Austin Powder Inc., Cleveland, Ohio, through a new subsidiary, U.S. Nitrogen LLC, plans to build a new liquid ammonium nitrate plant (ANSOL or ANS) with a capacity of 420 st/d near the small town of Mosheim, in Greene County in Eastern Tennessee. Some five buildings, including an anhydrous ammonia (200 st/d) facility and nitric acid (330 st/d) plant, will be constructed on the 400-acre site. It will include a two-to-three-story cooling tower.

“We are hopeful that the permitting process will go well and that we will be a corporate citizen of Greene County very soon,” said Jim Boldt, Austin Powder vice president and CFO. “The county offers a great workforce, a great business climate, and tremendous transportation accessibility. We look forward to a long and mutually beneficial relationship with the people here.”

Austin says the site is within a 250 mile radius of 70-75 percent of its customers. It plans to ship the product to its manufacturing sites in Ohio and elsewhere for further upgrading into explosives. Austin assured local officials than no actual explosives would be made at the site. The site is about a mile off Interstate 81 and not far from I-40, I-75, and I-74. A Norfolk Southern Railroad track adjoins the property, and a rail link will be built into the plant. The company expects to send some 20 truckloads of product out of the plant each day, and will also ship product out by rail.

Austin said some front-end products for the plant will arrive by railcar and be unloaded at the plant.

The plant will take up about 50 acres of the 400-acre site, allowing plenty of green space between it and neighbors. The site is in a rural area near the intersection of I-81 and Highway 11-E, with a large Walmart Distribution Center close by.

The East Tennessee Gas Co. pipeline is only one mile away and will supply the company’s gas needs. It will procure water (800 gallons per minute) from the local water district and dispose of it in the Mosheim Sewer system.

CF Industries Holdings Inc. is not just bullish on the 2011 U.S. corn crop it sees a positive trend continuing at least through 2013.

“We’re forecasting that 92 million acres of corn will be planted in the U.S. this spring, which would be only the second time we have exceeded 90 million acres,” CF Chairman, President, and CEO Stephen Wilson told analysts Feb. 18. “Even if a large corn crop is planted and harvested this year, U.S. farmers will need to continue to produce at high rates to replenish stocks to normal levels.

“As a result, we expect corn plantings to be sustained above 90 million acres in 2012 and 2013, as well,” added Wilson. “The impact of larger planted acreage is likely to be compounded by higher application rates. Even with fertilizer prices well above year-ago levels, fertilizer affordability to farmers, as measured by fertilizer costs as a percent of projected farm revenue, will be at the second most favorable level for farmers over the last 15 years. For 2010 and 2011, fertilizer costs as a percent of actual and projected revenue for corn are at about half the previous five-year average, giving farmers every incentive to fertilize optimally in 2011.

“In my 20 years in this industry, I have never seen a spring in which all the fundamental factors were as perfectly aligned for fertilizer producers as they are this year.”

For 2011, CF thinks corn fertilizer costs as a percent of projected revenue will be 14 percent, up from 2010’s 11 percent, but still much lower than a 10-year average of 19 percent. “So fertilizer is eminently affordable. In fact, it is highly desirable for the farmer to maximize his yield. And on top of that, we ended the last harvest year with about a 5 percent stocks-to-use ratio, that’s incredibly low. It’s certainly an uncomfortable level for U.S. agriculture and the food supply, so frankly, the stars and the planets are aligned here to support corn planting.”

Wilson said that if you look at the returns on an acre planted to corn versus one of soybeans, that corn comes out on top by $200 per acre. Citing that wide gap, he expects corn to remain in favor unless bean prices heat up and bid some corn acreage away. “But it would take a pretty big increase in soybean prices for that differential to be closed.”

Wilson says he believes that once fertilizer starts to move to the field this spring, it will become obvious that fertilizer stocking practices have been conservative. “We believe some fertilizers, notably UAN and phosphates, to be in tight supply.”

