AMMONIA

U.S. Gulf/Tampa: The barge and vessel markets remained quiet last week, leaving Tampa at $318/mt DEL and NOLA at $275/st FOB.

Eastern Cornbelt: Sources reported few changes to spot ammonia prices last week. One Indiana source said his location ran a fair amount of preplant ammonia to the field in late March, but water was still visible in field furrows last week after a period of heavy rainfall, with more precipitation expected late in the week.

Anhydrous ammonia was quoted in the $435-$470/st range FOB terminals to the dealer, with the low out of Illinois River locations and the higher numbers in Indiana for spot market tons.

Western Cornbelt: Perhaps due to the weather-related fieldwork delays in the region, sources reported softer ammonia pricing last week. While postings in Missouri remained as high as $440/st FOB, sources reported the Iowa market at $405-$410/st FOB, with Nebraska terminals as low as $375-$385/st FOB for prompt ammonia tons last week. One Missouri source quoted delivered ammonia at the $400/st level, give or take, from southern production points.

Southern Plains: The anhydrous ammonia market remained at $305-$325/st FOB regional production points on the low end, with dealer pricing out of pipeline terminals in Kansas quoted in the $350-$355/st FOB range.

South Central: Cash market pricing for anhydrous ammonia was tagged at $415-$430/st FOB regional terminals to the dealer, with the low reported at Memphis, Tenn., and the upper end in Kentucky. That range was down from last report, and sources said continued delays due to wet weather may end up hurting ammonia volumes as growers switch to urea or UAN.

Middle East: Producers say they are in good shape. The latest business to India under contract seems to confirm the bullish attitude. Sources say the latest cargo entered India at $294/mt CFR for an estimated netback of $270-$275/t FOB.

One Sabic line and Qafco III remains down, adding to the general tightness of the area market.

The Qafco closure is just an extended turnaround, say Asian sources.

The Sabic issue is a bit more complicated. Sources report the plant experienced technical difficulties last month. Some reported that the facility was just down a couple of days, came back up and then shut down again. Others say the line never fully came back into production. One source said the plant could be up and running at any time.

Area sources report that Transammonia nailed down 20,000 mt from Iran last week.

The Middle East producers face an interesting situation. Demand in Asia remains strong and looks as if that strength will continue well into May. Suppliers in Asia are said to be running at full capacity and have full order books and still cannot meet demand. The next natural place to look for material is the Middle East, but only if the price is right. Buyers are looking at trying to hold the line at $350/mt CFR. While this price is reasonable when buying cargo from Indonesia or Malaysia, it is not workable from the Middle East. Sources say even if tons were available, the pricing ideas from producers would put delivered ammonia closer to $370/mt CFR.

The new price for the area, based on the contract tons sold to India, is now pegged at $270-$275/mt FOB.

Black Sea: Some tons are still reportedly available, but in limited quantities. Most of the producers in the area remain closed because the selling price is still well below production costs.

Early last week rumors circulated that Transammonia had concluded a deal to sell Yuzhnyy tons to OCP. By the end of the week, said one source, it looked as if that deal fell through with Trammo, sending its newly acquired Iranian tons to Morocco instead.

With demand from the U.S. and Europe still not as strong as producers and traders would like, the price now appears to be sliding slightly.

Some have argued the price has dipped into the mid-$260s/mt FOB, but no one in Asia could point to any confirmed business at that level. The conventional wisdom has the market price staying in the $270s/mt FOB.

Asia: Asian buyers continue to call traders and producers looking for tons. While many in the area had expected demand to slow down once it was time to place May orders, no such reduction has occurred.

Asian sources say the major production outlets in Indonesia and Malaysia are doing all they can to keep up with just their contracted demand. At the same time, the same contract buyers are asking for additional tons well into May.

For the traders and producers, the steady demand from industrial buyers in Asia is a hopeful sign that the market is heading back up and that the credit crunch is beginning to ease.

Buyers are said to be anxious to get as many extra tons as possible but not at any price.

