Negotiations between the Histadrut Labor Federation, the Israel Chemicals Ltd.’s unions and ICL management broke down today. The powerful Histadrut trade federation accused management of backtracking on their commitments and failing to show up at today’s round of scheduled talks. The news of the break down of the talks followed progress in the negotiations in the past few days and predictions that the strike would end within the next few days. The Histadrut accused ICL management of raising new demands including a right to move workers from plant to plant and within subsidiaries themselves and in exchange management agreed not to fire any workers for the next three years.

The workers are demanding the right to replace workers that management wants to lay off with others that are prepared to go on early retirement. The Histadrut said that it would immediately report to the president of the Beer Sheba Regional Labor Court on the latest developments and ask for the Court’s intervention.

Negotiations to end the strike at Israel Chemicals Ltd. appear to have made major headway in the past 24 hours. Union officials at Dead Sea Works have said that ICL has agreed to drop its key demand to lay off workers at least at this stage and will agree to focus on those interested in early retirement. There are indications from both the union and management that the strike could end this week.

The strike at the two ICL subsidiaries-Dead Sea Works and Dead Sea Bromine Compounds—has lasted for over three months. It is one of the longest ever in Israel. Negotiations resumed this afternoon between the Histadrut Labor Federation, the ICL unions and the company’s management. Last week ICL reported that the strike had led to a $200 million drop in revenues in the first quarter of 2015 and a $76 million drop in profits.

Yesterday the southern Israeli towns of Dimona, Yerucham and Arad held a strike in solidarity with ICL workers. A large percentage of the population of the three towns work for ICL.

Israel Chemicals Ltd. reported a drop in revenues due to a strike at two of the company’s subsidiaries, while net profits actually rose largely a result of the sale of assets. Revenues were down by 13 percent totaling $1.4 billion versus $1.6 billion in the corresponding quarter a year ago. Net profits totaled $217 million in the first quarter of 2015 versus $131 million in Q1 of 2014. ICL said that the $154 million after tax gain from divestitures more than offset the strike’s impact of $76 million.
 
ICL estimated that following the end of the strike it will recover most of the delayed potash sales and production in the future due to excess production capacity at its potash plants. The company noted that evaporation activities at the Dead Sea ponds were not interrupted by the strike at Dead Sea Works. Workers at Dead Sea Works and Dead Sea Bromine Compounds have been on strike since February.

Potash sales during the first quarter fell to $377 million versus $491 million in the corresponding quarter last year. This had a sharp impact on operating profits which fell to $92 million versus $146 million in the corresponding quarter.

Fertilizer and phosphate rock sales fell slightly as a result of the weaker euro and totaled $452 million versus $465 million in the first quarter of 2014. However operating profit rose to $45 million from $30 million. The impact of the weaker euro was partially offset by higher fertilizer prices compared to the first quarter of 2014 and increased volumes.

OCI Partners LP reports that has implemented a state-of-the-art ammonia truck loading facility on-site at its wholly owned subsidiary OCI Beaumont LLC. At present, the LP sells ammonia via pipeline and barge. The new ammonia truck loading facility will help it diversify its customer base and generate higher netback prices for a portion of its ammonia sales volumes.

In other news, the company reported a drop in first quarter net income to $900,000 on revenues of $38 million, down from the year-ago $29 million and $100 million, respectively. This was due to both ammonia and methanol units being offline two months during the quarter to accommodate capacity upgrades and other initiatives.

The IPL tender that closed May 9 had more than 3 million mt offered at prices beginning at $296/mt CFR.
     
First-time participant Montana Shipping came in the lowest for various east-coast ports with 120,000 mt at $296-$300/mt CFR. Sources said over the weekend, however, that Montana was being dropped because it did not post a bid bond as part of its tender filings.
     
Traditional companies came in a couple of dollars higher for the same ports.

Samsung set the low price for west coast ports at $299.25/mt CFR.

Counter bids were also reported sent to the 21 offering companies that were within $5 of the lowest offer.
     
