Cranbury, N.J.-Specialty phosphate maker Innophos Holdings Inc. reported a net loss of $2.1 million ($.10 per diluted share) on net sales of $169 million for the third quarter ending Sept. 30, compared to year-ago net income of $15.1 million ($.69 per share) and sales of $161.9 million. The drop was due in part to one-time charges ?Çô $11.7 million for future claims regarding Mexican water duties, and $7.1 million for call premiums and accelerated deferred financing charges related to refinancing. Nine-month net income was $25.9 million, down from the year-ago $63 million.
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Scotts reports record performance for year
Marysville, Ohio-Scotts Miracle-Gro Co. reported a 33 percent increase in net income, to $204.1 million ($3.02 per diluted share) on sales of $3.1 billion for the fiscal year ending Sept. 30, 2010, compared to the prior year’s $153.3 million ($2.32 per share) on sales of $2.98 billion. “Every business unit exceeded its original plan, leading to record performance in fiscal 2010,” said Chairman and CEO Jim Hagedorn. “The strength of the core consumer business in particular demonstrates the resiliency of the lawn and garden category, especially of our brands. The strong spring season was followed by a challenging summer. However, fall lawn care activity is the highest we have ever experienced.” He is upbeat this engagement will continue into 2011. While annual results were up, the company said it anticipated a fourth-quarter decline due to a calendar shift and early season increases in retail inventory levels. Scotts had a fourth-quarter loss of $32.6 million ($.49 per share) on sales of $475.7 million, compared to a year-ago loss of $14.9 million ($.23 per share) on sales of $522.5 million.
Andersons’ 3Q spurred by Plant Nutrient Group
Maumee, Ohio-The Andersons Inc. reported net income of $1.4 million ($.08 per diluted share) on revenues of $707 million for the 3Q ended Sept. 30, 2010, compared with last year’s $1.3 million ($.07 per diluted share) on revenues of $601 million. For the first nine months of 2010, the company earned $38.8 million ($2.09 per diluted share) on revenues of $2.2 billion, versus last year’s $22.1 million ($1.20 per diluted share) on $2.1 billion. The Plant Nutrient Group saw 3Q operating income of $1.5 million on revenues of $129 million, up from last year’s operating loss of $2.8 million on $70 million. Volume was up 60 percent due to re-stocking of the nutrient pipeline spurred by rising grain prices, an early harvest, and favorable application weather throughout the Midwest. Margins were also improved due to price escalation. Nine-month operating income for the group was $21.2 million on $461 million of revenues, versus last year’s $9.6 million and $380 million. The company said the year-to-year improvement was due primarily to a significant increase in volume as spring and fall application rates of potash and phosphates returned to more normal levels and re-stocking occurred in the third quarter. The Grain & Ethanol Group’s 3Q operating income of $2.5 million was below last year’s $8.9 million. The grain business benefited from increased gross profit on grain sales due to the early harvest, but this was more than offset by a significant decrease in space income due to basis losses. The group’s operating income through the first nine months was a record $42.8 million, compared with 2009’s $23.5 million. The company attributed the nine-month results to increased performance in all businesses ?Çô grain, ethanol, and Lansing Trade Group. “We were pleased with the performance of the Plant Nutrient Group, which typically has little to no income during the third quarter,” said chairman and CEO Mike Anderson. “As it relates to our results through September, the Grain & Ethanol Group had record results of $42.8 million, and our Plant Nutrient Group is having their second best year, surpassed only by the unprecedented earnings seen in 2008.”
Agrifos, TKI extend ATS contract
Pasadena, Texas, and Phoenix, Ariz.-Agrifos Fertilizer LLC and Tessenderlo Kerley Inc. (TKI), said Nov. 3 that they have signed a multi-year agreement extension for TKI to be the exclusive marketer of the ammonium thiosulfate solution produced at Agrifos’ Pasadena, Texas, plant. “This is another significant step in redefining the business model of Agrifos as it transitions from a phosphoric acid producer to a multi-product producer and warehousing terminal,” said Dave Gutacker, Agrifos president. “Combining with a marketing company such as TKI with their extensive knowledge and sales coverage of the ammonium thiosulfate market is the right formula for our continued success.” “Our continued association with Agrifos will allow us to further expand our supply efforts in meeting the demand for sulfur-based nutrient solutions in today’s world agricultural markets,” said Jordan Burns, TKI CEO. The Agrifos facility is situated on the Houston ship channel, producing sulfuric acid, ammonium thiosulfate, phosphoric acid, and ammonium phosphates. Next year Agrifos plans to transition from phos acid production to ammonium sulfate production and increase their terminal business, while expanding their sulfuric acid and ammonium thiosulfate production.
