Trenton, N.J.-State environmental officials expect to be requiring 25 communities in Morris County to adopt ordinances restricting residential use of fertilizer as part of an effort to reduce runoff in watersheds covering 810 square miles that serve, among other areas, the city of Newark. The New Jersey Dept. of Environmental Protection aired plans at a public hearing earlier this month at Morris Township for local officials to adopt a model ordnance establishing protective 25-foot buffer zones and prohibiting any application of phosphorus fertilizer outdoors except in a few special cases. Liquid phosphorus is allowed if applied under the soil surface directly to the roots. Officials said the draft ordinance exempts agriculture, but calls for stewardship by commercial farms and urges growers to implement best management practices. DEP spokesman Larry Hajna told Green Markets that the department doesn’t consider the state-initiated action unusual, although in recent cases local authorities have been leading the way in adopting such restrictions on their own. “I’m told that this kind of thing has been done many times in various other states, and sometimes with much greater restrictions.” He said the wording of the ordinance is expected to vary when adopted from town to town, but will have to meet at least the minimum requirements as set forth in the model. The model allows some deviation on the buffers, which may be reduced to 10 feet on smaller properties. No fertilizer is to be applied during or before a runoff-producing rainfall; when soils are already saturated; 15 days prior to the start of the growing season; or after the end of the season. No applications are allowed on sidewalks, streets, or other impervious surfaces, which must be swept if it does occur. Enforcement is left to the local governments, which also must determine the size, if any, the fines should be. DEP officials say some communities also will have to adopt other strategies, such as public education programs and pet waste disposal ordinances, and discharge limits will affect more than 50 sewage treatment plants as well as numerous municipalities with regulated storm water discharge systems.
All posts by traceybg@gmail.com
TFI responds to fears of more pollution
Washington-The Fertilizer Institute last week sent a letter to the editor of the St. Louis Post Dispatch disputing an article entitled “More ethanol means more corn – and more water pollution.” TFI said the article misrepresents fertilizers role in food, fiber, feed and fuel production. “While the increase in corn demand for ethanol production is indisputable, the negative consequences of that change are not,” said TFI. “Commercial fertilizers are the most manageable source of nutrients and as such, are the best tool farmers have to maximize crop production while minimizing environmental impact.” TFI noted that USDA data shows that U.S. farmers are using fertilizer nutrients with the greatest efficiency in history. It said between 1980-2005, U.S. corn production increased 74 percent. Meanwhile, farmers’ use of nitrogen on corn over this period increased only 3 percent, while use of phosphates and potash fell 20 and 24 percent, respectively. TFI noted that the fertilizer industry has partnered with farmers and some 13,000 Certified Crop Advisors to ensure the maximum crop productivity while protecting water quality, soil quality, and the environment. “What’s more,” said TFI, “we have repeatedly sought U.S.D.A. backing for the use of advanced fertilizer technologies in conversation programs and to date, have received little support.”
LSB makes 100 Hot Growth List
Oklahoma City-LSB Industries Inc., the parent of El Dorado Nitrogen Co., has been named to Business Week‘s annual list of 100 Hot Growth Companies, published in the June 4, 2007 issue. LSB is ranked 76th. According to Business Week, “To identify Hot Growth companies, it sifts through the Standard & Poor’s Compustat database of 10,000 public companies for those with revenues of $50 million to $1.5 billion a year. It ranks businesses by three-year sales and earnings growth as well as return on capital. Companies must have a market cap of $25 million or more and a stock price of at least 5. Profit or stock price shortfalls, or news that puts prospects in doubt, may knock a company off the list.” Jack Golsen, Chairman & CEO, noted, “This achievement is shared by the nearly 1,600 members of the LSB team.”
CP strike ends, railroad downplays impact
Vancouver-Approximately 1,300 track maintenance employees for the Canadian Pacific Railway returned to work on June 11after walking off the job May 15 over a labor dispute with the railroad (GM May 28, p. 12). The Teamsters Canada Rail Conference had demanded a 13 percent wage increase over three years, while CP Rail was holding to its 10 percent offer, which was also ratified by other unions working with the railroad. In the end, after weeks of negotiations and finally meetings with federal mediators in Ottawa, the union took the 10 percent wage increase, payable as annual wage hikes of 3 percent, 4 percent, and 3 percent for the three-year contract. CP will also pay bonuses of 1 percent in all three years, as well as higher expense payments, and dropped its demands for changes in seniority rules. The tentative contract will now go before the union’s 3,200 workers for a ratification vote, with results expected by mid-July. CP representatives referred to the settlement as “cost neutral” for the railroad, and downplayed the service disruptions caused by the strike. The railroad replaced about 1,200 striking workers with management during the walkout, and sought injunctions against employees blocking truck traffic at some intermodal terminals. Analysts agreed the railway did not suffer materially from the work action, noting that CP’s volumes, an indication of its revenues, were strong during the quarter. Canada’s fertilizer industry also expressed muted concern during the strike due to the workers involved and the timing of the walkout at the end of the busy spring planting season. The opposite was true in February, however, during a two-week walkout at the Canadian National Railway by conductors with the United Transportation Union (GM Feb. 19, p. 1). That strike resulted in costly shipping delays for Canadian industry.
