AMMONIA
U.S. Gulf: Tampa prices were reported to be moving up. Mosaic was reported to have purchased a first half October cargo for $300/mt DEL, reportedly from Nitrochem. In the meantime, PotashCorp sold Yara a 21,000 mt vessel into Donaldsonville at $307/mt DEL. Sources continue to say price ideas for any new NOLA barge trade would be at least within the $280-$285/st FOB range.
The higher NOLA and Tampa prices conflict somewhat with lower gas prices. However, sources explain that the lower gas prices do not mean any extra production; that all those who can produce were already doing it. And, they note, any extra capacity that could have come up in the past has been long idled and out of commission.
U.S. imports in July were off 22 percent, according to the U.S. Department of Commerce. They sank to 553,287 st, down from the year-ago 704,826 st.
Eastern Cornbelt: Sources reported minimal change to the spot fertilizer markets last week, with most of the field activity limited to soil sampling. Ammonia was quoted at $350-$360/st FOB regional terminals to dealers for cash tons. Several sources reported some interest in spring ammonia, with most sources quoting the forward market at the $375/st FOB level in Illinois and Indiana for spring tons.
Western Cornbelt: Ammonia remained at $345-$355/st FOB most regional terminals.
Southern Plains: Anhydrous ammonia was $305-$315/st FOB regional production points on the low end, with dealer pricing out of pipeline terminals in Kansas quoted at the $320-$325/st FOB level after discounts. Delivered ammonia was quoted in a broad range at $330-$350/st, with the low in northern Texas and the high in eastern Colorado.
South Central: Ammonia was quoted at a nominal $345-$355/st FOB regional terminals. A Kentucky source reported spring pricing at the $375/st rail-DEL level.
Black Sea: Turnarounds in plants that feed into Yuzhnyy, along with stronger demand from the States and Europe, have pushed prices higher. Sources in Asia now peg the market in the upper $220s/mt FOB. The balance is expected to remain tight well into October. Sources say material booked for next month gives suppliers little incentive to discuss lower prices. One Asian observer noted October will mark the beginning of a steady increase in prices that should extend well into spring 2007.
Middle East: Mitsui took a cargo from Iran at $232/mt FOB, and Yara is taking tons from Qatar just below that level. Sources say demand from India and the U.S. is providing enough purchasing power to move prices upward.
Iranian material was offered in the PPL/India tender at $270/mt CFR for an estimated netback of $230/mt FOB. That business was taken by MITCO/Malaysia for about $30 less.
Another deal between IFFCO and MITCO took away other business that usually goes to the Middle East producers. Sources say the loss of these two deals is regrettable, but not devastating to the local market. Orders are said to be sufficient for the next month or so, and following that comes an expected heavy winter buying season.
The Yara material from Qatar is said to be slated to go Europe and the U.S. Sources add that the Yara contracts with QAFCO are said to be fully booked for October and well into November.
India: The PPL tender closed early last week, with Malaysia taking the prize. Seems there was some playing back and forth between MITCO/Malaysia and a major trading house. When the talks between the two broke down, MITCO offered its own tonnage directly – a rarity, and at a price that was guaranteed to spell defeat to the traders offering in the tender.
Asian sources report four offers were made from Transammonia, Transfert, Nitrochem, and MITCO. The first three companies offered Iranian material at $270/mt CFR for an estimated netback of $230/mt FOB. The winning MITCO tons were offered at $240/mt CFR for two cargoes of 10,000 mt each to arrive mid and late October.
This is not the first time MITCO took business usually taken by traders or Middle East suppliers. Another sale last week to IFFCO went to MITCO at $238/mt CFR for arrival this week.
While it is not uncommon for Malaysian or Indonesian tons to be sold to Indian buyers, sources in Asia said it was rare to see MITCO offer its own tons in a tender. In the past MITCO has usually sold its material through trading houses.
Indonesia: Full production at KPA is expected this week after a three-week maintenance shutdown. As of press time there were no indications the joint-venture operation is suffering from the usual start-up hiccups that have plagued it and KPI in the past. Asian sources say the start-up so far appears to be smooth.
Malaysia: The two sales to India, along with sales to East Asian buyers, have pretty well booked up the cargoes for October and possibly into November.
UREA
U.S. Gulf: While many sellers are still out there quoting as high as $230/st FOB, buyers insist that new business last week was done in the low $220s/st FOB. While most say the latest business has been at $222-$224/st FOB, there is at least one report that product has sold as low as $220/st FOB.
