AMMONIA
U.S. Gulf/Tampa: NOLA price ideas continue to be higher, though actual last done business remains at $242-$245/st FOB. Sellers project that the next trade could be up $10-$13/st FOB. In the meantime, Tampa remains at $275/mt DEL.
Other Gulf imports are still bouncing around the $285/mt DEL mark. Transammonia has reportedly sold at least two cargoes into Donaldsonville for CF. The new range is put at $283-$287/mt DEL.
Eastern Cornbelt: Anhydrous ammonia was quoted in the $330-$340/st range FOB regional terminals, with the low in Illinois and the higher numbers out of Indiana and Ohio terminals. Postings from regional suppliers ranged from $335-$350/st FOB in the region.
Western Cornbelt: Anhydrous ammonia remained at $325-$335/st FOB regional terminals; one central Iowa source tagged the common dealer price at the $333/st FOB mark last week. Agrium’s postings moved on Aug. 2 to $345/st FOB terminals in Iowa, Nebraska, and Minnesota.
Southern Plains: Anhydrous ammonia was pegged at $300-$325/st FOB, up slightly from last report, with the low out of regional production points and the higher numbers out of Kansas terminals. Effective Aug. 2, Agrium’s ammonia postings moved to $340/st FOB Clay Center, Kan.; $335/st FOB Conway, Kan.; $330/st FOB Mocane, Okla.; and $305/st FOB Borger, Texas. Delivered ammonia postings from the Borger location included $325-$330/st in Texas, with the low north of Interstate 40 and the high south.
Agrium’s fuel surcharge also increased Aug. 8, to 23 percent in Texas and New Mexico, 24 percent in Kansas, 24.5 percent in California, Nevada, and the Pacific Northwest, and 25.5 percent in Colorado.
South Central: Anhydrous ammonia was quoted at $335-$355/st FOB regional terminals.
Black Sea: Demand from the U.S., combined with lower freight rates, is pushing on netback prices in the area. Sources report that even though buyers in the States are reluctant to pay more, the lower freight rates are allowing producers to claim an increase in their FOB price. While sources point to higher September prices that have reached as high as $230/mt FOB, last week was filled with the lower-priced tons.
Basically, said one Asian source, Yuzhnyy is sold out for August at the lower rates seen earlier this month. Discussions for September, however, start much higher.
Helping temper the upward movement of prices is a report that plants in Europe are coming back online. As a result, the demand for imported material will be that much less in the coming weeks.
Despite the hype for higher prices being quoted for September, Asian sources say last week was comfortably at the same level as the previous week. This week, however, prices might be edging upward as the lower-priced tons are loaded and sent to sea.
Middle East: Prices have firmed in the area, with lower-priced material loaded and gone. Still, said one source, the price has not recovered from the drop that took place late last month. Yara reportedly concluded a deal with Iran at $210/mt FOB. With that deal, said one observer, the low end of the market moved up. Nothing last week indicated the upper end moved. Sources now put the market at $210-$220/mt FOB.
Helping hold down the price is the growing presence of Australian ammonia from the Burrup facility. Buyers from Korea to India are snapping up tons from Down Under, in direct competition with the Middle East suppliers.
Asia: Prices have eased off thanks to continued production in Indonesia and Malaysia, as well as the introduction of Burrup/Australia material.
Sources say KPI and KPA are running fine with no problems. There will be some disruption in exports next month when KPA goes down for September in a routine turnaround. Buyers are already building stockpiles where they can and making arrangements for alternative supplies.
The Kaltim plant in Indonesia was down for a couple of days last week, with a subsequent loss of 3-4,000 mt in production. Sources say the stoppage was just a part of the ongoing problem Kaltim faces in its operations.
While Korea and Taiwan have been able to see lower prices in their ammonia – CPDC just finished a deal at $260/mt CFR for September – Japan remains a high-priced market.
Japanese buyers face a problem of limited facilities to receive and store material. With only a couple of key places that can receive mid-sized ocean vessels, Japanese buyers are often stuck with depending on “just in time” delivery of their ammonia in smaller ships. Some buyers have been able to build storage facilities to ease the pain of disruptions in production, but with limitations in land size, many of these units are at best a short-term buffer for the end user.
Korean prices are softening because demand is dropping. Reports of work stoppages in Korea have forced some buyers to hold off on taking delivery of tons. In other cases, the high price of petroleum has forced some plants to shut down.
