All posts by webster@kennedyinfo.com

Potash

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

U.S. Gulf: Most sources last week said the barge market is dead, with prices called $505/st FOB at best. One said a cut of $10-$15/st “might” garner a new trade. However, citing Canadian production cuts and a large number of barges on the river, plus comfortable inland inventories, he said not too many are anxious to buy.

Eastern Cornbelt: Potash out of regional warehouses was tagged at $545-$567/st FOB to the dealer, depending on grade and location, with the upper end quoted for white granular tons on a spot basis.

Western Cornbelt: Potash pricing was steady at $545-$560/st FOB in the Western Cornbelt, depending on grade and location.

California: The potash market remained flat at $590-$610/st FOB California warehouses, depending on grade and location. Sulfate of potash (SOP) was unchanged at $695-$705/st FOB, and potassium nitrate was steady at $1,020/st FOB for bulk tons and $1,090/st FOB for bags.

Pacific Northwest: Potash was flat at $595-$610/st rail-DEL in the Pacific Northwest, depending on grade and location. Potash pricing at Utah mine locations ranged from $535-$545/st FOB.

Washington sources said the K-Mag market had firmed to $431/st FOB in early February, up some $15/st from last report. Product was reportedly in tight supply, and likely to stay that way through spring, according to sources.

Western Canada: Potash pricing remained at $607-$632/mt FOB regional warehouses, depending on grade and location. The market to Canadian customers FOB Saskatchewan mines was pegged in the $592-$601/mt FOB range.

Market Notes

Calcium Ammonium Nitrate, India, Market Watch, Pakistan

Oman: The Oman India Fertiliser Co. (OMIFCO) launched a new bagging unit for urea on Feb. 6. The unit will cater to the demands of regional markets. Earlier, to make the distribution system more streamlined and efficient, the company contracted Takamul Investment Co. to distribute the urea in the domestic markets. OMIFCO is owned 50 percent by Oman Oil Co. (OOC), 25 percent by Indian Farmers Fertiliser Cooperative Ltd. (IFFCO), and 25 percent by Krishak Bharati Cooperative Ltd. (KRIBHCO). The plant, which has capacity of 1.652 million mt of urea, is located in Oman’s Sur Industrial Area.

Pakistan: The country’s total production of urea, DAP, and other fertilizer during calendar year (CY) 2011 fell by 3 percent to 6.56 million mt. This figure could have been down further had it not been for additional Calcium Ammonium Nitrate (CAN) supply coming in from Fatima Fertilizer, as the company doubled its production of that fertilizer during CY11. Production from the country’s DAP plant, Fauji Fertilizer Bin Qasim, remained stable, growing by 2 percent year-over-year (YoY), according to data released by InvestCap Research and the National Fertilizer Development Co. (NDFC). The breakdown showed that urea production stood at 4.890 million mt, translating to a fall of 5 percent on a year-to-year basis, with DAP at 657,000 mt (2 percent growth YoY).

All types of fertilizer consumption in Pakistan during CY 2011 declined by 6 percent to 8.157 million mt, except CAN and NPK. Urea consumption declined by 3 percent to 5.918 million mt, and DAP by over 15 percent to 1.12 million mt. The lack of available locally manufactured urea caused urea consumption to decline, while DAP had the biggest volumetric decline. This highlights the unwillingness of importers to import DAP due to the high price of the commodity in international prices. However, the 34 percent YoY incremental consumption of CAN to 676,000 mt is providing a hint that farmers are using it as a substitute for urea. Other fertilizers observed a fall of 55 percent.

