AMMONIA
U.S. Gulf/Tampa: Nothing new was reported in the market last week. Players said that the $297/mt DEL achieved for Tampa appears to be the price for September, though some sellers are disappointed, saying it is only a slight increase and not reflective of Black Sea increases.
In the meantime, NOLA ammonia producers are enjoying low natural gas prices. The September NYMEX gas future contract went off the board Aug. 29 at $5.43/mmBtu, down $1.40/mmBtu from the year-ago number.
Eastern Cornbelt: The regional ammonia market was quoted at $470-$480/st FOB, up slightly from last report.
Western Cornbelt: The ammonia market was pegged at $450-$470/st FOB, with the low FOB Blair, Neb. One Iowa source quoted the common dealer price at the $470/st FOB level last week, with delivered pricing in Missouri from production points in Oklahoma and Kansas tagged at the $465/st level. Dealer reference pricing was reportedly as high as $485/st FOB some regional terminals last week.
Southern Plains: Ammonia was quoted at $380-$405/st FOB and $415-$425/st DEL in the region.
South Central: Anhydrous ammonia was unchanged at $410/st FOB Memphis, Tenn.
Black Sea: Asian sources point to anticipated U.S. demand as a major force pushing prices upward. Sources say the price has moved to $265/mt FOB, with nothing available for less. Nailing down sales above that level is also difficult. Sources report the usual global shortness of material at this time of year is not yet in place. Reportedly, India has yet to enter the market as strongly as expected.
Even though India takes its material from the Middle East, sources say the lack of buying from that region is having a rollover effect on Yuzhnyy. If the Middle East sold more tons to India, one Asian source said, we should see the Black Sea price move up quickly. As it is, he added, sales are laggard. Now the rollover effect is that prices are firm and only inching upward.
Producers are reportedly asking $270/mt FOB, and sources say that price will soon be achieved. At press time, however, sales are stuck in the upper $260s/mt FOB.
Middle East: Asian sources are still scratching their heads trying to figure out the Sabic move that sold a cargo at $235/mt FOB. By consensus, that deal was an aberration.
Sources say the market has retained a stable position in the upper $240s/mt FOB. Sales have been steady but not as frenzied as expected for this time of the year.
In the past, India bought many more tons for DAP production. So far this year, say Asian sources, the importation of phos rock and phos acid is not up to the levels of previous years. As a result, ammonia purchases are also off.
The price has not slipped because demand throughout Asia remains strong enough to keep suppliers happy with full order books. Tons that would have gone to India are instead finding their way to Korea and Taiwan.
At the same time, suppliers from Indonesia, Malaysia, and Australia are said to be fully booked. That means, said one trader, any demand for spot tons has to go to the Arab Gulf.
UREA
U.S. Gulf: Granular urea barges took a breather last week, with most sources calling the last done trades between $332-$335/st FOB. Others said forward barges into late September/early October may have traded as high as $338/st FOB.
The quiet market was attributed to several factors, including the upcoming Labor Day holiday, what with some players taking a little extra time off. Sources expected them to come back after the holiday to settle in for more trading. Others argued that the market has about topped out and buyers that can wait will do so, so as not to feed into a rising market. They said buyers are waiting on some new import vessels to come in to see if they will have product available or are sold out. Sellers, however, citing a climbing world market, had different ideas, saying NOLA still has room to move up.
In the meantime, prill barges are reported to be in short supply, and several sources said they have quickly moved up to be in line with granular – quite a jump.
Eastern Cornbelt: Granular urea was tagged at $355-$365/st FOB, but sources reported few new sales to test the market
Western Cornbelt: Urea was up slightly from last report, but lack of movement kept the increase in check compared to recent pricing upswings in other regions. Sources tagged urea at $355-$365/st FOB in the region, with minimal new sales to test the market. Effective Aug. 27, Agrium’s urea postings moved to $380/st FOB Shakopee, Minn., and North Dakota terminals at Alton, Carrington, Colfax, Marion, and Scranton. The company’s rail-DEL price in Minnesota, the Dakotas, and Wisconsin moved on that date to $385/st.
Southern Plains: Urea pricing was up from last report. Higher postings pushed the range to $362-$365/st FOB Inola and Enid, Okla., with the upper level reflecting dealer list prices.
South Central: Sources reported higher urea prices on the strength of a firming barge market. Granular urea pricing was tagged at $360-$370/st FOB regional terminals, although few new sales were reported to test the market.
