AMMONIA
U.S. Gulf/Tampa: The markets remained quiet last week, with $303/mt DEL still reported as the number for Tampa. While there was some speculation of possible business at NOLA, nothing had come in at press time.
Eastern Cornbelt: Several sources talked of record ammonia prepay bookings for the fall application season, indicating grower confidence in this year’s crops and a likely trend toward heavy corn plantings for next year as well. The ammonia market was tagged at $460-$470/st FOB regional terminals for spot tons, with most suppliers no longer taking fall prepay orders last week.
Western Cornbelt: Missouri sources said prepay ammonia could still be had for as low as $435-$440/st DEL last week; another source, however, said fall prepay pricing out of regional terminals was more commonly in the $460-$470/st FOB range to dealers, where available. Most prepay programs were now off the table, and several sources said a spot pricing uptick may be on the horizon in July.
California: Anhydrous ammonia was tagged at $435/st truck-DEL in the state, with the upper end quoted at $450/st rail-DEL.
Pacific Northwest: The anhydrous ammonia market was steady at $430-$440/st DEL and $410-$420/st FOB in the region.
Western Canada: Anhydrous ammonia was quoted at $666-$711/mt DEL in Western Canada, down significantly from in-season levels that climbed to as high as $809-$844/mt DEL in the region for spot tons.
Trinidad: Reports last week were that BP Trinidad will begin repair work on a gas platform July 8 for 60 or so days. Sources say this could reduce overall ammonia production by as much as 15 percent during the period.
Black Sea: Asian sources noted the Yuzhnyy market remains soft, but could soon be in for a move upward. Observers note the price is now hovering just under $240/mt FOB and has probably bottomed out.
The way back for prices is expected because of planned turnarounds in the area, shutdowns in Trinidad, and continued steady demand from the U.S. Gulf.
Asian sources note the price is probably closer to just under $240/mt FOB, while others say the price is near $230/mt FOB. Looking to mollify both camps, one source called the market $232-$238/mt FOB.
Middle East: Area producers are said to be in balance. One Asian trader noted that when producers use the term “balanced,” they really mean “surplus.”
The price has not moved in the area recently. The latest deal by Qafco showed a delivered price to India’s West Coast of $313/mt CFR. One trader estimated the netback to be $273/mt FOB.
Producers are trying to hold on to a higher price level because India is finally getting its shipments of phos acid. With the acid deliveries, the DAP producers will need more ammonia for their production. Still, as of late last week inquiries from India were limited.
Industry observers continue to peg the market at $270-$275/mt FOB, with rising expectations because of the potential Indian business.
India: FACT called a tender for July and August deliveries. Sources speculate this is the first wave of tender calls now that the phos acid is being delivered.
Middle East producers point to the FACT call as evidence the price should start moving up again. Others in Asia, however, expressed doubts FACT has the funds readily available for the deals.
Others opined that the reserve tanks in the Middle East are already filling up, and that it will be some time before these tons are liquidated and the price moves up.
UREA
U.S. Gulf: The urea barge market appeared to be quiet last week, with most calling it still within the $320-$324/st FOB range for granular. However, there was one report late in the week that some business may have fallen below the $320/st FOB mark. Others said they did not expect to see much happen in terms of price shifts until the Southwest Conference at the end of the month.
Prills continued to be called $290-$292/st FOB.
Eastern Cornbelt: Granular urea was quoted at $360-$365/st FOB regional terminals, with few sales to test the market.
Western Cornbelt: Granular urea was pegged at $355-$365/st FOB in the region, with most dealer quotes reported in the $360-$365/st FOB range out of river terminals in the region.
California: Granular urea was tagged at $380-$400/st FOB and $390-$410/st DEL in the state.
Pacific Northwest: Granular urea was unchanged at $385-$390/st DEL in Washington, Oregon, and Idaho, and roughly $365-$370/st DEL in Montana.
