AMMONIA

U.S. Gulf/Tampa: New Tampa numbers will have to wait a week or two, according to sources last week. However, new business at NOLA has finally occurred. Sources report a new trade at $255/st FOB, with some sources expecting much lower numbers in the near term due to the waning season and the potential for fall fill.

Eastern Cornbelt: In areas not sidelined by wet weather, sources reported a “fairly big push” for corn sidedressing with UAN and ammonia, according to one dealer. The ammonia market continued to be quoted at $320-$340/st FOB for prompt pull, with fill tons or fall prepay pegged in the $310-$330/st range. Forward contract tons for July were referenced by one supplier at $340-$350/st FOB regional terminals.

Western Cornbelt: Ammonia and UAN were moving for corn sidedressing in dry areas last week. Ammonia pricing covered a broad range in the region. The dealer market was reported at sub-$300/st FOB levels in Nebraska for prompt tons, with the upper end tagged at $320/st FOB in Missouri. One Missouri source quoted prompt cash market ammonia at $315-$320/st DEL from southern production points last week. Fall prepay also covered a broad range, from as low as $280/st FOB in Nebraska to $310-$325/st FOB elsewhere in the region. Forward contract ammonia for July was referenced by one supplier at $320/st FOB in Nebraska, $320-$325/st FOB in Iowa, and $345/st FOB Palmyra, Mo.

California: In the field last week, sources reported some fertigation applications as well as sidedress activity on silage corn, but rates are down from normal in most locations, with some estimating a 30-40 percent reduction in corn sidedressing volumes.

Anhydrous ammonia remained at $390-$435/st DEL in California, with the low for truck-delivered tons and the upper end representing the rail market. Aqua ammonia was quoted at $108/st FOB in the state. Sources said another pricing adjustment is likely in late June.

Pacific Northwest: The anhydrous ammonia market was tagged at $370-$375/st DEL in the region for railed tons, with truck-delivered product pegged at the $390-$395/st level. The dealer market FOB Ritzville, Wash., was quoted at the $360-$365/st level last week.

Effective July 1, Agrium’s anhydrous ammonia postings will move to $405/st rail-DEL in Oregon, Washington, and northern Idaho; $425/st truck-DEL in northern Idaho and in Oregon and Washington east of the Cascades; $430/st rail-DEL in southern Idaho and Utah; and $455/st truck-DEL in Montana and northern Wyoming. Also effective July 1, Agrium’s aqua ammonia postings will move to $104/st FOB Central Ferry and Finley, Wash.

Western Canada: Regional sources reported some topdress nitrogen movement on forage stands last week, but much of west-central Saskatchewan, central Alberta, and southern British Columbia have seen below-normal precipitation this spring, resulting in stressed crops and parched pasture land. Dealers were supplying hand-to-mouth to meet demand, and sources said spot fertilizer prices continued to slide.

The anhydrous ammonia market as of June 15 was tagged at $595-$640/mt DEL in Western Canada, reflecting a sizable drop from last report.

Black Sea: Production continues to dwindle in the area. Last week more producers in the region reportedly stopped sending ammonia in the pipeline to the Yuzhnyy port. The main issue for the producers remains the low global price of ammonia and the high cost of natural gas. For the Ukrainian producers the situation is more pronounced, because they have no national gas fields on which to draw tons. The Russian ammonia producers, however, are said to be getting favorable prices on their inputs.

Even as prices soften in the area – the last bit of business in the area was a deal from Yara at $185/mt FOB – buyers are not seen in the area now because of the reductions in output.

Sources say the limited European demand is being covered by orders out of Baltic Sea ports and domestic production. The U.S. is drawing its ammonia from wherever it can, including Trinidad, the Middle East, and the Baltic. And Asia pulls its ammonia from the Middle East and the Southeast Asian producers.

The diversity of supply, coupled with limited demand in key areas, is largely making the Black Sea option the last possibility on shopping lists. One Asian source said until the price of natural gas comes down or ammonia prices come up, Yuzhnyy could be pushed into last place as a potential source for material.

For now, however, a few tons are available. Sources peg the declining market in the area at $180-$190/mt FOB.

