Atlanta, Ga.-Agrico Chemical Co. and BASF Sparks LLC are among those agreeing to clean up contamination at the Landia Chemical Co. Superfund site in Lakeland, Fla., according to an EPA announcement. Pesticides were produced on the site for nearly a half century, as well as fertilizer on adjacent property. The settlement, approved by the U.S. District Court for the Middle District of Florida, commits the companies to fund and complete an $8.5 million cleanup at the 5-acre site and reimburse EPA for future oversight costs. Other parties are PCS Joint Venture, Ltd., Sylvite Terminal & Distribution LLC, and the individuals Billy G. Mitchell and Walter G. Grahn. According to EPA, pesticide manufacturing, blending, and formulating operations were conducted on the Landia property from 1940 until 1987 by Landia Chemical Co., Agrico Chemical Co., and the now-defunct Standard Spray and Chemical Co. Also, Standard Spray and Chemical Co. stockpiled sulfur directly on the adjacent Florida Favorite Fertilizer (FFF) property. These operations resulted in the release of various pesticides, metals, semi-volatile organic compounds, and volatile organic compounds into the environment. EPA concluded in a 2007 record of decision that: (1) the cleanup of the property should involve excavation and off-site disposal of contaminated soil; (2) in situ chemical oxidation treatment of groundwater in pesticide source areas should be carried out to address the highest ground water contaminant concentrations; (3) in situ bioremediation should begin in other selected areas to enhance the natural attenuation process; and (4) a performance monitoring plan should be performed to evaluate the effectiveness of the soil cleanup approach and the ground water interim action on ground water contaminant concentrations. EPA also wants to establish institutional controls to ensure the future use of the Landia and former FFF properties remains industrial, to restrict the use of contaminated ground water, and to ensure any engineering barriers that are relied upon are maintained.
All posts by traceybg@gmail.com
Management Briefs
Truth Chemical has hired Cookie Magen as director of fertilizer sales, Northeast. Magen previously held the position of regional manager at Meherrin Fertilizer, where she managed procurement for the company’s wholesale system, as well as its fertilizer trading business. She will continue to reside in Malvern, Penn., and can be reached by phone at 610-647-5467, or by e-mail at cmagen@truthind.com.
Truth Chemical also announces the hiring of Jake Simons as Midwest fertilizer sales representative for Illinois. Truth says he brings a strong farm background and has spent the last several years managing and directing sales for Streator Farm Mart. Simons resides in Normal, Ill., and he can be reached by phone at 309-261-2398, or by e-mail at jsimons@truthind.com.
Koch Fertiliser Ltd. has relocated its offices from Tidworth to the Marlborough Business Park in Wiltshire, U.K. “This move gives us improved access to transportation near the M4 corridor,” said John Ridd of Koch, “and our close proximity to Swindon will serve as a good base for recruiting future employees, service contractors and consultants.” The company established temporary offices in Tidworth last year when a subsidiary of Koch Fertilizer LLC acquired certain assets of the fertilizer importing, blending and marketing firm Usborne Fertiliser Ltd.
“Establishing our new offices in Marlborough positions Koch Fertiliser to better serve customers and add value in the markets we serve in the U.K. and Ireland,” said Jim Sorlie, senior vice president, supply and trading, for Koch Fertilizer LLC.
The company’s new address is 1 Woodstock Court, Blenheim Road, Marlborough, Wiltshire, SN8 4AN. The office number is 01672 518290. The fax number is 01672 518299.
Intrepid Potash Inc. has appointed John Mansanti as vice president of operations, reporting to Bob Jornayvaz, chairman and CEO. Mansanti will oversee operations at New Mexico and Utah facilities and be tasked with driving an optimal operations strategy. He will be based at corporate headquarters in Denver, and will join Intrepid in mid-October.
Mansanti, 54, joins Intrepid from Barrick Gold Corp., where he most recently served as general manager at the Goldstrike Mine in Carlin, Nev. He has held various engineering and management positions in the mining industry for the last 30 years.
Market Watch
AMMONIA
U.S. Gulf/Tampa: No new business was reported last week for import or NOLA. While some speculated that product might be getting long, sellers appeared to be working hard to keep prices from falling. They cited the current outage at FertiNitro, and now two outages at PotashCorp in Trinidad. PotashCorp’s number two Trinidad plant went down Sept. 5 to replace a catalyst and is not expected back up until Sept. 26-27. It is expected to take 38,500 st out of the market. The number four plant will go down Oct. 19 for general maintenance for some 28 days, taking 56,000 st out of the system.
In the meantime, the Direct Hedge (DH) paper market as of Sept. 17 indicated Tampa at $330-$350/mt for September, $325-$340/mt for October, and $300-$320/mt November-March.
Eastern Cornbelt: Spot quotes for anhydrous ammonia remained in the $350-$370/st FOB range to the dealer, depending on location. Sources reported no new business to test those numbers. Forward contract tons for October through December were being offered at $360-$365/st FOB in Indiana and $365-$370/st FOB in Illinois.
Favorable weather helped advance crop maturation in the region in mid-September, but progress continued to lag in all three states.
Western Cornbelt: Although fall ammonia movement has not yet kicked in, sources talked of firming prices based on reports of low inventories and expectations for brisk fall demand. Sources in some areas said they expect more ammonia to be applied this fall, while others predicted only 75 percent of their usual fall demand. Some talked of concerns about logistics in certain areas if the fall season is heavy and compressed. As for spring ammonia tons, farmer interest remained very low.
