Radnor, Penn.-Airgas Inc. reports that its AiRx?äó Diesel Exhaust Fluid (DEF) has been certified by the American Petroleum Institute. DEF is used in Selective Catalytic Reduction (SCR) technology to reduce diesel exhaust pollutants. API certification verifies that manufacturers and distributors are operating in compliance with industry standards and that DEF meets quality standards. Airgas, the largest U.S. distributor of industrial, medical, and specialty gases, and welding, safety, and related products, markets Airgas AiRx DEF through Airgas Specialty Products. “In order to meet 2010 clean air regulations, most diesel truck manufacturers are using SCR technology in all new models,” said Ted Schulte, Airgas Specialty Products president. “With this technology, DEF is injected into the exhaust stream to break down harmful nitrogen oxides, NOx, into inert nitrogen and water.” Airgas has been providing pollution control solutions for air quality since the early 1980’s. “Our nitrogen oxide abatement, or DeNOx, experience with stationary applications, such as coal- and natural gas-fired power plants, served us very well in creating Airgas AiRx to work with diesel engine SCR technology in mobile applications,” said Schulte. Available in a variety of package sizes ranging from one-gallon containers to bulk trailers, Airgas AiRx is supplied to truck stops, fuel retailers, private fleets, and lubricant and fuel distributors nationwide. With more than 5,000 vehicles, Airgas maintains one of the largest private truck fleets in the country and will be using Airgas AiRx Diesel Exhaust Fluid in all of its new trucks that use SCR technology. Other major DEF providers in the U.S. include Terra Industries Inc. (GM Sept. 21, p. 1) and Yara North America (GM Sept. 28, p. 1).
All posts by traceybg@gmail.com
John Deere is going for EGR over SCR
Moline, Ill.-John Deere claims its choice of cooled-exhaust gas recirculation (EGR) engines to meet EPA-mandated regulations for the reduction of nitrogen oxides (NOx) emissions has a number of advantages. They say use of EGR engines avoids the need for a separate tank, a sophisticated urea injection system, heating for the tank and delivery lines (since urea freezes), and tamper-proof diagnostic equipment that are part of selective catalytic reduction (SCR). Deere maintains that the most important part of EGR is that it does not require any operator intervention that involves having to deal with the cost and hassle of a second fluid, noting that SCR may be an appropriate technology for the future when the technology is more developed for off-highway applications. “We’re looking to provide the simplest iT4 (Interim Tier 4/Stage III B) solution for equipment users, all the while delivering the productivity, uptime and low daily operating costs that customers expect from Deere,” said Joe Mastanduno, product marketing manager, engines and drivetrains, for John Deere Construction & Forestry. “We believe cooled EGR with exhaust filters is the right technology right now.” Deere maintains that the lower an engine’s peak combustion temperature, the less the amount of NOx that is created, and that EGR is an effective method of achieving this. The concept is simple, Deere insists. With cooled EGR, measured amounts of exhaust gas are cooled and mixed with incoming fresh air to lower peak combustion temperatures, thereby reducing NOx. John Deere was the first engine manufacturer to widely commercialize cooled EGR in off-highway applications, introducing it in 2005 with the start of Tier 3/Stage III A emissions regulations. Deere claims experience with cooled EGR over a wide range of applications, resulting in a proven record of reliability with this technology. Other engine manufacturers are just now considering adopting these technologies for off-highway applications.
ARA names new president, CEO
Washington-The Agricultural Retailers Association has named Daren Coppock as its new President and CEO. ARA said Coppock is an experienced association leader with deep ties to the agricultural community, having been raised on a farm in Oregon and serving as an advocate for production agriculture for the past decade. He joins ARA from the National Association of Wheat Growers (NAWG), where he served as the organization’s CEO since July 2001. “Daren’s history of leadership, strong communications skills and previous experience serving as a voice for agriculture on the Hill and with federal agencies, combined with the experience, abilities and commitment of our current ARA staff will make for a very strong team and bright future for our association,” said ARA Chairman Ken Manning, vice president of the Pacific Intermountain region with Wilbur-Ellis Company. While Coppock served as NAWG’s CEO the association scored a number of policy achievements, including significant progress toward making the introduction of biotech wheat, successfully defending the direct payment in the 2008 Farm Bill negotiations, and advancing discussions to ease rail transportation concerns. Prior to joining NAWG, Coppock held key positions with the Oregon Wheat Growers League, including executive vice president and member services director. “I look forward to joining the team at ARA as we tackle some important agricultural challenges on behalf of agricultural retailers,” said Coppock. “I’m impressed by the leadership of the organization and eager to get out and meet some of the members in the coming months.” Coppock will begin transitioning from his current position with NAWG to ARA on Nov. 1, and will be working full time for ARA by Jan. 1, 2010. He is filling the position vacated by ARA’s former President and CEO Jack Eberspacher, who passed away in July after a brief battle with cancer.
