| Company | Symbol | Price | Week Ago | Year Ago |
| Producer | ||||
| Agrium | AGU | 23.17 | 23.25 | 21.03 |
| CF Industries | CF | 13.34 | 14.02 | NA |
| Mosaic | MOS | 14.86 | 14.96 | 16.36 |
| PotashCorp | POT | 85.65 | 83.77 | 101.66 |
| Terra Industries | TRA | 6.43 | 6.23 | 7.40 |
| Terra Nitrogen | TNH | 22.75 | 21.79 | 28.71 |
| Distribution/Retail | ||||
| Andersons Inc. | ANDE | 42.60 | 41.92 | 19.96 |
| Lesco | LSCO | 9.22 | 15.56 | 12.50 |
| Scotts | SMG | 40.02 | 42.47 | 36.545 |
| UAP | UAPH | 18.51 | 21.94 | 17.25 |
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ConAgra adding UAN storage capacity; new tanks capable of handling ethanol
ConAgra International Fertilizer Co. has commenced construction at four of its locations to expand liquid UAN storage capacity. The construction is expected to be completed Oct. 1, 2006.
In addition, all of the new tanks will be capable of handling ethanol so that ConAgra can take advantage of possible opportunities in the burgeoning ethanol market.
The locations with upgrades include:
- Corpus Christi, Texas – two more tanks of 10,000 st each, which will give the facility total storage capacity of 72,000 st of UAN.
- Hastings, Neb. – expanding by an additional 10,000 st, making total storage of 34,000 st (24,000 st UAN and 10,000 st ammonium polyphosphate).
- Nickerson, Kan. – expanding by an additional 10,000 st, making total liquid storage of 34,000 st (24,000 for UAN and 10,000 st for ammonium polyphosphate).
ConAgra’s fertilizer business is a part of ConAgra Foods Inc.’s Trading and Merchandising segment (Green Markets, July 3, p. 11). While ConAgra has recently been streamlining its businesses, sources say the fertilizer trading business has remained profitable. As a result, ConAgra continues to invest in that business as evidenced by the above, and has remained off the chopping block.
LSB to study new hydrogen technology, could have major impact on nitrogen production
LSB Industries Inc. said July 5 that El Dorado Chemical, its wholly-owned subsidiary, has concluded a license agreement with AirGen Corp., a Texas-based start-up company that may have developed a novel method of producing hydrogen. Under the agreement, El Dorado will study the use of the patent pending technology for production of bulk hydrogen. Hydrogen is the primary feedstock material for ammonia production, and ammonia is the feedstock for LSB’s chemical business’s nitrogen-based chemical products, such as nitric acid and nitrogen-based blasting products and fertilizers.
LSB said the technology is in the early, developmental stage and has not been proven by LSB to have commercial value. The agreement contemplates a pilot facility to be constructed within two years, subject to proof of concept.
The license agreement is exclusive within the field of ammonia production from hydrogen produced through the licensed technology. If the technology is successfully implemented at LSB or any affiliate of LSB, the agreement provides exclusive sublicensing rights to LSB within the global ammonia industry, where it is contemplated that LSB and AirGen would cooperate to pursue sublicensing of the technology.
“The technology looks promising, and if proven to be commercially viable, it could have a major impact on the nitrogen fertilizer business by eliminating natural gas as the primary source of hydrogen in the production of ammonia,” said Jack Golsen, LSB chairman and CEO.
“We are pleased to be working with LSB in what we view as a significant event in commercializing our technology for bulk hydrogen applications,” said Dr. Linnard Griffin, inventor of the technology, and AirGen’s chairman and CEO. “We are fully committed to work with the team at LSB to ensure successful testing, development and ultimate implementation of our technology.”
LSB’s principal business activities consist of the manufacture and sale of chemical products for the mining, agricultural, and industrial markets, the provision of specialized engineering services, and the manufacture and sale of commercial and residential climate control products.
AirGen, formed in 2005, is a developer of chemical processes for the production of hydrogen and metal reduction based upon novel chemistry involving the firm’s proprietary catalysts. The company has several patents pending in the U.S. and worldwide.
Oswal plans giant plant for Papua New Guinea
Sydney, Australia-Oil Search Ltd., with offices in Sydney and incorporated in Papua New Guinea (PNG), said July 7 that it has signed a memorandum of understanding with Oswal Projects for the supply of natural gas for a proposed world-scale ammonia/urea plant to be located in the planned Konebada Petroleum Park near Port Moresby, PNG. Subject to a feasibility study by Oswal, gas sales could begin in 2010. Oswal is affiliated with Oswal Group of India and is the primary stakeholder in the recently commissioned Burrup nitrogen facility in Western Australia. “We are delighted to have signed this agreement with Oil Search, which is leading the efforts for in-country gas industry development in PNG,” said Mr. Pankaj Oswal, Burrup chairman and managing director. “Oswal Projects is keen to repeat the Burrup success story in PNG. The proposed plant at the Konebada Petroleum Park for 2,600 mt/d ammonia and 4,500 mt/d urea capacity would be the largest of its kind in the world. Oswal Projects will be working exclusively with Oil Search, and intends to embark on the bankable feasibility study immediately.”