Chesapeake stalls Allied acid tank plans
Chesapeake, Va.-Allied Terminals is warning that the city’s decision not to allow storing of sulfuric acid or any other hazardous chemical without a conditional use permit will have a chilling effect on the entire port, where at least six or more terminals similar to Allied operate. “The position taken by the city and the zoning administrators has created a situation where storing any type of hazardous material is a very questionable situation,” according to Allied President Michael Law. Law indicated to Green Markets that because of the costs and “a worst case scenario of a year to a year and a half before we could even start” that Allied may give up entirely on the sulfuric acid proposal. The Chesapeake Board of Zoning Appeals voted 5 to 0 to require the conditional use permit, leaving Allied with the choice of appealing to the circuit court within 30 days or waiting out the city permit process, which Law says he has been told would take from three to 12 months. Assistant Chesapeake City Attorney Catherine Lindley told the local press that if Allied doesn’t appeal it would have to obtain the conditional use permit from both the Chesapeake Planning Commission and the Chesapeake City Council; she said getting a permit to store hazardous chemicals will require various studies to show the impact of a sulfuric acid spill on the community and emergency services. “It’s not an issue with just Allied Terminals,” Law emphasized. “Every other terminal in the harbor has the exact same problems I have (because) anytime you have to go through a conditional use permit it’s not a slam dunk.” Residents of nearby South Hill homes, flooded in 2008 by the release of 2 million gallons of liquid fertilizer from an Allied tank, were on hand to express their opposition. One of them declared at the hearing Oct. 28, “I don’t want an acid tank 60 feet from my door.” The president of their homeowners’ group declared that if Allied appeals the fight isn’t over because “we’ll be back down here in a couple of more months fighting the same thing we’re fighting now.”
Ammonia hose break causes Illinois evacuations
Macomb, Ill.-An estimated 5-to-10 tons of anhydrous ammonia escaped from a filling station due to a driver error at Crop Production Services in Sciota last Wednesday morning (Nov. 3), causing the evacuation of nearby residents and a high school. CPS Manager Travis Weaver told Green Markets that the driver broke one of the hoses while filling two nurse tanks when he removed all the hoses except for one before driving away. Weaver told Green Markets that the emergency responders extended a fire truck ladder over the top of the filling station and reached down and shut off the escaping ammonia. “There were no injuries, so we were fortunate that it turned out so well for us,” Weaver said. Police went door-to-door to evacuate the eastern half of Sciota and homes in adjoining rural areas, including two miles of Illinois Route 9. Police also evacuated students from West Prairie High School. The students were transported by bus to the Colchester Middle School. A few days earlier emergency responders at Molalla, Ore., and from two other communities thought they also had a big incident to handle when they responded to an anhydrous ammonia release at a berry packing plant. Expecting to be dealing with 3,000 gallons, Molalla Fire Chief Vince Stafford told Green Markets the release involved only 300 to 400 gallons confined to a maintenance room off from the main area. He said it’s off-season in this agriculture area, and only 20 or so workers were on the job and had to be evacuated from the Santiam River Inc. plant. “From what we gathered it was a valve failure while a maintenance man was working on the system,” Stafford explained. “He went to go get something and came back and detected the leak.” The nearest homes are about a half a mile away, he reported, and residents were advised merely to stay inside.
Two die in ammonia truck, armored car crash
Windsor, Ill.-One of two drivers and a passenger were killed in a head-on collision Nov. 1 between a semi-truck pulling an anhydrous ammonia tank and an armored vehicle. The accident closed down Illinois 16/32 about one mile south of here in Shelby County into the evening while cleanup, including transfer of the ammonia, took place. Few details about the collisions were available from Illinois State Police investigators or Shelby County sheriff’s deputies, who also responded. But those on the scene reported that although the collision with the Garda armored vehicle at approximately 5 p.m. spread currency over the highway, little, if any, ammonia was allowed to escape. State police said the accident resulted from one of the drivers trying to pass another car stopped in front of him and cutting into the path of the other truck. Both trucks overturned and came to rest in a ditch on the east side of Illinois 16. A passenger was thrown from one of the trucks, and died, while the driver of the other died inside his truck after it caught fire. The driver of the other truck, who was taken to a nearby hospital, was ticketed for improper passing.
TFI speaker clarifies comments at NAFTC
Phoenix-Items reported in the Green Markets Nov. 1 issue regarding Harry Vroomen’s comments at the North American Fertilizer Transportation Conference (NAFTC) were incorrect. Vroomen, vice president of economic services for The Fertilizer Institute (TFI), offered a comparison between the 2008 spike in fertilizer prices and current market conditions, and documented the dramatic growth in global nutrient demand through FY2007/08. Vroomen reported that ammonium phosphate inventories dropped to record levels in August 2010, not potash inventories as reported by Green Markets. He noted, however, that potash inventories have tightened dramatically as shipments have increased, and that nitrogen demand could rebound to FY2006/07 levels in FY2010/11. Vroomen said the period up through 2008 saw huge spikes in shipping costs, high natural gas and petroleum prices, stronger crop prices, and a falling U.S. dollar. He also noted the dramatic increase in the price of raw materials ?Çô the market costs of phosphate rock, sulfur, and ammonia alone required to product a ton of DAP rose from $144 in 2005 to $1,077 by mid-2008. Those factors combined to drive a 356 percent increase in fertilizer prices paid by U.S. farmers from January 2000 to September/October 2008.
Management Briefs
The Growmark Inc. board of directors on Nov. 2 announced that Jeff Solberg has been named CEO of Growmark effective Jan. 3, 2011. Solberg will follow current CEO Bill Davisson, who has announced his retirement for the same date. Solberg is a 1974 business administration graduate of Illinois Wesleyan and received an MBA from the University of Illinois in 1976. He has held the positions of financial analyst, cash manager, assistant treasurer, treasurer, vice president of finance, and senior vice president of finance for Growmark. Solberg is past president and chairman of the Institute for Cooperative Finance Officers and serves on the board of directors for Citizens Savings Bank.
Market Watch
AMMONIA
U.S. Gulf/Tampa: Speculation in the international market is that Tampa may go lower for December. For now, however, that is only speculation.
