AMMONIA

U.S. Gulf: Major Tampa players have inked all of June at the $310/mt DEL mark. Nothing new was heard across the Gulf.

Eastern Cornbelt: Spot ammonia pricing continued its slump last week. Sources quoted the Illinois market at $425-$435/st FOB on the low end, with the upper end of the range pegged at the $440/st FOB mark in Indiana.

An Illinois source said sidedress movement on corn was nearly half finished in his area, while Ohio sources predicted steady activity yet for the next two or three weeks. One source said the brisk sidedress business will cap a “phenomenal spring” for ammonia movement, and will likely leave terminal inventories sapped. As a result, significant restocking will be necessary for fall.

Western Cornbelt: Some sidedress applications of UAN and ammonia were underway in the region last week. Sources quoted spot ammonia pricing at $400-$425/st FOB terminals in the region, reflecting another slide from the previous week. Those suppliers holding to the upper end “want to know what they’re competing against,” observed one source. On a forward contract basis for July, one supplier was offering limited ammonia tons last week at $420/st FOB in Nebraska, $425/st in Iowa, and $430/st in Missouri.

Northern Plains: Some sidedress activity was reported on corn in Minnesota, and sources said they anticipate good movement of ammonia and UAN in the coming weeks. Several sources said their spring ammonia volumes were up in the region compared with average rates.

The ammonia market had reportedly slipped back to as low as $420-$425/st FOB Minnesota terminals, with one regional supplier offering forward contract ammonia for July at the $425/st FOB level in the region. North Dakota sources pegged the market at $470-$480/st DEL on the low end, with reference levels from some suppliers at the $505/st DEL level last week.

Great Lakes: Dealers in both Michigan and Wisconsin reported moving directly from pre- to post-season activities in recent weeks, including herbicide spraying and the start of corn sidedressing with ammonia and UAN. Ammonia pricing was down from last report. Michigan sources tagged the ammonia market at $467-$477/st FOB last week, with the high FOB Courtright, Ont. Wisconsin sources quoted the market as low as $435-$440/st FOB northern Illinois shipping points.

Black Sea: Prices remain soft even as demand in Asia and Europe remains stable. Sources in Asia peg the market at $235-$240/mt FOB with some more room to slide.

The best guesses say prices should start back upward come July, said one observer. By that time demand from American buyers will increase demand and begin to move prices. Another factor that could help stem a dramatic price slide are reports that turnarounds may occur within the next couple of weeks.

Middle East: Overall, sources say the supply-demand situation is helping maintain prices. The latest deal with FACT/India puts the price at $270-$275/mt FOB.

Despite offers from Sabic and Transammonia at $340/mt CFR and $344/mt CFR respectively, Qafco/Qatar came in at $304/mt CFR. Once $35/mt freight is backed off, sources say area market prices softened slightly by taking off the upper $270s/mt FOB from discussion.

The FACT tender is really the only business that can be used to nail down a price at this time, say sources.

The producers have plenty of business on the books from long-term deals that set prices based on pre-arranged formulas. Spot tonnage is virtually nonexistent, say area observers.

The $270/mt FOB range is consistent with the Yuzhnyy price, say sources. If the Black Sea price continues to soften and if the Middle East price holds firm, India may look to Yuzhnyy as an alternative source for its ammonia.

Sources report Safco IV may be once again going down for maintenance.

India: FACT closed its tender last week with two offers that tried to move up the price and one that didn’t. Sabic came in at $340/mt CFR and Transammonia at $344/mt CFR, for a netback to the Middle East of about $305/mt FOB. The surprise offer came from Qafco at $304/mt FOB.

With freight rates pegged at $35/mt, sources say a netback of $270-$275/mt FOB is about right.

Indian buyers remain the strong point for Middle East suppliers. One Asian source noted that if the Yuzhnyy price continues to fall, Black Sea material may become more competitive into India.

UREA

U.S. Gulf: Granular urea prices bounced last week, with most players reporting product trading within the $300-$310/st FOB range. The $305-$310/st FOB numbers were reported later in the week. Some suggested that sub-$300/st FOB might have been available early in the week, but there was no firm word on such a sale.