UAP income up 18%; fertilizer sales off slightly
Greeley, Colo.-Boosted by a 16 percent increase in seed sales, UAP Holding Corp. reported an 18 percent increase in net income to $58.3 million ($1.11 per diluted share) for the first quarter ending May 28, versus the year-ago $49.4 million ($.94 per share). Total sales were up 3 percent, to $1.398.0 billion from the year-ago $1.356.9 billion. The seed surge helped offset 1 percent drops in fertilizer and chemical sales. Fertilizer sales decreased to $334.3 million from $336.4 million due to lower sales volume, which was partially offset by increased unit prices. UAP said higher prices caused some customers to reduce purchases. UAP said in light of the challenging external environment and the company’s financial performance in the first quarter, it is revising its earnings guidance for the year to $1.25-$1.40 per share, not including any charges related to the refinancing of debt.
| Net Sales/millions | Q1-07 | Q1-06 | Percent Change |
| Chemical | 714.0 | 723.5 | (1) |
| Fertilizer | 334.3 | 336.4 | (1) |
| Seed | 321.6 | 276.3 | 16 |
| Other | 28.2 | 20.7 | 36 |
| Total | 1,398.0 | 1,356.9 | 3 |
Agrium first to sign up for new railcar service
Calgary-Agrium Inc. has become the first company to sign up for a railcar fleet maintenance and management service provided by GE Equipment Services, a Chicago-based unit of the General Electric Company. GE Equipment Services leases approximately 170,000 railcars, including grain and coal hoppers, tank cars, boxcars, plastics and other specialty hoppers, and intermodal flat cars. Additionally, the company leases 150,000 intermodal trailers, containers, and chassis to shippers and railroads. Agrium is reportedly placing 100 fertilizer hopper cars in the Maintenance MAX?äó service program, which draws on GE’s extensive data and experience in fleet maintenance to help extend maintenance intervals, keep cars on track, and reduce overall maintenance costs. According to GE, the Maintenance MAX program uses the company’s historical data and analyzes key components of customer railcars to help identify cost trends of the fleet. “Agrium, like so many other shippers in the rail industry, wants a firm handle on upkeep costs within their railcar fleet,” said Ted Torbeck, president and CEO of GE Equipment Services, Rail Services. “We are pleased Agrium has turned to us for a maintenance management solution that will allow them to get the most out of their railcar fleet.”
100 tons of AN spilled in rail mishap
Troy, Ill-CSX and state officials were trying to decide how to safely dispose of 100 tons of ammonium nitrate spilled in a derailment near here late last month, according to rail officials. CSX spokesman Gary Sease said the cause of the wreck, which involved 21 cars, including three hopper cars carrying the fertilizer, is still under investigation. He said cleanup crews still have several days of work at the site in a rural area of Madison County, where 13 families in a half-mile radius of the scene were evacuated to a Troy school as a precaution. Traffic was backed up on Route 40, which was closed for a few hours, reported Illinois EPA spokeswoman Jill Watson. She said a car carrying liquid hydrogen peroxide also overturned, but that there were no leaks; she added that local, state, and federal emergency response teams concluded there was no threat to the water supplies or the environment. Sease said the freight train was on its way from East St. Louis to Indianapolis.
UAP restructures debt
Greeley, Colo.-United Agri Products Inc. recently restructured its debt using GE Commercial Finance Global Sponsor Finance, Norwalk, Conn., as the administrative agent for $850 million of senior secured credit facilities. GE Capital Markets and GS Credit Partners served as joint lead arrangers and joint bookrunners. The financing consists of a $675 million 5-year ABL revolving credit facility and a $175 million 6-year term loan. “Given our operational momentum in recent years, we expect this successful restructuring will allow us to continue with our current strategy,” said David Bullock, UAP CFO. “GE was able to provide a creative over advance structure and eliminate high cost capital under the facility,” said Tony McCord, GE Commercial managing director.
Gulf Coast senators help move OCS legislation
Washington-Soon after the U.S. House of Representatives voted to approve oil and gas exploration into the Outer Continental Shelf (OCS) (GM July 3, p. 1), Sen. Mary Landrieu (D-La.) announced that she and other Gulf Coast senators have reached an agreement with Senate leaders to bring to the Senate floor legislation that shares a portion of federal revenues generated by the new leases with Gulf Coast states. All U.S. Gulf senators appear to be on board except for the Florida delegation. The Senate leadership is expected to address Florida concerns prior to proceeding with a vote. However, Sen. Bill Nelson (D-Fla.) has vowed to block the House measure should it come up in the Senate. Nelson, a proponent of alternative fuels, says the U.S., with only three percent of world reserves, cannot drill itself out of the energy crisis. Nelson, along with Sen. Mel Martinez (R-Fla), have introduced legislation that will permanently protect Florida from the threat of offshore drilling by providing a long-term guarantee to keep oil and gas rigs at least 260 miles off Tampa Bay. Under the House bill, drilling could occur between 50 or 100 miles offshore, depending on the consent of the state.