AMMONIA

Tampa/U.S. Gulf: Major players have concluded second-half Tampa business at $580/mt DEL. Specifically, Yara has reportedly agreed to this price with CF. In the meantime, there were reports of another deal for late February/early March that may go to Tampa or another U.S. Gulf port at the $625/mt DEL mark. As a result, sellers now say expectations for the next round of business is as high as $650/mt DEL.

In the meantime, no new business was reported at NOLA, though sellers were talking much higher numbers ?Çô $580-$600/st FOB for the next round of business.

Despite the higher prices, according to the U.S. Department of Commerce ammonia imports were up 22 percent in December, to 706,245 st from the year-ago 579,701 st. July-December imports, however, are up only 10 percent, to 4.3 million st from 3.9 million st.

Eastern Cornbelt: The anhydrous ammonia market was quoted at $660-$675/st FOB regional terminals, with the upper end reported for spring prepay tons booked in Illinois last week. Effective Feb. 13, Agrium’s anhydrous ammonia postings moved to $690/st FOB E. Dubuque/West, Iowa; $695/st FOB Niota and E. Dubuque/East, Ill.; $700/st FOB Meredosia and Marseilles, Ill.; and $710/st FOB Cincinnati/Finney, Ohio.

Western Cornbelt: Ammonia pricing in the region was steady at $645-$665/st FOB terminals last week. Effective Feb. 13, Agrium’s anhydrous ammonia postings moved to $670/st FOB Greenwood, Neb., Mankato, Minn., and Iowa terminals at Early, Garner, and Whiting; $665/st FOB Hoag, Neb.; $660/st FOB Clay Center, Kan.; $655/st FOB Conway, Kan.; $650/st FOB Mocane, Okla.; and $630/st FOB Borger, Texas. The company’s delivered postings in Texas and Oklahoma moved on that date to $655/st north of Interstate 40 and $660/st south.

California: Effective Feb. 11, Calamco moved its anhydrous ammonia postings in California up to $675/st truck-DEL and $690/st rail-DEL. Agrium’s postings for truck-DEL ammonia moved up on that date as well, to $675/st in Central California and $680/st in Northern California.

Pacific Northwest: Anhydrous ammonia remained at $675-$695/st FOB and $695-$725/st DEL in the Pacific Northwest region, depending on location.

Western Canada: Anhydrous ammonia pricing was quoted at $858-$889/mt DEL in the region. Spring movement remains a long ways off, especially after a dose of severe winter weather in early February. British Columbia was the only Canadian province to escape a winter weather warning on Feb. 13.

Black Sea: The wild ride continues. Asian traders pointed to a $570/mt FOB deal out of Yuzhnyy as evidence the ammonia market is still showing signs of strength. Reportedly, the deal was a spot purchase. Just how much this deal reflects the actual state of the market or is a flash in the pan is still up in the air.

One Asian source said once the $570/mt FOB price was hit the producers moved their pricing ideas to $600/mt FOB. He implied only buyers at least willing to pay lip service to this new level will be allowed in for talks.

Other sources note, however, that the $570/mt FOB most likely represented a prompt spot cargo of limited size.

Adding to arguments that the price has moved to this new record level, sources point to a Sabic deal with Yara at $530/mt FOB. One trader noted the difference between the Middle East and the Black Sea would mean the Yuzhnyy price should be $565/mt FOB. So, he said, $570/mt FOB is possible.

Sources report the tanks in Yuzhnyy are empty. At the same time, buyers from the U.S. and Europe continue to call for more tons. The resulting strong and steady demand, combined with tight supplies, is pushing the price ever higher.

Ukraine producers dodged a bullet last week when the Russian and Ukrainian governments reached an accord on settling the US$1.5 billion debt Ukraine owes Russia – specifically Gazprom – for natural gas already used. The deal was sealed just minutes before a threatened Gazprom shut-off of gas into Ukraine.

While sources say $600/mt FOB ammonia is possible by the end of the month, no one was ready to bite the bullet and declare that price has already been achieved. Some are even hesitant to claim the market has firmly moved to $570/mt FOB.

Some accord seems to be in place for prices at $550-$570/mt FOB.

Middle East: At least one producer finally pushed the price above $500/mt FOB. Sources report Sabic settled with Yara for a cargo of 23,000 mt at $530/mt FOB for late February lifting. The product is said to be destined for Europe. Industry watchers note that Sabic had the tonnage because the major Indian buyers are still not interested in buying ammonia.

While the sellers were reportedly happy with the dramatic jump in prices in the area, one trader hauled out a traditional Chinese saying: “One swallow does not make the summer.”

