AMMONIA

U.S. Gulf/Tampa: Prices at major price points appeared to remain the same last week, with no reports of any movement. At Tampa, there was one report that two players had agreed to $350/mt DEL for second half January. However, others were hesitant to agree to any rollover, and said the jury was still out as to whether that will occur. Some sellers were reluctant to give up hopes for another $10/mt DEL.

Eastern Cornbelt: Anhydrous ammonia was quoted last week at $390-$405/st FOB terminals east of the Mississippi River, for cash or prepay tons. Dealer postings were as high as $415/st FOB in Ohio.

Western Cornbelt: Anhydrous ammonia was $375-$395/st FOB regional terminals for cash or prepay, with the upper end in eastern Iowa. The market FOB Palmyra, Mo., was tagged at the $385/st mark, while delivered ammonia in central Missouri was quoted at $405-$410/st. Ammonia postings from Agrium moved on Jan. 1 to $395/st FOB Early, Iowa, Garner, Iowa, Whiting, Iowa, Greenwood, Neb., and Hoag, Neb.

Northern Plains: Anhydrous ammonia was quoted by Minnesota sources at $380-$390/st FOB for cash or prepay last week, while delivered ammonia in North Dakota was reported in a broad range at $420-$455/st, depending on supplier and whether the quote was for cash or prepay tons.

Dakota Gasification was referencing ammonia at the $455/st DEL mark in North Dakota for spring prepay. The company’s Beulah, N.D., ammonia plant was down for a scheduled maintenance turnaround until mid-February.

Ammonia postings from Agrium moved on Jan. 1 to $395/st FOB Mankato, Minn. Dec. 15 ammonia postings from the company included $427/st FOB and $445/st DEL out of the Leal, Grand Forks, and Beulah sales area in North Dakota.

Eastern Canada: Rail-delivered anhydrous ammonia from Western Canada took an increase on Dec. 22, moving from $687/mt to a reference level of $776/mt to Ontario and Quebec locations. No other current pricing was available for ammonia last week, and sources reported no new business to test the market.

Black Sea: The talk is that not only had the price hit $290/mt FOB, but also that $300/mt FOB is looking more likely each day. Asian sources look to the strong demand from Morocco on the heels of American buyers taking product as the driving force behind the price increases. One trader added that fellow traders might also be responsible for moving the price up more. It seems some are fearful they will get caught with long-term deals to fulfill, but no product as supplies tighten. With that fear, additional buying for future positions is expected. Sources say the move to buy could easily push the price to $300/mt FOB and beyond in the near future.

Additional pressure is coming on Yuzhnyy, because some buyers are finding Baltic ammonia more difficult to get at this time. Sources report more than one buyer has had to take small cargoes from Yuzhnyy instead of the Baltic.

Producers are already claiming $300/mt FOB, but other industry watchers were hard pressed last week to point to any business beyond $295/mt FOB – and even that level was only a rumor. Business last week was pegged at $290-$295/mt FOB. Still, say sources, with anyone looking to buy, even with a vessel booking in hand, producers will only consider $300/mt FOB as a low bid.

Middle East: India and the United States are still the prime movers in the Arab Gulf market. Producers all claim they are sold out, and traders back up that assertion.

The problem the producers face right now, however, is that the tons they are shipping were booked some time ago. One trader said the netback on tons shipped the last week of December had an effective netback of $260-$265/mt FOB. However, if a buyer were to approach a producer for tons this week, the starting price would be $300/mt FOB. The only problem is that there are no tons available for spot sales. Still, sources say traders were able to secure some spot tons for shipment this month in the upper $270s/mt FOB into the $280s/mt FOB. One Asian trader called the current market – if one can exist based only on deals cut weeks ago – at $275-$285/mt FOB.

Reportedly, traders looking to do some more business into India are finding that the $340/mt CFR price is being rejected by Indian buyers, and anything less is being rejected by producers. Fortunately for the buyers, one trader said, enough tons have been contracted to keep end users happy for a while. Eventually, he added, Indian buyers will have to step up and pay more. Just how much more they will have to pay will depend on demand from the States and Morocco.