Sellers claim the lower numbers are simply market hype to get prices down in time to get barges upriver. Buyers, on the other hand, say some sellers are letting go of barges, fearing they will have to pay storage on them into next year – or as some would say, cut and run. Buyers argue that big importers will soon start to have their regular milk runs of cargoes coming in, and they will meet a domestic industry at full production, very competitive prices, and very little demand until next spring. Most agree that NOLA is not an attractive market for any additional swing cargoes in the near term.
July urea imports were off 10 percent, dropping to 228,377 st, down from the year-ago 255,061 st..
Eastern Cornbelt: Granular urea remained at $260-$265/st FOB river terminals, and up to $270/st FOB inland.
Western Cornbelt: Granular urea was steady at $255-$260/st FOB most river terminals in the region. Missouri sources pegged the dealer market at St. Joseph at the $257/st FOB mark last week.
Southern Plains: Granular urea pricing was actually down from last report, with the dealer market pegged at $248/st FOB Inola, Okla., and $251-$253/st FOB Enid, Okla.
South Central: Granular urea remained at $255-$260/st FOB regional warehouses, with the high to dealers FOB Vicksburg, Miss.
Southeast: Granular urea pricing was down slightly from last report. The market was quoted at $250-$260/st FOB port terminals, with the low reported at Wilmington, N.C., and the upper end reflecting dealer reference pricing.
India: Looks as if IPL took all the offered tons that were priced at $252.50/mt CFR for east coast and $243.50/mt CFR for west coast or less. Anything beyond those prices was rejected. At the same time, IPL booked business with a couple of other companies following the awards. While there is some dispute over exactly who got the deals, it was clear that these pricing guidelines held.
Sources point out that the tender awards were not so much new business, but rather confirmation deals. Each of the winning companies had already consummated a deal with IPL, and the tender was used to confirm and legitimize the price.
The purchases after the tender included another cargo from ConAgra for $252.50/mt CFR to the east coast. There is some dispute among industry observers, but Middle East producers claim to have secured a post-tender deal as well. One source said the final price was “under $230/mt FOB,” while others claim they heard nothing about any such arrangement.
If the deal was done, sources say the price would have had to have been close to $228/mt FOB to fit into the IPL price target. One observer noted IPL might be willing to give the Middle East suppliers a little leeway in prices – but only half a buck or so – to ensure continued good will.
And another cargo from Malaysia was sold to IPL at a price of $225/mt FOB.
All told, about 700,000 mt of material was committed for purchase by IPL in the tender and subsequent talks.
While many in the industry figured that would be enough to keep Indian farmers happy for a while, rumors began circulating last week that MMTC might soon enter the market as well. The Indian government said it will be about 300,000 mt short this year unless another major purchase is made.
Reportedly, IPL has indicated that with all the purchases it has arranged, it is willing to let someone else take control of this hind-end buying.
Best guesses are that MMTC will call the tender either later this week or the first couple days of October. Then talks will take place to try to force a lower price so that the final price comes out at or near the IPL numbers. A best-case scenario puts awards being issued by Oct. 9. A more likely date is closer to the 13th, but only if everything moves smoothly.
With an early October award, sources say deliveries for that month are out of the question. The most likely delivery times will be November through January.
But there are still skeptics that a tender will be called.
Those who dismiss the idea of an MMTC tender point to a few trading houses taking positions in the Black Sea who are talking up the market. These traders are using the rumors of an MMTC tender, the skeptics say, to run up the price of Black Sea material and then cash in when others need the tons to fulfill other deals that have come around.
One skeptic of an MMTC tender said the move would not make sense. With the market looking balanced because of all the IPL business recently concluded, he said it would be folly to come back in at this time when everyone is looking for the market to move up. It would be better, he said, to wait and see how things settle in.
One source noted that MMTC might actually be providing cover for some domestic buyers who might strike out on their own, quietly securing tons. Under this scenario – that has been played out before – the end user makes a deal with a supplier and then gets MMTC to import the material. MMTC is required to hold a tender and does so to validate the deal that has already been worked out. And, if the price is right, MMTC will then pick up some additional tons for future use before the price goes up further.
The flaw in that scheme, say observers, is that without an MMTC entry soon, the price on the international market is expected to crater and thus provide better opportunities for discounted buying.
