AMMONIA

U.S. Gulf/Tampa: No significant change was reported in the market last week. The last done at Tampa remains $295/mt DEL, with speculation by sellers that higher numbers at Yuznhyy would spell higher Tampa prices down the road.

Eastern Cornbelt: Anhydrous ammonia was becoming increasingly scarce and moved up to $460-$475/st FOB, with the low end out of spot river locations and the upper numbers inland in northern Illinois. Forward contract ammonia for September through December was at $490-$500/st FOB regional terminals.

Western Cornbelt: The ammonia spot market increased from $440-$460/st FOB regional terminals to the dealer to $455-$475/st FOB, with the low reported in Nebraska. One supplier was referencing forward contract ammonia for September through December at $475/st FOB in Nebraska, $485/st in Iowa, and $490/st FOB Palmyra, Mo.

Southern Plains: Anhydrous ammonia was priced at $370-$385/st FOB Oklahoma production points, with the upper end quoted after netbacks on prepay offers earlier in July at the $415-$420/st DEL level. However, supplies were said to be very tight.

Agrium’s ammonia postings on July 9 were $420/st FOB Clay Center, Kan.; $415/st FOB Conway, Kan.; $410/st FOB Mocane, Okla.; and $400/st FOB Borger, Texas. Agrium’s delivered ammonia postings in Texas firmed on that date to $425/st north of Interstate 40 and $430/st south.

South Central: The anhydrous ammonia market was unchanged at $410/st FOB Memphis, Tenn., roughly $10/st higher at Blytheville, Ark., and another $10/st at Henderson, Ky. The ammonia barge market remained at $380/st FOB the Gulf for the last sales.

Black Sea: August supplies have dwindled to the point that the price has begun to move up. Sources report a deal late last week at $250/mt FOB. Asian sources say the market is still just below that level, but their information was before reports of the late-week business.

Reportedly, the reason for the reduced levels of material is that producers are still on turnarounds. By the end of this month, however, all plants are expected to be back in operation. At that time, said one observer, demand from the U.S. should kick in and compensate for the increase in available product.

UREA

U.S. Gulf: Granular prices appeared to be moving up last week. While players claimed $298-$300/st FOB was still being achieved early in the week, by mid-week sources said prices were firmly within the $302-$305/st FOB range.

Some buyers expressed surprise over the higher prices, saying there simply is not enough demand right now to fuel an increase. On the other side of the coin, there did not appear to be that much supply either, though another vessel, due in early September, was reportedly getting a lot of attention for gauging price direction. Buyers argued that higher prices will eventually lead to even more imports and lower prices.

In the meantime, problems at Lock 17 on the Arkansas River have again stalled barges trying to get upriver (see Phosphates, U.S. Gulf).

Eastern Cornbelt: Granular urea was steady at $350-$360/st FOB regional terminals to the dealer, but there was pressure to lower the price in the short-term and raise it later this year, when vessels arrive with higher priced product.

Western Cornbelt: Granular urea was unchanged at $350-$360/st FOB, with the low out of spot river terminals and the upper numbers out of inland locations in Nebraska.

Southern Plains: Granular urea dropped from $345-$350/st FOB Inola and Enid, Okla., at last report, to $332-$338/st FOB last week.

South Central: Granular urea was $335-$345/st FOB at regional terminals, but sales were down as rice movement continued to slow.

Southeast: Granular urea was pegged at $350-$360/st FOB port terminals, with the upper end reflecting reference prices to the dealer FOB Wilmington. Urea was reportedly referenced at $355/st FOB Savannah, Ga.

Black Sea: Industry observers spent last week marveling at the dramatic drop in Yuzhnyy prices. And then they went to work trying to figure out what to do next.

When the week opened, sources were still speculating that the floor might be hit at $245/mt FOB later in the week, even though the KIP was set at $240/mt FOB. For others, any discussion of prices sub-$260/mt FOB was just speculation. Traders figured the price would have to drop into the $240s/mt FOB if any sales were to be concluded for Latin America, but many expected to see negotiations stretch out and for a deal in the upper $240s/mt FOB to be hammered out.

Instead, the buyers held firm; the suppliers looked at growing inventories for next month and cut a deal with Brazilian buyers for a netback of $240/mt FOB.