The delivered price has been steadily moving up in recent weeks. The latest benchmark is $350/mt CFR. One trader noted that this is where buyers are beginning to form a strong defense against higher prices.

UREA

U.S. Gulf: The urea market last week was generally called quiet, with very little new business to report. Most said the market is waiting for inland areas to dry out before the next round of buying. Some sellers complained that buyers are using the lull to pound the market for lower prices. Sources said prices started the week at $285/st FOB; by late Thursday, sources were calling new trades in the $280-$282/st FOB. There were unconfirmed reports of sub-$280/st FOB.

Eastern Cornbelt: Granular urea remained at $330-$350/st FOB in the region, with the low reported by Illinois sources. An Indiana dealer quoted the upper end out of Ohio River locations, but said some suppliers were offering retail pricing at that level as well in early April, depending on location.

Western Cornbelt: Granular urea remained at $325-$335/st FOB most regional terminals to the dealer, with the low out of spot Mississippi River locations.

Southern Plains: The granular urea market was pegged at $310-$315/st FOB Inola and Catoosa, Okla., reflecting another slight drop from the previous week. Topdress movement on wheat is pretty much over in the region, and attention is now turning to preplant applications.

South Central: The granular urea market was tagged at the $320/st FOB level to the dealer out of regional terminals, down from last report.

Southeast: Granular urea was pegged at the $330/st mark FOB port terminals to the dealer, down slightly from last report.

Pakistan: Last week Pakistan issued a tender to buy 260,000 mt. This tender is in addition to another tender for 25,000 mt that closes April 20.

Due to confusion in the documents, Green Markets erroneously reported that TCP was also asking for 160,000 mt of bagged material in a tender to close April 14. The tender is actually a selling tender for “as is” material from the port of Korangi.

Area sources were conflicted about the meaning of all the tenders being offered.

One trader noted that the tons being sold are most likely industrial grade rather than suitable for NPK blending or direct agricultural application.

For traders, the buying tender is a clear indication that Pakistan still needs tons for the upcoming season, and it expects to receive what it considers “reasonable” offers.

Sources speculate that TCP wants to get most of its buying over before India steps back into the market. One trader said the rumors of a Transammonia-Indian deal for upwards of 200,000 mt might have helped prompt TCP to call its tender as soon as it did. The Trammo business eventually was debunked by all sides.

For TCP, however, the domestic demand for material is real, as is the political pressure to ensure no region is facing a urea shortage.

India: Rumors flew around the globe last week that Transammonia and IPL cut a deal for 200,000 mt from Yuzhnyy. Just as quickly as buy fever was spreading, both parties were denying the account. In the few days that people thought India was back in for some major tonnage, sources report the price shot up. Once the deal was debunked, the price went right back to where it started.

Industry observers are all convinced India will have to come in to buy by the end of May. Coincidently, that matches when the industry will be gathering in Shanghai for the IFA annual meeting.

Some sources speculated that IPL, MMTC, and STC will use the IFA meeting to nail down some face time with potential sellers and possibly sound out some for favorable pre-tender deals.

One trader said the Indians could spend all the time they want talking to people, but when IPL walked away from its last tender, leaving several companies holding suddenly unwanted tons, few may be willing to make a hard deal until a letter of credit is opened.

Offers and awards in tenders may all be predicated on the ability to get the necessary tons in time for shipping rather than actually having a firm deal from a producer with a commitment to take the cargo come what may.

The Indian buyers know they are in the driver’s seat for the next few months. If the timing of the tenders is right, Chinese tons might be included in the mix. At the same time about 400,000 mt/y of granular from Oman will start hitting the market, in addition to all the regular supplies from the Middle East and Yuzhnyy.

One trader said the name of the game for a few months will be close examination of production and domestic consumption. If Chinese producers, for example, find they can get a guaranteed return on more sales to the domestic market, even if the margin is less than an export sale, they just might not send their product to the ports.

Likewise, if Middle East or Yuzhnyy sales are not keeping up with production, the build-up at the storage facilities could help buyers nail down lower prices.

