Pawtucket, R.I.-Three Pawtucket Rhode Island firefighters are out of the hospital and in good condition after inhaling ammonia on the scene of an ammonia leak. An ammonia release occurred June 11 at the Pawtucket, R.I., power plant, where the local press reported three local firefighters were taken to a hospital after inhaling the fumes. A nearby day care center was evacuated successfully, with none of the children experiencing any problem.
All posts by traceybg@gmail.com
Science Channel features CF Industries
Deerfield, Ill.-CF Industries Holdings Inc.’s central Florida phosphate operations were featured earlier this month on the Science Channel, part of television’s popular Discovery Channel. According to CF officials, a film production crew working on an episode of How Do They Do It? spent two 12- to 14-hour days in November at the company’s Plant City factory and its more than 22,000-acre phosphate mine in Wauchula. Spokesman Richard Ghent said that over the course of two days of filming CF showcased its phosphate-to-fertilizer production from rock mining to land reclamation, with an emphasis on the engineering, science, and logistics. What ended up in the segment, however, focused on phosphate as an ingredient in fire extinguishers, which is one of the less common uses of CF’s product. The extinguishers use MAP to snuff out fires as quickly as possible. How Do They Do It? producers indicated they had already done a fertilizer show some time ago about potash in the UK. When they learned about MAP being the product of choice for fire extinguishers, they called CF. Ghent said that How Do They Do It? explores how everyday products are made or operate, from bowling alleys to mountain bikes.
Irrigation water tests may save on nitrogen
St. Paul, Minn.-The Minnesota Department of Agriculture (MDA) is helping farmers save on fertilizer by making available free sampling of their irrigation water to help with calculating the right nitrogen crediting. According to Water Quality Adviser Jennifer Gallus, accurate crediting requires knowledge of the nitrate concentration in the irrigation water and an estimate of the amount of water normally pumped during the period when the crop in question is actively taking up nitrogen. MDA is partnering with the East Central Irrigators Association to provide free nitrate testing during the 2010 irrigation season. Five sites have been designated for dropping off the water samples.
Market Watch
AMMONIA
U.S. Gulf/Tampa: The Tampa price appeared likely to rise for the next round, as world prices were moving upward. This was due in part to the situation in Ukraine, where many manufacturing facilities were on shutdown. The Yuzhnyy price has risen from $290/mt to $310-$315/mt, and that will be felt next month.
The price could even go higher if Ukraine’s price for natural gas from Russia increases. The gas price could rise as much as $1.50/mmBtu, which would result in an increase of around another $30/mt in order to get the plants in Ukraine back in operation.
Prices on the Gulf’s river system stagnated along with sales, due to a lack of need at this time of year. That will probably not change in the next couple of weeks.
Eastern Cornbelt: Anhydrous ammonia remained at $415-$445/st FOB in the region, with the low in Illinois and the upper end in the Indiana and Ohio market.
Western Cornbelt: Anhydrous ammonia was steady at $380-$415/st FOB regional terminals for prompt tons, with the low in Nebraska and the upper end in Missouri.
California: Anhydrous ammonia pricing remained at $520-$525/st truck-DEL in California, with aqua ammonia steady as well at $142/st FOB.
Pacific Northwest: The anhydrous ammonia market remained at $380-$410/st truck-DEL in the Pacific Northwest region for the last done business.
Western Canada: Anhydrous ammonia had reportedly dropped to $506-$550/mt DEL in Western Canada, down some $200/mt from last report, with the lower numbers in Manitoba and Saskatchewan and the upper end of the range reported in Alberta.
Black Sea: Sources report empty tanks in Yuzhnyy. A not surprising situation, said one trader, given that the Ukrainian plants are closed. The closures are because of continued uncertainty over the price of natural gas.
The upside is that the price now seems to be moving up. But it has not gone up enough to ensure it will surpass production costs.
Sources confirmed a deal late last week at $315/mt FOB. They add that $320/mt FOB is on the horizon. But even at $320/mt FOB, many of the producers will be hard pressed to justify starting up again.
Russia and Ukraine reached an agreement on the discount that will be granted to Ukraine on natural gas. The price the discount will be applied to, however, still needs to be settled.
Sources put the market at $310-$315/mt FOB as last week closed.
Middle East: Producers are now asking $305/mt FOB – and not getting it. Sales earlier this month and late last month at $305-$310/mt FOB are now being described as “one off” deals.
Downward pressure on the price has been coming as Indian buyers look to alternative sources of ammonia. Egyptian and Iranian sales into India have placed a ceiling on many deals, and are leading buyers into playing suppliers against each other for the spot ton deals.
Sources now say the best bet on the range is $295-$305/mt FOB.
UREA
U.S. Gulf: Urea prices in the Gulf river market were a little stronger last week, but not much. Granular urea prices for NOLA barges moved up slightly, from $252-$255/st to $255-$260/st FOB. Sources said efforts were being made to push the price even higher but the swaps price was holding steady, which was not a sign it would increase much.
Another brake on the price was the time of year, and minimal interest in using it for fill. The top price for prill was about $5/st FOB higher than granular last week. Some traders said they were waiting and watching the international market and the recent TCP tender, which drew only four bids – and higher prices.
