All posts by webster@kennedyinfo.com

Yara announces Belle Plaine and Porsgrunn expansions

Featured, News, Northwestern Europe, Saskatchewan

Yara International ASA on June 11 announced that it has approved expansion projects at the company’s Belle Plaine facility in Saskatchewan and its Porsgrunn facility in Norway. Yara said the expansions will add 1.3 million mt of urea at Belle Plaine and 300 kilotons of NPK at Porsgrunn.

“I am delighted to confirm these highly value-creating projects for Yara,” said Jørgen Ole Haslestad, president and CEO of Yara. “Taking advantage of the excellent location of our existing Belle Plaine facility in Canada, we will increase our presence and scale in the North American market by more than doubling our capacity at the site. The Porsgrunn expansion marks an important step in our value-added fertilizer growth plans, driven by increasing demand for high-quality NPK fertilizer for cash crop markets outside Europe.”

The Belle Plaine expansion, first announced by Yara back in February (GM Feb. 13, p. 1), will comprise an integrated world scale ammonia and urea line. Part of the urea produced will be with sulfur, which Yara said will meet the increasing demand from the canola crop segment in the Northern Plains region.

The Belle Plaine project is approved for a fast-track process, Yara said, with expected start-up in the second half of 2016. The final decision to implement the project is subject to an engineering, procurement, and construction (EPC) contract, and agreements with Saskatchewan authorities related to utilities and other key terms of the project.

At present, the site has one ammonia plant, one nitric acid plant, and one urea granulation plant. Belle Plaine capacity currently stands at 1 million mt/y urea, 700,000 mt/y ammonia, and 200,000 mt/y UAN, with most of the ammonia used in the production of UAN and granular urea. Total annual production capacity at the plant is 1.1 million mt of finished product.

The new plant will have two granulation units that will produce an additional 1.3 million mt of urea and urea plus sulfur per year, bringing the combined production capacity at Belle Plaine to 2.4 million mt/y. A company spokesman told Green Markets that Yara currently markets urea plus sulfur in Europe, and felt it would also be a good fit for Western Canada and the upper Midwest.

The new facility will be located next to the existing plant on Yara’s 660-acre Belle Plaine site. Although termed an expansion, the upgrade at Belle Plaine will in fact be an entirely new train, with its own urea and ammonia plants and granulation units, and its own natural gas lines, power, and water supplies. A company source stressed that there will be synergies, but the two plants will run independently of each other. If one goes down, he told Green Markets, the other will stay up.

Plant Manager Michael Schlaug told the local press that the existing plant, which will celebrate its 20th anniversary of operation this October, has reached its maximum capacity. “The existing ammonia-urea plant has been expanded and upgraded two to three times,” Schlaug was quoted as saying. “These units are basically maxed out.”
Pending the results of the EPC process and regulatory approvals, Yara plans to begin construction on the Belle Plaine expansion in 2013, with completion slated for 2016.
No projected costs for the project were divulged, but sources noted that, based on the C$1.6 billion price Yara paid for Saskferco in 2008, a total cost of more than $1 billion is likely for a world class ammonia plant.

The construction phase will require a minimum of 200 workers per day, equaling some 2-3 million man-hours, and a minimum of 50 permanent employees will be added once the facility is finished and operating.

In Porsgrunn, Yara will invest approximately NOK 300 million to increase NPK capacity by 300 kilotons. The project will be implemented with a gradual step-up in capacity from 2012 to com

Sulfur

Market Watch, Sulfur, Tampa, U.S. Imports, Vancouver

Tampa: Perhaps the loss of production at Miss Phos was enough to push supply past demand. Mosaic was continuing to get requests to sell its molten sulfur above its contract levels.

Last week, Mosaic agreed to purchase a vessel of molten in the mid-$160s/lt DEL, which was about $15/lt DEL less than its contract price. The company’s sulfur inventories were already high, and the new buy will make them flush.

Although negotiations for new third-quarter contract prices will probably not start for another couple of weeks, it appeared likely the new rate will be lower than the current $180/lt DEL.

Backlogs from the Canadian Pacific rail strike had pretty well cleared by last week. No significant problems resulted from the delays.

