Melbourne, Australia-Legend International Holdings Inc., a public Delaware Corp., has released historical mineralization estimates for the world class phosphate deposits in new project areas in Queensland, Australia. The site is approximately 333 kilometers from the company’s current phosphate projects in the Northern Territory. The metric tons and grade of each deposit are as follows: D Tree, 450 million mt, 15.9 percent P205; Lady Annie, 295 million mt, 16.6 P205; Lady Jane, 193 million mt, 17.6 percent P205; and Thorntonia, 47 million mt, 18.1 percent P205, for a total of 983 million mt, 16.5 percent P205. Legend said validation of these estimates is underway, with a view to upgrade them to current reserve estimates. It says past feasibility studies on these deposits will also be reassessed, with a view toward commercialization of the deposits, based on current prices. Legend says it is principally engaged in exploration and resource development activities, with exploration licenses for 19,000 square kilometers in the Northern Territory and Queensland, Australia.
All posts by traceybg@gmail.com
ARA coalition urges ITC to revoke urea duties
Washington, D.C.-The Agricultural Retailers Association and a coalition of national, regional, and state agribusiness and commodity organizations sent a letter on Nov. 8 to the U.S. International Trade Commission (ITC) urging the removal of antidumping duty orders on solid urea fertilizer from Russia and Ukraine. The ITC is currently reviewing its 2005 sunset review decision to continue antidumping duty orders on urea imports from the two subject counties. “Since the ITC’s 3 to 3 split vote in November 2005 there have been significant changes in both the domestic and international fertilizer marketplace that warrant the elimination of these outdated trade restrictions,” the letter states. ARA and the coalition organizations refer to recent USDA estimates that nitrogen use will be 6-8 percent higher than previous years at a time when farmers have paid record prices for fertilizer products for the past three years. The ITC’s review of the decision comes at the behest of a U.S. Court of International Trade judge, who in August remanded the case back to the ITC (GM Sept. 10, p. 1). The CIT judge asked for a review of several aspects of the ITC’s 2005 decision, including arguments that urea imports from the subject countries were likely to depress U.S. urea prices. The CIT judge also questioned the ITC’s conclusion that revocation of the orders would “render the domestic industry vulnerable to material injury,” particularly in light of the improved financial picture for domestic producers since the antidumping duty orders were instituted in the late 1980s and administered throughout the 1990s. The ITC has until Nov. 26 to file its remand results with the CIT. The plaintiffs and “defendant-intervenors” will then have until Dec. 28 to submit responses to the decision. The plaintiffs in the case include Russian urea producers Nevinnomysskiy Azot, Novomoskovsk Azot JSC, JSC MCC Eurochem, Kuybyshevazot JSC, JSC “Azot” Berezniki, and JSC “Azot” Kemerovo. The defendant-intervenors include Agrium U.S. Inc. and the Ad Hoc Committee of Domestic Nitrogen Producers, whose urea-producing members include CF Industries Holdings Inc. and PCS Nitrogen Inc.
ICL 3Q net income up 58 percent
Tel Aviv-Higher potash and phosphate prices and demand helped guide Israel Chemicals Ltd. to record net income for the third quarter ending Sept. 30, 2007. Company-wide third-quarter net income was up 58 percent, to $149.7 million on sales of $1.04 billion, up from the year-ago $94.8 million and $854.3 million, respectively. Nine-month net income was $371.0 million on sales of $2.9 billion, up from the year-ago $283.7 million and $2.4 billion, respectively. ICL Fertilizers reported third-quarter operating income of $144.7 million on sales of $538.9 million, up from the year-ago $61.6 million and $398.5 million, respectively. Nine-month operating income was $331.1 million on sales of $1.47 billion, up from the year-ago $163.6 million and $1.05 billion, respectively.
ARA to submit comments to EPA on SPCC rule
Washington, D.C.-The U.S. EPA is currently seeking public comment on proposed modifications to the Spill Prevention, Control, and Countermeasure (SPCC) regulations. According to the Agricultural Retailers Association, the modifications being proposed by EPA would primarily impact farms, but some could affect agricultural retailers as well. These include a proposal to exempt all pesticide application equipment and related mix containers used on farms, including ground boom applicators, airblast sprayers, and specialty aircraft. Equipment and mix containers may currently be subject to the SPCC rule when crop oil or adjuvant oil are added to formulations. ARA said EPA officials believe that since pesticides are regulated under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), additional regulation of pesticide containers and application equipment under the SPCC rule is not necessary. ARA said EPA is also considering exempting farms that store oil below a certain storage capacity threshold from the SPCC requirements, and is proposing to streamline and tailor the SPCC requirements for a subset of “qualified facilities,” allowing a self-certified, simpler SPCC plan template instead of a full SPCC plan. ARA is asking member companies to register their input on the proposed modifications to Jim Thrift, ARA’s Vice President of Regulatory Policy and Corporate Relations, so that ARA can submit its comments to EPA by Dec. 14. Thrift can be contacted at jthrift@aradc.org.
