AMMONIA
U.S. Gulf/Tampa: Tampa continued to be called $305/mt DEL, while import business to other Gulf ports was called $310/mt DEL.
U.S. imports were 1.37 million st for July-August, up 6 percent from the year-ago 1.29 million st. They were off 22 percent in August, to 580,142 st from the year-ago 741,257 st.
In the meantime, there were reports that NOLA business was moving up. While some say the last done is still $277/st FOB, others say forward cargoes into November have traded as high as $290/st FOB. Expectations are that the next prompt cargo will hit that mark or higher.
Eastern Cornbelt: Sources continued to quote the ammonia market at a firm $510-$520/st FOB regional terminals for spot tons, with forward contract ammonia on the table from one regional supplier for $520-$530/st FOB for November and December.
Western Cornbelt: The ammonia market continued to firm, with several sources speculating that producers were happy to sit tight on reference prices due to the volume of spring prepay orders on the books. The ammonia market was quoted at $505-$515/st FOB in the region, up again from last report, with talk of some suppliers now referencing ammonia as high as $520-$525/st FOB.
Agrium’s anhydrous ammonia postings firmed on Oct. 9 to $505/st FOB Hoag, Neb., and $510/st FOB Greenwood, Neb., Early, Iowa, Garner, Iowa, Whiting, Iowa, and Mankato, Minn. Those levels represent a $15/st increase from the company’s Sept. 18 reference prices.
Southern Plains: Sources said fertilizer supplies have not been an issue due to delays in preplant wheat movement, and in fact have been somewhat of a negative on the market for some nitrogen products. Although postings from some producers were at much higher levels, sources tagged the anhydrous ammonia market last week at $405-$415/st FOB regional production points and $415-$425/st FOB pipeline terminals in Kansas.
Agrium’s anhydrous ammonia postings firmed on Oct. 9 to $470/st FOB Borger, Texas; $490/st FOB Mocane, Okla.; $495/st FOB Conway, Kan.; $500/st FOB Clay Center, Kan.; $495/st DEL in Texas north of Interstate 40; and $500/st DEL in Texas south of Interestate 40. Those postings represent a $15/st increase from the company’s Sept. 18 ammonia postings in the region.
South Central: The anhydrous ammonia market was up from last report at $435/st FOB Memphis, Tenn., for spot market tons, with spring prepay reportedly being offered in the $460-$465/st FOB range.
Black Sea: Sources in Asia report the Yuzhnyy market is dropping despite strength in the United States. There are reports of a fixture by Transammonia for just less than $270/mt FOB. How much less, sources could not say. One Asian trader noted it was not too much, but enough for the industry to take notice.
One reason given for the apparent slip in the price, said one observer, is the restarting of facilities that had been down for routine turnarounds. With more material becoming available and demand remaining steady, sources say prices should drop slightly.
More plants are expected to come online in the next few weeks.
Based on estimates from Asian sources, the market is pegged at $265-$280/mt FOB, with deals at the upper end diminishing.
Middle East: Producers remain comfortable and supplies tight. Just how tight supplies are was evident by the feeding frenzy that broke out last week when IPCC/Iran said it had a cargo available for loading the end of this month. Reportedly, several buyers were bidding for the tons.
Last month Yara secured a couple of cargoes for European buyers. Sources say it is also one of the bidders for the new tons.
Transammonia has a deal with IPCC to export its ammonia, so some in the industry are trying to figure out the logic of IPCC selling its tons on a spot basis.
One trader noted that the Trammo deal was for tons from the #3 plant, which is delayed in opening. Excess tons from the other IPCC facilities, sources say, are open to the highest bidder.
Others dispute that simple explanation, and have harsh words for IPCC in the way it is handling its ammonia sales.
Still, for now the only spot tons coming out of the region are from Iran.
Sources say Iranian availability is getting tighter now that urea production is back to normal.
Difficulties in urea production during the past 45 days or so led to an increase in ammonia availability. One source estimated the available tons equaled the expected output of the #3 plant. With the urea plant now up and running, sources say the tightness in the Arab Gulf returned.