Eastern Cornbelt: Granular urea remained in a broad range at $285-$310/st FOB, with the low quoted by Illinois sources out of spot river locations and the upper end reported in Ohio.
Western Cornbelt: Granular urea was unchanged at $285-$310/st FOB in the Western Cornbelt, with the low out of spot river terminals and the high at inland shipping points.
California: Rail-delivered urea had reportedly dropped to $360-$380/st in California. No current FOB prices were reported.
Pacific Northwest: Effective July 1, Agrium’s urea postings moved to $315-$325/st DEL in Montana and Wyoming, depending on location; $330/st FOB West Woodburn, Ore.; $335/st FOB Acequia and Pella, Idaho, and Washington terminals at Glade, Warden, and Wilson; $340/st DEL in Washington, Oregon, Idaho, and northern Nevada; $350/st DEL in northern and central Utah; and $355/st DEL in southern Utah.
Western Canada: Granular urea was pegged at $380-$405/mt DEL in Western Canada, down more than $100/mt from last report, with the high again reported in Alberta and the lower numbers in Manitoba and Saskatchewan.
Pakistan: Only four companies offered tons in the TCP 150,000 mt tender that closed July 5. Offers confirmed efforts by sellers to move the price up.
The offers in this tender show pricing ideas about $6/mt higher than those made by the same companies in the IPL/India tender, with the exception of Swiss Singapore. Sources say, however, the differences may be in shipping costs and currency fluctuations.
The bottom line, said one trader, is that the industry is sending a firm message that the market is moving up.
The offers were not enough to cover the request at prices TCP could accept. The buyer traditionally does not engage in negotiations with also-ran offers.
A new tender was called late last week for 100,000 mt to close July 22. The tally from the tender follows.
| Offering Companies | Quantity (mt) | Origin | US$/mt CFR | Remarks |
| Transammonia | 50,000 | Open | 291.87 | Gwadar Port only |
| 50,000 (S/O) | Open | 296.47 | As per tender | |
| Helm | 50,000 | Open | 292.00 | |
| Keytrade | 50-60,000 | Open | 305.00 | |
| Swiss Singapore | 50,000 | Open | 308.00 |
Sources say TCP approached Transammonia to get them to remove the Gwadar port requirement on its firm offer. Trammo refused. Helm got the award at $292/mt CFR.
Industry sources are not sure where Helm will get the tons to cover the award. Speculation about the source ranges from a long position out of Yuzhnyy to recent tons from China. A long-shot proposal is material from the Arab Gulf. But with producers arguing they are sold out, any AG cargo would have to have been contracted some time ago.
One trader ruled out Chinese tons as a possibility. He reports that Helm is in serious discussion with a Chinese producer. With freight from China at $24-$25/mt and Chinese urea running at $260-$265/mt FOB, there is the possibility of a profitable deal.
Another trader, however, threw cold water on the Chinese option. He said Pakistan has long-standing questions about the quality of Chinese urea. An attempt to sell Chinese urea to Pakistan last year led to problems for one trader. Quality control agents tested the urea bound for Pakistan at the loading port and ruled it did not meet the TCP standards. Since then, TCP has avoided Chinese product.
Sources say Iranian material is also out. Pakistan is honoring the U.S.-led economic sanctions against Iran. One trader added that religious differences also play a role in Pakistan accepting Iranian tons.
That leaves the Arab producers and the Black Sea. With the Arab Gulf sold out for July, that leaves them out. The terms of the tender indicate that shipment must be within 21 days of the award.
India: STC called a tender to close July 13 for an unspecified amount. The tender is needed to fill in the gaps left by IPL and MMTC in the previous two tenders.
Industry sources estimate that India needs to import about 500,000 mt each month during the application season. So far it is behind by at least 300,000 mt.
Sources expect to see offers just above the non-Iranian material prices offered in the IPL tender that closed earlier this month.
IPL took the bulk of the Iranian tons that will be available for the next couple of months, leaving STC to pick from China, Yuzhnyy, and other Middle East producers.
Chinese urea sales will be operating in a narrow window that opened July 1 and closes Aug. 31. Beginning Sept. 1 until Oct. 15, the export duty will jump back to 110 percent.
Sources report that a number of traders purchased Chinese tons prior to July 1 for loading during the lower-export duty season. Those tons are now heading to ports and being loaded. Some of those tons could easily be part of the STC tender results on Tuesday.
With prices edging upward, sources say the government cap of $310/mt CFR is playing a larger role in what might happen in the tender. The government will pay subsidies only up to $310/mt FOB. Any price above that must be covered by the importer or end user.
Even though some reports out of India now say the government may revisit the limit, many in the industry dismiss the idea that India will give up one of its major negotiating tools at a time when the market is still in flux.
Few traders last week were willing to say that offers into the STC tender will meet or exceed the $310/mt CFR limit.
Middle East: Iran was the big winner in the IPL/India tender. More than 300,000 mt were awarded to Iranian producers. IPL also came out ahead because the price it paid was significantly lower than what all the other offers provided. In the end, the netback was pegged at $243-$245/mt FOB out of Iran.