Most players said the market has turned around. They cited several factors, including good demand in the U.S. and overseas, particularly India; good demand from rice country; and higher forward prices from domestic suppliers and the paper market. Sellers, who had been complaining about the domestic forward market in recent weeks, were happy with it this week, as they said it was helping to boost near-term prices. If buyers see increasing forward prices, they are more willing to pay up for near term.

Eastern Cornbelt: Granular urea pricing was slipping, with the regional market quoted at $350-$360/st FOB last week. The low was reported out of spot Ohio River terminals to the dealer.

Western Cornbelt: Granular urea reference prices remained as high as $360-$370/st FOB in the region, but sources continued to report cash sales taking place as low as $335-$340/st FOB spot river locations. In the Southern Plains region, sources reported some urea movement taking place for 90-day corn going in behind winter wheat.

Northern Plains: Granular urea pricing had dropped in the region, with most sources quoting the Twin Cities market last week at the $350-$355/st FOB level. The market in North Dakota was pegged at $390-$400/st DEL, with little movement reported. One supplier was offering forward contract urea for July as low as $360/st DEL in North Dakota and northern Minnesota.

Great Lakes: Granular urea pricing was down significantly from last report. Wisconsin sources pegged the low end of the market at $360-$365/st FOB. Reference prices remained as high as $425/st FOB in Michigan, but sources quoted the true market at the $405/st FOB level on the upper end.

Northeast: Demand for urea had lessened in the region, but sources reported steady movement for the lawn business last week. The urea market was pegged at $395-$401/st FOB, with the upper end quoted to dealers FOB Philadelphia as of May 29. Delivered urea was quoted at roughly $410-$420/st in the region, depending on location. Further south, the urea market was pegged at $365-$380/st FOB port terminals, with the low at Savannah, Ga.

India: The buying continues. MMTC reportedly has taken an additional 50,000 mt from Qafco/Qatar. Additional purchases have taken MMTC to just above 1 million mt. The extra tons picked up were reportedly sold at the tender price, so no price increases are being reported in the Black Sea or Middle East.

Industry observers are now expecting to see another tender come out of India soon. Dates for the tender range from June 4-12.

At the IFA meeting in Istanbul, many in the industry figured the Indian buyers would sit still for a month and then come back in. By the time everyone got home, however, the talk shifted to an earlier tender call.

Sources say who ever comes in – IPL or MMTC – the tender will be for about another 1 million mt for July and August delivery.

IPL will have to make up about 40,000 mt from its tender. Dawood had offered and was awarded a contract for tons from Pakistan. During the IFA meeting, the Pakistan government banned all urea exports. Sources from Pakistan confirmed that the ban impacts all exports, including the IPL business. As of just before the IFA gathering, IPL booked 845,000 mt.

Black Sea: So far the Yuzhnyy market has defied the tradition of the past two years. The market is holding even. Some sources report business just above $300/mt FOB, but many more in the industry argue the price has not exceeded that amount. One trader noted that some top-off tons may have been picked up, or some traders may have made a forward purchase above $300/mt FOB.

Following Indian tenders in the past two years, the Yuzhnyy market has crashed. This time, however, the only drop in price has been minimal. And with India expected to come back in the first half of June for possibly as much as 1 million mt, sources say there is no reason for the price to drop.

Adding support to the price, sources say Latin America still needs to come in for several hundred thousand tons a month through August.

The one main drag on rising prices, said one source, is the lack of business out of the Baltic.

Normally there is a $5-$8/mt price differential between Yuzhnyy and the Baltic ports. As of last week, that differential was $10-$15/mt.

Latin buyers could step in and take more from the Baltic than Yuzhnyy at that rate. This would give buyers of Black Sea tons a leg up on holding back any dramatic price increases.

For all intents and purposes, say sources, India is the main game for Yuzhnyy business. The possibility of another large tender so close to the awarding of two other tenders has whetted the appetite of traders and producers.

If the Indian buyer holds firm on price, said one source, the upcoming tender could show only a marginal increase – if at all.