Pryor ammonia upgrade completed

Ammonia, Midwest, News, News Briefs

Oklahoma City — LSB Industries Inc. said Feb. 6 that its chemical plant facility located in Pryor, Okla., completed a planned improvement project to increase anhydrous ammonia production levels. This project began on Jan. 3, 2012, and was completed on Feb. 3, 2012, during which time the plant was not in production. LSB said the permitted production level of ammonia at the plant is 700 short tons per day, but due to production limitations caused by restrictions in the flow of process gas through heat exchangers and other mechanical restrictions, the ammonia plant was unable to sustain production above 500 st/d during 2011. The primary purpose of the improvement project was to correct those restrictions. Management believes this was accomplished, and that production lost during the improvement project should be more than offset during the balance of 2012. During this period, Pryor took advantage of the downtime to correct certain other identified mechanical issues, which should minimize downtime later in the year.

Two Arkansas NH3 releases put eight in hospital

Ammonia, News, News Briefs, Southeast

Springdale, Ark. — Two ammonia releases caused by human error at poultry processing plants here only minutes apart early last week, Monday, Feb. 6, put eight employees in the hospital overnight with minor skin burns and respiratory injuries. “It was ironic that we had almost-simultaneous events,” reported Assistant Springdale Fire Chief Kevin McDonald. “We’ve never had that before. It was only about 20 minutes between the two calls.” McDonald said approximately 40 emergency responders were on the scene from Springdale and two surrounding communities. He said the first incident, at the Cargill Honeysuckle Turkey plant, was a major release caused by a third-party contractor working outside at the chillers making a wrong cut into an ammonia pipe they thought had been isolated. “Some permeated into the facility, but for most part it went into the atmosphere and that was the reason there were no injuries and no employees being transported,” he reported. “But while we were at Cargill we got a call about another release at the Tyson Berry Street plant approximately two miles directly south.” McDonald described the Tyson situation as very minor and also due to human error involving opening and closing ammonia valves. Tyson maintenance workers quickly closed the valve and stopped the release. The small amount that was released, however, was contained inside the building and had a more significant impact on the employees. For that reason 10 employees were transported to Northwest Med Center, where eight of them were admitted and kept overnight for evaluation. All were expected to be released the next day.

NEFCO Florida plant down for four months

Ammonia, News, News Briefs

West Palm Beach, Fla. — New England Fertilizer Co. (NEFCO) officials are taking a cautious approach to getting back online the biosolids processing plant that was damaged by an explosion here Jan. 24 (GM Jan. 30, 2012), and indications are that operations won’t be resuming anytime soon. “We’re expecting that maybe we’ll be out about four months,” NEFCO spokeswoman Virginia Grace told Green Markets. “We are in the process of making sure that our other process line that didn’t have any damage gets a thorough check-over. We’re in the process of finalizing our investigation and are working very carefully with insurers, equipment vendors, and our clients.” She insisted that this doesn’t mean that the investigation is having problems, but is just a matter of having to coordinate everybody’s schedule. In the meantime, she added, NEFCO will have to truck sludge at no cost to taxpayers from sewage plants in southern Palm Beach County, Palm Beach Gardens, and Jupiter. The $29 million plant, which opened in 2009, handles about 350 tons daily during peak season, converting sludge cakes into fertilizer pellets. The early morning explosion on Jan. 24 occurred as workers restarted the plant after it had been shut down to clean out the plugged area. Preliminary indications are that the cause was an obstruction in the air flow in a dryer outlet, but the specific source of the malfunction hasn’t been determined.

Vote on Mosaic mine expansion delayed

News, News Briefs

Bradenton — The Manatee County Commission decided to delay until March 1 a vote on The Mosaic Co.’s 646-acre mine expansion. Although the commission had planned to vote on whether or not to approve the expansion of the Wingate Creek Mine on Feb. 2, the large number of people speaking for and against the plan forced the delay as time for the meeting expired.