The deal, done through three trading houses, pretty much sells out Iran for the next couple of months. That means that lower-priced Iranian material will most likely not be a factor in the upcoming STC/India tender.
Arab producers are all claiming to be sold out. Traders say there is no more material for July available from Arab producers. While some traders are taking the claims of full order books with a grain of salt, they seem to be talking more about August tons than anything in the next 15-20 days.
Contracted tons are flowing out at a steady pace, and a number of spot tons have moved out to make everyone look busy. Even the IPL tender from last month showed only two producers willing to offer tons, and they both came in with only a total of 60,000 mt at that.
Sources report that Egypt sold tons at $264/mt FOB early last week or so. Producers in the Arab Gulf are also adamant that they will only talk with people offering $265/mt FOB and up.
Because of the Iranian tons sold to India and smaller deals around the area, Middle East prices are showing an unusually large spread of $246-$265/mt FOB.
Black Sea: The urea price keeps edging up. Some are saying the price is moving too fast to be sustained, while others claim the higher prices are speculation rather than hard deals.
Sources agree $255/mt FOB was done last week. Rumors of $260/mt FOB also circulated at the end of the week. Romania is quoting $260/mt FOB as its starting price.
One trader confirmed the $255/mt FOB deal, and added that the price has been moving so fast it could easily go past $260/mt FOB by Monday, July 12.
The fear of rapidly rising prices is often accompanied by a rapid drop in prices. Some traders have argued that step-by-step increases allow for a sustainable strong market. A jump-up in prices could quickly be cancelled out by a collapse in the market.
One thing that seems to be providing some sort of braking force on the Black Sea market is China. As long as China offers tons in the $260s/mt FOB to major markets such as India, sources say Black Sea producers will be shut out. Chinese sales enjoy better freight rates and timing options.
What the Black Sea, and Yuzhnyy in particular, has to offer is better loading time. Unfortunately for the Black Sea, freight rates seem to be on the rise. In the end, unless a trader nabbed a cargo or two while the price was still in the $230-$240/mt FOB range, sources do not expect to see tons from this area offered to India.
China: Prices are moving up, but not as fast as producers would like. The cost of producing urea keeps climbing at a rate faster than the price of the final product. Sources say producers are hoping the price can more quickly move to the $270/mt FOB level, but so far the price is hovering in the mid-$260s/mt FOB.
Chinese exports are no longer the cheap option for international buyers. The agreement to slowly revalue the renminbi means that the price of the fertilizer will go up without a corresponding positive value to the producers.
At the same time, the producers are under pressure from the government to limit price increases. Farmers are complaining about higher fertilizer prices at a time when they are not getting higher income from their crops.
Sources report that farmers are increasingly using middle men to move their crops to market. As expected, these middle men are bumping up the price of the food goods before they hit the public market. The combination of higher food costs and the revaluation of the RMB are causing a growing concern of inflation in the economy.
For now, the price keeps edging up.
Indonesia: Regional traders are still waiting for the Indonesian government to issue export permits to the urea producers.
NITROGEN SOLUTIONS
U.S.Gulf: Efforts to push up the price for nitrogen solutions were meeting with only limited success last week, trending along the same lines as urea. The price range changed only slightly, from $150-$160/st to $150-$165/st ($4.69-$5.16/unit) FOB. Buyers said they had little reason to go long at this time. A few said the long holiday weekend had slowed business and helped keep prices stable.
Eastern Cornbelt: UAN-32 was pegged at $205-$220/st ($6.41-$6.88/unit) FOB to dealers in the region, depending on location.
Western Cornbelt: UAN-32 remained at $200-$220/st ($6.25-$6.88/unit) FOB regional terminals to the dealer.
California: UAN-32 was tagged at $240-$245/st ($7.50-$7.66/unit) FOB Stockton, Calif., with rail-delivered tons in the $227-$240/st ($7.09-$7.50/unit) range in California. Sources continued to talk of truck-delivered product as high as $250-$260/st ($7.81-$8.13/unit). One source said there should be good movement of UAN on corn for silage well into August in his trade area.
Pacific Northwest: Sources tagged the UAN-32 market at $250-$260/st ($7.81-$8.13/unit) DEL in the region, down roughly $5/st from last report. Effective June 16, IRM’s postings for UAN-32 moved to $255/st ($7.97/unit) DEL in Eastern Oregon and Washington.
Western Canada: UAN-28 was quoted at $231-$247/mt ($8.25-8.82/unit) DEL, with the lower end in Manitoba and Saskatchewan and the higher numbers reported in Alberta and British Columbia.
AMMONIUM NITRATE
U.S. Gulf: Lack of demand was keeping ammonium nitrate prices in check last week, and that situation was not likely to change very soon. There was nothing to push the price downward, either, however, so the price range did not change.
Western Cornbelt: Ammonium nitrate pricing to the dealer remained at $305-$325/st FOB in the region.
California: No market was reported for ammonium nitrate in California. Sources talked of brisk CAN-17 movement in early June. The dealer market for CAN-17 had reportedly dropped to $242/st FOB on the low end, with the high pegged at $255/st FOB.
