New Tampa anhydrous ammonia business has been concluded by major players at $470/mt DEL for April, up some $70/mt from March. Sources say the $70/mt increase indicates that a $359/mt spot cargo to Tampa reported earlier was a distressed cargo by a heretofore unknown seller and not reflective of the true market.
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ICL inks potash deal
Israel Chemicals Ltd. has signed contracts to supply Chinese companies with some 550,000 mt of potash during the second quarter of 2012. There is also an option to supply an additional 120,000 mt. The pricing is unchanged from the previous contracts to China at $470/mt CFR.
The 550,000 mt represents an increase over the 500,000 mt achieved in the year-ago period. “The new agreements underscore our strategic decision back in 2010 to increase the number of customers in China and to sell directly to fertilizer producers and distributors,” said Danny Chen, ICL Fertilizers CEO.
ICL reports record 4Q
Israel Chemicals Ltd. reported a sharp rise in net profits and in revenues for the fourth quarter of 2011. The company said that the fourth quarter was the best in the company’s history. ICL reported a 50 percent rise in net profits to $370 million versus $245 million in the same quarter in 2010. Revenues were up by 20 percent to $1.71 billion compared to $1.42 billion in the fourth quarter of the previous year. ICL also reported that it was currently in negotiations with Chinese customers on closing potash deals.
For the year, ICL reported a 48 percent rise in net profits to $1.511 billion versus $1.024 billion in 2010. Revenues were up by 24 percent to $7.067 billion compared to $5.692 billion in the previous year.
ICL Fertilizers, the company’s largest division, accounted for 54 percent of total ICL revenues in 2011. The division reported a 31 percent in revenues to $4.1 billion versus $3.1 billion in 2010. The operating profit was up by 45 percent to $1.403 billion versus $965 million in 2010. Potash revenues totaled $2.506 billion versus $2.140 billion in 2010. Fertilizers and phosphate rock sales totaled $1.705 billion versus $1.056 billion in 2010.
The company attributed the improved results to a sharp increase in fertilizer sales and the contribution of a number of acquisitions.
Agrium plant returns to production
Agrium Inc.’s Carseland, Alberta, nitrogen plant, which has been down for maintenance, returned to production March 23, 2012. The company said it is currently operating at 80 percent of capacity and lost some 56,000 mt of urea due to the five week outage.
In other news, Agrium confirms that there has been positive movement toward the start up of the MOPCO nitrogen complex in Egypt, which was idled late last year due to local unrest and complaints about environmental concerns regarding the expansion at the facility. However, to date, there is not an official start up date for the complex, which is 26 percent owned by Agrium.
Ammonia
U.S. Gulf/Tampa: The new U.S. Gulf/Tampa price for April was pending last week, and indications were that it will rise for the next round. World prices were around $500/mt, compared to the Tampa price of $400/mt for March. If that price holds, the new price could be as high as $550/mt, but time remained for the situation to change.
A spot sale into Tampa was done this month at a low price of $359/mt, but that was not expected to be used as a benchmark.
Product was in short supply on the river system, despite the relatively low price.
Eastern Cornbelt: The prompt ammonia market was quoted at $640-$650/st FOB terminals in Illinois and Indiana, up slightly from the previous week.
With temperatures reaching the 80s throughout the region and ground temperatures already reaching the mid 50s in some areas, Illinois sources said a few corn planters were making their way to fields last week. An Ohio source said corn planters in his location were still on the sidelines in his area, but growers there were busy applying preplant fertilizer and burndown herbicides, and also topdressing wheat.
Western Cornbelt: The ammonia market was tagged at $590-$610/st FOB regional terminals, with the low in Iowa and Nebraska on a spot basis.
One Nebraska contact said tons were moving briskly to the field in spite of steady ammonia movement last fall and during portions of the winter. He reported some corn planting in his trade area last week. “It’s a little premature, but I think these guys are bored,” he said. “It was a mild winter, they have all their fieldwork done, and you can only grease machinery for so long.”
