All posts by webster@kennedyinfo.com

Urea

Black Sea, Eastern Cornbelt, Great Lakes, India, Indonesia, Market Watch, Middle East, Northeast, Northern Plains, U.S. Gulf, Urea, Western Cornbelt

U.S. Gulf: Pent-up demand surfaced last week, according to most sources, who said they were busy handling orders – or at least inquiries. As a result, granular urea barge prices ran up.

While some argued old prices from the previous week held over, others said they were gone by Monday. Still others said early week trades began at $408/st FOB and worked their way up to $420-$425/st FOB, and then on to $430/st FOB. At that point, offers of $435/st FOB met resistance and the market sank back to $425/st FOB.

July-December imports were off 5 percent, to 3 million st from the year-ago 3.15 million st. December imports were off 51 percent, to 452,564 st from the year-ago 921,192 st.

Eastern Cornbelt: The granular urea market was quoted at $440-$455/st FOB in the Eastern Cornbelt, with the low reported in Illinois and the upper end in the Ohio market. The Cincinnati urea market was tagged at the $450/st FOB level at midweek.

Western Cornbelt: The granular urea market in the Western Cornbelt had reportedly inched up to $440-$460/st FOB, with the upper end quoted in the Missouri market as the week advanced. Effective Feb. 15, Koch’s urea posting FOB Enid firmed to $465/st FOB, up $25/st from the Jan. 18 reference level.

Northern Plains: Granular urea pricing had firmed to $450/st FOB the Twin Cities, while delivered urea in North Dakota was pegged in the $502-$518/st range last week.
Great Lakes: Wisconsin sources pegged the low end of the granular urea market at the $440/st FOB mark last week. Michigan sources quoted the dealer market in the $450-$470/st FOB range, with the low out of terminals in northern Ohio and the upper end out of inland Michigan shipping points.

Northeast: Granular urea pricing continued to firm in the region. Sources said pricing levels at the $440/st FOB level in January had moved up to $450-$455/st FOB by last week, with the low in Philadelphia and the upper end quoted out of E. Liverpool, Ohio. There were rumors of rail-delivered tons pegged as high as $486/st into the region at mid-month, but sales at those levels were not confirmed.

India: Sources report that the current state of urea reserves is sufficient to allow Indian buyers to wait before jumping into the market.

The strength of the Indian reserves is disappointing to those in the market looking for a strong buyer to step in and set a bullish tone in the marketplace.

Usually about this time Indian buyers are beginning to kick a few tires to see how the urea market would react to a tender issued in early-to-mid-March. Unfortunately for people looking for a market trend or something to get the market moving, the Indian buyers are staying home.

One trader noted that last year the Indians wanted to secure large orders quickly and early. That action led to a jump in the price, something the Indian government wanted to avoid.

Sources point out that nothing can seriously begin to happen until mid-March. By then, the subsidy and import rules for the next fiscal year will be known. At that time, Indian buyers can begin to look for material to be delivered in April.

Part of the delay in moving on urea inquiries could also be related to the ongoing discussions about the urea subsidies and possible deregulation of the product. A committee representing various government ministries has been working to hammer out a deal that would ease the subsidy burden on the treasury, while at the same time protect the farmers from wild price swings.

In January it looked as if a deal was ready to be sent to the full cabinet. However, in the past week or so the Finance Ministry objected to any plan that included the freeing of urea prices. According to press reports, the ministry w

Nitrogen Solutions

Eastern Cornbelt, Great Lakes, Market Watch, Northeast, Northern Plains, UAN, Western Cornbelt

U.S. Gulf: Despite the uptick in the urea market, a slow, weaker tone was still apparent in the UAN market, which was called $255-$265/st FOB ($7.97-$8.28/unit FOB). Sources said there was more pent-up demand with urea, but more of a sense of full inland inventories with UAN.

UAN imports were up 22 percent for the July-December period, to 1.87 million st from the year-ago 1.53 million st. December, however, saw a 31 percent decline, to 298,926 st from the year-ago 434,052 st.

Eastern Cornbelt: Illinois sources last week quoted spot UAN-32 pricing as low as $330/st ($10.31/unit) FOB river terminals. Elsewhere in the region, the UAN-32 market was pegged more commonly at the $345/st ($10.78/unit) FOB level at mid-month.

