AMMONIA
U.S. Gulf/Tampa: With 10,000 mt of ammonia on the spot market last week due to the shutdown at Mississippi Phosphates, some were predicting the July Tampa price of $303/mt would fall in August, but that was far from certain. Four out of five plants in Ukraine shut down in mid-July and will stay down until early August. A source said those plants will probably not restart until the price there hits more than $230/mt FOB. However, prices on the world market appeared to be weak last week.
Still, gas curtailments in Trinidad in August could help strengthen the market. Negotiations for August had not begun last week and probably will not until the Southwestern Fertilizer Conference.
Eastern Cornbelt: The anhydrous ammonia market was pegged at $465-$475/st FOB regional terminals for cash market tons last week, with reports of dealer reference prices as high as $480-$485/st FOB in the region. One supplier was offering forward contract ammonia for August at $470-$480/st FOB in Illinois and Indiana, with a $5/st increase for September-November.
Western Cornbelt: Anhydrous ammonia was tagged at $440-$460/st FOB regional terminals, with the low reported in Nebraska. One supplier was offering forward contract ammonia for August at $455/st FOB in Nebraska, $465/st in Iowa, and $470/st FOB in Missouri, with a $5/st increase for September-November. Several suppliers were reportedly sold out for fall.
Southern Plains: Anhydrous ammonia was pegged at $370-$385/st FOB Oklahoma production points, with the upper end quoted by one source after netbacks on prepay offers earlier in July at the $415-$420/st DEL level. Several sources said most forward offers were now off the table, however. Cash market ammonia was quoted in the $400-$410/st range after discounts FOB Kansas terminals last week.
Agrium’s ammonia postings moved on July 9 to $420/st FOB Clay Center, Kan.; $415/st FOB Conway, Kan.; $410/st FOB Mocane, Okla.; and $400/st FOB Borger, Texas. Agrium’s delivered ammonia postings in Texas firmed on that date to $425/st north of Interstate 40 and $430/st south.
South Central: The anhydrous ammonia market was steady at $410/st FOB Memphis, Tenn., roughly $10/st higher at Blytheville, Ark., and another $10/st higher at Henderson, Ky.
UREA
U.S. Gulf: Rumors were circulating that granular urea barges were continuing to fall and might be available for as little as $305/st FOB the Gulf, but no sales at that price could be confirmed. Actual sales, which were few last week, put the range at $308-$312/st FOB. Many buyers were sitting back, watching and waiting, in the belief the price will continue to weaken. Urea was still a bargain in comparison to UAN. While some farmers have the ability to switch to urea, others do not have the equipment to do so.
Another drag on the market last week was the continued closure of the Arkansas River. NOLA barges were being fleeted at Rosedale, which will result in extra costs to the owners. That situation could continue for another two to six weeks until lake levels in Oklahoma, which has been deluged with rain, fall to safe levels.
World prices were considerably less than on the domestic market and more vessels were scheduled to arrive in August and September, which could push the price down even more. That should allow enough time to supply the closed river market, and prices could be lower at that time. One source said the price could fall to $300/st FOB or lower by the Southwestern Fertilizer Conference.
Prills and prill sales were hard to find last week. The asking price remained in the $280-$285/st FOB range. Buyers were in the market, but without much luck.
Eastern Cornbelt: Granular urea was unchanged at $350- $360/st FOB regional terminals, with the lower numbers reported out of river locations in Illinois and Ohio.
Western Cornbelt: Granular urea remained at $350-$360/ st FOB in the region.
Southern Plains: Granular urea was steady at $345-$350/st FOB Inola and Enid, Okla., but several sources talked of bullish attitudes from Oklahoma barge players due to the Arkansas River closure. One supplier was referencing forward contract urea for August at $358/st FOB Inola.
South Central: The granular urea market was pegged at $340-$345/st FOB regional terminals at mid-month. Move- ment on rice was rapidly slowing down in the region.
Southeast: Granular urea was pegged at $355-$365/st FOB port terminals, with the upper end reflecting refer- ence prices to the dealer FOB Wilmington, N.C. Urea was reportedly referenced at the $360/st mark FOB Savannah, Ga., at mid-month.
India: Close on the heels of the finalization of more than 500,000 mt of urea by MMTC, now IPL has issued a tender for an unspecified quantity of urea. The tender closes on July 23 and offers to remain valid till close of business July 25 for shipment in July-August, 2007. Blv AG producers are in discussions with IPL, and this tender may be used to simply formalize the sales made this week. IPL may strive to get more than 300,000 mt of urea for this limited ship- ment period.