Western Canada: Granular urea was quoted at $475-$500/mt DEL in the region, down from $550-$575/mt DEL during the spring planting season.
Argentina: Agrium Inc. said July 5 that its 50 percent owned nitrogen facility in Bahia Blanca, Argentina, Profertil SA, is experiencing supply interruptions of natural gas. To date, the supply interruptions have not had a material impact on Agrium’s financial performance. The facility has been out of production at different times since April 2007 for a total of 24 days, most recently for the past five days, due to gas deliverability issues associated with increased energy demand in Argentina during the winter period.
Profertil continues to meet with the Argentine regulatory authorities to stress the importance of restarting the facility as soon as possible to supply nitrogen to Argentine farmers for the upcoming corn planting season.
Profertil SA is the largest supplier of nitrogen to the Argentine market. Agrium’s 50 percent share of the Profertil facility has a capacity of about 635,000 mt of primarily urea per year (1,800 mt of urea per day), and accounts for less than 10 percent of Agrium’s Wholesale annual revenues.
India: MMTC took about 600,000 mt and stopped. Industry observers had expected to see MMTC award 800,000 – 1 million mt from the tender that closed earlier this month.
About 200,000 mt were secured from Black Sea sources prior to the calling of the tender in handshake deals that were then confirmed by the tender. The remaining purchases came as a result of other traders meeting or beating the pretender prices.
All in all, for the Indians July was a good month for buying. The price had come off in Yuzhnyy and China sufficiently that MMTC could secure a price lower than what IPL paid and at the same time prevent the international price from running away.
MMTC publicly awarded just under 500,000 mt. Results follow.
| Supplier | Qty ‘000 mt | US$/mt CFR | Discharge Port |
| Toepfer | 1 x 45-60 | 321.75 | Mundra |
| ConaAgra | 1 x 50-60 | 322.00 | Mundra |
| Keytrade | 1 x 50-60 | 322.00 | Mundra |
| 1 x 50-60 | 322.00 | Mundra | |
| Transammonia | 2 x 40-60 | 321.90 | Mundra |
| 2 x 20-35 | 324.50 | Tuticorin | |
| 325.50 | Chennai | ||
| Helm | 2 x 35-50 | 324.00 | Kandla |
| EuroChem | 1 x 35-45 | 324.00 | Kandla |
Sources in Asia say another 100,000 mt or so was booked after the tender. These tons will also most likely come from either the Black Sea or China.
The bottom line is that the Middle East producers were left out in the cold, while Chinese and CIS producers got the contracts.
Sources say the MMTC team played the market just about right. With prices softening, they took just enough material to satisfy their customers’ needs into early September. And with only India around as a major buyer, observers say the market will continue to soften.
Growing inventories in the Middle East, combined with continued softness in the Black Sea and China, could mean another tender might be called in the next 45-60 days with prices lower than this round.
Reportedly, some of the IPL material that was ordered back in May has yet to be lifted. Sources say the delay is because the authorities at the ports where the tonnage is to be offloaded have asked the shippers to hold off to avoid major congestion.
Despite the admonitions of the government, sources say the discharging and inland movement of urea once again face delays. The main culprit this month seems to be the steady rains that come at this time of the year. If the rains do not affect the port operations, they are definitely affecting the inland transportation, said one source.
No one is saying the problem at the ports is as bad as last year – when vessels sat at anchorage for days, if not weeks – but they are saying the delays are enough to cause some concern with ship operators and producers looking to move their product.
Still waiting in the wings is IPL. Sources say this other major buyer should be stepping back into the market soon as well.
Just when IPL will come in is up in the air. One trader noted that odds are IPL could enter any day now. Sources report that IPL has been conducting quiet talks with MITCO in Malaysia to secure a few cargoes.
In the past, IPL has been much more aggressive about securing cargo before a tender than MMTC. Sources point out that in previous tenders IPL walked in with almost half of its requirement covered by quiet pre-tender deals. The recent MMTC actions on this latest tender were not hard and fast deals, because it is limited to buying by tender. However, said one trader, MMTC did set a price it was not willing to exceed, and was able to get enough offers to cover their needs.
