All posts by webster@kennedyinfo.com

Sulfur

Market Watch, Pakistan, Sulfur, Tampa, U.S. Gulf, U.S. Imports, West Coast

Tampa: Supply and demand were still in balance last week, but supply appeared to be gaining. Not much has happened since prices for the third quarter were settled a few weeks ago.

In what may be a first, the U.S. Department of Energy said the refinery operating capacity rate was unchanged last week from the week before – flat at 92.6 percent, a fairly high rate.

U.S. Gulf: Prices were still in the $180-$185/mt range for prill exports.

U.S. Imports: June imports were off 13 percent, to 196,921 st from the year-ago 225,703 st. July-June imports were off only 2 percent, to 2.35 million st from 2.406 million st.

West Coast: Chevron was dealing with problems from an explosion and fire at its Richmond, Calif., facility. Sulfur from that plant goes to export, but the world market was not seeing a shortage.

A vessel loading at Long Beach was priced at $190/mt last week.

Benelux: The current price range was $212-$220/mt FOB, although a new price should be posted soon.

Pakistan: Pakistan’s state-owned oil gas production firm, Oil & Gas Development Co. (OGDC), has issued a tender to sell 7,000 mt of sulfur at a minimum base price of Rs23,098/mt (about US$243/mt) in different lots at Ex-Dakhni, Punjab.

The last date for receiving bids is Aug. 30, 2012, according to a company announcement.

Potash

California, Eastern Cornbelt, Market Watch, Pacific N.W., Potash Muriate, U.S. Gulf, U.S. Imports, Western Canada, Western Cornbelt

U.S. Gulf: The market was called very quiet. DAP and urea continued to be major conversations last week, with potash at the very end of the list. Sources called the market $460-$475/st FOB.

U.S. Imports: MOP imports were off 25 percent for the fertilizer year ending in June, to 9.2 million st from the year-ago 12.29 million st. June imports were off 9 percent, to 861,697 st from 944,377 st.

Eastern Cornbelt: The potash market was steady at $500-$510/st FOB regional warehouses in the Eastern Cornbelt.

Western Cornbelt: Potash pricing in the Western Cornbelt was unchanged at $500-$510/st FOB regional warehouses, with most dealer quotes at the lower end of that range.

California: Sources tagged the muriate of potash market at $570-$580/st FOB and $580-$590/st DEL in California.

The sulfate of potash (SOP) market was down some $15/st from last report at $680-$690/st FOB in California, and potassium nitrate remained at $1,020/st FOB for bulk tons and $1,090/st FOB for bags.

Pacific Northwest: Potash was quoted at $530-$540/st FOB regional warehouses and $540-$550/st rail-DEL in the Pacific Northwest. Out of Utah mine locations, the potash market was tagged at $500-$510/st FOB.

Western Canada: The potash market to Canadian customers FOB Saskatchewan mines remained in the $530-$540/mt FOB range. Out of regional warehouses, the dealer market was quoted at $548-$558/mt FOB, depending on grade and location.

Phosphates

California, Central Florida, Di-Ammonium Phosphate, Eastern Cornbelt, Market Watch, Mono-Ammonium Phosphate, Pacific N.W., U.S. Exports, U.S. Gulf, U.S. Imports, Western Canada, Western Cornbelt

Central Florida: As a result of heavy exports, phosphate producer inventories continued to be on the low end and will likely remain there, at least until sometime in September.

Producers were holding firm to their asking price, but no one had come forward seeking a large quantity, which would test their resolve. However, a trader was offering truck sales at $10/st FOB below the price sought by producers.

The DAP price range for Central Florida continued unchanged last week at $490-$500/st FOB. CF and Mosaic were listed at the $500/st FOB mark, while truck sales by traders accounted for the low end of the range.

MAP continued to sell at a $20/st premium to DAP in Central Florida. PCS Sales, which produces MAP at its White Springs facility in North Florida, was selling at prices comparable to the market.