Eastern Cornbelt: Another week of favorable weather sparked heavy fertilizer applications in the region in early November, and sources reported very thin inventories of potash, phosphates, and ammonia in some locations. One contact said numerous Illinois ammonia terminals were out of product as the week advanced. “Every piece of equipment out there is being utilized,” he added.
The anhydrous ammonia market had reportedly firmed to $680-$700/st FOB in Illinois and Indiana, with the low quoted for spring prepay offers in Illinois. The prompt ammonia market was pegged at a solid $690-$700/st FOB for limited tons last week.
Western Cornbelt: The ammonia market had reportedly firmed to $650-$670/st FOB regional terminals for limited prompt tons, with delivered ammonia quoted in the $650-$660/st range in Missouri and $670-$690/st in Iowa from southern production points. With fall ammonia movement now picking up steam, one source said delivered ammonia is “limited by the number of trucks you can find.”
Effective Nov. 2, Agrium’s anhydrous ammonia postings firmed to $660/st FOB Hoag, Neb., $665/st FOB Greenwood, Neb., and $670/st FOB Mankato, Minn., and Iowa terminals at Early, Garner, and Whiting. Agrium’s anhydrous ammonia postings in the Leal/Beulah sales area in North Dakota firmed on Nov. 2 to $670/st FOB and $690/st DEL.
Southern Plains: With highs expected to reach only into the 50s by the weekend, a Kansas source said ammonia movement will likely kick into high gear on next year’s rowcrop ground. The only issue was dry field conditions in some areas. “If we’d get 2-3 inches, then step back and get out of the way,” said one dealer.
Sources quoted the anhydrous ammonia market at $580-$590/st FOB most regional production points for limited prompt tons, with Kansas pipeline terminals pegged at $620-$625/st FOB. One source said spring prepay was actually being offered at cheaper values from some suppliers due to high expectations for a heavy fall application. “If fall volumes are huge, there won’t be much left to do next spring,” he said.
Effective Nov. 2, Agrium’s ammonia postings firmed to $605/st FOB Borger, Texas, $645/st FOB Mocane, Okla., $650/st FOB Conway, Kan., and $655/st FOB Clay Center, Kan. Agrium’s Borger posting reflected a $20/st increase from the Oct. 4 list price, and a $70/st hike from the Sept. 13 posting at that location.
Effective Nov. 4, Koch’s ammonia postings FOB Dodge City, Kan., moved to $580/st.
South Central: Regional sources quoted the ammonia market at $620-$650/st FOB, with the low reported at Memphis for spring prepay and the upper end for spot tons out of Henderson, Ky. One source said spring prepay sales were made earlier at $670/st FOB Henderson, but offers were no longer on the table last week.
Western U.S.: Effective Nov. 2, Agrium’s anhydrous ammonia postings firmed to $670/st rail-DEL in Oregon, Washington, and northern Idaho; $690/st truck-DEL in Washington and Oregon east of the Cascades, and in northern Idaho; $695/st rail-DEL in southern Idaho and Utah; and $720/st truck-DEL in Montana and northern Wyoming. Those levels were up $35/st from Agrium’s Oct. 14 ammonia postings.
Effective Nov. 10, Agrium’s anhydrous ammonia postings in California will firm to $670/st truck-DEL in central California and $675/st truck-DEL in northern California.
Middle East: So far, only Iran is saying it has a cargo available for November. All the other producers in the Arab Gulf claim they are sold out.
Traders and buyers agree that the regional market is very tight.
Sources say the need to fulfill contracts is keeping the main suppliers in the region busy.
The Iranian sellers are pushing the idea of $430/mt FOB. Asian sources say that price is reasonable, given the strong global demand.
Black Sea: Industry sources who work the area say everyone is waiting to see what happens in Tampa.
Asian sources say it is likely the market has peaked. The December Tampa numbers, they say, should represent a softening in prices. For now, say sources, the price remains in the low $400s/mt FOB.
Asia: Product in the area will be reduced in December when the Mitsubishi/KPI plant goes down for routine maintenance. The operators of the joint-venture project are working with other suppliers to ensure the contract buyers of the plant’s ammonia will not be inconvenienced by the shutdown.
Sources report South Korean demand is down this month. The reason for the softer demand seems to be because the downstream users of ammonia are taking their own turnarounds. With less demand downstream, importers are demanding less from offshore producers.
South Korean demand is expected to be back to normal in December.
UREA
U.S. Gulf: Granular barges took off again last week, with many sources citing speculation that China will impose new duties on imports as a major catalyst for the uptick. Overall, sources pointed to higher international price ideas in general, but others also noted the continued expectations for a strong spring season in the U.S. as underpinning their market optimism.
By Thursday, most were calling the most recent trades at $380-$386/st FOB for prompt, though early week trades were reported to have gone for as low as $360/st FOB or lower. Sources were predicting that the next round of trading would be in the $395-$400/st FOB range.
Recent prill trades were called $380-$385/st FOB, and sources said they were keeping pace with granular.
Eastern Cornbelt: Granular urea pricing was up in the region, fueled by the surge in NOLA barge values. Sources quoted the urea market at $410-$425/st FOB in the region last week, with the low out of river locations and the upper number inland.
Western Cornbelt: Granular urea pricing had firmed significantly as well, to $410-$425/st FOB regional terminals to the dealer. The low was reported in southern Missouri, and the upper end in Iowa late in the week.
Effective Nov. 2, Agrium’s granular urea postings firmed to $445/st FOB North Dakota terminals at Alton, Carrington, Colfax, Scranton, and Grand Forks, with rail-delivered urea postings moving on that date to $450/st in Minnesota, Wisconsin, and the Dakotas.