Western Cornbelt: UAN-32 pricing in the Western Cornbelt was tagged in a broad range at $335-$360/st ($10.47-$11.25/unit) FOB terminals last week, with both the upper and lower ends of the range quoted in the Missouri market. An Iowa source tagged the common dealer market at the $10.60/unit FOB level at mid-month.

Northern Plains: UAN pricing in the Northern Plains was down from last report. Regional sources quoted the UAN market in the $10.71-$11.25/unit FOB range, with the low reported by Minnesota contacts as UAN-28 ($300/st) FOB on a spot basis. Delivered UAN-28 was pegged in the $345-$350/st ($12.32-$12.50/unit) range in North Dakota, depending on location and time of delivery.

Great Lakes: The UAN-32 market was tagged at the $345/st ($10.78/unit) FOB level in Wisconsin, while rail-delivered tons were quoted in the $345-$360/st ($10.78-$11.25/unit) level in the Michigan market. Out of Michigan terminals, UAN-28 pricing was pegged in the $312-$317/st ($11.14-$11.32/unit) FOB range to the dealer.

Northeast: Sources reported pressure on UAN terminal pricing on the East Coast, fueled by a vessel market that was rumored to be in the low-to-mid $270s/mt CFR for new tons. Sources quoted UAN-30 at the $295/st FOB ($9.83/unit) level out of Baltimore last week, with UAN-32 pegged at the $310/st ($9.69/unit) mark FOB Baltimore or Savannah, Ga.

Ammonium Sulfate

Ammonium Sulfate, Eastern Cornbelt, Great Lakes, Market Watch, Northeast, Northern Plains, Western Cornbelt

Eastern Cornbelt: Granular ammonium sulfate was steady at $375-$385/st FOB in the region. The ammonium thiosulfate market was pegged in the $360-$370/st FOB range at mid-month.

Western Cornbelt: Granular ammonium sulfate pricing remained at $370-$385/st FOB in the Western Cornbelt region. The ammonium thiosulfate market was quoted at $350-$360/st FOB at mid-month, with the low in Iowa and the upper end in the Missouri market.

Northern Plains: Sources quoted the granular ammonium sulfate market at $380-$385/st FOB in the Northern Plains region. North Dakota contacts quoted delivered tons in that same range last week.

Ammonium thiosulfate was quoted at $370/st FOB in Minnesota, with 15-0-0-20 pegged in the $430-$450/st DEL range in North Dakota, depending on location and time of delivery.

Great Lakes: The granular ammonium sulfate market was tagged at a solid $385/st FOB in both Michigan and Wisconsin last week. Ammonium thiosulfate (12-0-0-26) was pegged at $365-$370/st DEL in Wisconsin and $370/st FOB in the Michigan market.

Northeast: Sources continued to quote the granular ammonium sulfate market at $350-$355/st FOB and $355-$360/st DEL in the Northeast region, though some talked of a $10/st increase that was slated to take effect in the near term.

Phosphates

Central Florida, Di-Ammonium Phosphate, Eastern Cornbelt, Great Lakes, India, Market Watch, Mono-Ammonium Phosphate, Northeast, Northern Plains, U.S. Exports, U.S. Gulf, Western Cornbelt

Central Florida: A couple of weeks ago, CF Industries told its customers that it would have less phosphate available during February. Last week it announced that it had begun a turnaround at its Plant City processing plant this quarter, rather than in May as originally scheduled.

It really didn’t make much difference. There was no better time to do maintenance work and slow down production, because the market hardly even noticed.

Areas of the country that are normally served from Central Florida were too wet to get anything done. The weather has been warmer than normal this year, but it makes little difference under the circumstances. Even the export market has fallen into the doldrums.

Sources said the CF curtailment resulted in about a 50 percent cutback during the turnaround, or about 2,500 st/day. Sources also said the facility was likely to return to full production sometime this week.

Florida was expected to begin buying fertilizers again now that a cold snap has passed. The chilly weather lasted only a few days, however, and the weather returned to warmer-than-normal immediately afterward.

The Central Florida DAP price continued last week at a flat $480/st FOB. Both Mosaic and CF were posted at the $480/st FOB mark, but a firm offer from a large buyer might be able to get a better deal. MAP was listed at a $20/st premium to DAP by Mosaic in Central Florida, about the same difference as from traders. MAP was in short supply.
PCS Sales was selling at prices comparable to the market.