Novozymes Biologicals plans $2.3M Indiana plant
Mirriam, Ind.-Indiana economic development boosters are cheering the decision of Salem, Va.-based Novozymes Biologicals Inc. to invest more than $2.3 million to relocate its Roots line of organic-based fertilizers research and production facility to a new 32,000 square-foot plant in Merriam in southern Noble County. Novozymes Biologicals, a subsidiary of Dutch-based Novozymes A/S, will be moving from nearby Albion, where the company must close its existing plant under edict from the Noble County zoning board to cease operations because of complaints about truck traffic and dust. Six months ago the board refused Novozymes’ application to renew its variance. “This expansion is a great growth opportunity for northern Indiana and an indication of the quality high-tech workforce available to companies who choose to call Indiana home,” said Nathan Feltman, Indiana secretary of commerce and CEO of the Indiana Economic Development Corp. “This new facility will allow us to accommodate our rapid growth and further improve on timely delivery to our customers,” said John Sedivy, Novozymes Biologicals director of new business development. Novozymes was offered up to $60,000 in performance-based tax credits and up to $6,000 in training grants based on the announced expansion plans. Noble County also pitched in with a property tax abatement worth approximately $89,000.
Southwest Florida eyes fertilizer restrictions
Ft. Meyers, Fla.-Residential fertilizer restrictions adopted for a six-county area by the Southwest Florida Regional Planning Council aren’t a done deal yet, according to the Florida Fertilizer and Agribusiness Association. “The planning council has adopted a resolution which has been presented to the six counties,” declared FFAA President Mary Hartney. “But each county needs to adopt an ordinance for the fertilizer restrictions and provisions to take effect. The potential exists for each county to deviate from this model language-which I’ve heard argued is necessary as each has its own specific issues. This is the reason why FFAA supported an amendment in the State Legislature which called for fertilizer regulation to be done at the state level. In other words, a law preempting counties and cities (from adopting their own regulations).” Officials with the council, which represents an area surrounding metropolitan Ft. Myers, agree that it’s up to the local entities to adopt their own version of the fertilizer restrictions adopted in the interest of preventing nutrient runoff. The resolution calls for cutbacks in the amounts, rates, and concentrations of nitrogen and phosphorus applications; use of slow release formulations; certification of professional applicators; a major education program on fertilizer use; and protective setbacks from waterways of up to 25 feet.
Michigan area pushes fertilizer sticker drive
Mt. Clemens, Mich.-The Macomb County Commission is getting behind a local high school project to use stickers to identify environmentally friendly fertilizer sold in stores selling lawn and garden products. The commission had planned to provide $1,000 for 10,000 of the bright green “lake safe” stickers from county money until one commissioner offered to foot the bill personally because “it seemed like a very good program.” Commissioner Philis (cq) DeSaele told Green Markets the South Lake high school Tree Huggers student club started distributing the stickers, which are the size of half a postcard, to hardware and home improvement stores two years ago in St. Clair Shores, where students convinced six businesses to use them on bags of selected fertilizers. Since then, DeSaele noted, there has been a noticeable increase in sales of the environmentally-friendly fertilizers, creating more awareness that the county is in the middle of the Great Lakes area, which contains 20 percent of the fresh water in the world. Now the project will go countywide to include possibly all 65 businesses in Macomb that sell fertilizer. The ACO and English Gardens stores are participating, DeSaele said, and she has personally tried to convince Lowe’s to join. She said stickers will be used on only low and no phosphorous and slow release and that contains no pesticides.
72 lawn care operators vow to manage fertilizer
Richmond, Va.-The Virginia Dept. of Conservation and Recreation (DCR) has signed up its 72nd lawn care and landscaping operator to a voluntary agreement to protect and improve the state’s ground and surface water by using proper fertilizing practices and recommending to homeowners approved lawn fertilizer use practices. Accomack County-based Advantage Lawn Care and Landscaping recently became the first on the Eastern Shore of Virginia to sign the voluntary water quality agreement with the DCR to implement nutrient management. Since the program’s inception, DCR also has received voluntary agreements from nearly a dozen state, local, and federal governments, school districts, home owners associations, and universities. According to agency officials, the program with Virginia lawn-care companies includes a review of the company’s fertilizer application plan to make sure that it meets Virginia’s standards to protect water quality by assuring that fertilizer applications are timely and in the proper amount, and that fertilizer spilled on sidewalks and driveways is cleaned up. By adopting approved management practices, they point out, lawn-care companies can make sure that fertilized turf efficiently uses the nutrients applied and the loss to the environment is minimized.