Southeast: Granular urea was reported at $360-$370/st FOB port terminals, with the upper end reflecting new reference pricing to the dealer. That range was up from the previous week, when dealer pricing FOB Savannah, Ga., had been reported as low as $345/st. Reference pricing FOB Baltimore, Md., had also reportedly firmed to the $380/st mark last week.
Pacific Northwest: Agrium issued new granular urea postings, effective Aug. 27. Delivered postings moved to $380-$395/st in Montana and Wyoming, depending on location; $410/st in Idaho, Washington, Oregon, and northern Nevada; $420/st in northern and central Utah; and $425/st in southern Utah. Agrium’s warehouse postings in Washington moved on that date to $405/st FOB Glade, Kennewick, Warden, and Wilson.
India: MMTC awarded about 400,000 mt in its last tender. Sources say an additional 100,000 mt might also be purchased in post-tender talks.
The Indian buyer was only able to eke out a dollar or two off the original offers after talks that stretched past the validity dates for some. Those who refused to lower their prices or extend the validity dates were rejected. Awards follow.
| Offerer | Origin | Quantity (mt) | US$/mt | |
| FOB | CFR | |||
| Transammonia | Open | 160-200,000 | 307.00 | |
| 308.00 | ||||
| 309.00 | ||||
| Sabic | Saudi Arabia | 75,000 | 286.00 | |
| option | 25,000 | 286.00 | ||
| QAFCO | Qatar | 50,000 | 287.00 | |
| Fertil | UAE | 50,000 | 287.00 | |
| Toepfer | Open/Bangladesh | 3 x 25,000 | 309.00 | |
| 313.13 | ||||
| 315.13 | ||||
Delivery on all awards is slated for September and October.
Sources report Transammonia is looking to fulfill its award with Chinese material.
Reportedly, MMTC went back to Qafco and Fertil looking for a similar deal on additional cargoes. And rumors are that MMTC may ask either Transammonia or Toepfer to add another cargo – at the same price – as well.
If all the options are covered and if the extra tons are secured, MMTC will take slightly more than half a million tons. This fits with what most in the industry expected.
Industry observers expect to see IPL coming in for a tender by the middle of September. The best guess is that between IPL and MMTC, another 1.5 million mt will be purchased by the end of the year.
Sources say if the two companies play their tenders right, they should just keep buying 500,000 mt at a time for the remaining months. One Asian source noted they should then take that idea into 2008 and begin a program of steady buying.
The two importers had started along the lines of regular purchases away from the seasonal demands earlier this year. This form of buying led to fewer market shockwaves.
In the past, whenever IPL or MMTC needed tons they waited until the last minute and then made large purchases that shocked the market higher. With steady buying, the sales price evened out with fewer bumps in the road.
Black Sea: It looks as if the Yuzhnyy suppliers were left out of the Indian business. Sources say that while the Transammonia delivered price might work if the trading house secured its tons at the start of the price run-up, it now looks as if the house is going to China to fill its obligations to MMTC.
Based on current freight rates of $50/mt to India’s West Coast, sources say the Trammo deal would netback to $258/mt FOB before incidental costs were backed off. The Black Sea market was at that level about three weeks ago before the market took off.
Even with the loss of business to the last remaining large urea buyer in the world, the price in the area has moved up.
Sources report $305/mt FOB was done for a small quantity. More than one deal at $300/mt FOB was reported.
Purchases that go beyond the top-off category are said to be firmly in the upper $280s/mt FOB. Still, say sources, producers appear to remain firm in starting talks at $300/mt FOB – and just as firm in refusing to go lower.
Other major buyers – notably those in Latin America – are balking at the higher price. Asian sources add that there are no buyers in Asia willing to pay the current rate either. The latest pricing idea from Latin America has an effective netback of $285/mt FOB. Even at that price, buyers are reportedly disgruntled.
Following previous Indian tenders, the Black Sea price fell dramatically. Still, said one source, the Yuzhnyy sellers are fully booked for September and have a few cargoes lined up for delivery in early October. Sources say there is no reason for the price to fall any time soon.
Others note that with IPL ready to come in for another 500,000 mt and with the Middle East sold out through October, China will be the only competition. Asian sources say Chinese ports will be busy handling all the business booked from July to present. Few will be willing to add more to the congestion by booking more October shipments.
