AMMONIA

U.S. Gulf: PotashCorp was reported to have signed on to the $310/mt DEL rollover for second-half November, following other players. In the meantime, sources said price ideas are higher for NOLA, though actual confirmation of new numbers was scarce.

Eastern Cornbelt: Sources reported firming nitrogen prices, but fall movement of ammonia, phosphates, and potash remained limited in the region due to continued wet conditions. Most sources tagged the ammonia market last week at $355/st FOB to dealers for spot tons, with spring prepay being offered in the $380-$385/st FOB range in Illinois and Indiana. Sources said those spring prepay numbers were generating some buyer interest at mid-month.

Western Cornbelt: Ammonia was moving briskly in many sections of the region at mid-month. The market was quoted in a broad range, with the low reported in Nebraska at $335/st FOB for open tons last week. The upper end, by contrast, was quoted by Iowa sources at $370/st FOB for new reference levels, with limited spot tons for sale. Several sources also confirmed some interest in spring prepay, which was reportedly being offered in Iowa in the $380-$385/st FOB range last week.

Northern Plains: Ammonia pricing continued to cover a broad range in the region, although spot numbers were generally up from last report. Minnesota sources tagged the dealer market at $355/st FOB. Delivered ammonia in North Dakota was reported at $360/st out of Leal, N.D., and referenced as high as $405/st to dealers out of Dakota Gasification’s Beulah, N.D., facility. One supplier was offering forward contract ammonia for December at $360-$385/st FOB regional terminals.

Eastern Canada: No current FOB pricing was reported for anhydrous ammonia in the region. On a rail-DEL basis to Ontario and Quebec locations, one regional supplier was referenced at $587/mt, up from an October list price of $525/mt rail-DEL. That reference price took another increase on Nov. 16, however, reportedly moving to $614/mt rail-DEL in the region.

Black Sea: Demand remains strong enough to keep the market tight, say Asian sources. The price out of Yuzhnyy is edging up, with sources now calling the market $245-$247/mt FOB. The reason for the increase, say observers, is speculation that the U.S. market will begin heating up sooner than expected. Asian sources point to weather reports that this winter may be drier than anticipated. This will allow farmers in the Midwest to begin ammonia applications earlier and may even provide an opportunity for a second application.

Reports that the Ukrainian natural gas prices could settle in at US$5.00-$5.50/mmBtu means, said one source, the break-even price for ammonia will be $220-$230/mt FOB. With those numbers in mind, he said, and with the Mideast fully booked and apparently running short, there is nothing to stop the Yuzhnyy price from moving up.

Producers at the Asian IFA meeting in Thailand last week were already talking about $250/mt FOB. Even though business has not been done at that level, Asian buyers are convinced it is only a matter of time.

New and higher freight rates are beginning to hit purchases made from Black Sea producers. The higher rates are the result of travel limitations imposed for passing through the Bosporus Straits. Only one ammonia vessel is allowed to travel through the straits at a time, and none are allowed to pass through at night. With fewer daylight hours as winter approaches, the opportunities for passage reduce accordingly.

Sources say even if the price of the product remained the same – which it isn’t – buyers would end up paying more just because of the increased transportation costs to accommodate passage through the straits.

Middle East: Producers are fully booked, and demand is not slackening. Mitsui reportedly purchased 12,000 mt from Qafco at $260/mt FOB for India. Other business into India confirms the higher prices, with one cargo showing a netback of about $259/mt FOB and another at $265/mt FOB.

Producers at the IFA meeting in Thailand last week said buyers would have to start at $280/mt FOB before any serious negotiations could begin. At the same time, they do not want to talk about anything for this month or early December. An Asian source noted that producers would only discuss late December or early January possibilities. At the same time, said one source, the producers are hesitant to commit to purchases for that timeframe. The source – a buyer – said the most likely reason is that producers expect prices to move up even faster as the year wanes, and they want to make sure to squeeze every possible penny out of their deals.

South Korea: Namhae concluded its 2007 demand talks. Next year will look the same as this year, said one source familiar with the talks. In the end, the South Korean industrial giant will take the same amount of tons from the same three suppliers it has used in the past – Mitsubishi, Yara, and Agrium. Sources say the need for Agrium to shut down its Kenai plant during the winter months to ensure enough natural gas for residential use caused some concern in the talks, but at the end of the day, Namhae was willing to continue its long-term relationship with the firm.