NiPKo completes Axss USA acquisition
Greeley, Colo.-NiPKo LLC announced on Sept. 9 the acquisition of the remaining shares of Axss USA LLC, based in Platte City, Mo. The company will now be headquartered in Greeley, Colo., and operate under the name of Axss USA LLC. The company, which markets generic agricultural chemicals, is owned and headed by Kevin Howard, formerly of Loveland Products Inc. Axss USA also recently announced that it has reached a sales and marketing agreement with Trace Mountain LLC, a Mississippi-based company that markets agrochemicals to the agricultural distribution network. “The agreement with Trace Mountain offers us an opportunity to enhance our selling and marketing functions across the U.S. while enabling us to spend more resources on procuring new products for our portfolio,” Howard said. Axss USA is now in its third year of selling and marketing agrochemicals.
Management Briefs
Innophos Holdings Inc. has named Neil Salmon vice president and chief financial officer. He comes to Innophos with nearly 20 years of experience in various finance and accounting positions with Imperial Chemical Industries P.L.C. (formerly known as ICI, which was acquired by AkzoNobel). Most recently, he served as CFO with ICI’s Adhesives Business Group, a $2 billion business unit with global operations.
Salmon holds a B.A. in Politics, Philosophy, and Economics from Oxford University, and is a member of the Chartered Institute of Management Accountants. He is expected to take up his post at the corporate headquarters in Cranbury, N.J., during the first week of October.
Reporting directly to Salmon will be Mark Feuerbach, vice president, treasury, financial planning & analysis, and Charles Brodheim, corporate controller and chief accounting officer.
Athabasca Potash Inc. on Sept. 30 announced the resignation of Robert Boyd as CEO. API’s board of directors is in the process of searching for new candidates for the position. Boyd had a short tenure, joining API in late summer (GM Aug. 10). API’s board changed in early September (GM Sept. 7).
Allana Resources Inc., Toronto, has announced the appointment of Jason Wilkinson as project manager for its Ethiopian potash project. He will be based in Ethiopia with responsibility for implementing and managing Allana’s upcoming exploration and development program in the Danakhil Depression.
Wilkinson has over 15 years experience in the exploration and development of mineral deposits, and he has worked throughout the world. His most recent experience was as vice president, exploration, for Lydian International, where he was responsible for the company’s exploration and development programs at the Amulsar gold project in Armenia and the Drazjna Pb-Zn-Ag project in Kosovo. Wilkinson has also been senior geologist for Aur Resources, engaged in the exploration and development of copper projects in Africa. In addition to his work with Aur, Wilkinson has been involved in exploration and mining projects in Zambia, Saudi Arabia, Oman, Romania, Greece, and Turkey at increasing levels of responsibility.
Wilkinson holds an M.Sc. in Mineral Exploration from the Royal School of Mines, Imperial College, in London and a B.Sc. in Applied Geology from Portsmouth University.
Market Watch
AMMONIA
U.S. Gulf/Tampa: Yara concluded new business last week with major buyers at $345/mt DEL, up $20/mt from September.
As of Oct. 1, Direct Hedge (DH) called the October market at $335-$350/mt, with November at $310-$330/mt and December-March at $300-$320/mt DEL.
Eastern Cornbelt: Sources continued to report minimal fertilizer movement and few spot pricing changes. Anhydrous ammonia remained in the $350-$370/st FOB range for spot tons to the dealer. Forward contract ammonia for November and December was referenced by one supplier at $360-$370/st FOB in the region, depending on location.
Western Cornbelt: The ammonia spot market remained at $330-$355/st FOB in the region, with the low in Nebraska. A Missouri source reported delivered ammonia in the $340-$350/st range from southern production points. One supplier was offering forward contract tons for November and December at $330/st FOB in Nebraska, $355/st FOB Iowa terminals, and $360/st FOB in Missouri.
California: Things were exceptionally quiet on the fertilizer front in California last week. “People just aren’t buying right now unless they need it,” said one source. He noted that little or no alfalfa was being planted in his area, and the fields that were being planted were going in without fertilizer. “We should be moving forage mixes to the dairies, but they’re dragging their feet,” he added.
There were few changes to the spot fertilizer markets in late September. Anhydrous ammonia remained at $390/st truck-DEL in California, with rail-delivered ammonia referenced at the $435/st level. Aqua ammonia was posted at $110/st FOB in California.
Pacific Northwest: With harvest activity and wheat planting first on the agenda, sources said interest in fertilizer remained low. “You couldn’t find an empty conveyer belt to haul fertilizer right now anyway,” said one source. Expectations remain low in most quarters for fall fertilizer applications, with one source estimating that growers will apply roughly 50 percent of normal volumes due to flat markets and “little upside potential” going into spring.
On the spot market, sources said the anhydrous ammonia price had firmed slightly from last report. The dealer market was quoted at $337-$365/st DEL, with the low for railed tons and the upper end reflecting the truck-delivered market. One supplier was referencing forward contract ammonia for November and December at $370/st FOB Washington terminals. Forward contract aqua ammonia was referenced at $95/st FOB for November and December.