Andersons reports record Plant Nutrient income

Midwest, News, News Briefs

Maumee, Ohio — The Andersons Inc. reported record operating income from its Plant Nutrient segment for the year ending Dec. 31, 2011, to $38.3 million on revenues of $691 million, compared to the prior year $30.1 million on revenues of $619 million. The company cited higher nutrient prices, which were partially offset by a decrease in volume. Plant Nutrient income for the fourth quarter, however, was off, at $2.5 million on revenues of $170 million from the year-ago $8.9 million on revenues of $159 million. The decline includes $4.7 million in charges due to the recording of a lower of cost or market inventory adjustment and asset impairment charges. “Clearly, both our full-year and fourth-quarter earnings were heavily influenced by the results within our agricultural businesses,” said CEO Mike Anderson. “The record full-year earnings in both our Grain and Plant Nutrient groups, and second best year in the Ethanol Group, is gratifying. Our 2011 Rail Group results improved significantly from the prior year as a result of improved economic conditions. In the last year we have demonstrated our commitment to growth by adding 1.7 million bushels of grain storage capacity, beginning construction on a grain shuttle loader facility in Nebraska, and acquiring two businesses in the Plant Nutrient Group – Immokalee Farmer Supply in Florida in October of 2011, and New Eezy Gro, an Ohio-based company, last week. We intend to continue to pursue our growth strategy in 2012 and beyond.” Company-wide, The Andersons reported net income attributable to the company at $95.1 million ($5.09 per diluted share) on revenues of $4.58 billion, compared to the prior year $64.7 million ($3.48 per share) on revenues of $3.39 billion. Fourth-quarter income was $21.7 million ($1.17 per share) on revenues of $1.3 billion, down from the year-ago $25.8 million ($1.39 per share) on revenues of $1.15 billion.

Scotts expects sales growth despite 1Q downturn

Midwest, News, News Briefs

Marysville, Ohio — Scotts Miracle-Gro Co. expects a 6 percent increase in sales growth for its fiscal year ending Oct. 31, 2012, despite a slow start from its first quarter ending Dec. 31, 2011. As it expected, first-quarter earnings, which are traditionally in the loss column, grew this year to $73.9 million ($1.21 per diluted share) on sales of $211.2 million from the year-ago loss of $67.9 million ($1.02 per share) on sales of $230.2 million. Scotts said the decline was expected as it worked with its retail partners to move shipments closer to the start of the lawn and garden season and away from the first quarter. Since Jan. 1, Scotts said sales are up more than 20 percent overall, with strong increases in Texas and Florida, two important early season markets. The company told analysts that in the southern markets fertilizer movement is positive, and it expects the same thing as the season moves south to north. Scotts plans to spend $40 million more on advertising this year than last. It also expects that major customer Walmart will be supporting its lawn and garden business more this year. Scotts said that it has now locked in 90 percent of its urea requirement for the year, and 70 percent of commodity costs overall. The company committed to new urea business when prices weakened in December. Scotts expects commodity inflation to be within its earlier estimated increase of $80 million. Scotts does expect its margins to be under pressure this year as it does not plan on passing on its increases in commodity costs. It expects competitors to also resist increasing prices, with a greater impact on their margins. After a bad weather year last year, Scotts is upbeat that 2012 will be a normal weather year.

New WASDE report sees lower corn stocks

Midwest, News, News Briefs, NPK 10-34-0

Washington — The USDA World Agricultural Supply and Demand Estimates released Feb. 9 reported a drop in U.S. corn stocks by 45 million bushels to 801 million from last month. U.S. corn exports are projected 50 million bushels higher, with reduced supplies in Argentina and recent increases in both sales and shipments. Argentina corn production was lowered by 4 million tons to 22 million tons as field reports confirmed that high temperatures and extensive dryness during pollination in December and early January resulted in irreversible damage to early corn in the central growing region. WASDE said late planting may help to offset the drop, but that additional rainfall is needed to stabilize production. In the meantime, WASDE also reported lower U.S. wheat stocks, down 25 million bushels to 845 million. No changes were made for U.S. stocks for soybeans, with those left at 275 million bushels. A decrease in export prospects increased the stocks for rice by 1 million ctw to 39.5 million cwt. Cotton stocks were raised 100,000 bales to 3.8 million.