Prices for each cargo will be negotiated as the time for shipment approaches.

Overall demand into South Korea remains soft, say sources. The caprolactum producer Capro remains shut down. This facility takes 70-75,000 mt/y of ammonia. The plant has been down because of strikes, and there is no indication of it coming back online soon.

Indonesia: The KPI plant was slated to shut down Nov. 18 for a routine 2-3 week maintenance check. The joint-venture operation has been planning the shutdown for several weeks. Sources say the plant built up some reserves and arranged for alternative supplies to ensure no customer was left wanting for ammonia. When the plant shut down previously, additional problems appeared that caused delays in the reactivation of the facility. This time, say observers, the turnaround should stay on schedule.

India: Buyers continue to dominate the ammonia market. Sales to FACT from Qafco, via Mitsui, and Transammonia show delivered prices moving upward. The Qafco product reportedly went for $299.50/mt CFR for 6,000 mt, and the Trammo business was at $288.50/mt CFR for 7-8,000 mt. Sources say the higher price for the QAFCO material was because FACT wanted prompt delivery. The producer tacked on a premium for quick loading.

UREA

U.S. Gulf: Price ideas during the week spanned a broad range, though for the most part they settled in the higher end of the range instead of the lower. By late in the week, several players said prompt granular barges had been trading in the $240-$246/st FOB range. Suggestions that product could be bought early in the week as low as $225/st FOB were met with great skepticism.

Players said the higher numbers are justified due to the strong international market and a lineup of imports that is expected to be below those of last year. Add to that general expectations of very good spring demand. Major importers are expected to be bringing in vessels in the next few weeks. If NOLA prices continue to move up, extra vessels may be allotted for the first quarter.

Forward business was being quoted from the high $240s for December, and well into the $250s for January and February. Prills were working hard to keep up with granular, with sales reported in the high $230s/st FOB.

Eastern Cornbelt: Granular urea pricing was also on the rise, with most sources tagging the dealer market at $265-$275/st FOB in the region. The low was reported FOB Cincinnati, Ohio. Agrium raised its granular urea postings again on Nov. 15, moving the price up $10/st to $285/st rail-DEL in Illinois, Indiana, Ohio, and Michigan. The company’s warehouse postings also firmed on Nov. 15 to $280/st FOB Garrett, Ind., and $285/st FOB Saginaw, Mich., a $10/st increase from Agrium’s Nov. 8 urea postings.

Western Cornbelt: Granular urea pricing was up from last report, with the low end quoted at $265/st FOB spot river terminals and for delivered tons in Nebraska from Oklahoma shipping points. Sources also reported new reference prices as high as $280/st FOB to dealers, effective Nov. 16, from some regional suppliers, based on firming barges prices at the Gulf.

Northern Plains: Granular urea was also up from last report, with tight supplies reported. The market was quoted at $270-$275/st FOB the Twin Cities and Carrington, N.D., with delivered urea in North Dakota pegged firmly at the $280/st mark. Spring prepay tons were reportedly being offered at $285-$290/st FOB the Twin Cities and up to $295/st FOB Carrington.

Agrium’s granular urea postings firmed again on Nov. 15 to $280/st rail-DEL in Minnesota, Wisconsin, and the Dakotas, and $275/st FOB Shakopee, Minn., and North Dakota warehouses at Alton, Carrington, Colfax, Marion, and Scranton. Those levels were up $10/st from the company’s Nov. 8 postings.

Northeast: Granular urea was quoted at $265-$270/st FOB, up from last report, with the low at E. Liverpool, Ohio, and the upper end reflecting dealer pricing FOB Baltimore, Md., and Philadelphia, Pa.

Eastern Canada: Granular urea was quoted at $335-$364/mt FOB in the region, up from last report. Reference prices for rail-DEL urea in Ontario and Quebec had also increased, from $325/mt last month to $360/mt earlier in November, and finally to $375/mt rail-DEL on Nov. 16. Several suppliers were reportedly unloading urea cargos at Hamilton, Ont., in mid-November.

Western U.S.: Agrium once again raised its granular urea postings in the Pacific Northwest and Western regions. Effective Nov. 15, warehouse postings in Washington firmed to $285/st FOB, up $10/st from the company’s Nov. 8 reference levels. Delivered urea postings also moved up $10/st on Nov. 15, to $272-$277/st in Montana and Wyoming, depending on location; $290/st in Washington, Idaho, Oregon and northern Nevada; $295/st in northern and central Utah; and $300/st in southern Utah.