Western Canada: The anhydrous ammonia market remained at $595-$640/mt DEL in Western Canada, with no movement to test the market.
Black Sea: With the Yara deal in Tampa set at $345/mt CFR, sources say the effective Yuzhnyy price is now at $280-$290/mt FOB. There is also talk of deals approaching $300/mt FOB by traders, but by press time nothing was done at that level. Asian sources say any discussion this week of new deals will need to start close to, if not at, $300/mt FOB.
The steady and slow rise in prices is a joy to the producers. A steep rapid rise could mean an equally steep fall, said one observer. Sources say the current market level is sustainable and leaves room for further increases.
Once the price moves past the $300/mt FOB mark, said one trader, more producers will begin considering restarting their facilities.
Some plants, such as Gorlavka and OPZ, will be able to sell material at a profit under the current price. Others will have to wait for further increases.
The biggest danger to the continued strength of the market price is that the producers will all come back online quickly. The influx of new ammonia could once again cause the price to plummet.
As of Oct. 1, Direct Hedge reported October Yuzhnyy at $275-$285/mt, with lower numbers for November-December at $270-$280/mt.
Middle East: After a flurry of activity last month, spot buying in the area slowed down. Sources report contract tons continue to flow, giving producers healthy order books throughout the month.
No new spot deals for the last quarter of the year keeps the market price at the $300/mt FOB level. Producers are asking for more, but until a new spot purchase comes along or a contract buyer reveals a new formula price, sources are calling the market price steady.
UREA
U.S. Gulf: Players reported some buying to get barges upriver before closing. Granular was put between $255-$261/st FOB.
As of Oct. 1, DH reported October paper business at $260-$265/st, with a big fall-off for November-December to $247-$252/st FOB. January-March rebounded slightly, to $252-$257/st FOB.
Eastern Cornbelt: Granular urea was quoted at $310-$320/st FOB in the region, down slightly from last report.
Western Cornbelt: Granular urea pricing to the dealer was down slightly to $305-$315/st FOB regional terminals, with one Missouri source quoting the common dealer price at the $310/st FOB mark in his trade area. The Catoosa, Okla., market had reportedly dropped to $295/st FOB. One regional supplier was offering forward contract urea for November and December at $305/st FOB Inola, Okla., and $315/st FOB Pine Bend, Minn.
California: Granular urea was pegged at $345-$360/st rail-DEL and $350-$375/st FOB to the dealer. One source said urea remains overvalued compared to UAN, so interest in urea is doubly slow. “There is some concern about urea inventories for spring,” he said. “The system won’t be full if retailers and farmers aren’t committing the tons. It’s just backing up right through the system.”
Pacific Northwest: Granular urea remained at $325-$330/st DEL in Montana, with the rest of the region reported in the $330-$345/st DEL range for spot tons. Forward contract urea for November was referenced by one supplier at $325-$330/st
DEL in Montana, $355/st DEL in Washington, Oregon, and Idaho, and $355-$365/st DEL in Utah, with a $10/st increase slated for December.
Western Canada: Granular urea was steady at $425-$450/mt DEL in the region.
Pakistan: The Trading Corp. of Pakistan called a series of tenders late last week to satisfy a need for 600,000 mt by the end of this month. The Economic Coordination Committee of the central government authorized TCP to call the tenders early last week. The ECC was initially ready to toss the job of importing the urea to the private sector for a maximum of 400,000 mt, but changed its mind at the last minute.
While TCP will retain the exclusive power to import urea, the National Fertilizer Corp. and National Fertilizer Marketing Ltd. will handle distribution.
The tenders came after the government’s Fertilizer Review Committee reported the urea requirement for the upcoming Rabi season would be about 3 million mt. The committee estimated the country would have only 2.8 million mt on hand for the season.
The FRC initially recommended importing 400,000 mt. That number was increased to 600,000 mt after further review of the potential Rabi season requirements.
The seven tenders TCP called require suppliers to ship the urea within 15 days of receiving an award. Sources say this tight shipping schedule eliminates the fully-booked Arab Gulf producers from contention.
Sources say even the material picked up in the Indonesian selling tenders late last week will be too expensive for TCP buying ideas.
Chinese material is out as well because of the 110 percent export duty in place until Nov. 1.
That leaves Yuzhnyy tons to compete in the tenders. Sources say some sub-$230/mt FOB deals from Yuzhnyy were concluded last week. With freight rates in the mid-$50s/mt, the best TCP can hope for is a delivered price in the mid $280s/mt.
The TCP tender schedule follows.
| Closing Date | Quantity (mt) |
| October 3 | 150,000 |
| October 6 | 150,000 |
| October 8 | 150,000 |
| October 10 | 150,000 |
| October 13 | 100,000 |
| October 15 | 100,000 |
| October 17 | 100,000 |
If TCP can get the full amount requested in each tender, it will only need the first four. Sources say, however, the game plan may be to take only the lowest offer and then move on. For example, the lowest offer in the first tender may include only 50,000 mt.