Sources say Indian agents will be closely watching the bonded port facilities in China, the Middle East, and Yuzhnyy to see who is building up reserves the fastest. Once the warehouses begin to fill and buyers become scarce, the Indians are expected to step in with very low prices to “help” the producer ease the storage pressure.

Middle East: Sources say the new Oman facility, with an annual output of 1.4 million mt, has changed the rules of the game in the area. Sources say 800,000 mt of the output is slated for the U.S. market. The remaining tons will be sold by Transammonia on the open market.

The first cargo from the plant is expected to move out early in the second half of the year, just about the same time India will be looking for delivery of the tons it will need.

The influx of so many tons of urea that will be available each month, say sources, will change how buyers look at deals from the Middle East.

In the past, when most of the tons were tied up in contracts, sources said the large producers could move the market. Some could also offer large quantities at low prices into major tenders to quickly dry up the available tons. This maneuver has been done before, with resulting higher prices from the area.

Now, however, there will be more tons available. And more buyers are more flexible about buying prills or granular.

Producers continue to claim their prices are in the low $300s/mt FOB. At the same time, however, sources continue to report rumors of offers to Australia are closer to a netback of $285/mt FOB. No one can point to actual signed documents at that level, but the persistence of the rumors and the lack of other outlets for the product lead many to believe the lower price is where the market is now sitting.

To counter the soft market theory, others say the absence of Sabic in the last TCP tender and Sabic’s high offer in the previous one point to just enough tightness to move the price up.

Sources say Middle East participation in the two upcoming TCP tenders will tell the tale of where the market is moving.

Black Sea: The price ran up and then back down again on rumors and then denials that Transammonia inked a deal with IPL in India. Sources reported a flurry of activity, but eventually the week closed right where it started. Some argue the market actually tightened a little as some low-end priced material disappeared.

For most of March sources had argued some tons were available in the upper $240s/mt FOB. Last week, no one was making that claim.

Depending on the freight rates, sources say Yuzhnyy material should play a big role in the large TCP tender to close next month.

Bangladesh: BCIC will close its tender April 15. The company is looking for 100,000 mt each of prills and granular. Unlike Pakistan or India, sources say the BCIC tender was called because the country needs the tons. Observers note that BCIC rarely calls a tender to build reserves or to test the market. The reason BCIC has not always taken all the tons it has asked for, said one trader, is because the company’s bureaucracy has often slowed down the award and payment process.

Sometimes it works fine and sometimes it doesn’t, said one trader. When it doesn’t work right, he said, BCIC will try to award to a company even though the validity date for the offer has expired. There have been times when the deal was consummated. And times when it hasn’t.

NITROGEN SOLUTIONS

Eastern Cornbelt: UAN pricing remained in a broad range at $7.00-$8.50/unit FOB in the region, with the low out of spot river locations in Illinois.

Western Cornbelt: Although dealer postings remained as high as $280/st ($8.75/unit) FOB Missouri River terminals, sources tagged the UAN-32 market more commonly in the $245-$256/st ($7.66-$8.00/unit) FOB range for cash tons, with continued reports of numbers as low as $7.00/unit FOB St. Louis from some suppliers.

Southern Plains: UAN-32 pricing was down from last report. The market was reported at $215-$235/st ($6.72-$7.34/unit) FOB in the region, with the low out of production points and the higher numbers to dealers FOB off-production tank locations.

South Central: UAN-32 was quoted at $240-$245/st ($7.50-$7.66) FOB regional terminals for prompt tons to the dealer, reflecting a slight drop from last report.

Southeast: Sources pegged the dealer market for UAN-30 at $210-$215/st ($7.00-$7.17/unit) FOB regional terminals, down from last report. UAN-32 pricing in the region was reported in the $225-$230/st ($7.03-$7.19/unit) FOB range to the dealer.

AMMONIUM NITRATE

Western Cornbelt: Ammonium nitrate remained at $270-$275/st FOB in the region.

Southern Plains: Ammonium nitrate was pegged at $250/st FOB Catoosa, and sources reported some movement taking place at that level.

