long as the price was below $320/mt FOB, there was little incentive to operate.
The uncertainty of the ammonia market, coupled with expectations of higher natural gas prices, led most of the manufacturers to take as long as possible with their maintenance work. The resulting shutdowns pretty much emptied the storage tanks in Yuzhnyy, said sources.
Whatever tons were available from Yuzhnyy seemed to be from the Russian producer OPZ.
With the regional market now moving beyond $320/mt FOB and the international market seemingly strong enough to sustain prices above that level, the Ukrainians are reportedly ready to think about restarting production.
Producers will find, however, that many of their traditional buyers have moved on wherever possible. Some European buyers, for example, turned to Egypt for their tons. And Americans strengthened their positions with Trinidad and Tobago.
Based on the last bit of business, the market has now moved to $320-$325/mt FOB.
Middle East: Sources report Iran is now asking $330/mt FOB. The move was expected by some Asian traders.
India was forced back to Arab Gulf producers for their material as Egypt shifted more sales to Europe.
The move by Iran indicates that they are less likely to offer deep discounts at a time when the market is moving up.
The Arab producers continue to claim full order books under contracts – mostly with India.
If Iran succeeds in getting $330/mt FOB, sources say that could indicate a much stronger Arab price.
The need to work around the U.S. dollar embargo against Iran often means buyers have to work with currency traders. The extra step and expense often leads the Iranians to offer a lower netback.
Arab producers have complained in recent months about the low-ball prices offered by Iran at a time when the market should have allowed prices to move into the $340s/mt FOB and beyond. One producer said without the Iranian ammonia in the market, $350/mt FOB could have been reached weeks ago.
With contract tons – and the subsequent lower prices – still dominating the Arab producers, sources say it is difficult to nail down a firm idea for the area market price.
No spot tons have been sold to confirm the higher prices, but, said one Asian trader, no one gets into the room to talk about a deal for under $330/mt FOB anymore.
One producer added that the idea of sub-$300/mt FOB material is gone. Even under contracts, material at that level is long gone. He added that a deal at $310-$315/mt FOB would be rare. Most of the cargoes at this time, the producer said, are going out at $315/mt FOB and up.
Once a new spot deal comes into play, sources add, the public price for the area will show a dramatic jump.
Based on the talk of traders and producers, the market is now being seen at $315-$330/mt FOB, with all sorts of room for maneuvering.
Asia: Kaltim and Mitsui settled a deal for a cargo of ammonia at $330/mt FOB. Sources in the area say the deal was exceptional for Mitsui. It needed the tons to satisfy its Asian customers, and the price was right.
Sources add the return of Kaltim to the ammonia market was at just the right time for Mitsui.
Kaltim has been out of the ammonia export business for several months as urea production and domestic ammonia buyers dominated the plant’s demand. Reportedly, demand for ammonia from a main buyer – Gresik – eased off this month, making a cargo available for export.
Sources expect industrial buyers in Taiwan and South Korea to start increasing their demand for ammonia the middle of next month as plants come back online following routine maintenance shutdowns.
UREA
U.S. Gulf: Granular urea prices continued to spike last week. It was hard to believe they were just $222/st FOB about a month ago. This week, sources said they started the week in the low $270s/st FOB and moved all the way up to $290/st FOB by late Thursday. It was enough to take the breath away from some players, who said it was the buyers in wheat country who needed product in the near term that would have to pay up for the product. They said those who need to simply stock up for next year could afford to wait and see what happens.
Eastern Cornbelt: Granular urea was quoted at $295-$305/st FOB in the Illinois market. Ohio sources pegged the market at $295/st FOB Cincinnati and $315/st FOB E. Liverpool, with dealer reference prices as high as $330/st FOB Maumee. One source said the stronger urea prices were being fueled in part by higher UAN and ammonia prices. He added that buyers are watching the grain market closely, and nitrogen sales could stop if grain prices start to falter.
Western Cornbelt: Granular urea had reportedly firmed to $300-$325/st FOB regional terminals to the dealer. The low end was quoted out of spot river locations, with the high at inland points in central and western Iowa.