Rather than negotiate with the also-rans, TCP will make the award and then take the lowest offer in the next tender. Sources say this process may require the company to use all seven tenders to reach the 600,000 mt mark.
On the downside, said one trader, TCP is allowing companies that are not pre-qualified to make offers. This move could open the doors for non-traditional firms to participate.
The experience of BCIC in Bangladesh, which also allows all comers to participate, indicates that some of the awards’ lowest offers may have to be scrapped because the non-traditional firm may not be able to deliver as promised.
Bangladesh: The government on Sept. 25 approved the import of 200,000 mt of urea to meet the demand for the next season. This will be split evenly between the Mongla and Chittagong ports.
India: Just as the week closed, the State Trading Corp. of India called a tender to close Oct. 8. Delivery must be by the end of November. The firm kept to Indian practice by not declaring how many tons it was ready to buy. Sources say STC agents were floating the idea of paying no more than $270-$272/mt CFR for its purchases.
The problem is that the market has moved beyond that level.
On the buyer’s side, however, is the fact that STC is allowing for late November arrival of the urea. This late date could put Chinese tons in play if the Chinese producers are willing to shave a couple more dollars off their current price in the mid $250s/mt FOB bagged for prills. The buyer is looking for bulk delivery.
Indonesia: Kaltim, PIM, and Pusri were active last week, selling nearly 120,000 mt.
The first selling tender came from Pusri, for 50,000 mt in 5,000 mt lots.
Swiss Singapore was the highest bidder at $257.55/mt FOB in the tender that closed Sept. 28. Pusri opened talks with the other bidders, but got nowhere.
The price paid was dramatically higher than other potential buyers had expected. At the same time, it showed a softening in the Indonesian market from the last selling tender.
The softness in the market was made clear by the unwillingness of the other companies to match the Swiss Singapore bid, said one trader.
Bids in the tender follow.
Bids in Sept. 28, 2009 Tender by Pusri in lots of 5,000 mt each |
|
| Company name | Bid US$/mt FOB |
| Swiss Singapore | 257.55 |
| Toepfer | 248.36 |
| Limardi | 246.50 |
| Summit | 246.00 |
| Youngwoo | 244.50 |
| BBSC | 244.00 |
| Universal | 244.00 |
| RCL | 243.00 |
| Unitrade | 243.00 |
| Profeta | 241.00 |
| Graja | 238.80 |
| Indevco | 237.50 |
| Diva | 236.00 |
| Liven | 234.00 |
Sources say the aggressive Swiss Singapore bid indicated a strong need for tons immediately.
Because the other buyers were unwilling to match the Swiss Singapore bid, Pusri rolled over the remaining 45,000 mt it offered to a tender that closed late Thursday.
Bids in the Oct. 1 tender were more in line with the results of the Sept. 29 tenders held by PIM and Kaltim.
As with the first tender, the second Pusri tender was for lots of 5,000 mt each. Results follow.
Bids in Oct. 1, 2009 Tender by Pusri in lots of 5,000 mt each |
|
| Company name | Bid US$/mt FOB |
| Limardi | 252.50 |
| Diva | 252.00 |
| Urbantara | 252.00 |
| Summit | 251.75 |
| RCL | 251.00 |
| BBSC | 251.00 |
| Prada | 251.00 |
| Swiss Singapore | 250.95 |
| Toepfer | 250.76 |
| Profeta | 250.00 |
| Youngwoo | 248.05 |
| Consul | 248.00 |
| Indevco | 247.50 |
| Parnaria | 245.00 |
Sources report Pusri immediately awarded a cargo to Limardi. It started talks with the other companies right away. One trader noted that after the jolt of the first Pusri tender and then the more sobering results from the Kaltim and PIM tenders, bids in the second Pusri tender were closer together and more manageable.
Kaltim and PIM awarded cargoes Sept. 29 well below the Pusri price of $257.55/mt FOB level, but still strong enough to put the market solidly in the low-$250s/mt FOB.
The PIM tender ended up with 59,000 mt of prilled urea awarded to the following companies at $255.02/mt FOB.
| Company | Quantity (mt) |
| Keytrade | 10,000 |
| Helm | 32,000 |
| Universal Harvest | 7,000 |
| Swiss Singapore | 5,000 |
| Davos | 5,000 |
The Kaltim selling tender for granular urea for 50,000 mt went for $250/mt FOB. Kaltim awarded 20,000 mt to Keytrade and 30,000 mt to Summit.
The lower price for granular urea, say sources, is an indication of how the urea market has changed in recent years. More granular urea production has come online recently. At the same time, buyers are less willing to stay with only one flavor of urea. They now tend to look at the price instead of the process.
Correction: The price reported in the PIM tender in the Green Markets Alert of Sept. 30 was incorrect due to a transcription error. The actual price awarded was as is reported here, $255.02/mt FOB.
Black Sea: Traders are looking to Yuzhnyy to supply material in the upcoming series of TCP tenders. Sources say the Middle East suppliers are comfortable for at least the first half of this month. One trader said that even if they wanted to, the producers do not have the tons to load and ship in the next fortnight.