Refineries continued at a blistering rate last week. A week earlier, the Department of Energy reported the refinery operating capacity rate rose 1.9 percent, from 89.1 percent to 91 percent. Last week, DOE said the operating capacity rate moved even higher to 92 percent. To put the rate in perspective, the operating capacity rate a year ago was 86.1 percent, and the five-year average was 88.3 percent.

Although gasoline prices have edged down during the past couple of weeks, the rate was not reflected at the gas pump. It will also not push the amount of sulfur recovered by much, if at all, because refineries have been using sweet crude, which has a premium of about $15/barrel over high-sulfur sour crude.

U.S. Import: April imports were up 3 percent, to 205,340 st from the year-ago 198,573 st. July-April imports were off 2 percent, to 1.97 million from the year-ago 2.02 million.

Vancouver: There were no delays remaining as a result of the Canadian Pacific rail strike, and deliveries into Vancouver were back to normal.

Prices at Vancouver for both spot and contract tons were said to be flat. Prices in China, its major customer, may have weakened about $5/mt.

Benelux: The current price range was $210-$228/mt FOB.

Potash

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

U.S. Gulf: Potash barges were quoted at $475-$485/st FOB.

U.S. Import: April MOP imports were off 30 percent, to 900,849 st from the year-ago 1.29 million st. July-April imports were off 25 percent, to 7.53 million st from 10.1 million st.

Eastern Cornbelt: PCS Sales reposted its warehouse potash prices on June 11, reflecting a roughly $20/st drop from spring pricing levels and an $80/st drop from the company’s last official published price on July 1, 2011.

Effective June 11, granular potash postings from PCS Sales dropped to $510/s FOB warehouses in Illinois, Indiana, and Ohio. These include Illinois locations at Casey, Colfax, Danville, Marseilles, Seneca, and Springfield; Indiana warehouses at Burns Harbor, Delphi, Crawfordsville, Jeffersonville, and Walton; and Maumee, Ohio. Elsewhere, PCS’s granular potash postings moved on June 11 to $512/st FOB Green Bay, Wisc., and $520/st FOB Baltimore, Md. A $20/st increase is scheduled for July 21.

Western Cornbelt: Potash was pegged at $510-$520/st FOB in the region. Effective June 11, granular potash postings from PCS Sales dropped to $510/s FOB Ft. Dodge and Waterloo, Iowa, and St. Louis, Mo. A $20/st increase is scheduled for July 21.

California: Potash pricing was off some $20/st from last report, with sources quoting the market at $570-$590/st DEL in California. Sulfate of potash (SOP) was steady at $695-$705/st FOB in the state, and potassium nitrate was unchanged at $1,020/st FOB for bulk tons and $1,090/st FOB for bags.

Pacific Northwest: Potash was down from last report, with sources quoting the market at $570-$580/st FOB or DEL in the Pacific Northwest. Potash pricing at Utah mine locations ranged from $530-$540/st FOB, depending on grade.

K-Mag was steady at $426-$431/st FOB in the region.

Western Canada: Potash was quoted at a nominal $607-$632/mt FOB Western Canada warehouses, depending on grade and location. The market to Canadian customers FOB Saskatchewan mines remained in the $592-$603/mt FOB range.

Phosphates

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

Central Florida: With the spring season over and done, producers turned their attention to the export market. With an eye toward an early corn harvest this year, prices by one were posted higher.

Inventories in Central Florida were low last week and have been for some time, and Mosaic used the opportunity to increase its price for DAP by $20/st FOB. It was not clear whether CF Industries would follow along, but that seemed likely. PCS Sales also had tight inventories, but was keeping up with contractual requirements.

Meanwhile, dealers were sitting tight and making no moves to build supplies in the belief that prices will stay flat or rise very little. That could be a mistake, however, considering the level of inventories and the recent move by Mosaic to hike prices. The Central Florida market was trailing both the NOLA DAP barge market and exports.

The Central Florida DAP price range was quoted at $480-$500/st FOB. CF Industries’ posted price was at the $480/st FOB mark, and Mosaic moved its price up to $500/st FOB. MAP continued to sell at a $20/st premium to DAP in Central Florida, about the same difference as from traders. PCS Sales, which produces MAP at its White Springs facility in North Florida, was selling at prices comparable to the market.