U.S. Gulf: Temperatures dropped slightly in the Midwest last week, but rain was scattered and did little to break the long running drought that has destroyed crops and sent grain prices through the roof.

Farmers who have been able to irrigate or have been lucky enough to get adequate natural moisture to save large portions of their crops will do very well, while the others will collect on their crop insurance.

Water levels on the Mississippi River received only a brief reprieve from rain in the Ohio Valley. Levels were so low late last week that barges were lightening loads and moving very slowly. That not only affects the movement of fertilizers, but also grain and virtually everything else that moves by water.

Scattered rainfall in the Midwest early last week was not really enough to save the nation from major agricultural losses, but it did hit the futures market. Crop prices were mostly down in comparison to the previous week.

The corn price for December dropped to $8.05/bushel, down from $8.2575/bushel a week earlier. The corn price for December 2013 was $6.3425/bushel, decreasing from $6.4625/bushel the previous reporting period. For November 2012, soybeans bucked the trend and rose to $16.27/bushel from $16.235/bushel the previous week, but beans for November 2013 decreased to $12.78/bushel from $12.825/bushel a week earlier. Wheat for July 2013 fell to $8.3275/bushel from $8.855/bushel the week before, and wheat for July 2014 was listed at $7.91/bushel last week, down from $7.93/bushel the previous week.

Terminal prices were holding despite a continued weakening in the NOLA DAP barge market, although business was slow.

NOLA DAP barge prices got some support from producers, who sources said were buying spot barges rather than selling last week. A source said CF Industries purchased 10 NOLA DAP barges at $510/st FOB, while Mosaic was buying at $508.50/st FOB.

However, a trader snatched up a deal on the Lower Mississippi at $499/st FOB, which was inevitable due to the low water levels in the South. Those who had already agreed to take barges and cannot unload them must either pay demurrage fees or sell.

As water in the Mississippi River continues to fall, so will prices – at least until the fall season starts. By that time, rain should be on the increase and farmers will need phosphate for their fields. Most in the industry still believe the fall season will be normal, or close to it, because crops use phosphate during the early stages of growth, so most of it will have already been used – even with a crop that fails.

Prices moved in both directions for the NOLA DAP barge market last week. The range changed from $500-$505/st FOB the previous week to $499-$510/st FOB last week.
Inventories remained low for all producers, but watch for prices to remain static until rain raises the water level on the river system. Then sources say prices should strengthen.

U.S. Imports: The U.S. saw a b

Ammonium Sulfate

Ammonium Sulfate, California, Eastern Cornbelt, Market Watch, Pacific N.W., U.S. Imports, Western Canada, Western Cornbelt

U.S. Imports: July 2011-June 2012 imports were off 21 percent from the prior year, to 290,203 st from the year-ago 368,058 st. June imports were off 22 percent, to 10,866 st from 13,863 st.

Eastern Cornbelt: The granular ammonium sulfate market was pegged at $350/st FOB and $360/st rail-DEL in the Eastern Cornbelt.

Western Cornbelt: The granular ammonium sulfate market remained at $345-$350/st FOB in the Western Cornbelt, with delivered sulfate referenced at the $360-$365/st mark in the region.

Ammonium thiosulfate was steady at $360-$380/st FOB, with the low in Missouri and the upper end quoted in the Iowa market.

California: The ammonium sulfate market was steady at $370-$400/st FOB in California, depending on grade and supplier.

Pacific Northwest: Ammonium sulfate pricing was up from last report. A Washington source quoted delivered granular ammonium sulfate at the $395/st level at mid-month.

On Aug. 9, IRM’s ammonium sulfate postings in Oregon, Washington, Idaho, and Montana moved to $400/st FOB and $410/st rail-DEL for Transzform and Western Premium ammonium sulfate, and $360/st FOB and $370/st rail-DEL for Western Standard ammonium sulfate.