Yara and ConAgra reportedly each bought 30,000 mt at $240/mt FOB Wednesday. By Thursday, other buyers were stepping in at $240-$242/mt FOB. Another deal for Turkey also carried a net back in the low $240s/mt FOB.

One source figured the week will close with about 100,000 mt bought in the low $240s/mt FOB. With so many tons picked up in such a short time, the producers moved to get the price back up. Reportedly, they began offering at $250/mt FOB Thursday morning, but were rebuffed. By Friday, they were still calling the market at $250/mt FOB.

Traders dismiss this pricing idea because there are no buyers currently willing to pay at that level. In addition, they say, the purchases just made rounded out the August sales. Sources report there are still almost a quarter of a million tons waiting to be sold for September.

The end of last week was spent by traders in a flurry of activity trying to figure out exactly where the market is going to move.

One source noted that even if the producers secure a purchase at or near $250/mt FOB, pressure from China and the Middle East, combined with a lack of other business, could push the price back down.

The industry is waiting to see what Indian buyers will do. Even if MMTC or IPL come back in for tenders later this year, sources say the Middle East suppliers have ever-growing stockpiles and Chinese product will be offered for last quarter shipment with its export duty halved.

At the same time, European and Latin American buyers are hammering Baltic suppliers for lower prices. The downward pressure on prices is expected to remain.

As the week closed, sources put the Black Sea market at $240-$245/mt FOB.

Middle East: At least one sale to Argentina by Qafco showed that the area producers are ready and willing to make some more deals.

Even after earlier securing large orders into India, sources say producer stockpiles could build quickly once those orders are consummated.

Prills and granular remain at parity, with prices now shifting into the $260s/mt FOB.

Sources estimate the Middle East price based on Yuzhnyy business. With Yuzhnyy at $240/mt FOB, sources say the $260s/mt FOB is about the right price from the Arab Gulf.

Sabic seemed to understand the pressure and ended up selling to ASSC in the upper $260s/mt FOB. Observers note that traditionally sales to Iran are priced at a premium, so orders from other buyers should be in the mid-$260s/mt FOB.

If Indian buyers come back in for last quarter purchases, sources expect to see buying representatives visiting the Middle East producers to nail down favorable prices and quantities before the tenders are called. Observers expect to see the Middle East producers secure several deals at lower prices.

For now, the price is being put at $265-$270/mt FOB for prills and granular.

India: The industry continues to wait for indications as to what MMTC and IPL will do. Conventional wisdom dictates that at least one more tender will need to be called in the next week or so. Chances are, said one source, that there could be as many as three tenders called before the end of the year.

The advocate of multiple tenders in the remaining months of the year argues that the Indian buyers have been taking large – but not overly large – purchases with each tender. The country still needs more urea and needs to build a stockpile for next year. With prices falling, the buyers are reportedly waiting until just the right moment to move.

Even as MMTC and IPL bean counters look at the market and at their own financing, the prime minister overrode the objections of his finance minister and promised the existing system of subsidies will remain in place for the rest of the fiscal year.

The finance minister, according to local media reports, complained bitterly that treasury did not have the funds to cover what it owed in past subsidies as well as this year’s payments. The finance ministry refused to release its first tranche of supplementary funds for the subsidies. Eventually the prime minister and other cabinet officials got involved and ordered the payments.

The 2007-2008 budget allocates about RS255 billion (US$6.4 billion) for subsidies. The Chemical and Fertilizer Ministry wanted almost as much in additional funds to cover subsidies from last year and purchases that are expected to exceed the current year buying estimates.

China: A clear gap between granular and prill urea exists. Sources now peg the prilled market at $240/mt FOB and granular in the mid-$250s/mt FOB. The difference was confirmed by the offers made in the BCIC/Bangladesh tender that closed last week. Offers made by Bulk Trade and Monsour showed a difference of $12-$22/mt between prills and granular.

Offers circulating the globe now are for October shipments. The export duty on Chinese urea is slated to drop from 30 percent to 15 percent beginning Oct. 1.

The decrease of the export tax, combined with less than dramatic demand at home and abroad, means, to some traders, that Chinese product will remain a strong contender in any tender or competitive purchasing program.

Indonesia: Even as the global market softens, Indonesian state-owned industries continue to offer tons for sale. PIM awarded 50,000 mt in a selling tender last week. Sources say the material will most likely end up in neighboring countries. One observer suggested the PIM material might be included in a sale to India.