Sources say the line-up for June is not yet fully booked. July is looking comfortable, but not nearly as full as producers would like. Prior to the rumors of the earlier call for product from India, one observer noted that the producers would most likely take some plants down for routine maintenance to avoid a massive oversupply of urea.

With the tender coming as soon as it is, one trader commented that the shutdowns may not be needed.

For now, with concluded business and traders looking to take positions for an upcoming tender, sources peg the market at $290-$305/mt FOB.

Middle East: No new business appeared to change prices from the last tender.

Qafco sold an additional 50,000 mt to MMTC at tender prices. Reportedly, other producers have also supplied extra tons at the same price.

All in all, say sources, producers are comfortable into July. In order to fill their books, however, the producers had to back off on their efforts to raise the price into the $320s/mt FOB. Initial offers to MMTC were at $323/mt FOB, with the final awarded price $315-$316/mt FOB. While producers still talk of the $320s/mt FOB, traders say the price is still below that level.

Pakistan: The government banned the export of all urea while the fertilizer industry met in Istanbul. Pakistan urea producers were upset with the decision, according to local media reports. The move also means that IPL/India will have to find another supplier of 30-40,000 mt of urea from its last tender. Dawood had offered the Pakistani material.

Sources said the offer was made with the best of intentions. At the time of the tender, observers note, a strong case for limited exports had been presented to the appropriate government agencies. Indications were that the exports would be allowed. That plan came crashing down when the government banned exports.

One reason for the ban, said one source, was pure politics. He noted that Pakistan will need to import urea throughout the year and that it would not look good to be importing by sea and exporting by land. Imports for the first half of the year are being covered by a deal between the Pakistani and Saudi governments. Sources are sure the market will see the re-entrance of TCP for last quarter imports.

However, local sources say the country will not import urea in coming months, as local production is sufficient to meet requirements in Kharif season 2007 (April-Sept.) in spite of the partial closure of a urea/DAP unit in Pakistan. According to estimates of the National Fertilizer Development Centre (NFDC), Kharif 2007 started with a heavy opening inventory of 626,000 mt of urea. It is estimated that urea availability would be about 2,996,000 mt in Kharif season, including local urea production of 2,370,000 against total consumption of 2,394,000 mt. Therefore, the urea supply appears to be satisfactory for the Kharif season, and the country would have a surplus of 600,000 mt at the end of season.

China: Chinese material is now pegged at $292/mt FOB bagged. Sources say this puts the Chinese tons at parity with the rest of the global market. India will be receiving a number of Chinese cargoes. Once the 30 percent export duty is lifted in the third quarter, additional tons are expected to find their way to India and other buyers.

Indonesia: PIM sold 20,000 mt in the $290s/mt FOB. Kaltim is expected to sell a similar amount for about the same price in a tender that closed late last week after Green Markets went to press.

NITROGEN SOLUTIONS

Eastern Cornbelt: UAN pricing remained firm, with continued reports of tight inventories. UAN-32 was steady at $290-$305/st ($9.06-$9.53/unit) FOB regional terminals for cash market tons, with the low out of spot river locations. On a forward contract basis, however, one regional supplier was reportedly offering limited UAN-32 tons for July at $245-$255/st ($7.66-$7.97/unit) FOB in the region.

Western Cornbelt: UAN remained in tight supply, but one source said many dealers are “in a comfortable position” in that they don’t want to carry over any high-priced tonnage. When UAN prices started climbing, the source said, many dealers decided they were prepared to run out during the sidedress run. The UAN-32 market was commonly quoted in the $290-$300/st ($9.06-$9.38/unit) range FOB river terminals in the region, with some locations referenced as high as $310/st ($9.69/unit) FOB on the Missouri River.

Northern Plains: The UAN market was quoted at $9.00-$9.25/unit FOB terminals in Minnesota, and up to $275/st ($9.82/unit) DEL in North Dakota for UAN-28. Looking forward, some were talking of softer numbers, with one regional supplier offering forward contract UAN-32 for July at the $259.40/st ($8.11/unit) mark FOB Pine Bend, Minn.