Western Canada: Granular ammonium sulfate pricing in Western Canada had reportedly firmed to $475-$485/mt DEL.

Ammonium Nitrate

Ammonium Nitrate, California, Market Watch, Pacific N.W., U.S. Gulf, Western Cornbelt

U.S. Gulf: The last round of business was put in the $335-$340/st FOB range.

Imports in June were up 88 percent, to 67,752 st from the year-ago 36,023 st. However, for the year ending in June, they were up only 6 percent, to 762,524 st from 717,668 st.

Western Cornbelt: Ammonium nitrate pricing had reportedly slipped to $400-$425/st FOB in the region, with the low quoted in the Iowa market.

California: No market was reported for ammonium nitrate in California.

CAN-17 was tagged at $300-$320/st FOB in California, depending on location.

Calamco’s reference price for AN-20 dropped on Aug. 13 to $310/st FOB, down $15/st from the previous posting. Agrium’s AN-20 posting was slated to move on Aug. 20 to $330/st truck-DEL in California, also down from last report.

Pacific Northwest: No current prices were reported for ammonium nitrate in the region.

AN-20 was listed at $260/st FOB Kennewick, Wash., and $270/st rail-DEL in Washington, Oregon, Idaho, Montana, Wyoming, Utah, and Nevada.

Nitrogen Solutions

California, Eastern Cornbelt, Market Watch, Pacific N.W., U.S. Gulf, UAN, Western Canada, Western Cornbelt

U.S. Gulf: Resistance continued on the barge market. Players said the last done business was in the $315-$318/st ($9.84-$9.94/unit) FOB range, with some suggesting the next round of business would likely be lower at $310/st ($9.69/unit) FOB.

June imports were off 20 percent, to 202,098 st from the year-ago 253,942 st. However, as with urea, UAN imports for the year ending in June were level with the year-ago, at 3.513 million st versus 3.516 million st.

Eastern Cornbelt: UAN remained at $11.25-$11.72/unit FOB for prompt tons in the Eastern Cornbelt.

CF’s forward program for UAN last week offered tons at $11.00/unit FOB Peru, Ill., for November through February, and at $12.05/unit FOB for tons shipped April through July 2013. Out of Kingston Mines and Albany, Ill., forward pricing was listed at $11.90-$12.00/unit FOB for April through July, 2013.

Western Cornbelt: The UAN-32 market in the Western Cornbelt remained at $360-$370/st ($11.25-$11.56/unit) FOB regional terminals for prompt tons. One Iowa contact tagged the common dealer market at the $368/st ($11.50/unit) FOB mark at mid-month.

CF was reportedly offering forward tons at $10.80/unit FOB St. Louis, Mo., for October through February, with the market jumping to $11.70/unit FOB for April through July 2013.

California: The UAN-32 market was up slightly in California, with sources quoting the dealer market at $380-$390/st ($11.88-$12.19/unit) FOB in the state. Agrium was referenced at $410/st ($12.81/unit) truck-DEL in the California market.

Pacific Northwest: The UAN-32 market was quoted at $415-$430/st ($12.97-$13.44/unit) DEL in the Pacific Northwest, depending on location and supplier, with the lower numbers reported in eastern Oregon and Washington.

Western Canada: UAN-28 dealer pricing in Western Canada had firmed to $429-$435/mt ($15.32-$15.54/unit) DEL in Manitoba, $435-$438/mt ($15.54-$15.64/unit) DEL in Saskatchewan, and $438-$447/mt ($15.64-$15.96/unit) DEL in Alberta.

Urea

Bangladesh, Black Sea, California, China, Eastern Cornbelt, India, Indonesia, Market Watch, Middle East, Pacific N.W., Pakistan, Sri Lanka, U.S. Gulf, Urea, Western Canada, Western Cornbelt

U.S. Gulf: Granular barge prices started the week in the $440-$442/st FOB range, but fell back into the low-to-mid $430s/st FOB by midweek, with $435/st FOB cited as the most common number.