TFI supports delay of tank car standards
Washington, D.C.-The Fertilizer Institute on Nov. 19 issued a statement commending the Association of American Railroads (AAR) for delaying until April 1, 2008, the implementation of new rail tank car specifications for toxic-by-inhalation (TIH) products such as anhydrous ammonia. The implementation date for the requirements was initially set for Jan. 1, 2008. “TFI applauds AAR’s decision to delay implementation of its new standards for rail tank cars hauling TIH materials,” said TFI President Ford B. West. “The fertilizer industry has been working closely with the AAR and Federal Railroad Administration (FRA) for the past year. With a pending federal rulemaking on the issue, we are pleased with this decision and hope this step indicates agreement that the statutory authority on tank car design rests with the FRA.” According to TFI, FRA Administrator Joseph Boardman had requested that the AAR delay implementation of its standards in view of the pending tank car proposal, which is expected to be released by FRA during the first quarter of 2008.
TFI, CTIC survey farmers’ conservation practices
Washington, D.C.-The Conservation Technology Information Center (CTIC) and The Fertilizer Institute in October announced the distribution of a conservation practices survey to thousands of producers. The organizations said the collaborative effort aims to gain a better understanding of environmental management measures on U.S. farms and barriers to adoption, as well as provide information on the best way to distribute educational materials regarding best management practices and environmental stewardship. “With this survey, we’ll know more about how to get the most needed information about conservation technology into the hands of farmers,” said Karen Scanlon, CTIC executive director. The survey is designed to collect data on conservation practices producers are using and what reasons producers may have for not implementing additional conservation practices in their operations. Topics include conservation tillage, soil tests, and nutrient management. “The results of this survey will provide us with knowledge of producer practices that will help us best identify how we can achieve documented nutrient use efficiency,” said TFI President Ford B. West. CTIC and TFI worked with the USDA Natural Resources Conservation Service, the Foundation for Agronomic Research, and the Certified Crop Adviser Program in developing the survey questions.
Management Briefs
Former North Dakota Governor Ed Schafer (R) has been nominated by Pres. Bush as the new Agriculture Secretary. He will replace former Secretary Mike Johanns, who resigned his position on Sept. 23 to run for the U.S. Senate in the state of Nebraska. Schafer served as Governor of North Dakota from 1992 to 2000, as co-chair on agricultural issues for the National Governors Association in 1999, and as chairman of the Republican Governors Association in 2000. Acting USDA Secretary Chuck Conner will continue to serve in his current position until Schafer can be confirmed by the full Senate.
Pres. Bush recently announced his intention to nominate Carl T. Johnson as Administrator of the Pipeline and Hazardous Materials Safety Administration (PHMSA) at the Department of Transportation. Johnson, who hails from Virginia, most recently served as President of the Compressed Gas Association (CGA). Prior to this, he served as Special Assistant to Rep. Amory Houghton (R-N.Y.). Earlier in his career, Johnson served as Director of Federal Government Relations at Corning Glass Works.
CF Industries Holdings Inc. has named Richard Hoker vice president and corporate controller. He succeeds Robert Webb, who retired earlier this year. Hoker, 43, was previously vice president and controller and principal accounting officer for Sara Lee Corp. He earlier held a number of senior accounting and financial positions at Sara Lee, which he joined 1996. Prior to joining Sara Lee, Hoker was a member of the Financial Advisory Consulting Services Group at Coopers & Lybrand LLP in Chicago (now PricewaterhouseCoopers). He also led teams in the firm’s Audit Practice.
A Certified Public Accountant, Hoker earned his B.S. in Accounting from DePaul University in Chicago and his M.B.A. in Finance and Accounting from the University of Chicago.
Market Watch
AMMONIA
U.S. Gulf/Tampa: Price ideas continue to be up based on international and inland pricing. Nothing new was reported for Tampa as Green Markets went to press before the Thanksgiving Holiday. However, other imports into the U.S. have been reported at the $370/mt DEL mark.
In the meantime, at NOLA, the long-standing $300/st FOB barge is believed to be giving way to much higher prices. Product has reportedly sold in NOLA at $350/st FOB for December/January.
U.S. anhydrous ammonia imports are up 6 percent for the first quarter of the fertilizer year (July-September), to 2.08 million st from the year-ago 1.95 million st, according to the Department of Commerce.