Once the main buying season for the United States ends, some of the demand pressure will ease. Moroccan buyers are expected to keep taking as many tons as they can get from Yuzhnyy and the Arab Gulf so they can satisfy strong demand for DAP from China.

The SAFCO IV plant has not helped the situation, say sources. It started up in early December and then went down again around the 25th. Sources say that as of late last week it was still not up and running.

Asia: The Indonesian joint venture plants – KPI and KPA – are working fine, say sources. Material coming out of the facilities is fully booked, with no spot material available. The state-owned Gresik plant has to remain shut down. Attempts to lay a temporary natural gas pipeline apparently failed to materialize.

Normally, Taiwan has a higher delivered price than South Korea, but this month, say sources, the situations are reversed. The reason for the reversal, said one source, is based on a number of factors, from the cost of the product to the shipping charges. Sources now say Korean buyers are paying $340-$350/mt CFR, while the Taiwanese are paying $320-$330/mt CFR.

Japanese producers are all working at full capacity. Sources say the market in Japan remains on a razor-thin balance, but for now, buyers’ needs are being fulfilled.

India: FACT has reportedly begun using imported ammonia and has procured 7,200 mt from Saudi Arabia on the Brugge Venture. It was recently unloaded at a tank a re-commissioned facility at the Kochi port. FACT is getting a better deal with imports than local naphtha-based product. The product will be railed to FACT’s Cochin facility.

UREA

U.S. Gulf: The market last week was quiet after the big run up toward the end of 2006. Most saw no or little change to pricing, with sources calling the last done business within the $308-$315/st FOB range for granular and $290-$300/st for prills.

Eastern Cornbelt: Granular urea was tagged at $335-$345/st FOB in the region, with the low at Cincinnati, Ohio, and out of Illinois River terminals. On Jan. 2, Agrium released a new round of granular urea postings that listed a Dec. 22 effective date. Those new reference levels included rail-DEL urea at $355/st in Illinois, Indiana, and Ohio, and $360/st in Michigan. New warehouse postings from the company included $355/st FOB Garrett, Ind., and $360/st FOB Saginaw, Mich.

Western Cornbelt: The urea pricing surge appeared to settle down a bit last week, albeit at much higher prices than month-ago levels. Sources tagged the regional urea market at $330-$345/st FOB, with new sales confirmed at the upper end of that range. One Missouri source commented that there are still “a lot of empty holes to fill” in the distribution chain as dealers and growers prepare for an expected brisk topdress run on winter wheat.

Northern Plains: Granular urea was quoted at $335-$350/st FOB in the region, while delivered urea in North Dakota was reported in the $355-$370/st range last week, depending on supplier. On Jan. 2, Agrium released a new round of granular urea postings that listed a Dec. 22 effective date. Those new reference levels included rail-DEL urea at $355/st in Minnesota, the Dakotas, and Wisconsin, with warehouse postings at $350/st FOB Shakopee, Minn., and North Dakota locations at Alton, Carrington, Colfax, Marion, and Scranton.

Northeast: Spot pricing for urea out of Philadelphia, Pa., and E. Liverpool, Ohio, reportedly moved from the $317/st FOB level to a firm $322/st FOB on Dec. 26, with some sources last week claiming $330/st FOB as the new dealer reference at those locations. The Baltimore urea price was quoted firmly at the $330/st FOB level, while reference pricing out of Savannah, Ga., was reported at $340/st FOB last week.

Eastern Canada: Rail-delivered urea from Western Canada into the region firmed on Dec. 22 to $470/mt, up from the mid-month price of $430/mt DEL. Ontario warehouse prices for urea ranged from $460-$490/mt FOB last week, with the upper end reflecting dealer reference levels that went into effect on Jan. 1 from one regional supplier.