Black Sea: As a result of speculation on a potential MMTC/India tender, sources say the current asking price is $225/mt FOB. One trader noted that just a week earlier anyone coming in with a bid at that level would be treated as a savior. Now, he said, this is the lowest producers are willing to consider. Offers below $225/mt FOB are said to be dismissed without even an opportunity to get a counter-offer.
The push for this price increase is especially surprising given reports that Brazilian and Colombian buyers settled deals for October that netback to $200-$202/mt FOB, and that the IPL/India tender results show a netback around $215/mt FOB.
The lower prices, however, are reportedly not the norm for business in the region. Sources say the $200/mt FOB is calculated from the sale of a floating cargo out of the Baltic that had to be liquidated. Once the discount to get rid of the cargo was calculated and then the standard difference between the Baltic ports and Yuzhnyy was worked out, sources came to the $200/mt FOB price, said one observer. He added that does not mean that a $200/mt FOB deal was done in Yuzhnyy.
The producers argue that the Indian business and the Latin American business was enough to create a shortage in Yuzhnyy to justify the price increase. Others say the booked business is a drop in the bucket compared to production.
Still, keeping track of the price last week was like grasping at fog. With most in the industry calling the Black Sea price around $215/mt FOB and a few pointing to $200/mt FOB, others argued the $225/mt FOB price is the correct one. Not that they necessarily like the higher price, but they say that is what it will cost to begin talks with producers.
The advocates of the higher price idea say the recent round of IPL/India buying – almost 700,000 mt – combined with rumors that MMTC/India and TCP/Pakistan will be coming into the market in the next couple of weeks for as much as 700,000 mt, means prices should go up. They add that turnarounds in the region and demand from Europe add to their side of the argument.
The bears, on the other hand, point to the drop in price that occurred when Brazil and Colombia bought. The netbacks to these countries also came in around $210/mt FOB, with the exception of the Baltic cargo that had a $200/mt FOB Yuzhnyy equivalent.
To see softer prices in Latin America following an Indian tender came as no surprise to a number of traders. In each of the previous IPL tenders the Yuzhnyy price dropped. This time, said one source, the price did not drop as much as in previous tenders.
Sources say the October and November orders from the region are well covered. Some sources say, however, that once the end of November rolls around there will be tons available. If MMTC does call a tender this week or next, sources say the best that can happen is some of the reserve pressure will be relieved in Yuzhnyy. One trader noted that 300,000 mt or even 500,000 mt spread out over three months will barely provide a safe floor for prices.
One thing is certain, said one source – if India does not come in, the price in the Black Sea will most likely begin a freefall.
So for now, with the IPL business done, some Latin American business concluded; but with more buyers looking cautiously and the potential for an MMTC tender, sources are comfortable with calling the market at $215-$217/mt FOB.
Middle East: Producers desperately want the price to get into the mid-$230s/mt FOB for prills, but so far everything has been conspiring against them.
Offers from three producers – Fertil, Sabic, and Qafco – in the IPL/India tender were at $235/mt FOB. Sources report that at least Sabic – and most likely all three – ended up accepting a bid under $230/mt FOB in post-tender talks.
Sources estimate the price of the deals was set based on IPL’s unwillingness to pay more than $243.50/mt CFR for west coast deliveries. Once $15/mt freight is taken off – and that is a cheap rate, say sources – the netback had to have been no more than $228/mt FOB.
This level represents stagnant pricing on prills. Previous weeks had material at just $226-$227/mt FOB.
If the freight rate was higher, as many believe, then the netback would represent erosion in the area’s price. But many in the industry are willing to be generous and stick with the $15/mt freight. So then, taking the best guess, the price of prills in the region remains stable.
Adding to the producers’ angst is the change in tactics by major buyers such as those in India. Once solid prill buyers, India and others are now willing to take a combination of prills and granular to satisfy their needs. With a glut of granular in the global market, prill sellers have to chase a softer granular market to secure deals.
Supplies from Malaysia, Indonesia, Australia, and China compete against Middle East product in ports from the east Pacific to India and into Europe. There is little in the market projections that could strongly argue for an increase in granular prices.
To add insult to injury, late last week a deal reportedly was concluded between Brazil and QAFCO for a cargo at $213/mt FOB. Sources say this represents a signal that even the producers are willing to accept that granular prices are on the way down as supply continues to grow.
