AMMONIA

U.S. Gulf/Tampa: While players continue to talk about possible higher prices for NOLA and for import, nothing new was reported last week.

Eastern Cornbelt: Sources continued to talk of heavy fall demand for anhydrous ammonia, phosphates, and potash in preparation for more corn acreage in 2007. Talk also centered on the strengthening nitrogen market, and higher postings were once again announced from some suppliers in December.

The market for anhydrous ammonia remained at a firm $375-$385/st FOB regional terminals, with several sources talking of spring prepay booked at the $385/st FOB mark or higher. Agrium’s anhydrous ammonia postings in Illinois moved on Dec. 1 to $380/st FOB E. Dubuque, Niota, Meredosia, and Marsielles, while postings FOB Cincinnati and Finney, Ohio, moved on that date to $390/st.

Western Cornbelt: Cold weather brought a halt to fieldwork in the region, but stronger nitrogen pricing continued to be reported. Most sources tagged the ammonia market now at the $365-$375/st FOB range, with spring prepay offered at the $385-$390/st FOB level. Terra was accepting prepay orders through Dec. 15 at the $390/st mark FOB Blair, Neb., Greenwood, Neb., Mankato, Minn., Port Neal, Iowa, and Whiting, Iowa.

Agrium’s anhydrous ammonia postings moved on Dec. 1 to $375/st FOB Early, Iowa, Garner, Iowa, Whiting, Iowa, E. Dubuque West, Iowa, Mankato, Minn., Greenwood, Neb., and Hoag, Neb.; $370/st FOB Clay Center, Kan.; $365/st FOB Conway, Kan., and Mocane, Okla.; and $315/st FOB Borger, Texas. Delivered ammonia postings in Texas and Oklahoma out of the Borger location moved on that date to $340/st north of Interstate 40 and $345/st south of the interstate. Out of the company’s North Dakota locations at Leal, Velva, Grand Forks, and Beulah, the posted price moved on Dec. 1 to $410/st FOB and $428/st DEL.

Northern Plains: Anhydrous ammonia was bringing a premium last week, with the price having moved up to $375-$410/st FOB. One source said he had seen a great deal of interest in prepay for ammonia for the spring. Agrium posted its price Dec. 1 at $428/st DEL and $410/st FOB for Leal, Velva, Grand Forks, and Beulah.

Great Lakes: Anhydrous ammonia increased in price to $390-$410/st FOB.

Western U.S.: Effective Dec. 1, Agrium’s anhydrous ammonia postings moved to $405/st truck-DEL in Montana and northern Wyoming, and $435/st rail-DEL in Idaho, Oregon, and Washington. The company’s aqua ammonia postings FOB Central Ferry and Finley, Wash., moved to $109/st FOB.

Black Sea: Asian sources report that after Keytrade fixed a cargo at $270/mt FOB last month, the price has moved up. Producers are now talking $280/mt FOB, but so far nothing can be confirmed at that level.

Strong demand from Europe and the United States is said to be the driving factor in the price increase. Adding to the upward pressure are reports that the Middle East suppliers are sold out into February and that repairs on a damaged natural gas pipeline in Indonesia could take longer than expected.

Middle East: Word is that SAFCO IV is finally up and running at full capacity. While ordinarily this would be good news to buyers, sources say whatever additional tons enter the market because of this, buyers will not see any immediate benefit in pricing. Sabic has to pay back tons of ammonia it picked up from other producers while its plant was not producing.

Asian sources say the swapping of tons is commonplace and was expected. No serious changes in prices are expected solely because of the SAFCO re-entrance to the market and its commitments into February to other producers.

Strong buying intentions from India, however, are having an influence on pricing. Sources say nailing down any new pricing ideas is difficult. Many in Asia claim the price has not moved, but that the tightness in the market means that if demand for tons increases just a small amount, the price will take off. Producers are already saying that $300/mt FOB should be considered for the first quarter of next year.

Despite the efforts of the producers to move the price up, sources say the going price remains in the $260s/mt FOB for another week.

Asia: There are still no firm estimates from Indonesia on how long it will take to repair the natural gas pipeline that was destroyed near the Gresik plant. Some in the industry are already looking at the pipeline being out of commission for most of 2007, an admittedly worst-case scenario.

One source noted that if the pipeline is unusable for 8-10 months, the ammonia shortfall for domestic and export purposes could reach 300,000 mt.

For now, say sources, orders are being covered with only minor inconveniences to buyers and sellers.