The best guess for the opening of the #3 production unit is now sometime in the second quarter of next year.
Besides the return to normal ammonia output and the delay of the IPCC #3 plant, producers got another bit of good news. It seems IFFCO/India has restarted its DAP production line. Sources expect to see increased demand from India soon.
Disputes over the cost of phos acid and rock have led Indian producers to reduce the normal amount of ammonia purchased this time of year. While sources are not sure that the acid and rock supplies will be steady, just the beginning of some DAP production in India is a psychological boost to ammonia suppliers.
Prices in the area have moved up with the growing tightness in the market.
Reportedly, Mitsui bought a cargo from Qafco at $240/mt FOB. The new starting offers are at $245/mt FOB.
Sources say a range of $240-$245/mt FOB for the week is a fair assessment of the situation.
India: IFFCO restarted its DAP operations. The start-up means additional ammonia will be needed. Just how many more tons will be secured is up in the air. Sources report the supply of phos acid and rock is still not steady enough to suggest that production will continue unabated.
UREA
U.S. Gulf: Granular barges took a breather last week, with most sources putting the last done business within the $358-$363/st FOB range. Some suggested that the big push to get barges upriver – at least way upriver – had abated. Prills were generally reported to be keeping pace with granular.
July-August U.S. imports were up 16 percent, to 634,772 st from the year-ago 549,513 st.
Eastern Cornbelt: Granular urea was pegged at $385-$395/st FOB in the region, up again from last report, although sources reported few new sales to test the market.
Western Cornbelt: The granular urea market was pegged at a firm $385-$390/st FOB, with confirmed sales at the top of that range. Agrium’s granular urea postings firmed on Oct. 9 to $410/st FOB Shakopee, Minn., and North Dakota terminals at Alton, Carrington, Colfax, Marion, and Scranton, and $415/st rail-DEL in Minnesota, Wisconsin, and the Dakotas. Those levels represent a $15/st increase from the company’s Oct. 1 urea postings at those locations.
Southern Plains: Granular urea pricing was up from last report following a “frenzy” of activity in early October, but most sources continued to comment on preplant wheat applications being down from expectations. Sources tagged the urea market at $375-$385/st FOB Oklahoma shipping points, with the upper end reflecting dealer reference pricing. Limited truck availability and slow movement out of Oklahoma caused some players to end up with long positions that they were scrambling to move, but several sources said these tons were gradually being cleaned up and the lower numbers were harder to come by as the week advanced.
South Central: Granular urea pricing was up from last report at $385-$395/st FOB regional terminals to dealers. Some sources were wondering about urea availability in February and March, as heavy topdress demand is expected for the big winter wheat crop.
Southeast: Granular urea was pegged at $380/st FOB Wilmington, N.C., Norfolk, Va., and Savannah, Ga. The Baltimore, Md., market was quoted at $385/st FOB, with reference pricing now at the $390/st level.
Western U.S.: Agrium’s granular postings firmed on Oct. 9 to $410-$425/st DEL in Montana and Wyoming, depending on location; $435/st FOB Washington warehouses at Glade, Kennewick, Warden, and Wilson; $440/st DEL in Washington, northern Idaho, northern Nevada, and Oregon excluding Malheur County; $450/st DEL in northern and central Utah; and $455/st DEL in southern Utah. Those postings represent a $15/st increase from the company’s Oct. 1 urea postings in the region.
In California, the company’s urea postings moved on Oct. 9 to $415/st FOB West Sacramento, $435/st DEL in Central California, and $440/st DEL in Northern California.
India: IPL settled its tender. All told, the company is expected to take 725,000 mt if all options are taken. Most of the tonnage was settled from pre-tender arrangements with major trading houses. Sources said about 600,000 mt were covered in the pre-tender deals. With the exception of 25-50,000 mt from Toepfer, all tons are expected to come from China.