Southern Plains: The granular urea market had moved to $295-$310/st FOB in the region, up some $20/st from last report. Effective July 20, Koch’s urea postings FOB Enid, Okla., firmed to the $295/st level. On July 22, that price firmed again, to $310/st FOB.
South Central: Urea movement on rice had slowed considerably, with sources talking of just a handful of trucks moving to field locations each day. “We’re seeing four to eight trucks per day out of all our locations combined, so it’s about finished,” said one contact. The terminal market was quoted at $280-$290/st FOB, up $20/st from last report, with the upper end reported in the Arkansas and Tennessee market.
Southeast: The granular urea market had reportedly strengthened to $315-$325/st FOB port terminals, up from what one source said was $295/st FOB in late June.
India: STC kept moving on its tender. Talks with trading houses continued until the middle of last week. In the end, STC took nearly 700,000 mt.
The big winner in the extra talks was Transammonia, which walked out with an award for an additional 100,000 mt. Gavilon also secured an additional award of 45,000 mt.
The final tally of the awards follows.
| Company | Quantity | US$/mt CFR | Discharge Port |
| Transammonia | 100,000 | 283.92 | Mundra |
| 100,000 | 287.92 | Kakinada | |
| 50,000 | 286.92 | Kistnapatam | |
| 50,000 | 285.92 | Pipavav | |
| Dreymoor | 55,000 | 283.92 | Mundra |
| 55,000 | 286.92 | Kistnapatam | |
| Quantum | 50,000 | 286.92 | Kistnapatam |
| Swiss Singapore | 25,000 | 283.92 | Mundra |
| Ameropa | 60,000 | 286.92 | Kistnapatam |
| Sinochem | 55,000 | 286.92 | Kistnapatam |
| Gavilon | 45,000 | 286.02 | Vizag |
| 45,000 | 288.92 | Tuticorin |
Sources speculated that the Transammonia tons will be equally divided among its Oman holdings, a CIS long position, and recent Chinese purchases.
The 690,000 mt purchased in this tender should provide India with enough urea to make it through the current season, say sources.
Sources add that these tons, combined with the DAP and NPK purchases made, should keep the ports busy well into October. One trader noted that a certain amount of backup and delays in discharging of tons should be expected.
Pakistan: The TCP tender for 100,000 mt closed July 22 with evidence that the market is not moving the way producers would like.
TCP usually pays a few dollars more than its Indian counterparts. But this time, the delivered price is just about the same for the lowest offer. The tender results follow.
| Sellers | Quantity (mt) | Origin | US$/mt CFR | |
| Transammonia | 50,000 | Open | 287.89 | |
| 50,000 | (S/O) | 287.89 | ||
| Incitec Pivot | 50,000 | Open | 294.50 | |
| Multicommerce | 50-70,000 | Open | 297.66 | |
| Gavilon Fertilizer | 50,000 | Open | 299.88 | |
| 50,000 | (S/O) | 299.88 | ||
| Keytrade | 50-60,000 | Open | 300.95 | |
| 295.95 | ||||
| Agrofertans | 30-35,000 | Ukraine | 306.60 | |
| Swiss Singapore | 50,000 | Open | 308.00 | |
| Liven Agrichem | 50,000 | Open | 308.89 |
Industry sources say the most likely scenario will be that TCP will issue an award to Transammonia for the initial 50,000 mt and then ask it to supply the optional tons as well. It will be up to Trammo to decide if it wants to accept the bid.
If Transammonia declines the bid for the optional tons, TCP will have to call another tender immediately to get the last 50,000 mt it needs for this season.
Indonesia: Two state-owned producers closed tenders last week. In each case, the winning bids moved the urea market up in incremental steps.
Pusri closed its prilled tender for 60,000 mt July 19. The winning price was only a slight increase from the sale the company made in May as it closed out its 2009 export allotments. At that time, the selling price was $268/mt FOB.
The tally of the bids follows.