The KPI/Mitsubishi plant in Indonesia is slated to be back online any day now. The plant went down Nov. 18 for a routine three-week maintenance turnaround. Sources say no major problems were found in the facility that could warrant an extended shutdown.

Sources report Japan is in the unusual position of having an ammonia surplus. Sources say with shortages apparent earlier this year a number of buyers began buying a few extra tons whenever possible. The result is that now the storage tanks are full and downstream demand is weakening.

The supply side should remain favorable to buyers into the first quarter as well, say sources. Domestic producers are not expected to take as many turnarounds early in the year as they did last year. The result will be more tons available compared to the same period of 2006.

Not all is rosy for buyers, however. More than one producer in Japan is planning on either taking a turnaround or closing facilities. Individually, each action would only be a minor blip on the screen, said one observer. Together – and depending on how many plants take turnarounds – the current surplus could be eaten up in a hurry.

UREA

U.S. Gulf: Granular barge prices continued to move up last week, with sources saying more buyers continued to call, being spurred by the increasing chatter about big corn acreage in 2007. Prices worked their way up last week from $254/st FOB early in the week to $261/st FOB on Thursday, with reports Friday morning of $265/st FOB being achieved for prompt. Some players saw little or no movement in prices, but the majority of sources saw some strength, with some being a lot more bullish than others.

A few sources estimated that NOLA numbers were starting to come into parity with global prices – maybe enough to attract spare cargoes from abroad. Others said there simply were not that many spare cargoes left abroad. Another, citing good demand from India, Pakistan, Iran, and Brazil, said global prices are not going to remain still and that any parity may not last long, and that global suppliers can find good demand elsewhere.

In the meantime, the last done prill barges were called $245-$247/st FOB, with expectations that they would continue to follow granular up.

Eastern Cornbelt: Granular urea continued to be quoted at $275-$285/st FOB for the last done business, but significantly higher postings were in effect. Granular urea postings from Agrium firmed on Dec. 1 to $300/st FOB Garrett, Ind.; $305/st FOB Saginaw, Mich.; $305/st rail-DEL in Illinois, Indiana, and Ohio; and $310/st rail-DEL in Michigan.

Western Cornbelt: Granular urea remained firmly at $275-$285/st FOB most regional terminals. Agrium’s granular urea postings firmed on Dec. 1 to $295/st FOB Shakopee, Minn., and North Dakota terminals at Alton, Carrington, Colfax, Marion, and Scranton, and $300/st rail-DEL in Minnesota, Wisconsin, and the Dakotas.

Northern Plains: Warehouse prices were running $265-$275/st FOB, which reflected recent increases in urea prices, so those prices will need to be adjusted. Agrium posted its price at $265/FOB at its warehouses in the region, but that will also likely change.

Great Lakes: Granular urea had increased in price by about $15/st FOB, to a range of $275-$285/st FOB, but the price of urea has been increasing rapidly and may actually be higher.

Agrium’s posted price for granular urea 46-0-0 was $265/st FOB warehouse in Minnesota and $270/st DEL by rail, but those prices were as of Nov. 8, and the price of nitrogens has been on a sharp increase.

Northeast: Granular urea appeared ready to move up again last week. At last report, the price moved from a range of $265-$270/st FOB to $270-$280/st FOB, and was $270/st FOB in Philadelphia. Again, higher transportation costs and natural gas prices were said to be responsible for pushing the price upward.

Western U.S: Agrium’s granular urea postings firmed on Dec. 1 to $305/st FOB Glade, Wash., Warden, Wash., and Wilson, Wash.; $292-$297/st DEL in Montana and Wyoming, depending on location; $310/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; $315/st DEL in northern and central Utah; $320/st DEL in southern Utah; $325/st FOB West Sacramento, Calif.; $345/st truck-DEL in Central California; and $350/st truck-DEL in northern California.

Pakistan: TCP awarded its tender to Sabic. Sources say the Saudi Arabian company got the nod because it was able to deliver in the period set out in the tender documents. Sabic will send the first 25,000 mt within two weeks of getting the award, and the second cargo within three weeks of getting the award.

The final price was $270/mt CFR. This is a negotiated price hammered out between Sabic and TCP. Sources say TCP went into talks with Sabic even through it did not provide the lowest price. It seems that Sabic was the only company that could meet the shipping deadlines as stated in the tender papers.