Awards follow.
| Offering Company | Quantity ‘000 mt | Price US$/mt CFR | Delivery Port |
| Toepfer | 25,000 | 346.50 | Vizag |
| 25,000 | 347.00 | Paradip | |
| 25,000 | 347.00 | Vizag | |
| Helm | 75,000 | 347.00 | Vizag |
| 25,000 | Paradip | ||
| Kisan International | 25,000 | 347.00 | Vizag |
| Ameropa | 50,000 | 345.50 | Vizag |
| 25,000 | 347.00 | Vizag | |
| 25,000 | 349.50 | Kandla | |
| Transammonia | 210,000 | 347.00 | Vizag |
| 30,000 | 347.00 | Paradip | |
| 160,000 | 349.50 | Kandla |
IPL accepted 725,000 mt. Of this amount, 25,000 mt from Toepfer and 50,000 mt from Ameropa were at seller’s option. Sources say IPL is anxious to take those tons.
Industry observers estimated before the tender that India would need 1.2 to 1.8 million additional tons by the end of the year. People are now waiting to see what MMTC will do to take up the rest of the slack.
Sources fully expect to see MMTC come in for 500-700,000 mt soon. The earliest a tender might be called is this week. The odds are in favor of one being called either right at the end of the month or during the first week of November.
Industry observers say MMTC will have to call its tender soon if it wants to get delivery by the end of the year – and if it wants more Chinese tons at a reasonable price.
Traders figure MMTC will still have to pay more than IPL even if the Yuzhnyy and Middle East suppliers drop their prices in the next tender.
Local media are reporting the fertilizer ministry is looking to set up more urea plants near targeted agricultural areas. The Indian Express reported late last week that international companies may bid for use of the sites. The winners will be determined by the firms that offer the lowest delivered price of urea. To sweeten the deal, the new facilities will receive natural gas at preferential rates.
The idea, the reports said, is to reduce the amount of subsidies required to fulfill the country’s urea needs. A government planning committee estimated an additional 10 million mt could be added to domestic production if all goes well.
Besides increasing domestic production of urea, the government estimates the country will get a sizable influx of foreign investments. Notices reportedly will soon be sent to interested companies.
Middle East: Area producers were left out in the cold in the IPL/India tender. Just about all the tonnage heading to India in the next 45-60 days will be coming from China.
Sources were stunned to see the aggressive pricing ideas Middle East producers put forth in the tender. The offers represented a $25-$30/mt increase in the FOB price.
Even after it was clear the delivered price could not exceed $349.50/mt, the Middle East suppliers just walked away from the business. Sources say IPL didn’t even bother to go to the producers with a counter bid.
For now, granular sales from the area to the United States are keeping the suppliers happy. However, that gravy train is expected to end soon.
Sources looked at the November and December possibilities for Middle East sales, and they kept coming back to only one place – India.
With China dominating the urea export market for the rest of the year, sources say Middle East and Yuzhnyy suppliers will have to drop their prices significantly to stay in the game.
Local producers could have secured business with IPL if they lowered their price to the current market level in the low $320s/mt FOB. One trader said he wasn’t sure if it was pride or greed that led the producers to refuse to drop their offers to India by $25-$30/mt to snare the business.
Chances are the next Indian tender will show a rise in prices. However, say observers, it will not be as high as the Middle East producers would like.
One theory has the producers holding off on their prices until Jan. 1, when the Chinese export duty jumps back to 30 percent. One trader estimated that would move the current $290/mt FOB bagged prills to $322/mt FOB bagged. Once freight and other costs are tacked on, the Chinese price is closer to the Middle East price.
The Middle East suppliers have an advantage in shipping that few suppliers can match, say sources. If given a choice of shipments from China or the Middle East for about the same price, sources say Indian buyers will take the Middle East tons.
The only problem with that scenario, said one trader, is that the Yuzhnyy price will have to come down by the end of the year because there are no major buyers for its product.
Sabic could be in good shape as the New Year approaches. Sources expect that Pakistan and Saudi Arabia will continue their arrangement of subsidized Sabic urea being sent to Pakistan as part of a government-to-government aid package.
Prilled and granular urea from the area remain at parity in the low $320s/mt FOB.