Still, others said prompt product was hard to find, and September tons were more common. Low water levels on the Mississippi River continued to be a nagging problem, delaying upriver movement because of limits on barge weights and on the size of tows.

The last done prill business was called $445/st FOB.

Imports were off 6 percent in June, to 219,056 st from the year-ago 234,061 st. They were level for the fertilizer year ending in June, however, to 6.616 million st versus the prior year 6.611 million st.

Eastern Cornbelt: Granular urea was quoted in the $495-$510/st range FOB regional terminals.

Western Cornbelt: Granular urea in the Western Cornbelt region was tagged at $495-$510/st range FOB in mid-August, with most dealer quotes reported at the $500/st FOB mark.

California: Granular urea pricing in mid-August was pegged at $570-$580/st FOB in California.

Pacific Northwest: Sources pegged the granular urea market at $530-$560/st FOB and $555-$585/st DEL in the Pacific Northwest, depending on supplier, location, and time of delivery.

Western Canada: Granular urea pricing was pegged at $630-$640/mt DEL in Manitoba, $635-$645/mt DEL in Saskatchewan, and $645-$660/mt DEL in Alberta.

Pakistan: TCP called a tender for 300,000 mt to close Aug. 27. The tender comes after TCP finished a round of tenders that also netted 300,000 mt.

Almost as soon as the last shipment was awarded, the government once again revised its evaluation of urea supplies and demand.

At first the estimate was that the country needed an additional 600,000 mt. By the first week of this month, however, the government only allowed TCP to import 300,000 mt.

Sources say the other 300,000 mt is still needed, but that the government will most likely try for a grant or loan from Saudi Arabia for the tons.

Even with the current soft urea market, sources say TCP will most likely have to hold at least three tenders to cover the amount it wants to import. The best guess is that offering companies will not offer any more than 100,000 mt at any one time.

The rules of procedures do not allow TCP to ask participating companies to match the lowest offer in the tender. As soon as the award is made, the expectations will be for TCP to call another tender.

Pakistan’s four offline urea plants on the Sui Northern Gas Pipeline (SNGPL) – Engro Fertilizer’s new 1.3 million mt plant, Dawood Fertilizers, Agritech, and Pak Arab – continue to suffer heavy financial loss due to the diversion of gas to power plants, and one of them has started laying off employees.

Engro incurred a loss of Rs311.198 million in the second quarter of 2012 due to lower sales and the closing of its plant on the SNGPL network. In the same period last year, the company posted a profit of Rs77.616 million.

Shahab Khawaja, executive director of the Fertilizer Manufacturers Pakistan Advisory Council (FMPAC), said all four plants have been closed for the past three months due to curtailments in gas supply. Agritech, one of the oldest urea plants, has filed a petition in labor court to lay off their work force of 3,000 employees, and the other plants will be forced to take similar measures if the situation does not improve. Khawaja questioned how the industry can survive under these circumstances.

Pakistan’s urea industry produced 4.685 million mt of urea during FY2011/12 (July-June), down 5.9 percent from the 4.979 million mt produced in FY 201

Ammonia

California, Eastern Cornbelt, Market Watch, Pacific N.W., U.S. Gulf, Western Cornbelt

U.S. Gulf: The market remained quiet last week, though there was speculation that tight supplies may lead to higher prices for Tampa for August.

June imports were down 13 percent, according to the U.S. Department of Commerce, to 570,854 st from the year-ago 659,925 st. Imports for the fertilizer year July 2011 to June 2012 were down 9 percent, to 7.1 million st from 7.77 million st.

Eastern Cornbelt: Sources reported few changes to spot fertilizer prices, and little new activity to test the markets. Ammonia pricing remained at $770/st FOB in the Illinois market.

Recent rains in Indiana came too late to salvage damaged corn crops, but the area of the state experiencing extreme or exceptional drought has dropped from 69 percent to 46 percent. USDA has now declared 78 Indiana counties as primary natural disaster areas and the remaining 14 as contiguous areas, meaning all of the state’s 92 counties have now been declared eligible for drought assistance.