U.S. Gulf: Mississippi Phosphates was in the process of bringing its plant back online late last week. Miss Phos was getting its acid plants, which were where the explosions occurred, up and running, but the phosphate granulation plant will take a bit longer.

Not much of Miss Phos’ output was going into the domestic market during the past month, even before the accidents, and that will probably be the case once everything is back to normal. The export market was still more profitable than the NOLA river market.

Dealers were still waiting and hoping their bins would be empty, or close to it, before they need to buy again. Predictions are that the corn crop will be harvested earlier than normal this year, which could mean farmers will have more of an opportunity to put down phosphates before Old Man Winter takes a seat at the table. The problem is that they will probably have to pay more than they would if dealers had already placed their orders for summer and fall.

Mosaic, which has been mainly using its output from Donaldsonville to fill contracts and for export, set a new price for DAP at $520/st FOB, which was higher than the market for prompt NOLA DAP barges last week.

Many in the industry believe phosphates will begin to take off again during or shortly after the Southwestern Fertilizer Conference in San Antonio July 14-18, but some may make moves before that time. Considering the lack of inventory and demand from the export market, prices may move much higher than anticipated, and possibly sooner.

Some parched areas of the Midwest got some moisture last week and that should help crops, but it also had the effect of dropping corn prices. During the first two days of last week, corn prices fell about $0.25/bushel.

By late last week, corn, soybean, and wheat prices were all down. Prices for 2012 corn futures fell from $5.35/bushel the previous week to $5.15/bushel for December. The corn price for December 2013 was $5.2275/bushel, decreasing from $5.40/bushel the previous reporting period. For November 2012, soybeans moved down to $13.1275/bushel from $13.39/bushel the previous week, and soybeans for November 2013 decreased to $11.835/bushel from $12.10/bushel a week earlier. Wheat for July 2012 fell to $6.2175/bushel from $6.425/bushel the week before, and wheat for July 2013 was listed at $6.9975/bushel last week, down from $7.27/bushel the previous week. Wheat for July 2014 was posted at $7.17/bushel.

The prompt NOLA DAP barge price range for the week moved to $500-$508/st FOB from the previous week

Ammonium Sulfate

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

U.S. Imports: Imports were off 20 percent for the July-April period, to 260,857 st from the year-ago 325,214 st. April was off 30 percent, to 34,065 st from 48,970 st.

Eastern Cornbelt: Ammonium sulfate was steady at $425-$445/st FOB in the Eastern Cornbelt, with mid-grade referenced at the $415/st FOB level.

Western Cornbelt: Granular ammonium sulfate remained at $415-$440/st FOB in the region, depending on location. One Iowa contact pegged the common dealer price at the $425/st FOB mark.

California: Ammonium sulfate pricing was unchanged at $370-$400/st FOB in California, depending on grade and supplier.

Pacific Northwest: Ammonium sulfate was steady at $380-$400/st FOB and $390-$410/st DEL in the Pacific Northwest, depending on grade.

Western Canada: The granular ammonium sulfate market remained at $550-$555/mt DEL in Western Canada.

Ammonium Nitrate

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

U.S. Gulf: The ammonium nitrate market was essentially quiet last week, with prices quoted around $370-$380/st FOB. Sources said very little remained on the river, and activity was very slow at terminals that carry the product.

U.S. Import: Imports were up 5 percent in April, to 76,098 st from the year-ago 72,714 st. July-April imports were off 2 percent, to 618,329 st from 630,302 st.

Western Cornbelt: Ammonium nitrate remained at a firm $480/st FOB in the region, where available. That pricing level was also reported out of the Tulsa, Okla., market.

California: No market was reported for ammonium nitrate in California. CAN-17 remained at $300-$320/st FOB in California, depending on location. The AN-20 market was quoted at $325-$335/st truck-DEL in the state.

Pacific Northwest: Ammonium nitrate was quoted at a nominal $544/st rail-DEL in Montana for the last done business.

CAN-17 remained at the $313/st level FOB Kennewick, Wash.

Nitrogen Solutions

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

U.S. Gulf: The UAN market was nearly dead last week, with the possible exception of applications for rice. Prices were up slightly to the $275-$280/st ($8.59-$8.75/unit) FOB range, but movement was slow. One source said Koch may be preparing a fill plan and could set prices around $260/st ($8.13/unit) FOB. Last week, CF Industries was not a player in the market.