Prior to the Brazil/QAFCO deal, another bit of business got pegged at $222/mt FOB. As a result, sources are now calling the market $213-$222/mt FOB.
China: Reports that Chinese product is being offered at $220/mt FOB bagged at the ports adds pressure to other urea producers. Exports of Chinese urea will begin in earnest Oct. 1 once the export duty is reduced from 30 percent to 15 percent.
Sources say talks are going on to send cargoes to the west coast of the U. S., but that with current increases in freight the FOB price will have to come down some. Still, some deals with western Latin America have reportedly been inked, with the promise of some profits to be made by all.
Bangladesh: Another tender will close Oct. 12 for BCIC. This time they are asking for 175,000 mt of prills and 100,000 mt of granular. Sources say Bangladesh needs the material and will most likely move quickly on the tender once it closes.
BCIC finally awarded the August tender to Summit for 100,000 mt of granular. The September tender was awarded to a variety of companies, including Summit. The other firms are said to be non-traditional companies with little experience in the urea market.
The more established companies that had a good shot at winning the tender – notably low-offering firm Liven – did not get the September business because they refused to extend the validity period on their offers. Reportedly, the initial offers were based on a price for Chinese material that is no longer available.
The October tender, which many in the industry had earlier written off as not happening, is crucial to the urea supplies of the country, said one trader. The tons are needed, and they are needed quickly. The growing shortage of material in the country is expected to push BCIC to make its awards quickly. Others are not so sure the BCIC and government bureaucracies will be able to move fast enough.
Material from Kafco has been sent to the west coast of the U.S.
NITROGEN SOLUTIONS
U.S. Gulf: Prices continued to erode. Players called barges within the $150-$152/st FOB ($4.69-$4.75/unit) range. Lower natural gas prices were cited as a major reason for the decline.
July imports were almost level at 128,357 st with the year-ago 128,799 st.
Eastern Cornbelt: UAN-28 remained at $163-$173/st ($5.82-$6.18/unit) FOB regional terminals, with the low out of spot Mississippi and Illinois river locations. The Cincinnati market was pegged last week at $166-$168/st ($5.93-$6.00/unit) FOB. An Illinois source reported spring UAN being offered as low as $6.10-$6.15/unit FOB, down from earlier numbers in the $6.75-$6.90/unit FOB range.
Western Cornbelt: UAN was steady at $5.80-$6.09/unit FOB regional terminals, with the low out of spot Mississippi River locations. The UAN-32 market FOB Bigelow, Mo., was tagged at the $195/st ($6.09/unit) mark last week.
Southern Plains: UAN-28 was quoted at roughly $150-$162/st ($5.36-$5.79/unit) FOB regional terminals, with the low reported out of production locations for the most recent sales. Several sources noted, however, that most UAN tons were purchased earlier, leaving little new business to test the spot market last week. Some Kansas sources quoted dealer postings out of terminal locations as high as $6.09/unit FOB.
South Central: UAN-32 was quoted at $175-$185/st ($5.47-$5.78/unit) FOB regional terminals, with the upper end out of river locations in Kentucky. The dealer market FOB Vicksburg was tagged at the $180/st ($5.63/unit) mark.
Southeast: UAN-30 remained at $175-$180/st ($5.83-$6.00/unit) FOB Wilmington and Norfolk, Va.
AMMONIUM NITRATE
U.S. Gulf: Barge prices were reported to be a little lower, in the $192-$195/st FOB range. Sources said lower gas, urea, and UAN prices are starting to impact AN.
July imports were off 35 percent, to 42,532 st from the year-ago 65,158 st.
Western Cornbelt: Ammonium nitrate remained at $245-$250/st FOB in the region.
Southern Plains: Ammonium nitrate pricing was steady at $245/st FOB the port of Catoosa, Okla.
South Central: Ammonium nitrate was unchanged at $235-$240/st FOB in the region, with the low at Alexandria and Yazoo City, Miss.
Southeast: Ammonium nitrate was quoted at a nominal $280/st rail-DEL in the Carolinas for imported tons.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate remained at $150-$155/st FOB in the region.
Western Cornbelt: Granular ammonium sulfate was $150-$155/st FOB, with warehouse postings now at the upper end of that number or higher, depending on location.
Southern Plains: Granular ammonium sulfate remained at $150-$180/st FOB Texas shipping points. One Kansas source noted some lower freight rates, however, possibly to match some less expensive sulfate tons coming into the region from the Dakotas.