Black Sea: Even though nothing from Yuzhnyy is heading to India, sources say the market is tightening and price increases are justified. Sources now say the market has moved out of the $320s/mt FOB and up a few dollars. Asian observers put the Yuzhnyy market at $330/mt FOB for done business and $335/mt FOB for bids.
What appear to be holding up the market for now are orders from Latin America and Europe. Sources expect to see these factors fade away by mid-November.
The strength of the purchases from Europe and the Americas kept Yuzhnyy from going into its traditional free fall after an Indian tender.
In the past couple of years, each time around, the price of an Indian tender first went up and then crashed below the starting point of the increase. Many in the industry were expecting the same thing to happen with the previous two Indian tenders. When the Yuzhnyy market not only remained stable but also went up, analysts started looking for other factors.
One source noted that no matter what the Yuzhnyy producers did – except crash the market before a tender – it was clear India would not buy from the Black Sea. The producers focused on sales they could make at prices more to their liking. With so many people looking at China for supply and India for sales, traders working with CIS producers sold product to Latin America and Europe.
Now that the ordering from those two areas is expected to slow down, Yuzhnyy producers may have to turn once again to India for relief.
Bets are now being placed that the Yuzhnyy producers will come down in their pricing ideas when MMTC calls a tender.
The gap that has to be closed between what the Indians are willing to pay and what the producers want, however, is large. In order to meet the current delivered price into India, the Yuzhnyy market would have to be at $290/mt FOB.
Even if the next tender settles at $10-$15/mt higher than the just concluded tender did, the producers would have to come down about $30/mt.
Still, said one trader, if the only game in town is India and if the Indians play hardball, there will be little the producers can do but to accept a lower price.
Even at $300-$310/mt FOB, the price would be about $100/mt higher than last year at the same time.
For now, however, sources say there may be some tons available below $330/mt FOB – but not likely. At the same time, producers are digging in their heels at $335/mt FOB. Asian observers say for discussion purposes the market is at $330-$335/mt FOB, with the lower end representing hard and firm business. Some business just below $330/mt FOB might also be available if the producer takes a liking to the buyer.
China: Prices on prills have moved up to $290/mt FOB bagged because of nearly 700,000 mt sold to India in the IPL tender. With the exception of 25-50,000 mt offered from Bangladesh, the rest of the 725,000 mt sold to IPL is slated to come from Chinese factories.
While prills move into the $290s/mt FOB, granular has jumped even more. Sources now peg the Chinese urea market at $310/mt FOB.
Transammonia reportedly sold a granular cargo to Agrium for the West Coast of North America with an estimated netback of $312/mt FOB.
So far, said Asian sources, international traders and Chinese producers are willing to send granular urea to the U.S. in spot deals. Observers say there does not seem to be any discussion of establishing contracts or long-term agreements for granular shipments to the West Coast along the same lines Sabic and U.S. buyers have in New Orleans.
The port congestion issue seems to be working itself out. One port has a commitment of moving out 400,000 mt in 30 days – but, said one source, it only had the capacity to do 10,000 mt a day. Even with that discrepancy in ability and expectations, sources say all the port operators are doing their best to break the logjam of urea in the ports.
Once the quayside warehouses are empty – or are emptying – sources say contracted tons from the factories can once again start rolling to the sea.
Vietnam: Despite some local reports that Vietnam may need to import urea, sources say Vietnamese traders are busy re-exporting Chinese urea to ready buyers. Production is up enough that Vietnam is close to establishing self-sufficiency.
NITROGEN SOLUTIONS
U.S. Gulf: The market remained quiet last week. Prices were reported within the $280-$282/st FOB range.
July-August imports were up 97 percent, to 434,656 st from the year-ago 229,547 st. August imports were even more dramatic – up 192 percent, to 268,795 st from 92,170 st.
Eastern Cornbelt: UAN-32 remained at $310-$315/st ($9.69-$9.84/unit) FOB most regional terminals, with one Ohio source quoting reference pricing as high as $320/st ($10.00/unit) FOB. On a forward contract basis for November through December, one supplier was referencing UAN-32 at roughly $318-$326/st ($9.94-$10.19/unit) FOB in the region.