Pusri Tender for 60,000 mt of Prilled Urea |
|
| Bidder | US$/mt FOB |
| Profeta | 269.00 |
| Universal | 268.40 |
| Swiss Singapore | 268.25 |
| Youngwoo | 268.00 |
| Trada | 268.00 |
| Diva | 267.00 |
| BBSC | 266.00 |
| Liven | 261.00 |
| RCL | 260.00 |
| Limardi | 257.25 |
| Consilindo | 255.00 |
| Graha | 255.00 |
Parna and Indevco were disqualified from the tender. Sources say the most likely reason was for a lack of a bid bond.
The tons are to be picked up in August and September.
As the deadline for the tender approached, sources speculated that Pusri may cut a swap deal with Kaltim or another producer. The draught in the Pusri port limits vessels to 5,000 mt. Therefore, it would be impossible to take the full 60,000 mt in one shot unless a swap is arranged.
Sources now say Profeta served as an agent for a number of buyers. The almost two-month shipping time should allow members of the consortium to get their tons without difficulty.
The tender was originally advertised as 20,000 mt, with an option for another 10,000 mt. In the end, Kaltim sold 60,000 mt for shipment by the end of September.
The winning price again moved the market up in small steps.
In the end, Liven took an award for 30,000 mt at $273.25/mt FOB. Trada and BBSC matched the Liven bid. Each was awarded 15,000 mt.
Industry sources ended last week wondering what the winners of the tenders will do with their tons.
Some industrial and plantation buyers might be interested in some of the tons because of the quality of the Indonesian urea. Other markets, however, are not as willing to pay more for their needs. In the end, some additional negotiating may be needed before the tons are actually shipped.
Initially, sources figured the rapid sale of 120,000 mt in one week would be enough to keep the producers from issuing another tender for 60-90 days. By the end of the week, however, more traders were coming to the conclusion that another set of tenders for an equal amount might be called as early as mid-August.
Kaltim Granular Urea Tender for 60,000 mt |
|
| Bidder | US$/mt FOB |
| Liven | 273.25 |
| BBSC | 273.00 |
| Trada | 273.00 |
| Youngwoo | 272.25 |
| Limardi | 272.00 |
| Profeta | 271.25 |
| Diva | 271.00 |
| Graha | 270.00 |
| Parnaraya | 270.00 |
| OE | 269.00 |
| Consilindo | 268.00 |
| Indevco | 267.00 |
| Urbantara | 263.00 |
Middle East: The lack of any awards directly to Middle East producers in the Indian or Pakistan tenders did not upset producers.
Sources report the regional order books are full enough to make the accountants happy. There are enough contracts being fulfilled that producers do not see a need to lower their prices.
The bids into the STC/India tender were intended to show the marketplace the level of pricing the producers wanted. Even when STC counterbid at $266-$267/mt FOB, the producers held firm to their original offers.
In the end they did not get an award in the tender, but sources say they did not need one.
Orders from Australia and the U.S. are coming in strong enough, say sources, to ensure enough business for a while.
At the same time, Sabic will begin fulfilling its commitment to Pakistan under a government-to-government deal closed earlier this year.
Taking the TCP/Pakistan tender as a basis for estimating a new market price for the Middle East, sources say the netback is $267-$272/mt FOB.
Sources peg that price range on Transammonia getting the TCP tender and fulfilling the contract from Oman.
Industry watchers say that even though no spot business has been clearly identified from the area – the Trammo deals are speculation based on probabilities – it has become clear the market has moved firmly into the upper $260s/mt FOB to low $270s/mt FOB.
Black Sea: Producers feeding out of Yuzhnyy came out all right in the recent STC/Indian tender.
Sources expect to see Transammonia take 100,000 mt out of the Black Sea to India. The Dreymoor tons are also expected to come from the CIS.
The Indian tender moved the price firmly into the $260s/mt FOB. Sources now peg the market at $270-$275/mt FOB.
The price is still shy of what industry analysts say is the break-even price of $280/mt FOB. Reports of possibly higher natural gas prices could raise that level to $300/mt by the end of the year.
NITROGEN SOLUTIONS
U.S. Gulf: As with urea, most players last week said that UAN is now in short supply. As a result, barges were now being called $180-$185/st FOB ($5.63-$5.78/unit), with $188/st ($5.88/unit) being reported toward the end of the week.