Management Briefs
The Fertilizer Institute has named Robert Tadsen as director of government relations. He will join TFI July 9 and comes from the Michigan Agri-Business Association, where he has been policy director since 2003.
J.R. Simplot Co. announces that Dave Dufault has joined the AgriBusiness Leadership Team as the vice president and general manager, retail division, which includes Simplot Grower Solutions and Simplot Partners. His primary job duties will include directing the activities associated with the sales, marketing, and distribution of ag fertilizers, crop protection products, seed, application, and new technologies.
He has been with Simplot for 18 years, most recently as area manager for the Red River Valley. He will assume his new post June 11, but will spend the summer transitioning and leading the effort to find his replacement. He and his wife will relocate to Boise in late summer.
Jim Haitz has been promoted from assistant vice president to vice president at Yara’s Ammonia Trade & Shipping team. He will lead Yara’s Tampa ATS team, reporting to Commercial Director Trond Hagen of Yara in Geneva. Yara North America will continue to provide administrative support to AT&S, as well as manage Yara’s Tampa ammonia terminal.
Steven Groce has joined Inter-Chem effective June 1 as a regional sales manager. He is covering the Southeast U.S. and will be based in Covington, La. He can be reached at 866-451-6721, cell 985-705-4726, or email sgroce@ictulsa.com.
BPC Chicago LLC, a unit of “JSC” Belarusian Potash Co., has announced its address and contact information as follows: 2150 East Lake Cook Road, Suite 110, Buffalo Grove, Ill 60089; Phone: 847-541-5747; Fax: 847-541-5913. BPC Chicago will be marketing for BPC, a joint venture of Belaruskali and Uralkali, the largest potash manufacturers in Belarus and the Russian federation. BPC Chicago will import their first panamax into New Orleans in August. For more information, contact Michelle Weathers, director, North America operations, or Barney Barnhart, logistics manager for North America.
Dr. Steven Phillips joined the staff of the International Plant Nutrition Institute (IPNI) as Southeast regional director June 1. He most recently was an associate professor of soil fertility and plant nutrition at Virginia Tech, having been with the university since 1999.
Dr. Clifford Snyder, Conway, Ark., who has served as Southeast director, was recently promoted to the new position of nitrogen program director, and will coordinate IPNI efforts dealing with environmental issues associated with nitrogen fertilizer use in agriculture in North America and internationally.
Market Watch
AMMONIA
U.S. Gulf/Tampa: While Tampa remained at $310/mt DEL for June, a new round of NOLA barge business was reported at $280/st FOB.
Anhydrous ammonia imports were up 14 percent in April, to 808,163 st from the year-ago 707,742 st, according to DOC information. However, they are still off 5 percent for the July-April period at 6.77 million st versus 7.12 million st.
Eastern Cornbelt: Sidedress movement of ammonia and UAN was rapidly winding down, with sources describing movement in terms of “a few loads per week” instead of the earlier heavy pace. With spot demand limited now to bottom ground acres where planting was delayed by wet conditions, sources reported interests switching to fill and prepay programs for the fall application season.
Sources said lots of fill ammonia tons were booked earlier in June for fall, with some reporting that suppliers had either pulled programs or jacked prices last week after the prior week’s heavy interest. Some sources said fall fill ammonia was booked during the previous week for as low as $415-$420/st FOB in Illinois, but fill tons last week were generally quoted in the $425-$430/st FOB level. The limited prompt business in the region was reported at the $420/st FOB level in Illinois, and up to $440/st FOB in Indiana.
One supplier was offering forward contract ammonia for July at $435-$445/st FOB in the region, depending on location.
Western Cornbelt: Sidedress movement on corn continued last week, with some sources also reporting planting of shorter-season corn varieties on previously flooded bottom ground. Ammonia pricing was “all over the place,” according to one source, who talked of a $55/st variance in pipeline terminals pricing last week, depending on location, delivery period, and payment terms.
Ammonia fill tons for fall were quoted at $410-$420/st FOB regional terminals, with fall prepay offers with extended terms quoted in the $415-$430/st FOB range for delivery in October, November, or December. One supplier was offering forward contract ammonia last week at $425-$435/st FOB in the region, with the low in Nebraska and the high in Missouri.