Western Cornbelt: UAN-32 pricing remained at $310-$320/st ($9.69-$10.00/unit) FOB terminals. One Iowa source quoted dealer pricing firmly at the $9.80/unit FOB level last week.
Southern Plains: UAN-32 remained in a broad range at $290-$305/st ($9.06-$9.53/unit) FOB regional terminals, up slightly from last report, with the low end reported at regional production points.
South Central: UAN-32 was quoted in a broad range at $290-$310/st ($9.06-$9.69/unit) FOB regional terminals, with the upper end in Kentucky to the dealer and the low FOB Vicksburg, Miss. The dealer market FOB Memphis was pegged in the $295-$300/st ($9.22-$9.38/unit) range.
Southeast: UAN pricing was all over the board as new product comes in, with the vessel market quoted in the $300-$305/mt C&F range. Some of that new tonnage was reportedly being referenced out of the terminal at $290/st ($9.06/unit) FOB as UAN-32, but there was still some older product dragging its feet in the $275-$280/st ($8.59-$8.75/unit) range FOB regional terminals. Several sources said the market will firm to the $290/st mark as the lower priced inventories get cleaned up.
The Baltimore market for UAN-30 had reportedly firmed to $260-$270/st ($8.67-$9.00/unit) FOB last week.
Western U.S.: Effective Oct. 9, Agrium’s UAN-32 postings firmed to $325/st ($10.16/unit) DEL in northwestern Oregon, Washington, and northern Idaho
AMMONIUM NITRATE
U.S.Gulf: Most players continued to call the market within the $280-$285/st FOB range, with some indications of $290/st FOB as being expected for the next round of sales.
July-August imports were up 51 percent, to 143,314 st from the year-ago 95,078 st.
Western Cornbelt: Ammonium nitrate remained at $320-$325/st FOB in the region.
Southern Plains: Ammonium nitrate was up from last report at $325-$335/st FOB Catoosa, Okla., with the upper end also quoted for prepay tons from one regional supplier.
South Central: Ammonium nitrate remained at $315-$320/st FOB most terminals to the dealer, where available, with the low quoted at $305/st FOB Yazoo City, Miss.
Southeast: Ammonium nitrate remained at $325/st FOB Tampa, Fla. Several sources talked of incoming CAN shipments last week.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was steady at $230-$240/st FOB.
Western Cornbelt: Granular ammonium sulfate was steady at $225-$230/st FOB in the region. Effective Oct. 12, Agrium’s ammonium sulfate postings firmed to $235/st DEL in Nebraska, Minnesota, Wisconsin, and the Dakotas.
Southern Plains: Granular ammonium sulfate remained at $200-$230/st FOB in Texas, with the low FOB Freeport and the upper end to dealers FOB Plainview.
South Central: Granular ammonium sulfate remained at $230-$235/st FOB in the region.
Southeast: Effective Oct. 8, ammonium sulfate postings from DSM Chemicals firmed $20/st, bringing reference pricing for granular product to $230/st FOB Augusta, Ga., and $255/st DEL in Florida. The company’s new postings for standard grade ammonium sulfate are $192/st rail-DEL in Florida and $175/st FOB Augusta for customers outside of Florida.
Western U.S.: Effective Oct. 12, Agrium’s ammonium sulfate postings firmed to $245/st DEL in Montana and Wyoming, $240/st FOB and $245/st DEL in southern Idaho, Utah, Nevada, and Oregon’s Malheur County, and $240/st FOB and $245/st DEL in Washington, northern Idaho, and Oregon excluding Malheur County.
U.S. Imports: July-August imports were up 58 percent to 57,126 st from the year-ago 36,046 st.
PHOSPHATES
Central Florida: Unit trains out of Central Florida were fully booked through the beginning of April 2008, and single car loads of phosphates were moving quickly. The biggest danger for those who require rail delivery from Central Florida was obtaining transportation. One source noted that 6.8 million mt of DAP and MAP had been purchased for domestic use through August, compared to 5.9 million mt during the same period a year ago. The heavy demand has been primarily due to big surge in the price of corn, which was destined for ethanol plants. Inventories continued to be low, and about the only way that will change is if the product cannot be moved out of the state. Meanwhile, Mosaic’s Bartow processing plant was still out of service last week as its turnaround continued.