India: Against all logic, MMTC closed its tender Nov. 16. Eight companies offered close to 400,000 mt. Sources in Asia and Europe were puzzled as to why the tender was called at this time. The ports are so congested that IPL has reportedly told its Mideast suppliers to hold off loading tons for a while. The government has ordered priority slots to fertilizer and grain vessels, causing other cargoes to sit at anchor. Sources say the calling of the tender was an example of bureaucratic mentality gone wild.

The Ministry of Fertilizer sees that it does not have enough fertilizer on hand, so it tells MMTC it needs more tons. MMTC dutifully agrees, and issues a tender. Supposedly at no time did anyone in these government entities look to see that the reason the urea was not in the hands of the farmers was port congestion.

The problem of clearing the ports is not that of the MOF or MMTC, so both are now pointing fingers at the port authority.

At the same time, MMTC reportedly is unconcerned about the extra costs of having its cargoes sit at anchor while waiting for an unloading berth. The costs of the wait are being passed on to the agents. The other major buyer, IPL, does not have that luxury, and has reportedly been calling suppliers who won contracts in the previous IPL tenders to hold off loading cargoes until a short berthing time can be arranged.

Sources say the latest MMTC tender caused a psychological bump in the market. Traders reportedly added in the demurrage costs to their offers. The Middle East producers simply moved the price up to a level that they have wanted to see for some time but have failed to achieve.

For the most part, the validity dates for the offers expired over the weekend. Reportedly, MMTC spent Thursday and Friday looking for extensions on the offers.

Offers in the tender follow:

Even if MMTC scraps the tender, as many think will happen, sources say the damage to buyers has been done. Sources in Asia and Europe say a new psychology has permeated the market that leans toward higher prices for all.

Middle East: The offers into the MMTC/India tender reflect prices the producers would like to see, say sources. From the offers made it is apparent the producers also see prills and granular running at parity for the time being.

For Asian and European sources, the driving force in the Middle East granular market is the U.S. The MMTC tender was just a diversion that allowed producers to show their pricing intent a bit early.

Even if MMTC scraps its tender, sources say granular offers can easily go to the U.S. once farmers there start buying. Producers would prefer sales to the States anyway, said one source. The netback is generally better.

Right now producers of prills and granular are showing some concern about the port congestion issues in India. Reportedly, IPL has not nominated vessels to pick up tons that should be at Indian ports by now. Likewise, MMTC has been slow to name ships for November and December pick ups.

The producers are happy for the business to India, said one Asian observer, but if vessels don’t start arriving soon from Indian buyers, the storage facilities in the Middle East will start filling up beyond producers’ comfort levels.

At some point, said an observer, the producers will turn around and start sending tons to the States or other locations just to relieve the storage pressures.

Producers throughout the region are confident the price will go up, but none can point to concluded business at their desired level. Industry watchers point to not only the Arab Gulf producers offering material at $244-$246/mt FOB, but also to the Egyptians, who are saying $240/mt FOB is their new price floor.

With no sales yet secured at those higher levels, say sources, the price out of the region remains in the mid-upper $220s/mt FOB. Eventually – possibly even by the end of this month – prices could reach the $240s/mt FOB, if for no other reason than the price out of the Black Sea is going up and the U.S. market is looking for tons.

Black Sea: The $238/mt FOB Yuzhnyy basis offer from Keytrade set a tone for the industry last week. Everyone is now looking at higher prices out of the Black Sea.

To add fuel to the fire, sources say Turkish buyers have been accepting prices from Yuzhnyy and Romania that have a netback of $230-$235/mt FOB.

A continued problem of shorts being covered at higher prices and top-off tons being purchased at a premium has moved the Yuzhnyy price up.

Sources say while business has been discussed in the mid-to-upper $230s/mt FOB, for now $230-$235/mt FOB is a safe bet for many in the industry. At the same time, sources say some older cargoes are still being loaded from the mid-$220s/mt FOB deals. Recent deals to Latin America still show netbacks around $220-$225/mt FOB.