California: The ammonia market remained at $475/st DEL in the state, although sources said a downward pricing adjustment was likely in the near term.
Pacific Northwest: The anhydrous ammonia market was quoted at $430-$440/st DEL in the region. Washington sources pegged the FOB range at $410-$420/st last week.
Western Canada: Anhydrous ammonia was steady at $809-$844/mt DEL in the region.
UREA
U.S. Gulf: Prices continued to strengthen last week, though sources said the quantity being traded was down. Buyers were reportedly trying to make do with current orders before re-entering such a strong mid-summer market. Most players were putting new granular prices within the $315-$320/st FOB range, though there was some suggestion of lower priced product earlier in the week.
Urea imports surged in April by 110 percent, at 897,238 st versus the year-ago 427,636 st. For July-April they were still off, but now down to 12 percent for the YTD period at 5.4 million st, down from 6.14 million st.
Eastern Cornbelt: Granular urea remained at $350-$360/st FOB, with no new business to test that market.
Western Cornbelt: Granular urea was pegged at $340-$365/st FOB regional terminals, with the upper end reported on the Missouri River. Urea postings from Agrium, effective June 4, included $345/st FOB Shakopee, Minn., and North Dakota warehouse locations at Alton, Carrington, Colfax, Marion, and Scranton, and $350/st rail-DEL in Minnesota, Wisconsin, and the Dakotas.
California: Granular urea remained at $390-$410/st FOB, with the lower end of the range FOB Stockton.
Pacific Northwest: Urea pricing was down from last report. Sources quoted the granular urea market at $385-$390/st DEL in Washington, Oregon, and Idaho, with the Montana urea price at $360-$370/st DEL. Agrium reposted granular urea on June 4 at $370/st FOB Washington warehouses at Glade, Kennewick, Warden, and Wilson; $345-$360/st DEL in Montana and Wyoming, depending on location; $375/st DEL in Washington, Oregon, Idaho, and northern Nevada from plant locations in Alberta and warehouse sites in Oregon; $385/st DEL in northern and Central Utah; and $390/st DEL in southern Utah. Those postings firmed on June 12 to $385/st FOB Glade, Kennewick, Warden, and Wilson; $360-$375/st DEL in Montana and Wyoming; $390/st DEL in Washington, Oregon, Idaho, and northern Nevada; $400/st DEL in northern and central Utah; and $405/st DEL in southern Utah.
Western Canada: Granular urea remained at $550-$575/mt DEL.
Black Sea: With India still out and Latin American buyers digging in their heels, the Yuzhnyy price is taking a pounding. Sources report that bids at $285/mt FOB would be accepted quickly. The problem would then be finding a buyer willing to pay that amount. Traders point to a $280/mt FOB deal based on estimated netbacks from business in Brazil. They add the sale was most likely a liquidated cargo, and that $280/mt FOB is most likely not available – yet.
One trader added that his estimates put the Brazilian business closer to $277/mt FOB. Whatever the exact price, many in the industry agree the price has shifted well below $300/mt FOB.
The blame for the price drop is laid directly at the feet of the Indians. When rumors circulated late last month that MMTC or IPL would be quickly re-entering the urea market, the price shot up to $305/mt FOB. Then, as the Indian buyers decided to hold back, the price began to slowly sink.
Latin American buyers, seeing that India was not coming back in quickly, played hardball with traders who were holding cargoes and hammered the price down further.
Some trader-to-trader deals and swaps were reported last week that put the price at $285-$290/mt FOB.
Besides buyers holding off on their orders, sources say the steady flow of Chinese urea into the international market has also played a role in the softer Yuzhnyy prices.
One trader noted that China has become a 300,000 mt/month exporting country, even with a 30 percent export duty. Once that duty is halved beginning Oct. 1, even more should hit the market.
Sources point to the large number of tons being covered for India from China as evidence that Yuzhnyy is facing serious competition from the Far East.
Middle East: Producers have been claiming their order books are full through July. Traders say, however, that the second half of July should have a few cargoes available. If the traders are correct, the price will have to come down from the last done business to make the material competitive with Yuzhnyy and China.
Prices are still being quoted based on the last bit of business tied to the Indian tenders of last quarter. Prills and granular prices remain at $310-$315/mt FOB.
Normally the gap between Yuzhnyy and the Arab Gulf is about $10/mt for shipments to Asia and India, largely due to the freight advantage enjoyed by the Middle East producers. The gap now is closer to $20/mt.
One Asian trader noted that either the Black Sea will have to come up or the Middle East will have to drop. With nothing on the horizon to push up the Black Sea price – as well as competition from China – to many it appears as if the Middle East prices will have to come down.
Still, once India does come in – and many think this will happen by mid-July – the Middle East producers will be in a good position to fill their order books at a decent price.