Middle East: Producers have been trying to push up the price in recent weeks to no avail. Now, say sources, the price might start heading up again.

Indian phosphate producers settled their final phos acid deal for the third quarter. Reportedly, OCP/Morocco will now get $490/mt CFR for its acid sales to India.

With Morocco and Tunisia now on board for phos acid, the DAP producers in India will need a steady stream of ammonia. Long-term contracts with Middle East producers and traders drawing on Middle East tons will mean more ammonia at possibly higher prices flowing into India from the area.

For now, the price remains steady at $200-$210/mt FOB.

Asia: Mitco/Malaysia remains down. The plant faces a feedstock problem that started in early June and shows no signs of easing. Asian sources say the company is hoping to restart operations soon, but are giving no firm dates.

Production in Indonesia by KPI and KPA remains strong. Sources report every ounce of production is spoken for.

Sources report that Mitsui is extremely short despite steady production by its facilities and several long-term contracts with other producers.

The problem Mitsui is facing is stronger-than-expected demand from India and South Korea. Reportedly, the Japanese trading house is working as many swaps as it can to ensure timely delivery of ammonia to its clients. The company is trying to avoid stepping into the market to buy spot tons as it had to do about a month ago.

When Mitsui last bought spot tons, the deal caused a spike in Middle East pricing. The trading house wants to avoid future spikes.

It does seem willing, however, to accept a steady increase in prices as Indian demand picks up now that the last of the major phos acid contracts are completed for the third quarter.

South Korean industrial buyers seem to be more than compensating for reduced ammonia demand from fertilizer giant Namhae. Taiwan buyers are also taking tons at a steady pace. All in all, say sources, Asia buying looks good through July. August remains a question.

The trend since the first quarter of the year has been steady demand. In February traders and producers talked about March being a good month, but April was questionable. By May these same people were talking about May and June being good months and the first half of July being strong, but the second half of July was in question. Now July is allowing sellers to feel comfortable, and August is the month in question.

With the conclusion of the phos acid deal between Indian phosphate producers and OCP, sources say August could look to be a strong month for steady demand into India.

UREA

U.S. Gulf: Most players last week were putting granular barge trades within the $240-$245/st FOB range, with those toward the end of the week toward the upper end of the range at $242-$245/st FOB. While there were some reports of sub-$240/st business, most said those were for forward cargoes, as sellers appear to be holding on to the $240s/st FOB numbers as long as rice country demand impacts the prompt market. Add to this the general perception of a scarce number of barges on the river. Sources credited CF for recent exports to Latin America for depleting supplies. One source noted that the NOLA price remains some $20-$30/st FOB below the international market, further keeping additional imports away.

Eastern Cornbelt: The urea market remained at $275-$285/st FOB regional terminals for prompt tons, with the low FOB Cincinnati and other river locations in the region.

Western Cornbelt: Granular urea was tagged at $270-$280/st FOB regional terminals to the dealer.

California: Granular urea pricing remained as low as $330/st rail-DEL in California, while the truck market was pegged at $360-$380/st FOB in the state.

Pacific Northwest: The granular urea market was quoted at $310-$335/st DEL in the region, depending on location. Effective June 15, Agrium’s granular urea postings moved to $310-$325/st DEL in Montana and Wyoming; $330/st FOB Acequia and Pella, Idaho, and Washington warehouses at Glade, Kennewick, Warden, and Wilson; $335/st DEL in Washington, northern Nevada, Idaho, and Oregon; $345/st DEL in northern and central Utah; and $350/st DEL in southern Utah.

Western Canada: Granular urea pricing was down to $425-$450/mt DEL in the region as of June 15, from the previous $470-$600/mt DEL range.

India: MMTC closed a tender June 16 and issued awards June 17. It then went into talks with several offering companies to get them to match their offers with those from the winning companies. The rapid nature of the awards told many in the industry of India’s desire to build its reserves as quickly as possible. The immediate awards totaled 255,000 mt.

The tender offers indicate a market with a large overhang of material. Firm offers totaled 1 million mt. Add to that amount another 505,000 mt in sellers’ options. Some in the industry say some offers have not had firm backing. In some other cases, producers may have backed more than one trading house in anticipation of only one company getting an award.

