The STC urea tender closed Nov. 29 with prices higher, but not as high as expected.

Liven came in with the lowest offers of 132-144,000 mt for Krishnapatnam at $308.65/mt CFR and $310/mt CFR for Mundra. Swiss Singapore, with a 60,000 mt offer, had the lowest offer for Pipavav at $311.22/mt CFR. These prices reflect a $3-6/mt increase on prices from the September MMTC tender. Some traders had expected to see most offers in the $310-$315/mt CFR range, with a few even suggesting $320/mt CFR might be breached.

The ship-by date is Dec. 10. Before the tender closed, traders expressed concern about the short time between the closing of the tender and the shipping deadline. Awards and letters of credit will have to be issued quickly, they said, for the product to ship on time.
The rising price of prilled urea plus the potential of port congestion in China led traders to suggest before the tender closed that fewer tons will be offered. In the end, 1.7 million tons of firm offers were made in the tender.
  
The total tonnage offered in this tender is less than the tons awarded in the MMTC tender just a month ago.

Cronus Chemicals LLC has selected Illinois as the site for its $1.4 billion nitrogen plant, officials close to plans have confirmed. Cronus had been weighing a site in Illinois or one in Mitchell County, Iowa.

The site is in Tuscola in Douglas County and is some 20 miles south of Champaign. The company will be headquartered in Chicago.

Cronus plans to build an 800,000 t/y of anhydrous ammonia plant with a 1.4 million t/y of granular urea plant. The company is owned by Swiss and Turkish investors and is led by Erzin Atac, a long-time fertilizer industry veteran, formerly president of Trammo Inc.’s fertilizer division.

Israel Chemicals Ltd. is selling segments of its ICL Performance Products division to Japan’s Kurita Water Industries Ltd. for €250 million. The company said late Sunday it expected the deal would close at the end of 2014. The sale involves the company’s aluminum, paper chemicals and water treatment units based in Ludwigshafen and Düsseldorf, Germany, as well as at additional ICL PP operations in Europe and China. However, ICL corrected earlier reports, saying while it is making this sale, it is not selling the entire Performance Products unit.

ICL said the move was part of its effort to focus on its core businesses in the agriculture, food and engineered materials markets. The move is expected to further increase ICL’s dependence on fertilizers which account for more than 50 percent of its revenues and an even greater share of its profits.

“Israel Chemicals is executing its strategy of focusing on its core business, and will use the proceeds of the sale, as well as the divestment of additional non-core assets, to strengthen its core business in the agriculture, food and engineered materials markets,” said Stefan Borgas, Israel Chemicals president and CEO. He said the company will build on its distinctive mineral assets and technologies and expand its global presence, especially in emerging markets.

The announcement of the sale comes less than a week after an Israeli government appointed committee recommended imposing a windfall tax on profits of ICL and other companies utilizing the country’s natural resource ICL has sharply criticized the recommendations and has said they will lead to reducing investments in Israel and greater investment abroad.

Potash Corp. of Saskatchewan Inc. reported net income of $317 million ($0.38 per diluted share) on sales of $1.64 billion for the third quarter ending Sept. 30, 2014, down from the year-ago $356 million ($0.41 per share) and $1.52 billion, respectively.

Third-quarter margins were up for both potash and nitrogen, but were down for phosphates.

Citing good potash and nitrogen demand as well as prices, the company was upbeat as to the near term markets for those products. It increased its annual potash sales volumes estimate to 9.0-9.2 million mt.

Yara International ASA plans to move forward with an investment of NOK 2,250 million (US$350 million) to increase value-added fertilizer capacity in the Porsgrunn plant in Norway.

The investment, will add 50 kilotons of compound NPK annual capacity and 200 kilotons of calcium nitrate annual capacity. In addition, the investment will enable optimization of production in Yara’s Glomfjord and Uusikaupunki sites, adding a further 150 kilotons of annual NPK capacity.