Indonesia: PIM closed its selling tender June 14. The bids all reflected a softening in pricing ideas. In the previous tender for Kaltim, the bids put the market in the low $300s/mt FOB. Now the $280s/mt FOB is all that could be achieved.
All bidding companies are local traders who will take 5,000 mt lots and then cut deals with international traders. Sources report many of the major trading houses received calls from these local traders looking to place their winnings into India. For most of the international players, they had already covered their sales to India. One source said any purchases now will be in anticipation of an upcoming tender.
Bids follow.
| Company | Quantity MT | Price US$/mt FOB |
| Indevco | 20,000 | 287.00 |
| Trada | 10,000 | 284.00 |
| Youngwoo | 20,000 | 283.75 |
| Limardi | 10,000 | 283.00 |
| Diva | 10,000 | 282.00 |
| Chala Praba | 10,000 | 281.00 |
| Profeta | 10,000 | 285.50 |
| Saturna | 10,000 | 283.00 |
China: Product keeps flowing out of the country. A number of panamax vessels were loaded for India. Earlier this month Keytrade and Transammonia loaded cargoes of 25-30,000 mt each, reportedly for the west coast of the U.S.
Sources report that domestic production is more than covering the domestic demand and inquiries from off shore.
The central government in Beijing is keeping the 30 percent export duty on urea until Oct. 1. After that date, the duty is expected to drop to 15 percent.
Sources say the strength of the international market is evident by the fact that Chinese product –even with the extra duty imposed – is competitive. The duty was initially placed on the urea to prevent it from leaving the country.
With domestic prices soft and demand weak, producers are more than happy to look to the international market.
Prills are pegged at $290/mt FOB for prills and the upper $290s/mt FOB for granular.
One trader commented that China is becoming a 300-350,000 mt/month export market. He estimated that number will go up once the duty drops in the fall.
The anticipated increase in exports in the last quarter of the year could come up against additional anticipated exports of phosphates. The export duty on phosphates is also expected to come off Oct. 1.
Vietnam: Once an importer and important factor in international urea, Vietnam is now exporting tons. Sources point to expensive – for the Vietnamese domestic market – material that came into the country from over the land border with China.
The tons being offered to international traders are reportedly the imported Chinese urea. The material was not taxed as it entered the country, and so carries only a slightly higher price than buying directly from China.
The Vietnam Fertilizer Association estimates the country will need about 1.7 million mt this year. The Phu My plant will churn out about 800,000 mt. A second plant to come online in three years – the Ca Mau facility – will turn out another 800,000 mt. Combined, the two plants will cover most of the country’s needs. Other smaller facilities will fill in the gap.
Demand for urea in Vietnam has dropped, said the VFA, because farmers are looking to other fertilizers to provide the needed nutrients.
The use of NPKs and other nitrogen-based fertilizers allowed farmers to get the N content their fields need without having to face the growing and expensive urea market.
The reduced demand for urea, combined with increased domestic production, could mean that Vietnam could soon be a net exporter of urea.
Besides the Phu My and Ca Mau facilities, other companies add an additional 800-850,000 mt/y to the urea stockpiles.
The most likely markets for the Vietnamese urea will be its immediate neighbors, so they will not have to depend on securing vessels.
Bangladesh: Once again, BCIC scrapped its tender. Area traders put the inability to make awards and get tons delivered at the feet of the caretaker government.
Until a permanent government is formed, said one trader, the bureaucrats who approve the BCIC deals will continue to make awards to small “non-traditional” companies that put in offers well below market rate and are then unable to deliver.
One observer had commented earlier that as long as these companies put up performance bonds, the bureaucrats don’t seem to care if the tons are delivered or not. The government makes money off the forfeited bonds, and – according to procedure – a new tender is called.
Sources estimated that BCIC tendered for about 2 million mt last year, but only took delivery of 25-40,000 mt.
Stockpiles are said to be dangerously low. Sources say BCIC doesn’t have to get serious about buying urea until September or October. By then, said one source, Bangladesh may have gotten rid of the caretaker government so “proper” decisions can be made.
NITROGEN SOLUTIONS
U.S. Gulf: Several sources last week said that UAN inventories are at historic low inventories. CF was reportedly sold out into late in the year, and importers had run out of material on the East Coast.
In the meantime, the prompt market was converging with the forward market last week, with recent prompt barges called around the $235/st FOB mark.
Imports were off 36 percent in April, to 144,398 st from the year-ago 226,509 st. July-April imports are off 21 percent, to 2.07 million st from 2.64 million st.