Great Lakes: UAN remained in tight supply in the region. Wisconsin sources pegged the UAN-32 market at the $296/st ($9.25/unit) FOB level to the dealer, while Michigan sources quoted UAN-28 reference prices at $269-$273/st ($9.61-$9.75/unit) FOB terminals.

Northeast: UAN-30 pricing continued to be quoted at $242-$247/st ($8.06-$8.23/unit) FOB Baltimore and Philadelphia to the dealer. The UAN-32 market was referenced at $300/st ($9.38/unit) FOB terminals in upstate New York, with discounts bringing the low end of the range to roughly $295/st ($9.22/unit) FOB. UAN terminal inventories remained low, but sources confirmed some new vessel activity booked out for late June arrival.

AMMONIUM NITRATE

Western Cornbelt: Ammonium nitrate remained at $320-$325/st FOB in the region, where available.

AMMONIUM SULFATE

Eastern Cornbelt: Granular ammonium sulfate remained in tight supply, but sources did report some spot tons in the $230-$240/st FOB range in the region last week. A new price list from Honeywell will reportedly take warehouse postings down to $200-$205/st FOB for granular sulfate, with rail-delivered postings in the $200-$210/st range, depending on location.

Western Cornbelt: Granular ammonium sulfate was quoted at $230-$240/st FOB in the region and in tight supply, although spot tons were available in the region. Effective June 18, new list prices from Honeywell are slated to move to $200-$205/st FOB in the region, with mid-grade sulfate $15/st lower than granular.

Northern Plains: Granular ammonium sulfate was available on a spot basis in Minnesota at the $230/st FOB level last week, but supplies remained tight. Postings from Dakotas Gasification were unchanged at $220/st DEL in North Dakota, $225/st DEL in Montana, $230/st DEL in Minnesota, $235/st DEL in South Dakota, and $265/st DEL in Saskatchewan and Manitoba.

Great Lakes: Ammonium sulfate was pegged at $220-$240/st FOB and in very tight supply. The upper end was quoted by Michigan dealers for granular product, while the low was confirmed by Wisconsin sources for mid-grade sulfate sales. New postings from Honeywell effective June 18 include granular sulfate at $200-$205/st FOB regional shipping points.

Northeast: Granular ammonium sulfate was pegged at $232/st FOB Philadelphia last week. Sources said new prices from Honeywell were on the books for June 18, with reference pricing dropping at that time to $200-$205/st FOB and $200-$210/st rail-DEL for granular sulfate, depending on location. Postings for mid-grade ammonium sulfate were said to be about $15/st lower than granular.

PHOSPHATES

Central Florida: The 1.1 million mt deal PhosChem announced with India last week put the domestic market on notice: inventories will remain low and prices will be firm or go higher this summer. Many on the buying end had hoped that prices would begin to deteriorate this summer, and had been holding off on making new buys. That will not be a problem in some areas, because weather – either too wet or too dry – left them with sufficient supplies in their warehouses to at least get through June. Most, however, will need to be resupplied beginning in July. Some of those who signed up for Mosaic’s summer-fill program chose to take the price at the time of loading, which will be based on the index at that time but with a collar of up to $25/st FOB up or down, depending on the amount and the customer.

Last week Mosaic was already thinking of possibly raising its domestic prices, which appeared more likely now that supplies will remain low. In addition, domestic prices were still lower than the price for export phosphates. Mosaic will conduct turnarounds on one unit each at New Wales and Faustina, which will take a total of about 80,000 st out of production. While that will cut deeper into inventories, it will give the company a chance to build its sulfur reserves, which have been well below desired levels.

Mosaic – and probably CF – began shipping under their summer fill program and forward pricing plan. Mosaic was known to have booked a large block of business for the period of June through August, so it will have little or no motive to lower prices. CF set its prices for July and August at $362/st FOB and $365/st FOB, respectively, and discounts will be hard to get.

While producers made no prompt sales of phosphates last week, a deal was done by a trader to sell 10 railcars of DAP at $365/st FOB.