UREA
U.S. Gulf: Most were putting the granular market within the $221-$224/st FOB range last week. FOB prompt sales were reported within that range. There was a report that some upriver tons were sold and netted back to NOLA as high as $230/st FOB. Sources said that number did not truly reflect the market due to its position upriver. They also speculated that it must have had an older, more lucrative freight rate. Some argued that is still bone dry in the Southern Plains, with no need for extra urea right now.
Higher barge rates and fleeting charges were a major topic last week, with sources saying sellers have to keep a close eye on these expenses or else be stuck with a very bad deal. They said they simply cannot afford to hold on to a barge for a long length of time, waiting for the right price to sell.
Citing an uptick in imports come September, some were predicting price erosion; some said slight, others said significant. Much depends on natural gas prices and hurricane season, and whether domestic producers continue to run at full throttle.
On Thursday, reports were that Agriliance and ConAgra were “close” to firming up their supply deal with PIC/Kuwait.
Eastern Cornbelt: Granular urea was quoted at $250-$260/st FOB in the region, with the low on the Illinois River on a spot basis. New sales were few, however. Dealer postings were reported as high as $270-$285/st FOB in Ohio and Indiana, although sources reported no business to test those numbers.
Western Cornbelt: Granular urea was pegged at $250-$255/st FOB, up slightly from last report, although movement was at a standstill. Regional postings ranged from $255-$270/st FOB, depending on location and supplier.
Southern Plains: Granular urea was quoted at $250-$255/st to dealers FOB Inola and Enid, Okla. Several sources said preplant movement for winter wheat will be off again this year if soil conditions in the region remain parched. A Kansas source said growers will decide by Labor Day whether to dust in the crop or wait. A Texas source also noted some concerns about the availability of winter wheat seed due to last year’s poor production.
South Central: Granular urea was still trickling out of the warehouse in mid-July to some “rice stragglers,” according to one Arkansas source, but movement was stalled last week. Pricing, however, was up from last report on the strength of the barge market and reports of short supply, at least until an expected influx of import tons in September.
The dealer market for urea was quoted at $245-$255/st FOB regional terminals, with the low reported in Arkansas. Dealer postings had reportedly firmed to $260/st FOB Vicksburg, Miss.
Southeast: Granular urea was $263-$265/st FOB port terminals, with the upper end reported FOB Wilmington, N.C., and the low at Savannah, Ga.
Black Sea: Based on the IPL/India numbers, sources say the market has slipped back to the low $200s/mt FOB, with a serious implication of even lower amounts. The winning Stirol and Helm offers of $235/mt CFR in the tender have an estimated netback of $195-$197/mt FOB once freight and other costs are backed off. While some in the industry point to a freight rate just under $30/mt, others say that low rate is for panamax vessels and not the sizes offered in the tender. A more realistic freight rate is closer to $34/mt. Then once other costs of $3-$4/mt are backed off, the price dips below the KIP of $200/mt FOB.
Adding to the belief that the price should be sub-$200/mt FOB is the price paid for Middle East prills in the same tender.
Generally, there is a $15-$20/mt difference between the Middle East and Black Sea prices. With those figures in mind and taking the higher of the two concluded Middle East award winners at $218/mt FOB, the Black Sea price should be $198-$203/mt FOB. At the same time, sources say taking that higher Middle East price is being generous to the producers.
With Indian buying done for a while, with Pakistan delaying its call for a tender for about a month, and with Chinese material looming on the horizon, the only serious game in town for the Black Sea producers is Brazil. The Latin American giant is expected to take about 400,000 mt through October, but even those sales, combined with the IPL business, is not expected to be enough to sustain higher prices. And even with Brazil as a likely buyer, sources are reporting that buyers from there are holding off making any commitment until it really appears as if the price has bottomed out.
So for now, say sources, the increase in prices shown earlier this month has apparently faded away. All the higher-priced tons that were reported sold the end of July were to traders looking to move in early on expectations that the market would jump on Indian and Pakistani business. By the end of last week, many of those tons have yet to find a home.
Some higher priced tons were purchased, but observers note that much of that movement was for top-off tons of 5-7,000 mt.
Based on the Indian tender, sources now peg the Black Sea market at $195-$200/mt FOB.