Western U.S.: On Jan. 2, Agrium released another round of granular urea postings in the Western U.S. With an effective date of Dec. 22, the new postings reflect a $25/st increase from the company’s Dec. 18 reference levels. New postings include $360/st FOB Glade, Wash., Kennewick, Wash., Warden, Wash., and Wilson, Wash.; $347-$352/st DEL in Montana and Wyoming, depending on location; $365/st DEL in southern Idaho, and Oregon’s Malheur County, and from the company’s warehouse and plant locations in Alberta and Oregon to points in Washington, northern Nevada, northern Idaho, and Oregon excluding Malheur County; $370/st DEL in northern and central Utah; and $375/st DEL in southern Utah.

India: For now, the betting is that Indian buyers will be returning to the market in the coming weeks. Some more bullish observers predict an announcement from MMTC or IPL could come as early as Jan. 15. Others who are more skeptical say it would not make sense for India to announce any tenders until the market shows definite signs of cooling off.

One trader said some in the industry are being influenced by reports of regional urea shortages being used by opposition party legislators to destabilize the government.

During the final weeks of 2006, a handful of opposition leaders took up the cause of local farmer groups, who claimed the urea deliveries were too far below needed levels. Government officials countered that the tons are being moved from the ports to the farmers as quickly as possible.

The ports in India have been backed up since November, causing some urea vessels to sit at anchor for a week or longer. Eventually, the central government ordered the port operators to give priority to the urea ships along with vessels carrying grains. Backlogs then began to occur at the rail yards, because sufficient railcars could not be found to accommodate grain and fertilizer.

Asian traders took the political uproar in stride. One source noted that governments regularly go through accusations of not buying enough urea this time of year. The issue, one trader said, is that the complainers are looking at the urea on hand and comparing it to the projected need. Not taken into account, he said, are the tons that are in transit from the Black Sea or Middle East – or even sitting at the docks waiting for transportation inland.

Sources say Indian buyers have stepped up vessel bookings to make sure urea gets into the country as quickly as possible. Because many of the tons are coming from the Middle East, sources say ships that can be unloaded at smaller ports are being booked in larger numbers than previously seen. One Asian observer noted that the increased activity in loadings for India appears to be a combination of placating local farmers and politicians and accommodating producers who have been pushing for contracted tons to be picked up. Reportedly, the producers are anxious to get rid of the Indian contracted tons so they can move the price up $20-$30/mt on the next buyer.

With projections that India will need about 3 million mt this year, sources say MMTC and IPL concluded they should be in the market on a regular basis. By spreading out their purchases, sources say, the Indians hope to prevent pricing schemes that ensure the first buyer gets a decent price, but subsequent tenders show ever rising costs.

Black Sea: Producers are claiming they will only talk if bids start at $265/mt FOB. However, one Asian trader noted that as of late last week he could get a cargo for $261/mt FOB without any serious negotiating.

A fair price, said one trader, is $255-$260/mt FOB. This claim comes on the heels of reports that the Yuzhnyy market is softening. Still, others say, that price range only works on old tons booked last month and earlier.

The $265/mt FOB the producers are asking might be realistic if they had product, said one observer. Reportedly, just about all the loadings that have taken place so far this year have been to cover Indian business.

One trader noted that the lack of new business has the producers worried. The year ended on a bullish trend, and, he said, the bull always needs to be fed. He added the lack of new business is not helpful in making a case for higher prices.

An interesting turn of events from Europe has the potential to help the producers.

Buyers in Europe are getting fed up with higher granular prices being driven by the U.S. market. Sources say some European buyers are looking to take prills instead of granular. The move is just the reverse of India’s shift to accepting either prills or granular for its purchases. Sources say the combination of these two large buyers now apparently being willing to accept either form of urea could lead to more parity in pricing and fewer spikes in prices.

The industry will be watching India closely, say sources. What they call for and when they call for it will help determine how robust or weak the Yuzhnyy price will be.

Middle East: Between the various religious holidays associated with the end of the year, sources say very little business was done out of the region in the past few weeks. One Asian source noted that most Middle East offices were effectively closed until this week.

