Plymouth, Minn. — The Mosaic Co. has updated its near-term market outlook for its potash and phosphates. It said since it announced fiscal fourth-quarter guidance on March 28, 2012, domestic and international crop nutrient markets have strengthened significantly, meeting the upper end of management’s initial expectations and resulting in an improved near-term volume outlook. "Global demand for crop nutrients has increased sharply, driven by an early and strong spring season in North America, combined with increasing shipments to South America," said Mosaic President and CEO Jim Prokopanko. "We expect demand to continue to grow, and crop nutrients to remain affordable. We anticipate another year of high farm income in North America – the second highest on record – and strong farm economics around the world. Our long-term outlook for the business is positive." In light of the rapid acceleration in demand, the company believes fourth-quarter fiscal 2012 volumes for both potash and phosphates will be in the upper end of the guidance ranges. As previously disclosed, these guidance ranges are – Potash: 1.7 to 2.2 million mt, and Phosphates: 2.3 to 2.7 million mt. The forecast continues to anticipate limited North American inventory re-stocking at the end of the spring application season. All other guidance, including pricing and phosphates segment margin expectations, is unchanged.
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Yara reports strong first-quarter results
Oslo — Yara International ASA reported strong first-quarter results as sales volumes returned to normal levels and margins remained healthy. Yara said following a slow first half of the Northern hemisphere season, activity levels in global nitrogen markets have increased and prices have strengthened significantly. First-quarter net income after non-controlling interests was NOK 3,020 million (NOK 10.58 per share), compared with NOK 2,889 million (NOK 10.02 per share) last year. Revenues moved up to NOK 21,303 million from the year-ago NOK 19,806 million. "Yara reports strong first-quarter results, as margins remained healthy and European deliveries picked up," said Jørgen Ole Haslestad, president and CEO. "As expected, Northern hemisphere fertilizer demand is strengthening following a slow first half of the buying season. This recovery is needed to avoid a further decline in global grain stocks." Total fertilizer volumes were just below year-ago numbers at 5.43 million mt versus 5.47 million mt, while industrial tons were up 14 percent, to 1.22 million mt from 1.07 million mt. Global Yara fertilizer deliveries were in line with first quarter 2011, while own-produced product sales increased. Nitrate sales volumes increased (1.47 million mt versus 1.41 million mt), while NPK (1.61 million mt versus 1.81 million mt) and urea (1.24 million mt versus 1.29 million mt) volumes decreased slightly. UAN volumes were up at 391,000 mt from 346,000 mt, while CN was down slightly at 232,000 mt from 237,000 mt. Increased industrial volumes reflected growth in environmental products and technical ammonium nitrates. Stock levels remained high during the first part of the quarter, but decreased sharply in March as demand picked up strongly. Season-to-date nitrogen fertilizer industry deliveries in Western Europe are 12 percent behind a year earlier, and Yara said full-season deliveries are likely to fall short of the previous season, as cold and dry spring planting conditions are likely to impact overall consumption. However, Yara saw record European deliveries in March, and satisfactory deliveries so far in April.
Compass fertilizer results nudge up
Overland Park, Kan. — Compass Minerals saw improvement in all categories for its specialty fertilizer business for the first quarter ending March 31, 2012. Operating earnings were $20.7 million on sales of $58.5 million, compared to the year-ago $19.3 million on sales of $55.4 million. Volumes moved up to 96,000 st from 95,000 st, while prices saw a more robust increase at $613/st from $583/st. Compass, which does business as Great Salt Lake Minerals and Big Quill Resources, said it expects second-quarter volumes of about 85,000 st and 2012 sales of 375,000 st, with stable and attractive prices. Compass-wide results were down due to the company’s salt business, which saw a big decline due to the mild winter. Compass net earnings dropped to $39.9 million ($1.19 per diluted share) on sales of $315.3 million from the year-ago $56.5 million ($1.69 per share) on sales of $390.6 million. The results also include about $10 million in losses due to the effects of the tornado that occurred at the Goderich, Ont., salt mine in August 2011. Operating earnings declined to $221.8 million from $275.9 million, and EBITDA dropped to $75.5 million from $100.4 million. Compass announced that it was increasing its quarterly dividend 10 percent, to $.495 per share from $.45 per share. The salt unit saw a drop in volume sales, to 3.61 million st from 4.86 million st. Salt operating earnings were $52.4 million on sales of $254.3 million, down from $77.2 million on $332.4 million. Average salt prices were actually up slightly, to $70.44/st from $68.36/st.
Bunge fertilizer EBIT off despite volume uptick
White Plains, N.Y. — Bunge Ltd. reported fertilizer EBIT of a negative $74 million for the first quarter ending March 31, 2012, compared to a year-ago negative $1 million. Some $27 million of the current quarter total was due to a legacy environmental claim in Brazil dating back to 1998. Volumes were up, at 1.1 million mt from 982,000 mt; however, margins were lower, and were pressured by falling market prices in the quarter. Results in the Moroccan joint venture were also down in the quarter, primarily due to lower international prices and scheduled maintenance. Total fertilizer sales were $600 million, up from the year-ago $515 million. Gross profit was a negative $8 million, down from the year-ago positive $36 million. Bunge expects fertilizer conditions to improve with the start of the traditional sales season later this year. Company-wide, net income attributable to Bunge common shareholders was $84 million ($.57 per diluted share) on sales of $13.4 billion, compared to the year-ago $224 million ($1.49 per share) on sales of $12.2 billion.