Middle East: At first the IPL/India tender looked as if it would give producers a chance to move the price up, but in the end prills actually softened. Purchases made before the tender took about 100,000 mt of granular out of circulation from PIC/Kuwait, but no regional prilled urea. The price for all those tons, which sources say reflected backed up unsold material, came in at $213/mt FOB. At the same time, the estimated netback to the States for granular was at $207/mt FOB – with no takers.
The prilled urea price remained steady, with just enough smaller buyers in Asia to keep the price from falling. Now, however, with Chinese urea becoming a major factor in sales to the area, prills have come off, as evidenced in the IPL tender.
Sabic and FERTIL first offered the Indians prilled material at $220/mt FOB. That price by itself reflected the low end of the market as perceived by industry observers going into the tender. After some discussion with offering companies, the Indians were able to get Sabic to shave off $2.50/mt and FERTIL and QAFCO $1.50/mt. At the same time, IPL took one additional cargo from each supplier for a total of about 140,000 mt.
All told, the “slop” in the Middle East has been picked up – at least for prills. Granular remains in a surplus state as more and more producers come on line.
Prilled producers are pleased with the results from India and looking forward to a quick tender from TCP/Pakistan as well. It now appears the TCP tender will be delayed a month or so. This will increase pressure on producers to either cut back on production – an unlikely scenario – or reduce prices.
Competition in the prilled market – notably with Asian buyers preferring bagged deliveries – will heat up in a few weeks as Chinese urea becomes more readily available on the international market.
Industry sources expect the Middle East and Black Sea producers to benefit most from a TCP tender, but if the Middle East guys try to push the price too high too fast, said one source, the buyer will take large quantities from Yuzhnyy and leave the Middle East with only token deals. Or, as another observer noted, leave the Middle East without anything, as has happened in the past.
Based on the IPL business and with an eye to upcoming deals, sources say the prilled price has moved down to the $215-$220/mt FOB range, and granular has remained stagnant at the $207-$213/mt FOB level.
India: All eyes were on India last week. With almost half a million tons now committed for delivery in the next few months, sources say Indian buyers can take a breather for 30-45 days before looking to the market again. The winners in the IPL tender follow:
| Company | Source | Qty | US$/mt FOB | US$/mt CFR |
| Chemo Stirol | Black Sea | 35,000 | 235 | |
| Helm | Black Sea | 40-55,000 | 235 | |
| Fertil | UAE/Qatar | 20,000 15-20,000 |
218.50 | |
| Sabic | Saudi Arabia | 25,000 | 217.50 |
Sources report that subsequent talks led to additional tons being picked up from Sabic, QAFCO/Qatar, and Fertil. Even before the awards were made, the results showed producers were cautious about moving the price upward too quickly. The initial offers follow:
| Supplier/Origin | Quantity (,000mt) | US$/mt FOB | US$/mtCFR |
| Transammonia/open | 60 | 242.50 | |
| 45 | 248.50 | ||
| 45 | 254.50 | ||
| Chemo Stirol/Ukraine | 35 | 235.00 | |
| Helm/Yuz/O/Novo/MEB | 40-55 | 235.50 | |
| 25-30 | 257.00 | ||
| 20 | 259.00 | ||
| 261.00 | |||
| 265.00 | |||
| 40-55 | 249.50 | ||
| 35-45 | 254.50 | ||
| Ameropa/Open | 40-60 | 246.53 | |
| 30-40 | 256.53 | ||
| 30-40 | 253.53 | ||
| Parfico/CIS/Libya/Egypt | 2×25-30 | 212.00 | 240.00 |
| 241.00 | |||
| 244.00 | |||
| 243.00 | |||
| 242.00 | |||
| 248.00 | |||
| Toepfer CIS/Russia/Ukraine/Bangladesh | 56 or | 238.43 | |
| 40 | 245.43 | ||
| 242.73 | |||
| 253.36 | |||
| 250.36 | |||
| 256.13 | |||
| 253.88 | |||
| 15-20 (Granular) | 225.00 | ||
| Keytrade/CIS/open | 50-60 | 239.00 | |
| Fertil/UAE | 20 | 220.00 | |
| QAFCO/Qatar | 15-25 | 220.00 | |
| 15-25 | |||
| Sabic/Saudi Arabia | 2×25 | 220.00 | |
| PIC/Kuwait | 25 (Granular) | 228.00 | |
| ETA/CIS | 25 | 225.00 | 265.00 |
What is significant about the offers is that the Middle East producers tried to move up the price. The $228/mt FOB offer by PIC is in stark contrast to the $213/mt FOB IPL paid just a week earlier for the same type of material.