China still has a 110 percent duty on its exported urea. Freight rates to Pakistan from Indonesia make the Kaltim and PIM material noncompetitive, say sources. That leaves Yuzhnyy.
Sources report that a deal just under $230/mt FOB for 40-50,000 mt was concluded late last week. That deal could set the floor for any tons offered to Pakistan.
Producers are looking at the seven Pakistan tenders and the STC/India tender as a way to make some money before the Chinese tons push prices down again.
Sources now peg the Yuzhnyy market at $229-$232/mt FOB.
Sources say producers will be arguing for higher prices as the TCP tenders progress. Observers say, however, that TCP could reject offers and roll over to the next tender. Likewise, STC could scrap its tender if prices are not to their liking.
As of Oct. 1, DH had October-December Yuzhnyy product at $230-$235/mt FOB, with January at $235-$245/mt FOB.
Middle East: The tenders in Pakistan and India will help give market players a better idea of where the Arab Gulf market sits.
At present, prices remain stuck in the mid-$250s/mt FOB. Sources report contract tons continue to move out at a steady pace.
The shortness of time between award and loading for the first few TCP tenders could eliminate Middle East suppliers, say sources. Producers may offer tons, but at a significant premium.
Sabic already has a deal with Pakistan. Sources report the governments of Pakistan and Saudi Arabia finally came to an agreement on the soft loan program for Pakistan. The loan will be for US$20 million, which should cover at least two cargoes from Sabic to Pakistan.
Sources say Sabic is in no rush to move the tons and may ship only after deliveries to the United States and Latin America slow down.
China: Prilled urea remains in the mid-$250s/mt FOB bagged before the export duty is added. Sources say granular is going for $5-$7/mt more.
Reportedly, producers are concerned that the global market may not recover enough to push the price out of China into the $260s/mt FOB once the export duty drops back to 10 percent Nov. 1.
Sources say many of the producers need the $260/mt FOB price to clear their own production costs. For the more efficient producers, $260/mt FOB is a means to a healthier balance sheet.
NITROGEN SOLUTIONS
U.S. Gulf: The UAN barge market is called in the $125-$130/st FOB range ($3.91-$4.06/unit). Sources reported less excitement in the market last week after a round of buying that pulled the market into the $120s/st.
As of Oct. 1, DH had October-December at $135-$140/st FOB. First-half 2010 product is $147-$152/st FOB.
Eastern Cornbelt: UAN remained at $5.47-$5.94/unit FOB regional terminals. Forward contract UAN-32 for November and December ranged from $185.60-$201.60/st ($5.80-$6.30/unit) FOB in the region.
Western Cornbelt: The UAN-32 market remained at $165-$185/st ($5.16-$5.78/unit) FOB regional terminals to the dealer, depending on location, with the upper end reported in Missouri on a spot basis.
California: UAN-32 remained at $200-$210/st ($6.25-$6.56/unit) FOB and $190-$200/st ($6.09-$6.25/unit) railDEL in California.
Pacific Northwest: Delivered UAN-32 was pegged at $190-$215/st ($5.94-$6.72/unit) in the region, with the low for railed tons and the upper end for truck-delivered UAN. Those numbers reflected a slight drop from last report.
Western Canada: UAN-28 was unchanged at $271-$287/mt ($9.68-$10.25/unit) DEL in Western Canada.
AMMONIUM NITRATE
U.S. Gulf: Most players call barges in the $200-$205/st FOB range.
As of Oct. 1, DH is showing forward paper business at $200-$210/st FOB October-December.
Western Cornbelt: Ammonium nitrate was unchanged at $255-$265/st FOB in the region, with some suppliers referencing a $275/st FOB price to the dealer.
California: No market was reported for ammonium nitrate in California. CAN-17, however, was unchanged at $235-$245/st FOB in the state.
Pacific Northwest: Ammonium nitrate was pegged at a nominal $335-$350/st DEL for the last done business. CAN-17 was steady as well at $245-$250/st FOB and $260/st DEL in the region.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was steady at $160-$180/st FOB.
Western Cornbelt: Granular ammonium sulfate was quoted at $160-$180/st FOB or rail-DEL in the region.
California: Ammonium sulfate was steady at $235-$272/st FOB, with the low for standard grade and the upper end for granular product in desert locations.
Pacific Northwest: Granular ammonium sulfate was quoted at $215-$225/st DEL in the region, reflecting a slight drop from last report.
Western Canada: Granular ammonium sulfate was quoted at $300-$305/mt DEL to the dealer.
PHOSPHATES
Central Florida: No new prompt phosphate railcar deals were found last week, but truck loads – at least a few – were done. Producers and traders were both saying they were still waiting for dealers to begin ordering, but dealers were still waiting for the farmers to make a move. Rain in the Midwest last week was not helpful.