Pacific Northwest: Ammonium nitrate was a nominal $334-$340/st rail-DEL in the region, and CAN-17 was steady at $235-$245/st DEL.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate remained at $170/st FOB or rail-DEL based on dealer pricing for summer fill tons, with mid-grade sulfate referenced at $155/st FOB or rail-DEL. One source put the low end of the DEL range for granular sulfate at the $161.50/st level after discounts.
Western Cornbelt: Granular ammonium sulfate was pegged at $170/st FOB or rail-DEL, with discounts bringing the low end of the delivered range to $162/st.
California: Ammonium sulfate was unchanged at $220-$247/st FOB, with the low for standard grade and the upper end for granular product in desert locations.
Pacific Northwest: Ammonium sulfate pricing was down from last report, with sources tagging the Pacific Northwest market at $220/st FOB and $225/st DEL. Effective July 2, IRM’s postings for granular and regular grade ammonium sulfate moved to $220/st FOB and $225/st DEL in Oregon, Washington, Idaho, and Montana. Agrium’s July 1 ammonium sulfate postings included $225/st DEL in Washington, Oregon, Idaho, Montana, Wyoming, Utah, and Nevada, and $220/st FOB warehouses in Washington, Oregon, Idaho, Utah, and Nevada.
Western Canada: Granular ammonium sulfate pricing slipped to $295-$300/mt DEL in Western Canada, down $30/mt from last report.
PHOSPHATES
Central Florida: Railcars were loaded at Central Florida last week, but only on a formula basis, and no new prompt sales were made, although a few deals for truckloads were done here and there.
Sources said CF Industries told its customers that it had no DAP available for sale and would not until September. Meanwhile, Mosaic had little available for prompt shipments due to volumes that need to be loaded for export. PCS Sales was receiving more inquiries for domestic buyers than in past weeks, although it, too, was busy filling existing orders.
The July Fourth holiday took a toll on transactions in many of the areas serviced from Central Florida, and more than a few in the industry took a few extra days off, which did little to stimulate business.
With a lack of prompt, new sales last week, the Central Florida DAP price range remained unchanged at $395-$400/st FOB. CF Industries’ price was $395/st FOB. However, Mosaic increased its asking price from $395/st to $400/st FOB. PCS was making sales at “competitive prices.” Agrifos’ prices were unchanged at $440/st FOB for MAP and $430/st FOB for DAP, and railcars were about $5/st less.
U.S. Gulf: With phosphate inventories low, some buyers were moving to grab up available supplies, and that was pushing up the market last week. The longer the week went on, the higher the price became.
Interestingly, many said they had seen no activity, while others said they were making far more sales than normal, especially for this time of year. At the same time, many extended their vacation time after the holiday weekend.
The greater interest in securing phosphate for the fall season began shortly after the USDA announced its revised estimate for the corn crop. The report said that fewer acres were planted, yields would be essentially unchanged, and inventories of corn were down. All of that meant farmers would – or should – do better financially than originally anticipated. Late last week the price of corn was closing in on $3.90/bushel, and that was encouraging news for both farmers and phosphate producers.
However, a couple of sources questioned the government’s estimate on yields, and said they should be higher than anticipated. If that turns out to be the case, those who commit to selling on the futures market earlier may prove to be the winners.
While prices for NOLA phosphate barges were heading upward, warehouse prices were holding firm in the $430-$450/st FOB range. That could change dramatically if the upward surge continues for NOLA barges.
Meanwhile, phosphate producers in the West – Simplot and Agrium – were making DAP available at prices low enough to keep the big companies from the East away.
NOLA DAP barges could be purchased and were as low as $408/st FOB, but began to rise, and offers to sell were being made at $410-$415/st FOB range later in the week. Based on actual sales last week, the NOLA DAP range was $408-$415/st FOB, compared to the previous week’s range of $405-$410/st FOB.
Eastern Cornbelt: DAP was unchanged at $435-$450/st FOB regional warehouses, with MAP $10/st higher. 10-34-0 remained at $335-$355/st FOB in the region.
Western Cornbelt: DAP was steady at $435-$445/st FOB, with MAP $10/st higher. 10-34-0 was pegged at $325-$350/st FOB in the region.
California: Phosphoric acid was tagged at $8.45/unit DEL for both super phosphoric acid (SPA) and merchant grade acid (MGA). Simplot was also referencing MGA at $8.65/unit FOB in the state. Effective July 1, Agrium’s phos acid postings moved up $40/st from June reference levels, to $845/st rail-DEL for both SPA and MGA in California and Arizona.
Effective July 1, Agrium’s MAP postings moved down to $480/st FOB and $485/st rail-DEL in California and Arizona.
16-20-0 was pegged at 324-$331/st FOB, and 10-34-0 was quoted at $370-$390/st FOB in the state.
Pacific Northwest: DAP and MAP were quoted by Washington sources at the $475/st DEL level, down $10-$15/st from last report. 16-20-0 was steady at $319-$325/st DEL. 10-34-0 pricing to the dealer was down slightly at $360-$370/st FOB in the region.
Effective July 1, Agrium’s MAP postings moved to $465/st DEL in Montana and Wyoming; $470/st DEL in southern Idaho, Utah, Nevada, and Oregon’s Malheur County; and $470/st FOB and $475/st DEL in Washington, northern Idaho, and Oregon excluding Malheur County.