Sources tagged the ammonia spot market at $330-$360/st FOB in the region, with the low in Nebraska and the upper end reported in Iowa. Missouri sources continued to talk of delivered tons in the $350-$360/st range from southern production points. There was no new business to test the market, however.
Northern Plains: Ammonia was going down on preplant winter wheat in some locations, but most sources reported minimal activity and few new sales to test the spot market. Anhydrous ammonia was pegged at $350-$370/st FOB regional terminals to the dealer, with delivered ammonia at $370-$390/st in North Dakota. One supplier was offering forward contract ammonia for October through December at $360-$370/st FOB in the region.
Middle East: The tender results from the FACT/India tender confirm the $270/mt FOB level for Middle East tons. Only two offers were entered in the FACT tender, one from Sabic and the other from Transammonia. Industry sources say Trammo will most likely take its tonnage from Iran, if it wins the award. As the TFI World Conference left Washington, FACT had yet to decide a winner.
The pricing trend has been moving up. Producers are turning out the tons as fast as they can, say sources. Demand from India and Asia are the main engines driving the market.
Black Sea: Rumors continued to circulate that a deal in the $270s/mt FOB was done in recent weeks. Sources, however, cannot name a buyer or seller, nor can anyone agree on the tonnage purchased.
Without indications of new purchases, the price remains firmly at $265/mt FOB. Producers are said to be unwilling to discuss any price below that. One observer noted that even $265/mt FOB is too low to get a discussion going.
The main issue in the area is that the ammonia price is too low for production costs.
Producers have been pushing for higher prices so that those that are open will stop writing entries in their account books in red ink. The plants that are closed would like to re-open, but can only do so after the price is firmly in the low- to mid-$300s/mt FOB.
Sources say the push by those few plants – mostly Russian – that are running to get to $280/mt FOB is based on the basic production costs. Reportedly, $280/mt is the break-even point for Ukrainian producer OPZ. Russian plants have a slightly lower cost.
They all want the price to settle at higher levels – but not too high.
Right now, the plants that are operating are able to sell their cargoes without much problem. If more plants come online, the extra tonnage put back into the system could once again dramatically lower prices.
For now, prices remain in the upper $260s/mt FOB for purposes of discussion. No new deals confirming a higher price came out last week.
As of Sept. 17, DH was indicating September at $265-$280/mt and October-December at $270-$280/mt.
India: FACT closed its tender for 7,500 mt early last week with only two offers. Sabic offered tons at $330/mt CFR and Transammonia at $320/mt FOB.
FACT regularly depends on tenders for its ammonia supplies. Many of the other Indian buyers have long-term contracts with suppliers, mostly from the Arab Gulf.
The FACT price will set a new point for the formula talks that will continue.
India remains a strong buyer, helping keep the Middle East market on an upward trajectory.
UREA
U.S.Gulf: Most put the granular market in the $265-$270/st range last week. However, a cargo as low as $258/st FOB was sold for mid-October, giving an indication for forward business.
As of Sept. 17, DH was indicating September at $265-$270/st, with a big drop-off for October-December to $245-$252/st.
Eastern Cornbelt: Granular urea was steady at $315-$325/st FOB in the region, with no movement reported.
Western Cornbelt: Sources quoted the granular urea market at $310-$320/st FOB regional terminals to the dealer, with little fall demand and minimal interest in spring pricing. The dealer market FOB Inola and Enid, Okla., was reported in the $305-$310/st FOB range last week.
Northern Plains: Sources quoted the granular urea market at $315-$320/st FOB and $325-$360/st DEL in North Dakota, depending on location and supplier.
Northeast: Things were very quiet on the fertilizer front in mid-September. “Very few people are willing to buy,” said one source. Another dealer said he planned to hold off on purchasing any replacement tons until the corn harvest is well underway in his location. “We are not being aggressive right now, on chemicals or fertilizer inputs,” he said.
Granular urea was pegged at a nominal $315-$325/st FOB in the Northeast region, although there was limited tonnage and no sales to test the dealer market.
Eastern Canada: The granular urea market was quoted at $415-$450/mt FOB in the region, depending on location and supplier.
India: IPL awarded about 900,000 mt from a tender that showed 1.9 million mt in firm offers.
The buying house was successful in holding to the $270/mt CFR target it set, despite offers that came in much higher. Awards follow.
| Company | Source | Quantity (mt) | Price US$/mt CFR | Price US$/mt FOB | Notes | |
| Qafco | Qatar | 100,000 | 255.00 | |||
| PIC | Kuwait | 125,000 | 255.00 | Bahrain | ||
| 254.00 | Shuaiba | |||||
| Sabic | Saudi Arabia | 50,000 | 254.50 | |||
| Fedcominvest | Open | 100,000 | 268.00 | Mundra | ||
| 270.00 | Kandla | |||||
| 200,000 (s/o) | 268.00 | Mundra | ||||
| 270.00 | Kandla | |||||
| Transammonia | Open | 120-180,000 | 268.00 | Mundra | ||
| 270.00 | Kandla | |||||
| CIFC | Open | 75,000 | 268.00 | Mundra | ||
| 271.00 | New Mangalore |
Letters of intent to buy were issued almost immediately to the Arab Gulf producers. PIC/Kuwait was originally awarded 100,000 mt, but got an award for the additional 25,000 mt after a round of talks between IPL and the producer.
The tons purchased from the traders are expected to come from the Black Sea.
As Green Markets went to press, Asian sources reported that the 200,000 mt optional tons offered by Fedcominvest were not accepted by the Indians.
Word circulated late last week that Indian buyers were talking to traders and producers about some private deals to buy more material.