Even without active trading, sources say it is clear producers are sold out well into March. At the same time, apparently Indian buyers have increased their loading of earlier contracted tons.

Just where the market sits depends on who is doing the talking.

Taking the latest netbacks based on business into the United States would indicate the price is at $290-$295/mt FOB for granular. However, others claim the real price is closer to $275/mt FOB at the upper end. The reason for the confused pricing ideas is that most of the tons heading to the States are under contracts. As a result, say sources, only the buyers and sellers know how much of a discount on material and/or shipping the buyers received.

Add to the mix that a gap appears to be growing between European and American delivered prices. The Europeans reportedly are looking elsewhere for material, and are serious about taking Yuzhnyy prills instead of granular from Egypt and the Arab Gulf.

Even though producers are arguing the new set price should be approaching $300/mt FOB, few in the industry think this is realistic. For now, Asian and regional observers peg the market solidly in the $270s/mt FOB if – and that is a big “if” – a new order is placed.

With everyone sold out through February, sources say nailing down the “real” market will be more an academic exercise than transparent calculations. The only opportunity to get a glimpse at serious pricing ideas will be tender offers. And the only major tender on the horizon is expected from India. The problem is that no one knows exactly when the Indians will come in. Estimates range from mid-January to late February.

Sources agree granular once again gets a premium to prills. Sources say the most likely range for granular is $270-$275/mt FOB, with the bulk of the business at the lower end. Prills are put at $260-$270/mt FOB.

Even though these prices are lower than producers would like, sources say they are better than predictions of a year ago. One trader noted many analysts predicted the price at the end of 2006 would be $200-$220/mt FOB.

The SAFCO IV plant came down late December, with no indication as to when it will start again.

Bangladesh: Sources report BCIC only awarded one contract in the pair of tenders that closed last month. Reportedly, only ConAgra got the business based on their offers in the first tender. The other companies, with lower prices, were asked to extend their offers.

Asian sources say two things are clear no matter what happens: BCIC still needs tons, and it will have to pay more this quarter than last quarter.

During the last three months of 2006, BCIC repeatedly tendered for bagged urea. During that time, Chinese product was competitive and offered a viable alternative to the Middle East – the only other source for bagged prills and granular urea. Now, with the Chinese export tax back up to 30 percent, that option is removed.

Many of the tons offered in the December tenders included Chinese and Middle East tons. Sources are hard pressed to explain how any of the deals offered in the tenders can now be carried out without either BCIC paying much more or the trading house taking a financial bath.

The pattern of delays exhibited by BCIC is in sharp contrast to BADC, which has taken over the importation of potash and phosphates. Contracts were issued, letters of credit opened, and cargoes shipped and received without major difficulties.

The only delay in the whole process, said one trader, came at the ports because of industrial actions that were most likely politically motivated. Sources say the opposition party dominates the Chittagong government, and is looking to embarrass the national government by encouraging port strikes.

China: With the 30 percent export tax firmly in place, sources say the price has moved to $275-$280/mt FOB bagged. Even with the rise in prices in the Black Sea and Middle East, sources say this price effectively keeps Chinese tons out of consideration until the government once again reduces the duty to 15 percent for the last quarter of the year. The rising and falling of the export duty is an attempt by the Chinese government to ensure plenty of inexpensive urea during the height of the domestic season, and export opportunities for the manufacturers during the slow period at the end of the year.

NITROGEN SOLUTIONS

Eastern Cornbelt: UAN continued to be quoted at higher numbers. The UAN market was pegged at $6.50-$6.90/unit FOB regional terminals, with the upper end quoted by Illinois sources for spring prepay offers in early January.

Western Cornbelt: The dealer market for UAN was reported at $6.50-$6.72/unit FOB in the region, with the low on the Mississippi River and the high to dealers out of Missouri River terminals. One source said dealer pricing for UAN-32 would firm again in the near term to the $220/st ($6.88/unit) FOB level at his location.