Players in the market are still scratching their heads over why TCP came into the market at all. The 50,000 mt being picked up will go into reserves rather than into immediate use. Sources say the move to hold a tender most likely came in reaction to the multiple Indian tenders. Once MMTC called its most recent tender, sources say TCP and other buyers got nervous. Rather than get caught in an up market, TCP called its tender quickly.

Once the price refused to move up, however, TCP rethought its intentions. Initial offers were dumped, and the tender was reissued to close Dec. 5. The results of that tender were not much more to the liking of TCP, but after talking to Sabic a deal was struck.

Middle East: The deal between Sabic and TCP/Pakistan confirmed the market is flat. Despite claims by Sabic that the deal represents a netback of $250/mt FOB, sources say that number works only if a vessel was found far below the market rate and somebody else other than the buyer or seller picks up the incidental fees.

Industry observers put the freight at $21-$22/mt. Once agent fees and other incidental costs are taken into account, sources say the $270/mt CFR price TCP is paying comes out closer to $245/mt FOB.

Promoters of higher prices also point to the $252/mt FOB netback claimed from the ASSC/Iranian business. Again, say Asian sources, the math doesn’t really work out. Iranian buyers usually pay a $5-$6/mt premium. Once that is backed off, said one observer, the real netback looks closer to $245/mt FOB than $250/mt FOB.

While arguing the lower price level, sources in Asia are not quick to dismiss sales at or near $250/mt FOB. One observer noted there probably were sales at that level for smaller tons or for prompt loadings.

Producers remain concerned about Indian buyers IPL and MMTC not nominating vessels to pick up awarded tons. The congestion in the Indian ports is prompting IPL to hold off as long as possible in naming ships. The last thing the buyer, trader, and ship owner want, said one source, is to get the vessel booked, loaded, and sent to an Indian port and then have it sit at anchor for days. For IPL the demurrage costs are not covered in the tender, and thus become their problem. For MMTC, said one observer, the problem is not as great because it will just pass on the cost to the government. So IPL delays taking the tons.

With the delays in loadings for India, some producers are said to be facing storage problems. One source noted that the TCP business might be settled using tons originally slated to be sent to India. Should Indian buyers demand their product, sources say Sabic and others will be able to cover the call with a delay of only a day or two.

Prills and granular continue to run at parity.

Black Sea: Producers are looking at the long positions that traders have taken and claim the price is now $260/mt FOB and up.

The problem for the producers is that no one believes them.

The top price quoted by Asian sources puts the Yuzhnyy market at $252/mt FOB. Sources say once it became clear the market was not moving ever upward, major buyers held back their inquiries. Just as the Indians were in their last roll of the dice on tenders and as TCP entered, Brazilian buyers began to snap up tons. Once it was clear purchases were not going to be as great in the Asian markets as expected, these same Brazilian buyers made themselves scarce.

While Brazil by itself cannot move a market, its presence or absence can have a psychological influence on the market. For now, that is a depressing influence.

Sources say the last-done business in the $250s/mt FOB remains the benchmark for pricing ideas, despite the calls for higher prices from the producers.

Bangladesh: Companies that were given awards to supply much-needed urea to BCIC are still looking for vessels. Reports continue to circulate that Helm and Transammonia are trying to find ships to load Chinese material for delivery to Bangladesh. Reportedly, Liven, which also got an award, has secured its vessel.

Sources say there is no doubt BCIC needs the tons. It has tendered for 600,000 mt since March, but has only received about four cargoes. The reason for the disparity in what the country needs and what it has been able to get falls squarely on bureaucratic mindsets, say sources.

Because BCIC allows and accepts offers from non-traditional companies that come in far below market levels and then fail to perform, the buyer has to reissue tender after tender. Despite a shake-up at BCIC, few in the industry believe things will improve any time soon.

Right now, said one source, not only are there the usual bureaucratic delays, but pressure from opposition political forces against the caretaker government is making the situation worse. If the urea doesn’t arrive, the opposition will claim the government doesn’t care about the farmers. If it does arrive at current market levels, the opposition will claim the government is ripping off the farmers. Either way, said one observer, the government loses. Many of the bureaucrats that have to push through the paper to seal the final deals might become paralyzed as they try to figure out the less destructive path.

On top of the bureaucratic issues, sources say the strikes at the ports and along the internal transportation network are the worst in recent history. Vessel unloading is taking longer than in the past, and at times even once the material is unloaded, it might have to sit on the pier while negotiations take place to get the rail or truck workers back to work.

BCIC will have two more tenders before the end of the year. Each one is for 50,000 mt each of prilled and granular urea. The first closes Dec. 13, and the second closes Dec. 18. Many in the region hold little hope that all 200,000 mt will be awarded and shipped.