Eastern Cornbelt: UAN-32 was quoted at $218/st ($6.81/unit) rail-DEL in Illinois on the low end, with rail-delivered tons in Ohio and Indiana reported in the $228-$230/st ($7.13-$7.19/unit) range. Terminal prices for UAN-32 were pegged at the $214.40/st ($6.70/unit) FOB level in Illinois at midweek. Ohio sources reported UAN-28 at $185-$189/st ($6.61-$6.75/unit) FOB Cincinnati, and $194.60/st ($6.95/unit) FOB E. Liverpool.
Higher UAN postings were circulating as the week advanced, however. For the July 22-23 order and shipping period, one supplier reposted UAN at $6.95/unit FOB Mt. Vernon; $7.05/unit FOB Kingston Mines and Peru; $7.10/unit FOB Albany and Cincinnati; $7.25/unit FOB Terra Haute; and $7.45/unit FOB E. Liverpool.
Sources said there would be no UAN loading at Rentech’s E. Dubuque, Ill., facility from 5 p.m. July 23 through 7 a.m. July 28.
Western Cornbelt: UAN-32 was pegged at $215-$225/st ($6.72-$7.03/unit) FOB terminals to the dealer for prompt tons, reflecting another slight increase from the previous week. One Iowa source quoted reference pricing for fill tons as high as $240-$245/st ($7.50-$7.66/unit) FOB late in the week.
“The amount of tons that went out on the initial offering were very limited and you had to know something on someone and have pictures to even get a price,” said one contact. “We were able to buy some, more than most folks our size, but still not what we wanted, so we will let it play out and will be watching the urea market to see which nitrogen source will be favored come spring.”
Southern Plains: UAN-32 was pegged at $215-$230/st ($6.72-$7.19/unit) FOB, with the low at production points and the upper end out of inland tanks to the dealer.
South Central: UAN-32 spot pricing remained at $210-$225/st ($6.56-$7.03/unit) FOB regional terminals to the dealer, with field movement all but over except for some spotty applications on cotton in the region. On July 21, one supplier reposted UAN at $7.05/unit FOB Louisville, Ky.
Southeast: Nitrogen continued to dribble on cotton in the region, but sources said there was little new buying activity to test the regional markets. Georgia sources quoted UAN-32 at $200-$205/st ($6.25-$6.41/unit) FOB inland tanks to the dealer. Out of port terminals, the UAN-30 market was tagged at $195-$200/st ($6.50-$6.67/unit) FOB.
AMMONIUM NITRATE
U.S.Gulf: This market has remained inactive, with sources saying it may be a while before actual demand starts to kick in. However, some say higher prices for other nitrogens may eventually give AN legs, though inland prices have been slipping.
Western Cornbelt: Ammonium nitrate pricing was down slightly at $290-$300/st FOB in the region.
Southern Plains: The ammonium nitrate market was tagged at a solid $295/st FOB the port of Catoosa, Okla.
South Central: Ammonium nitrate pricing had reportedly slipped to $285-$295/st FOB regional terminals to the dealer.
Southeast: Ammonium nitrate remained at $315-$325/st FOB in the region.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was steady at $170-$180/st FOB or rail-DEL.
Western Cornbelt: Granular ammonium sulfate was reported at $170-$185/st FOB, with the low also quoted for rail-delivered fill tons. The upper end of the range was quoted in the Iowa market late in the week.
Southern Plains: Granular ammonium sulfate pricing was unchanged at $175-$215/st FOB Texas shipping points, with the low at Freeport and the upper end FOB Littlefield or Plainview, depending on the supplier. Other postings FOB Plainview included coarse grade ammonium sulfate at $205/st, and standard grade at $200/st.
South Central: Granular ammonium sulfate was quoted in a broad range at $205-$225/st FOB in the region, with the low in the Louisiana market and the upper end FOB Memphis to the dealer. Sources said sulfate movement on rice was over in the region, so the next demand will occur next spring on wheat acres.
Southeast: Granular ammonium sulfate remained at $210-$220/st FOB in the region, with reference levels at the $235/st DEL mark in Florida.