The result of this tender, plus the 230,000 mt IPL picked up from PIC, Toepfer, and others, means the buying is done for a while. At this point, said one Asian trader, IPL and MMTC can sit back and rest. The next need to buy will come for October shipments. Sources expect to see feelers for tenders coming out in early September.
The best bet is that IPL will wait until it is clear Pakistan will be issuing a tender. At that point, say sources, the IPL buyers will first try to nail down some private deals as they did this time, and then issue a tender for the rest.
Pakistan: Government officials and TCP representatives are slated for a huddle Sept. 7. At that time the participants are expected to walk out with a firm decision on when TCP will call a tender and how much it will seek. Traditionally, TCP calls a tender about this time. However, this year is an election year, and the government did not want to face accusations from farmers that there was not enough urea for the upcoming season and that what was available was too expensive.
Sources say the major buyers repeatedly told government officials that urea was not needed earlier this year, but the government power brokers reminded them the urea will be subsidized and that it would be best to have a surplus at this time. As a result, 450,000 mt were picked up, and now the warehouses are bulging at the seams.
The domestic price is down, and sources estimate the country currently enjoys a surplus of about 300,000 mt.
Asian observers are clear that Pakistan will need more tons before the year is out, but chances are the purchases will not be needed until much later. As a result, a tender is expected to be called sometime late September for October and November delivery.
While the bulk of the purchases are expected to come from the Middle East and the Black Sea, the mere presence of Chinese material in the international market means prices will be softer than producers would like when large orders are being taken.
Bangladesh: The Aug. 3 tender closed with Liven and Bulk Trade coming out winners. BCIC called tenders for 100,000 mt each of granular and prilled urea. Chinese product dominated the offers.
Results from the prilled tender follow. The boldfaced offering companies and offers represent the 10 lowest prices.
| Supplier | ORIGIN | Qty MT | US$/MT FOB | US$/mt CFR |
| Liven | China | 25,000 25,000 25,000 25,000 |
223.67 223.57 223.07 222.17 |
260.37 259.77 258.27 257.37 |
| Reliant Commodities | China | 25,000 25,000 25,000 25,000 |
235.00 223.00 221.00 221.00 |
271.42 262.35 260.82 259.37 |
| Helm | Egypt/China | 12,500 12,500 12,500 |
229.00 228.75 228.50 |
262.00 261.75 261.50 |
| Bulk Trade | China/Saudi Arabia | 12,500 50,000 25,000 12,500 |
227.47 223.42 226.32 223.72 |
267.47 263.42 266.32 263.72 |
| Poton Traders | Qatar | 12,500 12,500 25,000 25,000 |
238.27 238.27 236.31 235.21 |
273.27 273.27 271.31 269.31 |
| D.H.K. ENEGRY | China | 12,500 12,500 |
228.00 230.00 |
272.82 275.20 |
| Meheco Corp. | China | 12,500 | 240.32 | 290.72 |
| ETA | China | 12,500 12,500 |
245.75 245.75 |
290.95 289.95 |
The granular tender results follow.
| SUPPLIER | ORIGIN | Qty mt | US$/mt FOB | US$/mt CFR |
| Liven | China | 25,000 12,500 12,500 25,000 25,000 |
228.17 227.77 227.17 226.07 225.17 |
267.37 265.97 264.37 261.27 260.37 |
| Bulk Trade | Egypt/China | 12,500 50,000 25,000 12,500 |
225.40 223.44 222.82 224.70 |
265.40 263.44 262.82 264.70 |
| Helm | Egypt/China | 12,500 12,500 12,500 |
231.00 230.75 230.50 |
264.00 263.75 263.50 |
| Reliant Commodities | China | 25,000 25,000 25,000 25,000 |
227.00 227.00 227.00 228.00 |
265.39 266.38 265.77 266.92 |
| ConAgra | China | 12,500 12,500 12,500 12,500 12,500 12,500 |
234.50 232.50 231.50 230.00 229.50 229.00 |
272.05 270.05 269.05 267.55 267.05 266.55 |
| Meheco Corp. | China | 12,500 12,500 |
275.00 243.27 |
325.40 293.67 |
Liven and Bulk Trade were the clear winners in both groups. Sources say that if and when BCIC issues the formal award, the tender calls for shipment within 21 days of opening the letters of credit.