U.S. Gulf: First, the good news. The drought in West Texas has eased and the area has gotten enough rain to sustain crops, at least for awhile. Also, much of the South was ready to get started with the spring season.

The bad news was that none of that will have a major impact on phosphate sales, because corn is not the primary crop in those areas.

In some areas of the Western Cornbelt, ground preparation could be underway again very shortly, especially where the ground was frozen and farmers could get into their fields. On the other hand, the Mississippi River was still closed north of St. Louis – not because it is frozen or dangerous, but because the Army Corps of Engineers was doing maintenance on Lock 25.

Still, dealers were not likely to start ordering phosphate in any quantities until they can see some space on the floor of their bins. With the market weak, dealers fear the price could drop and they would get stuck with higher-priced product.

Nevertheless, the overwhelming consensus is that it will be a very good spring, based on the number of acres for corn to be planted and the price of corn.

New supplies of Russian MAP were expected to become available this week, and that should have the effect of reducing the differential between DAP and MAP, which had increased to as much as $50/st FOB. Last week, it was down to $30-$40/st FOB.

Prices for corn futures were lower last week compared to the previous week, falling from $5.69/bushel to $5.6475/bushel for December 2012. The corn price for December 2013 was $5.5125/bushel, up from $5.5425/bushel the previous reporting period. Soybeans for November 2012 increased to $12.58/bushel from $12.4375/bushel the previous week, and beans for November 2013 were down at $12.00/bushel from $12.0875/bushel the previous week. Wheat for July 2012 went down to $6.4825 from $6.6875/bushel a week earlier. Wheat for July 2013 was listed at $7.155/bushel last week, down from $7.305/bushel a week earlier.

Sales continued to be depressed last week, and few NOLA DAP or MAP barge transactions occurred. A few sales at the end of the reporting period set the bottom of the range, which was an indication of the market’s direction.

The NOLA DAP barge price range for the week was $432-$437/st FOB, below the pre

Potash

Eastern Cornbelt, Great Lakes, Market Watch, Northeast, Northern Plains, Potash Muriate, U.S. Gulf, Western Cornbelt

U.S. Gulf: Barge prices were slipping last week, with sources calling the market $495-$505/st FOB. Others thought even lower.

The fourth-quarter lull was apparent in December imports, which were off 32 percent to 715,120 st from the year-ago 1.05 million st. July-December imports were off 12 percent, to 4.63 million st from the year-ago 5.27 million st.

Eastern Cornbelt: Illinois sources quoted the potash market in the $535-$545/st FOB range on the low end last week. The upper end of the regional potash market was tagged at the $560/st FOB mark for granular tons.

Western Cornbelt: The potash market remained at $540-$560/st FOB regional warehouses, depending on grade and location. An Iowa source pegged the red granular potash market commonly at the $550/st FOB level last week.

Northern Plains: Potash was quoted in a broad range at $530-$560/st FOB Northern Plains warehouses, with the low reported out of the Twin Cities market. Delivered potash in North Dakota was tagged at the $560/st level last week.

Potash pricing FOB Saskatchewan mines for U.S. customers remained at $530-$540/st FOB, depending on grade and supplier.

Great Lakes: Potash was down from last report in the Great Lakes region. Sources quoted the dealer market at $540-$555/st FOB regional warehouses for red granular tons. White granular potash, however, remained as high as $577/st FOB on a spot basis out of Michigan warehouses.

Northeast: Potash remained at $560-$575/st FOB and $570-$590/st rail-DEL in the region, depending on grade and location. The Philadelphia market was quoted at the $565/st FOB level last week, while potash out of Hagerstown, Penn., was tagged at the $560/st FOB mark.

Sulfur

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

Tampa: Molten sulfur inventories at Tampa were at maximum levels last week as a result of a decrease in phosphate production and no let-up in a steady supply of sulfur.

Mosaic, which already had high inventories, was at capacity last week. Still, some of its strategic suppliers were looking to unload additional sulfur, and the company agreed to take more on a spot basis. Because the extra supplies cannot be stored for immediate use at Tampa, it will be put into vat storage at Galveston.

The spot price was "significantly" lower than the first quarter contract price of $172/lt because of the additional cost Mosaic will have to handle and store the material. Logistical costs will be higher.