He noted that the price was for a prompt cargo for a buyer that needed tons right away, and Sabic had the extra material to offer.

Other deals from the Middle East are usually based on contracts or long-term arrangements, which would indicate lower prices.

Still, said one buyer, once the producers have tasted an increase in prices, they will want more in future deals.

Prices for contracted and spot tons are spread out over a lot of territory. One source said if the price of the contracted tons was to be included with the recent spot business, the difference between the low and high prices would be about $130/mt. Such a range, one observer noted, is not useful or practical when looking at the market.

Contracts that are being shipped now reportedly carry price tags in the low $400s/mt FOB. The spot business, on the other hand, quickly moved into the upper $400s/mt FOB and is now approaching the mid-$500s/mt FOB.

Now, with the Sabic deal, the price range will have to be raised to at least $530/mt FOB.

If the reports of $570/mt FOB in Yuzhnyy are confirmed, said one Asian trader, the price in the Middle East will have room to increase $5-$10/mt.

For now, industry watchers who discount the long-term contract prices and focus on the limited spot business put the market at $510-$530/mt FOB.

Safco IV is expected to come up some time next week.

Asia: Industrial buyers remain a strong source of demand in this area. Sources say the Taiwanese and Korean buyers have secured the tons they need. China, however, is an unknown factor.

Plants in China have been pulling in material as demand for Chinese products increases. Now, said one trader, the economic slowdown in the U.S. may force some factories to cut back on production. These cutbacks may affect ammonia imports as well.

Another source also noted that the central government may force a number of factories around Beijing and other Olympic sites to shut down just prior to and during the summer Olympics.

The shutdowns will be a vital part of Beijing’s efforts to live up to its promise of cleaning up the air in time for the Olympic Games.

Elsewhere in the region, the KPI and KPA facilities in Indonesia remain oversold. So far, said one trader, the suppliers have been able to ship enough ammonia to keep buyers happy. If anything happens to either facility, however, the resulting imbalance could push prices higher.

India: Ammonia buyers remain on the sidelines because the phos acid and sulfur talks are not yet completed.

The big buyers – such as IFFCO – will have little problem getting the material they need once demand grows. Sources say they will have to pay more than last year, but at least they will not go wanting.

Smaller buyers who have depended on the spot market will find the going rough once regular large-scale Indian purchases begin.

UREA

U.S. Gulf: Buyers and sellers were still grappling with the direction of the urea market last week. While many had said it had hit bottom and bounced, others this past week were not buying that scenario. Some buyers said that a few stray barges could still be picked off below the $390/st FOB mark. In fact, way below the $390/st mark, according to a few. However, most players saw no or little business last week.

Most put recent FOB transactions between $380-$395/st FOB, with one claim that a netback to NOLA on delivered business could net as low as $375/st FOB. In the meantime, some sellers were defiant that they would not sell below $400/st, saying it is just a matter of time before a rush of demand will ensue.

Buyers can point to increased imports for the July-December period. U.S. urea imports are up 45 percent during the period, to 3.22 million st from the year-ago 2.23 million st, according to the DOC. December imports were up only 17 percent, to 658,029 st from the year-ago 563,975 st.

Eastern Cornbelt: Granular urea was quoted in a broad range at $450-$480/st FOB in the region, with the low out of spot river locations in Illinois. One Indiana source said some urea had moved on wheat in southern locations of the state, but topdress demand was still a ways off in most other areas of the region at mid-month.

Western Cornbelt: The granular urea market appeared to be weakening a little due to the softer pricing at the U.S. Gulf and on the Arkansas River, even though movement had yet to kick in for wheat topdressing in the region. An Iowa source tagged the dealer market last week at $440-$450/st FOB for limited tons, but generally described the market as a “dead horse.” Dealer pricing out of the Inola and Enid, Okla., markets remained flat at $410-$415/st FOB.

California: Granular urea was unchanged at $490-$510/st FOB and $510-$515/st DEL in the state.

Pacific Northwest: Granular urea was quoted in a broad range at $490-$535/st DEL in the region, depending on location, with the low end reported for some limited tons on a rail-DEL basis. As one source said regarding the lower priced tonnage, however, you had to have room to take it and you had to be able to store it immediately, which few in the region were in a position to do last week.

Western Canada: Granular urea was steady at $575-$600/mt DEL in Western Canada.

Black Sea: It seems the slide in prices has stopped. Sources report deals with Turkey at $325/mt FOB provided a new floor for pricing out of the area.

Buyers are – predictably – trying to push the price back to $300/mt FOB, while producers are now saying $330-$340/mt FOB is the new entry fee for discussions.