China: Rumors persist that Beijing may alter the export tax plan come Jan. 1. Conventional wisdom has Beijing raising the export duty on urea to 30 percent for the first three-quarters of the year and then dropping it back to 15 percent. The higher number discourages exports and helps keep domestic prices low for farmers. The lower rate is when the domestic season is slow. By encouraging exports, the central government hopes to prevent layoffs in the urea factories.

Now, say sources, there is reportedly a plan circulating in Beijing that will set the export duty at 20 percent year-round. This move would be welcomed by international traders, because it would eliminate the uncertainty that has come with the vicissitudes of the export duty. It would also eliminate the current rush to find vessels to ship material before the Jan. 1 deadline.

At present, getting vessels to move tons is difficult. Sources say other commodities, such as steel, coal, and grain, are getting better fees than fertilizer. It seems an announced move by the Chinese government to limit the sales of energy-related items by imposing a surcharge on exports beginning early next year has prompted a number of plants in those fields to ship as much as they can now so they can have more hard currency. Ship owners see more value in the other commodities, and so push requests from fertilizer dealers to the back of the line.

One source noted that he finally got a vessel to pick up a cargo that had been sitting pier side for some time. The deal was consummated some time ago, and even with a generous estimate on shipping costs back then, the current rates are so much higher he is not sure how much profit – if any – will come out of the deal.

Indonesia: The closure of Gresik because of a natural gas pipeline explosion could have a serious impact throughout the country. Sources say with Gresik out of action, the urea it once manufactured will now have to be supplied by another state-owned company. Sources say PIM and Kaltim have already been notified they will have to divert some of their production to Gresik customers.

Local media say that Indonesia may have to import tons to make up for the loss of the Gresik production. International traders dismiss such speculation as nonsense. First, said one source, Indonesia doesn’t have the money to import urea. Secondly, said another, Kaltim has plenty of material in reserve. Chances are the company will blend some of its granular product with the more desired prills.

For the international community, the gas line explosion only means there will be no tons of granular offered by Kaltim any time soon.

NITROGEN SOLUTIONS

U.S. Gulf: Of the active nitrogen barges, UAN were the hardest to assess. Most were putting them in the mid-$160s/st FOB, or $5.16-$5.22/unit.

Eastern Cornbelt: UAN was unchanged at $6.00-$6.25/unit FOB regional terminals, but sources reported little new business to test the spot or prepay markets.

Western Cornbelt: UAN was steady at $5.94-$6.25/unit FOB most regional terminals, with the upper end out of Missouri River terminals to dealers.

Northern Plains: UAN was selling for $6.15/unit FOB for prompt and $6.30/unit FOB prepay, but that prepay price will go up on Dec. 15, according to a source.

Great Lakes: UAN was also on the rise and was in the range of $6.15-$6.45/unit FOB, but at least one producer planned a $0.15/unit increase on Dec. 15.

Northeast: Activity in general was considerably slower throughout the region last week, and will not likely improve until after the first of the year. However, a push was on to hike the price of UAN, which has been in short supply, although a source said the new price would not be known until sometime this week. Another source said the effort was to increase the price of UAN by $10-$15/st, but no business had been done at that level. Higher transportation costs were cited as the primary factor for the higher prices. The price has already increased from the range of $5.67-$5.80/unit FOB Baltimore a few weeks ago to $6-$6.20/unit FOB last week.

Pacific Northwest: UAN-32 postings from Agrium also firmed Dec. 1, with pricing moving on that date to $218/st ($6.81/unit) DEL in northwestern Oregon excluding Malheur County, Washington, and northern Idaho.

AMMONIUM NITRATE

U.S.Gulf: Barge prices were reported to be moving up last week, with players calling the market $202-$207/st FOB.

Western Cornbelt: Ammonium nitrate remained at $250-$260/st FOB in the region.

AMMONIUM SULFATE

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

Western Cornbelt: Granular ammonium sulfate was quoted at $160-$165/st FOB last week. Granular sulfate postings from Agrium will firm on Dec. 15 to $175/st DEL in Nebraska, Wisconsin, Minnesota, and the Dakotas.

Northern Plains: The price was up about $10/st FOB. The delivered price increased from $160-$165/st to $170-$175/st, while FOB prices climbed from $155-$160/st to $165-$170/st. Agrium posted a DEL price of $175/st for rail to North and South Dakota and Nebraska on Dec. 15.