Eastern Cornbelt: With nearly all of the harvest now complete in the region, sources continued to report very brisk fall fertilizer movement. The heavy ammonia run had virtually “drained the system,” according to several sources. One supplier was referencing spot ammonia at $595-$605/st FOB terminals in the region last week, but reportedly had no tons for sale. Spot tons from resellers were reported as high as $615-$620/st FOB early in the week “if you can find any,” according to one source.
Spring prepay ammonia was on the table for as high as $665/st FOB from some suppliers, reflecting a huge jump from the limited prepay offers reported during the prior week.
Western Cornbelt: A cold, snowy forecast for much of the region during the Thanksgiving week provided some relief for fertilizer dealers and wholesalers faced with a critically short supply of products and very heavy demand. One source said his company had moved more fall tonnage to date last week than they did all last fall. “I’m looking for snow and 10 below,” said another contact on Tuesday, noting that ammonia availability was a “total wreck” due to extremely heavy usage in recent weeks. Another source referred to the ammonia situation as a “meltdown,” with terminal outages reported everywhere and prices pulled due to lack of product.
Provided spot ammonia could be had from a reseller or distributor, most sources quoted that market firmly in the $575-$580/st FOB range in the region, with nothing reportedly on the table from producers. A Missouri source also quoted delivered ammonia at the $575/st mark from southern production points, but that supply was tightening up rapidly as well. No prices were reported for spring prepay ammonia in the region last week.
Southern Plains: Sources said prompt ammonia tons were hard to find last week, with virtually none available from producers and very limited tons available from resellers. Pipeline and production points were all on very strict allocation as a result, and prices were up significantly from last report.
Sources quoted ammonia pricing at $490/st FOB Oklahoma production points early in the week, and one source reported a pipeline quote of $525/st FOB in Kansas. Another reported an offer from a reseller at $510/st FOB for spring tons, and there were reports of at least one producer listing spring prepay north of the $600/st FOB mark, presumably to shut down orders.
South Central: Anhydrous ammonia was pegged at $495-$500/st FOB Memphis, Tenn., and Blytheville, Ark., for very limited spot loads. One source said spring prepay ammonia was being offered at the $545/st level FOB Memphis.
Black Sea: Even with a shorter week for Americans, the price keeps inching up. Asian sources swallow hard and say rumors of offers at $300/mt FOB keep surfacing. One observer noted that if $300/mt wasn’t hit by the weekend, it will most likely be accomplished by the end of the month.
New business from Yuzhnyy was hard to nail down in the first part of the week, but sources say the upper $280s/mt FOB is the most likely area for discussion. One trader said the low $290s/mt FOB has also been rumored.
High natural gas prices are causing many ammonia producers in the continent to shut down. The demand, however, is not slowing down. With demand up and European production down, sources say the Black Sea suppliers are in a good position to take advantage of the situation.
Prices are pegged at $285-$295/mt FOB. The upper end is based more on speculation of deals.
Middle East: Producers say they have no spare tons. Prices are still determined by the FACT/India tender from earlier this month.
The business actually done – with Sabic – puts the new price in the upper $280s to lower $290s/mt FOB. The other offers for December and January tons push the price to more than $300/mt FOB.
Sources in Asia say the producers are not being shy about asking $300/mt FOB for December and January cargoes. Of course, said one trader, the producers also claim they have no material for December, and January is already looking tight.
Until new public business is secured, sources say the market is pegged at $285-$295/mt FOB.
Japan: Buyers are watching the international market more closely now that prices are on the upswing. Reportedly, the difference between the domestic and international price was enough to keep the domestic suppliers in check. Now that the potential imported price is moving up rapidly, buyers are beginning to feel a serious pinch in their pocketbooks.
Local turnarounds by producers, combined with higher imported prices, have a few buyers looking around to see what they can do to ease the price tag shock they see coming. A few began buying whatever extra tons they could secure in the past few weeks, said one source. That will help for a while, but because of the limited storage capacity of most Japanese buyers, the shortage from local production and the increased international price will soon catch up to them.
UREA
U.S. Gulf: Overall, sources said it was a quiet week, with many players taking an early holiday. The last done granular barge business was put within the $415-$420/st FOB range. Prills were called $405-$410/st FOB.
September imports were up 100 percent, to 772,546 st from the year-ago 362,025 st. July-September imports were up 49 percent, to 1.36 million st from the year-ago 911,583 st.
Eastern Cornbelt: Granular urea pricing to the dealer was up from last report at $465-$475/st FOB in the region, with the upper end reported in Ohio.