Asian traders doubt there is support for higher prices just yet.

India remains out of the market. At the same time, Brazil is sitting on the sidelines and Mexico is reportedly done with its seasonal purchases.

China will not return to the market until next week, once everyone gets back from the extended lunar New Year celebrations.

And even once China is back in, sources say domestic demand, coupled with a current 30 percent export duty, could make Chinese tons uncompetitive in the global market.

With the latest deal and little to indicate strong demand in the next couple of weeks, sources peg the market at $320-$330/mt FOB.

Middle East: Producers are pretty well sold out.

Prills move smartly from Sabic to Pakistan even as the Safco IV facility remains down.

The granular producers are reportedly comfortable with long-term deals with the U.S., Europe, and Asia.

Prices are just as stable as the outflow of product. Sources say some of the shipments leaving the area reflect sub-$400/mt FOB rates. The best guess for pricing, say traders and producers, is $395-$405/mt FOB for prills and granular.

China: International trading houses are firing numerous queries to their representatives in China to get a handle on what damage – if any – the severe weather has had on urea production and transportation.

Earlier sources had reported some delays in shipping product from factories to ports because of damage to or blockage of the rail lines. Now some are worrying that the weather may have also affected the plants.

Some industrial facilities were forced to cut back on production because natural gas and coal was diverted to home heating use. Just how many urea plants were affected by this diversion – if any – is still up in the air.

As China returns to work from the New Year celebrations, sources say the price of prills is $350-$355/mt FOB bagged and granular is selling closer to $400/mt FOB.

Whether these prices will hold as we enter March is the big question traders are asking. Two factors will play into what will happen to the domestic and export price of urea in the next six weeks.

Sources report that the government still must buy about 85 percent of what it calls its state reserves. These are the tons – estimated to be at 10 million mt for this year – to be purchased by state entities to ensure farmers have enough urea for the application season. The government also wants to make sure the price does not get out of hand.

The second issue is the scheduled increase in the export duty from the current 30 percent to 35 percent beginning April 1.

India: Sources now say buyers should begin making the rounds to talk about the beginning of the 2008 buying season sometime in the next couple of weeks.

The first place Indian intentions might be felt is with the Middle East producers. Indian buyers have a long and fruitful relationship with the producers.

The appeal of buying from the Middle East, even at a slight premium, is the flexibility such purchases offer. Cargoes of various sizes can be designated for East Coast or West Coast ports, or even delayed to better accommodate existing port facilities.

Sources say the purchases made last year were enough to build a slight reserve for the 2008 application season. Industry observers expect to see Indian buyers move quickly, however, to ensure the reserves do not dip too low.

This is an election year. The government does not want opposition politicians to use any shortage – no matter how local or temporary – against it.

Bangladesh: The country continues to face imminent famine following devastating floods and pest infestations.

Some recent purchases have helped. Sources say, however, more imports will be needed. Traders from major houses remain leery of calls by BCIC for purchases. In the previous year, BCIC called numerous tenders but awarded only a portion of them. And of those awards, even fewer LCs were opened.

Critics blame the bureaucratic process BCIC must follow to secure urea purchases. Others agree the process is a problem, but also blame many of the people who handle the process. One trader said there are enough difficulties to lay the blame at any one aspect of the process.

NITROGEN SOLUTIONS

U.S. Gulf: Barge prices continue to erode, as do imports. Sources say tanks are full and it is difficult to find a place to put new tonnage. Barges were reported to be $310-$320/st ($9.69-$10.00).

The pressure on the UAN market is reflected by import statistics that show a 110 percent increase in UAN imports for the month of December, to 389,023 st, up from the year-ago 184,970 st. December is following the July-December year-to-date trend, which is up 104 percent – to 1.82 million st from the year-ago 893,489 st.

Eastern Cornbelt: UAN remained at $11.45-$12.00/unit FOB regional terminals for spot or prepay tons.

Western Cornbelt: UAN-32 was quoted at $363-$373/st ($11.34-$11.65/unit) FOB regional terminals, with most locations referencing dealer prices at the upper end of that range or higher. In the Oklahoma market, sources continued to report the low end of the range at the $355/st ($11.09/unit) level FOB production points.

California: UAN-32 was quoted firmly at the $400/st ($12.50/unit) FOB mark to dealers, with postings as high as $410-$430/st ($12.81-$13.44/unit) FOB in California, depending on location and supplier.

Pacific Northwest: UAN-32 was pegged at $400-$410/st ($12.50-$12.81/unit) DEL in the region, with some suppliers reportedly posted as high as $425/st ($13.28/unit) DEL last week.