In the past, when buyer agents were talking about private deals, a tender usually followed. This time, said one source, the buyers are hoping to piggyback on the IPL tender instead.
Sources say the pricing levels under discussion were in the upper $230s/mt FOB.
Even though the monsoons were late this year, sources say several key areas are recovering nicely. The better-than-expected situation could mean that Indian farmers will need more tons than earlier predicted.
Middle East: No one was surprised that prices came off in the IPL/India tender. People were surprised, however, that the price did not drop further.
The Indian buyers were able to shave a few more dollars off the original offers, but not a lot.
With the IPL tender behind us and 275,000 mt booked for the next eight weeks, the market is firmly locked in the mid-$250s/mt FOB.
Producers were reportedly nervous about their growing stockpiles, but not nervous enough to offer aggressively low prices.
The shipments booked in this tender will keep these three producers happy into the last quarter of the year.
The area is expected to quiet down for the next couple of weeks as post-Ramadan celebrations kick in.
Black Sea: A majority of the tons awarded in the IPL tender will most likely come from the Black Sea, say sources. While sources peg the market in the low $230s/mt FOB, they also say no one could point to a real deal at the $230/mt FOB level. They add that some Indian buyers were reportedly looking for private deals in the upper $230s/mt FOB.
As of Sept. 17, DH was indicating Yuzhnyy at $230-$235/mt for September, $233-$237/mt October, and $230-$235/mt November-December.
Pakistan: Early last week the Economic Co-ordination Committee approved the importation of 400,000 mt by private companies. By week’s end, however, the government panel reversed its decision and left import authorization with TCP.
Sources say Pakistan needs at least 300,000 mt. The additional tons may reflect political pressure from local leaders anxious to satisfy the concerns of the farmers.
It appears that the US$100 million soft loan package from Saudi Arabia is now dead. Sources say there has been no discussion of the Saudi offer for about a week and a half.
China: Reports that tons in the bonded warehouses will have until Sept. 24 to be shipped out are being dismissed by many in the industry. Sources say only cargo that started loading onto vessels Sept. 15 will be allowed to go out at the lower 10 percent duty. After Sept. 15, the export duty jumped to 110 percent until Nov. 1.
Sources say the bonded warehouses will continue to fill up until the November window opens. The problem for the producers is that few seem willing to take a chance on a position into November.
All dealings with China are expected to be put on hold for the next fortnight. Besides the mid-autumn festival, the country will be celebrating the 60th anniversary of the founding of the People’s Republic of China.
Indonesia: Pusri is expected to call a tender Sept. 25 to sell 50,000 mt of prilled urea in 10 lots of 5,000 mt each.
Kaltim will call a tender Sept. 29 to sell 20,000 mt of granular, with an option on an additional 10,000 mt.
Some in the industry said the Pusri tender may stay at only 5,000 mt to test the pricing waters.
Bangladesh: BCIC called another of its short-call tenders. There is a validity of 10 days on the following tenders of 25,000 mt each of bagged prill and granular material for Chittagong and Mongla. Sources say no awards have been made in any of the previous tenders.
12,500 mt bagged prilled urea for Chittagong |
|||||
| Offering company | Origin | Qty (mt) | US$/mt FOB | Freight (US$/mt) | US$/mt CFR |
| BD Commodities Trading | Russia, China, Qatar, Egypt, Indonesia, Ukraine | 12,500 | 240.17 | 35.00 | 275.17 |
| Yunna Dehong International | Ukraine, CIS, Russia, China, Indonesia, Malaysia, Lithuania | 12,500 | 242.90 | 35.00 | 278.90 |
| Pentagon Group | Ukraine, Russia, Turkey, China, Indonesia, Egypt | 12,500 | 239.50 | 35.00 | 285.00 |
| Helm Fertilizer | Qatar, Egypt, China, Middle East, Iran. | 12,500 | 260.19 | 32.00 | 292.19 |
| Bulk Trade | China, Indonesia, UAE, Saudi Arabia, Qatar, Russia, Egypt, CIS, Uzbekistan | 12,500 | 263.30 | 30.00 | 293.30 |
| Blue Deebaj Chemical | Uzbekistan, Russia, China, Malaysia, CIS, Middle East | 12,500 | 273.00 | 35.00 | 308.00 |
| International Fertilizer Trading | Russia, China, Indonesia | 12,500 | 285.76 | 30.00 | 316.06 |
| Toepfer | Qatar, Egypt, China, UAE, Indonesia | 12,500 | 283.15 | 36.00 | 319.45 |
12,500 mt bagged prilled urea for Mongla |
|||||
| Offering company | Origin | Qty (mt) | US$/mt FOB | Freight (US$/mt) | US$/mt CFR |
| BD Commodities Trading | Russian Federation | 12,500 | 241.17 | 38.00 | 279.17 |
| Pentagon Group | Russia, Romania, China Turkey, Indonesia, Qatar | 12,500 | 241.30 | 45.00 | 286.80 |
| Helm Fertilizer | Qatar, Egypt, China, Indonesia, Iran | 12,500 | 263.19 | 32.00 | 295.19 |
| Desh Trading | China, Egypt, Saudi Arabia, Qatar, UAE, Indonesia, Oman | 12,500 | 264.30 | 33.00 | 297.30 |
12,500 mt bagged granular urea for Chittagong |
|||||