This is exactly what IPL did last time, and what is expected to happen with its next tender.
Black Sea: Sources report the bulk of the business to India will come from this area. That is the good news. The bad news is that MMTC is only taking a few cargoes, and no one else is stepping up to the plate for more cargoes.
The competition from China remains a major influence on Yuzhnyy pricing.
Helping the area producers nail down deals with India was the reluctance of the Middle East suppliers to lower their prices. Rather than spend a lot of time arguing, sources say MMTC just went with the Black Sea and China and ignored the Middle East.
Even with several cargoes coming out of the area, sources say the lack of Latin America purchases, along with other buyers sitting on the sidelines, means prices may still come off in the next few weeks.
In an effort to show the softness of the market, one trader noted the estimated netback of some of the MMTC business is closer to $270/mt FOB than the $275/mt FOB producers claim.
One observer noted a firm bid at $270/mt FOB would be accepted in a New York minute. A trader commented that with producers so willing to settle at that level, the market has to be on a downward slope.
For now, the market is pegged at $270-$275/mt FOB with expectations of a price drop.
Middle East: The area producers were aced out of the MMTC tender. Sources say the offers of $305/mt FOB were too high once compared to the Chinese and Black Sea offers. Rather than spend time haggling over a few dollars, MMTC apparently just took what tons they needed from the east and west of the Arab Gulf and let the producers stew.
Sources say in order to have been competitive into India, based on the Yuzhnyy and Chinese numbers, the Middle East producers would have had to lower their price to $300/mt FOB.
Apparently the loss of any awards in the Indian tender prompted some producers to start knocking on traders’ doors offering spot prompt tons.
Reportedly, Fertil offered a cargo of bagged material at $302/mt FOB to an African buyer. Once the cost of the bags is backed off, sources say the price is $292/mt FOB.
At the same time, some traders are reporting hints from producers that if $290/mt FOB bulk is bid, a deal could be consummated.
Such enthusiasm for a deal told one trader that an even better price might be found in a few weeks.
The Middle East producers once had to worry only about competing with the Black Sea for major contracts. If a buyer was looking at a panamax, the deal often went to the Black Sea. Those desiring more flexibility in vessel size and port assignment went to the Arab Gulf.
Now, however, China is competing against both of the traditional suppliers by being able to offer panamaxes and smaller vessels into various ports. Once traders offer tons into tenders with open sources, often the deal will go to a Chinese supplier.
The Arab Gulf suppliers are also facing buyers who have shifted to price buying instead of insisting on prills or granular.
India is the latest buyer to take either flavor of urea, pitting prill and granular suppliers against each other.
For now, the offers made around the MMTC tender for prills and granular set the high end of the price range. The Fertil business and other possible offers put the price a few dollars lower. Asian sources peg the market at $300-$305/mt FOB, with a real possibility the price could come off in the coming weeks.
China: A number of the awards issued in the MMTC tender were from traders offering “Open” sourced tons. After the initial 200-250,000 mt from the Black Sea involved in the pre-tender deals are eliminated, sources say the bulk of the remaining 400,000 mt or so could easily come from China.
Traders in Asia talked about the flexibility of Chinese suppliers as a key component of doing business there. The ever-softening Chinese market hasn’t hurt as well. Sources say the market in China has now dropped into the $260s/mt FOB. Just a few weeks ago, the price was $290/mt FOB. Some say the granular price is holding up better than the prills, but few think the difference will last long.
The flexibility that some traders seem to like is the ability of Chinese suppliers to move tons in various sized vessels, as well as adjusting loading dates to accommodate interruptions in discharging at the delivery port.
Indonesia: PIM closed a selling tender as Green Markets went to press. It offered the usual 20,000 mt.
Asian sources expect the price to go sub-$270/mt FOB.