Western Canada: UAN-28 was quoted at $362-$378/mt ($12.93-$13.50/unit) DEL in the region.

AMMONIUM NITRATE

U.S. Gulf: Barges continued to remain stable at $355-$365/st FOB, not seeing any of the erosion of urea and UAN. Sources said product has simply been harder to find.

AN imports were up 29 percent in December, to 124,261 st from the year-ago 96,577 st, according to the DOC. July-December imports are up 30 percent, to 555,430 st from the year-ago 425,922 st.

Western Cornbelt: Ammonium nitrate remained at $390-$400/st FOB in the region.

California: No market was reported for ammonium nitrate in the state. The CAN-17 market was steady at $310-$320/st FOB, with some movement reported in the Central Coast area

Pacific Northwest: Ammonium nitrate was reported at $463/st rail-DEL, up just slightly from last report. CAN-17 was pegged at $294-$304/st DEL in the region, with the FOB level at the $284/st mark in Washington.

AMMONIUM SULFATE

U.S. Imports: December imports were off 8 percent, to 31,583 st from the year-ago 34,191 st. July-December imports, however, are up 31 percent, to 184,751 st from the year-ago 140,817 st.

Eastern Cornbelt: Granular ammonium sulfate was tagged at $285-$300/st FOB in the region.

Western Cornbelt: Granular ammonium sulfate was firm at $285-$300/st FOB last week.

California: Ammonium sulfate remained at $280-$300/st FOB, depending on grade and location, with the low for standard grade. Simplot is raising its ammonium sulfate postings $30/st effective Feb. 16, which will put reference pricing in California at $310-$330/st FOB, with the upper end in desert areas of the state.

Pacific Northwest: Granular ammonium sulfate was quoted at $302-$312/st DEL in the Pacific Northwest, up $10/st from last report. Tiger-90 sulfur pricing had reportedly doubled in the last month, to $428/st DEL for bulk and $433/st DEL for bags.

Western Canada: Granular ammonium sulfate pricing in the region firmed on Feb. 6 to $390-$395/mt DEL, up $15/mt from last report.

PHOSPHATES

Central Florida: For the Central Florida phosphate market, “It’s the same old thing, no change,” said one source. “The price just keeps going up.” A trader said he bought at $685/st FOB on Friday from a non-producer and sold early this week at $690/st FOB, before he learned the price from producers had risen to $700/st FOB or higher. The source noted that he has had to charge higher margins because of the rapid rate of price hikes from producers, “but it’s easier to get $710/st FOB than it was $200/st FOB.”

As an indication of what’s to come, Mosaic made a sale of a unit train of DAP at $740/st FOB last week for delivery beyond what is considered prompt. That deal cannot be included in the current price range, only because inventories were too low to meet the order.

Just a year ago, Central Florida DAP could be purchased for as little as $265/st FOB – and that seemed high at the time. At this point the domestic market has been pushed by the world market, and inventories here and elsewhere remain low.

“We’re sitting here in awe,” one producer said. “This is absolutely stunning.” Few could argue with that.

It appeared farmers who produce corn, wheat, and soybeans will have no problem or reluctance to pay the higher prices, but those with less fertile ground used for pasture will take a pass on fertilizers once the weather allows them to get into their fields.

The Central Florida DAP price range leaped again last week, from $680-$685/st FOB the previous week to $685-$720/st FOB last week. Mosaic was posting an asking price for phosphates of $720/st FOB for DAP and $716/st FOB for MAP. PotashCorp’s Central Florida reference price climbed to $700/st FOB from $680/st FOB, and CF’s asking price was $700/st FOB for DAP and MAP. Discounts for national accounts were no longer available. MAP supplies continued to be scarce. In Texas, Agrifos’ truck price rose to $730/st FOB and its rail price was set at $725/st FOB for DAP last week, but was no longer posting a price for either.

U.S. Gulf: Cheap NOLA DAP and MAP barges dried up a couple of weeks ago, and prices began to rise at an alarming rate. Considering farmers have still not been able to begin work on their fields, that alone has been incredible. Producer inventories remain critically low, and some companies, such as CF, have hiked their price for March to extremely high levels – $750/st FOB. By the time March rolls around in another couple of weeks, that price may seem dirt cheap. Several traders made future sales last week at $730/st FOB, and that was already a good price by the end of last week.

Low inventories, coupled with high grain prices, along with the world market, have driven prices to all-time, unheard-of levels. There were no signs that will change anytime soon, meaning months and possibly longer.