PHOSPHATES
Central Florida: Slow business is better than no business, especially if the prices are higher, as was the case in Central Florida last week. Both producers and traders reported sales of truckloads and railcars last week, at prices $5-$10/st FOB higher than the previous week.
Tropical Storm Bonnie was forecast to move across Central and South Florida late last week, but it was not expected to do much more than dump heavy rain in some areas, as conditions did not favor intensification. After rolling across Florida, Bonnie was expected to move into the Gulf of Mexico and across the area of BP’s Deepwater Horizon oil spill. That could pose some additional problems for keeping the well sealed as well as more damage to coastal areas, and could push the ultimate permanent closing back another two weeks.
Phosphate inventories remained quite low last week, and that situation was not expected to change until sometime in October at the earliest. Unfortunately, that would be too late for use in the fall season in most areas.
Agrifos will likely suspend production of phosphate at its Pasadena processing plant around the end of the first quarter or the beginning of the second quarter of next year because of limitations of its phosphogypsum stack.
The Central Florida DAP price range changed from the previous week’s flat $400/st FOB to $410-$415/st FOB last week. CF’s price increased $20/st FOB to $415/st FOB, but the company was said to have nothing available. Mosaic increased its price $10/st FOB to $410/st FOB, and was making sales at that price until it got a $415/st FOB sale late last week. PCS was making sales at “competitive prices.” Agrifos also increased its asking price $10/st FOB, to $450/st FOB for MAP and $440/st FOB for DAP, and railcars were about $5/st FOB less.
U.S. Gulf: The Southwestern Fertilizer Conference at San Antonio begins this week, and odds are a fair amount of trading will be done there. Although prices were higher for DAP/MAP barges on the Gulf’s river system last week, fewer barges were traded.
Early last week, NOLA DAP barge prices had increased between $6/st FOB and $16/st FOB, and by the end of the week, sellers were getting about $5/st FOB more than at the beginning of the period. Around the same time fewer barges were available, and that situation will probably continue into this week.
Meanwhile, producer inventories were tight and will remain that way for the next few months – just in time for the season to end. Pressure was continuing to build to push prices even higher.
Warehouses and terminals were moving their prices upward to reflect the higher barge cost. In most areas, the price was up to $460/st FOB, and CF at Inola was said to be $465/st FOB as of late last week. Dealers were making moves to secure their inventories, which was something they had been reluctant to do earlier in the season.
The higher price for phosphate was apparently gaining acceptance, because the prices of corn for December 2010 and December 2011 were strong and getting stronger last week. Corn on the futures board for December 2010 was up to $3.96/bushel, and reached $4.21/bushel for the same month next year. As one trader put it, the 2010 corn price will be the money farmers have to work with to buy fertilizer and other needs for growing for the 2011 season. With prices for both years up, the picture looks much brighter.
Early last week NOLA DAP barges were purchased as low as $431/st FOB, but toward the end of the week barges were bringing as much as $436/st FOB. Offers by late in the week were running between $440/st FOB and $445/st FOB. Based on confirmed sales last week, the NOLA DAP range was $431-$436/st FOB, compared to the previous week’s range of $415-$425/st FOB. With no negative downward pressure, expect higher prices this week.
Eastern Cornbelt: The DAP market was “on the move,” as one source put it. The dealer market was tagged at $455-$470/st FOB regional warehouses, with the higher numbers reported as the week advanced. One source at midweek put the E. Liverpool DAP price at the $460/st FOB level and moving up.
On July 22, DAP postings from one supplier firmed to $460/st FOB Peoria, Ill., and $465/st FOB Cincinnati. Those prices firmed again on July 23, to $465/st FOB Peoria and $470/st FOB Cincinnati.
10-34-0 was quoted at $340-$355/st FOB in the region.
Western Cornbelt: DAP and MAP prices were firming. Sources quoted the DAP market at $455-$475/st FOB in the region, with MAP roughly $10/st higher. Those sources quoting the low end of the range said higher numbers were imminent. “Some retailers appear to be 65-70 percent bought for fall, with others still holding out,” said one source.