Chances are the standard practice of awarding small quantities – about 5,000 mt – to a series of local traders will continue. Major international trading houses would then be forced to line up separate deals to get a cargo worth selling on the international market.
One trader noted that the major houses might forego the tender this time around unless the price is exceptionally low.
With little demand in the world, major houses may want to sit out the operation and let the smaller traders sell their lots to regional buyers such as Malaysia or the Philippines.
Vietnam: Buyers are looking for tons, but they are only bidding at $295/mt CFR, which equates to about $253/mt FOB from China. Even with a softening market, the Chinese material is not that cheap. At the same time, offers to sell are coming out of Vietnam at $260/mt FOB. The material being offered is Vietnamese and Chinese tons.
NITROGEN SOLUTIONS
U.S. Gulf: UAN price quotes rose at NOLA last week, though sources could pinpoint no actual trades. Sources said several factors were in play. While the Coffeyville psychology could be argued to run up prices, sources said many players were on vacation and that UAN barges are hard to find.
Sources said barge prices had already firmed up to $250-$255/st FOB ($7.81-$7.97/unit) by the end of the prior week, with quotes now at $260/st FOB ($8.13/unit) for the next round of business.
Eastern Cornbelt: UAN prices were difficult to come by last week. One source said the flooding situation at Coffeyville had a “huge impact” on the market, with suppliers “pulling in their horns” and not offering pricing for forward or spot tons until inventories are assessed. When pressed, sources said the terminal market had likely firmed back up to in-season levels, with most quoting the regional range last week at $288-$300/st ($9.00-$9.38/unit) FOB for any available spot tons.
Western Cornbelt: One regional source said UAN was the subject of choice on the fertilizer front last week, due to short supply and higher prices. Some sources continued to talk of fill tons being offered at the $285/st ($8.91/unit) FOB or DEL mark on the low end, but material was very limited at that level. Dealer pricing for cash market tons was quoted in a broad range at $288-$305/st ($9.00-$9.53/unit) in the region, with reference pricing quoted as high as $310/st ($9.69/unit) FOB some locations.
California: The UAN-32 market remained at $300-$310/st ($9.38-$9.69/unit) FOB and $320-$330/st ($10.00-$10.31/unit) DEL in the state.
Pacific Northwest: Liquid nitrogen continued to move through irrigation systems in the region. The UAN-32 market was quoted at $300-$310/st ($9.38-$9.69/unit) DEL in the region, with dealer reference prices in the $315-$325/st ($9.84-$10.16/unit) DEL range.
Western Canada: UAN-28 was pegged at $295-$311/mt ($10.54-$11.11/unit) DEL, compared with $341-$356/mt ($12.18-$12.71/unit) DEL at last report.
AMMONIUM NITRATE
Western Cornbelt: Ammonium nitrate was quoted at $315/st FOB in southern Missouri, with the upper end of the range at $325/st FOB for the last sales. Nitrate was in short supply in the region.
California: No market was reported for ammonium nitrate in California. CAN-17 pricing was steady at $220-$230/st FOB in the state last week.
Pacific Northwest: Ammonium nitrate remained at a nominal $327-$335/st DEL in the region. CAN-17 was unchanged at $222-$227/st FOB and $232/st rail-DEL.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate remained at $230-$240/st FOB for the last sales. Sources said summer fill postings as low as $205/st FOB were on paper only, with no tons available for sale at those levels.
Western Cornbelt: Ammonium sulfate was quoted at $225-$240/st FOB for the last sales.
California: Granular ammonium sulfate pricing was unchanged at $210-$230/st FOB, with the high reported in desert areas of the state.
Pacific Northwest: Granular ammonium sulfate remained at $205-$220/st DEL in the region.
Western Canada: Granular ammonium sulfate was quoted at $295-$300/mt DEL last week, down $55/mt from posted prices during the spring planting run.
PHOSPHATE
Central Florida: The July Fourth holiday fell in the middle of last week, so naturally many in the industry took off two days before and two days after, which did little to stimulate new business.