Regardless of the strategy used by producers or traders, to have so many tons offered in one tender is, to many in the industry, an indication of how bearish the market has become.

The results of the tender also indicate that Middle East producers were so anxious to have full order books that they did not try to push up the price. Only Fertil offered at levels close to what the producers as a bloc had been arguing for. And Fertil is in the middle of a turnaround and conversion project.

The Helm offer, in Euros for the FOB offer, set a low price that other traders may not be willing – or – able to match.

And the Sinochem offer showed that the Chinese trading house expects to see prices out of China shift next month. Sources say depending on who is talking, the Sinochem offer represents either a $2/mt drop or a $3/mt increase in the current Chinese price. Either way, the price is not competitive into India.

Nailing down tons from the Black Sea is problematic. Sources say the pirate threat off the coast of Somalia remains a major concern for ship owners. Vessels must either risk the danger of pirate attack if they go through the Suez Canal or take a long route around Africa. Either way, the freight costs are major concern to any buyer and trader.

Offers in the tender follow on page 7.

Immediate awards were issued to the following firms.

Sabic could be the big winner. Following awards in Pakistan and with IPL and now MMTC, the Sabic order books should be full into August.

The big issue for India now is to secure as many tons as cheaply as possible so the reserves will be fully built up in time for the fall applications.

One trader noted that if Helm’s offer was just slightly higher, the gap between it and the next higher price could have been small enough for the other trading houses to meet the price. In that case, close to 500,000 mt could have been picked up in this tender.

As it is, one source said he would be surprised if the total number of tons purchased in this round exceeds 350,000 mt.

The most likely candidate for matching the Helm offer is Transammonia, say sources. Trammo has tons it needs to move from Oman. Sources say the Trammo offer leaves plenty of room for the trader to lower its price to match the Helm or Middle East offers.

Toepfer is also said to be in the running.

While Fedcominvest has been reported snapping up as many tons as possible in the Black Sea, sources say the purchases are most likely aimed at fulfilling its award from IPL, rather than expecting to secure an MMTC deal.

Sources expect to see another tender issued by an Indian buyer by the end of July. The most likely buyer at that time will be STC, but one source said he would not be surprised to see IPL issue the July tender.

Pakistan: Local media reports say the government authorized the rapid purchase of 200,000 mt of urea to ensure no shortages for the upcoming application season. Earlier in June some government ministries had argued for – and received – a lifting of restrictions on the private sector to import urea.

Yet early last week, the government directed the state-owned buyer TCP to advance its purchases of urea.

The closing date for the tender TCP called June 12 has been changed from July 11 to June 27. In a statement published on its web site, TCP said the move was in response to the “emergent need of urea in the country.”

Minister for Religious Affairs Hamid Saeed Kazmi told local media the cabinet moved quickly to purchase more urea on reports shortages might appear in select areas. He said current stockpiles are pegged at 111,000 mt, with another 220,000 mt to be imported by the end of June. He added that another 175,000 mt would be brought in by the end of July.

Traders and other observers of the market say the government is panicking for no reason other than politics.

Sources report urea stockpiles are currently adequate to start the application season. There is consensus that more urea would have to be imported by the end of July to satisfy all farmers’ needs.

One trader noted that the 50,000 mt tender may lead to larger purchases, depending on the prices being offered. Any announcement to increase the number of tons being asked for could, said one source, cause a spike in prices.

The shift in the tender closing date puts it so close to the closing of the MMTC/India tender that few were willing to speculate on the prices that might be offered this week.

Middle East: Facing a continued soft market, producers in the area apparently have given up on the idea of using the Indian business to push up the price. Leading up to the Indian tender producers had been arguing that the current price was/should be closer to $270/mt FOB for prills and granular. Some even argued granular should maintain its $5/mt premium.

Reports prior to the closing of the MMTC tender had at least one producer – incorrectly identified as Fertil in strong rumors – settling at $261/mt FOB. In the final results, the new price in the area is firmly set at $260-$263/mt FOB for both prills and granular.