The overall picture for phosphate during the next several months appears to be restrained. The domestic market has been barely breathing for nearly two years, and this Fall has been a disappointment. The export market has more than likely nearly come to an end, and the lack of markets could very well lead to increased curtailments by producers. The only real hope is for a surge during the next two weeks, after crops in the Midwest begin to be harvested. Whether the surge will be a ripple or a tsunami was hard to judge last week, because wet weather delayed field activity.
Ammonia prices were settled last week at an increase of $20/mt, which will add only a little more than $4/st in production costs for DAP. Quarterly sulfur prices were scheduled to begin sometime early this month.
The Central Florida DAP price range was unchanged last week at a flat $275/st FOB. Both Mosaic and PCS Sales had a $10/st FOB additional charge for MAP. Agrifos, which had a slight uptick in sales, was charging $300/st FOB for DAP and $305/st FOB for MAP.
U.S. Gulf: Sellers were still hopeful the rain delay in the Midwest last week will ease and farmers will be able to begin harvesting corn and soybean crops this week, so dealers can begin making sales. Then – and only if that happens – will there be a chance to salvage the fall season. If that does not happen within the next two weeks, it will be a very bleak period.
As of last week, there were no serious moves to begin re-supplying the upriver areas, and that will soon not be possible due to the closed river starting around the middle of this month.
Meanwhile, producers have been able to keep inventories low with a heavy export schedule, but that business will be coming to an end by around Oct. 15, and curtailments could be on the horizon.
Most in the industry were predicting a robust spring season because the two previous springs have been well below expectations. If farmers feel confident that they can get a decent price for their crops and fertilizer prices do not rise too much or too fast, that is a possibility. Last week corn prices were on the upswing, and late in the week the price for December corn was around $3.43/bushel and about $0.50/bushel higher for December 2010.
Congress was considering a proposal from farm state members to increase the amount of ethanol in gasoline from 10 to 15 percent. However, the auto industry was warning that such an increase could damage engines in many vehicles, and the measure will likely meet with stiff resistance.
Warehouse prices, which were too low to support NOLA DAP barge prices, were softer last week, although sales from terminals were taking a slight upturn. Oklahoma and Kansas, wheat country, and Texas were ahead of the rest of the Midwest, which was normal for this time of year.
The NOLA DAP barge price range moved down last week, from $276-$280/st FOB the previous week to $272-$275/st FOB. Mosaic was seeking $295/st FOB. Both Mosaic and CF were charging a $10/st FOB premium for MAP.
As of Oct. 1, DH had paper trades at $270-$280/st for October-December.
Eastern Cornbelt: DAP remained at $310-$320/st FOB regional warehouses to the dealer, with MAP $10/st higher. Forward contract DAP for November and December was posted at $320-$325/st FOB regional warehouses from one supplier.
10-34-0 was pegged at $315-$325/st FOB in the region.
Western Cornbelt: Movement remained on the backburner. While many were predicting usage cutbacks this fall, particularly for potash and phosphates, others were optimistic that fall volumes will still be decent if the weather cooperates.
DAP pricing was down slightly to $305-$315/st FOB warehouses to the dealer, with MAP $10/st higher. One regional supplier was referencing forward contract DAP for November and December at $320/st FOB St. Louis, and $325/st FOB Inola and Pine Bend.
10-34-0 was quoted at $310-$325/st FOB in the region. Effective Oct. 1, Agrium’s phos acid postings moved to $670/st rail-DEL for both super phosphoric acid (SPA) and merchant grade acid (MGA) in Colorado, Iowa, Kansas, Minnesota, Nebraska, New Mexico, North Dakota, South Dakota, Oklahoma, Texas, and Wyoming.
California: DAP and MAP were steady at $370-$375/st FOB or DEL in California. 16-20-0 remained at $270-$277/st FOB and $270/st rail-DEL, and the 10-34-0 market in California was pegged at $333-$354/st FOB, with the low in the Central Valley and the upper end at desert locations.
SPA and MGA were unchanged at $7.40/unit DEL in California, with Simplot referenced at $7.60/unit FOB the warehouse for MGA. Agrium’s phos acid postings for October remain at $740/st rail-DEL for both SPA and MGA in Arizona and California.
Pacific Northwest: DAP and MAP were steady at $360-$370/st DEL in the region, depending on location. 10-34-0 was tagged at $350-$375/st FOB, and 16-20-0 was quoted at $265-$270/st DEL in the region.
Phosphoric acid pricing remained at $7.40/unit DEL in the region for SPA and MGA. Both Agrium and Simplot announced no pricing changes for October.
Western Canada: MAP to the dealer remained at $440-$460/mt DEL in Western Canada.
U.S. Export: The export season was drawing to a close last week, and no new deals were found. India’s RCF was scheduled to act on its offer to buy 200,000 mt very soon, but no bids were made by North American suppliers. Latin America was also moving out of the picture late last month, and no new business prospects were waiting in the wings.
The export market has kept inventories low and shipments to India under previous agreements will continue for another few months, but with a lackluster domestic market, curtailments of phosphate production could be on the horizon.
The export price range last week was unchanged at $310-$312/mt FOB due to a lack of new sales.
