AMMONIA
U.S. Gulf/Tampa: While there was no new business reported for Tampa last week, there was much speculation on the direction of prices. Sources said falling prices for Yuzhnyy and unexpected tonnage in Trinidad may lead to lower numbers for Tampa buyers for January shipments.
The new Trinidad AUM plant is still pumping out excess ammonia, while the UAN plant, which had been slated to come up in November, is still not in production, according to sources. This situation is expected to continue into January, making more tonnage available for the Tampa market.
The Direct Hedge (DH) paper market as of Dec. 10 had Tampa at $320-$330/mt DEL, with January-March at $315-$325/mt DEL.
Eastern Cornbelt: Anhydrous ammonia was steady at $360-$390/st FOB for spot tons and $425-$435/st FOB regional terminals for spring prepay. One supplier was offering forward contract ammonia for January through May as high as $440-$445/st FOB in the region last week. One source said most suppliers were agreeing to refunds of unapplied fall prepay ammonia.
Western Cornbelt: Spot ammonia pricing remained at $340-$360/st FOB in the region, although there was little spot business to test those numbers and the inclement weather most likely ended the fall season. Spring prepay offers for ammonia were generally quoted in the $390-$410/st FOB range in the region. One supplier was referencing forward contract tons as high as $410-$430/st FOB regional terminals for January through May shipments, with the low in Nebraska.
Northern Plains: North Dakota sources continued to quote delivered ammonia at the $375/st mark for cash tons, with prepay reportedly being offered at $435-$450/st DEL. Agrium’s anhydrous ammonia postings firmed on Dec. 10 to $480/st FOB and $500/st DEL in the Leal, Velva, Grand Forks, and Beulah sales area in North Dakota. One supplier was offering forward contract ammonia for January through May at $435/st FOB in Minnesota and $440/st FOB North Dakota terminals.
Eastern Canada: One source tagged the anhydrous ammonia market at $420/mt FOB in Ontario for prompt tons, with indications that a spring prepay program would be out by the middle of December.
Western U.S.: Agrium’s anhydrous ammonia postings firmed on Dec. 10 to $480/st rail-DEL in Oregon, Washington, and northern Idaho; $500/st truck-DEL in Oregon and Washington east of the Cascades, and in northern Idaho; $505/st rail-DEL in southern Idaho and Utah; and $530/st truck-DEL in Montana and northern Wyoming.
Black Sea: Reports are circulating that at least one deal was done below $290/mt FOB. Sources say Transammonia bought the cargo. Sources also report another deal at $275/mt FOB, with bids now hitting $265/mt FOB.
Asian sources have been saying for a while that the ammonia market would soon start to soften as Indian and American demand waned in the winter months. One source said the Trammo deal is most likely the first indicator of that downturn.
Ukrainian producers will not welcome any drop in the price. Industry observers say the producers need $300-$320/mt FOB for their ammonia to break even. Prices had moved into the low $300s/mt FOB last month and then hit a plateau. Some of the ammonia producers had shifted to more urea production to take advantage of growing demand in that market. Others just shut down.
With the latest reports, the price seems to be on a slippery slope. The market is now called at $275-$280/mt.
As of Dec. 10, the DH paper market had Yuzhnyy at $280-$290/mt FOB for December-March.
Middle East: Demand from East Asia is helping keep the Middle East market from sliding. Sources report Indian demand will start easing off in the next week or so in a seasonal downturn.
Producers continue to turn out as many tons as possible. The Sabic facilities that were down last month are slowly coming back online. One source said the plants should reach full production by the end of the month.
Because the material flowing out of the area at this time is nearly all done under a formula basis or contract, it will take a while to see if the apparent slide in the Black Sea price will carry over to the Middle East.
UREA
U.S. Gulf: Granular barge prices retreated last week, with several players calling new trades at $310/st or below. Several factors were cited, including cold, bone-cracking weather across much of the country that froze fertilizer application and corn harvesting in its tracks. This will likely serve to push more fertilizer application into 2010, and also jeopardize the value of the corn still to be harvested.