| Offering company | Origin | Qty (mt) | US$/mt FOB | Freight (US$/mt) | US$/mt CFR |
| BD Commodities | Russia | 12,500 | 253.17 | 35.00 | 288.17 |
| Pentagon Group | Russia, Uzbekistan, Turkey, China, Egypt, Indonesia | 12,500 | 247.70 | 47.00 | 295.20 |
| Helm Fertilizer | Qatar, Egypt, China, Indonesia, Iran | 12,500 | 267.99 | 32.00 | 299.99 |
| Bulk Trade | China, Egypt, Saudi Arabia , Qatar, UAE, Malaysia, Indonesia, Iran, Oman | 12,500 | 282.65 | 30.00 | 312.65 |
| Agora International | Open | 12,500 | 283.42 | 30.00 | 313.92 |
| Blue Deebaj | UAE, Russia, China, Malaysia, CIS | 12,500 | 280.00 | 35.00 | 315.00 |
| International Fertilizer Trading | Russia, China, Indonesia | 12,500 | 299.91 | 30.00 | 330.21 |
12,500 mt bagged granular urea for Mongla |
|||||
| Offering Company | Origin | Qty. (mt) | US$/mt FOB | Freight (US$/mt) | US$/mt CFR |
| BD Commodities | Russia | 12,500 | 249.17 | 38.00 | 287.17 |
| Pentagon Group | Russia, Uzbekistan, Turkey, China, Indonesia, Egypt | 12,500 | 249.50 | 47.00 | 297.00 |
| Helm Fertilizer | Saudi Arabia , Iran, Qatar, Egypt, China, Middle East | 12,500 | 270.99 | 32.00 | 302.99 |
| Agora International | Open | 12,500 | 283.42 | 30.00 | 313.92 |
| Desh Trading Corporation | China, Egypt, Saudi Arabia, Qatar, UAE, Malaysia, Indonesia, Iran, Oman | 12,500 | 285.65 | 33.00 | 318.65 |
NITROGEN SOLUTIONS
U.S.Gulf: Barge demand was hard to find. Most put recent trades within the $130-$135/st ($4.06-$4.22/unit) FOB range. As with other fertilizers, sources said buyers are going to wait until the last minute. However, with UAN, sources said they are going to wait to see what Helm does with respect to the tons from Trinidad, as that plant is expected to begin production in November. Others, however, suggested that the first few months’ worth of production from that plant might already be committed. However, that could not be confirmed.
Another plant coming up in the near term is LSB Industries Inc.’s Pryor Chemical in Pryor, Okla. That plant will also produce UAN, which will be marketed by Koch Nitrogen. The official word from LSB is that that plant is expected to come up sometime by the end of the third quarter – Sept. 30.
As of Sept. 17, DH was indicating bullish numbers for the paper market at $140-$143/st for September and $142-$148/st for October-December.
Eastern Cornbelt: UAN pricing continued to be quoted at $5.47-$5.94/unit FOB regional terminals, with the low out of spot river locations. Forward contract UAN-32 tons for October through December were referenced by one supplier in the $184-$201.60/st ($5.75-$6.30/unit) FOB range in the region, depending on location.
Western Cornbelt: The UAN-32 cash market was steady at $165-$185/st ($5.16-$5.78/unit) FOB regional terminals, depending on location. One Iowa source put the common dealer market in the $170-$180/st ($5.31-$5.63/unit) range last week, with speculation that some lower numbers were available on a spot basis.
Northern Plains: The UAN market was pegged at $5.62-$6.05/unit FOB regional terminals, with delivered UAN-28 quoted at the $175/st ($6.25/unit) level in North Dakota. Forward contract UAN-32 FOB Pine Bend, Minn., was referenced at $6.05/unit for October, $6.10/unit for November, and $6.15/unit FOB for December.
Northeast: The UAN-30 market was pegged at $165-$168/st ($5.50-$5.60/unit) FOB Baltimore, Md. The UAN-32 market out of terminals in upstate New York was referenced at $192/st ($6.00/unit) FOB to the dealer, with very little movement to test the market.
Eastern Canada: UAN-28 was pegged in a very broad range at $205-$258/mt ($7.32-$9.21/unit) FOB in Eastern Canada, with the upper end reflecting reference pricing to the dealer from some regional suppliers. The low was reported for fall prepay booked earlier.
AMMONIUM NITRATE
U.S. Gulf: Barge pricing continues to be called $200-$210/st FOB and slow.
Western Cornbelt: Ammonium nitrate was unchanged at $255-$265/st FOB in the region, with some suppliers referencing an untested $275/st FOB price to the dealer.
Eastern Canada: Ammonium nitrate pricing remained at $385-$400/mt FOB in the region.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was steady at the $160/st FOB level to the dealer.
Western Cornbelt: Granular ammonium sulfate remained at $160/st FOB or rail-DEL in the region.
Northern Plains: Minnesota sources quoted the granular ammonium sulfate market at $160/st FOB, while delivered sulfate was pegged at the $225/st level in North Dakota.
Northeast: Granular ammonium sulfate continued to be quoted at $158/st FOB Hopewell, Va., with delivered tons at $175-$178/st to points in Delaware and Pennsylvania.
Eastern Canada: The granular ammonium sulfate market remained in a broad range at $330-$425/mt FOB regional shipping points, with fine grade sulfate quoted as low as $160/mt FOB on a spot basis.
PHOSPHATE
Central Florida: Unlike the Southwest Conference earlier this summer at San Antonio, talk at the TFI World Conference at Washington D.C. last week was definitely upbeat on the future of phosphate. Still, one source pointed out that was true the previous two years, “and if you say it every year, eventually it’s bound to come true.”