Southern Plains: Granular urea pricing firmed to $405-$415/st FOB the Tulsa market last week. Koch’s urea price FOB Enid, Okla., moved on Oct. 30 to $405/st, and then firmed again on Nov. 5 to $415/st FOB.
South Central: The granular urea market was pegged at $390/st FOB Memphis early in the week, but sources said a move to $400/st FOB was likely at midweek. The dealer market was quoted firmly at the $410/st FOB level in the Arkansas market as the week advanced.
Southeast: Regional sources said granular urea prices had firmed dramatically to $420-$440/st FOB port terminals, with the upper end reflecting the new dealer reference at locations such as Norfolk, Va., Wilmington, N.C., and Savannah., Ga.
Western U.S.: Effective Nov. 2, Agrium’s granular urea postings firmed $20/st to $445/st FOB Idaho warehouses at Acequia and Pella; $445-$455/st DEL in Montana and Wyoming, depending on location; $460/st FOB West Woodburn, Ore.; $465/st Washington warehouses at Glade, Warden, and Wilson; $470/st DEL in Washington, Oregon, Idaho, and northern Nevada; $480/st DEL in northern and central Utah; and $485/st DEL in southern Utah.
In the California market, Agrium’s urea postings firmed on Nov. 2 to $445/st FOB West Sacramento, $470/st truckDEL in central California, and $475/st truck-DEL in northern California.
China: Buyers started scrambling last week to get product and ships lined up for loadings before Nov. 15. The rush was caused by rumors circulating that China may change its export policy as early as this week.
Sources report that the central planners in Beijing are not happy with the projected numbers of urea reserves for the spring season. Nor are they happy with the higher prices that producers are demanding.
To build reserves and push down domestic prices, Beijing may impose a higher export duty on all urea – and possibly phosphates – this month.
Sources say the most likely level for the duty will be 110 percent, the amount that is already slated to take effect Jan. 1, 2011.
Besides the fear of low reserves, sources say the central planners are also looking at the cost of re-exporting energy because some urea plants operate with either imported coal or imported natural gas. The government planners want to contain costs and limit exports in this area.
India: When STC closed its tender Oct. 28, most people in the industry expected the company to take 500-600,000 mt. The initial reports of awards backed up that assumption.
By the end of last week, however, it looked as if the company was ready to buy about 900,000 mt.
Negotiations with offering companies ended up with east coast prices at $362.75/mt CFR and west coast prices at $365.50/mt CFR. One offer from Quantum with Indonesian material is reported at $364.50/mt CFR. Awards are as follows.
| Seller | Origin | Quantity (mt) | Discharge Port |
| Transglobal | Iran | 25,000 | Kandla |
| Amber | China | 35,000 | Vizag |
| Quantum | Indonesia-China | 50,000 | Vizag-Krishnaptnam |
| Keytrade | China-CIS | 50,000 | Mundra |
| Continental | China | 50,000 | Karaikal |
| Bary Chem | China | 60,000 | Krishnaptnam |
| Ameropa | China | 60,000 | Krishnaptnam |
| Dreymoore | China-CIS | 75,000 | Vizag-Krishnaptnam |
| Emmsons | Iran | 100,000 | Mundra |
| Swiss Singapore | Iran-China | 300,000 | Mundra-Kandla-Pradeep |
Sources say an additional 50,000 mt was awarded to Rare Earth with Chinese material. Some Asian traders say, however, the company may have been dropped as the final list was prepared.
All told, booked tonnage is more than 800,000 mt. The purchase of such a large order could allow India to hold off until late December or early January for a final tender for the fiscal year.
Sources estimated that before the STC tender India needed 1.2-1.5 million mt by the end of February.
The tender documents require loadings to be completed by Dec. 24. Sources now say that if the rumors of a change in the Chinese export duty program are true, shipments from China will have to be loaded by Nov. 15.
One trader noted that many of the companies that offered Chinese tons in the tender have been on the phones hustling to get cargoes assigned and ships nominated as quickly as possible to avoid the higher duty.
Traders are wondering what will happen if China changes its rules as soon as expected. Sources said an increase in the export duty from the source country is not good enough grounds to declare a force majeure.
One trader noted that only the lack of access to product would be an acceptable excuse to back out of an award. He said if the factories and transportation system can get the urea to the port, then the only problem would be dealing with the Chinese customs officials to ensure the higher tariff is not paid.
Indian buyers will face a major financial problem in their final tender. Even if China holds to its original plan of raising the export duty Jan.1, sources say the Indians would still need tons. They would then be stuck with buying from the Black Sea, Egypt, or the Arab Gulf. A few pricey tons from Indonesia might be added to the mix, but not enough to satisfy the buyers.
The Arab Gulf continues to report producers are largely sold out into January.
Black Sea producers are now talking $400/mt FOB by the end of this month.
And Indonesia just hit $387/mt FOB in a Kaltim tender.
In the end, sources say any buying tender in late December or early January will show prices dramatically higher than the one that just closed.
Middle East: Despite the softer pricing ideas offered in the STC tender Oct. 28, producers are now saying any talks to buy product have to start at $390/mt FOB.
Producers looked at the results of the Kaltim granular tender and saw the Indonesian price hit $387/mt FOB. One trader said in a week or so the $390/mt FOB being discussed might look like a good deal.
For now, the only country offering tons on the spot market in any quantity is Iran. The awards in the STC tender show nearly 300,000 mt going to India from Iran. Sources say these cargoes could keep the Iranian producers happy until the end of the year.