According to the Aug. 14 U.S. Drought Monitor, nearly all of Illinois was suffering extreme drought conditions, while the southern edge of the state had transitioned to the more severe exceptional drought category. Most of Ohio was experiencing moderate drought conditions at mid-month.

Just 5-9 percent of the corn acreage in Illinois and Indiana was rated as good or excellent last week, while 71-75 percent of the acreage fell in the poor or very poor categories. Ohio’s corn was 14 percent good or excellent and 53 percent poor or very poor. USDA labeled 50-55 percent of the soybean acreage in Illinois and Indiana as poor or very poor last week, compared with 34 percent in Ohio.

On the national scale, 23 percent of the corn and 30 percent of the soybeans were rated as good or excellent last week, only slightly different from the previous week. Poor or very poor ratings had expanded from the prior week, however, with 51 percent of the national corn crop and 38 percent of the soybeans now placed in those two categories.

Western Cornbelt: One Nebraska dealer said the phone was starting to ring for fall tons, but he doesn’t think there will be much fall applied ammonia in his location if field conditions stay dry.

The anhydrous ammonia market was pegged at $725-$760/st FOB in the region, with the low in Nebraska.

According to the Aug. 14 U.S. Drought Monitor, the area of exceptional drought has expanded to cover a broad section of southern and western Missouri, with nearly all of the rest of the state classified as an extreme drought area. Nearly all of Nebraska is now experiencing either extreme or exceptional drought as well, with the area of exceptional drought expanding considerably from the previous week in central and western areas of the state.

In Iowa, only the southern and northern areas of the state remained in the lesser category of severe drought, with a wide swath of extreme drought conditions reported across the center of the state.

Crop ratings changed only slightly from the previous week. In Nebraska, however, corn and soybean conditions fell 4-9 percentage points, with 41-46 percent of the acreage now rated as poor or very poor.

California: Calamco raised its anhydrous ammonia price on Aug. 13 to $780/st DEL in California, up $35/st from the previous list price. The aqua ammonia price also moved up on Aug. 13, to $209/st FOB from the previous $200/st FOB level.

Agrium also announced new anhydrous and aqua ammonia postings. Effective Aug. 17, Agrium’s anhydrous postings moved to $780/st truck-DEL in Central California and $785/st truck-DEL in Northern California. Agrium’s aqua ammonia posting moved on Aug. 17 to $210/st FOB in California.

Summer heat blanketed much of California in mid-August, wi

North Dakota weighs another option for flared natural gas/ammonia production

Ammonia, Featured, News, Northern Plains

North Dakota energy and agriculture interests are enthusiastic about a little known system that its owner/developer is claiming will convert onsite flare gas from the plentiful oil wells in this state and turn it into ammonia fertilizer. “It’s almost too good to be true to be able to take one problem and turn it into a solution for another,” said one observer.

N-Flex LLC’s future project may hinge on its request for a $1 million grant from the state to launch an onsite plant to convert the flare-offs into ammonia. N-Flex founder Neil Cohn, New York City, declined to comment on the grant application or how soon the initial demonstration could take place, though another source indicated something could be in place within 18 months.

The plants would be small and modular, with the initial cost for the first one put at $4 million. One oil well would reportedly produce 3 st/d of anhydrous ammonia. The plants would be put on skids and could be moved easily. Initial pilot plants would reportedly be constructed in Europe and use Proton and Casale technology.

Agriculture interests are watching closely because of the high price of ammonia and a proposal by the North Dakota Corn Growers to build a $1 billion nitrogen production facility in North Dakota or other nearby states, also to use flared gas (GM July 16, p. 1). That project recently received a $100,000 grant from the North Dakota Agricultural Products Utilization Commission (GM July 30, p. 12).