Other factors last week included a flush of imports, and lower prices on the paper market. On the barge market, it could have been that prices just ran up too high for many buyers to take the risk that prices would be lower now than in 2010.
In addition, sources pointed to international factors for lower NOLA price ideas, including reports that China would lower and extend its export duty, as well as India’s IPL resolve to hold the line on higher urea prices.
As of Dec. 10, the DH paper market had NOLA granular barges at $310-$315/st FOB for December and January, $315-$320/st FOB for February, and $320-$330/st FOB for March-June.
Eastern Cornbelt: The granular urea market had reportedly firmed to $350-$360/st FOB in the region, with the higher numbers more prevalent as the week advanced.
Western Cornbelt: The granular urea market was tagged at $350-$355/st FOB in the region, with the low reported in St. Louis and the upper end quoted in Iowa to the dealer. One supplier was referencing forward contract urea at $365/st FOB Inola, Okla., for January and February, with a $5/st increase for March and April.
Northern Plains: Granular urea prices had reportedly firmed to $360-$380/st FOB in the region, with the low at Minneapolis and the higher numbers in the Dakotas. Spring prepay was quoted at the $375/st level FOB Minneapolis. Agrium’s granular urea postings moved up again on Dec. 10, reflecting a $20/st increase from the company’s Nov. 27 postings. New reference levels include $380/st FOB North Dakota terminals at Alton, Carrington, Colfax, Scranton, and Grand Forks, and $385/st rail-DEL in Minnesota, Wisconsin, and the Dakotas.
One supplier was offering forward contract urea for January and February at $375/st FOB Pine Bend, Minn., and $395/st DEL in North Dakota and northern Minnesota, with a $5/st increase for March and April shipments.
Northeast: Granular urea pricing had reportedly firmed to $360/st FOB Philadelphia, with dealer postings in upstate New York quoted as high as $390/st FOB last week.
Eastern Canada: The granular urea market was pegged at $445-$460/mt FOB in Eastern Canada, depending on location and supplier.
Western U.S.: Agrium raised its granular urea postings again on Dec. 10, moving up $20/st from Nov. 27 list prices. New postings include $380-$395/st DEL in Montana and Wyoming, depending on location; $400/st FOB warehouses at Acequia and Pella, Idaho, and at Washington locations at Glade, Warden, and Wilson; $405/st DEL in Washington, Idaho, Oregon, and northern Nevada; $415/st DEL in northern and central Utah; and $420/st DEL in southern Utah.
China: Rumors about changes in the export duty circulated widely at the IFA regional conference. By the time conference participants were flying home, most in the industry were taking the rumors as gospel. Sources report Beijing is planning to lower the off-season export duty from the current 10 percent to 7 percent effective Jan. 1. At the same time, the off-season time period will be altered.
The 2009 export duty plan has the current duty of 10 percent expiring Dec. 31. While many in the industry expected the off-season rate to continue through January, the lack of any guidance from Beijing prompted cautious traders to plan on the duty being increased to 110 percent.
Now, if the rumors are to be believed, not only will January remain in the off-season, but so also will the first 15 days of February. Additional small changes in the schedule for next year are also expected, say sources.
The new rate of 7 percent would make Chinese material even more competitive in the global marketplace, said one trader.
Sources were not sure what might happen when the duty is increased.
The 2009 plan specifically said that the high-season rate would include a 100 percent surtax. Under that line of thinking, the high-season rate in 2010 would be 107 percent instead of 110 percent.
Most seem to expect an announcement this week – as early as Monday, Dec. 14, or as late as Friday, Dec. 18. One trader said he would not be surprised if it was made as late as Dec. 30.
The move to lower the export duty is closely related to balancing stockpiles and prices, said one source.
Beijing central planners have been working to fine-tune their plans to ensure that farmers get a plentiful supply of urea at a reasonable price, while at the same time making sure urea producers earn enough to pay for the inputs without government subsidies.