CF Vice President, Sales and Marketing Bert Frost added that he thinks there will be more inventory build-up this year compared to last year, when the goal was zero inventory at the end of the season. “I think because crop prices are so positive, the chain wholesale, retail, trader, end-user is accepting the prices relative to returns as Steve mentioned, and therefore is willing to probably hold more inventory at this time than they were last year.” Overall, Frost said the company is very confident about spring and fairly confident that the inventory levels in the U.S. are low on nitrogen, as well as low worldwide on nitrogen and phosphate.

Wilson said the company has been fielding a lot of inquiries about potential Fall 2011 deliveries. Others in the fertilizer industry have also commented to Green Markets about this trend, most notably for anhydrous ammonia.

Wilson was disappointed that the Woodward 500,000 st/y UAN expansion was not up and running in fourth quarter 2010 as originally expected (GM Nov. 15, 2010). However, the company was able to sell excess ammonia produced for that expansion into a very tight ammonia market. “We shipped 917,000 st of ammonia to our customers in the fourth quarter. That’s about 200,000 st more than we shipped on a pro forma-combined basis in either 2008 and 2009. The extended app

Agrium Inc. officials are focusing on cleanup rather than decisions about rebuilding in the aftermath of the ravaging fire that broke out in the main part of their fertilizer plant in Hartsville, S.C., Feb. 14 (GM Feb. 21, p. 1), and burned for several days.

“We still have yet to make a decision on the next step while we concentrate on the cleanup, which is progressing very well,” spokesman Paul Poister told Green Markets. “There is still a lot of work to be done, but we feel the cleanup will be completed in the next few weeks.” Poister, who is on the scene from Agrium’s Denver office, said efforts are concentrating on the warehouse, which is a total loss. He said crews are also trying to determine if some of the product in the building can be used at a later time. Other buildings on the site, including the plant headquarters and outbuildings, appear to have suffered minimal or no damage.

Poister said the cause of the fire is still under investigation. He also reported that insurance adjusters have been on the scene to look at the adjoining buildings, and that Agrium is awaiting their report before deciding about the other structures. He added, “The fire chief has come out regularly over the last few days to check on our progress, but the site is now being managed by Agrium.”

While the cleanup was moving ahead, one possible hitch developed last week that wouldn’t prevent rebuilding but could add to the costs, according to Hartsville Mayor Mel Penning. Pennington said the potential problem arose with disclosure that in the process of updating its flood maps, FEMA has included the area surrounding Prestwood Lake, where Agrium’s Rainbow operation is located. Other industries operating on the lake could be affected also, Pennington explained. He said the city has undertaken an appeal of the designation, which, if not reversed would require more insurance and impose additional restrictions.

“So we appealed this flood map on behalf of the city in support of our industries based on the lake,” the mayor reported. “We did a detailed study showing the lake has never breached the 100-year flood plain.” Pennington said waters feeding into the lake are controlled by flood gates, and that the level is monitored and remains in check around the clock.

These and other concerns likely came up at a community meeting scheduled Feb. 24 for any of the residents of the community of 7,500 who have questions about the fire and its affect on them. “We’re hosting this with Agrium to talk publicly about the events and answer any questions folks may have regarding their safety or anything else comes up,” Mayor Pennington explained. “It’s just a part of better communications and transparency to those who live near by the Agrium site and anyone else who is interested.”

Pennington also emphasized that the objective is to keep Agrium in the city and short of that, at least in Darlington County.

In related news, Hartsville officials said they have applied for a $25,000 federal grant to help cover the costs of cleanup.

In addition, newly-inaugurated South Carolina Gov. Nikki Haley showed her concerns by driving into town with a police escort. Haley said she was thankful no one was hurt, and that the way the fire was contained was a tribute to first responders. Before her departure she held a press conference with fire department personnel and the area’s representative in the legislature. She also had been in touch earlier with city officials.