Northern Plains: The UAN market was commonly quoted at the $6.75/unit FOB mark in Minnesota to dealers, with delivered UAN-28 reported at $203-$207/st ($7.25-$7.39/unit) in North Dakota from Canadian shipping points.

Northeast: UAN-30 was reported at $185-$187/st ($6.17-$6.23/unit) FOB Baltimore to the dealer, up from the $180/st ($6.00/unit) FOB level at last report. There were reports of solutions at the $185/st ($6.17/unit) FOB level out of Philadelphia, but some said tonnage was unavailable at that location last week. Prepay UAN-30 was reportedly being offered at the $189/st ($6.30/unit) FOB level at some locations.

UAN-32 out of terminals in upstate New York was referenced at the $224/st ($7.00/unit) FOB level in early January.

Eastern Canada: UAN was quoted in a broad range at $9.56-$10.71/unit FOB regional terminals, with the upper end reflecting new dealer reference pricing from one supplier, effective Jan. 1. An Ontario source pegged the common UAN-28 range at $271-$275/mt ($9.68-$9.82/unit) FOB last week.

AMMONIUM NITRATE

U.S. Gulf: Barges moved up toward the higher end of last week’s range, with sources now reporting them between $225-$230/st FOB.

Western Cornbelt: Ammonium nitrate was quoted at $255-$260/st FOB, with one supplier talking of a near-term increase to $265/st FOB.

Eastern Canada: Ontario sources tagged the ammonium nitrate market at $350-$370/mt FOB. There were reports of lower numbers on a delivered basis in New Brunswick, but sales at that level could not be confirmed. CAN-27 was reportedly referenced at the $350/mt FOB level as well in Ontario for German product.

AMMONIUM SULFATE

Eastern Cornbelt: Granular ammonium sulfate remained at $160-$165/st FOB in the region.

Western Cornbelt: Granular ammonium sulfate was steady at $160-$165/st FOB in the region, with dealer postings expected to go to the $175/st FOB mark from some suppliers.

Northern Plains: Granular ammonium sulfate was pegged at $165/st FOB and $175/st DEL in the region, but postings from Dakota Gasification were slated to firm significantly later in the week to $200/st DEL in North Dakota and $205/st DEL in South Dakota.

Northeast: Granular ammonium sulfate was quoted at $157-$165/st FOB, with the upper end to dealers FOB Philadelphia. Delivered granular sulfate was pegged at $165-$185/st in the region.

Eastern Canada: Granular ammonium sulfate was quoted at $235-$244/mt FOB in Ontario, and $260/mt DEL in New Brunswick.

PHOSPHATE

Central Florida: Although the spring season was still officially a couple of months away, everyone seemed to be in a rush to fill their bins rather than take a chance on having shortages when the farmers storm their doors. The biggest problem last week was finding phosphate products, especially MAP. Mosaic eased off on taking orders last week, because it needed time to figure out how much it still had available and when it could make good on deliveries. Late last week, Mosaic was making DAP available for March and April deliveries. PotashCorp was accepting orders for mid-February and later, while CF was sold out for January and taking new DAP business for February – but not orders for MAP. On the plus side, Mosaic’s Donaldsonville processing plant was back in full production last week, after completing repairs necessary due to an explosion at its ammonia plant late last year. That will help meet demand, which continues to be abnormally strong.

Most – or at least many – dealers in the Northeast appear to have completed the job of refilling their bins, but sources said holes did exist in the Midwest, especially the western Midwest. With temperatures well above normal for this time of year, some sources were predicting farmers may start hitting the fields sometime in January. That would be good all the way around, unless the weather returns to more normal conditions in February.

Meanwhile, Central Florida phosphate prices were on the rise last week, and will likely be even higher this week. PotashCorp hiked its Central Florida reference price from $230/st FOB to $250/st FOB. Mosaic was pushing to get the domestic price up another $5/st FOB. For several months the U.S. price had been a bargain compared to export, but that has changed. Based on the $231/st FOB price of Central Florida DAP, phosphate companies were earning about $5/st FOB more than from the most recent export price of $256/mt FOB. PhosChem was pushing to increase the export price up to $260/mt FOB, which would equalize the two, but Mosaic was working on getting the domestic up another $5/st FOB, so it was likely the export price will go even higher.