This dual purpose in fertilizer planning has caused some problems for the economic planners. While officially denying urea plants direct central government subsidies, some local governments provide subsidies of various types to ensure that even inefficient plants keep running in order to avoid large-scale unemployment in their areas. The central government then provides subsidies to the local governments.
Sources report that the changing prices and potential changes in export policy is causing some problems placing orders with Chinese exporters.
Reportedly, many ports have full warehouses without any buyers lined up.
Sources also report that some producers have torn up agreements with international traders when the international price moved up. One trader said he would find it very hard to justify doing a deal with a Chinese producer until the new export policy is announced and the international market settles down.
India: Sources say a lot of the talk during the IFA regional meeting in Malaysia last week focused on the bullish nature of the international urea market. Industry players pointed to the high numbers offered in the IPL tender that closed last week.
It was apparent that IPL was not happy with the numbers offered. Almost immediately, the buyer counter-bid at much lower levels.
By the end of last week sources say the price gap was not going to close. Some traders said IPL was scrapping the tender, others said the company was just going to let it drift away by not extending validity dates on the offers to continue discussions.
All told, firm offers comprised about 880,000 mt of urea. Another 260,000 mt was included in sellers’ options.
Sources said IPL had hoped for nothing higher than $300/mt CFR. A run-up in prices just as the tender closed dashed those hopes.
IPL Urea Tender, Closed December 4, 2009
|
| Supplier |
Origin |
Quantity (MT) |
Shipment Time |
US$/mt FOB |
US$/mt CFR |
Discharge Port |
| Qafco |
Qatar |
15-25,000 |
2nd Half January |
315.00 |
|
|
| Fertil |
Abu Dhabi |
25,000 |
Dec. – Jan. |
315.00 |
|
|
| Sabic |
Saudi Arabia |
25,000 |
|
|
|
|
|
|
25,000 (S/O) |
By Jan. 10 |
314.00 |
|
|
| Transammonia |
Open |
35-45,000 |
By Jan. 15 |
|
325.87 |
Mundra – Kandla |
|
|
35-45,000 |
|
|
335.97 |
Mundra – Kandla |
| Stirol |
Ukraine |
35,000 |
January |
285.00 |
|
|
| Dreymoor |
Open |
25-35,000 |
By Jan. 15 |
|
329.75 |
Kandla |
|
|
25-35,000 (S/O) |
|
|
|
|
| Quantum |
Open |
25-40,000 |
2nd Half Dec. – Jan. |
|
345.00 |
Kandla |
| Agora |
Ukraine |
130- 200,000 |
January |
281.00 |
321.00 |
Kandla – Vizag |
|
China |
|
|
301.00 |
321.00 |
|
| Helm |
Open |
25-50,000 |
|
|
322.50 323.50 |
Mundra Kandla
|
|
|
40-50,000 |
|
|
322.50 323.50 |
Mundra Kandla |
|
|
40-50,000 (S/O) |
|
|
329.50 330.50 |
Mundra Kandla |
| Uzagro |
Uzbekistan Iran (Shipment) |
15,000 |
By Jan. 15 |
288.00 |
|
|
| Keytrade |
Open |
40-60,000 In 1-2 Lots |
By Jan. 10 |
|
319.50 324.00 |
Mundra Kandla |
| Gavilon |
|
25-55,000 |
|
|
349.00 |
Mundra |
|
|
25-55,000 |
|
|
349.00 |
Mundra |
| Ameropa |
Open |
25,000 |
By Jan. 15 |
|
322.00 330.00 |
Mundra – Kandla Vizag |
|
|
25,000 (S/O) |
|
|
322.00 330.00 |
Mundra – Kandla Vizag |
| ETA |
Open |
50,000 2 Lots |
End Dec. – Early Jan. |
|
325.00 |
Mundra |
|
|
25,000 (S/O) |
|
|
|
|
| Swiss Singapore |
Open |
40-50,000 2 Lots |
End Dec. – Early Jan. |
314.00 |
321.50 |
Mundra – Kandla |
|
|
40-50,000 (S/O) 2 lots |
|
|
321.50 |
Mundra – Kandla |
|
|
40-50,000 (S/O) 2 Lots |
|
|
326.00 |
Mundra – Kandla |
IPL made counter bids to Transammonia, Helm, Agora, and Keytrade. The buyer set prices based on ports of delivery, with an arrival date of Jan. 15, 2010.