Dealers, sources said, were becoming more likely to order phosphate for their bins, but not right now. Later. Like in the spring of 2010. However, most expect what is left of the fall season to have a spurt of sorts before the middle of October. Talk – as well as confidence – was less enthusiastic for potash and urea.
Production of phosphate in Central Florida continued somewhat below normal levels, and that will probably not change until early next year, when the long-awaited spring season gets into gear. PotashCorp will cut its production in North Carolina in half when it begins a turnaround at Aurora in November.
No new prompt sales in Central Florida were found last week. The Central Florida DAP price range last week continued to be flat at $275/st FOB, based on the most recent sales. Small buyers can expect to pay a little more once traders unload what they have on hand. Both Mosaic and PCS Sales had a $10/st FOB additional charge for MAP. Agrifos had no posted railcar price, but its price for truckloads was $300/st FOB for DAP and $305/st FOB for MAP.
U.S. Gulf: Although no new prompt NOLA DAP barge deals were done at the TFI World Conference at Washington D.C. last week, the outlook was for a better year in 2010 for phosphate.
Sources said no new prompt phosphate deals were done on the river system last week at all, but several said they had seen a steady flow of material out of terminals and warehouses. In general, warehouse prices were mostly unchanged except along the Arkansas River system, which moved up about $5/st FOB last week. In some areas, the DAP warehouse price was as low as $282/st FOB.
Fears of a potential frost problem in some areas of the Cornbelt helped drive up the price of a bushel on Monday, but then the market pushed it back down late in the week to around $3.35/bushel for December 2009. The price for the following year was about $0.50/bushel higher. Hedge funds were also playing a role in the commodities market.
The maturity of the corn crop last week varied from field to field, with some virtually ready to harvest and others lagging a couple of weeks behind. An early frost would push the price of a bushel up significantly. Other crop prices were also somewhat improved. All of that was good news for the phosphate industry.
The two locks closed for maintenance by the Army Corps of Engineers reopened on Sept. 11, and normal barge traffic on the Arkansas River system had returned.
Although no new NOLA DAP barge deals were done last week, most were guessing that the price for prompt barge was about the same as the previous week. Still, those with positions for October were either asking for higher prices or were holding off on offering them for sale. One source said phosphate prices would be lower within a month, possibly as low as $265-$270/st FOB. A heavy demand in the final weeks of the season will push prices up.
The NOLA DAP barge price range remained unchanged last week – $280-$283/st FOB. Asking prices late last week were around $280-$283/st FOB. Both Mosaic and CF were charging a $10/st FOB premium for MAP.
As of Sept. 17, DH indicated NOLA barge at $275-$280/st for September-October and $270-$280/st November-December.
Eastern Cornbelt: DAP remained at $310-$320/st FOB regional warehouses to the dealer, with MAP $10/st higher. One source said he booked DAP fill tons earlier at the $312/st DEL level to his location. One supplier was referencing forward contract DAP tons for October through December at $325-$335/st FOB regional warehouses.
10-34-0 was quoted at $315-$320/st FOB in the region.
Western Cornbelt: DAP was quoted at $310-$315/st FOB warehouses to the dealer, with MAP $10/st higher. One source pegged delivered MAP at the $330/st level in his trade area. Several sources said they expect average fall demand for phosphates, provided weather conditions cooperate and harvest progresses. 10-34-0 was steady at $310-$320/st FOB in the region.
Northern Plains: DAP was quoted at $315-$325/st FOB in the region, with MAP $10/st higher. Delivered MAP in North Dakota was pegged at $345-$360/st last week. Forward contract MAP FOB Pine Bend was referenced at $340/st for October and November, and $345/st FOB for December through February.
10-34-0 was pegged at $315-$325/st FOB, with delivered 10-34-0 in North Dakota quoted as low as $315/st as well.
Northeast: MAP was tagged at $325-$335/st FOB in the region, with the low in western Pennsylvania. DAP was $10/st less than MAP, where available. 10-34-0 remained at $320/st FOB the tank in upstate New York, with other sources quoting a $340/st DEL level in the New England market.
Eastern Canada: The DAP market was pegged at $450-$475/mt FOB regional warehouses to the dealer, with MAP reported at $435-$460/mt FOB. No current dealer pricing quotes were available for TSP.
U.S. Export: India took another big step toward meeting its vast need for phosphate last week by purchasing about 300,000 mt of DAP from U.S. suppliers. PhosChem got the bulk of the business, about 200,000 mt, but Transammonia secured a contract for a handymax vessel. The third seller was believed to be KeyTrade. The price will be formula-based for PhosChem, while the balance was sold for a delivered price of $370/mt, which would amount to between $310/mt FOB and $312/mt FOB.
As of Sept. 17, DH indicated the paper market as $315-$325/mt for September, $300-$310/mt October, and $295-$305/mt November-December.
Brazil was said to be poised to hit the DAP market for between 300,000-500,000 mt during the next few months, and then seek MAP beginning in April.
TFI released its export report for August, which showed India took another 322,353 mt of DAP, while its neighbor, Pakistan, got 32,116 mt. Vietnam was the third largest customer at 27,600 mt. For the month, a total of 477,732 mt of DAP were exported, which was a decrease of 5.4 percent from the same period last year. Of course, India has been the major buyer for the calendar year-to-date, having taken 2,367,159 mt from the U.S. Vietnam was number two so far this year, at 254,246 mt, and Australia third at 131,499 mt. TFI said a total of 3,758,554 mt have been exported through August, which was a 15.5 percent increase over the same period in 2008.