“I’ve never seen a season like this,” one source said, who was not unhappy with the situation.

Prices for Central Florida phosphates were on the rise last week, and discounts were no longer available. MAP was still exceptionally difficult to find. The Central Florida DAP range last week increased from $228-$231/st FOB the previous week to $231-$232/st FOB. PotashCorp’s Central Florida reference price was increased to $250/st FOB. In Texas, Agrifos’ truck prices for DAP or MAP were increased from $250/st FOB to $265/st FOB for either. That company also matches the rail prices of other producers.

U.S. Gulf: The good news for the river system last week was that Mosaic had brought its Donaldsonville processing plant back to full operation after it was crippled by an explosion at its ammonia plant late last year. However, that increased supply was not likely to be enough to offset the even stronger demand in the region, nor will it help to either stabilize or lower prices.

Because of the short supply, most deals made last week were for future sales, but those buyers who found product available were paying more than they did just a week earlier. Last week, future sales prices for February DAP and MAP were $246/st FOB and $248/st FOB for March and April. This week prices for both DAP and MAP will be higher. Mosaic began asking more this week and, although the official new prices had not been determined, they were expected to be about $5/st FOB higher.

MAP was the product in the shortest supply, and the price was keeping pace with DAP and was actually higher in some cases. One buyer was thrilled when he found and bought MAP at $244/st FOB for January loading and $246/st FOB for February. “MAP’s been in short supply, so we took all the barges (the seller) had available,” which was a total of 10 barges.

The big push last week was to get bins filled – and filled as quickly as possible. One of the reasons was the weather, which has been much warmer than normal and could get farmers into their fields as early as January. And with the big push to produce corn for ethanol plants either operating, under construction, or on the planning boards, farmers will want more fertilizers. Millions more acres of corn will need a lot more fertilizer to produce maximum yields. Several sources have said they expect the NOLA DAP barge price to reach $260-$265/st FOB by spring, and possibly go higher. Those higher prices will help keep phosphate supplies in North America, where domestic prices were higher than export product, which was a major change compared to the past several months.

Last week, many in the industry were just beginning to return from their holiday vacations, and sales this week will likely be greater, along with higher prices.

NOLA DAP barge prices for prompt delivery jumped last week from $236-$240/st FOB the previous week to $240-$244/st FOB, and prices were expected to continue an upward climb.

Eastern Cornbelt: DAP remained at $265-$270/st FOB for cash tons and up to $275/st FOB for prepay, with MAP quoted in roughly the same range. One Illinois source also quoted rail-delivered MAP at the $280/st level to his location last week. TSP was an untested $240-$245/st FOB in the region, and 10-34-0 was pegged at $265-$275/st FOB.

Western Cornbelt: DAP and MAP were quoted at $265-$270/st FOB river terminals in the region for immediate take, with prepay reported in the $270-$275/st FOB range. TSP was a nominal $240-$245/st FOB. 10-34-0 remained at $255-$275/st FOB in the region, with the low in Nebraska and the upper end quoted as a dealer reference price in Iowa and Missouri.

Northern Plains: DAP and MAP were up from last report at $270-$275/st FOB the Twin Cities. Delivered phosphates in the central North Dakotas were quoted in the $300-$305/st range, with reports of tight inventories and a likely supply shortfall for spring. 10-34-0 was also reportedly in tight supply, with pricing in North Dakota quoted as high as $300-$305/st DEL.

Northeast: DAP and MAP were pegged at $275-$280/st FOB Philadelphia and E. Liverpool, with the upper end reflecting reference pricing to the dealer. Truck-delivered DAP was reported at the $271/st level in Delaware out of North Carolina. 10-34-0 was quoted at $267-$268/st FOB terminals in upstate New York, up slightly from last report.