On July 22, one supplier’s DAP postings inched up to $460/st FOB St. Louis and $465/st FOB Pine Bend, Minn. That increase was followed by another on July 23, with postings moving to $465/st FOB St. Louis and $470/st FOB Pine Bend. MAP was listed $10/st higher than DAP at Pine Bend. A Missouri source said late in the week that DAP in his location had firmed to $475/st FOB, with MAP at $485/st FOB.
10-34-0 was tagged at a nominal $335-$350/st FOB in the region.
Southern Plains: Sources quoted the dealer price for DAP in a broad range at $445-$470/st FOB the Tulsa market, with the low reported earlier in the week and the upper end reflecting new list prices as the week advanced. MAP was in the $460-$480/st FOB range, and reportedly in limited supply.
On July 22, one supplier’s phosphate postings at Inola, Okla., firmed to $465/st for DAP and $475/st for MAP. Those prices moved up again on July 23, to $470/st for DAP and $480/st for MAP.
The 10-34-0 market was pegged in the $335-$345/st FOB range in the region.
South Central: DAP out of regional warehouses was pegged in the $445-$460/st FOB range, reflecting a $20-$25/st increase from last report. Suppliers at the low end of the range said a near-term increase was likely given the strengthening NOLA barge market.
MAP was $10/st higher than DAP. There was no market for TSP out of regional terminals.
U.S. Export: No new export transactions of U.S. DAP or MAP were found last week, but inquiries were on the upswing, especially from Latin America.
Producers and traders were either asking more for their product or were not offering at all. One trader said he had moved his price up to $475/mt FOB, but had not made a sale at that level.
Mexico, Brazil, and Argentina were believed to be in the market.
Because no new export sales were made last week, the export DAP price range was unchanged at $455-$465/mt FOB. Prices will be higher this week and inventories will remain low.
POTASH
Eastern Cornbelt: Potash was pegged at $380-$390/st FOB most regional warehouses, reflecting a slight drop from last report. Fill postings from producers remained at $390/st FOB and $400/st rail-DEL in the region.
Western Cornbelt: Several sources said potash deals could be had in the $380-$390/st range FOB regional warehouses to the dealer. An Iowa contact quoted rail-delivered Canadian potash at the $400/st mark for granular tons.
Southern Plains: Intrepid Potash’s prices for potash to agriculture customers FOB Carlsbad, N.M., were quoted at $360/st for 60 percent red granular, $362/st for 62 percent white standard, $365/st for 62 percent white fine standard, and $368/st for 62 percent white granular. Out of regional warehouses, the potash market was quoted in the $380-$390/st FOB range, also down from last report.
Intrepid Potash’s sulfate of potash magnesia (Intrepid Trio™) postings FOB Carlsbad, N.M., are slated to move on Sept. 1 to $193/st for standard and $211/st for granular grade. Those prices represent a $15/st increase from the company’s March 1 list prices.
South Central: Potash pricing out of regional warehouses remained in the $380-$385/st FOB range, with NOLA barges pegged in the $345-$365/st range, depending on point of origin. “We are encouraged by some of the prices we are hearing on potash,” said one source. “Hopefully with this, coupled with corn prices and good weather, maybe we could have a fall for a change.”
Southeast: Potash fill tons remained at $390-$400/st FOB and $405-$412/st DEL, depending on grade and location. The upper end of the delivered range was quoted in North Carolina for white granular potash.
SULFUR
Tampa: The significantly greater drop in prices anticipated two weeks ago changed to a more likely smaller range when delivered prices to China rose last week after falling steadily earlier. That reversal works in favor of sulfur suppliers of molten to Tampa.
A source said the two sides were close to an agreement and a settlement could be made within a few days, which would be around the time of the Southwest Fertilizer Conference. At press time came word that at least one buyer had achieved a $50/lt drop in early negotiations from the second quarter $145/lt.
Mosaic was having a problem – too much moisture – at its Galveston remelting facility, but with drier weather in Texas last week the problem began to evaporate, and the process had returned to normal.
Vancouver: Delivered prices of sulfur to China moved up last week after dwindling during the past month or so. At the same time, oceangoing freight rates were also more favorable.