Western Cornbelt: The granular urea market continued to climb, with most sources quoting the dealer price early in the week at $445-$450/st FOB to the dealer. Some suppliers were planning a midweek increase again, however, which would move dealer pricing up to $460-$465/st FOB some locations in the region.
Agrium’s granular urea postings firmed on Monday, Nov. 19, to $455/st FOB Shakopee, Minn., and North Dakota terminals at Alton, Carrington, Colfax, Marion, and Scranton, up $30/st from the Nov. 2 reference levels. The company’s delivered postings firmed on Nov. 19 to $460/st DEL in Minnesota, Wisconsin, and the Dakotas, also reflecting a $30/st increase from the previous level.
On Tuesday, Agrium announced another increase in urea pricing. Effective Nov. 23, reference prices were slated to move up another $35/st to $490/st FOB Shakopee, Alton, Carrington, Colfax, Marion, and Scranton, and $495/st DEL in Minnesota, Wisconsin, and the Dakotas.
Southern Plains: Granular urea was quoted at $440-$445/st FOB the Tulsa market early in the week, and some sources said $250/st FOB was likely before the week was out.
There was no firm word from Koch last week as to the status of the Enid, Okla., nitrogen plant that went down a few weeks ago due to a fire. However, industry sources report that at least part, if not all, of the facility was back up by the end of the week. The plant was due back up sometime the week of Nov. 19.
South Central: Granular urea pricing in the region was also up significantly from last report. Sources tagged the market at $430-$460/st FOB regional terminals to the dealer, with the upper end reported in Arkansas.
Southeast: Granular urea was pegged at $460-$475/st FOB port terminals last week, up significantly from last report. The low end of the range was reported FOB Savannah, Ga., but sources said a near-term increase there is likely. Dealer reference prices remained as high as $485/st FOB Baltimore, Md.
Western U.S.: Agrium’s granular urea postings firmed on Nov. 19 to $475/st DEL in central California and $480/st DEL in northern California.
Effective Nov. 23, Agrium’s urea postings will move up to $490-$505/st DEL in Montana and Wyoming, depending on location; $515/st FOB Washington warehouses at Glade, Kennewick, Warden, and Wilson; $520/st DEL in Washington, Oregon, Idaho, and northern Nevada; $530/st DEL in northern and central Utah; and $535/st DEL in southern Utah. Those levels reflect a $35/st increase from the company’s Nov. 19 postings at those locations.
Black Sea: Sales to Europe, Turkey, and Latin America are providing a solid floor on the Yuzhnyy price. Reportedly, producers will now only discuss bids close to $400/mt FOB. Traders are predictably calling that level too high and way out of bounds.
Recent deals into Turkey from Egypt indicate that the Yuzhnyy suppliers will have to keep their prices below $395/mt FOB to remain competitive. One source even said the price needs to be closer to $380/mt FOB.
The only ones who seem to be talking seriously are agents of producers. Still, the marketplace is abuzz with stories that producers are digging in their heels and aiming for $400/mt FOB.
Each week this month the Yuzhnyy price has set a new record. The average this month is about $354/mt FOB. The best price in previous years was two years ago at $234/mt FOB.
Sources put the price at $380-$395/mt FOB.
Middle East: A couple of weeks ago Egyptian suppliers were talking about soon hitting $400/mt FOB. Sources say the producers reached that goal and are looking for more.
Reportedly, buyers looking for tons from Egypt are now being rebuffed if they start at $400/mt FOB.
Taking a clue from Egypt, the Arab Gulf producers are now saying they, too, would like to see $400/mt FOB for their material. It may be awhile before the AG guys see that level, said one trader.
In the short term, the producers are looking at pushing the price past $370/mt FOB.
Following the MMTC/India tender, prices moved easily into the $360s/mt. Sources report IPL/India buyers were knocking on doors looking to replicate the MMTC levels of $355-$360/mt FOB, but to no avail.
The IPL agents added a few dollars to the bids and were still politely shown the door until they could come up with more cash.
The buying interest is part of the usual move to secure tons before a price increase frenzy hits the market once a tender is called. The Indian buyers then use the tender to back up the deal.
Demand from Europe, the U.S., and India has taken its toll on material availability. Oddly enough, said a representative of a producing country, prills are now going for a premium from the region.
One trader said nothing was available at $365/mt FOB; he added, however, that a bid of $370/mt FOB might shake loose a few tons, but that anyone looking for prills will need to look elsewhere for a while.
Area producers are looking to the expected IPL tender to round off their order books for the beginning of the new year.