The new prices bid by IPL were $300/mt CFR for Mundra, $302/mt CFR for Kandla, and $305/mt CFR for Vizag.
If these prices had been accepted, it would have meant a price drop from the original offers of as much as $35/mt.
At the time of the counterbid, sources put the netback for these prices at $285/mt FOB from Arab ports, $280/mt FOB from Iran, and $260/mt FOB from the Black Sea.
The Black Sea netback is just a bit lower than where sources had earlier pegged the market. The Arab Gulf price is about $30/mt lower than what producers had offered in the tender. Observers noted the absence of the Middle East producers in the current after-tender talks.
IPL set Tuesday, Dec. 8, at 4 p.m. as the deadline for responses from the trading houses. Sources report only one trader asked for an extension of the deadline.
One Asian trader noted that Dec. 8 was the last day material could be loaded into a panamax vessel in Yuzhnyy and make it to India.
Working against the Indians were strong markets in China and East Asia.
The domestic Chinese market did not allow for much give on prices. At the same time, demand is expected to get serious in Vietnam and Thailand in the next couple of weeks. Producers reportedly saw enough other selling opportunities that they saw no reason to lower their prices.
The question for many revolves around the real urea needs for India. As the tender closed, some in the industry commented that the terms of the tender – including delivery by Jan. 15 – indicated domestic supplies were in good shape for the spring application season.
One trader noted that tons purchased two months ago under an earlier tender still have not been loaded for delivery. If India was desperate for material, he said, there would be no delay in the shipment of previous purchases.
The delay in making additional purchases could work in India’s favor if the rest of the international demand goes soft. However, said one trader, there seems to be enough demand to sustain the current price levels – and even allow for a few more dollars to be added to the bill.
Middle East: The tightness in the international market has pushed up granular prices. Sources report a cargo sold for $315/mt FOB last week. Another deal for 750,000 mt from Iran went for $300/mt FOB.
Some traders think the new deals are not purchases for end users, but rather buyers taking positions, expecting to see the market keep climbing.
The bullish attitudes at the IFA conference confirm the atmosphere of buying at what seems to be much higher prices now because there is said to be room for more increases.
Oddly enough, prills have not followed granular on the up escalator.
The $10-$15/mt difference between prills and granular is odd, but not unprecedented.
Reports of strong demand from the U.S. and Europe have contributed to the flame that seems to have heated up the market. Many of the Middle East producers have formula based deals to deliver granular to the U.S.
Qafco and BCIC/Bangladesh inked a deal that would guarantee 300,000 mt/y of granular material to BCIC. The deal will help Qafco keep its inventory under control and make sure BCIC does not have to float as many tenders as it has in the past.
The new business in the area now sets the granular market at $300-$315/mt FOB, while prills remain at $265-$270/mt FOB.
Black Sea: Sources report the paper market took a dip last week, but rebounded.
High-end deals from the previous weeks that neared $270/mt FOB were chased away as traders reported deals in the mid-$260s/mt FOB.
The slide in the market, said one trader, was tied to India’s reluctance to pay beyond $300/mt CFR for its urea.
Asian sources, however, say India may have been a contributing factor to the slight drop, but the fact that the market rebounded indicates there is still strong demand for material from the area.
Despite India’s apparent reluctance to buy, sources say the market is stable in the mid- to upper-$260s/mt FOB.
As of Dec. 10, the DH paper market had Yuzhnyy at $265-$270/mt FOB for December-January and $265-$275/mt FOB for February-March.
Bangladesh: BCIC closed a tender Dec. 10 for 400,000 mt of prilled urea and 100,000 mt of granular. The company announced another tender for 100,000 mt of granular to close Dec. 21.