The Week in Fertilizer Stocks
| Producer | Symbol | Price | Week Ago | Year Ago |
| Agrium | AGU | 59.04 | 60.33 | 40.27 |
| CF Industries | CF | 78.91 | 77.96 | 73.73 |
| Intrepid Potash | IPI | 22.90 | 23.22 | 23.51 |
| Mosaic | MOS | 44.95 | 43.25 | 48.42 |
| PotashCorp | POT | 97.41 | 98.49 | 88.93 |
| Terra Nitrogen | TNH | 73.21 | 73.20 | 102.89 |
| Distribution/Retail | ||||
| Andersons Inc. | ANDE | 34.24 | 33.13 | 29.80 |
| Deere & Co. | DE | 62.81 | 61.08 | 40.17 |
| Scotts | SMG | 45.85 | 46.35 | 39.54 |
SPOT BARGE PRICES
Mosaic says phos rock mine may close; 221 mine workers could go jobless
The Mosaic Co. on July 12 issued a conditional warn notice to 221 mine employees advising them that in 60 days the company’s South Fort Meade, Fla., phosphate rock mine may close indefinitely. The company issued the notice because of a lawsuit filed in the United States District Court for the Middle District of Florida, Jacksonville Division (GM July 12, p. 11) on June 30, 2010, by Sierra Club Inc., Manasota-88 Inc., and People for Protecting Peace River Inc.
The lawsuit, reported in Green Markets last week, contests the issuance by the U.S. Army Corps of Engineers of a federal wetlands permit for the extension of the company’s South Fort Meade, Fla., phosphate rock mine into Hardee County. The suit alleges that the issuance of the permit by the Corps violates several federal laws relating to the protection of the environment, and was arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law.
On July 1, 2010, the court issued a temporary restraining order (TRO) prohibiting the Corps and Mosaic from conducting activities in the waters of the United States in reliance on the federal wetlands permit. The TRO remains in effect through July 28, 2010, unless modified or extended by the court. The court also set a hearing on the plaintiffs’ motion for a preliminary injunction for July 22, 2010. Mosaic anticipates receiving a ruling from the court on the motion for preliminary injunction prior to the expiration of the TRO.
Mosaic said that without the federal wetlands permit for the Hardee County Extension, mining at the South Fort Meade mine cannot continue without adverse consequences. It said three of the mine’s four draglines have been idled awaiting access to the new reserves in Hardee County, and output from the single remaining dragline cannot economically support the operating costs of the mine.
Mosaic said the warn notices were necessary at the present time because of the 60-day notice period required by law prior to layoffs of affected employees, in case the court grants a preliminary injunction halting mining until a trial is held to decide the merits of the lawsuit. Should a preliminary injunction not be entered by the court, work will continue on the Hardee County Extension and the warn notices will be allowed to expire without any layoffs occurring.
Mosaic believes that the plaintiffs’ claims are without merit and intends to vigorously defend the Corps’ issuance of the federal wetlands permit for the Hardee County Extension.
Mosaic shares went down 8 percent after the Monday, July 12 announcement, closing that day at $42.48. The preceding Friday, July 9 close was $46.13. However, by the end of the week most fertilizer stocks, including Mosaic, began to rally, aided by higher crop prices.
Fresh from a new joint venture contract (GM July 12, p. 8) that allows it to access phosphate rock from the new Bayóvar project in Peru, Mosaic is better positioned to source phos rock should the Hardee Extension not proceed as planned.
After years spent in the phosphate mine permitting process, Mosaic has sternly responded to opposition in recent years. Faced with a potential multi-million dollar lawsuit from Mosaic, the Manatee County, Fla., County Commission in 2009 voted 5-2 (GM Jan. 26, 2009) to reverse an earlier decision (GM Sept. 22, 2008) and approved Mosaic’s permit to mine the 2,000-plus acre Altman Tract.
Two-year HOS exemption proposed for NH3; trade groups voice support, but urge more
The Federal Motor Carrier Safety Administration (FMCSA) on July 14 proposed a two-year, limited exemption from the federal hours of service (HOS) regulations for the transportation of anhydrous ammonia from any distribution point to a local farm retailer or to the ultimate consumer, and from a local farm retailer to the ultimate consumer, as long as the transportation takes place within a 100 air-mile radius of the retail or wholesale distribution point.