U.S. Import: April UAN imports were off 29 percent, to 279,303 st from the year-ago 396,031 st. However, July-April was level with a year ago, at 2.931 million st versus 2.928 million st.

Eastern Cornbelt: UAN pricing continued to slip in the Eastern Cornbelt, and regional pricing covered a broad range at mid-month. Sources quoted the UAN-28 market at $335-$340/st ($11.96-$12.14/unit) FOB river terminals and $360-$365/st ($12.86-$13.04/unit) FOB out of inland shipping points.

Western Cornbelt: The UAN-32 market in the Western Cornbelt had reportedly slipped to $340-$350/st ($10.63-$10.94/unit) FOB regional terminals on the low end. At the upper end of the range, sources continued to quote dealer pricing at the $400/st ($12.50/unit) FOB level on a spot basis.

California: UAN-32 remained in the $395-$425/st ($12.34-$13.28/unit) FOB range in California. “It’s a large gap, but at this time it’s all about where product is located in the state,” said one source. On a rail-delivered basis, sources pegged the market in an equally wide range of $399-$430/st ($12.47-$13.44/unit) last week.

Pacific Northwest: The UAN-32 market was quoted at $450-$470/st ($14.06-$14.69/unit) DEL in the region, with the upper end of the range reflecting posted levels.

Western Canada: UAN-28 pricing was steady at $548-$563/mt ($19.57-$20.11/unit) DEL in Western Canada, depending on location.

Urea

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

U.S. Gulf: The old saying, “high prices cure high prices,” proved true again last week, as the granular urea market took a major drop and prices plummeted by roughly $100/st FOB.

A price of $500/st FOB was done as late as the previous Friday, but by Monday it was down again significantly. The range last week was quoted at $400-$420/st FOB.
Although there were claims that it might have sunken even farther below, no actual transactions of under $400/st FOB could be found.

A major reason for the decline in price was the dwindling market for prompt barges. Even the demand for rice applications will soon fade. As a result, a portion of the trading done last week was for future deliveries, primarily July through September.

Prill urea was in very short supply, and virtually no NOLA barges were available to trade. If it was being traded more heavily, the price would probably have dropped, as it did for granular urea and UAN. However, at terminals on the Arkansas, prill was reportedly bringing a premium of about $15/st over granular urea.

U.S. Import: April saw a surge in urea imports from the year-ago month. They were up 57 percent, to 909,321 st from the year-ago 579,971 st. However, July-April imports were off 2 percent, to 5.8 million st from 5.94 million st.

Eastern Cornbelt: Granular urea was pegged at $580-$610/st FOB regional terminals and falling in the Eastern Cornbelt, but sources reported minimal business to test the market.

Western Cornbelt: Urea continued to move on rice and cotton in southern Missouri. Sources quoted the market as low as $545/st FOB terminals in that location, with the upper end of the range pegged at the $600/st FOB mark in Iowa.

California: Granular urea pricing had reportedly slipped to $605-$625/st FOB in California for any available tons, but supplies were tight. No delivered prices were reported in the state at mid-month.

Pacific Northwest: Granular urea pricing in the region had reportedly slipped to $650/st DEL on the low end of the range, though sources said they expect some additional weakness going forward.

Western Canada: Granular urea was unchanged at $870-$895/mt DEL in Western Canada, with the lower numbers reported in Manitoba and Saskatchewan and the upper end in Alberta and British Columbia.

Indonesia: Pusri closed a tender Friday, June 15, after Green Markets went to press.

All told, the holding company is offering 70,000 mt of granular urea from Kaltim and 10,000 mt of its own prills.

Industry watchers will be paying close attention to the tender for indications of how the rest of the market sees pricing.

Loadings are expected to take place though July 15.

Go to the Green Markets website for updates on the auction.

India: Industry watchers expect to see a tender called any day now.

The general consensus is that India is comfortable thanks to material in the pipeline from previous tenders, but will need to get the next large order processed and ready for loading soon.

With the global urea market softening, sources figure an Indian buyer – most likely MMTC – will step in soon and take a large order that will place a floor under the market.

One of the cards the Indians will play is its role as the sole large buyer in the market. Even though TCP is still on track to close its own tender next week, it will only take 200,000 mt at the most. The next Indian tender could take more than 1 million mt.