Sources say there is no doubt the country needs the tons. Procedures to make an award, however, are often so cumbersome that many times the validity of the offers is long expired before a decision is announced.
Asian sources speculate that the larger tender that closed Dec. 10 was needed to make up for tons BCIC failed to buy in previous tenders.
BCIC signed a deal for Qafco/Qatar to supply 300,000 mt/y. The deal will not be enough to make up for the difference between domestic production and demand. It will, however, help provide a steady supply that can be supplemented with tenders.
Indonesia: Asian sources are waiting to see what will happen when PIM closes its selling tender of 20,000 mt of prilled material Dec. 14. The last tender netted $328/mt FOB. Just a month ago, the price was $277/mt FOB.
Asia: Vietnam and Thailand are reportedly ready to buy more tons soon. Sources say buyers from the two countries were feeling out suppliers during the IFA gathering in Malaysia last week.
Both countries would be pleased to see China lower its export duty so they can take their tonnage from there. Vietnam is in the best position to take advantage of any lowered export price from China. Barges from small Chinese ports can easily move along the Vietnamese coast. Shipments to Thailand, however, will require larger vessels.
Pakistan: The shipment of 50,000 mt of urea imported by TCP has been delayed. The vessel JPO Delphinus, laden with the product, was reported to have run aground in the side of the channel in the Gwadar Port on Dec. 8.
NITROGEN SOLUTIONS
U.S. Gulf: The prompt UAN barge market last week was called $178-$185/st FOB ($5.56-5.78/unit). While producers were touting prices over $200/st, sources said those were for first quarter into April.
As of Dec. 10, the DH paper market had UAN at $185-$195/st FOB for December, $200-$210/st FOB for January March, and $210-$220/st FOB for April-June.
Eastern Cornbelt: UAN pricing out of regional terminals was also moving up. Sources said the dealer market had firmed to as high as $7.35-$7.50/unit FOB for cash or prepay out of some locations. The low end of the range was quoted at $6.90-$7.15/unit FOB river terminals on a spot basis last week, but sources said terminal prices had to go up based on firming barge values in the Gulf.
Western Cornbelt: UAN was quoted in a broad range in the region last week. Iowa sources tagged the dealer market as high as $7.35-$7.50/unit FOB terminals, while the low end was reported at $6.75/unit FOB spot river locations. One source said spring prepay could also be had for as low as $6.75/unit FOB river and $6.90-$7.15/unit FOB inland, but it wasn’t clear if those offers were still on the table as the week advanced.
Northern Plains: UAN pricing continued to firm. Sources quoted the dealer market at $6.60-$7.35/unit FOB regional terminals, depending on location and time of delivery. A North Dakota source pegged the UAN-28 market at $220/st ($7.86/unit) DEL for prompt tons and $240/st ($8.57/unit) DEL for spring prepay.
Northeast: UAN-30 was quoted at $189-$193/st ($6.30-$6.43/unit) FOB, with the low reported in Delaware on a spot basis and the upper end in Baltimore. One source said dealer postings out of the Baltimore market had firmed to the $195/st ($6.50/unit) FOB level as the week progressed. Another said he was offered some prepay earlier in December at $185/st ($6.17/unit) FOB Baltimore for tons pulled by June, but was uncertain if that offer was still on the table. There were reports too of one regional supplier offering UAN-30 spring prepay tons for as low as $185/st ($6.17/unit) direct to the farm.
Out of terminals in upstate New York, the UAN-32 market was pegged at $232-$235/st ($7.25-$7.34/unit) FOB to the dealer.
Eastern Canada: The UAN-28 market was quoted in a broad range at $250-$274/mt ($8.93-$9.79/unit), with the upper end reflecting dealer list prices from some regional suppliers. The UAN-32 market was listed at $305/mt ($9.53/unit) FOB on the upper end.
AMMONIUM NITRATE
U.S. Gulf: Barge prices are now being reported in the $205-$210/st FOB range, with quotes for the next round of business at $215-$220/st FOB. Sources say after a long lull, then a quick flurry of business, prices are moving up, and that the product is at long last starting to follow urea and UAN.