SPA and MGA were tagged at $8.45/unit rail-DEL in the region. Agrium on July 1 moved its phos acid postings up $40/st from early June reference levels, to $845/st rail-DEL for both SPA and MGA in Idaho, Montana, Nevada, Oregon, Utah, and Washington.
Western Canada: MAP pricing slipped to $570-$605/mt DEL in the region, with the low again in Manitoba and Saskatchewan and the upper end in Alberta and British Columbia.
No current prices were reported for 10-34-0 in the region last week.
U.S. Export: With PhosChem sitting on the sidelines with enough orders to keep them going for the next couple of months, no export phosphate sales were made last week. If prices start to rise, watch for PhosChem to find enough to get back to business.
However, both Argentina and Brazil were said to be at least kicking tires and may be in the market sometime soon. Ocean-going freight rates have been down in recent weeks, which could help to increase FOB prices when deliveries are actually made.
With no new sales last week, the export DAP price range was unchanged at $450-$460/mt FOB.
POTASH
Eastern Cornbelt: Potash was quoted at $390/st FOB regional warehouses and $400/st rail-DEL in the region, based on summer fill postings from Agrium and PCS Sales for the July 1 through Sept. 30 fill period. Agrium’s postings FOB Vade, Sask., moved to $345/st for standard and $350/st for red premium potash for that period, while PCS moved its Saskatchewan mine postings down to $345/st for standard, $350/st for granular, and $357/st for soluble and white granular. PCS said a $20/st increase is slated for Oct. 1.
Western Cornbelt: Potash pricing was unchanged at $390/st FOB and $400/st DEL based on summer fill postings from producers.
California: Potash pricing had slipped as well, with sources quoting delivered tons at the $420/st level in the Central Valley on the low end. Potassium nitrate pricing remained at $929-$996/st FOB, with the low for bulk tons and the upper end for bagged product. Sulfate of potash (SOP) pricing quoted at $620-$650/st FOB for bulk tons.
Pacific Northwest: Potash pricing had slipped in the Pacific Northwest, with sources quoting the dealer market at $410-$425/st DEL in the region, depending on grade and location.
Agrium’s red premium potash postings for the July 1 through Sept. 30 period include $405/st FOB and $415/st rail-DEL in southern Idaho, Utah, and Oregon’s Malheur County; $410/st FOB and $420/st rail-DEL in Washington, the Idaho Panhandle, and Oregon excluding Malheur County and the Willamette Valley; and $415/st FOB and $425/st rail-DEL in Oregon’s Willamette Valley.
Western Canada: Potash to Canadian customers FOB Saskatchewan mines had dropped to $405/mt FOB, with warehouse locations in Manitoba reportedly referencing dealer tons at the $420/mt FOB level.
SULFUR
Tampa: Negotiations for new third-quarter prices for molten sulfur delivered to Tampa finally got underway last week, although no progress was reported. A rumor held that one supplier had reached an agreement with a phosphate producer at $115/lt, but that could not be confirmed.
Meanwhile, supply and demand remained in balance as refineries were cranking out product at a rate of 86.7 percent of capacity, according to API. The summer driving season appears to be healthier this year than last, although the prolonged recession will still hurt. Still, any improvement was welcome.
A recent ruling by the Florida Supreme Court could have an impact on BP’s Deepwater Horizon spill in the Gulf. In a case involving the spill of highly acidic water that reached Tampa Bay in 2004, the court ruled fishermen do have the right to sue Mosaic Co. for losses they suffered due to the diminished supply of fish in the bay. Two lower courts had ruled in favor of Mosaic. Cases will surely be filed in the oil spill in the state, and that will not be favorable for the oil company.
Correction: A spot price for Tampa published in Green Markets for the past few weeks was withdrawn this week because sources now say it was not actually done for that market. Instead, it was made elsewhere on the Gulf Coast and adjusted to reflect a Tampa price.
The Week in Fertilizer Stocks
| Producer | Symbol | Price | Week Ago | Year Ago |
| Agrium | AGU | 55.38 | 49.60 | 36.73 |
| CF Industries | CF | 73.52 | 65.49 | 70.73 |
| Intrepid Potash | IPI | 21.37 | 19.95 | 24.73 |
| Mosaic | MOS | 44.72 | 38.90 | 40.67 |
| PotashCorp | POT | 90.31 | 85.31 | 90.60 |
| Terra Nitrogen | TNH | 69.60 | 67.62 | 91.68 |
| Distribution/Retail | ||||
| Andersons Inc. | ANDE | 32.79 | 32.53 | 29.53 |
| Deere & Co. | DE | 57.26 | 55.21 | 35.84 |
| Scotts | SMG | 45.53 | 44.94 | 34.27 |
SPOT BARGE PRICES
Pryor nitrogen plant expected offline for 90 days due to fire; later leak was very minor, says CEO
Pryor Chemical Co.’s anhydrous ammonia and UAN plants in Pryor, Okla., are both offline due to a June 18 fire that destroyed the ammonia plant’s primary reformer. LSB Industries Inc., Oklahoma City, which owns the facility, said the fire was immediately extinguished and there were no environmental releases as a result of the incident. LSB said it was not aware of any injuries resulting from the fire.