Sources expect to see at least two more similar tenders being called next month and October. While the calling of what looks to be tenders for an additional 200,000 mt each of prilled and granular material would ordinarily help move the market, sources say many of the tons BCIC will call for are actually overlapping.
It seems that BCIC will sometimes allow some offers to lapse, and other times the validity of the offers expires while BCIC and the political leaders of the country haggle over the cost. Industry observers say the call for large quantities is more to ensure the tons that are really needed get covered rather than showing an actual need for that much urea.
China: Chinese product dominated the BCIC tender and is expected to repeat that showing in subsequent tenders. Reportedly, China is offering at $210-$215/mt FOB bagged. Even at those prices and with Vietnam and the Philippines looking, some traders are reluctant to make a long offer until at least 80 percent of the cargo from a producer is at the pier. Seems some Chinese producers are notorious for walking away from deals if the price goes up after a deal is struck. At the same time, if the international price drops the producer tries to strictly enforce each clause in the contract, often forcing a trader to take tons at a disadvantageous time.
Beijing is still on track to lower the export duty from 30 percent to 15 percent Oct. 1.
Vietnam: Even with the Phu My plant running at capacity, sources say Vietnam needs tons. A rumor circulated last week that $240/mt CFR bagged was done with Chinese material. While this was just passed off as talk by many, others could confirm that $245/mt CFR and slightly lower was done. Imported tons are expected to come almost exclusively from China.
Brazil: Buyers will still need about 300,000 mt by the end of the year, but so far are holding off until the impact of the IPL/India tender is fully assessed. Sources report the Brazilians have looked at past Indian tenders and noted how Black Sea prices have come off after each one. For now, they appear to be sitting and waiting – with the occasional phone call to test the waters – until it is clear the market has bottomed out.
NITROGEN SOLUTIONS
Eastern Cornbelt: UAN-28 remained at $155-$165/st ($5.54-$5.89/unit) FOB terminals in the region, with dealer postings as high as $175/st ($6.25/unit) FOB inland tanks.
Western Cornbelt: UAN was steady at $5.40-$5.78/unit FOB regional terminals. An Iowa source pegged the common river market for UAN-32 at $172.80-$176/st ($5.40-$5.50/unit) FOB last week. Sources continued to talk of a fair amount of spring carryover.
Southern Plains: UAN pricing was up from last report. Most sources tagged the market at $5.18-$5.47/unit FOB regional terminals, with the low reported out of production points in Kansas and Oklahoma after netbacks. A northern Texas source also confirmed the higher prices, saying rail-DEL UAN-32 had firmed from a low of $165/st ($5.16/unit) earlier this summer to a more recent $180/st ($5.63/unit) figure.
South Central: UAN-32 remained at $175-$185/st ($5.47-$5.78/unit) FOB regional terminals, with the lower numbers in Arkansas and Mississippi and the high in Kentucky. Dealer reference pricing was pegged at the $180/st mark ($5.63/unit) FOB Vicksburg. There were reports of retail pricing anomalies in the region last week; one Louisiana source relayed rumors of spot sales to farmers for as low as $165/st ($5.16/unit) FOB the dealer, but these were isolated and likely short-lived.
Southeast: UAN-30 was tagged at $175-$180/st ($5.83-$6.00/unit) FOB Wilmington and Norfolk, Va., up slightly from last report, although little new business was reported to test the market.
AMMONIUM NITRATE
Western Cornbelt: Ammonium nitrate remained at $255-$260/st FOB.
Southern Plains: Ammonium nitrate was quoted at $245-$250/st FOB Catoosa, Okla., with little movement reported.
South Central: Ammonium nitrate was $235-$240/st FOB in the region.
Southeast: Ammonium nitrate was a nominal $280-$285/st DEL in the region, with little new business reported to test the market.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate remained at $150-$155/st FOB.
Western Cornbelt: Granular ammonium sulfate was unchanged at $150-$155/st FOB and $155/st DEL in the region.
Southern Plains: Granular ammonium sulfate remained at $150/st FOB Freeport, Texas, and $180/st FOB Plainview, Texas.
South Central: Granular ammonium sulfate was steady at $170-$175/st FOB regional warehouses.