At least one major trading house is said to have moved the market by securing tons at higher prices, even though the end-user price will cause the trader to lose money. Eventually everything will even out, said one trader, as deals from a number of sources earn enough to cover any Black Sea losses. And in the end, said one source, if the price keeps going up, the positions taken this month will look good when the TCP/Pakistan tender is called Nov. 21.

Bangladesh: The riots and strikes that are wracking Bangladesh are affecting the ability of BCIC to issue letters of credit and finalize the awarding process from its most recent tender. Sources say companies that were expecting to receive the necessary paperwork to begin the process of loading and shipping tons to BCIC are now in limbo. With the government paralyzed by civic disorder, sources say no one is sure what will happen with the tender orders.

Observers note Bangladesh needs the more than 300,000 mt that was to have been awarded from the last tender. Reportedly, letters of intent to buy were sent out a couple of weeks ago so that the winners could begin to arrange for the tons to be shipped. Formal notification of being granted an award and letters of credit were to have followed immediately after the LOIs were issued. Sources say the paperwork for the final steps was not completed before the disturbances began.

Vietnam: Normally an active urea buyer, Vietnam remains quiet. Sources say there are two major reasons for the lack of interest in the international market. The first is that Phu My, the major producer of Vietnamese urea, regularly lowered its price each time there was a shift in the international market. Now, with prices moving up, Phu My managers are still matching prices – but this time they are following the international curve instead of preceding it.

The other reason is that farmers are using more NPKs, and at the same time, NPK producers are taking more ammonium sulfate instead of urea as the N component. One trader noted that using AS instead of urea represents a savings of $5-$6/mt.

Pakistan: TCP is expected to call a tender Nov. 21. Sources say the company will try for at least 100,000 mt, but may take more. The tender will provide a psychological floor to the market, especially on material from the Black Sea. Once the TCP business is merged with the short coverings and Indian business, sources say there is no reason for the Black Sea to soften.

NITROGEN SOLUTIONS

Eastern Cornbelt: UAN-28 was quoted at $163.80-$174.20/st ($5.85-$6.22/unit) FOB regional terminals, with the upper numbers quoted by Ohio sources for spring prepay tons. Prepay offers were reportedly limited at mid-month, however, and some sources were doubtful that the low end of the range could still be had for spot tons.

Western Cornbelt: UAN pricing was firming, with the market quoted at $5.95-$6.20/unit FOB regional terminals for new sales.

Northern Plains: UAN was tagged at $6.00-$6.25/unit FOB Minnesota terminals, with delivered UAN-28 reported at the $180/st ($6.43/unit) mark in North Dakota out of Canadian shipping points.

Northeast: The UAN-30 market was quoted at $170-$174/st ($5.67-$5.80/unit) to dealers FOB Baltimore, Md., and Philadelphia, Pa. There were reports too of some spot sales taking place in the upper-$160s/st FOB at mid-month, but sources said these levels are short-lived, with replacement costs expected to drive a $7-$8/st spot price increase at East Coast terminals in the near term.

UAN-32 out of terminals in upstate New York was quoted at $208/st ($6.50/unit) FOB, with an increase to $212/st ($6.63/unit) slated for Dec. 1.

Eastern Canada: UAN-28 was pegged at $254-$265/mt ($9.07-$9.46/unit) FOB in the region.

AMMONIUM NITRATE

Western Cornbelt: Ammonium nitrate remained at $245-$250/st FOB in the region.

Eastern Canada: Ammonium nitrate pricing was unchanged at a nominal $365-$385/mt FOB.

AMMONIUM SULFATE

Eastern Cornbelt: Granular ammonium sulfate remained at $155-$160/st FOB in the region.

Western Cornbelt: Granular ammonium sulfate was steady at $155-$165/st FOB in the region.

Northern Plains: Granular ammonium sulfate was unchanged at $155-$160/st FOB and $160-$165/st DEL in the region.

Northeast: Granular ammonium sulfate was steady at $147-$160/st FOB, with the low at Hopewell, Va., and the high at Philadelphia. Delivered granular sulfate was unchanged at $155-$175/st, depending on location and quantity.

Eastern Canada: Ammonium sulfate remained in a broad range at $195-$230/mt FOB, with the low for steel mill grade product and the upper end for good quality granular sulfate.