Northeast: Granular ammonium sulfate continued at $147-$160/st FOB, with the high at Philadelphia. Delivered granular sulfate remained at $155-$175/st in the region, depending on location.

Great Lakes: Ammonium sulfate was relatively stable since the last report of $160/st FOB, and was in the range of $160-$165/st FOB last week. Agrium posted a DEL price of $175/st for rail to Minnesota and Wisconsin on Dec. 6.

PHOSPHATE

Central Florida: With CSX planning to raise its rates by another 8 percent on Feb. 1, rail orders for Central Florida DAP and MAP kicked into a higher gear last week. The buyers, of course, want delivery in December and January, but those who buy last may miss out on the lower rail rates, and available tons for those months were growing tight last week.

Another motivating factor last week was that Mosaic planned to raise its price for DAP and MAP $5/st FOB for both Donaldsonville and Central Florida on Friday, Dec. 8. Previously, the company began asking for $5/st FOB on the river, but this was the first increase for Central Florida in many months.

PotashCorp has changed its Central Florida reference price and its actual sale price. The reference price dropped from $245/st FOB to $230/st FOB, and its actual sales price switched in the other direction from $220/st FOB to $230/st FOB, which matches the reference price.

At this point, no one in the industry believes the spring season will be anything but spectacular – or at least very good. Dealers have let their phosphate bins go empty, and many were attempting to bring in product last week to make ready for the spring rush. Many of the large traders were making buys for their own systems, as opposed to resale, which had been the case for most of the fall season.

Meanwhile, Central Florida is not only serving its rail market and much of the export, but has been moving tons to the river due to demand. The Donaldsonville processing plant was still operating at about 20 percent capacity, while the ammonia unit was being repaired after an explosion and fire in November. That job was not expected to be complete until sometime in January, so supplies will remain tight – while demand increases.

Prices in Central Florida became firm last week. The Central Florida DAP price range remained at $218-$219/st FOB, but discounts were no longer available. This week the price from Mosaic should be $5/st FOB higher, and the price range will likely change. Mosaic discounts MAP $4/st from the price of DAP, while CF has no price difference. PotashCorp’s Central Florida reference price was adjusted to $230/st FOB from $245/st FOB. In Texas, Agrifos’ truck prices for DAP or MAP were up $5/st FOB to $250/st FOB for either. That company also matches the rail prices of other producers. Agrifos was sold out through the end of January.

U.S. Gulf: Warehouse activity came to a grinding halt in much of the Midwest last week after frigid temperatures, snow, and ice swept through. Farmers will now have to wait until their fields freeze before going back to work. However, that was not enough to stop sales on the wholesale market. Several sources, both producers and traders, reported they had bought or sold large numbers of DAP and MAP barges. Most of the buyers planned to put what they obtained into their own warehouse systems to make ready for spring. One of those buyers of a large number of barges said 95 percent was for its own system. Only a few said they had resold any of what they bought.

Virtually everyone in the industry was salivating over the prospects for the spring season, which is why the big build-up has begun. Although phosphate sales were up significantly last week, nitrogen products were moving even faster, because the supply is down and the price has been on a steady upswing. DAP could soon figure into that market because of its nitrogen content, which could make the domestic market even tighter. The prospect for the next several months is for higher prices. Future sales, which are not included in the price range, were running between $225/st FOB January and up to $231/st FOB for March. Future prices will likely continue to increase.

A few who bought barge tons a month or so ago at prices in the teens will be taking delivery fairly soon – but don’t expect to see any bargains offered for those deals. Most of those buyers will be taking the barges for their own facilities, and those that are resold will be not be cheap.

Mosaic planned to raise its price of DAP and MAP for both the river and Central Florida by $5/st FOB on Dec. 8. The company previously increased its price by $5/st FOB for the river about a month ago, but that was the first increase for Central Florida in many months. A source said the company was not loading barges at Donaldsonville, but railcars instead.

CF was said to be sold out of MAP until Feb. 1. It also raised its asking price for forward sales in January to $227/st FOB, with $231/st FOB for February, and $234/st FOB for March, April, and May.

Miss Phos was said to be busy loading tons for export under its still-existing contract with PhosChem, which has helped tighten the NOLA DAP barge market. When the PhosChem contract expires at the end of the year, Miss Phos will sell much of its production through Transammonia, which will use it for export. Export tons are a special blessing for Miss Phos, because it currently must discount its barges to make up the difference for the trip to New Orleans – about $6.50/st FOB – and that cost could increase to as much as $12/st FOB after the first of the year, when freight rates increase. However, it can load vessels for overseas delivery for virtually no cost, so its netback will be higher.