Corn acreage predictions for this year were about 88 million acres, down from the 93 million acres last year, but that slight drop will be reversed in the years ahead, say sources. Talk last week was that much of the pasture land, which tends to be of poorer quality, may be converted into farm land in order to take advantage of the higher grain prices. If so, cattle will be sold off and the price of beef will jump. It would also mean that land would require more fertilizer than existing, more fertile farmland, which will tend to support higher phosphate and other nutrient prices.

In the domestic market last week, prices were rising by the deal and by the hour, rather than week by week as in years past. Around the first of March, the more southern areas of the Midwest should be ready for farmers to turn the soil, and the bulging bins of dealers will begin to empty. Considering the sharp upward trend of the market, dealers will want to refill as rapidly as possible.

Terminal prices were already moving up last week, and were in the $700-$725/st FOB range to dealers, but that was around the same price as a phosphate barge before transportation and other costs. Those prices will escalate once the farmers begin hitting the dealers for supplies.

“I have seen this in the export market one week,” a source said, “but what is happening this week (last week) in the domestic market has never happened before.”

The NOLA DAP barge price surged upward from $660-$675/st FOB, to $700-$740/st FOB last week. MAP was selling at a premium. Mosaic’s barge price last week was set at $740/st FOB, and CF was said to be moving its price to $750/st FOB for March NOLA DAP barges.

Eastern Cornbelt: Sources continued to report ever-higher phosphate prices, fueled by low inventories and a strengthening global market. Remarkably, most sources tagged the warehouse markets for DAP and MAP at levels well north of the $700/st FOB mark, with several sources putting the dealer range last week somewhere in the $725-$740/st FOB range. Dealer postings were also confirmed at the $760/st FOB level as the week advanced, which established the top end of the range for the region.

No current numbers were reported for TSP in the region. The same was true of 10-34-0, due to extremely tight supplies.

Western Cornbelt: Sources continued to report firming phosphate markets. Postings for DAP and MAP had reportedly moved to as high as $760/st FOB in Iowa from some suppliers, with confirmed warehouse sales there at the $740/st FOB level. The low end of the range was reported at $725/st FOB in the region early in the week, which was up from the prior week’s $675/st FOB low.

10-34-0 remained in very tight supply, and few sources were able to quote a number for current replacement costs. One source mentioned a $580/st FOB level, but that was speculation as he said he could not find any actual spot tons for sale.

Effective Feb. 1, Agrium’s phosphoric acid postings moved to $940/st rail-DEL for both super phosphoric acid (SPA) and merchant grade acid (MGA) in Iowa, Nebraska, and Missouri. Additional per-month increases of $10/st are slated for both products in March, April, and May.

California: Additional increases were reported for phosphate products last week. Simplot moved its MAP price in California up on Feb. 5 to $750-$755/st FOB or DEL, with DAP $15/st higher. Simplot’s TSP price in the region moved to $605/st FOB or rail-DEL, reflecting a $35/st increase from the Jan. 18 reference price. Effective Feb. 6, Agrium’s MAP postings moved to $755/st FOB or rail-DEL in California and Arizona, up $50/st from the company’s Jan. 17 list price.

16-20-0 was up as well at $448-$455/st FOB in the state, reflecting a $30-$35/st increase from last report. 10-34-0 was pegged at $426-$438/st FOB, but a $10/st increase was on tap for Feb. 15, bringing the range at that date to $436-$448/st FOB.

On the heels of a big increase Feb. 1, super phosphoric acid (SPA) and merchant grade acid (MGA) were quoted at a firm $9.50/unit DEL in the region. In addition, Simplot’s MGA postings FOB local warehouses in California firmed on that date to $9.70/unit. Agrium’s phosphoric acid prices moved on Feb. 1 to $950/st rail-DEL for both SPA and MGA in California and Arizona, with $10/st per month increases slated for both products in March, April, and May.

Pacific Northwest: Sources continued to report firming prices for phosphates. The MAP market was quoted at $740-$750/st DEL or FOB warehouse in the region, with DAP at the $755-$765/st FOB or DEL mark. Some sources were talking about the possibility of another increase by the end of the week, with MAP remaining in tight supply. TSP was pegged at $560/st FOB Washington warehouses, up roughly $35/st from last report.

Effective Feb. 6, Agrium’s MAP postings moved to $740/st DEL in Montana and Wyoming; $745/st DEL in southern Idaho, Utah, Nevada, and Oregon’s Malheur County; and $745/st FOB and $750/st DEL in Washington, northern Idaho, and Oregon excluding Malheur County.