California: Anhydrous ammonia was steady at $585/st truck-DEL in California, with aqua ammonia referenced at the $160/st FOB mark. Sources reported some ammonia movement to the field earlier in March, but mid-month precipitation across the state slowed the pace.
Pacific Northwest: The anhydrous ammonia market remained at $630-$660/st DEL in the region, depending on location.
A powerful storm moved through the Pacific Northwest as winter transitioned to spring, blanketing the Cascades with two feet of snow and dropping two to five inches of rain in northwestern Oregon and southwestern Washington.
The system also brought heavy rain and snow to Idaho and Montana. More than an inch of steady rain caused areas of isolated flooding in parts of south central Idaho and Idaho’s Wood River Valley, and up to 26 inches of snow was reported on March 19 in parts of north central Montana. As the week advanced, however, warmer temperatures and sunshine returned to much of the region.
Western Canada: The anhydrous ammonia market was pegged at $996-$1,040/mt DEL in Western Canada, with the lower numbers reported in Manitoba and the upper end in the Alberta market.
While unseasonably warm weather continued in Manitoba and Saskatchewan in mid-March, parts of British Columbia and Alberta were blanketed with snow last week.
Urea
U.S. Gulf: Granular urea continued to skyrocket last week, and prices for NOLA barges increased to a range of $560-$595/st FOB, based on confirmed transactions. Most of the trades last week were in the $570/st FOB range. The lowest price in the range was at the beginning of the week and the highest at the end, and there were several at the high end.
Rumor held that one urea barge was traded at $600/st FOB, but no one was able to determine who the buyer was or where the barge was at the time of purchase, so that was not included in the range.
The number of NOLA barges available last week was small and may become even thinner this week. Demand remained very high due to the early spring.
Forward prices for April ran as high as $575/st FOB, which was also a sharp increase, and May reached $500/st FOB. Speculation was those prices will have to rise, and are likely to do so sometime soon.
A 40,000 mt urea vessel was scheduled to arrive or had just arrived late last week, but all of the product was planned in advance for terminals.
Eastern Cornbelt: Fueled by another surge in NOLA barge prices, the granular urea market firmed quickly in the Eastern Cornbelt region as the week advanced. The low end of the terminal range was quoted at $580/st FOB Cincinnati early in the week, but sources said the market had firmed $20/st by March 22. Illinois sources on Thursday also quoted the granular urea market solidly at the $600/st FOB mark to the dealer.
Western Cornbelt: Granular urea pricing had firmed to $595-$615/st FOB in the Western Cornbelt region, up some $30-$35/st from the previous week, with the low reported in Nebraska and the upper end in the Missouri market. An Iowa source described the urea market as “on fire,” and pegged the dealer price solidly at the $600/st FOB mark in his trade area at midweek.
Effective March 22, Koch’s urea postings FOB Enid and Inola/Catoosa, Okla., firmed to $595/st FOB.
California: The granular urea market was pegged at $550-$575/st FOB in California, depending on location. That range reflected a $40/st increase from last report, with several sources tagging the common dealer price in the $550-$555/st FOB range at mid-month.
Sources talked of limited product availability for prompt shipments from suppliers. “They’re all saying they’re going to run out,” said one source.
Pacific Northwest: The granular urea market was quoted in a broad range at $550-$590/st FOB in the region last week, depending on supplier and location. The low end of the range was for Simplot tons FOB Rivergate, Ore., which reflected a $10/st increase from the company’s Feb. 27 posting at that location. Washington sources quoted the market at $560-$590/st FOB for any available tons, but supplies were described as snug.
Delivered urea was pegged in the $585-$595/st range in the Pacific Northwest.
Western Canada: The granular urea market was steady at $655-$680/mt DEL in Western Canada.