Other buyers are not taking large forward positions. The Australians and Latin Americans are each taking what is needed in the short term. One trader

Ammonia

Ammonia, Black Sea, California, Eastern Cornbelt, Indonesia, Market Watch, Middle East, Pacific N.W., Tampa, U.S. Gulf, U.S. Imports, Western Canada, Western Cornbelt

U.S. Gulf/Tampa: A new price for ammonia for Tampa had not been set by press time. That will change in about a week, however, when the new monthly price is agreed upon.

Early indications last week were that another price increase in the general area of the last one might be in the offing. The price at Yuzhnyy was in the $600-$605/mt FOB range. If that is translated to the Tampa market, the cost would be in the range of $675-$700/mt, depending on the method of transportation. The increase from May to June was $80/mt DEL, so the scene was set for a higher range.

However, a sale by Transammonia late last week of 23,000 mt from Yuzhnyy for delivery to Tampa in mid-July was done at $710/mt DEL. The price was said to be based on a Yuzhnyy price of $600-$610/mt FOB and freight cost of $100/mt, although the cost of shipping could be reduced to $75-$80/mt if a larger vessel was involved. The transaction was considered to be at the high end of a new potential price.

U.S. Import: April imports were off 15 percent, to 552,180 st from the year-ago 648,526 st, according to the U.S. Department of Commerce. July-April imports were off 8 percent, to 5.97 million st from 6.46 million st.

Eastern Cornbelt: Ammonia remained at $680-$730/st FOB regional terminals for the most recent prompt sales, but sources said July prices for summer fill tons out of Illinois terminals were listed as low as $640-$650/st FOB.

According to the June 12 U.S. Drought Monitor, most of Illinois was classified as abnormally dry, with pockets of moderate and severe drought located in the central and southern portions of the state. In Indiana, 90 percent of the state was rated as abnormally dry, with moderate drought covering some 40 percent of the state and a small pocket of severe drought centered on the southwest corner of the state. In Ohio, only the northern half of the state was rated as abnormally dry, but those conditions were sufficient to produce reports of likely damage to fruit crops in the state.

Western Cornbelt: The anhydrous ammonia market was flat at $625-$660/st FOB regional terminals, with the low in Nebraska.

Drought conditions worsened in the Midwest in mid-June, and crop conditions slipped from the previous week. Most of Iowa was rated as abnormally dry as of June 12, with pockets of moderate drought in northern, western, and southeastern areas of the state. Moderate to severe drought persisted across a wide swath of southeastern Missouri, with the rest of the state classified as abnormally dry or in moderate drought. Nebraska, too, was dominated by abnormally dry or moderate drought conditions last week.

California: Anhydrous ammonia was steady at $705/st truck-DEL in California. Aqua ammonia was referenced at the $190/st FOB level in the state.

Pacific Northwest: Anhydrous ammonia pricing had reportedly inched up to $800-$810/st DEL in the Pacific Northwest, up some $20/st from May pricing levels.

The cool temperatures in early June limited fertilizer movement in the region, though sources reported some sidedress movement of ammonia on irrigated silage corn in parts of Washington at mid-month.

Western Canada: The anhydrous ammonia market remained at $1,209-$1,218/mt DEL in Manitoba, $1,218-$1,227/mt DEL in Saskatchewan, and $1,227-$1,253/mt DEL in Alberta.

Heavy rains in Saskatchewan, western Manitoba, and southern Alberta delayed the completion of planting in some locations in early June, and also hindered crop emergence.

Indonesia: Kaltim sold 5,000 mt to a local trader in a quick auction early last week for $621/mt FOB. The local buyer reportedly turned around and sold the product to Mitsui.

The sale is no

Intrepid Potash Inc. – Management Brief

Management Briefs

Intrepid Potash Inc. announced that Dr. Sebastian Braum joined the company on June 4 as the manager of agronomic services and market development. He has relocated from California to Intrepid’s corporate headquarters in Denver, Colo. Dr. Braum previously worked as an agronomist with Cenex-Land O’Lakes, Agriliance, and Yara North America Inc. He holds a degree in agricultural biology from Hohenheim University in Germany, and a PhD in soil chemistry from the University of Wisconsin-Madison.