With nothing indicating freight rates will drop soon, sources say either IPL will have to adjust its pricing ideas up or the suppliers will have to concede lower prices.
As of the end of August, the price of completed business is pegged at $285-$300/mt FOB.
Middle East: With only a minor concession, Sabic, Fertil, and Qafco secured enough business to keep them happy for September and October.
The offers by Fertil and Qafco were in the $290s/mt FOB, with Sabic just a dollar or so lower. The final awards put the market firmly at $285-$290/mt FOB.
Area producers continue to show prills and granular running at parity. Sources say Sabic’s offer to MMTC is for either flavor of urea at the seller’s choice.
With the MMTC deal done and another 1.5 million tons still needed by India, sources say there are few incentives for the Middle East suppliers to lower their prices.
Besides the Indian business, granular suppliers have steady contracted business with the Untied States and several Asian countries.
Only a dramatic price drop out of China could affect the Middle East market, say sources. And such a move is not expected.
China: Granular is running at a premium to prills. Sources peg the granular market at $280/mt FOB and prills at $260/mt FOB for October shipments.
No one is talking about September loadings. Tons are reportedly sitting at portside warehouses waiting for vessels. No one is planning to take anything out until after Oct. 1, when the export duty drops from 30 percent to 15 percent.
The dearth of September shipments is no surprise. Sources report most of the tons at the ports were ordered back in July for October shipment.
The problem some ports are now facing is too much urea coming in. Reportedly, a number of the warehouses are so full shipments from the factories to the ports have to be stopped. In some cases, reported one source, one shipment is being stored near the port in rail cars. The source noted this was a very expensive way to store the tons.
Chinese urea will continue to play a major role in the international markets, say sources.
India is ready to buy another 1.5 million mt by the end of the year. At the same time, Chinese export prices will lower because of the reduction in the export duty. With more options for vessel size and timing, Chinese exporters could do very well in subsequent Indian tenders.
Indonesia: Reportedly, Kaltim is down to one last export allowance, and then the country’s urea producers are out of the export business for the year.
In the past couple of weeks, first Pusri settled a 40,000 mt sale for $268/mt FOB bagged. Five days later, Gresik sold about 20,000 mt of bagged urea for $283/mt FOB.
Both deals went to local traders, who then went shopping to international traders. Sources report the price and logistics of getting the tons make it difficult to find an international buyer.
One source said that once shipping and handling costs are added in, the delivered price is too high for consideration. Reportedly, the Philippine buyers are balking at $290/mt CFR, let alone numbers in the $300s/mt FOB, as would be the case of the Indonesian tons.
Kaltim will most likely hold a selling tender next week. Once that is done, sources say the company, along with the other state-owned producers, will begin lobbying for more export allocations.
The government may be reluctant to issue the licenses too soon, said one trader. They will first want to make sure the local market is fully covered before allowing any tons to go off shore.
NITROGEN SOLUTIONS
U.S. Gulf: Barge prices were reported to have moved up, with most putting new trades within the $263-$268/st FOB range. Sellers were predicting $270/st FOB for the next round of business. There was an unconfirmed report that CF had sold out of product into March.
Eastern Cornbelt: UAN-32 remained at $295-$305/st ($9.22-$9.53/unit) FOB regional terminals, with most sources tagging the common dealer price at the $300/st ($9.38/unit) FOB mark for prompt tons.
Western Cornbelt: The UAN-32 market was quoted at $295-$310/st ($9.22-$9.69/unit) FOB in the region, with the upper end reflecting dealer reference prices out of some locations.
Southern Plains: UAN-32 was pegged at $275-$290/st ($8.59-$9.06/unit) FOB, down slightly from last report, with the reference dealer price FOB Oklahoma terminals commonly at the $285/st ($8.91/unit) mark before discounts.
South Central: The UAN-32 market was pegged at $275-$285/st ($8.59-$8.91/unit) FOB regional terminals.
Southeast: The UAN-30 market was reported at $245-$250/st ($8.17-$8.33/unit) FOB Norfolk, Va., and Wilmington, N.C., with reports of some suppliers now referencing the $255/st ($8.50/unit) FOB level to dealers. Several sources said terminal values need to rise to reflect current replacement costs; vessel UAN-32 tons were reportedly being indicated in the low-$290s/mt C&F for new sales.
AMMONIUM NITRATE
U.S. Gulf: Barge prices were reported to have moved up in line with recent expectations. Last week new trades were being reported at $272-$275/st FOB, with sellers now eyeing $280/st FOB.