LSB is determining the extent of the damages, and based upon its current assessment, anticipates that due to lead times for replacement parts, the repairs will be completed in approximately 90 days. LSB has notified its insurer of this event. The company’s insurance policy, which provides replacement cost coverage, has a $1 million deductible for property damage. The company’s business interruption insurance covering certain lost profits and extra expense has a 30-day waiting period with a $250,000 deductible.
In addition to the fire, there was another incident at the Pryor plant on June 24, which LSB officials described as “a very minor event that produced a lot of misinformation.” LSB CEO Jack Golsen told Green Markets that an anhydrous ammonia leak from a rupture in a pipeline was under control by the time the fire department arrived.
“There was never an evacuation of any surrounding plants,” Assistant Fire Chief Sherman Weaver told the local press. “The fire department never issued an evacuation order for anybody.” That, Golsen added, was a far cry from reports that the plant had been evacuated and people were being advised to stay indoors. “It was a short-term event that was quickly contained,” according to Golsen. “We evacuated the people from the plant for safety precautions. They were actually out for about 15 to 30 minutes and everyone went back to work. When the alarms go off you never know what you’re dealing with, so we just got everybody out.”
Golsen said the ammonia pipe had a rupture that was about ¾ of an inch long. Golsen noted that the Pryor plant has been producing ammonia commercially since the first of the year, “but not in the quantities that we expect to be producing eventually.” He added that “We don’t expect to be in production for another 90 days (because) we still need to make some repairs not connected with this event.”
LSB brought the long-idled Pryor ammonia plant back up in January (GM Jan. 25, p. 10) in hopes of producing ammonia and UAN. UAN capacity is 325,000 st/y, with an additional 35,000 st/y of ammonia available for the market once the UAN is produced. Koch Nitrogen has an agreement to market the UAN (GM May 11, 2009). UAN production was initially slated to begin in 2009; however, the startup date kept being pushed back.
Golsen told analysts in May that Pryor was not yet at targeted quantities (GM May 17, p. 1). “If we were producing at targeted quantities, we’d be making substantial profits today, but we’re not quite doing that. So at this point, I would say we’re virtually covering our costs.” He said the company would put out a press release when UAN production got to a sustained basis. It has not yet done so.
“Startup delays were primarily a result of unanticipated equipment issues that were discovered after we began the startup process,” said Barry Golsen, LSB vice chairman and president, in May. “Some of these were due to vendor deficiencies and some were just not possible to foresee until we activated the plant.” He said that when equipment issues arose, in some cases there were significant vendor lead times. In May, LSB was hopeful those issues were behind it.
Producers announce summer fill potash postings; new prices also circulate for AS, urea, MAP, phos acid
Several potash producers trotted out their summer fill programs as June came to a close, with lower prices announced for mine and warehouse locations and on a delivered basis.
PCS Sales on June 28 announced its new potash postings for the July 1 through Sept. 30 fill period. The company’s published prices FOB Saskatchewan mines will drop to $345/st for standard, $350/st for granular, and $357/st for soluble and white granular. A $20/st increase is slated for Oct. 1.
For the same July 1 through Sept. 30 period, PCS Sales’ warehouse postings for granular potash will move to $390/st FOB at locations in Iowa, Illinois, Indiana, Missouri, Ohio, and Wisconsin, $397/st FOB Chesapeake, Va., and $400/st FOB Baltimore, Md.
On a rail-delivered basis from July 1 through Sept. 30, granular potash postings from PCS Sales include $400/st in the Midwest and $410/st in the Southeastern and Northeastern U.S. The $20/st increase on Oct. 1 also applies to warehouse and rail-delivered postings.
Agrium also reposted potash for the July 1 through Sept. 30 shipping period, with standard grade potash moving to $345/st and premium grade to $350/st FOB Vade, Sask.
Agrium’s warehouse postings for red premium potash during that period move to $390/st FOB terminals in Illinois, Indiana, Iowa, Michigan, Ohio, Minnesota, Missouri, Nebraska, North Dakota, and Florida; $397/st FOB Wilmington, N.C.; and $405/st FOB Georgia locations at Americus, Bainbridge, Savannah, and Tifton.
On a rail-delivered basis, Agrium’s red premium potash postings for July 1 through Sept. 30 include $400/st in Midwest, Southern Plains, and Northern Plains locations, and $410/st in southern and eastern U.S. locations.
In the Western U.S., Agrium’s red premium potash postings for the July 1 through Sept. 30 period include $405/st FOB and $415/st rail-DEL in southern Idaho, Utah, and Oregon’s Malheur County; $410/st FOB and $420/st rail-DEL in Washington, the Idaho Panhandle, and Oregon excluding Malheur County and the Willamette Valley; and $415/st FOB and $425/st rail-DEL in Oregon’s Willamette Valley.