Eastern Cornbelt: The UAN market was transitioning from prompt sidedress business to summer fill, with several sources in Indiana and Illinois quoting the fill market last week at roughly $8.50/unit FOB regional terminals on the low end. One supplier was offering forward contract UAN-32 at $272-$285/st ($8.50-$8.91/unit) FOB regional terminals last week. Sources continued to talk of very tight inventories, however, with some commenting that fill orders were difficult to cover.
Western Cornbelt: UAN was a “different animal” at mid-month, with supplies remaining very tight and the market in a transition from prompt sidedress demand to summer fill prices. Some described inventories as the tightest they’ve seen in 10-15 years. Fill pricing last week was reportedly on a “bid basis” for available tons after some reportedly heavy business earlier. Fill quotes for later delivery were reported in the $260-$280/st ($8.13-$8.75/unit) FOB range in the region, with the low to resellers. As for spot quotes for continued sidedress demand, the dealer market was quoted as high as $300/st ($9.38/unit) FOB last week.
California: The UAN-32 market was steady at $300-$310/st ($9.38-$9.69/unit) FOB and $320-$330/st ($10.00-$10.31/unit) DEL in the state.
Pacific Northwest: UAN-32 remained at $300-$310/st ($9.38-$9.69/unit) DEL in the region, with dealer reference prices quoted in the $315-$325/st ($9.84-$10.16/unit) DEL range. Washington sources reported lots of UAN movement through irrigation systems.
Western Canada: UAN-28 was $341-$356/mt ($12.18-$12.71/unit) DEL in the region.
AMMONIUM NITRATE
U.S. Gulf: AN barges continued to be hard to peg. There were some reports of imports on the horizon that could serve to lower prices, with some suppliers quoting as low as $260/st FOB last week. Others said they were looking for wet weather to spur demand.
Imports continue to lag year-ago levels by a wide margin. April imports were off 39 percent, to 117,125 st from 192,145. July-April imports are off 26 percent, at 942,195 st from 1.26 million st.
Western Cornbelt: Ammonium nitrate remained at $315-$325/st FOB in the region, where available.
California: No market was reported for ammonium nitrate in the state. CAN-17 was tagged at $220-$230/st FOB, with the low FOB Stockton.
Pacific Northwest: Ammonium nitrate remained at a nominal $327-$335/st DEL in the region. CAN-17 was steady at $222-$227/st FOB and $232/st rail-DEL.
AMMONIUM SULFATE
U.S.: Imports were up 40 percent in April, to 63,190 st from the year-ago 45,150 st. July-April imports are up 16 percent, at 332,127 st versus the year-ago 287,000 st.
Eastern Cornbelt: Granular ammonium sulfate remained in tight supply at $230-$240/st FOB in the region.
Western Cornbelt: Granular ammonium sulfate remained at $230-$240/st FOB and in tight supply.
California: Granular ammonium sulfate was unchanged at $210-$230/st FOB, with the high reported in desert areas of the state.
Pacific Northwest: Granular ammonium sulfate remained at $205-$220/st DEL in the region, depending on location. Ammonium thiosulfate was quoted at $155-$160/st FOB and $175-$180/st DEL, with reports of some supply problems related to logistics.
Western Canada: Granular ammonium sulfate remained at $350-$355/mt DEL.
PHOSPHATE
Central Florida: Mosaic’s summer fill program ended last week, and was so successful that the company took the next step – upwards. With a heavy loading schedule through September and export demand strong, Mosaic bumped its price for DAP up $20/st FOB. Actually, it first kicked the price up $10/st FOB a week earlier, but allowed customers to buy at the previous price, then pushed it up another $10/st FOB about the same time as the other price hike went into effect, for the total of $20/st FOB. Inventories have been well below normal since last November and demand soared since then, keeping supplies short. With little need for new business through September, Mosaic figured, why not? However, as of late last week, Mosaic had made no new, prompt sales at the new price level, but expected buying to resume within the next couple of weeks.
Although many dealers stocked up during the summer fill program, those who did not will pay higher prices. Those who were short of cash were hoping the market would make its traditional downward correction in the summer, but that was not likely to happen this year.
Activity in some areas of the country ground to a virtual halt last week, especially in the Northeast, where the crops were in the ground and the fertilizer already applied.
The drought that turned Florida into a tinderbox eased last week, as summer rains started a couple of weeks earlier than normal. Many or most of the wildfires that had raged were brought under control.
The Central Florida DAP price range was $370-$372/st FOB. Discounts are not included in the range. Mosaic’s list price was $385/st FOB for DAP and $4/st FOB less for MAP. PotashCorp’s Central Florida reference price was unchanged at $370/st FOB. CF’s price was said to be $372/st FOB for both DAP and MAP. In Texas, Agrifos’ price was $410-$415/st FOB for truck sales and $410/st FOB for railcars.