The biggest problem the urea producers face is an adequate supply of natural gas. Disputes among the gas extractors, the national gas distributing company, and the end users have resulted in shutdowns and cutbacks in production. To alleviate that problem, Indonesian firms have been looking at setting up joint ventures or other arrangements in areas with a more stable supply of raw materials.

While some of the currently announced deals involve phosphate-related facilities, one source opined it would not take much imagination to see a urea plant being built in the Middle East soon.

Bangladesh: Another tender closed last week. Once again, the usual companies of Monsour, Bulk Trade, and Liven participated. Results of the offers follow:

Industry observers say some cargoes from past tenders have been awarded and are on their way to Chittagong. Identifying exactly what cargo is tied to what tender is difficult because of the delay in making the awards and then sorting the appropriate financial documents.

One trader noted that besides the long time lag between offer, award, and payment, a number of companies are staying away from the BCIC tenders. Another noted that efforts to participate in previous tenders have been stymied because of the reluctance of ship owners to send their vessels into Chittagong and its slow discharging process.

NITROGEN SOLUTIONS

U.S. Gulf: The debate continued last week whether weaker international prices were finding their way into the U.S. market. Sources indicated that imports into the East Coast are now being called in the $270s/mt DEL, whereas the last done business was in the $280s/mt DEL.

By the end of the week, more and more sources reported that UAN barges were starting to slip. By week’s end, most were putting them between $255-$260/st FOB ($7.97-$8.13/unit). There were unconfirmed reports that domestic forward prices were being adjusted downward.

Eastern Cornbelt: UAN-32 continued in very tight supply at $295-$305/st ($9.22-$9.53/unit) regional terminals to the dealer. Forward contract tons for September-December continued to be referenced in the $297.80-$312.20/st ($9.31-$9.76/unit) FOB range from one regional supplier.

Western Cornbelt: The UAN-32 market was firm at $290-$300/st ($9.06-$9.38/unit) range FOB regional river terminals, and in very tight supply.

Southern Plains: UAN-32 was last quoted at $290-$300/st ($9.06-$9.38/unit) FOB regional terminals for spot tons, with the low FOB Woodward, Okla. Solutions inventories remained very tight, and there was pressure for prices to rise.

South Central: UAN-32 continued to have a wide range at $275-$300/st FOB ($8.59-$9.38/unit). Supply remained tight.

Southeast: UAN-30 inventories remained very tight, but terminal prices were virtually unchanged from the last report at $245-$248/st ($8.17-$8.27/unit) FOB Norfolk, Va., and Wilmington, N.C. Sources also reported prices for new vessels indicated a possible, although slight, decrease.

AMMONIUM NITRATE

U.S. Gulf: Actual barges were hard to find for new business, leaving the last done range at $260-$265s/t FOB. However, sources expected that buyers would have to at least come up with $268-$270/st FOB for the next round of sales, if not more.

Western Cornbelt: Ammonium nitrate was firm at $315-$325/st FOB based on the last sales.

Southern Plains: Ammonium nitrate was firm at $310/st FOB Catoosa, Okla.

South Central: Ammonium nitrate was quoted at $310-$320/st FOB terminals, where available. Product was out at some locations last week, although activity tends to be slow in the summer.

Southeast: Ammonium nitrate was put at $280-$305/st FOB in the region, depending on location and supplier, with trucks from Yazoo City running $300-$305/st FOB.

AMMONIUM SULFATE

Eastern Cornbelt: Granular ammonium sulfate continued in a broad range at $210-$240/st FOB, but supplies were very tight and new sales limited.

Western Cornbelt: Granular ammonium sulfate remained at $210-$240/st FOB and in tight supply.

Southern Plains: Granular ammonium sulfate continued at $200-$230/st FOB in Texas, with the low FOB Freeport.

South Central: Granular ammonium sulfate was pegged at $235-$240/st FOB regional terminals, with the upper end referenced to dealers FOB Vicksburg, Miss.

Southeast: Sources reported no change to the ammonium sulfate market, although manufacturers were looking at prices with a possible increase in mind. Normally, at this time of year ammonium sulfate prices are reduced for fill programs, but that will not happen this time. Granular ammonium sulfate remained at $205-$210/st FOB in the region, and delivered sulfate was quoted at $215-$235/st, with the upper end in Florida.