As of Oct. 1, DH had Tampa paper trades at $300-$310/mt for October and $290-$300/mt for November-December.
POTASH
Eastern Cornbelt: Spot quotes for potash were reported in the $465-$500/st FOB range in the region, with the low for Russian tons out of spot river locations in Illinois.
Western Cornbelt: The regional potash market was quoted at $465-$500/st FOB, with the low reported for Russian product on a spot basis. One source put the market for Canadian product in his location at $485/st FOB for red granular and $493/st FOB for white granular.
California: Potash was tagged at $530-$565/st FOB or DEL, depending on grade and supplier. Potassium nitrate remained at $1,080/st FOB for bulk tons and $1,150/st FOB for bags.
Sulfate of potash pricing had reportedly dropped to $685-$730/st FOB for bulk tons, depending on grade and supplier.
Pacific Northwest: Rail-delivered potash was pegged at $515-$530/st in the region, depending on grade, with the lower numbers for 60 percent muriate and the upper end for 62 percent.
Western Canada: Potash postings to Canadian customers FOB Saskatchewan mines remained at $560-$569/mt, depending on grade.
China: Migao Corp., a China-based specialty fertilizer producer, reports that it has agreed to several contracts to deliver 75,000 mt of the company’s specialty potash fertilizers to high-value-crop customers across China. Three large contracts comprise the majority of the 75,000 mt. The orders, to be delivered by the end of the year, are from recurring customers for tobacco, as well as fruit and vegetable applications. Along with existing delivery commitments, Migao’s core products are all sold forward until Dec. 31, 2009.
“As expected, demand for our products has increased as the crops we serve prepare for the more intense fertilizer application seasons. This season goes all the way through to March for much of the country given the climate for the concentrated agricultural regions of China,” said Liu Guocai, Migao CEO. “A somewhat more stable potash price recently, combined with lower than ideal applications of fertilizer earlier this year, has created an improved environment for Migao’s fertilizers.”
Migao’s annual production capacity for its core potassium nitrate and potassium sulfate fertilizers is 320,000 mt. Major repairs and maintenance were completed earlier in the year, and there are no other scheduled major shutdowns at any of the facilities in China for the balance of the calendar year.
SULFUR
Tampa: The new quarter began last Friday. PotashCorp had begun negotiations with its suppliers, but Mosaic had not.
Sulfur producers’ hopes for a sharp price increase, which they were touting at the TFI World Conference in Washington last month, were apparently being tempered by reality last week. With the phosphate industry in the dumpster in terms of a spring season and the export market’s season coming to an end, demand for sulfur to produce phosphate will likely abate during the next several months, and any increase was likely to be modest if at all, said sources.
At the same time, supply and demand were nearly in balance, because the summer driving season was coming to an end and less was being sold. Refineries were continuing to use more sweet crude than normal.
Prill operations on the Gulf were running around 50 percent of capacity, but the world market was beginning to make a retreat. About 30,000 mt of prill was exported in September, and about 40,000-45,000 mt will be done this month. The price was still $20/mt or above.
Correction: The contract prices for the Price Scan for Tampa, Houston, and New Orleans changed in Green Markets Aug. 10 from the second quarter to the third quarter, and this was reflected in the fine print on page five. However, starting with the Aug. 17 issue up until this issue, dated Oct. 5, the fine print incorrectly showed second quarter instead of third quarter.
West Coast: Prill production was down and no vessels were scheduled for loading this month as of late last week.
Vancouver: China has about 2 million mt of sulfur stored at its docks, and at least one source said the Chinese will probably use that as a wedge to hold down prices – a tactic it has used in the past with phosphate.
The Week in Fertilizer Stocks
| Producer | Symbol | Price | Week Ago | Year Ago |
| Agrium | AGU | 47.68 | 49.82 | 54.90 |
| CF Industries | CF | 84.20 | 86.63 | 88.64 |
| Intrepid Potash | IPI | 22.22 | 23.42 | 29.65 |
| Mosaic | MOS | 46.43 | 50.40 | 67.51 |
| PotashCorp | POT | 86.42 | 90.86 | 128.04 |
| Terra Industries | TRA | 34.85 | 36.49 | 28.40 |
| Terra Nitrogen | TNH | 103.55 | 104.15 | 94.79 |
| Distribution/Retail | ||||
| Andersons Inc. | ANDE | 34.50 | 34.98 | 34.98 |
| Deere & Co. | DE | 41.40 | 44.43 | 46.30 |
| Scotts | SMG | 41.58 | 42.25 | 23.21 |
SPOT BARGE PRICES
Terra to pay special $750 M dividend, repurchase senior notes, raise capital; CF still interested, reviewing impact
Terra Industries Inc. said Sept. 24, after the markets closed, that it plans to return an aggregate of approximately $750 million in cash to shareholders through a special cash dividend of $7.50 per share, expected to be declared and paid in the fourth quarter of 2009. Terra also announced that Terra Capital Inc. is commencing a tender offer and consent solicitation to purchase any and all of the company’s 7.00% Senior Notes due 2017 for cash at a price equal to 104.5 percent of par, including a consent fee. In addition, Terra plans to raise up to $600 million of capital through a debt financing.