Oil and gas producers are under state requirements to limit the practice of gas flaring because of environmental problems. Current estimates are that up to one-third of the gas being produced in North Dakota is being wasted by flaring.

Agriculture Commissioner Doug Goehring told the local press if N-Flex is successful, it could reduce the wasteful practice of flaring while reducing fertilizer costs to farmers. Goehring, along with Gov. Jack Dalrymple and Attorney General Wayne Stenehjem, is a member of the industrial commission that will consider the N-Flex grant Monday, Aug. 20. “This has potential, and I think it will work very well and the state will reap the rewards,” said Goehring.

The North Dakota Department of Mineral Resources is also very positive about N-Flex’s potential. “This is a great example of the value added services that North Dakota natural gas production provides,” said Alison Ritter, department spokeswoman. “Not only can this technology help reduce the amount of flaring; it does so in a way that benefits North Dakota farmers. It’s a win for everyone.”

BioNitrogen and United Suppliers sign urea agreement; biomass urea plant planned for Florida

Featured, News, Urea

BioNitrogen Corp., a Florida company that has developed proprietary technology to convert biomass waste into urea fertilizer, announced on Aug. 15 that it has signed an agreement with United Suppliers Inc., giving the Eldora, Iowa-based wholesale fertilizer company the right of first refusal for biomass-based urea produced by any future BioNitrogen plants in North America. The agreement also provides for urea purchases by third-party customers of United Suppliers.

“The support and backing of such an important fertilizer supplier is a testament to the validity of our business model and mission,” said Carlos Contreras, president and CEO of BioNitrogen. “This relationship provides us access to 735 ag retailers in United Suppliers’ footprint in North America. Our intent is to build plants in the U.S. that allow the North American ag retailers and farmers to use domestic urea fertilizer made from U.S. biomass. Our partnership with United Suppliers creates a true win for our company, and for the North American ag retailer and the farmers that United Suppliers represents.”

Earlier this year, BioNitrogen entered into a letter of intent with United Suppliers (GM Feb. 6, p. 12) for the purchase of up to 300,000 st of urea annually, in granular or prill form, for an initial term of three years. BioNitrogen reported then that its small, modular urea plants can produce up to 124,200 st/y and can be located in high agricultural areas, where they can buy biomass (plant stalks, husks, household garbage, etc.) from farmers, and in turn supply them with urea.

A source with United Suppliers said more details of the agreement will be released soon.

BioNitrogen also reported on Aug. 10 that it has signed an agreement to purchase biomass – including tree trimmings, agricultural waste, and woodchips – from 40 acres of land in Florida’s Hardee County. The company said the Hardee County property is part of a larger parcel on which BioNitrogen plans to construct its first biomass-to-urea production facility. The land is currently owned by Larry Davis, a partner in Florida Fertilizer Company, and is being leased to BioNitrogen for a period of two years with an automatic two-year renewal provision.

As a result of the Florida deal, BioNitrogen said it has decided to postpone plans announced earlier to construct a fertilizer plant in West Texas, and instead focus its resources and capital in Hardee County. BioNitrogen said the decision was based on “a reassessment of both the availability of appropriate biomass and the potential market for urea” in Hardee County.

The company noted that Florida is one of the largest producers of tree trimmings as well as other sustainable biomass, and that the availability of this feedstock is year-round and not subject to declines due to changes in weather. BioNitrogen also said rapid and sustained development in Florida, along with the growth in the number of golf courses, has increased the amount of land producing biomass, and that companies disposing of biomass are paying large “tipping fees” to collection centers where the trimmings are disposed. BioNitrogen said it also intends to collect tipping fees for the disposal of biomass waste.

“The biomass, or plant feedstock, is a material cost in our plant business model,” said Contreras. “In the planned operation being set up in Hardee County we can source the biomass and generate revenues at the same time, on a year-round basis.”

BioNitrogen noted that it may review the feasibility of a plant in West Texas at some point in the future.