Western Cornbelt: The ammonium nitrate market remained at $260-$270/st FOB in the region.
Eastern Canada: Ammonium nitrate was quoted at $335-$385/mt FOB in the region, reflecting a slight drop from last report. The CAN-27 market was pegged at $340/mt FOB in southern Ontario.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate remained at $185-$200/st FOB in the region.
Western Cornbelt: Granular ammonium sulfate was unchanged at $185-$200/st /st FOB.
Northern Plains: Granular ammonium sulfate pricing had reportedly firmed to $200/st FOB and $210-$225/st DEL in the region, depending on location.
Northeast: Granular ammonium sulfate was quoted at $165-$175/st FOB and $192-$195/st DEL, depending on location.
Eastern Canada: The granular ammonium sulfate market was quoted at $260-$318/mt FOB in Ontario, with fine grade referenced at the $151/mt FOB level.
PHOSPHATES
Central Florida: Demand finally played a role in the Central Florida phosphate market, but supplies were too low to spur the market. Prices did go up, but probably could have gone even higher if more had been available. CF raised its prices, and a source said Mosaic was holding off making additional sales until the price goes up a bit more.
Severe weather – a blizzard – struck across the Northeast in the middle of last week, and that did little to improve sales out of terminals. In most cases, dealers were looking to prepay for later delivery, rather than seek prompt shipments.
Phosphate producers were continuing to see steady business from the export market, which was a major factor in inventories in Central Florida and made any lost domestic sales less of a problem.
High rail rates for small shipments out of Central Florida were another reason sales have been less robust than for either the export or Gulf river markets. Still, in general, activity and prices were moving upward in all markets.
The Central Florida DAP price range last week moved up from $285-$290/st FOB the previous week to a flat $310/st FOB. Both Mosaic and PCS Sales were charging a $10/st FOB premium for MAP, but CF was seeking a $15/st FOB differential for MAP. CF’s DAP price was $315/st FOB and $330/st FOB for MAP. Agrifos increased its prices $25/st FOB, to $340/st FOB for DAP and $350/st FOB for MAP for trucks and $5/st less for rail shipments; however, it had sold out through January by late last week.
U.S. Gulf: A pre-winter blizzard swept across much of the Midwest last week, bringing high winds, ice, and more than a foot of snow to some areas. The good news was most of the crops were already out of the fields, and the bigger problem facing farmers was where to put all of the corn and beans. A source said only 2 to 5 percent of crops had not been harvested before the hard weather began.
Although corn prices were trimmed a bit as the U.S. dollar improves against other currencies, they were still high enough to make for a happy holiday season. Corn was still bringing better than $3.80/bushel late last week. Farmers will have money to buy as much fertilizer as they need for the spring season. Traders and producers said they had seen a sharp increase in prepay deals for spring, although producers appeared less willing to take offers into February or later.
Prompt sales were relatively strong early last week, when the weather was still on the moderate side, but those came to an abrupt halt once the mercury dipped to single digits or below and the snow began to fall. Even in areas where the snow was light, the cold was enough to put a damper on sales.
The spurt of activity began a couple of weeks ago, and the supply of available NOLA DAP barges quickly plummeted. By last week, prices began to take off for both barges and at terminals. Early in the week, DAP barges were bought and sold for $330/st FOB, and offers to sell climbed to as high as $340/st FOB. However, the highest confirmed NOLA DAP barge sale found last week was done at $334/st FOB. Prepay orders were running about $10/st FOB higher than prompt.
Warehouse prices jumped sharply to as high as $355/st FOB, after hovering around $20/st FOB lower for weeks. NOLA DAP barge prices rose about the same amount. With the Christmas/New Year holidays just around the corner, prices could continue to edge upward before the end of the year.
The NOLA DAP barge range last week was $330-$334/st FOB, up sharply from the previous week’s range of $300-$310/st FOB, and was likely to be up again this week. MAP prices were running about $10-$15/st higher than DAP, but that commodity was scarce and the price differential will likely increase in the near future.