16-20-0 pricing was quoted at $450-$460/st FOB or DEL in the region, up $35-$45/st from last report. As for 10-34-0, product remained incredibly tight, with spot values reported anywhere from $445/st FOB in southern Oregon to $525/st FOB for spot tons in eastern Washington. “Pricing might not be the major concern,” said one source regarding 10-34-0. “Supply will be.”

SPA and MGA were quoted at a firm $9.50/unit DEL in the region as of Feb. 1, up dramatically from last report. Agrium reposted both products at $950/st rail-DEL in the region, with $10/st per month increases slated for March, April, and May. Some sources said additional and even higher prices are likely from producers in the nearer term, however.

Western Canada: MAP pricing continued to climb dramatically. Sources tagged the Western Canada dealer market last week at $840-$875/mt DEL, reflecting a $130/mt increase from January pricing levels.

U.S. Export: Shortly after PhosChem inked a contract to supply a “key Indian customer” with a million mt of DAP between March this year and March 2009 at indexed prices, export prices began to rise again. As predicted, the magical number of $800/mt FOB arrived, and will go higher for the next sale. At the TFI Orlando meeting in early February some in the industry said the price of export DAP would hit $1,000/mt FOB, and that looks entirely possible.

Phosphate has been in short supply worldwide. The scarcity of sulfur has been a major factor, but more recently, several of China’s phosphate processing plants have been hit by power outages in one of that country’s worst winters on record. Also, the demand for grain on the world market to produce more protein has contributed to greater demand for fertilizers and higher prices. While sulfur will definitely return to an oversupply situation someday in the future and its price will go down, and China will not always be in the grips of a bitter winter, the demand for feed grain will continue to increase, which will tend to stabilize prices.

Last week, PhosChem made a sale of 6,000 mt of DAP into Mexico at $785/mt FOB, then another sale of the same amount into the same country at $800/mt FOB shortly after, which set the export price range. The previous week, the export market price range was $745-$760/mt FOB. PhosChem’s new asking price rose to $815/mt FOB, and it will not take too long to find a buyer at that price.

The Fertilizer Institute issued its phosphate export report for January last week. India started off the first month of the calendar year with 128,340 mt, followed by Argentina at 52,168 mt, and South Africa with 51,347 mt in January. The total amounted to 353,945 mt, which was a decline of 10.6 percent from January 2007. Canada continued to be the biggest importer of MAP, taking 34,307 mt, and Colombia imported 16,994 mt. In January, MAP exports totaled 76,624 mt, a sharp reduction over the same period last year of 50.3 percent.

Pakistan: The private sector is negotiating deals with foreign suppliers to import about 150,000-200,000 mt of DAP to meet near-term requirements, according to market sources. Jaffer Bros/MultiCommerce was reported to have bought one cargo of 25,000-30,000 mt Tunisian DAP at around $790-800/mt CFR Karachi, and already sold to Fauji Fertilizer of Pakistan. Another local firm – Khalid Javed Bros. – is understood have bought one DAP cargo of 25,000-30,000 mt around $880-890/mt, but no more details are available. A similar quantity was reportedly bought by Pak-American from Trammo ex-China at around $880-890/mt. Similarly, Engro+ Chawla bought one cargo of 25,000-30,000 mt of DAP from Trammo ex-China at around $830/mt. Separately, Engro bought one more cargo from ICEC Ex-China at around $825/mt.

By contrast, a report of the National Fertilizer Development Corp. (NFDC) says that the country does not need any imports of DAP now, as 541,000 mt of imported DAP is available during the Rabi period, which is sufficient to meet the requirement of 755,000 mt, and that in fact a surplus of 264,000 mt of DAP would be available for next season.

POTASH

U.S. Imports: According to the DOC, potash imports into the U.S. were down 12 percent in December, to 873,265 st from the year-ago 988,217 st. However, imports are still up for the July-December span by 12 percent, to 5.3 million st from the year-ago 4.7 million st.

Eastern Cornbelt: Potash pricing continued to march up in the region. Most sources placed the regional market at the $525/st FOB level for brokered tons last week, if you can find any. The top of the range was reported at the $550/st FOB level.

Western Cornbelt: Potash was quoted at $475-$525/st FOB regional warehouses for limited tons, with more sources likely to press the upper end of that range as a more realistic dealer price last week. At least one supplier had firmed its warehouse price in Iowa to the $550/st FOB mark, although no sales were confirmed at that number.