Sources remain convinced India will have to buy at least 400,000 mt for delivery by mid-February. Reported delays in the major ports that handle panamax vessels mean deliveries in smaller ships from China and the Middle East might get priority in the upcoming tender.
Sources in Asia put the market at $355-$365/mt FOB for granular and $360-$365/mt FOB for prills.
China: This is the time of year when domestic and international markets compete more directly. Sources say difficulties in moving tons from plants to the ports are leading some producers to just look to the domestic market. Prills are still readily available, but granular is not.
Sources say the prilled price is now topping out at $320/mt FOB bagged for December cargoes. Granular is pegged at $340/mt FOB.
But sources repeat that finding new December tons of granular is not likely.
Limitations in railcar availability are combining with a manpower shortage at the ports to create a backlog just getting to the port. Even if a supplier can deliver a full order to the port on time, sources say a manpower shortage to load the vessels is adding a further headache to buyers.
One Asian trader noted the plant-to-port problem is the more aggravating of the two. Now that the domestic buyers are becoming interested in getting urea and the government is more interested in allocating shipping resources to handle inland needs instead of fertilizer exports, sources say some traders could end up empty handed.
India: Reports circulated that IPL buyers were trying to convince Middle East suppliers to provide tons at levels equal to those paid by MMTC earlier this month. Failing in that, the IPL representatives reportedly sweetened the pot by $5/mt. That, too, failed.
Industry observers say India will need to buy at least 400,000 mt in the next couple of months to complete its pre-application season buying rounds. People are waiting for the new tender to be called.
NITROGEN SOLUTIONS
U.S. Gulf: Barge prices appeared to be relatively stable last week; however, that may have simply been that folks were out due to the holiday.
September imports were up a whopping 209 percent, to 372,931 st from the year-ago 120,820 st. July-September imports were up 137 percent, to 807,587 st from the year ago 341,347 st.
Eastern Cornbelt: The UAN market was quoted at $10.60-$10.90/unit FOB, with the low reported out of spot Illinois River terminals and the upper numbers out of inland terminals. One source tagged the dealer market at the $10.70/unit mark FOB Albany, Ill., early in the week.
Western Cornbelt: UAN-32 was pegged at $330-$340/st ($10.31-$10.63/unit) FOB terminals, with most sources quoting the higher numbers as the more common dealer price for any available tonnage. Iowa sources confirmed recent spot sales at the $10.60/unit FOB level, and one supplier was anticipating a dealer pricing increase to $345-$350/st ($10.78-$10.94/unit) FOB in the near term.
Southern Plains: UAN-32 was tagged at $330-$335/st ($10.31-$10.47/unit) FOB regional production points, while Kansas sources quoted the upper end of the range at $340-$345/st ($10.63-$10.78/unit) FOB truck terminals to the dealer. One source said spring prepay offers, if available, were carrying at least a $10/st premium to spot offers last week.
South Central: UAN-32 had reportedly moved to a firm $330-$335/st ($10.31-$10.47/unit) FOB regional terminals to the dealer, with inventories described as extremely tight.
Southeast: The UAN-30 market was quoted at $300-$305/st ($10.00-$10.17/unit) FOB Norfolk, Va., and Wilmington, N.C., with Baltimore pricing firm at $310/st ($10.33/unit) FOB at the low end of the range. As for replacement UAN vessels, business has reportedly been done at the $345/mt C&F mark, but most traders were eyeing $350/mt as the firm price for any new transactions.
Western U.S.: Agrium’s UAN-32 postings firmed on Nov. 19 to $370/st ($11.56/unit) DEL in Oregon excluding Malheur County, Washington, and northern Idaho; $375/st ($11.72/unit) rail-DEL and $380/st ($11.88/unit) truck-DEL in southern Idaho, Nevada, Utah, and Oregon’s Malheur County; $378/st ($11.81/unit) FOB Sacramento, Calif.; $395/st ($12.34/unit) DEL in central California; and $400/st ($12.50/unit) DEL in northern California, Montana, and northern Wyoming. Agrium’s UAN-28 postings in Montana and northern Wyoming firmed on that date to $350/st ($12.50/unit) truck-DEL.
AMMONIUM NITRATE
U.S. Gulf: Barges were hard to find, according to sources, who put them in the $310-$315/st FOB range for the last done. In fact, sources said forward numbers have shot up. Just the prior week, sources had been quoting first quarter AN barges at $330/st FOB. This week the number for January/February was being called $370/st FOB. Sources say international prices are up, as is the cost to get them here.
July-September imports were up 38 percent, to 259,200 st versus the year-ago 188,209 st. They were up 24 percent for September, to 115,886 st from the year-ago 93,131 st.