As of Dec. 10, the DH paper market had NOLA at $320-$325/st FOB December, $333-$335/st FOB January, and February-March at $335-$340/st FOB.
Eastern Cornbelt: Phosphate inventories were depleted at many locations after a spurt of spot demand in recent weeks. DAP pricing had firmed dramatically to $360/st FOB in the region, with MAP $10/st higher. For the order and shipping period from Dec. 8-12, CF was listing DAP at $360/st FOB Peoria, Ill., and $365/st FOB Cincinnati, Ohio.
10-34-0 was steady at $315-$330/st FOB in the region.
Western Cornbelt: One source said most of the interest was focused on phosphates last week. Dealer pricing levels had reportedly firmed to $355-$360/st FOB regional warehouses for DAP, with MAP $10/st higher. Spot sales were confirmed at the new, higher numbers, and warehouse inventories were described as tight, with some locations out of product last week.
CF was referencing DAP at $355/st FOB St. Louis and Inola for the Dec. 8-12 order and shipping period. MAP was listed at $370/st FOB Inola. Another supplier was offering forward contract DAP at $365/st FOB St. Louis and Inola for January and February, with May through April tons $5/st higher.
Northern Plains: DAP and MAP were in tight supply in the region. Sources quoted the DAP market at $365/st FOB in Minnesota, with forward contract tons for January and February offered at the $375/st level FOB Pine Bend. Delivered MAP in North Dakota was pegged at $395-$400/st.
For the order and shipping period from Dec. 8-12, CF was listing DAP at $365/st FOB Pine Bend, with MAP for that period posted at $380/st FOB Pine Bend.
Agrium’s phosphoric acid postings are slated to firm $10/st on Jan. 1 to $680/st rail-DEL in Minnesota and the Dakotas. Another $10/st takes effect on Feb. 1, bringing reference prices in those states to the $690/st rail-DEL for both merchant grade acid and super phosphoric acid.
Eastern Canada: The MAP market was reported at $440-$470/mt FOB in the region. One source quoted DAP at the $440/mt FOB mark in southern Ontario. No current prices were reported for TSP in the region.
Western U.S.: Agrium hiked its MAP again on Dec. 9, moving up $15/st from Nov. 30 list prices. New levels include $395/st DEL in Montana and Wyoming; $400/st DEL in southern Idaho, Utah, Nevada, and Oregon’s Malheur County; $405/st DEL and $400/st FOB the warehouse in Washington, northern Idaho, and Oregon excluding Malheur County; and $410/st FOB warehouse or rail-DEL in California and Arizona.
U.S. Export: Export DAP and MAP sales continued last week, as PhosChem made a sale of about 20,000 mt of the two products into Australia at a new high price of $350/mt FOB.
The most promising export markets last week were Australia, New Zealand, and Central America. India, the world’s biggest buyer, was expected to return for additional supplies early in the next quarter, as will its neighbor, Pakistan.
The export market was keeping pace with the price for NOLA DAP barges, which were both slightly higher than at Central Florida. The markets will probably slow a bit before the end of the calendar year, but then resume the upward trend.
Based on the most recent sales, the export DAP price range rose from $330-$342/mt FOB the previous week to $342-$350/mt FOB. PhosChem was seeking an increased price of $360/mt FOB for its next sale.
As of Dec. 10, the DH paper market had Tampa export at $340-$350/mt FOB for December and $355-$365/mt FOB January-March.
POTASH
Eastern Cornbelt: Potash pricing was unchanged at $440-$450/st FOB in the region, depending on grade and location.
Western Cornbelt: Potash was steady at $440-$450/st FOB in the region.
Northern Plains: The potash market remained $440-$450/st DEL in the region. One source pegged the warehouse market at the $450/st level FOB Sioux City, Iowa. Granular tons FOB Saskatchewan were quoted at the $400/st level on the low end to U.S. customers.
Northeast: Potash pricing continued to slide in the region. The market was pegged at $440-$450/st FOB regional warehouses, with delivered tons quoted in the $460-$470/st range.