The proposal, published in the Federal Register and flagged by the Pike & Fischer FR Today alert service, kicks off a 30-day public comment period. The Fertilizer Institute (TFI) and the Agricultural Retailers Association (ARA) both expressed support for the measure, although ARA said it doesn’t go far enough. Both organizations had been working with members of Congress and FMCSA to secure a permanent HOS exemption that would allow the pick-up and delivery of all farm supplies beyond the retail location.
The proposed two-year exemption comes after FMCSA on March 22 announced a limited 90-day waiver with the same provisions to facilitate the transportation of ammonia during the busy spring planting season. The 90-day waiver expired on June 21.
According to TFI, U.S. Reps. Sam Graves (R-Mo.) and Blaine Luetkemeyer (R-Mo.) sent a letter to FMCSA requesting a meeting in an effort to arrive at a permanent solution, including consideration of other farm supplies where there is limited retail storage, requiring truck drivers to transport products beyond the retail location. Following the meeting with FMCSA, a letter signed by 19 members of Congress was sent to FMCSA on July 9.
TFI said it is “collaborating with its members to provide recommendations and support for the two-year exemption.” ARA’s Richard Gupton told Green Markets that ARA appreciates FMCSA “at a minimum addressing this important issue,” but said the two-year exemption “falls short of meeting industry needs as all farm supplies should be covered per the statute that has been in place since 1995 and reaffirmed in the 2005 highway bill.”
In a July 14 alert to members, ARA said that because FMCSA failed to include all farm supplies in the HOS exemption extension, it believes “FMCSA continues to misinterpret Congressional intent of the agricultural exemption.” ARA urged members to submit comments in favor of the broader, permanent exemption. “We believe that if a clear argument is made for other farm supplies such as UAN, pesticides, propane, etc., we will have a better opportunity to include additional farm supplies into FMCSA’s proposed extension,” ARA said.
In the Federal Register notice, FMCSA said it has “long understood that limited farm storage capacity necessitates a ‘just in time’ delivery system from retail distributors of certain farm supplies to farms (or other locations where the farm supply product will be used) during the busy planting and harvesting seasons.” FMCSA said that its understanding of the HOS regulations has been that the exemption applies to the transportation of farm supplies from the local farm retailer to the ultimate consumer within a 100 air-mile radius, but does not extend to deliveries from wholesalers to either local farm retailers or farms.
FMCSA said, however, that this understanding “may not reflect today’s economic reality as it pertains to the transportation of anhydrous ammonia during planting and harvesting seasons. Like farms, local retailers have limited storage capacity and therefore must constantly replenish certain supplies during the planting and harvesting seasons. They are part of the ‘just in time’ distribution system that extends from a wholesaler to the ultimate consumer of the supplies.”
ARA said in its alert that “it is critical for industry to send in substantive comments as safety and enforcement groups will undoubtedly be submitting comments regarding safety concerns.” ARA noted that FMCSA’s Federal Register notice acknowledged “the strong safety record of agriculture movements utilizing the 100 air-mile ag exemption and the accident-free movement of anhydrous during the 90-day waiver.”
In April 2009, the Commercial Vehicle Safety Alliance issued a press release saying the HOS agricultural and utility exemptions should be repealed because they have resulted in higher crash rates and are unsafe (GM May 4, 2009).
FMCSA said that it believes the two-year exemption “would likely achieve a level of safety that is equivalent to, or greater than, the level that would be achieved absent such exemption, based on the terms and conditions imposed.” FMCSA said the proposed two-year exemption would not apply to drivers for motor carriers with “conditional” or “unsatisfactory” safety ratings, however.
Comments on the two-year extension are due on or before Aug. 13, 2010, and can be submitted by fax at 202-493-2251; online at http://www.regulations.gov; or by mail to Docket Management Facility, U.S. Department of Transportation, Room W-12-140, 1200 New Jersey Avenue, SE., 20590-0001.
After the 30-day comment period, FMCSA will adjust the extension appropriately and issue a final proposal.