Western Cornbelt: Ammonium nitrate pricing continued to firm. The dealer market was quoted at $355-$365/st FOB in the region, up $15/st from the previous week. Sources said another increase is imminent.
Southern Plains: Ammonium nitrate was pegged at $335-$340/st FOB the port of Catoosa, Okla., up $10/st from last report.
South Central: Ammonium nitrate was quoted at $335-$350/st FOB in the region, up roughly $20/st from last report. Terra’s nitrate postings had reportedly firmed to $335/st FOB Yazoo City, Miss, and $350/st FOB McComb. An Arkansas source quoted CAN-27 last week at the $260/st FOB mark.
Southeast: Ammonium nitrate pricing remained firm at $335/st FOB Tampa, Fla.
Western U.S.: Agrium’s ammonium nitrate solution (20-0-0) postings for the Washington, Oregon, Idaho, Nevada, Utah, Wyoming, and Montana sales area firmed on Nov. 19 to $225/st FOB Kennewick, Wash. Agrium’s CAN-17 postings FOB Kennewick also firmed on that date to $265/st.
AMMONIUM SULFATE
U.S.Imports: July-September imports were up 47 percent, to 93,101 st from the year-ago 63,389 st. September imports were up 32 percent, to 35,976 st from 27,343 st.
Eastern Cornbelt: Granular ammonium sulfate was pegged at $240/st FOB to the dealer, and remained in very tight supply in the region.
Western Cornbelt: Granular ammonium sulfate was tagged at a firm $240/st FOB regional terminals to the dealer.
Southern Plains: Granular ammonium sulfate remained at $210-$240/st FOB in Texas, with the low at Freeport and the upper end FOB Plainview. Other sulfate prices included coarse grade at $195-$230/st FOB, and standard at $185-$215/st FOB, depending on location and supplier.
South Central: Granular ammonium sulfate pricing was up from last report and remained in tight supply in the region. The dealer market was quoted at $240-$250/st FOB most terminals, with some locations reportedly referencing as high as $265/st FOB to the dealer.
Southeast: Ammonium sulfate remained in tight supply, and pricing was up from last report. Sources quoted the Hopewell, Va., granular ammonium sulfate market at $230/st FOB and going to $240/st, but availability was uncertain. One source said the company had indicated sold-out inventories through December due to “recent issues with production,” with plans to price tons in late December for the first of the year.
Effective Nov. 19, list prices from DSM Chemicals firmed $20/st, bringing reference prices for granular ammonium sulfate to $250/st FOB Augusta, Ga., and $275/st DEL in Florida. The company’s list prices for standard grade firmed on that date to $195/st FOB Augusta for customers outside of Florida, and $212/st rail-DEL in Florida.
PHOSPHATES
Central Florida: Prompt sales of railcars out of Central Florida ground to a halt a few weeks ago, but not because of a lack of demand. Instead, producers have sold virtually everything they have and have essentially nothing to offer. That has skewed the price index, and the actual prices a buyer would have to pay could be as much as $50/st FOB higher than the index.
Expectations were that prices will continue to climb for the rest of the year and into the spring season. One producer warned that some customers may not be able to get all of the phosphates they need in the spring.
Thanksgiving took a toll on new business last week, in large part because many in the industry included the beginning of the week in their holiday vacation.
Last week the price range for Central Florida was unchanged at an unrealistic $415/st FOB and $425/st FOB, but new prompt sales will be done at higher prices. Mosaic has basically abandoned posting an asking price for DAP because of a lack of supply. Previously, Mosaic’s asking price was pegged at $440/st FOB, with a MAP price of $436/st FOB. However, new sales will be done above – perhaps well above – those prices. PotashCorp’s Central Florida reference price held at $440/st FOB and CF’s asking price was $440/st FOB, with a price for MAP $3/st FOB lower than DAP. MAP supplies were said to be unavailable. In Texas, Agrifos’ truck price last week was $480/st FOB and its rail price was $475/st FOB, although railcars were sold out into January.
U.S. Gulf: Activity slowed last week on the river system, but that didn’t keep NOLA DAP barge prices from rising. All sales done last week were $5-$10/st FOB over the top of the previous week’s high in the price range. Estimates last week were that the price of phosphates will continue to rise through the end of the year, with some saying it could hit $500/st FOB. More conservative estimates held it will only reach $480/st FOB.
Producers were no longer issuing price lists to traders last week, because they have little or nothing available for spot sales. “The industry buzz is how little (product) is available,” one source said.
Buyers were continuing to seek prepay phosphates for the first three months of next year, in order to spend some of that extra cash they earned from the run-up of fertilizer prices and reduce their tax burden. While some traders were reluctant to do prepay, those who already have positions for that period were agreeing to take their money.