Potash postings from Intrepid Potash FOB Carlsbad, N.M., firmed on Feb. 1 to $397/st for 60 percent granular and 62 percent standard, $400/st for 62 percent fine standard, and $405/st for 62 percent granular. Those levels represent a $40/st increase from the company’s January postings, and an $80/st increase from December levels. Effective March 1, Carlsbad postings will firm another $20/st, bringing 60 percent granular and 62 percent standard to $417/st FOB, 62 percent fine standard to $420/st FOB, and 62 percent granular to $425/st FOB.

California: Potash out of regional warehouses was quoted at $440-$457/st FOB, depending on location, grade, and supplier, based on new producer postings for March and April shipments. Intrepid Potash’s postings FOB Bakersfield, Calif., firmed on Feb. 1 to $457/st for 62 percent white standard. The company’s potash postings FOB Chico, Calif., moved on Feb. 1 to $440/st for 60 percent white standard and $446/st for 60 percent white granular.

Potassium nitrate firmed $100/st to $710/st FOB for bulk and $770 FOB for bags, with additional near-term increases likely. There were reports of some suppliers now referenced as high as $840/st FOB for bags in the state.

Sulfate of potash (SOP) remained at a firm $553/st FOB for granular and $541/st FOB for standard grade last week, but pricing increases were imminent, with some talking of a move to $608-$618/st FOB in the near term. One source noted that those new numbers would reflect an increase of $220/st since the first of December. Sources talked of very tight standard and water soluble SOP supplies, with water soluble product reportedly moving to $565/st FOB for bulk and $615/st FOB for bags.

Great Salt Lake Minerals Corp., a subsidiary of Compass Minerals, increased prices on SOP specialty fertilizer products by $120 per ton on all shipments effective Feb. 11.

Pacific Northwest: Sources continued to quote the potash market at $363-$385/st FOB in the region for February shipments, but it was unclear if any railcars were actually being offered at that or would be priced $80/st higher for March shipments forward.

Effective Feb. 1, Intrepid Potash hiked its potash mine postings in Utah, with 60 percent granular potash firming $40/st to $397/st FOB Moab and $411/st FOB Wendover, and 60 percent standard potash moving to $391/st FOB Moab and $405/st FOB Wendover. Another $20/st increase is slated for March 1, bringing Intrepid’s postings for 60 percent granular to $417/st FOB Moab and $431/st FOB Wendover, and 60 percent standard to $411/st FOB Moab and $425/st FOB Wendover.

Agrium’s red premium potash postings for the March 1 forward shipping period include $431/st rail-DEL and $436/st FOB warehouse in southern Idaho, Utah, and Oregon’s Malheur County; $436/st rail-DEL and $441/st FOB warehouse in Washington, the Idaho panhandle, and Oregon excluding Malheur County and the Willamette Valley; and $441/st rail-DEL and $446/st FOB warehouse in Oregon’s Willamette Valley.

Western Canada: No current prices were reported for potash in the region last week.

SULFUR

Tampa: With the world price of sulfur running between $500/mt and $600/mt FOB, sulfur producers appeared to have become emboldened last week – as if they needed to get any bolder. With the second quarter a month-and-a-half away, some in that industry were throwing out a wide range of wilder guesses on how much they would be seeking. Those ranged between a low of $100/lt, and double the current price of around $250/lt to $500/lt. Realistically, the upper end appeared unlikely, but new prices could settle somewhere around $400/lt. Phosphate producers won’t like it and may take a hard stance, which would be understandable. One trader, who is not in the sulfur business, said he made a bet that the new price would go up by $150/lt or higher for the second quarter, and his odds were not bad, say others.

However, industrial customers have been, and will continue to be, the ones hardest hit by the big jumps in sulfur prices, because few included those kinds of price hikes in their projections for their products. They should not feel alone, because no one else did, either.

CF was beginning a turnaround on one of its sulfuric acid plants at Plant City, Fla., that will take between two and three weeks. That will give the company an opportunity to stockpile sulfur at the facility.

Two vessels, at least one of which was scheduled for Brazil, were scheduled to depart from Beaumont with loads of prill during February. The price was not available.

Sulfur suppliers were operating on a just-in-time basis for sulfur deliveries to customers, and that can be a problem, a source said. Invariably, refineries will have problems, which interferes with sulfur production. Recently, ConocoPhillips suffered a blip in its production at its Sweeny, Texas, plant that lasted less than 24 hours. Citgo suffered a power outage at its Lake Charles refinery last week, and powering back up takes about a week, which means lost sulfur production that cannot be replaced.

On the positive side, French-owned Total announced it was expanding production of ultra-low-sulfur diesel fuel at its Port Arthur refinery to process another 50,000 barrels a day. The amount of additional sulfur that will mean was not available.

Meanwhile, sulfur supplies remained extremely tight and demand remained extremely high, a good combination for higher prices.