Despite some recent rains drought conditions continued over much of the Midwest and the eastern U.S. last week, which was not helping crops and was keeping fire indexes on the high side. However, in Texas, which is served primarily by Agrifos, the opposite was a problem – far too much rain and disastrous flooding.
Prompt phosphate sales out of Central Florida were nonexistent last week, although producers were busy loading orders from their recent fill programs. While the Central Florida index has not changed in several weeks due to a lack of prompt sales, asking prices were $3-$5/st higher than the range. The DAP price range last week remained at $370-$372/st FOB, which reflected the most recent transactions a few weeks ago. Mosaic’s asking price was $385/st FOB for DAP and $381/st FOB for MAP. CF was listing a price of $375/st FOB for prompt, $378/st FOB for September, and $382/st FOB for October. PotashCorp’s Central Florida reference price remained at $385/st FOB. In Texas, Agrifos was asking $410-$415/st FOB for truck sales and $410/st FOB for railcars. Agrifos was sold out into late September.
U.S. Gulf: Heavy rains were beginning to ease last week in Kansas, Oklahoma, and Texas, but fields remained so wet and soggy that farmers could not get in to harvest their wheat crops. As of last week only 59 percent of Oklahoma’s wheat crop had been harvested, and much of what remains was beginning to rot in the fields. Normally, phosphate sales for that area are strongest in the spring, but if farmers lack the money, many will reduce or eliminate the use of phosphate in the spring. That could spell a problem for the industry in that area. At the very least, wheat prices will go up.
Although heavy rain eased in most of Oklahoma and Kansas last week, much of Texas continued to be facing flooding. The weather forecast claimed that could last another two weeks or more.
With many in the industry stretching the one day off for the Fourth of July into an entire week, not a lot of trading took place on the river system last week. One company did purchase four barges – one for the second half of July and the remainder for August loading. The price for the July barge was at the top of the range at $398/st FOB, while the three for August were priced at $399. With the $405/st FOB Mosaic was asking, speculation was that the new higher price will hold, and possibly go higher. Last week, Mosaic rejected offers to sell NOLA DAP barges at $399/st FOB.
In addition, the river system will have to compete with the export market for phosphates this spring. India was almost certain to come back into the market for several hundred thousand metric tons, and Pakistan was also in a buying mode. Recently, Pakistan bought two vessels of phosphate from Australia, and more will be needed.
As demand continues to outstrip supply both domestically and the world, prices are not likely to go down but probably will go up.
The NOLA DAP barge price range last week narrowed from $390-$398/st FOB the previous week to a flat $398/st FOB, based on actual sales. Mosaic’s price last week was $405/st FOB for prompt sales, if supplies exist.
Eastern Cornbelt: DAP and MAP remained firm at $425-$432/st FOB to the dealer, with the low out of river locations in Illinois. Prompt phosphate sales out of Central Florida were nonexistent last week, although producers were busy loading orders from their recent fill programs.
10-34-0 remained at $335-$350/st FOB in the region for the last sales.
Western Cornbelt: Sources said a fair amount of phosphate fill was booked earlier in the $415-$420/st FOB range. With those programs now over, sources pegged the spot market at a firm $420-$430/st FOB for DAP and MAP. 10-34-0 remained at $325-$350/st FOB, with limited tons available.
California: DAP and MAP prices were also on the rise in the wake of recent posting hikes. MAP was quoted at $445-$450/st FOB or DEL in California last week, with DAP roughly $5-$7/st higher. 16-20-0 pricing was also up from last report, with the market pegged at $295-$300/st FOB or DEL.
Agrium’s ammonium phosphate postings in California and Arizona moved on June 25 to $300/st rail-DEL or FOB warehouse for 16-20-0, and $450/st rail-DEL or FOB warehouse for MAP.