PHOSPHATE

Central Florida: Last week, rumor held that CF was in the process of finalizing a fill program, which could be revealed within the next week or two. What form the program might take was totally speculation. Producers, especially Mosaic, have been attempting to get the price on the river to go up relative to the Central Florida price, at least to somewhere around $10/st FOB. Currently, Central Florida producers have been offering DAP as low as $218/st FOB, but mostly to preferred customers, and have been holding firm with no discounts available. For a fill program, that could change. If CF does a fill program, Mosaic will likely follow. Mosaic’s normal strategy for fill programs has been to offer it for a brief – like a three day – period, and then raise its price to a new higher level. A snooze and you lose proposition.

With the prices for corn and wheat higher than they have been for months, and with more acres of corn predicted to be planted this year, optimism in the fertilizer industry has been on the upswing. Dealers in some areas were taking no chances, and were filling their bins last week in order to make certain they have phosphates on hand when the spring season starts. Phosphate prices have stopped their downward trend and began moving up two weeks ago, at least on the river. Unit trains were moving last week in Central Florida, but most of that was under existing contracts. Spot sales were, well, spotty.

One area of the country where optimism was absent last week was in the Northeast, where dairy farmers were caught in an unfortunate situation. Milk prices remained low, but grain prices, which their stock consumes, were up, along with fertilizer prices. Warehouse activity for other forms of agriculture in that area was going well.

DAP prices in Central Florida continued in the range of $218-$219/st FOB, but discounts were unavailable. As a result, traders for the area were planning to charge as much as $221/st FOB. Mosaic discounts MAP $4/st from the price of DAP, while CF has no price difference.

PotashCorp’s Central Florida reference price was still at $245/st FOB. In Texas, Agrifos’ truck prices for DAP or MAP were $245/st FOB for either. That company also matches the rail prices of other producers. Agrifos has sold out into January after heavy demand from areas outside of Texas, where some drought continues.

U.S. Gulf: With Mosaic’s Faustina processing plant producing at only about 20 percent capacity and much of Miss Phos’ product destined for offshore locations, barges on the river system were running thin last week, and prices were rising. Faustina could run at a much higher level if the company chose to buy ammonia, but that was unlikely to happen. If it did, there would be two negative consequences. First, it would put pressure on the ammonia market and the entire system could see higher prices. Second, Mosaic is seeking to get the price of NOLA DAP barges to go up so that it will have the more traditional price difference from Central Florida – $10-$15/st FOB. Mosaic’s goal is to not shoot itself in the foot.

Last week, it appeared demand was outstripping supply on the river. Few floaters were available, and more barges were being purchased to be loaded in New Orleans. That has been putting pressure on prices. Early last week a few sales were made as low as $218/st FOB, but by the end of the week sales were confirmed as high as $222/st FOB. However, most of the transactions were in the $219-$221/st FOB range. Meanwhile, warehouses on the Arkansas increased their price for DAP from $252/st FOB to $255/st FOB.

The two most active areas last week were along the Illinois and Arkansas rivers, where warehouse activity was booming. Warehouse operators in the most northern areas of the Midwest still capable of receiving barges were refilling bins as fast as possible. Farmers have been telling dealers they are more optimistic for the spring season due to higher wheat and corn prices, and projections were that as much as 7.5 million more acres of corn will be planted. More corn acres translates into more fertilizer sales. Virtually everyone believed the spring season will be exceptional, and most warehouse operators want to be in a position to take advantage of it. With the price of phosphates on the rise, buying now for later makes sense. However, one source noted that while business has been much better during the past couple of weeks, “It’s still not a run.”

The NOLA DAP barge price range for the Gulf market last week was $218-$222/st FOB, up from $216-$221/st FOB the previous week. Last week’s low price will likely not be available this week, say sources, so buyers should expect prices to either stabilize or increase slightly. However, activity may slow due to the Thanksgiving holiday, when many operations will shut down on Wednesday and not restart until the following Monday.

Eastern Cornbelt: Periods of brisk plowdown movement in Illinois in recent weeks reportedly led to some phosphates supply issues, with temporary outages reported earlier in the month at Pekin and Naples. The shortage has not impacted prices, however. DAP remained flat at $253-$263/st FOB last week, with the low out of spot river warehouses. MAP was quoted at $250-$260/st FOB in the region, with the low end confirmed by Ohio sources out of river locations last week.

TSP was a nominal $235-$245/st FOB in the region, with the low on the river system and the upper numbers inland. 10-34-0 pricing remained at $255-$265/st FOB.