“Terra’s board is focused on delivering value to our shareholders, and the special dividend offers shareholders significant additional value for their investment in Terra,” said Terra President and CEO Michael Bennett. “The stabilization in financial markets allows us to recalibrate our balance sheet while positioning Terra to continue to take advantage of opportunities to acquire assets that complement our business strategies.”
The Terra move may very well change the dynamics in CF Industries Holdings Inc.’s hostile takeover attempt of Terra. CF had been assuming Terra would have some $1 billion in cash. Under Terra’s latest move, that would be reduced to $500 million. While CF has not extended its latest offer, it still is attempting to elect three members to Terra’s board at the Nov. 20 shareholder meeting.
“We remain committed to acquiring Terra and are reviewing this news and the way it could affect our offer,” a spokesman for CF Industries Holdings Inc. told Green Markets late Thursday.
“Terra is committed to return value to its shareholders and this special dividend and debt refinancing is one way to do that,” a Terra spokesman told Green Markets, when asked if these were mechanisms to also stave off a CF takeover attempt. Prior to the move there had been speculation that Terra might continue to take “poison pills” to deter CF. Earlier this year, Terra successfully moved its shareholder meeting from May until later in the year.
Ironically, under CF’s last offer for Terra (GM Aug. 10, p. 1), CF would have returned $1 billion in cash to shareholders of the combined company following the closing of the transaction. Terra has now opted to give its shareholders the money beforehand, instead of after an acquisition. CF said a CF/Terra combo would have an estimated $2.1 billion in cash.
Yara and Mansfield join forces on DEF
Nitrogen giant Yara International ASA and major fuel distributor Mansfield Oil Co. of Gainesville, Ga., are combining forces to provide North American fleets with a diesel engine exhaust solution (DEF) that meets rigid 2010 Clean Air Act standards. Beginning with 2010 diesel models, DEF reduces nitrogen oxide emissions by some 90 percent while boosting mileage by 5 percent.
“Since 1957, Mansfield’s network of hundreds of supply and distribution points in local markets nationwide has been relied on by leading fleets like Republic/Allied Waste and UPS. Yara’s expertise in reducing harmful exhaust chemicals to practically zero is a fact proven out by their strong market position in Europe,” says Michael Mansfield Sr. “We’re proud to bring our customers a proven solution to 2010 emissions compliance through this partnership of expertise and experience.”
Yara has been a global pioneer in NOx abatement and today claims a 40 percent share of the DEF market in Europe, which began requiring such emission controls some four years ago. It is also a large supplier in Australia. Yara is the world’s largest diesel exhaust fluid producer, commercialized under the Air1 brand. Yara’s Sluiskil plant in the Netherlands is the single biggest DEF production site in the world.
“Starting today, we offer the most developed DEF supply platform in the U.S. ?Çô combining domestic production with a strong back-up global supply for serving the 50 billion gallons of diesel consumed commercially every year in this country. Air1’s unrivaled expertise in rolling out this new market, combined with Mansfield’s distribution network, will help operators across the country move with full confidence into DEF usage,” says Chad Dombroski, director, Yara North America.
“We are excited to add Air1 DEF, a new product with a mandated market, to our partnership, so we can develop our local market while expanding our service to national accounts,” stated Glenn Pumpelly, president of Pumpelly Oil.
Pumpelly Oil, a distributor that has worked with Mansfield for several years as a member of their DeliveryOne network, is pleased with the opportunity to offer DEF.
Mansfield’s DeliveryOne network is already poised to supply Air1 in every major local market, according to Doug Haugh, Mansfield executive vice president. “Calls will first come into our national service center in Denver, Colo., which is staffed with friendly, knowledgeable fleet experts that can answer questions on the emissions and performance issues facing fleet owners today.” The Denver center refers callers to their local service center.
Mansfield delivers fuel services across 49 states from over 900 supply points. The company annually delivers 2 billion gallons of fuel to corporations, fleets, retailers, convenience stores, and government agencies.
In addition to Mansfield, which is known for its distribution to major fleets, Yara has also been pursuing other distributors, such as Pilot Travel Centers of Knoxville, Tenn. Pilot just began supplying Yara Air 1 in Oregon and North Carolina, with plans to supply DEF at over 100 stations by the end of first quarter 2010 (GM Sept. 21, p. 10). Pilot, the nation’s largest retail operator of travel centers for the professional driver and traveling motorist, in 41 states with over 300 retail interstate properties, is in the process of merging with Flying J and will be making arrangements for installations at those locations.
Both Yara and Terra Industries Inc. appear poised to have significant shares of the North American DEF market (GM Sept. 21, p. 1). Like Terra, Yara also serves the stationary SCR market, which includes nitrogen-based emission abatement products for utilities.
Mansfield and Yara have set up a toll-free help line for fleet operators, owners, and managers: 877-810-4DEF (333).