With a sharp focus on the situation, Mosaic, which raised its price by $5/st FOB just two weeks ago, was planning another increase for Central Florida this week. Just how much had not been determined. The object will be to reduce the price difference between Central Florida and the river market, where transportation will be easier to obtain.
The other problem facing phosphate production continued to be sulfur, and how to get enough. So far the impact has been minimal, amounting only to earlier turnaround at Bartow, but sulfur supplies remain extremely tight. Negotiations were underway last week, and they will be tough. So far the hurricane season has been kind to the Gulf Coast, but the season does not end until Nov. 30, and any storm could be devastating to sulfur supplies. Sulfur suppliers were said to be asking for a bump of somewhere between $30/lt and $50/lt, which will be a tough pill for the phosphate industry to swallow.
The Central Florida DAP price range moved up last week to $390-$395/st FOB from $385-$390/st FOB the previous week. Mosaic’s posted price remained at $395/st FOB for DAP and $391/st FOB for MAP. CF’s price was $390/st FOB for both DAP and MAP, and PotashCorp’s Central Florida reference price remained at $390/st FOB. In Texas, Agrifos was moving its DAP price up $10/st FOB, taking its truck price from $430/st FOB to $440/st FOB, and railcars from $415/st FOB to $425/st FOB.
U.S. Gulf: Activity at warehouses along the river system was brisk last week, and that situation should continue for another few weeks. Total barge sales were down somewhat from the previous week, because many who were planning on buying did so before Mosaic moved its price up $10/st FOB.
In the wheat country of Oklahoma, DAP and MAP sales were both up, but MAP supplies became exhausted last week. While activity was strong there, traders will not be able to recoup the business they lost the previous couple of months – although they will exceed expectations for October. The delay in planting wheat was the primary reason. Farmers there do not want to take the chance of sustaining frost damage to their plants, so they were either waiting longer to plant or switching to MAP so the plants would grow more slowly and have a better chance of surviving. Last week, terminals still had sufficient supplies of DAP, but MAP will be a problem.
One source said traders were in the dark as to how much phosphate products they will need, because they get their information from dealers and farmers were not telling dealers what their needs will be. Another noted that as prices continue to rise, phosphates, especially DAP, could see reductions in usage, although nitrogen products would not.
Sale prices took a wide stance last week, with sales running from as low as $405/st FOB early in the week to as high as $415/st FOB by week’s end, and many others were made within that range of $405-$415/st FOB. The previous week’s range was $398-$405, which were the good old days. Mosaic’s asking price was $415/st FOB, but others were asking in the $408-$410/st FOB range.
Correction: Last week, Green Markets reported there was a shortage of genetically modified wheat seed in Oklahoma and parts of Kansas, which was incorrect. The Kansas Association of Wheat Growers said there were no known GMO wheat seed varieties in the world, but there are pest resistant wheat seeds. Those can be treated with a fungicide or are naturally more resistant to conditions, such as rust. The association said a shortage of the rust resistant wheat seed does exist in Oklahoma and areas of Kansas. Using the resistant seed reduces or eliminates the need for treatment in the field.
Eastern Cornbelt: DAP and MAP were quoted at $435-$440/st FOB in the region, with forward contract DAP available from one supplier for November at $440/st FOB Peoria, Ill., and $443/st FOB Cincinnati, Ohio. 10-34-0 remained in tight supply, with the market quoted at $375-$385/st FOB in the region.
Western Cornbelt: DAP was steady at $435-$445/st FOB, with most sales out of river locations at the low end of that range. The upper end was quoted out of inland warehouses in Nebraska. MAP was quoted at $435-$440/st FOB in the region.
Tight inventories caused the 10-34-0 market to be “hotter than a firecracker” in early October, according to one source. Most sources tagged the market last week at $385-$395/st FOB, up another $10/st from last report.