NPK and calcium nitrate are key value-added fertilizers in Yara’s product portfolio, which benefit cash crops in particular.

"This investment confirms Yara’s ambition to create value through brownfield expansions and debottlenecking projects. Furthermore it strengthens our position as the global NPK leader and shows our dedication to provide farmers with premium products and agronomic competence to increase agricultural productivity" says Torgeir Kvidal, Yara acting CEO.

The project includes a new-build nitric acid plant and innovative technology application, which further bring down greenhouse gas emissions, improve energy efficiency and reduce waste.

Construction will start immediately and the expansion is expected to be finalized in 2017.

Yara International ASA reported third-quarter net income after non-controlling interests of NOK 1,707 million (NOK 6.18 per share), compared with NOK 1,571 million (NOK 5.66 per share) a year earlier. Excluding net foreign exchange loss and special items, the result was NOK 7.62 per share compared with NOK 5.62 per share third quarter 2013. Third-quarter EBITDA excluding special items was NOK 4,002 million compared with NOK 3,223 million a year earlier.

“Yara reports a strong third-quarter result with record deliveries, reflecting both organic growth and the Bunge acquisition in Brazil," said Torgeir Kvidal, Yara acting CEO. "Our European production plants performed well, with both higher production and improved margins as natural gas cost has declined."

Global Yara fertilizer deliveries were up 16 percent on third quarter last year, mainly driven by Brazil with the inclusion of the Bunge volumes from Aug. 8, 2013. Excluding Brazil, fertilizer deliveries were up 6 percent compared with third quarter 2013, mainly due to higher deliveries of urea and nitrates. Industrial sales increased by 7 percent compared with third quarter 2013 with Air1 deliveries up 34 percent as demand remains strong in both the U.S. and Europe.

Yara said margins benefited from lower energy costs during the third quarter. While Yara’s global average oil and gas cost decreased 19 percent in the third quarter, Yara’s average realized urea prices increased 3 percent compared to a year ago and realized nitrate prices were at the same level as last year. Industrial margins increased for all main product groups except technical ammonium nitrate.

Global nitrogen demand remained strong during the third quarter, while supply curtailments continued in several key export locations. Third-quarter nitrogen fertilizer deliveries in Western Europe were up 5 percent on last year, with deliveries particularly strong in September. U.S. nitrogen deliveries in the quarter are estimated to be 12 percent higher than a year ago.

Lower European natural gas prices have improved the relative competitiveness of European ammonia/urea plants. Based on current forward markets for oil products and natural gas Yara’s European energy costs next two quarters are expected to be NOK 1,150 million lower than a year earlier.

Israel Chemicals Ltd. management has informed the company’s workers that the final report of the government appointed committee on taxation of natural resources issued Oct. 20 would prevent it from implementing its investment plan in Israel. In the letter, ICL management officially announced that it would cancel planned investments of $700 million in Israel, review a further $1 billion in investments, redirect planned investments outside of Israel, shut down its magnesium plant and speed up efficiency plans at other ICL facilities in Israel in order to reduce costs.

The powerful unions at ICL are expected to react to the letter and the committee recommendations in the coming days. This is likely to include lobbying efforts to prevent ICL management from closing the magnesium plant and other efficiency measures.

In its final report issued Oct. 20, the committee recommended a windfall profits or surtax of between 25 to 42 percent depending on the level of profitability. According to the recommendation a return on equity of 14-20 percent would mean a surtax of 25 percent and a return in excess of 20 percent would translate into a surtax of 42 percent. The committee also recommended a uniform 5 percent royalty tax on production of natural resources.

The recommendations now go to the Israeli government which will have to review them and decide on whether to amend them and then to the Knesset, Israel’s parliament for final approval. Meanwhile three senior Israeli government officials on the 11 member committee on taxation submitted a minority report calling for further concessions to ICL in order to guarantee continued investments in Israel by the company and prevent the shutdown of the magnesium plant.