Warehouse sales continued to be strong last week even as prices continued to rise. Last week, terminal prices ranged from as little as $480/st FOB to as much as $490/st FOB. As high as those prices were, they will have to be adjusted upward when the new, higher-priced product on barges goes into the bins.
Sources said weather has allowed farmers to remain in the fields for longer than usual preparing soil for the spring. Even if the ground freezes, farmers will continue spreading fertilizer. As a result, the fall season may continue well into December, which will continue pushing up the price.
In an interesting development, Mosaic sold MAP by barge at $5/st FOB more than it did DAP barges last week. Normally, Mosaic charges $4/st FOB less for MAP than DAP, but scarcity of MAP has reversed that norm.
The NOLA DAP barge price range last week, based on actual sales, was $465-$470/st FOB, compared to the previous week’s range of $450-$460/st FOB. The price of MAP moved up to $470/st FOB. Expect prices to continue to rise this week as buyers and sellers return from the Thanksgiving Holiday.
Eastern Cornbelt: DAP and MAP continued to move briskly in the region. The market for both was pegged at $485-$495/st FOB in the region, with another near-term increase likely as higher-priced barge tonnage makes its way into regional warehouses. No current prices were reported for TSP or 10-34-0 in the region.
Western Cornbelt: DAP was pegged at $485-$495/st FOB regional warehouses, up another $10/st from the prior week. The upper end of the range reflected dealer reference pricing at some locations, while the low end was for confirmed dealers sales. MAP was quoted in roughly the same range as DAP, if spot tons could be had. Dealer reference pricing for MAP was reported as high as $500/st FOB in Missouri.
10-34-0 was also in very tight supply, with some suppliers holding off on pricing to the dealer until they “find out where (they’re) at” on acid supply and raw materials costs. Those who were quoting a dealer price reported a range of $415-$425/st FOB in the region, with reports of dealer reference levels as high as $435/st FOB in Nebraska.
Southern Plains: Phosphate pricing was up substantially from last report. DAP was pegged at $485-$490/st FOB Catoosa, with MAP quoted at $490-$495/st FOB and in very tight supply.
10-34-0 was in short supply as well. Sources reported spot offers early in the week at the $390/st FOB level in the region, but others reported the market firmly at the $425/st FOB level as the week advanced. Those levels were up substantially from last report.
Agrium’s phosphoric acid prices in Colorado, Kansas, Oklahoma, Texas, and New Mexico will firm in December to $725/st rail-DEL for merchant grade acid (MGA) and $735/st rail-DEL for super phosphoric acid (SPA).
South Central: The DAP and MAP markets were up significantly from last report. Sources tagged the regional warehouse markets at $480-$490/st FOB and moving up “daily.” The TSP market was pegged at $440-$445/st FOB in the region.
U.S. Export: PhosChem made no new export sales last week, and it was seeking $10/mt FOB more for the next sale than the last. Worldwide demand for fertilizers remained extremely strong, and prices reflect that situation as available supplies continue to diminish. Brazil and the rest of Latin America remained the most promising markets for phosphate exports from the United States.
With a lack of sales, the export price range was unchanged last week at $511-$520/mt FOB, and PhosChem was asking $530/mt FOB for its next sale. Prices will continue to rise.
POTASH
U.S. Imports: July-September imports were up 13 percent, according to the DOC, to 2.33 million st from the year-ago 2.07 million st. September imports were up even more at 20 percent, to 888,438 st from 739,528 st.
Eastern Cornbelt: Potash was tagged at $365-$385/st FOB regional warehouses for extremely limited spot tons from brokers/resellers. Several sources talked of a $375/st FOB dealer price early in the week, but cash market tons were hard to find and fall demand remained brisk in the region.
Western Cornbelt: Brokered potash was quoted at $365-$385/st FOB regional warehouses for the limited tons available, and it appears the market has more upside potential. One source reported an asking price of $415/st FOB in Iowa for spot granular potash tons early in the week.
Southern Plains: Potash remained in very tight supply, and most sources said they were unable to get a current price. One Kansas source quoted an offer early in the week from a reseller firmly at the $375/st level FOB warehouse level for granular potash.
Effective Dec. 1, potash postings from Intrepid Potash FOB Carlsbad, N.M., will move to $317/st for 60 percent granular and 62 percent standard, $320/st for 62 percent fine standard, and $325/st for 62 percent granular. The company’s postings FOB Moab, Utah, will firm on that date to $311/st for 60 percent standard and $317/st for 60 percent granular, while pricing FOB Wendover, Utah, will move to $325/st for 60 percent standard and $331/st for 60 percent granular. Those levels represent a $50/st increase from the company’s Nov. 5 reference levels, and an $80/st increase from the Oct. 1 price levels at those locations.