U.S. Gulf: Although NOLA DAP barge sales were thinner than the previous week, prices were fatter. Sources attributed the increased price for prompt sales to the hike Mosaic imposed in what amounted to two-at-once. First, it imposed a $10/st FOB bump the previous week but delayed putting it into effect until the end of that week, then kicked it up another $10/st FOB last week to a new level of $405/st FOB. Those buyers who relied on history and held off buying under the fill program offered by Mosaic and the future program from CF will not benefit. History means nothing in the current market, which has seen low inventories and high demand, just the opposite of the norm.
The big question last week was, how high will it go? The consensus appeared to be a slow rise during the next several weeks toward the $400/st FOB level, and possibly reaching the $405/st FOB asking price set by Mosaic. In that type of market, resellers scheduled to receive barges under the fill program will reap the rewards.
Terminal operators were recommending dealers put at least 25 percent of the phosphates they will need for the fall in their bins this summer to ensure they have a supply when their customers come calling. With the already strong line-up of sales from the summer fill and strong export demand, inventories were likely to remain low when the fall season starts in October, and that could be a problem for those unprepared. The strongest demand last week was coming from dealers seeking to shore up their supplies. Buyers who were seeking to buy tons-in-place at terminals were being turned away and pushed into the barge market, which will result in higher costs.
Last week, heavy rains over portions of the Midwest meant soggy conditions and reduced activity, but in the long run the wet weather will help farmers.
The NOLA DAP barge price last week moved from $382-$390/st FOB the previous week to $390-$392/st FOB. Buyers should expect slightly higher prices this week.
Eastern Cornbelt: Phosphate pricing was up, with most sources quoting the DAP and MAP markets at the $420-$425/st FOB range for fill tons last week. No current prices were reported for TSP in the region. 10-34-0 remained at a nominal $335-$350/st FOB for the last done business.
Western Cornbelt: Phosphate pricing was up from last report, with most sources quoting the fill market for DAP and MAP at $420-$425/st FOB regional terminals last week. No current prices were reported for TSP in the region. 10-34-0 was quoted at $325-$335/st FOB for minimal spot business, with sources quoting no updated prices yet based on acid allocations at new, higher prices since June 1.
California: As of June 1, super phosphoric acid pricing firmed to $7.00/unit DEL in the state, with merchant grade at $6.90-$7.00/unit DEL, depending on supplier. A nickel/unit increase for both products is slated for August, and again in September.
On the heels of the phos acid increase, 10-34-0 pricing moved to $315-$325/st FOB in the state, with postings reportedly as high as $332/st FOB from some suppliers. Sources continued to report some movement on silage corn ground, but planting activity was about finished by mid-month.
DAP and MAP pricing were also on the rise, with MAP quoted at $425-$430/st FOB or DEL in California, and DAP roughly $7/st higher. 16-20-0 was pegged at $285-$295/st FOB or DEL, up $5/st from last report.
Pacific Northwest: Phosphoric acid pricing led the charge in early June, with sources tagging the market firmly at the $7.00/unit DEL level for super phosphoric acid, and $6.90-$7.00/unit DEL for merchant grade acid. A nickel/unit increase is scheduled for August, and again in September.
10-34-0 pricing was also up significantly since last report. The regional market was quoted at $315-$325/st FOB, with some movement reported through fertigation.
MAP was quoted at $410-$425/st DEL in the region, up $5-$10/st from last report, with the low end of the range reported in Montana. DAP was also pegged in a broad range at $417-$432/st DEL, with the low again in Montana. 16-20-0 was tagged at $285-$295/st DEL in the region, up $5/st from last report.
Western Canada: MAP was quoted at $595-$640/mt DEL in the region, with the upper level reflecting dealer list pricing.
U.S. Export: The export phosphate market continued churning upward last week, with sales reported by both PhosChem and Transammonia. PhosChem made a sale of 10,000 mt into Ecuador at $435/st FOB, and another group of sales amounting to a total of 22,000 mt into Mexico and Central America at $437/mt FOB. Transammonia did a deal for 10,000 mt into Latin America at a somewhat lower price of $432.50/mt FOB.
In addition, Pakistan was said to have purchased three handymax vessels of phosphate from a source believed to be Russia, which will soon exhaust its supplies. Sellers in the Middle East and North Africa were also rapidly depleting their inventories.
PhosChem since increased its asking price for the next sale to $440/mt FOB. The continued export demand, coupled with the recent deal to supply India with 1.1 million mt, will help keep inventories well below normal for the summer. As other phosphate producers in the world were running down their inventories, India was virtually certain to come back into the market during the next couple of months, and U. S. producers were well poised to take advantage of that situation. Pakistan and Brazil were also likely buyers during that period.