South Central: Granular ammonium sulfate remained at $170-$180/st FOB regional warehouses, with the upper end reflecting dealer postings.
Southeast: Granular ammonium sulfate postings from Honeywell reportedly moved up on Sept. 20 to $147/st FOB Hopewell, Va., and $155/st FOB other warehouse locations. DSM Chemical had a $5/st increase on the books for Sept. 25, when granular pricing will move to $152/st FOB Augusta, Ga., and $185/st DEL in Florida, while standard grade sulfate will move to $135/st FOB Augusta.
PHOSPHATE
Central Florida: It hasn’t happened often, but the lower priced NOLA DAP barges on the river system could be purchased for less than a railcar out of Central Florida last week, when the cheapest barges could be bought for $218/st FOB, compared to the low for railcars at $223/st FOB. However, the price for DAP out of Central Florida was not likely to see adjustments anytime soon because of a lack of new orders, according to both traders and producers. There was no motivation to lower prices when no one was buying.
Information released by TFI for August showed DAP production was down 13 percent from the same month last year, and down 14 percent for the year-to-date. DAP inventories were about the same as August 2005. Producer disappearance of DAP was down 2 percent from August of last year, and 9 percent for the year-to-date from the same period in 2005. MAP production was up 6 percent from August 2005, and 1 percent up compared to the previous year-to-date. MAP producer disappearance was up 4 percent compared to August 2005, and 7 percent for the year-to-date in comparison with the same period in 2005.
DAP and MAP shipments out of Central Florida last week continued to be either under existing contracts or from orders taken in August, before CSX Transportation increased its railcar rates and fuel charges on Sept. 1.
One source noted that unusually high levels of rain in the Midwest and the Northeast had delayed work by farmers in those areas, so fall activity was also deferred. Once farmers are able to begin working their fields, that situation should change.
With a lack of new sales, the Central Florida DAP price range remained at $223-$226/st FOB. Mosaic’s posted price was $228/st FOB but was selling as low as $226/st FOB, and CF’s posted price was said to be $227/st FOB with sales at $223/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 was still at $245/st FOB. In Texas, Agrifos’ prices were $255/st FOB for DAP or MAP, after the company recently decided to follow the major producers in equalizing its DAP/MAP prices.
U.S. Gulf: The Gulf NOLA DAP barge market continued to be an anomaly last week, with the lowest priced barges cheaper than the low-priced railcars out of Central Florida. In addition, the market has taken on a wide range with a $12/st FOB difference between the high- and low-cost barges. That situation has been due in large part to an excess of barges sold to traders by Miss Phos. However, that situation may soon change. Oakley was said to have purchased 13 barges for transloading for resale to Uruguay, and ConAgra was said to have done a similar deal with barges for another sale into that same country. While that would seem to be a matter of removing phosphate from one market to favor another, which would be a break-even, Uruguay has generally purchased Russian product in the past; but, since Russia was in short supply, it was replaced with DAP produced in the U.S., so it should help remove cheap barges from the river and not have a negative impact on U.S. export sales.
Another company buying barges last week was Mosaic, which will further reduce the number of cheap barges on the river and make its own product more attractive. However, sources said last week that a significant number of the lower-priced DAP barges were still available throughout the river system, so the overall impact on the NOLA DAP barge market remained unclear last week.
With the exception of terminals along the Arkansas River, terminal activity remained slow for this time of year and prices were unchanged. For some that will mean a loss, because they restocked their bins with phosphates when prices were higher and have not been able to charge high enough prices to make up the difference.
The range for NOLA DAP barges last week continued to widen, with confirmed buys and sales at $218/st FOB – a new low – and the high still at $230/st FOB. Unconfirmed reports said barges could be purchased for as low as $216/st FOB.
Eastern Cornbelt: DAP and MAP remained at $255-$265/st FOB in the region, with the low out of river warehouses and the upper numbers inland. MAP out of E. Dubuque, Ill., was tagged at the $256/st FOB mark last week. TSP was quoted at a nominal $235-$239/st FOB river terminals and roughly $245/st FOB inland. 10-34-0 remained at $250-$260/st FOB in the region.
Western Cornbelt: DAP was steady at $257-$265/st FOB regional warehouses, with MAP quoted in the same range. TSP pricing remained at $235-$245/st FOB, with the low on the river and the upper end inland. 10-34-0 was $250-$265/st FOB, with the low in Nebraska and the high in Iowa.