Meanwhile, the weather in the Southeast and the Northeast was extremely dry last week, with conditions in the Southeast the worst. Florida remained a tinderbox, as a prolonged drought continued to contribute to forest fires. However, the state was expected to get rain from a low pressure system last weekend, but forecasters said it would not be enough to ease the drought.

The Central Florida DAP price range remained at $365-$370/st FOB. Discounts are not included in the range. Mosaic’s list price was $365/st FOB for DAP and $4/st FOB less for MAP. PotashCorp’s Central Florida reference price was unchanged at $370/st FOB. In Texas, Agrifos’ price was $410/st FOB for truck sales. Agrifos’ planned production through August was nearly sold out last week.

U.S. Gulf: Activity on the river system slowed to a near stop last week, as Mosaic and CF were beginning to load barges under their programs for the summer. Mosaic’s summer-fill program set prices at $380/st FOB and $385/st FOB, and the $385/st FOB price appeared to have set a benchmark for current sales. However, last week Mosaic was considering whether to increase its price after PhosChem closed on a deal with India to deliver 1.1 million mt. That export transaction will cut into already low domestic inventories. Still, PhosChem has a great deal of flexibility on deliveries, so it may choose to send material to India later in the season and feed off the domestic market instead. The product must be delivered by the end of November under the terms of the contract.

While Mosaic was considering a price rise, last week CF set its prices at $383/st FOB for July, $385/st FOB for August, $388/st FOB for September, $390/st FOB for October-December, and $400/st FOB for January.

Weather in the Midwest was generally favorable for farmers, with showers and warm, but not hot, temperatures. Warehouse activity was said to be strong. Warehouse prices on the Arkansas River were running about $415/st FOB for DAP. MAP was tight.

A couple of sources said they believed the barge market was as low as $378/st FOB, but no sales were made at that or a lower level. Others said there were no barges available in the lower price range. One big buyer said he was attempting to obtain barges in the belief the NOLA DAP barge price will rise to around $400/st FOB as a result of the deal with India. “If anyone says they have them at that price (below $380/st FOB), have them give me a call,” he said. Both producers and traders said inquiries have picked up since the India announcement last week.

In June, Mosaic plans to take a unit at Faustina off line for a turnaround, which will reduce production by about 45,000 st, and another unit at New Wales, for a 35,000 st reduction. On the bright side, that will give the company an opportunity to build its low sulfur supply. The total loss of supply of 80,000 st of phosphate will have an impact on the market, in addition to the big order from India.

NOLA DAP barge sales were at a standstill last week, so the DAP price range was unchanged at $382-$385/st FOB. Expect prices to increase somewhat during the next few weeks, say most sources.

Eastern Cornbelt: Sources continued to report phosphate sales “to finish spring,” with some Illinois sources reporting dry movement on alfalfa ground as well. While some had yet to “unhook” from spring demand, many were transitioning to summer fill. Some ended the season with carryover, but many will need to resupply. One source, noting particularly heavy fall phosphate movement in Illinois, said buyers there are looking at a $150/st increase from last summer’s fill levels.

The DAP market last week was pegged at $410-$413/st FOB spot river terminals and $420-$425/st FOB inland warehouses in the region. Producers were starting to ship under their summer fill program and forward pricing plan. Sources said any fence-sitters would likely commit now that Mosaic was reported to be thinking of raising its domestic prices in the wake of the India contract announcement.

No current prices were reported for TSP in the region. 10-34-0 remained at $335-$350/st FOB for the last business, but spring demand had tapered off in the region.

Western Cornbelt: Sources reported a little bit of phosphate tons “trickling” out the door last week. The DAP market was pegged at $410-$420/st FOB river warehouses, and several said fill orders placed earlier at the $415/st FOB number were about ready to ship. MAP was roughly the same as DAP.

10-34-0 remained at $335-$350/st FOB in the region. Inventories remained low, but sources said demand was waning. Sources also talked of likely pricing increases in the wake of higher acid postings. Agrium’s phosphoric acid prices firmed on June 1 to $690/st for SPA and $680/st for MGA rail-DEL in Iowa, Missouri, Nebraska, Minnesota, the Dakotas, and Wyoming. A $5/st increase for both products is slated for August, and again in September.