With the uncertainty surrounding gas availability and pric- ing, the public sector Rashtriya Chemicals & Fertilisers (RCF) may be forced to go ahead with a Rs 35bn coal-to-gas project at Talchar in Orissa to feed its plants. “We have tied up with Reliance Industries and Oil and Natural Gas Corporation (ONGC) for supplying gas,” said U. S. Jha, chairman and managing director. “There may be delays although Reliance has assured us supplies from March next year. We are also talking to GAIL for fuel supply. If the availability of gas becomes an issue, then we will have to look at the option of setting up the Talchar project.”
Jha said the pact with Reliance-ONGC was for a supply of 2 million cubic meters per day at about $7 per mmbtu. The coal gasification project could provide gas at a much cheaper price. According to governmental policy, all chemical and fertilizer companies have to switch over to fuels cheaper than naphtha in the future as naphtha is valued at about $18 per mmbtu. The techno-economic feasibil- ity studies commissioned by RCF showed Talchar to be the most suitable site in terms of infrastructure, facilities, and proximity to coal mines. The latest coal gasification technology will be utilized to allow the use of coal with high ash content of up to 30-35 percent. “A final decision will be taken after assessing the availability of other fuels as feedstock and prices,” he said.
RCF is also planning to revive two fertilizer plants in Durgapur and Talchar at an investment of about Rs 60bn. Its urea plant in Trombay has been idle for the last five years due to non-availability of sufficient gas. The company is in talks with GAIL to supply LNG from the Uran pipeline. A project to debottleneck the plant at an investment of Rs 4.5bn is on the anvil. The company is setting up a new argon plant at Thal, the ammonia plant at Trombay has been revamped, and the methanol and ANP plants are to follow suit. RCF has lined up about Rs 100bn for expansion and revamping, he said.
NITROGEN SOLUTIONS
U.S. Gulf: The big surprise last week was the announce- ment that Coffeyville was returning to production, at least on the nitrogen side. Earlier estimates held it could be closed for a month or more. The refinery will remain closed, possibly for another few months. The plant had a 30-day supply of petroleum coke on hand, and will make truck deliveries to keep the facility operating.
UAN barge prices stayed firm last week in the same $260- $265/st FOB ($8.13-$8.28/unit) range as the previous week, and there were no signs of weakening. Strong demand in Argentina was said to be a factor in the domestic market. Talk of U.S. farmers possibly switching from UAN to urea continued last week, but one thing is certain – that won’t happen in all areas.
The closure of the Arkansas River to barge traffic was keeping warehouses from being resupplied, but demand at this time of year is minimal, so that should not be a problem unless the closure continues for an extended period. There was a wide range of predictions about the duration of the closure, ranging from two to six weeks. Fortunately, the heavy rains that caused water levels in Oklahoma lakes to rise took a break last week.
Eastern Cornbelt: UAN supplies remained very tight, and prices high. Sources quoted the regional market at $9.25- $9.50/unit FOB, with the lower numbers reported out of spot river locations in Illinois. One supplier was offering forward contract tons for August-December ranging from $297.80- $312.20/st ($9.31-$9.76/unit) FOB in the region.
Western Cornbelt: UAN was in tight supply in the region. Sources tagged the regional UAN-32 market at $295-$305/st ($9.25-$9.53/unit) FOB, where available. One source pegged the dealer price FOB Omaha, Neb., firmly at the $300/st ($9.38/unit) level last week. One supplier was referencing forward contract UAN for August-December at the $310.60/st ($9.71/unit) mark FOB Pine Bend, Minn.
Southern Plains: UAN-32 was quoted at $290-$300/st ($9.06-$9.38/unit) FOB regional terminals for spot tons, with the low FOB Woodward, Okla. Solutions inventories remained very tight, but some sources said the return to production at Coffeyville may “take some upward pres- sure off UAN.”
South Central: UAN-32 was quoted in a broad range at $275-$295/st ($8.59-$9.22/unit) FOB regional terminals. Inventories were very tight, and numerous locations were out of product at mid-month. One supplier was referenc- ing forward contract UAN-32 for August at $299.40/st ($9.36/unit) FOB Louisville, Ky.
Southeast: UAN-30 inventories remained very snug, with the terminal market up from last report at $245-$248/st ($8.17-$8.27/unit) FOB Norfolk, Va., and Wilmington, N.C. Sources also reported firming prices for the vessel UAN market, with quotes reportedly in the high-$280s/mt C&F for the next round of business.
AMMONIUM NITRATE
U.S. Gulf: The ammonium nitrate barge market was quiet last week, and prices were unchanged but firm at $255-$260/st FOB. Due to high temperatures and high humidity, barge sales were unlikely for the next couple of months, although some warehouses still had product available.