Southern Plains: DAP was pegged at $255-$258/st FOB Catoosa, with MAP in roughly the same range. Delivered MAP in eastern Colorado was tagged in the $260-$270/st range. 10-34-0 remained at $245-$250/st FOB in the region, with delivered product quoted in a broad range at $255-$275/st.
South Central: DAP was steady at $255-$260/st FOB most regional warehouses, with the upper end reflecting dealer postings. MAP was quoted commonly in the $250-$255/st FOB range last week, and there were reports as well of DAP available at the $250/st mark at spot warehouse locations. TSP remained at $220-$225/st FOB, with most dealer quotes reported in the $223-$225/st range.
One source, noting that fall is traditionally the big season for TSP movement in the region, said product was hard to come by due to delays in vessel shipments until early October. The result, he said, will be a shift to MAP instead of TSP in many locations.
U.S. Export: PhosChem made a sale of 20,000 mt of DAP into Latin America last week at $260/mt FOB. In addition, it was said both Oakley and ConAgra had purchased NOLA DAP barges to transload for shipments to Uruguay, but information on those deals was not available.
According to the August report released by TFI, both DAP and MAP exports were up compared to the same month last year. DAP exports increased 8.3 percent to 704,011 mt, and MAP 3.4 percent to 279,099 mt.
India continued to be PhosChem’s biggest DAP customer, with deliveries of 352,607 mt; neighboring Pakistan was second at 80,751 mt, followed by China at 55,000 mt. For the calendar-year-to-date, DAP exports were down 13.7 percent to 4,035,747 mt. India, of course, received the most at 1,483,453 mt, with China next at 690,911 mt, and Mexico the third biggest buyer at 351,447 mt.
For August, MAP sales increased 3.4 percent over the same month in 2005. Brazil was the biggest buyer with 73,740 mt, Mexico was second with 68,385 mt, and Canada was third for the month at 279,099 mt. For the calendar-year-to-date, MAP sales were down a lot – 26.9 percent, compared to 2005 for the same period. Canada has been the biggest customer for U.S. MAP at 342,759 mt; Australia followed with 248,347 mt, and third was Brazil at 213,822 mt.
Export sales last week were within the previous week’s range of $259-$263/mt FOB, so the export DAP range did not change.
Pakistan: Importers of DAP may be in a fix, as their three import cargo contracts, worth around $30.97 million, have been cancelled due to uncertainty regarding the subsidy on DAP imports by the government. According to the local media, approximately three months back the Pakistan government had announced a subsidy on DAP imports after getting approval from the economic coordination committee (ECC) of the cabinet; however, the decision has not yet been implemented. “The ECC had decided to give subsidy of Rs 285 per 50 kilogram bag on imported DAP fertilizer. However, the said decision has not been implemented yet,” industry sources said. “Importers had made contracts of around 105,000 mt of DAP at an average cost of $295/mt, and they were in the process of opening up LCs. However, banks refused to open up LCs as the subsidy issue was not resolved until that time,” sources said. They said banks were of the view the government has not yet allowed a subsidy on DAP imports and they could not provide guarantees to any importer until the matter gets resolved. In this connection it is pertinent to mention that the country’s annual consumption of DAP currently stands at 1.2 million mt, of which 0.3 million mt is produced locally by Fauji Fertiliser Bin Qasim, while the remaining gap is met through imports mainly from the U.S., Russia, China, Australia, and Tunisia.
POTASH
U.S.: U.S. imports were off 29 percent in July, to 537,304 st from the year-ago 753,329 st.
Eastern Cornbelt: Potash remained at $195-$200/st FOB regional warehouses. Barge-delivered Russian potash was reported as low as the mid-$170’s/st on the river system, with several sources speculating that the lower-priced tonnage may work against efforts by domestic producers to raise pricing in October.
Effective Oct. 1, Agrium’s 0-0-60 muriate of potash postings are scheduled to move to $204/st FOB most warehouse locations in the region, and up to $208/st FOB Rock Island, Ill. The company’s postings FOB Saskatchewan mines will move on that date to $175/st for standard, $181/st for coarse, and $183/st for granular. Rail-delivered coarse potash postings will move to $210/st in the region and in Michigan and Wisconsin.