Northern Plains: Phosphate movement had slacked off as preplant demand ebbed in the region, and sources reported some lower spot prices as extra tons were bartered. Delivered MAP was pegged as low as $415-$420/st in North Dakota from western shipping points, while Minnesota sources quoted warehouse pricing as low as $406/st FOB on a spot basis. Forward contract tons for July FOB Pine Bend were available from one supplier at $418/st for DAP and $415/st for MAP.

The 10-34-0 season was virtually finished in the region. Sources tagged the market at $325-$335/st FOB, with delivered product at the $375/st mark in North Dakota from Canadian shipping points.

Great Lakes: Sources reported some phosphate movement on alfalfa, but demand had tapered off considerably in the region. The DAP market was pegged at $425-$446/st FOB in the region, with the low out of inland warehouses in Wisconsin and the high to dealers FOB Essexville, Mich. MAP was pegged at $420-$434/st FOB in the region, with the low in Wisconsin and the high quoted by Michigan sources. Some sources said they were getting ready to bite the bullet on summer fill commitments last week.

TSP was pegged at $405-$410/st FOB inland warehouses, where available. 10-34-0 was $325-$340/st FOB, with the low in Wisconsin and the high in Michigan.

Northeast: Phosphate pricing was down from last report, and sources said movement had tapered off in the region. DAP was pegged at $422/st FOB E. Liverpool, Ohio, and MAP was quoted at that same level FOB Philadelphia for new sales. 10-34-0 remained at $285-$305/st FOB in the region, with 11-37-0 referenced at the $305/st FOB mark in upstate New York.

U.S. Export: Last week, PhosChem and India dropped a bombshell when they announced a deal to provide 1.1 million mt of DAP to India. Under the terms of the contract PhosChem must complete deliveries by the end of November, but will have flexibility as to when the shipments will actually be made during that period. The price was set at $477/mt CFR. PhosChem was able to obtain a freight rate about $10/mt lower than recent ocean rates, at $63/mt, which would make the actual price $414/mt FOB. Shipments will be made using a combination of panamax and handymax vessels. However, that was not PhosChem’s new price. The only reason India was able to buy about $15/mt FOB less was the size of the order. PhosChem’s next sale will be made at $430/st FOB or higher.

Rumors last week held that Transammonia had made a sale of 10,000-12,000 mt of DAP from Miss Phos into Latin America at $429.50/st FOB, but that never actually happened. The company had been scouting for ocean freight rates for a potential deal to Peru that did not materialize. However, several other deals were in the works. For Miss Phos, export sales provide a bonus due to not having to pay $10/st FOB barge freight to get phosphate to New Orleans and its low cost of loading vessels for export.

Pakistan was poised to enter the market and PhosChem was certain to make a pitch for that business when it becomes available. However, worldwide phosphate inventories remain low and prices remain high. Latin America will soon be hitting the market, and that will have the effect of shortening inventories and driving up prices. China was not expected to be a major buyer of U.S. phosphates this year, but it will not be a major competitor, either, due to its new export tax of 20 percent.

As a result of the big India deal, the export DAP price range widened to $414-$428/mt FOB, but the low end of the range will not be available for sales smaller than the one to India.

Pakistan: Local sources say the country would import 500,000 mt of DAP in Kharif season. The country is estimated to consume 635,000 mt of DAP during April-Sept 2007. The major quantity has to come from import, as local production from Fauji Fertilizer Bin Qasim (FFBL) is suspended due to expansion of plant.

India: Local sources report a DAP shortage in the State of Tamil Nadu area for kharif season. Estimates are that just half the quantity of the requirement of 175,000 mt of DAP is available in the market. The reason for the short supply is that SPIC, which supplies more than 50 percent of the state’s requirement of DAP, is out of production and alternative arrangements have not been finalized. SPIC, which had shut down production in March 2007 for maintenance activity, was expected to restart by the end of April. However, the company has informed the stock exchange that two of its working capital lending banks have raised claims in the Debt Recovery Tribunal, so the opening of letters of credit is delayed and the company is taking steps to restart production.