A few smaller cargoes may still be offered, but Iran continues to have problems as to where it can sell its product. Currency restrictions and other sanctions against Iran continue to limit where it can do business.
With cargo estimated at $18-$20/mt for west coast deliveries to India, sources estimate the Iranian netbacks at $342-$346/mt FOB. That would indicate a softening of the overall area market. But some traders are not sure freight will actually be that high.
The Arab producers remain fully booked with contracts. Because of the Indian deals with Iran, the Arab producers can move up their formula prices as part of their effort to improve their netbacks.
Some producers are looking forward to the next Indian tender. With only Yuzhnyy as the main competitor in that tender, some producers believe they will be able to secure some sales to India at a much higher level.
Egyptian material, which had moved into the $370s/mt FOB last month, is not reportedly settling at $380/mt FOB.
Black Sea: The urea price has been edging up. Now, say sources, it is ready to skyrocket. Industry sources say $365/mt FOB has been done. Producers reportedly are now saying that $400/mt FOB by the end of the year should be considered a possibility.
The reason the industry has gotten so bullish on Yuzhnyy is that India will still need to buy more tons and China is reported ready to shut down its exports 45 days early.
For now, with the $365/mt FOB price being mentioned by a number of sources, one trader said it is fair to put the high end of the market at that level. In another couple of weeks, he added, that $365/mt FOB could look like a bargain.
Indonesia: Kaltim pulled another quickie tender last week. The tender was called early in the week and closed Nov. 4. The winning bid of $388/mt FOB represents a $40/mt jump in price since the last Kaltim granular tender.
The company offered 80,000 mt of granular material for prompt loading.
Almost 20 companies bid on the urea. A tally of the bids follows.
| Bidding Company | US$/mt FOB |
| Liven Agrichem | 388.00 |
| Trada | 387.25 |
| Indevco | 386.25 |
| Fertcom | 386.00 |
| Mekatrade | 379.75 |
| Central Control | 379.00 |
| Helm | 377.75 |
| Summit | 375.00 |
| Parna Artha | 375.00 |
| Feltra | 374.00 |
| Keytrade | 370.00 |
| Swiss Singapore | 363.00 |
| Kolon | 357.00 |
| Toepfer | 355.50 |
| RCL | 355.25 |
| Sao Viet Trading | 355.00 |
| Samsung | 346.00 |
Liven won the tender. It took all 80,000 mt with its bid of $388/mt FOB.
Kaltim is still under pressure to move more tons before the end of the year, when its export allotments expire.
NITROGEN SOLUTIONS
U.S.Gulf: Compared to interest in urea, UAN was stagnant, but still $280-$285/st ($8.75-$8.91/unit).
Eastern Cornbelt: Sources continued to quote the UAN market at $10.31-$10.89/unit FOB regional terminals last week.
Western Cornbelt: UAN-32 was quoted at $325-$340/st ($10.16-$10.63/unit) FOB regional terminals last week, also up from last report. The low was reported in southern Missouri. An Iowa contact put the common dealer market in his trade territory at $10.30/unit FOB last week.
Southern Plains: The UAN-32 market was pegged at $315-$320/st ($9.84-$10.00/unit) FOB production points, with reseller tons quoted in the $330-$340/st ($10.31-$10.63/unit) FOB range out of inland tanks in the Kansas market.
South Central: UAN-32 was quoted at $300-$320/st ($9.38-$10.00/unit) FOB regional terminals, with the low reported out of the Memphis market for prompt tons.
Southeast: UAN pricing was pegged in a broad range at $8.94-$9.50/unit FOB regional terminals in the Southeast region, depending on location, with terminal inventories described as sparse. UAN-32 vessel tons were quoted at $315-$320/mt CFR for the last business.
Western U.S.: Agrium’s UAN-32 postings firmed $10/st on Nov. 2 to $350/st ($10.94/unit) DEL in Washington, northern Idaho, and Oregon excluding Malheur County; $355/st ($11.09/unit) rail-DEL and $360/st ($11.25/unit) truck-DEL in Nevada, southern Idaho, and Oregon’s Malheur County; and $360/st ($11.25/unit) DEL in Montana and northern Wyoming. Agrium’s UAN-28 posting firmed on Nov. 2 to $315/st ($11.25/unit) DEL in Montana and northern Wyoming.
In the California market, Agrium’s UAN-32 postings firmed on Nov. 2 to $343/st ($10.72/unit) FOB Sacramento, $365/st ($11.41/unit) truck-DEL in Central California, and $370/st ($11.56/unit) truck-DEL in Northern California.
AMMONIUM NITRATE
U.S. Gulf: The last done barge trades continue to be called $300-$302/st FOB, with sources expecting the next round of business to be higher.
Western Cornbelt: Ammonium nitrate pricing in the region had reportedly firmed to $350-$360/st FOB for any available tons.
Southern Plains: Ammonium nitrate was pegged at a solid $340/st FOB the Tulsa market.
South Central: Regional sources quoted the ammonium nitrate market at $325-$335/st FOB last week.
Southeast: Ammonium nitrate remained at $315-$320/st FOB Tampa for the last done business.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was pegged at $250-$260/st FOB, up $15-$20/st from last report.
Western Cornbelt: Granular ammonium sulfate was quoted at $240-$260/st FOB in the region, reflecting a $10-$20/st increase from the previous week.
Southern Plains: Granular ammonium sulfate pricing was firm at $210-$250/st FOB Texas shipping points, with the low at Freeport and the upper end FOB Littlefield and Plainview.