PHOSPHATES

Central Florida: While not an avalanche of new orders, sales of prompt rail DAP cars were done in Central Florida last week, although all were within the existing price range.

“I’ve never seen so much forward buying as this year,” a source commented. “Most big dealers have already bought as much as they need (to fill their bins). Some have bought more (than they need) and think they will need it by the time it arrives.”

Fear, the source said, was the motivating factor. Faced with a market that has only gone up since shortly after the first of the year, buyers took advantage of Mosaic’s fill program and CF’s future plan during the second half of June and early July. By doing so, most did save money.

Currently, inventories are adequate, but that will not be true within another couple of months. PhosChem announced another sale to India of 550,000-600,000 mt of DAP, and will be shipping roughly six vessels a month for its export commitments. By late October or early November, inventories will be reduced to the floor. That will put a crimp on domestic supplies, but because the fall season will be coming to an end by that time, it may not have much of an effect on prices in this country. However, it will keep inventories low, so prices will be unlikely to head south during the winter, and will probably remain firm into spring.

A rumor last week that CF had stopped production at Plant City was unfounded. The company did have a problem a few weeks ago, but that was long ago resolved and the processing plant returned to production.

The DAP price range last week remained at $382-$385/st FOB. Mosaic’s asking price was $385/st FOB for DAP and $381/st FOB for MAP. CF was listing a price of $382/st FOB for prompt DAP and MAP; however, CF rarely makes sales to the dealer level. PotashCorp’s Central Florida reference price remained at $385/st FOB. In Texas, Agrifos was asking $410-$415/st FOB for truck sales and $410/st FOB for railcars, but was sold out through the end of September for rail-delivered phosphates.

U.S. Gulf: Two weeks ago, the Corps of Engineers reopened the Arkansas River at Rosedale and barges began moving. The river was closed due to the high speed of the flow after the Corps began releasing water from dams that feed the river. However, last week the Corps closed the river again at Lock 17 at Muskogee, after the first few barges that passed that point had insufficient draft due to the heavy buildup of silt. The Corps will probably have to dredge the river to make it passable past Muskogee, but it was uncertain how long that will take. The level of the river will be lowered to ease the dredging job, but there will not be enough water to bring the level back up to a normal level, so barges will still not be able to get through.

After enduring flooding last month, Oklahoma has had little or no rain in the past couple of weeks, and none was in the forecast. As a result, terminals upriver at Inola and Catoosa cannot be resupplied. “We’re going to run out,” a source said. “Everybody is going to run out.” Barges were being fleeted at Muskogee, but when that fills up they will have to begin fleeting downstream at Rosedale again. Rosedale is about six hours from Muskogee.

The sale of phosphates and urea may be negatively affected by the disastrous wheat crop failure in Oklahoma, because farmers who lost their crops may not be able to afford to fertilize.

Last week, NOLA DAP barge sales were made, but none above the top of the previous week’s range. Sales were slow last week, but continued at a reduced pace. The NOLA DAP barge range last week changed from $398-$403/st FOB the previous week to $401-$403/st FOB, based on actual sales. Mosaic’s asking price was $405/st FOB, but it was making sales at the $403/st FOB level last week.

Eastern Cornbelt: DAP and MAP were $430-$435/st FOB regional warehouses, with the low out of spot river locations and the higher numbers inland. 10-34-0 remained at $335-$350/st FOB regional shipping points to the dealer.

Western Cornbelt: DAP moved from $425-$435/st FOB regional warehouses to $430-$435/st FOB, while MAP was running $430-$432/st FOB. Sources put the 10-34-0 market at $345-$350/st FOB.

Southern Plains: DAP and MAP remained at $427-$435/st FOB Catoosa. The 10-34-0 market was steady at $305-$335/st FOB in the region, with the low in the Texas panhandle and the upper end FOB Wichita, Kan., to the dealer.

South Central: DAP increased from $415-$425/st FOB most regional warehouses to $425-$435/st FOB, with MAP at $420-$425/st FOB. TSP moved up to $395-$410/st FOB to the dealer.

Southeast: Phosphate sales continued, although slowly, out of Central Florida last week. Mosaic sold DAP railcars on a prompt basis at $385/st FOB, and CF listed its DAP at $382/st FOB. Mosaic charges $4/st FOB less for MAP than DAP; CF charges the same price for both, but rarely makes direct sales to dealers.