One Asian source noted that the argument for a granular differential has long been gone from this region. He based his assessment on more granular production coming online each quarter, and the producers being more than willing to offer one price for either prills or granular.

Sabic appears to be the big winner in the latest round of tenders.

After securing awards for 90,000 mt from TCP and 100,000 mt from IPL, and now another 90,000 mt from MMTC, the Sabic order book looks pretty full.

One observer noted that Pakistan and India remain strong markets for the Middle East producers – but only if the price is right.

The producers learned several years ago that past efforts to push the price high quickly usually leads to large orders going to Yuzhnyy or China.

This time, Chinese producers have shown resistance to lowering prices – for now. But Fedcominvest has shown an aggressive nature with Black Sea tons not recently seen.

Middle East producers, say sources, cannot be complacent about their access to India and Pakistan now that buyers from both countries are primarily focused on price rather than past relationships.

Black Sea: Offers in the MMTC/India tender that are thought to come from Yuzhnyy put the netback at $235-$245/mt FOB, with some showing even higher levels. With the MMTC tender results in hand and a continued soft market, sources argue that sub-$240/mt FOB is a reasonable price. They say it is unlikely MMTC will accept any offers that exceed that level. If that is so, sources say, the price could face further drops because there are few buyers for major tons.

Sources estimate the freight from Yuzhnyy to be about $35/mt, but highly flexible.

The issue of pirates off the Somali coast continues to plague purchases from the Black Sea heading for Asia. Ship owners who are willing to let their vessels go through the Suez Canal and then through the main pirate zones are demanding higher freight and insurance rates. Those who still want a ship in Asia but who are unwilling to risk the Somali coast are forcing their vessels around Africa. The extra steaming time more than cancels out a lower freight rate.

China: Prices range from $265-$270/mt FOB, depending on who is talking at the time. Sinochem offered material in the MMTC/India tender at $268/mt FOB. Sources say Sinochem was thinking the price was $2/mt off the current market. Other traders, however, say the offer represents an increase of $3/mt. The bottom line is that Chinese material is still too expensive to be competitive in India and Pakistan.

Sources say producers are pushing the central government hard to remove all export duties come July 1. Under the current export regime, the urea export duty will drop from its current 110 percent to 10 percent for July and August. There is talk that the lower rate might be extended through September, but that is not good enough for the producers, who are seeing domestic prices fall and reserves build.

The main purpose of the export duty plan was to make sure farmers had adequate supplies of urea. The regime was put in place following record exports of urea when the global market was on fire. Now with the global market far below the domestic market and the buying season still a few months off, stockpiles are building up.

Many of the coal-powered urea plants are beginning to feel the pain of an expensive production line and lower prices. These are the producers making the most noise to eliminate the export duty completely. The gas-powered producers have lower production costs and are more able to ride out lower prices that come with the ever-growing inventories.

Few traders outside China expect to see the duty removed July 1. One trader noted that the government did not remove the 10 percent duty on DAP, and the phosphate producers are in more financial pain than the urea producers. “If they didn’t do it for DAP,” he said, “there is little chance Beijing will do it for urea, which is a much more valuable product.”

The most likely scenario is that Beijing will watch what happens during June and July. If the international and domestic prices do not reach a balance that will allow for exports, the government may be more willing to provide assistance to the producers to prevent shutdowns and the economic upheaval that would follow. If this type of stopgap measure does not work, say sources, the government may then consider reducing or removing the export duty just long enough to eliminate the excess stockpiles.

Finding the right balance will be tricky, say sources. Reduce the export price too much and local farmers could once again face a shortage of urea. And the whole purpose of regulating urea exports was to prevent the possibility of 900 million angry farmers.

Indonesia: PIM is expected to call a selling tender this week or next. The tender could be for 20-30,000 mt, and might include tons not lifted from the last tender.

It seems some of the local traders who won awards in the last tender decided that either they or their customers did not want to pay a premium for the Indonesian urea.

In general, industrial buyers in Asia are willing to pay a few dollars more for the Indonesian product because of its high quality. With a glut of granular urea now in the global market, however, charging a premium is a luxury PIM cannot afford, said a trader.