South Central: Granular ammonium sulfate was pegged at a solid $225-$230/st FOB in the region.
Southeast: Granular ammonium sulfate pricing was up in the region. Effective Nov. 1, DSM Chemicals moved its granular sulfate postings up $20/st, to $210/st FOB Augusta, Ga., $225/st DEL in Georgia, and $230/st DEL in Florida. The company’s standard ammonium sulfate postings firmed to $180/st DEL in Florida.
PHOSPHATES
Central Florida: The fall season was coming closer to the end last week, and traders were scrambling to find enough phosphate and trucks to cover the orders they had already booked, mostly by scavenging warehouses. However, Mosaic was able to find enough extra to make a sale of MAP, but most of its production was still being used to meet its export commitments – which meant India for the most part.
Although the official hurricane season does not come to a close until the end of November, storms in the Gulf of Mexico are rare from here on out. Still, Tomas was a tropical storm late last week but was expected to increase to at least Category 1 hurricane status during the weekend and most likely strike Haiti, which has already been devastated by an earthquake earlier this year and was battling an outbreak of cholera.
Producers in Central Florida, CF and Mosaic, were running their processing plants as hard as possible in an effort to build inventories for the spring season, but heavy export schedules may make that difficult. Imports from Russia and Morocco were picking up some of the slack, but how long that will continue was a mystery.
For the fourth quarter, phosphate producers agreed to pay $160/lt Tampa for molten sulfur, but that raw material was becoming even scarcer than it had been and the price was expected to rise again in the first quarter of next year.
CF’s most recent price for DAP was $535/st FOB, but had nothing available to sell until late this year or early next year. Mosaic’s posted price was $550/st FOB. Mosaic had little DAP available until late December or January, but did have a small amount of MAP available in November. MAP was bringing a premium of $10/st FOB. Based on posted prices and actual sales, the Central Florida DAP price range last week was $535-$550/st FOB. Small lots from traders could cost $5-$10/st FOB more. PCS was making sales at “competitive prices.” Agrifos’ price for truck sales was $580/st FOB, and rail – if available – was $570/st FOB. The company had no MAP available for sale. Agrifos was expected to have enough product to carry it through the first quarter of next year.
U.S. Gulf: As the fall season nears to a close, fewer NOLA phosphate barges were available and fewer buyers were in the market. Forward sales indicated a softening of prices in late November and December, but producers were offering no fill programs.
Forward deals before the end of the year were fetching $5-$7/st FOB less than the current range. The recent influx of imported product from Russia and Morocco appeared to have a role in holding down or even slightly lowering prices, but was being quickly absorbed by the market. Low domestic inventories were a major factor in the increase in imports.
A source said Gavilon was bringing in vessels of DAP and MAP in late November-early December and late December early January, but another source said that entire product had already been claimed by buyers.
With the NOLA phosphate market slowing, warehouses and terminals in the river system were soaring in terms of both business and prices. In some areas, the price to dealers was about $630/st FOB for DAP and between $10/st FOB and $20/st FOB more for MAP.
Farmers in the Cornbelt were rushing to buy phosphate and put it on the ground as soon as possible, before hard weather takes a firm grip. Growers were eager to increase production to take advantage of much higher prices.
Last week, the NOLA DAP barge price range was $560-$565/st FOB, which was close to the previous week’s range of $558-$565/st FOB, but the most common price last week was at the low end of the range. Asking prices for forward sales late last week were in the range of $553-$560/st FOB NOLA. MAP, where available, was bringing a premium of about $10/st FOB for NOLA barges last week, but was $10-$20/st FOB higher at warehouses.
Eastern Cornbelt: Where available, sources quoted the DAP market at $605-$630/st FOB in the region, with MAP $20/st higher. The 10-34-0 market was quoted at $475-$485/st FOB, and was also in very tight supply.
Western Cornbelt: Out of river terminals, the DAP market was generally pegged in the $600-$605/st FOB range in the Western Cornbelt region last week, with MAP at $620-$625/st FOB river points, where available. “We are waiting on product,” said one Missouri source. “It’s gone as soon as we get a car in.”
DAP and MAP prices out of inland warehouses were higher, with Iowa and Missouri contacts reported MAP as high as $650-$655/st FOB on a spot basis.
10-34-0 was quoted at a solid $465/st FOB in the region, with very limited availability. Effective Nov. 1, Agrium’s phosphoric acid postings firmed on Nov. 1 to $1,000/st DEL for both SPA and MGA in Iowa and Nebraska, with a move to $1,075/st DEL slated for Dec. 1.
Southern Plains: MAP was hard, if not impossible, to find in the region. One Kansas source put the market for any available tons at $620-$630/st FOB, while another pegged the market in a much broader range at $620-$650/st FOB. “The word ‘gouging’ comes to mind,” said one source, adding that “it doesn’t really make a difference because there is very, very little product to sell in the Oklahoma market.”
DAP inventories were also very tight, with the dealer market quoted at $605-$615/st FOB the Tulsa market last week. The 10-34-0 market had reportedly firmed to $465-$485/st FOB in the region, and remained in tight supply as well.
Effective Nov. 1, Agrium’s phosphoric acid postings firmed from $925/st to $1,000/st DEL for both SPA and MGA in Colorado, Kansas, New Mexico, Oklahoma, and Texas. A move to $1,075/st DEL is slated for Dec. 1.