Western Cornbelt: Ammonium nitrate was steady at $315-$325/st FOB for the last sales.
Southern Plains: Ammonium nitrate pricing remained at $310/st FOB Catoosa, Okla.
South Central: Ammonium nitrate was quoted at $310- $315/st FOB terminals, where available. Product was out at some locations last week.
Southeast: Delivered ammonium nitrate remained at $330- $340/st in the region, depending on location and supplier.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate pricing was something of an enigma in mid-July. Some sources maintained that fill tons could be had for as low as $200- $205/st FOB in Illinois, with reports of spot sales concluded at that level for granular sulfate in recent weeks. Others said the low-priced fill tonnage was nowhere to be found, and pegged the market at the last cash sales value of $230-$240/st FOB.
Western Cornbelt: Granular ammonium sulfate was quoted at $205-$225/st FOB, with the low reported for spot sales of summer fill tons. Sources said the lower priced mate- rial may be sold out, however.
Southern Plains: Granular ammonium sulfate remained at $200-$230/st FOB in the region, with the low FOB Free- port, Texas.
South Central: Granular ammonium sulfate was pegged at $230-$240/st FOB regional terminals, with the upper end referenced to dealers FOB Vicksburg, Miss.
Southeast: Sources reported no change to the ammonium sulfate market, although suppliers reported lots of inquiries for fill tons and improving demand for topdress tons on cotton. Granular ammonium sulfate remained at $205-$210/st FOB in the region and delivered sulfate was quoted at $215-$235/st, with the upper end in Florida. Sources continued to express concern about low inventories and limited availability.
PHOSPHATES
Central Florida: With the Southwestern Fertilizer Con- ference scheduled to begin July 29 and summer vacations taking priority in mid-July, prompt phosphate sales slowed to a trickle in Central Florida last week. Mosaic sold DAP railcars on a prompt basis at $385/st FOB, which was $5/st FOB higher than the previous week.
Between an active export market and robust domestic ac- tivity, inventories remained tight during June, falling about 14,000 mt as sales in the U.S. hit a surprising 565,000 mt. Mosaic had one of its production units at New Wales out of service during that period, which did nothing to build inven- tories. As a result, prices remained firm and were likely to continue an upward trend.
The DAP price range last week moved to $375-$385/st FOB based on actual sales, up from the prior week’s $372- $380/st FOB. Mosaic’s asking price was $385/st FOB for DAP and $381/st 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.
U.S. Gulf: The Arkansas River remained closed last week, and barges were piling up at Rosedale. The U.S. Army Corps of Engineers was planning to check water levels at the reservoir behind the Keystone Dam on Friday, and industry speculation varied widely that the river could remain closed for another week or up to five weeks. The height of the river was not the problem, but the speed of the water was.
The cost of fleeting – about $300/day – was putting pressure on phosphate barges in that area, and was believed to be the source of a sale at $398/st FOB, the lowest priced transac- tion of the week. Despite the closure, warehouses along the Arkansas were not suffering and had sufficient product to continue making sales because business was slow. However, if the closure continues for the maximum estimate, that could become a problem.
Mississippi Phosphates will lose about 30,000 st of pro- duction as a result of the component failure at its sulfuric acid plant, which would help account for firm phosphate prices on the river system. Overall, prompt sales were down last week, which was attributed to the upcoming Southwestern Fertilizer Conference and the normal sum- mer slowdown.
The NOLA DAP barge price range was quoted at $398- $403/st FOB based on actual sales. Mosaic’s asking price last week was $405/st FOB for prompt sales, up $2/st FOB from the previous week, but quantities were limited.
Eastern Cornbelt: DAP and MAP remained at $425-$435/ st FOB regional warehouses, with the low end out of spot river locations and the higher numbers inland. One supplier was offering forward contact DAP for August at $432/st FOB Peoria and $435/st FOB Cincinnati, with a $3/st increase for the September-December period. 10-34-0 remained at $335-$350/st FOB for the last sales.
Western Cornbelt: DAP and MAP were quoted at $425- $430/st FOB river warehouses in the region. Forward contract tons were being offered from one supplier at $432/st FOB St. Louis for August, with a $3/st increase for September- December. 10-34-0 was unchanged at $325-$345/st FOB for the last sales.
Southern Plains: DAP was pegged at $427-$435/st FOB Catoosa, up from last report, with several sources quot- ing $432/st FOB as a common dealer price at mid-month. Some sources said spot sales could still be had as low as $425/st FOB the port last week, but others were skepti- cal. 10-34-0 was also up from last report; the market was pegged at $305-$335/st FOB in the region, with the low in the Texas panhandle and the upper end FOB Wichita, Kan., to the dealer.