TFI said a total of 246,493 mt of MAP were exported in August, which was a huge increase over the same month last year – 41.7 percent. Brazil was the major buyer at 104,113 mt, followed by Canada at 36,727 mt, and Argentina with 26,922 mt. Brazil was also the biggest buyer so far this calendar year-to-date, with U.S. MAP imports amounting to 413,800 mt. Canada was second at 275,469 mt, and Australia the third biggest customer at 289,679 mt. Total MAP exports amounted to 1,145,955 mt, a decrease of 4.8 percent compared to the same period in 2008.
Based on the most recent sales to India, the export DAP price range last week was $310-$312/mt FOB, which was a slight decrease from the previous week’s $315-$323/mt FOB. Ocean freight rates have been suppressing phosphate prices.
POTASH
U.S. Gulf: Barge price ideas last week were called $445-$450/st FOB.
Eastern Cornbelt: There was little activity to test the fertilizer markets at mid-month, and sources reported no changes in spot pricing from the previous week. One source did report some inquiries from growers on fall potash, which he took as a good sign. “When you can take your prices down $200 or $300 from where they were, that gets noticed,” he said. Others, however, were less optimistic. “Unless the farmer can buy potash for under $500, he won’t use it based on the current corn prices,” said another. “And that can’t be done yet today.”
Spot quotes for wholesale potash remained in the $475-$510/st FOB range in the region, with the low for Russian tons and the upper end from Canadian producers. One Indiana source confirmed a $515/st truck-DEL price to his location last week. Several sources reported price protection programs available from some North American producers, allowing retailers to fill now and delay payment – potentially until the end of March 2010.
Western Cornbelt: The regional potash market remained at $475-$510/st FOB, with the low for Russian product and the upper end from Canadian producers. While some held out hopes for at least an average fall on potash volumes, others were doubtful. “If a farmer cuts anything this fall, it will be potash,” said one.
Northern Plains: Potash remained at $467-$480/st FOB Saskatchewan mines to U.S. customers, depending on grade. Delivered potash was pegged at $510-$520/st in the region.
Northeast: Sources quoted the potash market at $510-$520/st FOB and $512-$535/st DEL in the region, depending on grade and location. Those numbers reflected another slight drop from last report, but there was no new buying taking place, and one source said he doesn’t anticipate any interest until mid-October when harvest is well underway. “I think there’ll be a lot of deals come December if this buying wall continues,” he said, noting that his business did not have a lot of potash left in inventory. Some sources even talked of likely offers of price protection to spur some buying activity.
Eastern Canada: Sources put the warehouse market for potash at $625-$635/mt FOB in Ontario, with the low for red and the upper level for white granular. Potash postings included 60 percent at $610/mt FOB Sussex, N.B., and $630/mt FOB Ontario and Quebec warehouse locations, with rail-delivered postings in Ontario and Quebec at $647-$656/mt, depending on grade.
The K-Mag market was quoted at $427/mt FOB in Ontario, down from last report.
SULFUR
Tampa: Talk at the TFI World Conference last week included how much the price of molten sulfur for Tampa should increase for the next quarter. The range was said to be between $15/lt and $30/lt. However, the phosphate industry was said to be seeking some stability in pricing, which might be acceptable to oil companies if they do not continue to lose money on every ton sold.
Refineries continued to produce at a lower rate than they normally would for this time of year, and more sweet crude was being used. Both of those factors were helping to reduce supplies, while demand has remained essentially unchanged during the past several months. Prill operations on the Gulf Coast were taking a larger portion than the previous year, which was a trend that will likely continue.
Prices on the world market were stable to up slightly, and China has remained in the market, despite reports of more than 2 million mt stored at docks in the country.
Pakistan: Pak-Arab Refinery Ltd. (PARCO) issued a tender to sell 5,000 mt of product in the fourth quarter from its Mid-Country Refinery. The minimum reserve price is $76/mt, excluding general sales tax and special excise duty. Bids are due on Sept. 18 and must be made for at least 250 mt.
The Week in Fertilizer Stocks
| Producer | Symbol | Price | Week Ago | Year Ago |
| Agrium | AGU | 53.29 | 50.28 | 73.94 |
| CF Industries | CF | 90.06 | 87.43 | 109.70 |
| Intrepid Potash | IPI | 25.19 | 24.15 | 30.51 |
| Mosaic | MOS | 53.73 | 50.72 | 83.65 |
| PotashCorp | POT | 96.51 | 90.30 | 160.33 |
| Terra Industries | TRA | 36.68 | 32.58 | 39.46 |
| Terra Nitrogen | TNH | 106.91 | 107.10 | 106.19 |
| Distribution/Retail | ||||
| Andersons Inc. | ANDE | 36.03 | 34.36 | 41.82 |
| Deere & Co. | DE | 45.92 | 43.03 | 59.92 |
| Scotts | SMG | 43.84 | 43.06 | 26.75 |
SPOT BARGE PRICES
Terra gives positive outlook, lambastes CF, offer resets meeting date; Agrium renews efforts to raise $1 B
Terra Industries Inc. said Sept. 8 that it has sent a letter to shareholders and has now set Nov. 20, 2009, as the date of the annual shareholders meeting. On Aug. 31 it had indicated Nov. 19 as the meeting date (GM Sept. 7, p. 1). Terra has yet to name a location for the shareholder meeting.
Terra says that any shareholder proposal to be included in the company’s proxy statement for the meeting must be received by the company by close of business Sept. 18.
In its letter, Terra went on to give an upbeat review of the company’s outlook, saying the future continues to look bright. “The weakness in nitrogen markets in the first half of 2009 has leveled off as the general economy has stabilized. Since the beginning of 2009, the North American unaffected fertilizer composite has risen 29.0 percent, and during that time the broader market has shown signs of recovery, with the S&P 500 index gaining 13.9 percent.”