Southeast: Based on new postings effective Aug. 1, granular ammonium sulfate pricing was up $5/st from previous levels to $142/st FOB Hopewell, Va., and $147/st FOB Augusta, Ga. Delivered granular sulfate was $162-$180/st in the region, depending on location.
PHOSPHATE
Central Florida: Producers continued to sell slightly more DAP and other phosphates out of Central Florida last week than previously, primarily because of CSX Transportation’s upcoming rate increase. However, producers were somewhat surprised the volume wasn’t much larger and more customers were not taking advantage of the savings.
In general, most described the DAP market as growing weaker last week, putting a dark cloud over the heads of those who left the Southwestern Conference highly optimistic about the fall season. Traders, more than producers or dealers, were suffering, and the lack of cash flow was a problem.
Drought was still a problem in Texas and Oklahoma, and other areas surrounding those states were not much better off. That area would normally be buying at this time of year, if there was sufficient moisture.
Although there were new sales last week, they were within the previous week’s price range, so the Central Florida DAP range was unchanged at $223-$227/st FOB. Mosaic’s posted price remained at $235/st FOB, and CF’s posted price was $227/st FOB. Prices do not include discounts; however, some large buyers can obtain a lower price without a discount from some producers. CF was said to be selling DAP as low as $223/st FOB. Mosaic discounts MAP $4/st from the price of DAP, while CF has no price difference. PotashCorp’s Central Florida reference price remained at $245/st FOB. In Texas, Agrifos’ prices were unchanged at $255/st FOB for DAP and $261/st FOB for MAP.
U.S. Gulf: DAP prices on the river system renewed their downward trend last week as unsold barges continued to collect at storage facilities, where high rates were building up. For the previous two weeks traders had been saying barges were available below the low for the price range of $228/st FOB, but none had made new sales below the range. Some of those who said they were available as low as $226/st FOB were actually sitting on them. Then, last week, five new barge sales were reported, and all were at $225/st FOB. The seller said that he believed all were for use for plowing in preparation for the corn season next spring. The source also said that an attempt to raise prices after the first couple of sales fell flat with buyers, so the low price was reinstated. New sales for the fall season continue to avoid detection, if they exist at all.
Many sources said last week they believe the DAP market was growing weaker, and prices may fall even farther. Considering the dip in the price range, that looks possible. They also said this summer has been slower than last year’s slow summer, which is not good.
The U.S. Army Corps of Engineers will close two locks on the Arkansas River for two weeks on Sept. 9, which means barges would need to leave New Orleans within the next week or two in order to beat the closing. Urea, more so than DAP, would be affected in that region.
With the new sales last week, the NOLA DAP barge price range fell from $228-$233/st FOB the previous week to $225-$228/st FOB.
Eastern Cornbelt: DAP and MAP were both quoted in the $260-$270/st FOB range out of most river terminals, with inland warehouses referenced at higher numbers. An Ohio dealer tagged the DAP market FOB Cincinnati at the $263/st FOB level last week. No market was reported for TSP. 10-34-0 was $250-$265/st FOB in the region.
Western Cornbelt: DAP and MAP were quoted at $260-$270/st FOB most river terminals, with postings at the $275/st FOB mark or higher at inland locations. TSP was a nominal $240-$245/st FOB in the region, where available, and 10-34-0 was pegged at $255-$265/st FOB.
Southern Plains: DAP and MAP were steady at $260-$265/st FOB Catoosa, with most sources quoting the lower end as the more common dealer price. 10-34-0 was unchanged at $245-$250/st FOB in the region.
South Central: DAP remained at $255-$260/st FOB most regional warehouses, with the upper end reflecting dealer postings FOB Vicksburg. There were reports of dealer DAP tons priced as low as $250/st FOB Caruthersville, Mo., but that level was not confirmed. MAP was pegged at $255-$261/st FOB in the region, and TSP was $220-$225/st FOB the warehouse.
U.S. Export: The export market continued to be the bright spot for phosphate producers last week, which was a good thing, since the U.S. domestic market was hardly moving. PhosChem made a sale of 40,000 mt to Pakistan at $260/mt FOB, and another 6,000 mt into Central America at $263/mt FOB.
India and Pakistan continue to be good prospects for U.S. phosphates. Jordan is out of product until sometime in November, and Russia will not have more DAP available until about a month earlier than Jordan. With those two big competitors out of the picture, the coast is clear for PhosChem – and, possibly, CF, until it joins PhosChem in October. Brazil, too, should be making an impact on the phosphate market during the next couple of months, but a large part of its purchases are for MAP.