Fewer refineries than normal were undergoing turnarounds during the first quarter – at least so far – but the amount of oil being processed was not much different. Two weeks ago, the refinery operating capacity rate was 82.8 percent, while the four-year average was 82.2 percent – although the rate last year was 84.7 percent, according to the U.S. DOE. Last week, the operating capacity rate increased 1.2 percent to 84 percent. However, more sweet crude was being used.

Vancouver: Prices paid by China were fluctuating last week, and buyers were still holding out for even lower prices. Inventories at ports and on inbound vessels were said to be high. Delivered prices were said to be below $200/mt.

West Coast: The West Coast market continued to track Vancouver, which meant lower than the previous quarter.

U.S. Imports: July-December imports were up 5 percent, to 1.21 million st from the year-ago 1.16 million st. December imports were up 28 percent, to 222,863 st from the year-ago 174,674 st.

The Fertilizer Institute – Management Briefs

Management Briefs

The Fertilizer Institute announced the election of James Prokopanko, The Mosaic Co. president and CEO, to serve a two-year term as chairman of the institute’s board of directors. In addition, the board tapped Stephen Wilson, chairman and CEO of CF Industries Holdings Inc., to serve a two-year term as vice chairman. During TFI’s annual meeting, the following new board members were elected: Donnie Dickerson, Jimmy Sanders Inc.; John Diesch, Rentech Nitrogen; Mark Shaw, Knox Fertilizer Co.; Dave Spears, Mid Kansas Cooperative; and Scott Tinsman, Twin State Inc.

The new inductees join existing members Farouk Chaouni, Agrifos Fertilizer LP; Michael Wilson, Agrium Inc.; Nicholas Adamchak, Ameropa North America Inc.; Vladimir Nikolaenko, Belarusian Potash Co.; Stephen Wilson; Cheryl Schmura, CHS Inc.; Stanley Riemann, CVR Energy Inc.; Phil Gough, El Dorado Chemical Co.; Brian Harlander, Gavilon Fertilizer; James Spradlin, Growmark; Qamar Bhatia, Honeywell Resins and Chemicals; Robert Jornayvaz, Intrepid Potash; Melih Keyman, Keytrade AG; Steve Packebush, Koch Fertilizer; Robert Jones, Mississippi Phosphates; Stephen Stallons, Oxbow Fertilizer; William Doyle, PotashCorp; Garrett Lofto, Simplot; Dennis Addis, The Andersons Inc.; James Prokopanko; Brent Hart, Transammonia Inc.; Matt Carstens, United Suppliers; Gene Gauss, Wilbur-Ellis; and Bartolomeo Pescio, Yara North America, Inc.

Dasco Inc. – Management Briefs

Management Briefs

Dasco Inc., Monument, Colo., made recent management announcements. Scott Magill joins the company as area sales manager. Dasco said he brings several years experience in industrial chemical sales with companies such as Safety-Kleen Corp, Nalco, and International Chemtex Corp.

Stig Uhlen joins the company as director of diesel exhaust fluid (DEF). He brings over 10 years experience in international urea business, five years DEF business in Australia/Asia Pacific, and two years of DEF business in the U.S.

Terra Nitrogen 4Q income nearly doubles

Ammonia, Midwest, News, News Briefs, UAN

Deerfield, Ill. — Terra Nitrogen Co. LP reported net earnings of $129.8 million ($3.87 per common unit) on sales of $201 million for the fourth quarter ending Dec. 31, 2011, up from the year-ago $65.8 million ($2.61 per unit) on sales of $142.9 million. Ammonia and UAN average selling prices increased by 21 and 79 percent, respectively, while sales volumes were off 12 and 1 percent, respectively. Gas prices decreased 7 percent for both the quarter and year. Ammonia volumes were 84,000 st ($530/st) versus the year-ago 95,000 st ($439/st), while UAN volumes were 454,000 st ($343/st) versus the year-ago 459,000 st ($192/st). Full-year net income was $508 million ($15.33 per unit) on sales of $798.9 million, compared to 2010’s $201.6 million ($8.01 per unit) and $564.6 million, respectively. Ammonia and UAN prices increased 28 and 55 percent, respectively, while volumes were up 15 and 5 percent, respectively. Full-year ammonia volumes were 385,000 ($473/st), up from 2010’s 335,000 st ($369/st). UAN volumes were 2.05 million st ($299/st), up from 2010’s 1.96 million st ($193/st).