Terra sees improving fundamentals for the remainder of the year. It expects a strong fall fill season and strengthening nitrogen prices to refill depleted inventories. It said natural gas prices remain low, and that the company expects them to remain that way into next year. As of Aug. 28, Terra said it has a strong cash position totaling in excess of $1 billion, or more than $10 per share, as well as a strong balance sheet with minimal debt.
Terra also went on to lambaste CF Industries Holdings Inc.’s last offer for the company, which CF has since withdrawn. CF still seeks to put three directors on the Terra board at the shareholder meeting.
Terra said CF’s proposal is opportunistic and substantially undervalues Terra, not fully reflecting the underlying fundamental value of Terra’s assets, operations, and strategic plan. It said that while Terra would contribute approximately 59 percent of the nitrogen results of the combined entity (based on full-year 2008 results), Terra shareholders would receive only 48.5 percent of the equity. It added that CF’s proposed contingent futures shares proposal could result in an actual exchange ratio of only 0.4224 CF shares per Terra share, or 46.1 percent of the combined company, which is 0.3 percent lower than CF’s original unsolicited bid in mid-January.
Terra also believes CF’s stock has been inflated as a result of Agrium Inc.’s offer for CF, with the actual value of CF’s offer significantly lower than what current trading prices would indicate.
Terra said CF’s projected synergies claims are aggressive, particularly given CF’s lack of experience in large acquisitions of any consequence, and the proposed combination is subject to substantial execution risk. It said the CF-Terra combo would expose Terra shareholders to risks associated with the phosphate fertilizer market without compelling scale in that nutrient.
And Terra still argues that CF shareholders are unlikely to approve a transaction with Terra if given the alternative of the Agrium bid. Indeed, last week sources pointed to a Reuters report that indicated large hedge funds have been loading up on CF stock in expectation of a possible Agrium-CF deal. These funds now reportedly own more than 11 percent of CF’s outstanding shares and are among its 20 largest investors.
In the meantime, Agrium Inc. spokesman Richard Downey told Green Markets that an F-10 Registration Statement filed on Sept. 10 with the Securities and Exchange Commission had nothing to do with Agrium’s plans to buy CF. “The filing is for a universal shelf that was originally filed 25 months ago. It was refiled today as a matter of course as it was about to expire. It has nothing at all to do with CF.”
Still, according to the filing, the proceeds would allow the company to raise $1 billion via the sale of shares, subscription receipts, or debt securities, which would be used to reduce outstanding indebtedness, to finance future growth opportunities, including acquisitions and investments, or to finance capital expenditures of for general corporate purposes. Agrium did update its filing to include information about the proposed CF acquisition. As reported last week, speculation has been that if the Agrium-CF deal does not happen, Agrium may turn its sights on another acquisition, such as Intrepid Potash Inc. (GM Sept. 7, p. 11).
Agrium’s current offer for CF expires Sept. 22 unless extended.
Phosphate Holdings optimistic about 2010, looks at contingencies just in case
Phosphate Holdings Inc., the owner of Mississippi Phosphates, told analysts Sept. 10 that it is optimistic about the return to profitability in 2010, though it is not ready to give earnings guidance. PHI was adding color to its near break-even second quarter results ($100,000 net income), which were recently released (GM Sept. 7, p. 1).
PHI CEO Robert Jones said that though it may be a cliché, the basic fundamentals for the industry are still in place, noting that improving diets and a growing world population demand more food and fertilizer.
“I feel better today than I did a year ago,” said Jones, “as that was when the roof fell in.” He said that fall 2008 was a “complete bust,” and that spring 2009 was “very disappointing.” Jones said the industry has gone through the largest contraction in fertilizer usage in 75 years, and that each time there has been a contraction, there has been a demand response. “That is going to happen,” he added. “Poor applications are not sustainable.” He said he agrees with the consensus that 2010 will improve.
While PHI gave a laundry list of pros and cons for the fall season this year, Jones said he did not want to falsely give the impression that the company had given up on this year’s fall season. PHI said the barge market is currently slow, with not much fall season to date; however, it added there is a good export line-up in September and October to relieve some of that pressure. He said there has been good demand for product to India, Pakistan, and Latin America, with a new 300,000 mt tender from Ethiopia later in the month. In addition, a big corn crop is expected to have depleted phosphates from the soil, which will need to be replaced. That said, the company acknowledged concerns over a late harvest, low corn prices, and buyers who are risk adverse and who now only want to buy on a prompt basis rather than stocking up. Jones noted that years ago, buyers would fill up just after the Southwestern Fertilizer Conference, but now they wanted to wait until the last minute. As a result, buying has been pushed back to September/October. The company noted that its barges would need to get on the water early before upriver closes between Oct. 15-Nov. 15.
When asked about PHI’s liquidity, Jones volunteered that it has actively been in discussions about a possible monetization of a fixed asset. This could also be a lease and not a sale. “This is a potential transaction, however, it is unlikely it will be sold,” said Jones. “We have not decided to pull the trigger.” PHI believes its existing credit facility is adequate. The company has $5.5 million available under its facility. Jones said PHI is reluctant to sell more stock in the company as it would dilute the value of existing shares. PHI did not identify any assets that are under consideration; however, in the past, it has discussed the potential to build a 40,000 st UAN storage facility (GM Sept. 1, 2008), opening the area up as a terminal. The company had also been reviewing a new $125-$150 million sulfuric acid plant prior to the onset of the global financial crisis.