Under that plan, the price range will be from $298.30/mt CFR from Liven to $303.50/mt CFR from ETA. The netback to China for this range is pegged at $285-$290/mt FOB. While this is the rate that was being quoted just before the tender closed, sources say the Chinese producers may dig in their heels and hold off for a floor of $290/mt FOB.
     
If all the companies get awards, IPL would be booking almost 1.7 million mt. Sources said before the tender getting 1.5 million tons would be a good start for the next application season. One trader noted IPL would most likely be looking at 2 million tons to make up for the material not being delivered under the previous STC tender.

In the run up to the tender, traders said the fear Chinese producers would hold firm in the $290s/mt FOB might lead to conservative offers, limited to one or two cargoes. The tender tally showed how many traders were indeed unwilling to go long on large quantities.
     
The base offers from 14 companies in the $5 range of the lowest price offered 60-70,000 mt. Six offered 100-125,000 mt and Swiss Singapore offered a whopping 280,000 mt.
     
The buyer is expected to issue awards with base prices for different ports. The shipping deadline is June 29.

A Memorandum of Cooperation has been signed by Mr. Liu Deshu, Chairman of Board of Sinochem Group and Ms. Elena Kudryavets, Director General of Belarusian Potash Co. It is for a period of 5 years from 2015-2019.

BPC and Sinochem Group intend to make continued joint efforts that address emerging issues related to potash fertilizer exports and imports, whereby the parties undertake commitments to sell and purchase 4 million mt of Belarusian potash fertilizers during a term of 5 years.

This quantity includes both firm and optional volumes. The total value of the fertilizer to be supplied to the PRC shall be around $1.3 billion on a current value basis. The exact price level is subject to further discussion.

The parties are confident that the Memo shall contribute to the market development and strengthen long-term and mutually beneficial collaboration both between the parties and the countries in general.

Mr. Liu Deshu, Chairman of Board of Sinochem Group, pointed out that “With a long-term, friendly and strategic cooperation relationship, Sinochem and BPC are complimentary to each other in terms of market and product and enjoy a sound foundation and a broad prospect for cooperation,” said Deshu. "We believe that under the principle of mutual benefit, we will continue to deepen our cooperation, cultivate our friendship, work together to support and guarantee China’s agricultural development and food security and make persistent efforts in active response to Chinese President Xi Jinping’s strategic conception of One Belt and One Road."

"We value respectful and trust-based relations established between Sinochem Group and BPC that are predicated on harmonious and balanced market development," said Kudryavets. "Our track record in delivering potash fertilizers to the PRC suggests that BPC will continue to be a leader in this market. We are interested in further cooperation supporting the companies’ growth and having a positive effect on the development of Belarusian-Chinese relations in general."

CF Industries Holdings Inc. reported first quarter net income of $230.6 million ($4.79 per diluted share) on net sales of $953.6 million. Overall, CF reported a 3 percent year-over-year decrease in revenues from the sales of nitrogen products during the quarter primarily driven by a decrease in overall sales volumes. Nitrogen sales volumes were 2.91 million st, down from the year-ago 3.02 million st.

While year-ago net income was much higher at $708.5 million ($12.90 per share) on sales of $1.13 billion, it included $461 million or $8.39 per EPS for the after-tax gain on the sale of the phosphate business. First quarter 2015 gross margins were $415.8 million compared to the year-ago $442.8 million (prior to the addition of the phosphate sale).

CF said it expects a strong second quarter performance relative to overall market conditions. It reports a robust set of orders for second quarter ammonia though it said first half 2015 ammonia volumes will likely be slightly lower than the record first half 2014’s due to lower inventories on hand at the start of 2015.

While The Andersons said first quarter fertilizer volumes were lower than expected due to poor weather conditions at the start of planting season, the company’s Plant Nutrient Group, which now includes the former Turf & Specialty segment, saw a uptick in income before taxes to $424,000 on revenues of $153.9 million for the first quarter, up from a year-ago loss of $36,000 on sales of $151.3 million.

The Andersons hopes to regain some of the fertilizer business it lost in the first and fourth quarters in the second quarter.

Company-wide, net income sank to $3.94 million ($0.14 per diluted share) on revenues of $950.1 million, down from the year-ago $26 million ($0.80 per share) and $1 billion, respectively.