Intrepid Potash Inc. reported net income of $18.2 million ($.24 per diluted share) on sales of $96.1 million for the fourth quarter ending Dec. 31, 2010, up from the year-ago $6.7 million ($.09 per share) on sales of $73.1 million.

“During the fourth quarter of 2010, we saw a significant expansion in nutrient demand, which was more robust than we had expected and was further bolstered by a strengthening commodity market,” said Bob Jornayvaz, Intrepid’s executive chairman of the board. “A number of factors contributed to the overall strength in the potash market domestically during the fourth quarter. Mild fall weather and an early harvest in much of the United States allowed for an extended application period for potash and other nutrients well into December. Further, prices for virtually every agricultural commodity moved higher, as yield estimates were trimmed and global demand continued to grow, driving farmer economics to historically attractive levels.”

Intrepid also touted its ability to serve the just-in-time truck market. “The flexibility our locations afforded us, coupled with our decision to manage inventories and support the local truck market, was integral to our solid results for the quarter,” added Jornayvaz. “Not only were we able to service our traditional truck markets in the southern United States, but we were also able to meet customer demand for tons outside these locations as customers required timely delivery of product from suppliers to satisfy farmer demand.”

Fourth-quarter potash sales volumes were 216,000 st with an average net realized sales price of $386/st, compared to the year-ago 150,000 st and $408/st. The more telling measure, according to Intrepid, was that its 4Q average price was $43/st higher than it was in the third quarter of 2010. Potash net sales were $83.6 million, compared to the year-ago $61.2 million.

Fourth-quarter Trio sales volumes were 27,000 st ($222/st), versus the year-ago 25,000 st ($190/st). Net sales were $5.9 million versus the year-ago $4.8 million.

Intrepid also said that based on its calculations, its average net realized sale price for the fourth quarter continued to exceed that of its North American competitors, with an average net realized sales price advantage of $79/st. Intrepid claimed this same advantage for the year to the tune of $61/st.

Intrepid said that as the spring fill gets underway, it has seen a number of dealers place orders well in advance of anticipated spring demand as they appear confident in their ability to profitably sell the tons they have ordered. Intrepid expects sales during the spring to be normal or slightly above normal based on historical levels. It said it seems dealers may be more willing to exit spring with some level of inventory entering the summer.

Despite the 4Q uptick, full-year net income was down at $45.3 million ($.60 per share) on sales of $359.3 million, compared to the prior-year $55.3 million ($.74 per share) and $301.8 million. Full-year potash volumes were 810,000 st ($363/st), vs. the year-ago 440,000 st ($541/st). Net sales were $294.1 million vs. the year-ago $237.8 million. Trio volumes were 204,000 st ($174/st); the year-ago was 149,000 st ($286/st). Net sales were $35.5 million, versus the year-ago $42.5 million.

Israel’s Psagot Investment House has downgraded Israel Chemicals Ltd. from a buy to market perform. A report issued by the Tel Aviv-based investment bank said the next few weeks would be crucial for determining the performance of its key Dead Sea Works subsidiary. Specifically, Psagot research head Limor Gruber cited the upcoming negotiations with Indian buyers.

In an interview with Green Markets, Gruber noted that the Indian government has set a potash subsidy price of $390/mt. This is below the average price of $400/mt for recent deals to China. Gruber notes that Indian prices have traditionally been 5-10 percent higher than prices in China. “If Dead Sea and other producers sign deals at prices below $420/mt, then this is likely to have an impact on other buyers like Brazil and will put downward pressure on prices,” she said. If this happens, Gruber said it will have a negative impact on ICL’s bottom line in 2011.

Earlier this month, DSW announced a major supply agreement with Chinese customers for 500,000 mt of potash in the first half of 2011. DSW noted that the price was in line with recent deals signed by other producers and is approximately $50/mt higher than 2010 prices, putting it at around $400/mt.

Gruber said that in recent years, China and India have become increasingly important markets for DSW. She estimated that in 2010, 36 percent of potash sales were to the two countries, and the level is likely to rise to 40 percent this year.