The NOLA DAP barge price increased last week from $218-$223/st FOB the previous week to $222-$225/st FOB. Expect prices to increase this week, say sources, after Mosaic hikes its price and demand continues to be strong.

Eastern Cornbelt: DAP and MAP were steady at $255-$265/st FOB in the region, with most sources reporting the common dealer price out of river points at the $260/st FOB mark. TSP remained at $235-$245/st FOB where available, with the low on the river and the upper numbers inland. 10-34-0 was unchanged at $255-$265/st FOB in the region.

Western Cornbelt: DAP and MAP were steady at $255-$265/st FOB in the region. TSP was pegged at $235-$245/st FOB, with the low on the river and the upper end inland. 10-34-0 was unchanged at $255-$265/st FOB, with the low in Nebraska and the upper numbers reported in Iowa.

Northern Plains: DAP increased slightly from the range of $260-$262/st FOB to a firmer price of $265/st FOB, as supplies tightened during the past few weeks. MAP was running about $2/st FOB less than the price of DAP. Wholesale phosphate prices were on the rise last week. 10-34-0 was said to be $270/st FOB.

Great Lakes: Wholesale prices for phosphates began to increase last week and were still in the range of $265-$280, depending upon location, but will increase during the next few weeks. MAP was $262-$275/st FOB, and expected to increase as supplies shorten. TSP, where available, was $245/st FOB.

The price of 10-34-0 was said to be $260-$274/st FOB, depending on location.

Northeast: DAP and MAP were still in the range of $265-$270/st FOB in the region, with the low reported to dealers FOB E. Liverpool. 10-34-0 was $265/st FOB terminals in upstate New York, up from $260/st FOB as of Dec. 1.

U.S. Export: PhosChem had its best week in a month or so last week, when it sold more than 100,000 mt. The largest sale was made into Brazil – 48,000 mt of DAP at a price that should result in a FOB price of $254-$255/mt. That was an unusually large buy of DAP for that country at this time of year. In addition, it made a DAP sale of 45,000 mt into India at $250/mt FOB, and another DAP deal into Argentina – 12,000 mt at $250/mt FOB. While those sales were within the existing export price range, they came at a time when the domestic market was tight. That will likely result in higher prices for both markets within a short period.

The export DAP price range last week was $250-$255/mt FOB, with the top of the range down slightly from the previous week’s $250-$257/mt FOB.

POTASH

Eastern Cornbelt: Potash was quoted at $201-$207/st FOB most regional warehouses.

Western Cornbelt: Potash was $201-$208/st FOB regional warehouses, depending on grade and location, with talk of another increase after the first of the year.

Northern Plains: Potash pricing FOB Saskatchewan mines remained at $175-$178/st for standard, $181/st for coarse, and $183-$188/st for granular. Delivered potash ranged from $207-$212/st in the region.

Great Lakes: Potash prices remained in the $202-$207/st FOB range at regional warehouses, and $210-$212/st DEL.

Northeast: Potash still had a broad range at $210-$246/st DEL in the region, depending on grade and location, with the high reported for 62 percent soluble potash. The warehouse market for granular potash FOB E. Liverpool was $212/st.

SULFUR

Tampa: Both PotashCorp and Mosaic began negotiating with their suppliers for new contract prices for the first quarter of next year. PotashCorp was said to be seeking a rollback of $6/lt, but the amount of the reduction sought by Mosaic was not known. Speculation within the industry was that prices will decline between $3 and $5/lt for the next quarter, so PotashCorp was pretty close to the target. Simply the fact that negotiations for the next quarter were already underway more than three weeks before the end of the contract period was unusual, and may be an indication the price will go down. A source said the negotiations will be concluded more quickly than normal, because all sides were aware of the situation.

There is currently an oversupply of sulfur, say most sources. One said Mosaic has been getting a lot of calls asking if it would buy sulfur railcars, which were in abundance last week. In addition, in Vancouver, sulfur sources said they expect to receive an average price in 2007 in the high $30 range, which was slightly below the current price.

However, estimates were that sulfur will become more scarce later in 2007, as new projects requiring its use on the world market get into production. That will not likely result in any price increases, though, because the large amount already on the ground will supplement production. In Alberta alone, an estimated 11-12 million tons was being stored. So, even with the higher demand, there should be plenty of sulfur to go around, and the price will not likely go back up.