U.S. Export: PhosChem announced the sale of 550,000 to 600,000 mt of DAP to India last week, which will be in addition to the previous deal for 1.1 million mt. The delivered price was $495/mt, which will be somewhere between $420/t FOB and $425/mt FOB, depending on ocean freight. Last week freight rates were on the decline, but were still high.

In addition to the PhosChem sale, Transammonia sold 75,000 mt of DAP at the same delivered price as PhosChem’s and 75,000 mt of MAP at $20/mt less. Helm was said to have also sold between 25,000 mt and 50,000 mt DAP into India last week at the same price.

PhosChem also sold 25,000 mt into Peru at $430/mt FOB. The delivered price of all of PhosChem’s export sales in recent weeks was affected by ocean freight rates, although the actual delivered price has not changed. The decline in freight costs provided PhosChem with an additional $5/mt FOB.

Pakistan, Brazil, and India were said to be in the market, but no deals had been completed late in the week.

Based on the most recent sales, the export DAP price range last week widened from $425-$428/mt FOB to $420-$430/mt FOB. Ocean freight rates will continue to affect FOB prices.

POTASH

Eastern Cornbelt: Potash rose to $250-$255/st FOB from the previous $245-$250/st FOB regional warehouses for limited spot tons, depending on grade and location. Indications were that potash prices will continue to rise into the fall season. However, many large dealers have already filled their bins.

Western Cornbelt: Potash pricing increased from $245-$252/st FOB the warehouse to $250-$260/st FOB, depending on grade and location, after reports that additional supplies may not be available until the fall. However, one source noted a great deal of potash had already been put on the fields, and not as much may be needed.

Southern Plains: Potash was $208-$214/st FOB Carlsbad, N.M., depending on grade, but availability of tons at those numbers was questionable. Out of the regional warehouse system, the market moved up from $235-$240/st FOB at last report to $250-$255/st FOB last week. The Tulsa market firmed at the upper end of that range last week.

South Central: Potash was reported to be hard to find. The price increased from $235-$245/st FOB to $250-$260/st FOB, although many dealers have already filled their bins earlier this year.

Southeast: Sources tagged the potash market at $245-$250/st FOB regional warehouses, with delivered potash in the $252-$265/st range in the region, depending on grade and location.

Posting: Great Salt Lakes Minerals, a subsidiary of Compass Minerals, will increase prices on all sulfate of potash specialty fertilizer products by $20 per ton, effective on all shipments beginning Sept. 1, 2007. This action is being taken to help offset increased input and logistics costs and to support investments needed to meet expanding demand.

Southeast Asia: JSC Belarusian Potash Co. has announced a US$30/mt price increase, to $330/mt for Southeast Asian markets. The increase, which will take effect Oct. 1, will remain in effect until further notice. BPC said that in June/June 2007 it successfully negotiated with a range of potash importers in Southeast Asia to supply at $300/mt.

BPC said the new price increase is caused by a vast growth of potash demand worldwide, a surge in freight rates, and an increase in production costs due to a boost in energy prices.

SULFUR

Tampa: After accountants pushed negotiators to settle third quarter contracts, the industry became extremely quiet last week. However, PotashCorp said the contracts it signed at a $20/lt bump prior to the main settlement of $23/lt up would apply, which was different from the normal procedure of all contracts being equal.

Sulfur supplies remained tight in the U. S. last week, even as more refineries were returning to normal production. The recent contract PhosChem signed with India for an additional 550,000 to 600,000 mt of DAP will help insure sulfur remains tight in the near future.

Valero’s St. Charles refinery had nearly completed its conversion to ultra-low diesel fuel, which will increase its production of sulfur to between 500 and 550 tpd when the project is complete. The company’s Houston refinery, which is also switching to ultra-low diesel, continued to have problems, and sulfur production was suffering.

Speculation on what Venezuela will do with its sulfur output continued last week. If President Chavez decides to cut off liquid shipments to the U. S., he could send it to the adjacent prillers and sell at a higher price to Brazil.

Mosaic was said to have taken its sulfur vessel, the Bahia, out of service for maintenance and repairs on the tug.

West Coast: A sulfur prill vessel left late last week for Brazil from Stockton with 38,100 mt on board.

Prillers are reported to be paying $61-$81/st FOB for sulfur, though some industrials report they are pulling product at much lower numbers–$18/lt. The Green Markets range has traditionally been a price to prillers.