Western Cornbelt: Potash remained at $193-$198/st FOB regional warehouses. Agrium’s rail-delivered coarse potash postings were scheduled to move on Oct. 1 to $212/st in the region, with warehouse postings at $208/st FOB Dubuque, Iowa, and Kansas City, Mo., and $204/st FOB Shakopee, Minn.
Southern Plains: Potash postings remained at $192-$198/st FOB Carlsbad, N.M., depending on grade. Warehouse pricing was tagged at $198-$205/st FOB in the region, with delivered potash at $210/st on the upper end.
South Central: Potash remained at $193-$198/st FOB regional warehouses. Effective Oct. 1, delivered 0-0-60 muriate of potash postings from Agrium are scheduled to move to $218/st in Alabama, Kentucky, and Tennessee.
Southeast: Dry potash remained at $209-$220/st DEL in the region, depending on grade and location, with the lower numbers reported for delivered granular potash in the Carolinas. Agrium’s postings for rail-delivered coarse potash are slated to move on Oct. 1 to $218/st in Virginia, Florida, Georgia, and the Carolinas.
Bangladesh: Toepfer took an award from BADC in an MOP tender that closed last week. Sources say the 25,000 mt that will come from Byelorussia was priced at $255/mt CFR liner out, with bagging to take place at the discharge port. Apparently BADC wanted offers from multiple sources – but, said one observer, the only suppliers willing to help out came from the FSU.
SULFUR
Tampa: Negotiations for fourth quarter sulfur contract prices began last week, with PotashCorp opening with a push for a $7/lt decrease. Although it was unlikely that sulfur producers – oil companies – would jump to bite at that cut, they will likely settle for something close, perhaps a decrease of $4-$5/lt FOB, say sources. The primary reason was simply that they were refining oil at high levels and demand was limited. So far, no major hurricanes have struck the Gulf Coast, so that has created no operating problems for refiners and made it easy to deliver sulfur to Tampa. Another reason the phosphate producers were in the driver’s seat was the continued low netbacks for sulfur on the world market due to higher freight rates. Negotiations were underway with China and sulfur producers were seeking a hike to make up the difference for the freight cost, but the Chinese were said to be seeking a reduction in the delivered price. The sulfur producers were in the same boat they were with U.S. phosphate producers, because sulfur is really a waste byproduct and it is beneficial and absolutely necessary for them to dispose of it, even if it means taking a loss. Those sulfur losses can easily be recaptured through refinery operations, which are far more profitable.
Because of lower demand for sulfur from phosphate producers, more sulfur was scheduled to go to prill operations and export next year, and the expectation was that that will depress the world market even more.
Alberta: Stockpiles were said to be increasing in the northern, oil-sands areas, while they were decreasing through remelting in the southern, more heavily populated areas. That trend was expected to continue. Overall, inventories there were expected to begin increasing, rather than remaining stable or decreasing as they have for the past several years.
Vancouver: Netback prices out of Vancouver for the third quarter will be lower than anticipated – possibly as low as $39-$40/lt – as a result of higher freight rates. Those prices could soon be reflected in the index, if that situation actually materializes.
MARKET NOTES
Western U.S.: Effective Oct. 1, Agrium’s rail-delivered postings for 0-0-60 muriate of potash are scheduled to move to $230/st in southern Idaho and Oregon’s Malheur County; $235/st in Washington, the Idaho panhandle, and Oregon excluding Malheur and Willamette counties; and $242/st in Oregon’s Willamette County. Coarse potash postings out of warehouse location are slated to move to $230/st FOB in Washington, the Idaho panhandle, and Oregon outside of Malheur and Willamette counties, and $237/st FOB in the Willamette Valley.
Pakistan: The government has fixed Sept. 25 as a tentative bidding date for allocation of 100mmcfd gas for setting up a new urea plant. Two local leading urea manufacturers – Fauji Fertilizer (FFC) and Engro Chemical Pakistan (Engro) – and two foreign firms – International Petroleum Investment Co. (IPIC) of United Arab Emirates and a consortium of Orascom and Saif Group (local) – have prequalified for the final bidding. A local analyst expects the competition to remain intense among all four parties for this US$700 million to $1 billion plant. FFC is the largest urea manufacturing company in Pakistan, controlling 62 percent of the market, followed by Engro with a 20 percent market share. IPIC is wholly owned by UAE and is responsible for investment in refining, marketing, utilities, petrochemicals, and hydrocarbons. The Consortium of Orascom and Saif group already have a jv in Pakistan, Pak Mobile Communications (Mobilink).