Eastern Canada: Potash pricing out of regional warehouses ranged from $520-$545/mt FOB, depending on grade and location, with the upper end reported for white granular tons in Ontario. One source put the common dealer market for red granular potash at $535-$540/mt FOB in his trade area.
The K-Mag market was tagged at $410-$427/mt FOB to the dealer, while sulfate of potash (SOP) was reportedly referenced at the $890/mt FOB mark on a spot basis in Ontario.
SULFUR
Tampa: An explosion at Valero’s Texas City refinery killed one person on Dec. 4, but did not cause a serious interruption of sulfur production there. Still other refinery problems and turnarounds have hampered growth of sulfur inventories along the Gulf Coast. Those situations, coupled with the greatly increased use of sweet crude oil, have made sulfur harder to come by than was the case only a few months ago.
As the economy continues to sputter, consumption of gasoline remained depressed. The switch to fuel oil for heating will not increase supplies, at least for the next couple of months.
Meanwhile, the possible passage of the cap-and-trade bill in Congress has made refinery officials a bit nervous as to how they will deal with the new situation, if and when it passes.
Prices on the world market were said to be improving, but ocean freight charges were having a negative impact on netbacks.
The good news for the industry was the end of the official hurricane season on Nov. 30, which produced no major storms in the Gulf for the year.
Vancouver: Prices for spot sulfur sales out of Vancouver were said to have been fetching as much as $60/mt FOB last week. China was said to be paying in the $90-$100/mt range for delivered sulfur.
MARKET NOTES
India: The Indian fertilizer industry will need Rs 350bn of investments to augment capacity and meet demand, according to the Fertiliser Association of India (FAI). There is a need to produce an additional six million mt each of urea and DAP over the next three years to ensure food security, FAI Chairman K.S. Raju told the press.
“The production of nitrogenous nutrients remained stagnant at 10.9 million mt from 2000-01, while phosphate containing fertilizers declined from 3.7 million mt in 2000-01 to 3.4 million mt in 2008-09,” said A. Vellayan, co-chairman, FAI. The gap between the consumption and domestic production of nutrients had increased from 1 million mt in 2003-04 to 7.3 million mt in 2008-09, he added. The industry is in a bad shape due to delays in releasing subsidies from the government. “By March 2010, the deficit payment due to industry from the government would be around Rs 200bn. This is in addition to the Rs 130bn bonds issued at 6 percent interest earlier,” said Satish Chander, director-general, FAI.
India: The government may put on the block eight state owned fertilizer units that were closed down years ago due to feedstock and other problems. This is one of the options that the government is mulling for the revival of these sick units, which would significantly help the country achieve self-sufficiency in fertilizers.
Secretary to the Department of Fertilisers S. Krishnan said the government was keen to revive these eight units, including the Ramagundam plant in Andhra Pradesh, but was considering various options for it. “One way could be to first ask public sector units to take them over or pick up a portion of the equity. If this does not work out, we could invite the private sector through a transparent system that could include an open bidding format,” he told the press. He said each of these units would require an investment of between Rs 30bn and Rs 40bn for revival. On gas allocation to fertilizer industries, Krishnan said the some 32-40 mmscmd of gas has been allocated, but more is being sought. “An additional 30mmscmd may come our way,” he added.
India: The government is considering a proposal to introduce a nutrient-based subsidy (NBS), which could encourage balanced fertilization. This proposal envisages fixing subsidies based on nutrient value, which could stem overuse of fertilizers. However, the government cautions that the plan must not lead to runaway increases in fertilizer prices and subsidy burdens on the government. The government is encouraging the industry to forge joint ventures with its foreign counterparts to enhance the local availability of fertilizers.
FAI Chairman K.S. Raju said the existing fertilizer policy needed a complete makeover for restoring the health and growth of Indian agriculture and ensuring food security. “The mechanism of direct transfer of subsidy to farmers may take some time for implementation to service the 120 million farming families, but until then the subsidy can be disbursed at the retailer’s level through the proposed NBS scheme,” he said.