Eastern Canada: MAP was pegged at $385-$395/mt FOB in Ontario, with DAP roughly $5/mt less. TSP was referenced as high as $408/mt FOB from one supplier in Ontario, but no sales and no movement were confirmed to test that market.

U.S. Export: The export market was slowly returning from the holidays last week, but PhosChem was able to make one sale of 25,000 mt of DAP into Brazil at $256/mt FOB. During the past several weeks, when the U.S. domestic market began to surge, the domestic price and demand have outstripped the export price, which was a major swing from the previous several months. Based on the current Central Florida low price in the range of $231/st FOB, the domestic price was about $5/st FOB higher than the export price of $256/mt FOB. PhosChem plans to kick the export DAP up to $260/mt FOB for its next sale, but Mosaic was planning to raise the Central Florida and NOLA DAP barge prices another $5/st FOB, so export buyers should expect a second price hike in the very near future.

The sale to Brazil set the range last week at $256/mt FOB, but prices will be higher this week – and probably even higher the following week or sale, say sources. The previous week the range was $250-$255/mt FOB.

POTASH

Eastern Cornbelt: Potash was quoted at $203-$209/st FOB most regional warehouses, with the low quoted out of Illinois River points for Russian potash.

Western Cornbelt: Potash pricing was reported at $204-$215/st FOB regional warehouses last week, with the upper end reflecting new dealer pricing out of the warehouse system from some regional suppliers as of Jan. 1.

Northern Plains: Potash pricing FOB Saskatchewan mines was up $10/st in the new year, with the market quoted at $185-$188/st for standard, $191/st for coarse, $193/st for soluble, and $193-$198/st for granular. No current delivered pricing was reported in the region.

Northeast: Potash was quoted in a very broad range, depending on location and grade. The low was reported in Delaware at $214/st for coarse tons shipped before the end of February, while delivered soluble potash was reported as high as $259/st in New Jersey. The market for granular potash FOB E. Liverpool had reportedly firmed $10/st to the $222/st level, with rail-DEL granular potash quoted at $230/st in Pennsylvania and Maryland.

Eastern Canada: Potash was quoted at $298-$301/mt FOB Ontario warehouses as of Jan. 1, depending on grade and supplier. Rail-delivered coarse potash was pegged at the $301/st level from Western Canada. Potash pricing FOB the Sussex mine in New Brunswick was $263/mt as of Jan. 1.

SULFUR

Tampa: Last week Mosaic tossed a hand grenade into the ongoing negotiations for prices for the first quarter’s sulfur contracts. PotashCorp had sought a $6/lt reduction, which was less of a drop than anticipated, and most in the sulfur industry believed negotiations would be concluded quickly and settle in the range of $3-$5/lt down. Then, last week, Mosaic said it wanted a rollback of $8/lt. That took oil refiners aback, and they pushed away from the table to figure out how to respond. That new proposal will likely delay a quick settlement.

Meanwhile, refineries were beginning to do their annual maintenance programs. Shell was taking its Deerpark refinery in Houston mostly down for five weeks, which will reduce its sulfur output by 75 percent, from about 1,000 lt/day to 250 lt/day. Marathon was doing the same at its refinery at New Orleans. Others will soon be following. Last week, sulfur was still in abundance, but as refineries begin their annual turnarounds, supplies will be reduced. In addition, the world market appeared to have found the bottom, reversing its downward slide. Sulfur producers will be using that as leverage in their negotiations with the phosphate industry. If a stalemate in the talks extends for more than several weeks, sulfur could become in shorter supply and phosphate’s bargaining position would be weakened.

MARKET NOTES

Western Europe: Nitrogen producers breathed a sigh of relief as the New Year began, as Russia’s Gazprom and Belarus ended their natural gas dispute, which had threatened to disrupt gas supplies to Europe. Reports were that Belarus agreed to a 112 percent increase in gas prices and a turnover of control of its gas pipeline. However, Belarus reportedly turned around and imposed a surcharge on Russian oil shipments sent across Belarus to Europe. Sources said the surcharge would match the increased gas costs to Belarus.