Sherritt 1Q fert volumes up 50 percent
Toronto — Sherritt International reported a 50 percent increase in fertilizer volumes for the first quarter ending March 31, 2012, to 26,627 mt from the year-ago 17,694 mt. Sherritt noted that the prior year period had a high level of snow cover, which caused delayed planting. Fertilizer revenues for the quarter were up 83 percent to C$15 million from the year-ago $8.2 million, while cost of sales were up 20 percent to $9.5 million from $7.9 million. Sherritt potash royalties were off 44 percent during the quarter, to $2.7 million from $4.8 million. Sulfur prices were up 37 percent and sulfuric acid 14 percent, to $274.30/mt and $198.04/mt, respectively, versus the year-ago $199.85/mt and $174.09/mt. Higher input commodity prices such as these, along with higher financing costs and decreased revenues – partly due to lower nickel prices – served to cut company-wide earnings almost in half, to $32.3 million ($.11 per diluted share) on sales of $462.2 million, down from the year-ago $63.6 million ($.22 per share) on sales of $474.5 million.
CVR Partners declares distribution
Sugar Land, Texas — CVR Partners LP, which owns a nitrogen plant in Coffeyville, Kan., on April 26 declared a cash distribution of 52.3 cents per common unit for the first quarter of 2012. The distribution will be paid May 15, 2012, to unit holders of record on May 8, 2012. This will be the fourth cash distribution paid by the partnership since its IPO in April 2011, and will result in cumulative cash distributions paid of $2.09 per common unit. This exceeds the company’s previous distribution guidance range of $2.00 to $2.05 per common unit for the 12 months ended March 31, 2012, and represents a 9 percent increase over its original distribution guidance of $1.92 per common unit for the same period. CVR will release earnings May 1.
Yara takes control of Ethiopotash
Oslo — Yara International ASA said April 27 that it has agreed to increase its ownership in Ethiopotash BV from 16.67 percent to 51 percent and take over management of the company. In 2009 Yara entered into an agreement with two partners to participate with 16.67 percent ownership in Ethiopotash. The partners were XLR with 57.33 percent ownership and management of the company, and Seftec with 26 percent ownership. Yara has now agreed to increase its ownership to 51 percent and take over management of the company, while XLR will retain a 49 percent ownership. Ethiopotash is developing a potash resource in Dallol in the Danakil Depression of Ethiopia, based on the mining and exploration permits held by the company. Drilling activity started at site in 2010, and most drilling and drilling related activities have now been completed. The project development phase will be finalized with a definitive bankable feasibility study, which is expected to be completed in mid-2013. This study will be the basis for a decision on whether to proceed with project execution and realization, with production start-up 2-3 years thereafter. Estimated capacity for the Dallol project is 1-1.5 million mt/y, with resources of more than 30 years of mining.
Mitsubishi partners in Nigerian urea plant
Lagos, Nigeria — Notore Chemical Industries Ltd., owner of the only urea plant in sub-Saharan Africa, said April 24 that it has signed a joint venture agreement with Mitsubishi Corp., Tokyo, to develop an ammonia, urea, and other petrochemicals plant at its existing facility at Onne, Rivers State, Nigeria. The project will involve the construction of an integrated plant complex with production capacities of 1,700 mt/d of ammonia, 3,000 mt/d of urea, and 1,500 mt/d of other petrochemicals. An agreement was also signed with Mitsubishi Heavy Industries (MHI) in Japan to carry out the pre-FEED for the project. It is expected that early works (including FEED) should be concluded in the first quarter of 2013. The early works phase will be followed by 36 months of Engineering, Procurement, and Construction (EPC). The new plant, owing to its advantage of being built on a "brown-field" site with existing gas facilities and other infrastructure, is expected to come on-stream by 2016. Notore commenced production of commercial quantities of ammonia in January 2010 and granular urea in April 2010 at its 300,000 mt/y ammonia and 500,000 mt/y urea capacity plants. Notore says it has now achieved its plant’s nameplate capacity through a refurbishment and operational excellence program that it embarked upon. A debottlenecking exercise is planned for fourth quarter 2013, which will further increase annual output to 430,000 mt of ammonia and 750,000 mt of urea.
OCI inks Beaumont deal with Methanex
Vancouver — Methanex Corp. said April 23 that it has entered into a long-term offtake agreement with Orascom Construction Industries (OCI) for a significant portion of the production from its methanol plant in Beaumont, Texas, which is expected to commence commercial production in June 2012. Methanex is the world’s largest supplier of methanol to major international markets. OCI, a leading international nitrogen fertilizer producer and engineering and construction company, with its headquarters in Cairo, Egypt, already has its 250,000 mt anhydrous ammonia plant in production. The methanol plant can produce up to 750,000 mt/y.
Florida sulfuric acid spill blocks road
Bartow, Fla. — A truck carrying about 1,000 gallons of sulfuric acid and rock salt on a flatbed trailer spilled its load after making a sudden stop at an intersection in Polk County, Fla., during the early morning hours April 23. The acid mixed with the salt and created dangerous fumes. The driver of the truck, Eric Scott Garland, received second-degree burns on about 10 percent of his body when he fell while attempting to warn motorists to stop to avoid damage to their vehicles. Many did not stop and drove through the spill. The road remained closed until after the late afternoon rush hour while the emergency crews worked on the cleanup.