India: The first IPL tender of 2012 closed Friday, March 23, as Green Markets went to press. In the run up to the tender, however, industry sources were not getting too excited. One trader said the malaise was due to a widely held belief that the whole tender would be an Iranian play.
Other traders agree that Yuzhnyy and the Arab producers would be hard pressed to match the price mostly likely to come from Iran. Sources say the top price IPL has indicated it would accept is $400/mt CFR. At that level, Yuzhnyy would have to drop to $340/mt FOB and the Arab producers would have to offer at $360-$380/mt FOB. Both ideas are way out of the current pricing ideas from those suppliers.
In the past few years India
Nitrogen Solutions
U.S. Gulf: UAN was following the general trend of urea, but was far less volatile – although it did rise about $30/st FOB last week.
The previous week, nitrogen solution could be purchased for as little as $280/st ($8.75/unit) FOB, but was fetching as much as $320/st ($10.00/unit) FOB at the end of last week. The rise started earlier in the week, when tons were offered at the $285/st ($8.91/unit) FOB level. UAN will continue to track urea, but should continue to be less erratic as well.
Eastern Cornbelt: UAN pricing was starting to move up in the Eastern Cornbelt. Ohio sources said tons could still be had for as low as $10.50/unit FOB on a spot basis last week, but some terminals had also increased UAN-28 pricing levels to the $310/st ($11.07/unit) FOB level for replacement tons. Illinois contacts quoted UAN-32 at $352-$355/st ($11.00-$11.09/unit) FOB terminals to the dealer.
Western Cornbelt: UAN-32 had reportedly inched up to $345-$352/st ($10.78-$11.00/unit) FOB regional terminals in the Western Cornbelt.
California: The UAN-32 market had reportedly firmed to $340-$355/st ($10.63-$11.09/unit) FOB in California, depending on location and supplier. One source also quoted rail-delivered tons at the $355/st ($11.09/unit) level last week. “Railcars are moving up and starting to support higher levels at local terminals,” said another contact.
Pacific Northwest: Sources quoted the UAN-32 market in a broad range at $350-$375/st ($10.94-$11.72/unit) DEL in the Pacific Northwest, with the upper end reflecting dealer postings. While some maintained that the bulk of dealer quotes were at the $365/st ($11.41/unit) DEL level, others confirmed offers for replacement tons as low as $350/st ($10.94/unit) DEL at mid-month.
Western Canada: UAN-28 was quoted in the $417-$432/mt ($14.89-$15.43/unit) DEL range in Western Canada last week, with the low reported in the Manitoba market and the upper end in Alberta.
Ammonium Nitrate
U.S. Gulf: Along with other nitrogen products, ammonium nitrate had a price bump last week, running from $350-$360/st FOB the previous week to $355-$370/st FOB last week. Inventories were said to be limited.
Western Cornbelt: Ammonium nitrate pricing was working its way up out of regional terminals. Sources quoted the dealer market at $415-$420/st FOB last week, with reports of some locations now referenced as high as $440/st FOB for limited tons.
California: No market was reported for ammonium nitrate in California.
CAN-17 was unchanged at $300-$320/st FOB in the state, depending on location, with good movement reported.
AN-20 remained referenced at the $265/st DEL level in California.
Pacific Northwest: Ammonium nitrate was reported at the $424/st DEL level in Montana. CAN-17 was unchanged at $291/st FOB Kennewick, Wash.
Ammonium Sulfate
Eastern Cornbelt: The granular ammonium sulfate market had firmed to $385-$395/st FOB in the Eastern Cornbelt region, with the upper end reflecting new reference levels following posting hikes on March 12 from Honeywell and DSM.
The ammonium thiosulfate market was steady at $360-$380/st FOB in the region.
Western Cornbelt: Granular ammonium sulfate pricing in the Western Cornbelt was quoted in a broad range at $375-$395/st FOB. The ammonium thiosulfate market remained at $360-$380/st FOB in the region.