South Central: DAP remained at $415-$425st FOB most regional warehouses, with MAP in roughly the same range. TSP was steady as well at $380-$385/st FOB to the dealer.
U.S. Export: PhosChem made a small sale of 6,000 mt into South America last week at $440/mt FOB, a price that has held firm for the past several weeks. As a result, the export DAP price range last week remained flat at $440/mt FOB.
India: The joint venture (between RCF and Rajasthan State Mines and Minerals Ltd) DAP plant in Rajasthan has elicited two techno-commercial offers – from Uhde India Ltd and China National Chemical Engineering Group – against a tender seeking lump sum turnkey bids. The third pre-quali- fied party, Hindustan Dorr Oliver, did not submit their offer. Technical evaluation of the two offers is in progress by the consultant PDIL, with clarifications being obtained. The Ra- jasthan jv has been renamed Rajasthan Rashtriya Chemicals & Fertilizers Ltd.
POTASH
Eastern Cornbelt: Potash supplies remained very tight. The regional warehouse market was quoted at $235-$250/st FOB for limited spot tons, depending on grade and location. One supplier reportedly raised its warehouse list price from $240/st to $250/st FOB last week.
Western Cornbelt: Potash was quoted at $237-$245/st FOB warehouses to the dealer, depending on grade and loca- tion, with inventories described as very tight. Some suppliers were referencing a firm $250/st FOB to the dealer for red granular potash, sources said.
Southern Plains: Potash remained at a firm $208-$214/st FOB Carlsbad, N.M., depending on grade, but availability was another question. Out of the regional warehouse system, the market was pegged at $235-$240/st FOB, where available. One source quoted the Tulsa market firm at the upper end of that range last week.
South Central: Tight potash supplies remained a topic of choice among dealers, with warehouse pricing ranging from $235-$245/st FOB in the region, depending on availability, grade, and location. Several sources indicated they were well positioned for the fall application season. As for spring 2008, one source said early indications in his area are for a swing back to soybeans from heavy corn this year.
Southeast: Sources tagged the potash market at a firm $240-$245/st FOB regional warehouses, with delivered potash in the $248-$260/st range in the region, depending on grade and location. Red granular potash was quoted at the $257/st DEL mark in the Carolinas.
SULFUR
Tampa: Negotiations for third-quarter sulfur contracts continued last week, and some contracts have been settled – but at varying prices. Late the previous week, Mosaic reached a settlement with one of its major suppliers at $17/lt up from the previous quarter. Last week, PotashCorp agreed to a $20/lt increase with some of its suppliers. However, both companies were continuing to negotiate, and it was not clear what the final outcome will be.
“One of the problems this quarter is getting (sulfur) suppliers to decide how much they want,” said one source. Typically, all of the contracts will wind up being at the highest price achieved if the market is going up, which it is. The opposite would be true in a downward market. Both the world and the Tampa markets continue to be short of product, which puts the sulfur industry in the driver’s seat this time around.
Historically, sulfur agreements are settled shortly before the Southwestern Fertilizer Conference, but this time could be different. Although the Coffeyville nitrogen plant was coming back online last week, the refinery will remain out of service, most likely until September. Most refineries were operating normally last week, but were still not able to meet sulfur demand
West Coast: Contract negotiations for the West Coast had not started last week, but prices were highly likely to take a significant jump, considering spot deals there were bringing in excess of $100/mt.
Vancouver: Canadian sulfur producers were struggling to bring in supplies to Vancouver, as demand remained extremely strong last week. Contracts with South African customers were settled at $105-$110/mt FOB, but others were still on the table. Regardless, by the time the dust settles, it is likely that all will be in excess of $100/mt FOB for the second semester.
India: FACT closed a tender on July 19 for three lots of 15,000-18,000 mt of sulfur for delivery to Cochin in late-July/ early-August, mid-August, and late-August/early-September. However, it received only one offer from Swiss Singapore at US $201/mt FOB AG, or US $213.50/mt CFR Cochin. No decisions have been made yet.
MMTC announced a tender, closing on July 25, for 29,000 mt of sulfur—19,000 mt to arrive Vizag in mid August, and the balance of 10,000 mt during the second week of August at Mumbai/Dharamtar. Offers are to remain valid for a month.
RCF has issued a tender for 11,000 mt of sulfur, closing on July 27, for arrival at Mumbai/Dharamtar during the second week of August.