South Central: Prices were up across the board last week, and inventories were extremely tight for phosphates and potash. “We’re all out of P and K, and producers keep moving our delivery schedule back,” said one contact. “Availability has crimped fall tons.”
The DAP market was quoted firmly at the $590-$595/st level for any available tons out of regional warehouses last week. An Arkansas source reported a $585/st FOB level for the last business in his area, but said tons were tapped out there in early November. TSP was pegged at the $490/st level FOB Memphis.
Western U.S.: Effective Nov. 3, Agrium’s MAP postings firmed to $635/st DEL in Montana and northern Wyoming; $640 /st DEL in southern Idaho, Utah, Nevada, and Oregon’s Malheur County; $640/st FOB and $645/st DEL in Washington, northern Idaho, and Oregon excluding Malheur County; and $650/st FOB warehouse or rail-DEL in California and Arizona. Those levels were up $15/st from Agrium’s Oct. 19 MAP postings.
U.S. Export: A little break in the icy conditions of the export phosphate market occurred as PhosChem made a sale of 30,000 mt into South America last week. Although a small portion of the product was priced at $600/mt FOB, the balance of the shipment will be priced at the time of delivery at an indexed price.
A source pointed out that after the Federal Reserve announced it was issuing additional cash – since it cannot lower interest rates it charges banks below zero – that weakened the U.S. dollar, which will make it easier to export products from this country. Unfortunately, the phosphate industry will have little to offer for export in the near future.
The export DAP price range last week moved from a flat $580/mt FOB to $580-$600/mt FOB based on the only real sale in weeks, albeit small. The export market was expected to remain restrained in the near future.
POTASH
Eastern Cornbelt: Warehouse potash tons, provided you could find any, had reportedly firmed to $500-$515/st FOB in the region. Following PCS Sales’ lead a week earlier, Agrium on Nov. 4 reposted its red premium potash postings to $515/st FOB Illinois terminals at Rock Island, Granite City, Marseilles, and Calumet City; Indiana terminals at Garrett, Seymour, and Mt. Vernon; Ohio terminals at Washington Court House, E. Liverpool, and Toledo; and Saginaw, Mich. Agrium’s rail-delivered red premium potash postings firmed on that date to $525/st in Illinois, Indiana, Ohio, Michigan, and Wisconsin.
Agrium also raised its potash prices at the mine on Nov. 4, with standard moving to $475/st and premium to $480/st FOB Vade, Saskatchewan.
Western Cornbelt: Heavy demand for phosphates and potash – coupled with remarkably low inventories – sparked both consternation and elation from dealers last week. “This thing is wild,” said one contact. “I’ve never seen anything like it in 25 years of business.” Another Missouri contact said his terminal had little left to sell after an October that “was a lot of fun.” A third source noted that growers could make some money based on crop prices and input costs as long as “the fertilizer industry doesn’t get too stupid and force prices up to a level of demand destruction.”
Sources quoted the potash market at $500-$515/st FOB regional warehouses last week, but spot tons at the low end of that range were tapped out at midweek. “We have product that was supposed to ship in August that we haven’t seen yet,” complained one source.
An Iowa contact at midweek put the market firmly at the $515/st FOB level for limited sales, while a southern Missouri contact said on Nov. 4 that limited spot tons could still be had at the $510/st FOB level. Potash postings from PCS Sales firmed on Oct. 25 to the $515/st level FOB warehouses in Iowa and Missouri.
Effective Nov. 4, Agrium’s red premium potash postings firmed to $510/st FOB North Dakota terminals at Colfax and Grand Forks; $515/st for premium potash FOB Dubuque, Iowa, Homestead, Neb., New Madrid, Mo., and Shakopee, Minn.; and $525/st for rail-DEL premium potash in Iowa, Missouri, Nebraska, Minnesota, and the Dakotas.
Southern Plains: Potash out of the warehouse was virtually nonexistent in the region last week. One source put the market at $500-$515/st FOB, but called that a “theoretical” range only. Another said he’d heard some barged tons from the Gulf would be available at $495/st FOB Inola, Okla., later in November.
Effective Nov. 1, potash postings from Intrepid Potash FOB Carlsbad, N.M., firmed to $480/st for 60 percent standard; $482/st for 62 percent standard; $485/st for 60 percent granular and 62 percent fine standard; and $493/st for 62 percent granular. Those levels reflect a $50/st increase from the company’s Oct. 15 postings, and a $105/st increase from Oct. 1 postings.
Intrepid’s potash postings FOB Moab and Wendover, Utah, moved on Nov. 1 to $480/st for 60 percent standard and $485/st for 60 percent granular.
Effective Nov. 4, Agrium’s red premium potash postings firmed to $525/st for rail-DEL in Kansas, Oklahoma, and Colorado.
South Central: One source said limited potash tons were available in the Memphis market for $465/st FOB last week, but others said the dealer market would be closer to $485-$495/st FOB for any available reseller tons, if they’re out there. Potash barges were quoted in the $450-$460/st range at the Gulf. “The Canadians don’t even have the summer fill tons shipped yet, so the market is messy,” said one source. “It’s about as weird right now for fall pricing as it’s ever been. No one expected a fall like this.”
Effective Nov. 4, Agrium’s red premium potash postings firmed to $530/st rail-DEL in Kentucky and Tennessee.
Southeast: One source said limited spot sales of potash could still be had at $450/st FOB from resellers for previously transacted tons, but replacement costs were up significantly. New price quotes for rail-delivered potash ranged from $530-$545/st in the region, depending on grade and location.