Western Cornbelt: The ammonium nitrate market was pegged at $320-$325/st FOB in the region for limited tons.
Southern Plains: Ammonium nitrate was in tight supply, with pricing quoted firmly at the $315/st level FOB Catoosa, Okla. Several sources said an increase to $320/st FOB was likely in the near term.
South Central: Ammonium nitrate was quoted at $305-$320/st FOB terminals, where available, with the low FOB Yazoo City, Miss.
Southeast: Ammonium nitrate was pegged at the $310/st mark FOB Tampa, Fla. On a delivered basis, the regional nitrate market was tagged at $320-$325/st, depending on location.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was unchanged at $220-$240/st FOB.
Western Cornbelt: Granular ammonium sulfate remained at $210-$230/st FOB in the region, with reports that regional supplies have loosened up a bit.
Southern Plains: Granular ammonium sulfate remained at $200-$230/st FOB in Texas, with the low FOB Freeport.
South Central: Granular ammonium sulfate remained at $235-$240/st FOB regional terminals, and in tight supply at some locations.
Southeast: Granular ammonium sulfate was unchanged at $205-$210/st FOB, with the low FOB Hopewell, Va., and the upper end FOB Augusta, Ga. As of Sept. 4, standard ammonium sulfate postings from DSM Chemical will move up $10/st to $172/st rail-DEL in Florida, and $155/st FOB Augusta for all customers outside Florida. DSM’s current postings for delivered granular ammonium sulfate in Florida is unchanged at the $235/st mark.
PHOSPHATE
Central Florida: Phosphate sales out of Central Florida were continuing last week, but most were for the December to May period. Sales were also made for September through November, and a smaller number were for prompt shipment.
There were concerns that snug sulfur supplies could start to impact phosphate production (see Sulfur).
The market was not likely to begin seeing an uptick in activity until after Labor Day, when the fall season will kick into higher gear. Most dealers had already filled their bins, and will not begin to reorder until necessary.
Last week the DAP price range became a flat $385/st FOB, as CF was said to have raised its price to match Mosaic’s. The previous week, the range was $382-$385/st FOB. Mosaic’s asking price was $385/st FOB for DAP and $381/st FOB for MAP. CF was listing a price of $385/st FOB for prompt DAP and MAP, and $385/st FOB for forward sales. 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, but was sold out through the end of September for rail-delivered phosphates.
U.S. Gulf: The Army Corps of Engineers issued no new progress reports on the status of dredging the river north of Lock 17 at Muskogee, and barges were still moving in single file through the narrow channel created a few weeks ago. A source said that last week the limited deliveries into Catoosa and Inola were sufficient because of the lack of activity, but that situation could change quickly when the season kicks off after Labor Day. “Then,” the source said, “everyone will run out.”
Sales of NOLA DAP barges on the river system were extremely limited last week, and sources said almost everyone had filled their bins earlier this summer. Meanwhile, Mississippi Phosphate returned to full production the previous weekend, and barge sales by those who contract for their barges could help to soften the market. Several sources said they had been offered barges as low as $395/st FOB, but declined because their warehouses were already full. The only sale that could be confirmed was made for $400/st FOB. Mosaic, which had been making prompt sales at $403/st FOB, made none during the past two weeks.
Mosaic’s loading facility at Donaldsonville remained out of service last week, and will continue to be down for a prolonged period. In the meantime, the company has been loading at its other dock there, so the impact, if any, has been minimal.
MAP was said to be in short supply in some areas, which could push the price upward if that continues. Mosaic was said to be out of MAP, and CF was firming its price upward.
The NOLA DAP barge price range last week flattened out to a single digit – $400/st FOB. The previous range was $401-$403/st FOB. However, that range will likely broaden during the next two weeks as the spring season gets into gear.
Eastern Cornbelt: DAP was pegged at $430-$438/st FOB in the region last week, with MAP quoted at $430-$435/st FOB. No agricultural demand was reported for TSP in the region. The 10-34-0 market remained at $340-$350/st FOB.
Western Cornbelt: DAP and MAP were generally quoted in the $430-$435/st range FOB regional warehouses last week. 10-34-0 remained at $345-$360/st FOB and in tight supply in the region.