South Central: Potash pricing was up dramatically from last report, and supply was described as very tight. Several sources reported heavy fall movement of potash in the region. Where available, the potash market was tagged at a firm $360-$370/st FOB regional warehouses for spot tons last week. Effective Dec. 1, Intrepid Potash’s 60 percent red granular potash posting FOB McComb, Miss., will move to $362/st.
Southeast: Sources continued to report no current potash prices in the region due to incredibly tight inventories and strictly allocated tons.
SULFUR
U.S. Imports: September imports were reported at 162,593 st, up 24 percent from the year-ago 131,295 st. July-September imports were up 12 percent, to 469,855 st from 417,863 st.
Tampa: The sulfur industry was busy working on new supply agreements for next year. The biggest problem the industry had was a lack of supply. Spot prices around the country have soared, but even with extremely high prices offered by buyers, few deals were being done.
The world market continued to be extremely tight and strong, and there was no sign of a let up anytime soon. Predictions were that prices may begin to fall by late 2008. However, Tampa molten prices for the first quarter were almost certain to take another big bump up due to the supply shortage.
The good news was that no serious transportation issues existed last week, which probably was related to the lack of supply.
Valero’s Port Arthur refinery, which suffered an explosion and fire a few weeks ago, was close to reaching normal production levels last week. Before the problem, that plant produced a little less than 1,000 lt of sulfur a day. Its return will help – but not cure – the supply shortage.
West Coast: Valero has completed the turnaround at its refinery near Stockton, Calif., and was in the process of a turnaround at its other refinery near Long Beach, Calif., late last week. That job should be finished around the middle of December.
MARKET NOTES
Bangladesh: Bangladesh and Myanmar are discussing setting up a urea plant as a joint venture. Bangladesh has requested that Myanmar supply gas for the plant in Bangladesh, and the products would then be sent back across the border. The proposal was made at the second Bangladesh-Myanmar Joint Trade Commission meeting at a Dhaka held earlier this month. “We have given Myanmar a concrete proposal to utilize its gas to produce fertilizer in Bangladesh. Later the fertilizer would be exported to Myanmar,” said Commerce Secretary Feroz Ahmed. The proposal comes after gas was discovered in the bordering Rakhaine area in Myanmar. Feroz said the proposal would not only help meet the huge and growing demand for urea in Myanmar, but also move towards reducing the trade gap between the two countries. He added, however, that Myanmar is keen on building the factory on their side of the border, but Dhaka maintains that Bangladesh has better expertise, infrastructure, and resources for the project since they are already running fertilizer plants.
Pakistan: The government has invited Expressions of Interest by Dec. 8 for the acquisition of 90 percent of the shares of Hazara Phosphate Fertilizers Ltd. (HPFL). The plant is located at Haripur, 75 kilometers from Islamabad. HPFL produces granulated single super phosphate (GSSP). Sulfuric acid, which is used for the production of GSSP, is also being produced by the unit. The plant, which was designed to produce 90,000 mt/y of GSSP and 30,000 mt/y of sulfuric acid, was rehabilitated and recommissioned in April 1999. National Fertilizer Marketing Ltd. is currently marketing the product of HPFL. The purchaser shall, however, be free to market the product using its own arrangement. In order to encourage use of phosphate, the Government of Pakistan is currently providing a subsidy of Rs. 204 per bag, effective from July 1, 2007. To improve the profitability of HPFL, the government is trying to make local phosphate rock available as raw material by enabling private sector mining companies.
The Week in Fertilizer Stocks
| Company Producer | Symbol | Price | Week Ago | Year Ago |
| Agrium | AGU | 53.29 | 54.52 | 30.16 |
| CF Industries | CF | 83.22 | 83.89 | 22.62 |
| Mosaic | MOS | 61.10 | 61.98 | 21.45 |
| PotashCorp | POT | 110.24 | 109.81 | 45.66 |
| Terra Industries | TRA | 34.47 | 35.14 | 10.11 |
| Terra Nitrogen | TNH | 105.20 | 102.59 | 30.00 |
| Distribution/Retail | ||||
| Andersons Inc. | ANDE | 42.95 | 43.25 | 41.17 |
| Deere & Co. | DE | 145.00 | 141.94 | 89.41 |
| Scotts | SMG | 35.11 | 37.52 | 49.59 |
| UAP | UAPH | 29.90 | 31.37 | 24.90 |