NITROGEN SOLUTIONS

U.S. Gulf: The most recent barge market is called $120-$125/st FOB ($3.75-$3.91/unit). As with urea, sources say recent exports have helped remove an overhang of product out of the market, though with more impact on urea than UAN.

Eastern Cornbelt: UAN pricing covered a broad range depending on supplier and time of delivery, but sources were unanimous that prices were falling. Some said fill tons could be had for as low as $5.25/unit FOB for product pulled now through August, while others put the dealer market as low as $165-$170/st ($5.16-$5.31/unit). One supplier was referencing forward contract tons for July through August at $5.25-$5.75/unit FOB regional terminals.

Western Cornbelt: UAN pricing covered an even broader range. Spot pricing for prompt tons remained in the $180-$200/st ($5.63-$6.25/unit) level FOB regional terminals, but sources said fill tons could be booked for as low as $160-$168/st ($5.00-$5.25/unit) FOB. Some said sub-$5.00/unit deals could also be had in the region, but that was not confirmed. One supplier was referencing forward contract UAN-32 for July through August at $179.20/st ($5.60/unit) FOB Pine Bend, Minn.

California: Rail-delivered UAN-32 was tagged as low as $195-$200/st ($6.09-$6.25/unit) in California, reflecting another drop from last report. The truck market for UAN was reported in the $205-$210/st ($6.41-$6.56/unit) FOB range in the state, also down from last report.

Pacific Northwest: Washington sources reported steady movement of water-run fertilizer at mid-month, with one saying he expects a “solid run” through the end of July. UAN-32 was quoted at $215-$225/st ($6.72-$7.03/unit) DEL in the region, reflecting another drop from last report. Effective July 1, Agrium’s UAN-32 postings will move to $240/st DEL in Washington, northern Idaho, and Oregon excluding Malheur County; $245/st rail-DEL and $250/st truck-DEL in southern Idaho, Nevada, Utah, and Oregon’s Malheur County; and $260/st DEL in Montana and northern Wyoming. Agrium’s UAN-28 postings will move on that date to $228/st DEL in Montana and northern Wyoming.

Western Canada: The UAN-28 market was tagged at $271-$287/mt ($9.68-$10.25/unit) DEL in the region, down $100/mt from last report.

AMMONIUM NITRATE

Western Cornbelt: Ammonium nitrate pricing was steady at $265-$270/st FOB in the region.

California: No market was reported for ammonium nitrate in California. CAN-17 was pegged at $235-$245/st FOB in the state, down some $20/st from last report.

Pacific Northwest: Ammonium nitrate was unchanged at $335-$350/st DEL in the region for the last completed business. CAN-17 remained at $245-$250/st FOB and $260/st DEL in the Pacific Northwest.

AMMONIUM SULFATE

Eastern Cornbelt: Granular ammonium sulfate was steady at $225-$235/st FOB, with rail-delivered sulfate referenced at the $225/st level in the region.

Western Cornbelt: Granular ammonium sulfate remained at $225-$245/st FOB in the region.

California: Ammonium sulfate pricing was slipping, with sources quoting the dealer market at $235-$272/st FOB in the state. The low end of the range was for standard grade and the upper end for granular product in desert locations.

Pacific Northwest: The granular ammonium sulfate market remained at $225-$230/st DEL in the region.

Western Canada: Granular ammonium sulfate was reported at $300-$305/mt DEL as of June 15, reflecting a drop of $80/mt from the previous level.

PHOSPHATES

Central Florida: Transactions out of Central Florida continued at a slow pace last week, but prices appeared to be weakening. With the disappearance of inventories around 90,000 st in May, lower prices in relation to the Gulf system may be the key to improving sales. However, a lack of activity has rarely been used as an excuse to change prices in the past.

Phosphate production was running less than 70 percent of normal capacity in May, but it appeared an increase in export sales could lead producers to increase supplies, if that trend grows. A source said PotashCorp was increasing its take of sulfur for White Springs, which could be a sign the facility was preparing to restart.