Southern Plains: DAP remained at $430-$435/st FOB Catoosa, with MAP quoted at $428-$433/st FOB. As with urea, sources continued to talk of slower-than-normal phosphate movement on preplant wheat in the region. The 10-34-0 market was pegged at $325-$350/st FOB and in tight supply, with the low end reported in the Texas panhandle.
Agrium’s phosphoric acid prices in Colorado, Kansas, Oklahoma, Texas, and New Mexico for October include $705/st rail-DEL for merchant grade acid (MGA) and $715/st rail-DEL for super phosphoric acid (SPA). Postings for both products will increase by $10/st in November and again in December.
South Central: Phosphate pricing was up from last report. The dealer market was tagged at $430-$440/st FOB regional warehouses, with the upper end reported in Arkansas. MAP was quoted at $430-$435/st FOB in the region, and TSP was pegged at $405-$415/st FOB to the dealer, also up from last report.
U.S. Export: Export phosphate sales went on a binge last week, with more than a total of 150,000 mt moving on the market. PhosChem made sales totaling 139,000 mt, which included 35,000 mt to Brazil, 6,000 mt to Africa, and the balance of 98,000 mt into Mexico and Central America. The sales were made at a wide range of $440/mt FOB to $450/mt FOB. In addition, other sales were made by third parties, but details were not available late last week.
Meanwhile, sources continued to say the phosphate market in Europe was “on fire.” However, PhosChem and other U. S. sellers have obtained virtually none of that market. Instead, Russia, the Baltic producers, and North Africa have been the biggest beneficiaries. High freight rates have made it difficult for North American producers to compete. At the same time, those high transportation costs have made it equally difficult for others in the world to compete in the Western Hemisphere for the same reason. Africa appeared to be open to both North American and other world producers. Still, FOB prices of other world producers have been moving up even faster than those of North America, so PhosChem and others here may be at an advantage there.
The export DAP price range moved up again last week, to $440-$450/mt FOB from the previous week’s $440-$443/mt FOB. Prices this week will likely moved up a few dollars. PhosChem’s asking price after its last sale moved up to $455/mt FOB.
POTASH
Eastern Cornbelt: Potash was pegged at a firm $295-$305/st FOB in the region, with very tight inventories reported. Most sources were now quoting any available spot tonnage at the $300/st mark or higher.
Western Cornbelt: Potash remained in very tight supply, with the warehouse market quoted firmly at $295-$305/st FOB range in the region. Several sources quoted the $300/st level as a common dealer price for granular potash last week, provided spot tons could be had.
Southern Plains: Sources quoted the potash market at $234-$242/st FOB Carlsbad, N.M., depending on grade, but product was very tight. There were reports that some suppliers were planning to move their mine reference price up another $20/st Nov. 1, with some already referencing the $267/st FOB mark for granular potash last week. Out of regional warehouses, the market was quoted at a firm $295-$300/st FOB for granular potash.
Effective Oct. 1, Intrepid Potash’s muriate of potash postings FOB Carlsbad, N.M., moved to $234/st for 62 percent standard, $237/st for 60 percent granular and 62 percent fine standard, and $242/st for 62 percent granular. The company’s postings FOB Moab, Utah, moved on that date to $231/st for 60 percent standard and $237/st for 60 percent granular. Postings FOB Wendover, Utah, moved to $245/st for 60 percent standard and $251/st for 60 percent granular.
Great Salt Lakes Minerals, a Kansas-based subsidiary of Compass Minerals, announced on Oct. 3 that it will increase prices on sulfate of potash (SOP) specialty fertilizer products by $35/st on shipments to the U.S. and Canada beginning Dec. 1, and by $60/st on all international shipments effective immediately. The company is introducing the price increases to support investments needed to meet expanding demand.
South Central: Dealers reported some phosphate and potash movement on winter wheat ground last week, with continued concerns about potash availability. Potash remained in very tight supply, and warehouse prices were up significantly from last report. Sources tagged the regional market at $290-$305/st FOB, depending on grade and location, with several speculating that spot tonnage at the low end of that price range was increasingly difficult to come by.