Of the planned supply, SPIC was expected to supply about 97,000 mt DAP, but except for about 1,200 mt in April, supplies are down to zero in May. Industry sources say no supplies are expected from the company for the rest of the season.

POTASH

Eastern Cornbelt: Potash was pegged at $226-$235/st FOB regional warehouses, depending on grade and location.

Western Cornbelt: The regional potash market was firm at $224-$235/st FOB last week, depending on grade, location, and supplier. One supplier was referenced at $226/st FOB, but was considering an increase June 1 based on higher producer postings at the mine.

Northern Plains: Minnesota sources tagged the warehouse market for potash at $225/st FOB on the low end last week, with a move to $235/st FOB slated by the end of the week. The market FOB Saskatchewan mines was pegged at $202-$212/st FOB, depending on grade, reflecting new reference levels that have taken effect for shipments after June 1.

Great Lakes: Sources tagged the potash market at $231-$234/st FOB regional warehouses last week, up from last report. A Wisconsin source pegged the common dealer market for red granular potash at the $232/st FOB level last week. One Michigan supplier said postings would probably firm another $3/st June 1, bringing reference levels for white granular potash to the $237/st FOB mark.

Northeast: Coarse potash pricing remained at $226/st FOB E. Liverpool, with delivered potash pegged at $235-$250/st. Sources expected higher prices to take effect as of June 1, however. At that time, reference prices for soluble potash reportedly ranged from $250-$280/st DEL in the region, depending on location.

India: During the IFA conference, Coromandel Fertilizers agreed to a US$50/mt increase over last year’s level for its annual quantity of 350,000 mt MOP. Coromandel is an NPK producer and needs MOP on regular basis. Sources said the deal will set in motion other buyers who were waiting for levels to be set in India. The annual Indian requirement is about 3.8-4.2 million mt/y.

SULFUR

Tampa: PhosChem’s sale of 1.1 million mt to India was not only a boon to the phosphate industry, but to the sulfur industry as well. Sulfur supplies on the Gulf, the West Coast, Vancouver, and the rest of the world remained very tight. Prillers on the West Coast were suffering from a lack of supply, and prillers along the Gulf Coast were empty.

Meanwhile, refineries were not running at 100 percent of capacity, but more like 90 percent, which was not only responsible for higher fuel prices but also tighter sulfur supplies. The main reason for the lower production was refineries were aging and operation was temperamental. Valero’s Texas City plant was producing about 130 lt/day less than the normal 650 lt/day. In early July, that refinery will undergo a turnaround expected to last 35 days, which will remove about 4,000 lt for the supply chain. Late last week, Valero’s Houston refinery was cranking out about 22 lt/day, but that facility was ramping up production and should hit about 200 lt/day some time this week. At least, that was the plan. At Beaumont, ExxonMobil was nearing completion of a turnaround at its refinery there.

While a report circulated that Mosaic had a sulfur tug out of service, Mosaic said that was not so – its tugs are operating and its sulfur supply at Tampa is above normal, although it had been extremely low in recent weeks. The company did buy one, not two, loads of sulfur from Europe, which it planned to use as a reserve for the hurricane season, which began June 1 and runs through November.

With sulfur supplies tight, sulfur sellers were predicting another price increase for the third quarter. How much was uncertain, but some said it could be more than the $5.50/lt bump in the second quarter.

Vancouver: Florida will not likely get a boost in sulfur supplies from Canada anytime soon. The cost of rail to the state remained high, while prices on the world market make the Tampa market even less appealing. China has already done a deal to buy sulfur at $150/mt, and was said to be poised to buy at $160/mt. In the Middle East, netbacks were said to be in excess of $100/mt.

The biggest problem Vancouver might face is a slowdown on deliveries as a result of the CP strike. Still, if supplies are reduced, prices will likely climb even higher.

“They are all smiling in Vancouver,” a source said. “They think the price will jump up significantly – between $20 and $40 mt – during the second half of the year.”