Simplot’s 11-52-0 MAP postings moved on June 18 to $450/st rail-DEL in California and Arizona. Warehouse postings in California as of that date included $450/st FOB French Camp, Helm, Edison, Richvale, and Dixon, and $455/st FOB El Centro. Simplot’s postings for 11-52-0 SSP (Simplot Stabilized Phosphate with Avail®) moved on June 18 to $522/st DEL in California and Arizona, $522/st FOB French Camp, and $527/st FOB El Centro.
Simplot’s 16-20-0 postings moved on June 18 to $300/st FOB Richvale, Dixon, and Lathrop, and $320/st FOB El Centro. Simplot’s 0-45-0 postings moved on that date to $415/st FOB French Camp and DEL in California and Arizona, and $420/st FOB El Centro.
Super phosphoric acid pricing remained firm at $7.00/unit DEL in the state, with merchant grade at $6.90-$7.00/unit DEL. A nickel/unit increase for both products is slated for August, and again in September.
10-34-0 was quoted at $315-$325/st FOB in the state.
Pacific Northwest: MAP was quoted at $435-$445/st DEL in the region, with the low in Montana. DAP was pegged at $442-$452/st DEL, also up significantly from last report. The 16-20-0 market was on the rise as well, with the market tagged at $295/st FOB and $300-$305/st DEL in the region. 10-34-0 remained at a solid $315-$325/st FOB in the region.
Simplot issued new dry phosphate postings for the region, effective June 18. Adjusted levels for 18-46-0 DAP include $447/st DEL in Montana, Wyoming, Idaho, Utah, and the West Slope of Colorado; $452/st DEL in Nevada; and $452-$457/st DEL in Washington, Oregon, and the Idaho panhandle.
Simplot’s 11-52-0 MAP postings moved on June 18 to $440/st DEL in Montana, Wyoming, Idaho, Utah, and Colorado’s West Slope; $445/st DEL in Nevada; and $445-$450/st DEL in Washington, Oregon, and the Idaho panhandle. Simplot’s postings for 11-52-0 SSP (Simplot Stabilized Phosphate with Avail®) moved on June 18 to $512/st DEL in Montana, Wyoming, Idaho, Utah, and Colorado’s West Slope; $517/st DEL in Nevada; and $522/st DEL in Washington, Oregon and the Idaho panhandle.
Simplot’s 16-20-0 postings moved on June 18 to $295/st FOB Hopmere, Ore.; $300/st DEL in Montana, Wyoming, Idaho, Utah, Nevada, and Colorado’s West Slope; and $300-$305/st DEL in Washington, Oregon, and the Idaho panhandle. The company’s 0-45-0 postings moved on that date to $370/st FOB Pocatello, Idaho, and $385/st FOB Hedges.
Effective June 25, Agrium’s ammonium phosphate postings firmed to $300/st DEL for 16-20-0 and $435/st DEL for MAP in Montana and Wyoming; $300/st DEL for 16-20-0 and $440/st DEL for MAP in southern Idaho, Utah, Nevada, and Oregon’s Malheur County; and $300/st DEL and $445/st DEL for MAP in Washington, northern Idaho, and Oregon excluding Malheur County. Agrium’s warehouse postings moved on that date to $295/st FOB for 16-20-0 and $440/st FOB for MAP in Washington, northern Idaho, and Oregon excluding Malheur County.
Phosphoric acid pricing remained firm at the $7.00/unit DEL level for super phosphoric acid, and $6.90-$7.00/unit DEL for merchant grade acid. A nickel/unit increase is scheduled for August, and again in September.
Western Canada: MAP was tagged at $530-$565/mt DEL in the region, roughly $65-$75/mt less than in-season levels.
U.S. Export: As were the domestic markets, the export DAP market was quiet last week, with neither PhosChem nor any other firm reporting sales. However, the market remained healthy, with India, Pakistan, and possibly Brazil likely to make purchases in the near future. Inventories both domestically and worldwide remain low. With no new sales, the export DAP price range last week remained flat at $440/mt FOB.