California: Ammonium sulfate pricing remained at $350-$380/st FOB in California, with the upper end of the range reported in desert areas of the state. Reference prices from one supplier for standard grade ammonium sulfate had firmed to the $362/st FOB mark.
The ammonium thiosulfate (12-0-0-26) market was quoted at $305/st FOB distribution points in the state, with rail-delivered tons reported as low as $295/st.
Pacific Northwest: The ammonium sulfate market was unchanged at $360-$380/st FOB and $370-$390/st DEL in the Pacific Northwest, depending on grade and location, with the upper end for granular tons.
Western Canada: Granular ammonium sulfate was quoted in a broad range at $470-$500/mt DEL in Western Canada, depending on location and supplier.
Phosphates
Central Florida: Good weather in the Northeast and Eastern Cornbelt brought farmers out into their fields, and traders reported requests to move up the delivery dates for all fertilizers.
Phosphate was moving from terminals and dealer warehouses, and it won’t be much longer before that is reflected in railcar orders from Central Florida.
Sales into the Southeast have been up during the past two weeks, and that was spreading into the southern areas of the Northeast last week. Logistics problems will more than likely follow the long drought, as dealers begin to reorder to meet the rush that has been brought on by an early spring.
Rain has been a problem in the Eastern Cornbelt, but the area was beginning to dry last week and fieldwork was getting underway.
DAP and MAP inventories were up 84,000 tons, and were 15 percent higher than the five-year average, despite curtailed operations. It appears the spring season will soon lower those numbers.
Central Florida DAP was unchanged last week at $460-$470/st FOB. CF Industries was posted at the $465/st FOB mark, and Mosaic was offering tons in the $460-$470/st FOB range, depending on quantity. MAP remained in tight supply, and was listed at a $20/st premium to DAP by Mosaic in Central Florida, about the same difference as from traders.
PCS Sales was selling at prices comparable to the market.
U.S. Gulf: The phosphate market was getting little attention last week, and was being overshadowed by exploding urea pricing. However, both products were more scarce than they should be, considering the spring season has arrived earlier than usual this year.
Do not be surprised if the phosphate market takes big strides during the next few weeks, because the amount of product on the river was limited, even with slack demand.
One source said he was told Mosaic had only seven floating NOLA DAP barges late last week, and the company is normally the biggest supplier. However, a source said the company was sending a vessel cross-Gulf, but it was not clear whether it was a normal, scheduled move or additional.
The export market has been the phosphate industry’s hedge against a slow domestic market, but export prices appeared to be on the wane and the domestic market was just beginning to awaken after its winter nap.
Russian product was on the scene last week, and was selling at as much as a $20/st discount to domestic phosphate. Despite its quality, it does not command the respect or price of domestically produced phosphate. However, it does affect the price range for DAP and MAP.
Sources reported high activity in the Southern Plains, and the Northern Plains was picking up speed as fieldwork in the Dakotas and Minnesota was just getting underway. As business was picking up at terminals last week, prices were beginning to creep up.
Despite bumps here and there, crop prices have been very good and farmers will need and want as much fertilizer as possible. That is a given. The season will be early this year, which is another given. And phosphate prices? Take a guess.
Crop prices were down a small amount last week from the previous week. Prices for corn futures fell from $5.7025/bushel the previous week to $5.5625/bushel last week for December 2012. The corn price for December 2013 was $5.48/bushel, down from $5.725/bushel the previous reporting period. Soybeans for November 2012 moved down to $13.135/bushel from $13.225/bushel the past week, and beans for November 2013 decreased to $12.2325/bushel from $12.40/bushel a week earlier. Wheat for July 2012 fell to $6.5675/bushel from $6.6725/bushel the week before, and wheat for July 2013 was listed at $7.0675/bushel last week, down from $7.1875/bushel previously.
Based on actual transactions, the NOLA DAP barge price range for the week was $435-$455/st