Jones touted PHI’s recent investment in a $3 million, 15,000 st sulfuric acid tank, which became operational in the second quarter. It was opportune as the company had been having trouble with its own sulfuric acid plants. Jones said the tank is providing solid returns as it has allowed the company to take advantage of distressed situations and carry substantial quantities to maintain good production levels.
While DAP capacity was at 95 percent, or 173,000 st, in the second quarter ending June 30, 2009, sulfuric acid capacity was off at only 84 percent, or 214,000 st. Problems in the acid plant necessitated down time for repairs in August, which will impact the third quarter. The number three acid plant was down for 16 days, and number two for five days. In addition, the phosphoric acid and DAP production were 34,000 st and 37,000 st, respectively, in August.
On the raw materials front, PHI said one major reason for optimism is its recently-signed phosphate rock agreement with Morocco’s OCP. The company expects the import ammonia price at Tampa to begin declining in November and December. As for sulfur, while Tampa is $10/lt, PHI is still in negative numbers at Pascagoula.
Heartland Co-op may get SynGest ammonia
SynGest Inc., the San Francisco-based company that plans to build a $102 million corn cob-based anhydrous ammonia plant near Menlo, Iowa, says it has signed a letter of intent with Heartland Co-op, West Des Moines, to explore a partnership to make and sell the ammonia.
SynGest says Heartland would be an equity and retail partner. The plant is expected to use about 130,000 st/y of corn cobs to produce 50,000 st/y of ammonia. SynGest CEO Jack Oswald says that Iowa could eventually accommodate 20 bioammonia plants.
“We are very supportive of this process. It’s good for our industry and good for the state of Iowa,” said Dave Coppess, Heartland executive vice president. Coppess told Green Markets that Heartland has been in contact with SynGest since January. “We’ve had an ongoing discussion with them about our role,” he said. “We’ve been an active partner with them in this process so far.”
Coppess said Heartland has committed no funds to the project to date. “Our interest is limited to the (ammonia) off-take, storage and marketing, and to cob collection,” he said. “Whether we take an actual equity position is still to be determined.”
Coppess said the SynGest location is on the western edge of Heartland’s trade area. One of the biggest challenges is to develop an efficient process for cob collection, he noted, but the co-op is excited about the possibilities. “We really like the idea of taking a waste product and using it to generate a viable ammonia product,” he said. While acknowledging that there are still “a lot of negotiations to be done and decisions to be made,” Coppess said he is hopeful the partnership will yield a “long-term, sustainable supply” of ammonia. “We see it as a viable alternative that would be good for Heartland,” he said.
SynGest recently received a $2.5 million loan from the Iowa Power Fund (IPF), though the company says the form and final terms remain under negotiation. Previously, the company had already received state benefits of over $3 million, which included a $2 million loan from the Iowa Department of Economic Development (GM Aug. 31, p. 11), as well as tax credits and educational support. In addition, it plans to ask the U.S. Department of Energy for a $50 million grant.
Coppess said Heartland has committed a letter of support for SynGest’s DOE grant application.
Heartland has some 48 locations throughout central Iowa. The cooperative was formed in 1987, and grew through numerous acquisitions during the 1990s and 2000s. According to its website, Heartland has annual sales of more than $560 million, and a workforce of 340 employees in the company’s agronomy, grain, energy, feed, and credit divisions. Heartland operates 28 agronomy facilities throughout central and east-central Iowa.
Scotts announces expansion in Ohio
Marysville, Ohio-The Scotts Miracle-Gro Co. said Sept. 8 that it is expanding its existing manufacturing plant and recently broke ground on a new office building to accommodate future growth. It also announced the purchase of a new 550,000 square-foot manufacturing and distribution facility in Orrville, Ohio. The combined projects will eventually create about 100 additional jobs. Scotts employs more than 8,000 associates worldwide, about 1,500 of them in Marysville. The 730-acre Marysville campus is the location of the company’s corporate headquarters, North American consumer business, Scotts LawnService, Research & Development center, and a one million square-foot manufacturing facility. Scotts is adding capacity to its manufacturing facility in order to process a key ingredient in Scotts® EZ Seed®, one of its most successful new products. In a limited first-year release in 2009, EZ Seed led to a more than 70 percent increase in consumer purchases of lawn patching products. The expansion of the Marysville facility will allow EZ Seed to be distributed nationally in 2010 and in Europe in 2011. The new Marysville campus office building, which will open in 2010, will alleviate over-crowding in the existing headquarter facility. It will also house expanded product and merchandising displays to be used in conjunction with key retail partners. State of Ohio assistance for the projects in Marysville and Orrville included two Job Creation Tax Credits, two Workforce Guarantee grants, and a Roadwork Development grant to the City of Marysville, with a total value of nearly $500,000.
ABOCOL completes $46 M expansion
Cartagena, Colombia-ABOCOL said Sept. 8 that it has enlarged its integrated production process by adding new facilities to produce nitric acid (83,000 mt/y), ammonium nitrate solution (82,000 mt/y), and calcium nitrate (100,000 mt/y). The company said the US$46 million investment was built in record time, only 17 months. The company markets products both in the Americas and offshore, and to the agricultural and mining industries. Company total infrastructure annual capacity now stands at ammonia (117,000 mt), nitric acid (266,000 mt), ammonium nitrate (240,000 mt), NPK compound fertilizers (300,000 mt), calcium nitrate (120,000 mt), liquid fertilizers (55,000 mt), blends (177,000 mt), hydrosolubles (15,000 mt), and foliar (500 mt).