Western Cornbelt: Some spot shortages of phosphates were reported in the region earlier in the month. The DAP market remained at $255-$265/st FOB, with the low on the river and the upper numbers inland. MAP was quoted in roughly the same range, with delivered MAP at $270/st in Nebraska, and $20-$23/st freight from Oklahoma shipping points.

TSP remained at $235-$245/st FOB in the region, with the low on the Mississippi River. 10-34-0 was unchanged at $255-$260/st FOB in Nebraska and $260-$265/st FOB in Iowa.

Agrium’s phosphoric acid prices are slated to move on Dec. 1 to $545/st for merchant grade and $555/st for super phosphoric acid in Iowa, Missouri, Nebraska, Colorado, Kansas, Oklahoma, New Mexico, and Texas. A $5/st increase is scheduled for both products in January, and again in February and March.

Northern Plains: DAP was steady at $260-$262/st FOB the Twin Cities and Winona, Minn., with MAP quoted at $258-$260/st FOB. Delivered MAP was quoted at $280/st DEL in North Dakota. 10-34-0 was reported at $270/st FOB Grand Forks, N.D.

Agrium’s phosphoric acid prices are scheduled to move on Dec. 1 to $545/st for merchant grade and $555/st for super-phosphoric acid in Minnesota, the Dakotas, and Wyoming. A $5/st increase is scheduled for both products in January, and again in February and March.

Northeast: Phosphate pricing was down from last report. DAP and MAP were quoted at $265-$270/st FOB in the region, with the low end reported to dealers FOB E. Liverpool. 10-34-0 was $260/st FOB terminals in upstate New York, with a move to $265/st scheduled for Dec. 1.

Eastern Canada: MAP was pegged at $363-$373/mt FOB the warehouse for a pay-and-store program for spring. DAP was quoted at $368-$385/mt FOB, with TSP unchanged at $341-$343/mt FOB in the region. Sources said a phosphate vessel was slated to arrive at Hamilton at the end of the month.

Western U.S.: Effective Dec. 1, Agrium’s delivered phosphoric acid prices are slated to move to $555/st for merchant grade and $565/st for superphosphoric acid in Arizona, California, Idaho, Montana, Nevada, Oregon, Utah, Washington, and Wyoming. A $5/st increase is scheduled for both products in January, and again in February and March. In May, merchant grade acid will take an additional $5/st increase to $575/st rail-DEL to those locations.

U.S. Export: PhosChem made two export phosphate sales last week. One was to Pakistan for 40,000 mt at $257/mt FOB, the other 25,000 mt into South America at $250/mt FOB. In addition, sales of 6,000 mt and 10,000 mt were made into Central America by a non-PhosChem company at prices between $253/mt FOB and $257/mt FOB.

In what could be good news for phosphate producers, corn did well in Brazil and Argentina this year, and buyers in those countries, where inventories are low, may decide to act sooner – sometime between December and February – to start placing orders, if it appears prices will be higher in the spring, which appeared likely last week.

PhosChem submitted a bid for an Indian tender for 200,000 mt, but no decisions had been made as of late last week. PhosChem will ship two panamax-sized vessels to China in November and at least one in December under its contract with the Chinese co-op.

Long-term predictions were that PhosChem will continue to do well for at least the next three years, but in 2010 more competition will be online. Saudi Arabia will have its new phosphate processing operation up and running, and India will likely be its main customer, due to lower transportation costs.

The export DAP price range last week was $250-$257/mt FOB, compared to $253-$257/mt FOB the previous week.

India: RCF has issued a tender for 122,500 mt of DAP closing Nov. 16, and offers are to remain valid until close of business Dec. 15. Offers are to be made on both FOB and CFR basis to the ports of Dharamtar, Mumbai on the West Coast, and Chennai and Vizag on the East Coast for shipments December, 2006 and January, 2007.

Iffco is planning to produce between 800-900,000 mt/y of DAP and complex fertilizers from its Paradip plant in the current financial year (2006-07). Currently, the plant is producing 2,500-3,000 mt/d of DAP and complex fertilizers. This amounts to roughly 50 percent of the installed capacity of the plant. Company sources said that capacity utilization would be around 80 percent by January, 2007, with full capacity utilization expected by March-April, 2007.