Southern Plains: DAP and MAP were pegged at $430-$435/st FOB Catoosa. 10-34-0 was tight, with pricing all over the board. The low end of the 10-34-0 range was quoted at $315/st FOB shipping points in the Texas panhandle. On the upper end, however, sources tagged the dealer market in a broad range at $325-$350/st FOB in Kansas and Oklahoma, depending on location.
Agrium raised its phosphoric acid prices for the sales area comprising Colorado, Kansas, Oklahoma, Texas, and New Mexico. Effective Aug. 17, prices include $685/st rail-DEL for merchant grade acid (MGA) and $695/st rail-DEL for super phosphoric acid (SPA). Postings for both products will increase by $5/st in September, followed by a $15/st increase in October, a $10/st increase in November, and another $10/st increase in December.
South Central: DAP and MAP were quoted at $420-$430/st FOB regional warehouses, while TSP remained at $395-$410/st FOB to the dealer.
U.S. Export: India continued purchasing phosphates last week and made buys from South Korea and the Philippines at what was believed to be a price of $495/mt FOB. PhosChem, which already has a large book of export business, did not participate. India and Pakistan were still in the market.
PhosChem did offer phosphate to Brazil at $435/mt FOB, but no deal had been concluded as of late last week.
The export DAP price range last week remained unchanged at $430-$433/mt FOB. Ocean freight rates will continue to affect FOB prices.
Pakistan: The private sector booked orders for import of about 150,000 mt of DAP. Sources report that Transammonia sold one cargo of 40,000 mt of DAP to Pak-Arab Fertilizers at around US$520/mt ex Australia for September/October shipment. Furthermore, Pak Arab was reported to have finalized a deal for the import of 30,000 mt from Transammonia ex-China at around $515 /mt and 40,000 mt from Southern Cross Australia at $521/mt.
Fauji Fertilizer has opted to delay a tender for the first week of September for the import of 30,000-50,000 mt of DAP. Pakistan is expected to need about 672,000 mt of imported DAP between April-September 2007.
POTASH
Eastern Cornbelt: Potash was pegged at $255-$265/st FOB regional warehouses and in tight supply.
Western Cornbelt: Potash remained at $260-$265/st FOB the warehouse for new sales. One Missouri source reported red granular potash at the low end of that range, and white granular at the upper end.
Southern Plains: Sources tagged the granular potash market firmly at the $215/st mark FOB Carlsbad, N.M., with warehouse pricing in the $255-$260/st FOB range in the region. As of Oct. 1, sources said granular potash postings at the mine will firm to $237/st FOB Carlsbad.
Great Salt Lakes Minerals, a subsidiary of Compass Minerals, will increase prices on all sulfate of potash specialty fertilizer products by $20 per ton, effective on all shipments beginning Sept. 1, 2007. This action is being taken to help offset increased input and logistics costs and to support investments needed to meet expanding demand. Great Salt Lakes Minerals is based in Overland Park, Kan.
South Central: Potash out of the regional warehouse system continued to firm, with most sources now pegging the market at $255-$265/st FOB to the dealer.
Southeast: Sources tagged the potash market in a broad range at $245-$260/st FOB regional warehouses, with the upper end reported in the Carolinas for white granular potash.
On a delivered basis, white granular tons were also quoted in
the $261-$263/st range in North Carolina last week.
SULFUR
Tampa: Sulfur remained in short supply, and that could threaten some phosphate production in Central Florida, where production curtailments were possible in September. However, no decisions on curtailment had been made as of late last week.
Most refineries along the Gulf Coast were operating normally with the exception of Valero’s Texas City and Port Arthur plants, which were still experiencing problems.
PEMEX was forced to shut down production in the Gulf as a result of Hurricane Dean, which means one shipment of 15,000 tons to Tampa will be lost.
Two prill vessels were scheduled to leave Beaumont in September. One will be bound for Brazil and the other for Morocco, but one of the deliveries could be pushed back into October.
Phosphate producers could face another increase in sulfur prices for the fourth quarter, as a result of the tight market conditions both domestically and on the world market. The increase was not expected to be anywhere near as much as the $23/lt bump of the third quarter. Negotiations could begin at the TFI World Conference in Boston in September.
West Coast: Sulfur producers were still trying to come up with a pricing system that would help them retain their agricultural business. With the sharp price hike on the West Coast for the third quarter, agricultural buyers began searching for new sources.
Vancouver: Producers of sulfur were said to be negotiating last week with Brazil for new semester contracts. Prices were expected to rise dramatically, based on skyrocketing world prices.