West Coast: A sulfur vessel was being loaded for delivery to China with a price that will net better than $500/mt FOB.

U.S. Imports: Imports were up 42 percent for December, to 165,108 st from the year-ago 116,421 st. Ironically, they are also up 42 percent for the year, at 1 million versus the year-ago 718,405 st.

Vancouver: Spot prices out of Vancouver were made in the range of $540/mt FOB last week.

Bangladesh: BCIC has re-issued a tender to import 15,000 mt of rock sulfur on a C&F Chittagong basis. Offers are to be received up to Feb. 28 and are to remain valid for 30 days.

MARKET NOTES

India: The national budget may bring bad news for urea manufacturers, with the government likely to expand the list of fertilizers eligible for subsidy. The move will benefit fertilizer companies manufacturing complex fertilizers. Under the new norms, budgetary provision for this category may be hiked substantially instead of simple fertilizers like DAP, MOP, and urea. The group of ministers for agriculture (GOM), headed by agriculture minister Sharad Pawar, is understood to have submitted its report on the issue. The GOM recommendations include single super phosphate (SSP) and new generation products such as water-soluble fertilizers that contain other plant nutrients such as sulfur, zinc, and calcium.

GOM has also recommended higher subsidy provisions for this category, the sources said. The proposal, if accepted, could put an additional subsidy burden of Rs 12bn on exchequer. “Of the 90 products that are approved under the Fertilizer Control Order, 1985, only 15 are currently eligible for subsidy. The government intends to explore the possibilities of including more fertilizers from the approved list to encourage the use of nutrient-based fertilizers,” said Chemicals and Fertilizers Minister Ram Vilas Paswan.

The major share of the current fertilizer subsidy, which is expected to go up to Rs 640bn this fiscal from last year’s Rs 450bn, goes to urea manufacturers for supplying to farmers. The finance ministry is not ready to enhance the subsidy from the current level of Rs 450bn. The budgetary allocation for the last year was Rs 224.52bn.

India: The governments of India and Oman are planning to build another fertilizer project at cost of $1 billion to produce urea in the Sultanate. Anil Wadhwa, Indian Ambassador to the Sultanate, told the local media. “India and Oman have agreed to build another fertilizer project. In terms of capacity, it will be similar to the existing joint venture.”

Both countries have set up a $968 million-joint venture – Oman Indian Fertilizer Co. (Omifco) – to produce ammonia and urea at Qalhat in Sur, which started production in March 2005. Omifco produces 1.652 million mt of granulated urea and 248,000 mt/y of surplus ammonia. India has a 100 percent buy-back agreement with the company.

The Indian government has agreed to invest in the project,” he added. “The location will depend on the availability of gas. It could be an extension of the existing fertilizer project in Sur or could be in some other area,” added the ambassador.

Iran: Iran on Feb. 13 once again warned India that it would not wait indefinitely for resolution of the differences between India and Pakistan over the $7.4 billion Iran-Pakistan-India (IPI) gas pipeline, adding that it could sell the gas to China if India continued to stay away from the pipeline. While declining to give a timeframe for the implementation of the much-delayed IPI pipeline, Iran has said it could not wait much longer for India and Pakistan to agree on the tariffs payable by India to its neighbor for the gas passing through the pipeline.

“We do not have much time,” said Sayed Mohammad Hosseni, Iran’s foreign minister’s representative and spokesman. The pipeline, which was conceptualized more than 10 years ago, is currently being held up due to differences between the sides on pricing of the gas. Also, India and Pakistan have not yet agreed on the transit fee that India has to pay to Pakistan for ensuring safety of the pipeline crossing through its territory. The disagreement between India and Pakistan has been cited by India as a reason for its not taking part in the last few meetings on the pipeline between Iran and Pakistan, during which the two sides claim to have agreed on many issues. Hosseni said that an India delegation, along with a Pakistani one, had been invited for talks on the pipeline in Tehran. “We are working out the dates for the talks,” he said.

Iran also said that it remained committed to finalizing the deal with India. “Many countries have approached us and they want to be a part of the pipeline project. We may consider other countries after implementing the project between Iran, Pakistan and India,” Hosseni said. In fact, China may replace India in the pipeline project if India does not agree on the project soon. The pipeline is scheduled to transport 60 million cubic meters per day (mcmd) of gas in the first phase from Iran’s prolific South Pars field to Pakistan and India. Of this, Pakistan and India would get 30 mcmd each. An Iranian official said that the 30 mcmd of gas marked for India could go to China if the project morphs into an Iran-Pakistan-China pipeline.