South Central: The ammonium nitrate market remained at $270-$275/st FOB regional terminals to the dealer, with steady movement reported on pastures and spring grass. One source pegged the CAN-27 dealer market at the $230/st FOB level in his trade area.

Southeast: Ammonium nitrate pricing continued to slip, with sources pegging the Tampa market last week at $305-$315/st FOB.

AMMONIUM SULFATE

Eastern Cornbelt: Granular ammonium sulfate was unchanged at $225-$245/st FOB in the region.

Western Cornbelt: Granular ammonium sulfate remained at $225-$245/st FOB in the region. Postings from Honeywell and DSM had granular sulfate at the $245/st DEL level in the Midwest, with Honeywell also referenced at the $255/st DEL level in Nebraska for allocated tons.

Southern Plains: Ammonium sulfate pricing was up from last report following recent pricing adjustments from suppliers. Effective March 30, posted prices FOB Plainview, Texas, moved up $15/st to $265/st for granular, $255/st for coarse, and $245/st for standard grade. Also effective March 30, American Plant Food Corp.’s reference levels for granular ammonium sulfate in Texas firmed to $225/st FOB Freeport, $235/st FOB Galena Park, $250/st FOB Fort Worth, and $265/st FOB Littlefield. APF’s coarse grade postings moved on that date to $215/st FOB Freeport, $225/st FOB Galena Park, $240/st FOB Fort Worth, and $255/st FOB Littlefield, while standard grade postings firmed to $205/st FOB Freeport and $245/st FOB Littlefield.

South Central: Granular ammonium sulfate was quoted at $215-$225/st FOB in the region and in tight supply. Effective March 23, Honeywell moved its ammonium sulfate postings to $225/st for granular and $215/st for mid-grade FOB warehouse and/or rail-DEL in Arkansas and Mississippi. Effective March 30, American Plant Food Corp.’s reference levels for granular ammonium sulfate firmed to $255/st FOB Mermentau, La.

Southeast: Granular ammonium sulfate pricing was up some $25-$35/st from last report at $200-$210/st FOB terminals for allocated tons to the dealer, with the low FOB Hopewell, Va., and the upper end reflecting new posted levels FOB Augusta, Ga. Delivered granular ammonium sulfate was pegged in the $220-$249/st range in the region, depending on location.

PHOSPHATES

Central Florida: Truck deliveries and a few railcars sold into Georgia made up a large portion of the Central Florida market last week, but conditions were improving along the East Coast.

Spring has been as late as Easter in July, and the delay has been taking a toll on phosphate sales in all the major markets. After phosphate production ramped back up in January to better than 85 percent of capacity, the industry may be headed for another period of curtailments unless something surprising happens and – happens fast. If it had not been for PhosChem’s sale to India earlier this year, a cutback in production might have already begun. As has the domestic market, export business has been down this season, and won’t probably kick off again until summer.

Several sources blamed the lack of activity on the high price of potash and said farmers were unhappy with the situation and that was affecting other commodities. Phosphate prices were said to be the most stable of all fertilizers, and with the cost of raw materials down, margins were said to be good for producers.

The Central Florida DAP price range remained unchanged from the previous week’s $315-$320/st FOB. PCS Sales had no published price. Mosaic’s price was $315/st FOB for DAP and $325/st FOB for MAP. CF was at $315/st FOB for DAP and $20/st FOB higher for MAP. The price from Agrifos remained at $350/st FOB for trucks and $340/st FOB for rail shipments, but truck sales were on the increase.

U.S. Gulf: Wet weather in the form of both snow and rain continued in areas of the Midwest last week, and that was not helping the sale of fertilizers. NOLA DAP barge sales were still depressed last week, nearly as much as the spirits of traders and dealers.

With most warehouses still nearly full and farmers unable to get into their fields in many areas, some in the industry were predicting there would be no surge in buying activity until sometime in mid-to-late summer. Dealers would like to see nearly empty bins by the end of the spring season, and that may happen. Few barges were in a position to take advantage of any activity that might erupt if the weather cooperates and product begins to move. While the ideal may be to have empty storage space when the season ends, nobody wants to lose business by not being able to meet customer needs. Still, many of the companies that normally have barges placed in strategic positions along the river did not last week. Along the Arkansas River phosphate was actually in short supply, and transportation from New Orleans takes about three weeks, which meant outages could occur. Oklahoma was one of the few areas where sales were on the upswing.