Southeast: Potash pricing was up dramatically from last report, with the upper end quoted at $300/st rail-DEL in the region for granular product. Agrium’s Sept. 26 postings for 60 percent red premium potash included $277/st rail-DEL in Florida, Alabama, Georgia, Kentucky, Tennessee, the Carolinas, and Virginia, and $282/st FOB Norfolk, Lynchburg, Va., Chesapeake, Va., Americus, Ga., Bainbridge, Ga., and Tifton, Ga.
U.S. Imports: July-August imports were up 9 percent, to 1.446 million st from the year-ago 1.33 million st. However, August imports were actually off 5 percent to 756,428 st from 794,197 st.
SULFUR
Tampa: Negotiations for fourth-quarter prices for sulfur contracts were still in the early stages last week, and suppliers and phosphate producers were still far apart. It’s no wonder. ExxonMobil was said to be asking for an increase of somewhere between $30/lt and $50/lt as an opening volley. Perhaps it was a shot across the bow of the phosphate industry. The sulfur industry was quick to point out that not only is sulfur in short supply on the Gulf Coast, it is worldwide as well, and the world price has soared to as high as $150/mt FOB. The sulfur industry, which amounts to oil and gas companies, wants to bring the Tampa market more in line with the world market. That is probably not going to happen, say sources, although it seems almost certain the price will take another hike. Refineries along the Gulf Coast produce large volumes of sulfur, but there are only two priller systems in the area to convert it to an export product. About the only thing they could do would be to aggravate the shortage by producing more prill, but that option is limited.
U.S. Imports: July-August imports are up 7 percent, to 307,263 st from the year-ago 286,568 st. August imports were up 52 percent, to 187,057 st from 123,097 st.
West Coast: Negotiations for fourth-quarter contract prices for sulfur were just getting started for priller operations on the West Coast. Normally, differences are settled more easily there than those for the Tampa market, and a resolution could come as early as this week for some.
Vancouver: Now that semester contracts with Brazil have been settled around $150/mt FOB from Vancouver, talks were said to still be underway with China on their quarterly contracts. Initially, China was said to have taken a hard stance against any more sizable price hikes, but there has been no word on the progress of the current negotiations.
MARKET NOTES
Azerbaijan: India’s Department of Fertilizers is reported to be talking to the government of Azerbaijan regarding a urea project. MMTC could be a probable Indian partner, with the balancing 50 percent to be held by Azerbaijan with a 100 percent urea buyback facility. Talks are in the initial stages.
Ukraine: India’s RCF is reported to be interested in participating in the privatization of the Odessa Port Plant – a fertilizer company in Odessa, Ukraine. The plant has a capacity of 900,000 mt/y of ammonia and 660,000 mt/y urea. The DOF is reported to have asked the Indian Ambassador in Kiev for more information on the privatization process, including data on plant parameters. Ukraine`s State Property Fund is expected to hold a tender for a 99.5 percent stake in the plant. The privatization process went through a tough patch after President Viktor Yushchenko suspended the sale. Later, however, the government clarified that they would indeed sell the plant. The reserve price for the plant is slated to be around $190 million.
Pakistan: The country’s second largest urea manufacturer, Engro Chemical Pakistan Ltd. (ECPL), has signed two financing deals worth around $450 million with local and foreign banks for the establishment of a 1.3 million mt urea complex in the northern Sindh province of Pakistan. The basic aim of these financing deals is to mark the financial closure of its landmark financial plan to raise approximately $1 billion to construct a brand new, world-class ammonia/urea complex at Daharki, district Ghotki, Sindh, said Asad Umer, president and CEO of Engro Chemical. Engro needs some $750 million in financing, while the remaining amount would be borne by the company’s own resources. He said that new plant was expected to commence operations in the first half of 2010, and Engro’s market share for urea was expected to increase from the present 19 percent to 35 percent in 2011. He said at present the country’s urea demand stood at 5.2 million mt, out of which some 4.5-4.7 million mt was local production, while the remaining quantity was being imported.