Apparently, a vessel of 30,000 mt recently sold by CF to an export trader and resold into Pakistan resulted in a loss for the middleman. CF was said to have held firm on its asking price, and freight rates increased to the point the shipment cost more than what the buyer in Pakistan paid.
The export DAP price range tightened last week from the previous week’s $259-$264/mt FOB to $260-$263/mt FOB. Freight rates will likely control FOB prices, at least for the time being.
India: Under the 275,000 mt phos rock tender held Aug. 8, RCF received the following technical offers: 1) OCP 275,000 mt ex Morocco (75-79 BPL) for shipment up to June 2007; 2) Tradeline 15-17,000 mt ex Syria (30.5-31.5 percent P2O5), trial shipment in August/September, 2006; 3) JPMC 275,000 mt ex Jordan (33.86 percent P2O5) shipment up to June 2007; 4) Getax 275,000mt ex Algeria, grade not specified, shipment up to June 2007; 5) Getax 50,000 mt ex Togo, grade not specified, December 2006-January 2007 shipment. Price offers of companies found eligible will be opened at a later date.
POTASH
United States: Citing growing momentum and a positive outlook for fall and spring seasons, PotashCorp has announced a $6-$10/st increase on potash across the board in the U.S., effective Oct. 1.
Eastern Cornbelt: Potash was steady at $195-$200/st FOB in the region, with the low reported by Illinois sources out of river locations.
Western Cornbelt: Granular potash was $193-$200/st FOB in the region, depending on grade and location, with the low reported at St. Louis, Mo. One Iowa source tagged the common range last week at $195-$198/st FOB river warehouses for granular potash.
Southern Plains: Potash postings remained at $192-$198/st FOB Carlsbad, N.M., depending on grade. A Kansas source quoted warehouse pricing last week at $198-$205/st FOB, while one Texas source quoted a $210/st DEL number for granular tons.
South Central: Potash was tagged at $193-$198/st FOB regional warehouses; one Kentucky source tagged the common dealer price at $195/st FOB Ohio River terminals. There were also reports of direct-transferred barge tons trading at the $187-$190/st level at Memphis.
South Central: Potash was down slightly from last report at $212-$228/st DEL in the region, with the low reported in North Carolina for delivered granular potash.
India: Belorussian Potash Co. reports that it has signed a new supply agreement with IPL which will retain prices at 2005 levels through April 2007.
SULFUR
Tampa: The BP plant at Texas City, which suffered a fire and explosion last year, will not reopen until some time after the first of next year. Considering the other problems BP was having with its pipeline in Alaska and an earlier spill there, the company was said be acting very cautiously, which was probably wise.
Railcars were said to be sitting for prolonged periods at their destinations, and that was beginning to cause a shortage of sulfur rail cars. The situation was said not to be a demand issue, merely transportation.
Although sulfur contracts for the third quarter were settled a couple of weeks ago, speculation last week was that there will be another decrease in price for the fourth quarter, probably of between $3 and $4/lt. Prices on the world market continued to be depressed, mainly because of the high cost of transportation, which reduces the delivered price. Mosaic was said to be telling its suppliers that it has an overabundance of sulfur at Tampa, but some said that may simply be a ploy for negotiating in the fourth quarter.
MARKET NOTES
India: By midweek, leading companies like Reliance Industries Ltd., Essar Steel, IFFCO, Kribhco, and NTPC Ltd were forced to downscale production after the ONGC suspended supply of natural gas from its gas processing station at Hazira due to incessant rains. ONGC closed its plant after it was flooded with 4-5 feet of water released from the Ukai dam. By morning the boundary wall had collapsed, and the water level at the plant had risen to ten feet. Subsequently, the offshore platforms of ONGC’s Bassein field, and the joint venture fields of Panna-Mukta and Tapti, which supply 40MMSCMD to the Hazira plant, were closed. The current gas availability in India stands at 91 MMSCMD. As the Hazira plant feeds GAIL’s HVJ pipeline, this has impacted a number of industrial units drawing gas from pipeline. Restoring supplies on the pipeline could take anywhere from 2-3 days to a week, a GAIL official said. This will also impact urea production at both the IFFCO and Kribhco plants and result in loss of production.