The USDA estimated 85 million acres of corn will be planted this year and corn prices were still over $4/bushel. However, the big ethanol market was showing continued signs of stress as the price of gasoline has hovered around $2/gallon, which was below the cost of ethanol. A year ago when the price of gas was double the current price, ethanol was a good deal for refineries to use as a 10 percent blend. How much corn actually gets planted will depend on whether farmers believe the ethanol situation will depress corn prices.

Pastureland was going without fertilizer this year, as the price of beef remained well below average. In some areas, dairy cattle were being sold for slaughter.

With warehouses full and the market for NOLA DAP barges stalled, the market continued to drift south a bit more last week. Sales were made in the range of $304-$308/st FOB last week, and offers to buy were made as low as $300/st FOB and offers to sell came in as high as $310/st FOB, but neither of the extremes were satisfied. Warehouse prices dipped a bit into the $345-$365/st FOB range, after CF lowered its price.

The NOLA DAP barge price range last week was $304-$308/st FOB, down from the previous week’s $305-$308/st FOB. Mosaic has a $10/st FOB additional charge for MAP, while CF’s MAP was $20/st FOB higher than its DAP price.

Eastern Cornbelt: DAP was steady at $360-$375/st FOB regional warehouses to the dealer, with MAP $10/st higher.10-34-0 was quoted at $650-$750/st FOB in the region, with the low in Illinois and the upper end in Ohio.

Western Cornbelt: DAP was steady at $360-$370/st FOB river terminals to the dealer, with MAP $10-$15/st higher. A Nebraska source pegged delivered MAP at the $385/st level for spot loads last week. 10-34-0 pricing remained at $600-$700/st FOB in the region, with the low in southern Iowa and the high in Missouri to the dealer.

Southern Plains: DAP pricing to the dealer was tagged at $345-$350/st FOB Catoosa, down slightly from last report, with MAP pegged at $360-$370/st FOB the port and in fairly tight supply. 10-34-0 was quoted at $530-$575/st FOB, with the low in Texas and the high in Kansas.

South Central: The DAP market was tagged at $330-$340/st FOB regional warehouses to the dealer, down roughly $10/st from last report. MAP was $10/st higher than DAP, and TSP was quoted at $320-$325/st FOB to the dealer.

U.S. Export: No export sales were made by either PhosChem or other domestic exporters of phosphate last week, but India was still buying from other exporting nations. India was said to have made buys from Russia in the $370s/mt DEL range, and Tunisia was said to have sold to India at $340/mt FOB.

Freight rates were on the decline last week, and were running about $32/st FOB from Tampa to India. Rates from other world ports were proportional.

In the short term the export market was less than bright, but that could change this summer when Latin America enters the market. However, prices were likely to erode before regaining strength when buying begins to pick up.

Last week, the export phosphate price range remained unchanged at $340-$350/mt FOB.

China: Rumors circulated last week that Indian buyers were ready to sign deals with Chinese DAP producers. Asian sources said the deal would make sense, but only if the price is right.

Chinese DAP is currently under an export duty of 110 percent. That rate will drop to 10 percent later this year. The window of opportunity to buy and ship the tons is only two months, said one trader.

The producers are facing a financial situation that almost forces them to offer prices at levels that might scare off the price-conscious Indians.

Many of the producers are said to still be holding expensive inputs in their reserves. Even averaging the costs of new inputs – for those who can afford to buy new material – would still make the exported DAP more expensive than most regional buyers are willing to accept.

Talks are expected to continue through the month.