Iffco claims to have done a significant amount of work to upgrade the Paradip plant, which was taken over from Oswals in October, 2005. The first of the two sulfuric acid plants has already been revamped, and work on the second plant is currently occurring. The second plant will be ready for re-commissioning by the end of December, 2006. It is essential that both sulfuric acid plants work in tandem for Iffco to produce phos acid to run the plant at full capacity.

Iffco sources said that repairs on the second sulfuric acid plant are not hampering the production of DAP and complexes. This is because acid is also being simultaneously imported to ensure the production of finished fertilizers.

POTASH

Eastern Cornbelt: Potash pricing also appeared to be up in the region, with most sources tagging the warehouse market last week in the $201-$204/st FOB range. One source said his suppliers are telling him not to expect a rollback, and to look for another producer pricing increase this winter.

Western Cornbelt: Most sources said potash pricing was now firming to new postings, with new sales reported in the $201-$209/st FOB range in the region. While some claimed cheaper Russian tons were still available, most said this material was booked earlier and did not reflect current replacement costs.

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.

Northeast: Potash was quoted in 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 referenced at $212/st.

Eastern Canada: Out of the warehouse, potash was quoted last week at $288-$301/mt FOB in the region, depending on grade and location. Sources said pricing FOB the mine was technically up $10/mt, but the new levels remain untested. Coarse potash was also quoted at the $301/mt mark on a rail-DEL basis in Ontario and Quebec.

SULFUR

U.S.: If it weren’t for bad news, there probably wouldn’t be any news at all about sulfur these days. The price of shipping sulfur to China from California was said to be about $50/lt last week, which puts even more pressure on refineries to help priller operations stay afloat. The world market continued to sag last week, and the U.S. market was actually paying a premium in comparison. Far more Gulf Coast refiners will be committing more tons of sulfur for prill next year with plans to export it on the world market, which already has more than it can possibly use.

What Canadian producers will do continues to be the big question. Last week rumor held that Ram River may cease remelting, which might be a good idea, since getting rid of the new molten material produced was becoming increasingly difficult.

With the first quarter of 2007 still in the distant future, predictions were that phosphate producers will pay less for sulfur, possibly as much as $5/lt, than this quarter.

India: Under its tender held Nov. 6, FACT received the following offers for three lots of 15,000 mt to arrive from Dec. 25 through Feb. 4: Transfert 3×15,000 mt ex Mideast/Iran at US$56.65/mt FOB sight or US$71.65/mt CFR sight; Swiss Singapore ex Mideast Iran, 15,000 mt at US$62.30/mt FOB sight or US$73.74/mt CFR sight; and 30,000 mt at US$63.20/mt FOB sight or US$74.91/mt sight. No decision has been made as of yet.

MARKET NOTES

Pakistan: Food and Agriculture Minister Sikandar Hayat Bosan has indicated that the subsidy on phosphate and potash will not only continue, but its rate will be raised to Rs400 ($6.66) from Rs250. He denied that there was any fertilizer shortage and added that presently 400,000 mt of DAP stocks were available with the government. He further said that import of more quantities had already been ordered to avoid any shortage of fertilizer in the Kharif season and to ensure that the benefits of the subsidy reached the growers. He said the government was encouraging growers to use potash and phosphate instead of urea to get increased per acre yield. Bags of urea are being sold at a subsidized rate of Rs500 against its actual price of Rs1,200 per bag, because the country was producing 85 percent of total urea demand while only 15 percent was being imported, he added. The minister ruled out any increase in prices of fertilizers.

India: An unprecedented jump in fertilizer and wheat imports during the last couple of weeks and resultant chaos at the ports, especially on the West Coast, has prompted the government to mandate the Kandla port to develop a highly mechanized five million mt fertilizer handling facility. The country’s largest port will commission a study early next month for the proposed project, which will be completed by February or March next year, and will be followed by work on the project. The port would spend between Rs2.00 to Rs2.5bn on new proposed capacity, which would exclusively handle fertilizer imports. The idea is to bring 5 million mt of fertilizer that arrives on the West Coast exclusively through the Kandla port. The total dry cargo handling capacity of the port would increase from the present 14 million mt to 19 million mt. The new fertilizer handling facility will be located at the Tuna port, very close to Kandla. KPT has already launched work on the Tuna port. The road connecting the Kandla port with Tuna, as well as other infrastructure, is being created by KPT.