The Central Florida DAP price range changed last week to $250-$255/st FOB from the previous week’s $250-$260/st FOB. PCS Sales had no published price. Mosaic had no list prices for Central Florida. CF’s price was $250/st FOB for DAP and $10/st FOB higher for MAP, but a source said lower prices were possible. Agrifos was no longer posting prices, but was charging based on markets in various areas.

U.S. Gulf: NOLA DAP barge sales were conducted last week within a fairly tight range and most of the deals were for fill, which was normal at this time of year. Normal meant historically normal, not what was normal last year, when prices took giant steps up early and then dove for the second half of the year. As one source commented, “This is a bull market, but not with big jumps in prices.” Prices during the next couple of months will probably continue to rise, but not by astronomical amounts.

The Southwestern Conference starts in about a month and business will probably be conducted at that time, but some activity seemed likely until then.

Last week, CF lowered its prices at its warehouses on the river system and others appeared ready to follow, but probably will not fall quite as low. The company’s new warehouse price was between $288/st FOB and $290/st FOB, and other terminals will probably be below the $300/st FOB level this week.

Available DAP barges for prompt delivery were more limited last week, but those seeking to buy were able to secure what they needed. Supply and demand was close to being in balance. Prices have been stable for the past month and that has apparently helped provide some confidence in the market, something that had been lacking for most of the year.

The Fertilizer Institute put domestic consumption at 377,000 st in May, which was low, but June appeared to be running at a somewhat more brisk pace, although that will not be confirmed for another month.

The top of the NOLA DAP barge price range moved up $2/st FOB last week, and most sellers were seeking the higher number toward the end of the week. The price range last week moved up, from $255-$258/st FOB to $255-$260/st FOB. Both Mosaic and CF had a $10/st FOB additional charge for MAP.

Eastern Cornbelt: The DAP market was quoted at $290-$320/st FOB regional warehouses for prompt or fill tons, with MAP $10/st higher. The low end was reported in Illinois on a spot basis. Forward contract DAP for July was referenced by one supplier at $300/st FOB Peoria and $305/st FOB Cincinnati. 10-34-0 pricing continued to slip, with sources quoting the dealer market at $450/st FOB most regional shipping points.

Western Cornbelt: Sources continued to quote DAP at $285-$315/st FOB warehouses to the dealer, with the low for summer fill tons. One Missouri source put the dealer market for prompt tons at $295/st FOB for DAP and $305/st for MAP in his location last week. Cash market pricing for DAP out of St. Louis was pegged at the $288/st FOB level as of June 18.

10-34-0 was pegged at $400-$450/st FOB in the region.

California: MAP and DAP were steady at $455-$460/st DEL or FOB California warehouses. 16-20-0 was steady at $310-$320/st FOB. 10-34-0 pricing remained at $477-$487/st FOB, but sources speculated that deals could be had from some sellers trying to liquidate positions. New 10-34-0 sales were hard to come by last week, however.

Effective June 1, Agrium’s postings dropped to $610/st rail-DEL for both super phosphoric acid (SPA) and merchant grade acid (MGA) in Arizona and California, down dramatically from the previous $1,100/st level. Agrium’s SPA and MGA postings will move in July to $635/st rail-DEL, and to $660/st rail-DEL in August. Simplot did not make an adjustment to its phos acid postings in June, but is planning to move to $7.05/unit DEL on July 1, with a 25 cent/unit increase scheduled for August.

Pacific Northwest: MAP remained at $445-$455/st FOB or DEL, with DAP at $450-$460/st FOB or DEL. 16-20-0 pricing was steady at $300-$305/st DEL in the region. 10-34-0 was quoted at $425-$455/st FOB in the region.

Effective June 1, Agrium’s phosphoric acid postings dropped to $610/st rail-DEL for both SPA and MGA in Idaho, Montana, Nevada, Oregon, Utah, and Washington. Agrium’s SPA and MGA postings will move in July to $635/st rail-DEL, and to $660/st rail-DEL in August. Simplot did not make an adjustment to its phos acid postings in June, but is planning to move to $7.05/unit DEL in the region on July 1, with a 25 cent/unit increase scheduled for August.

Western Canada: MAP pricing has fallen dramatically in the region, with sources quoting the dealer market last week at $420-$455/mt DEL in Western Canada.