New, lower postings were also in effect for ammonium sulfate. Honeywell on June 23 lowered its ammonium sulfate postings to $170/st for granular and $155/st for mid-grade on an FOB warehouse or rail-delivered basis in Illinois, Wisconsin, Minnesota, Iowa, Missouri, Nebraska, and Kansas. DSM Chemicals also moved its granular ammonium sulfate posting in the Midwest to $170/st DEL less a 5 percent discount.
And effective June 28, American Plant Food Corp.’s granular ammonium sulfate postings in Texas dropped $40/st to $175/st FOB Freeport, $185/st FOB Galena Park, $200/st FOB Fort Worth, and $215/st FOB Littlefield. APF’s coarse ammonium sulfate postings dropped on that date to $165/st FOB Freeport, $175/st FOB Galena Park, $190/st FOB Fort Worth, and $205/st FOB Littlefield, while standard grade ammonium sulfate postings moved to $160/st FOB Freeport and $200/st FOB Littlefield. APF’s N-Pac Compacted posting fell on June 28 to $190/st FOB Galena Park.
Agrium also reposted ammonium sulfate, moving on July 1 to $225/st DEL in North Dakota, Minnesota, Wisconsin, Washington, Oregon, Idaho, Montana, Wyoming, Utah, and Nevada, and $220/st FOB warehouses in Washington, Oregon, Idaho, Utah, and Nevada.
Agrium released new MAP postings in the Western U.S. as well, effective July 1. These include $465/st DEL in Montana and Wyoming; $470/st DEL in southern Idaho, Utah, Nevada, and Oregon’s Malheur County; $470/st FOB and $475/st DEL in Washington, northern Idaho, and Oregon excluding Malheur County; and $480/st FOB and $485/st rail-DEL in California and Arizona.
Not all new fertilizer postings were moving down, however. Effective July 1, Agrium’s phosphoric acid postings moved up $40/st from June reference levels to $785/st railDEL for both super phosphoric acid (SPA) and merchant grade acid (MGA) in Colorado, Iowa, Kansas, Minnesota, Nebraska, New Mexico, the Dakotas, Oklahoma, Texas, and Wyoming. Agrium’s SPA and MGA postings in the Western U.S. also firmed $40/st on July 1, to $845/st rail-DEL in Arizona, California, Idaho, Montana, Nevada, Oregon, Utah, and Washington.
IFA gives 2010-2014 outlook
The International Fertilizer Industry Association (IFA) released publicly on July 2 its Fertilizer Outlook 2010 – 2014. The report highlights that, after a gloomy year in 2009, fertilizer demand is seen firmly rebounding in 2010 and growing at sustained rates over the next four years. On the fertilizer supply side, the growth of capacity is slower than anticipated last year because of numerous delays in announced projects. However, in the long-term, a potential supply surplus for nitrogen (N) and potassium (K) fertilizers can be expected due to a faster increase in capacity compared to that of demand.
After two consecutive bumper crops, it is anticipated that the 2010 world cereal output will reach a new record of 2.28 billion mt (Bt), according to the Food and Agriculture Organization of the United Nations. With world cereal utilization seen at some 2.25 Bt, global grain stocks would remain unchanged and relatively low at the end of the 2010/11 marketing campaign. In response to relatively stable supply/demand conditions since the beginning of 2009, international cereal prices have remained fairly constant, above pre-crisis levels. A return to more stable crop prices is making it less risky for farmers to invest in fertilizers than a year ago, resulting in a more rapid recovery in phosphate (P) and potassium (K) demand than had been foreseen.
In the medium term, increasing agricultural production will be required to meet global demand for food, feed, fiber and bioenergy. Yield gains are expected to contribute to most of the output growth, as scope for expanding cultivated land in the next five years is limited and sustainable intensification of the currently cultivated land is the best option for mitigating climate change and preserving biodiversity. Meeting increasing demand for agricultural products and reducing the environmental footprint of farming will require both greater and more efficient fertilizer use.
With the progressive economic recovery and a return to more favorable and more stable agricultural market conditions, world fertilizer demand in 2010/11 is forecast to increase by 4.8 percent over 2009/10, to 170.4 million mt nutrients. Demand for N, P, and K fertilizers is seen growing by 1.9 percent, 4.5 percent, and 18 percent, respectively. The positive agricultural market fundamentals over the medium term are expected to stimulate world fertilizer demand, which is projected to reach 188.3 million mt in 2014/15. The bulk of the increase in demand would come from Asia and, to a lesser extent, from the Americas.
Regarding fertilizer production, the conditions in the global fertilizer market stabilized in 2009, as fertilizer demand started to recover by mid-year in the main consuming countries. However, total sales and production dropped to levels unprecedented for more than a decade due to important inventory carry-overs in worldwide distribution systems. Global capacity increased in key exporting regions, but at modest rates compared with those of the previous years.