Iraq was said to have issued a tender seeking 100,000 mt, but it was not clear whether any seller from this country will be in line to make an offer.
The export DAP price range continued to rise last week from $428-$430/mt FOB the previous week to $432-$437/mt FOB. Buyers should expect higher prices this week.
China: Beginning July 1, the export duty on all phosphates – except phos rock, which is banned from export – will be bumped up to 20 percent. The tax should drop to 10 percent beginning Oct. 1. Sources expect ports handling phosphate and urea exports to become chaotic in the last quarter, when both products become cheaper and more attractive to international buyers.
POTASH
New Posting: Mosaic is raising its domestic potash prices $20/st, effective immediately. Mosaic says current supplies are low and once they are gone it will not take new orders in the domestic market until October. Mosaic noted that there has been a 24 percent drop in North American potash inventories since the end of April and that May shipments were a record high of 1.51 million st.
U.S.: Imports were up 22 percent in April, to 1.27 million st – up from the year-ago 1.04 million st. July-April imports are up 10 percent, to 9.2 million st from 8.4 million st.
Eastern Cornbelt: Several sources reported locking in potash fill earlier in the season, but new levels last week reflected higher pricing from producers. The potash market FOB regional warehouses was pegged at $227-$235/st FOB, depending on grade and location, with potash barges reported in the $220-$222/st range on the river system.
Western Cornbelt: The regional potash market was quoted at $227-$235/st FOB last week, depending on grade and location. One source quoted granular reference levels as high as $238/st FOB before discounts, with rail-DEL potash as high as $238-$240/st in the region, based on new pricing.
California: Potash was quoted at $254-$260/st FOB in the state, depending on grade. Potassium nitrate remained at $480/st FOB for bulk and $540/st FOB for bags. Sulfate of potash (SOP) pricing was quoted at $368-$378/st FOB in the state, up $10/st from last report.
Pacific Northwest: Potash was pegged at $256-$260/st DEL in the region, depending on grade and location, with continued talk of tight inventories and strictly allocated sales from producers.
Western Canada: Potash was steady at $260-$275/mt FOB plant sites or warehouses in the region.
SULFUR
Tampa: With the second quarter coming to a close in the next couple of weeks, sulfur suppliers were said to be trying to pick a number – probably double digits – to toss on the table for the upcoming third quarter contract price negotiations. Wild guesses were that the initial request could be as high as $20/lt.
Sulfur’s wild ride on the world market was the primary motivator for seeking high prices, coupled with tight supplies on the Gulf Coast. Actually, the situation on the Gulf has improved during the past couple of weeks, but supplies were far from abundant. Sulfur sellers said they had been receiving calls seeking spot sulfur, but had not been able to take advantage of that due to tight supplies. Sulfur railcars were being emptied quickly, as storage facilities continued to be low.
For the phosphate industry, sulfur’s biggest customer, the situation could be a lot worse. High prices for phosphate would make even a substantial increase in quarterly prices relatively easy to swallow, although they were still expected to put up a fight. The short supply situation will ease next year, and begin to go in reverse on a more or less permanent basis.
As of last week refineries were operating at their possible peaks, which means less than 90 percent efficiency. Even Valero’s Houston plant, which is in the process of switching to the production of ultra-low-sulfur diesel, was beginning to crank; however, it was still far from its ultimate goal.
Hyperion Resources announced it was considering building the nation’s first new refinery in more than 30 years in South Dakota. If that project goes forward, it would refine about 400,000 barrels/day of crude into ultra-low-sulfur gasoline and diesel fuel, which would add to the sulfur supply. In the past, new refineries have been derailed due to environmental concerns, but the company said it would “go the extra mile to protect the environment.”
The wild card in the sulfur game started on June 1, the beginning of the hurricane season. If the season is as active as forecasters predict, supplies could become long if storms strike Central Florida. If the Gulf Coast gets battered, sulfur could become extremely short.
Vancouver: Sulfur sources in Vancouver were preparing to begin negotiations on their semiannual contracts, and prices were expected to take a huge jump – possibly as much as $20-$30/mt. One source said some suppliers were refusing to make spot sales and were waiting for new prices to be set, which could wind up as $105-$110/mt FOB.
MARKET NOTES
Pakistan: The government will provide a subsidy of RS113.92 billion, or US$1.9 billion, against last year’s estimate of Rs88.87 billion. The subsidy for DAP is being raised from PKR400 per bag to PKR470.
The government is allocating Rs4billion to TCP for urea import and Rs9.5 billion for DAP import. Fauji Fertilizer will receive Rs860 million for subsidizing fertilizer.