Effective Nov. 4, Agrium’s red premium potash postings firmed to $522/st FOB Wilmington and Lynchburg, Va.; $525/st FOB Mulberry, Fla., and Georgia terminals at Americus, Bainbridge, Savannah, and Tifton; and $530/st rail-DEL in Alabama, Florida, Georgia, the Carolinas, Virginia, Pennsylvania, West Virginia, Maryland, Delaware, New York, New Jersey, Connecticut, Massachusetts, Rhode Island, Vermont, New Hampshire, and Maine.
Pacific Northwest: Effective Nov. 4, Agrium’s red premium potash postings firmed to $525/st FOB and $535/st rail-DEL in southern Idaho, Utah, and Oregon’s Malheur County; $530/st FOB and $540/st rail-DEL in Washington, the Idaho panhandle, and Oregon excluding Malheur County and the Willamette Valley; and $535/st FOB and $545/st rail-DEL in Oregon’s Willamette Valley.
India: Canpotex Ltd. has signed a new three-year agreement to supply Tata Chemicals Ltd. (TCL), a key customer in India, with a minimum of 1.5 million mt of Saskatchewan potash. The agreement between Canpotex and TCL covers the period April 1, 2011, to March 31, 2014, and provides TCL with the option to extend the agreement for an additional two years to March 31, 2016. In the event the agreement is extended, the supply to TCL could total a minimum of 2.88 million mt. Pricing will be at competitive rates based on prevailing market conditions.
“This agreement confirms Canpotex’s long-term commitment to the important Indian market, and reflects the confidence our Indian partner, TCL, has in Canpotex’s ability to meet their growing demand for potash,” said Steve Dechka, Canpotex’s president and CEO.
South Korea: Canpotex has signed a Memorandum of Understanding for a five-year 2.2 million mt supply agreement with Unid Co. Ltd., an industrial buyer in South Korea. The deal will span from 2011 to 2015, and Canpotex will supply a minimum of 400,000 mt each year. Prices are to be at competitive rates based on the market in South Korea.
SULFUR
Tampa: The threat of hurricanes in the Gulf of Mexico, which could disrupt sulfur shipping and threaten oil refineries and phosphate plants on the coast of Florida, pretty much ended at the beginning of November, although the hurricane season does not come to an official close until the end of this month. Still, that was a relief.
Refineries eased off on production a little last week, as rates fell from 83.7 percent of capacity the previous week to 81.8 percent, a reduction of 1.9 percent. Although the drop in refining was relatively small and probably just a blip, the use of more sweet crude was more of a factor in reducing the amount of sulfur being produced.
Sulfur continued to be in great demand, not only from phosphate producers, but also chemical companies, tire and metal manufacturers, and other industrial customers.
As sulfur supplies continue to become increasingly tight, the prospect of higher prices for the first quarter for molten deliveries to Tampa also increases. How much will be determined in the next month or so.
Vancouver: Spot prices were in the $150-$160/mt FOB range last week, while recent contracts for the fourth quarter were in the range of $125-$145/mt. Efforts to push the price China pays to as much as $200/mt DEL were not meeting with much success, and buyers in northern China were backing off from the current $180/mt DEL, a source said.
MARKET NOTES
Pakistan: The government has revised its demand/consumption of urea and DAP from pre-flood estimates of 6.6 million mt and 1.8 million mt, respectively, to 6 million mt and 1.3 million mt in the current year, says a top official of the Fertilizer Industry of Pakistan. CFO Syed Aamir Ahsan of Fauji Fertilizer Bin Qasim Ltd., (FFBL) told Green Markets last week that Pakistan has sufficient stocks of urea and DAP to meet the requirements for Rabi season 2010-2011. He ruled out any import of urea in the near future, but suggested
one or two cargoes of DAP would be imported in November/December to meet requirements, if demands go up beyond 1.3 million mt.
He urged the government to address the issue of ongoing gas curtailments for fertilizer companies by adhering to its commitment of restoring full pressure gas supply to fertilizer plants as early as possible; otherwise. they have the right to approach the concerned department for compensation.
He said that the government, with the partnership of the public (National Fertilizer Corp., NFC) and private sectors would set up a 1 million mt urea and 1 million mt DAP plant as an integrated complex at Port Qasim in Karachi to meet requirements for the coming five years. He said the project will take off as soon as the government allocates gas for the complex and the modality of joint venture is worked out.
In the meantime, between January-September 2010, the country sold/consumed 4.16 million mt of urea, compared to 4.64 million mt in the corresponding period last year, reflecting a decline of 10 percent. It includes an import of 886,000 mt of urea against 975,000 mt in the same period of 2009. This records a fall of 9 percent in imports in nine months.
Similarly, Pakistan’s consumption/sale of DAP has declined by 42 percent in the last nine months of 2010 (Jan.-Sept. 2010), to 665,000 mt from 1.14 million mt of DAP in the corresponding period last year. It includes 545,000 mt of imported DAP against last year’s 589,000 mt, registering a fall of 7 percent.
Furthermore, Pakistan’s only DAP Producer – Fauji Fertilizer Bin Qasim Ltd. (FFBL) – has posted a higher profit of Rs. 2.931 billion in the first nine months of 2010, compared to Rs. 1.805 billion in the corresponding period last year. During Jan.-Sept. 2010 it produced 400,000 mt of urea and 475,000 mt of DAP against 450,000 mt and 376,000 mt, respectively, in the year-ago period. The company is likely to produce 650,000 mt of DAP this year against 550,000 mt of last year. Its urea production would fall due to gas curtailments.