Capacity growth in the short-to-medium term is seen as expanding at a slower pace than projected in 2009. Delays and some cancellations have reduced the announced expansion of capacity and the commissioning of new projects by 6 to 24 months. However, interest in investing in the fertilizer sector appears unabated. In the past year, several new projects have been announced for the near-term since many countries continue to promote new capacity and to foster self-sufficiency. A wave of mergers and acquisitions has characterized the restructuring of the sector over the past 12 months. It is anticipated that this trend will continue in the short term. Energy prices, government policies, and environmental regulations have the potential to influence future global fertilizer supply. The mid-term market perspectives vary from one product to another:
- In the nitrogen sector, much of the increase in ammonia capacity is associated with new urea capacity, which is forecast to grow by 51.3 million mt, or 30 percent over 2009, to reach 222 million mt in 2014. The forecast sees a large potential urea surplus, accelerating after 2012, if all the announced projects are realized according to their respective schedules. The global nitrogen supply/demand balance would show a potential surplus of close to 4.7 million mt N in 2010, accelerating to 16.7 million mt N in 2014.
- In the phosphate sector, the global capacity for the main processed phosphate fertilizers is projected to be 42.3 million mt P2O5 in 2014, representing a net increase of 8.2 million mt P2O5 over 2009. Over the next five years, close to 40 new MAP, DAP, and TSP units are expected to be constructed in ten countries. Expansion of DAP capacity would account for threequarters of this increase. While major DAP capacity expansions will be taking place, it is projected that demand growth would absorb most of this new capacity through 2014.
- In the potash sector, global sales collapsed in 2009 as major carry-over stocks were available in several consuming countries. However, a strong rebound in demand and moderate capacity growth should be picking up in the short term. Widespread interest in new potash capacity has been witnessed in 2010, with close to 100 projects being carried out in about 25 countries. Potash balances show a sustained surplus through 2014, but the expected growth in capacity is likely to be absorbed by the forecast increase in demand.
In the short term, world supply/demand conditions are expected to include resilient annual potential surpluses of phosphate rock, potash, and urea due to the emergence of large capacity in the main exporting regions. Over the next five years, market conditions for phosphate fertilizers, notably DAP, merchant phosphoric acid, merchant ammonia, and sulfur, are seen as relatively balanced due to firm demand growth and a gradual increase in capacity. Over the period 2009 to 2014, global trade will expand by 15 to 33 percent, depending on the nutrient products and regions. In the medium term, the industry is taking the necessary measures to provide the fertilizer supply needed by farmers worldwide.
U.S. sees record-high soybean crop, second highest corn acreage on record
U.S. farmers planted 78.9 million acres of soybeans this year, exceeding last year’s planted area by 1.4 million acres, or 2 percent, and setting a new record high, according to the Acreage Report released June 30 by USDA’s National Agricultural Statistics Service (NASS).
Aided by favorable weather conditions early in the season, farmers in the Northern Plains, the Western Cornbelt, and the Northeast regions upped their soybean acreage this year. Record-high planted acreage was reported in Kansas, Nebraska, New York, and Pennsylvania, while Minnesota and Oklahoma tied their all-time record highs. Iowa continues to lead all states in total soybean acres with 10.2 million acres.
Compared with last year, soybean acreage increased by 300,000 acres or more in Iowa, Kansas, Minnesota, and Nebraska. The states with the largest declines compared with last year are Arkansas, down 270,000 acres, and North Carolina, down 250,000 acres.
U.S. farmers also planted a near record-breaking 87.9 million acres to corn this spring, up 1.4 million acres from last year but down 1 percent from March projections. The report noted that this marks the second consecutive increase in planted acreage to corn and the second highest acreage on record since 1946, behind only 2007.
Illinois and Kansas reported the largest increases in corn acres, with both states planting 600,000 acres above last year. Other notable increases in corn acreage this year were shown in Indiana, up 400,000 acres; Missouri, up 300,000 acres; and Ohio, up 250,000 acres. While Iowa continues to lead the nation with 13.3 million corn acres, the state experienced a decrease of 400,000 acres from 2009, which NASS attributed primarily to the increase in soybean acreage. Nebraska and South Dakota were also down 350,000 acres from the previous year.
The report also shows an increase in cotton acres for the first time since 2006, which NASS attributed in part to advantageous weather and high prices. U.S. farmers planted 10.9 million acres of cotton this year, up 1.8 million acres, or 19.2 percent, from 2009. Increased acreage was widespread throughout most of the Cotton Belt, the report said, with increased planted acres observed in all states except Louisiana, where acres are unchanged from last year’s record low. In Alabama, California, Mississippi, North Carolina, South Carolina, and Tennessee, acreage planted to cotton increased by more than 30 percent, with California experiencing the largest percentage gain with a 76 percent increase.
Despite the increases in corn, soybean, and cotton acres, total U.S. crop area is down slightly, decreasing by 0.1 percent, or 360,000 acres, from last year. NASS’s acreage estimates are based on surveys conducted during the first two weeks of June on approximately 11,000 segments of land and from a sample of approximately 71,500 farm operators across the U.S.
All wheat planted area in the U.S. is estimated at 54.3 million acres, down 8 percent from 2009, and the lowest U.S. total since 1971. The 2010 winter wheat planted area, at 37.7 million acres, is 13 percent below last year, the report said.
NASS also released the quarterly Grain Stocks report on June 30, showing corn stocks up 1 percent from June 2009, soybean stocks down 4 percent, and all wheat stocks up 48 percent. Despite the increase in corn stocks from this time last year, there was a 3.38 billion bushel disappearance between March and May. This is the highest disappearance on record for corn during this quarter, NASS said.