POTASH
Eastern Cornbelt: Potash pricing continued to show strength due to tight inventories, both for current sales and going forward. Sources tagged the potash market out of regional warehouses at $232-$242/st FOB, depending on grade and locations. One source said some producers were not offering current pricing, and others were offering sales only at new prices technically slated to take effect this fall. One supplier was referenced at a firm $249/st rail-DEL in the region for red potash.
Western Cornbelt: Potash prices were all over the board, but sources agreed that the market was strengthening. Red granular potash was still available out of spot warehouses for as low as $227/st FOB in Missouri last week, but only through July 6, after which an increase of $5-$10/st was on the books. Iowa sources pegged the granular potash market last week as high as $242/st FOB, with new warehouse postings from some suppliers reportedly as high as $249-$252/st FOB.
California: Potash pricing was firm at $254-$260/st FOB in the state, depending on grade. Potassium nitrate remained at $480/st FOB for bulk and $540/st FOB for bags. Sulfate of potash (SOP) pricing was quoted at $368-$378/st FOB in the state.
Pacific Northwest: Potash was pegged at $260-$267/st FOB and $265-$272/st DEL in the region, up from last report, with continued talk of tight inventories and strict allocation. Effective June 19, Agrium’s postings for red premium potash firmed to $267/st rail-DEL and $262/st FOB in southern Idaho, Utah, and Oregon’s Malheur County; $272/st railDEL and $267/st FOB in Washington, the Idaho panhandle, and Oregon excluding Malheur County and the Willamette Valley; and $279/st rail-DEL and $274/st FOB in Oregon’s Willamette Valley.
Western Canada: Potash pricing in the region was up from spring levels. The market last week was pegged at $270-$285/mt FOB regional plant sites or warehouses, roughly $10/mt higher than last report.
SULFUR
Tampa: The midweek holiday slowed negotiations for third-quarter sulfur contract prices last week, and both sides indicated they were far apart on a settlement. One source said that if the sulfur industry and oil companies decide to be reasonable, they will accept an increase of $10-$20/lt – but it was not clear what they may consider reasonable. The biggest problem facing domestic phosphate producers was the wild ride the world sulfur market has been taking the past couple of months. Last week in Abu Daubi, the price of sulfur increased from $120/mt FOB to $150/mt FOB. Also last week, Iran made a deal to sell 25,000 mt of sulfur at $175/mt FOB, which was the highest of the 24 bids they received.
Unless the bottom falls out of the sulfur market soon – which appears highly unlikely – prices on the world market will continue to increase steadily. That will not help domestic phosphate producers get a better deal. As several sources said, it would be better for phosphate to settle sooner than later.
U.S. Gulf: Valero’s Houston refinery, which was switching to producing ultra-low-sulfur diesel fuel, was at near capacity last week, and was producing 120-150 t/day. The company’s Lake Charles facility was having a problem with one of its refining units, and production had fallen from the normal 380 t/day to 265 t/day. Exxon’s refinery at Beaumont was said not to have come fully back on line as of last week following a turnaround.
West Coast: Spot prices have risen to more than $100/mt FOB. Contract prices there were established earlier in the year at much lower prices, but those contracts will be coming up for renewal soon and will be much higher.
The Canadians will likely move as much of their sulfur production from deliveries to the U.S. to the world market, where prices will be much, much higher.
It was not at all clear how long the sulfur shortage will continue, but if sulfur producers drive prices too high for domestic phosphate producers in this round of negotiations, they will probably pay the price when the market makes its ultimate – and long-term – correction to an oversupply situation. As one source said, “People are in a panic mode. When the pendulum swings too far in one direction, momentum builds for a swing in the other direction.”
Vancouver: Negotiations for second semester sulfur contracts were still underway, but sulfur producers were said to have asked for prices that would amount to about $120/mt FOB. A finalization of contracts could take place as early as this week. China was believed to have settled some of its contracts at $160/st DEL. Deliveries to Vancouver were back to near normal following recent railroad strikes.