Pakistan: Pakistan’s Ministry of Agriculture says there is presently about 300,000 mt of DAP available in the country. It says with Fauji Fertilizer producing about 50,000 mt per month, there could be very little imported for Kharif season. Engro and United Agro have informed the government that they would be in the market for import during May/June. According to a report of National Fertilizer Development Centre (NFDC), DAP opening inventory would be 259,000 mt in Kharif season. The estimates of domestic production are 330,000 mt. Total planned DAP imports figures are not confirmed by the importers; however 589,000 mt would be available in the country. Total DAP consumption is estimated at 560,000 mt. Hence, the Ministry believes the supply of DAP during the season will be comfortable.

Bangladesh: BCIC has issued a tender to import 30,000 mt of phos acid (52-54 percent) in bulk in tanker in a maximum of three lots, each of 10,000 mt, on a C&F Chittagong basis. Offers are to be received up to May 4. They should be valid for 30 days.

POTASH

Eastern Cornbelt: Potash was steady at $680-$720/st FOB regional warehouses from brokers or resellers. Most sources pegged the dealer market commonly at the $700/st level on the secondary market in early April.

Western Cornbelt: Potash remained at $680-$710/st FOB warehouses to the dealer, depending on grade and location. Out of Missouri River terminals, the market was commonly tagged at $700/st FOB for red granular and $710/st FOB for white granular potash. A Nebraska dealer quoted delivered potash at the $685/st mark to his location for what he described as “hand-to-mouth” loads in early April.

Southern Plains: Granular potash FOB Carlsbad, N.M., remained in the $760s/st FOB, while potash out of regional warehouses locations was quoted at $680-$700/st FOB from brokers or resellers.

South Central: Potash was pegged at $650-$680/st FOB regional warehouses to the dealer from brokers and resellers, reflecting a sizable drop from last report. “People are just trying to liquidate some inventory,” said one. Another source pegged the Memphis market at a solid $675/st FOB last week, and said that product is moving at that level although overall spring demand will be well below normal.

Southeast: Sources tagged the potash market at $740/st FOB Wilmington, N.C., with postings from producers remaining as high as $842/st rail-DEL in the region.

SULFUR

Tampa: At the recent Sulphur Institute Conference at Madrid it was clear the U.S. market was trailing the rest of the globe. Prices on the world market had stabilized at a higher level than the $0.00/lt in the U.S., but it was unclear what, if any, effect that may have on quarterly price negotiations in this country.

A source said accountants were already growing agitated by the lack of a new price, and may begin pushing for a settlement sometime soon. Speculation on a new price for the second quarter was as low as a rollover to as high as $50/lt; however, neither of those numbers appeared probable. The phosphate industry points out that its sales have been well down this spring season and production curtailments were a very real possibility. The sulfur side noted that the industry was closer to balancing supply and demand than it has for about six months. Most likely, a small price hike seemed probable, although it may not be enough to cover transportation costs. The low price of sulfur has had the greatest impact on companies that only refine and do not have in-house oil supplies.

If the U.S. phosphate industry is able to hold the line and keep the price very low, that could mean much more available sulfur would be going to prill operations to serve the export market.

West Coast: Contract negotiations for the West Coast will not begin until around the end of April, when current agreements were scheduled to expire.

Vancouver: Brazil had not reached an agreement on new contract terms, and its lack of need for sulfur was given as the primary reason. Brazilian customers currently pay around $200/mt FOB, but that price was expected to drop to between $30/mt FOB and $45/mt FOB when the new contracts are reached.

MARKET NOTES

Pakistan: The country is seeking strategy-consulting support for the development of a national fertilizer strategy. The strategy would deliver a clear analysis of the global and Pakistani fertilizer market and recommend to the government how to best meet the rising fertilizer demand in Pakistan.

The Pakistan Industrial Development Corp. (PIDC) has invited applications from international firms for in-depth knowledge of the global fertilizer market and respective feeds markets, fertilizer technology know-how, experience in feasibility studies on large scale industrial plants, financial engineering capabilities, proven risk and sustainability assessment methodologies, development and financial modeling of strategic options, and comprehensive experience in consulting government institutions, especially development of national policies preferably in Pakistan. The last date for receiving applications is May 8, 2009.