AMMONIA
U.S. Gulf/Tampa: The Tampa price is up $55/mt DEL for March to $635/mt DEL. Sources say new business at that level was concluded between Yara and CF. Some expressed surprise that the price went up so high. Buyers claim that Tampa tanks will be full going into April, and they are hopeful prices will retreat the next time around.
In the meantime, vessels to other Gulf ports were put within the $625-$655/mt DEL range, with the last done at $655/mt. The last done barge is called $610/st FOB.
Eastern Cornbelt: Dealers were just waiting for the spring season to kick off, but winter was lingering in the region in early March. Cash market ammonia remained at $675-$685/st FOB in Illinois last week, with dealer reference prices as high as $700-$710/st FOB in the region. Sources reported little new business out of regional terminals, however. Sources said most suppliers had pulled in their horns on offering fall prepay ammonia after taking a lot of orders in February.
Western Cornbelt: Anhydrous ammonia remained at $640-$670/st FOB in the region for spot tons, with the low reported in Nebraska. Sources reported little new business to test the market last week, however.
California: Anhydrous ammonia was steady at $675-$690/st DEL in the state, but sources said increases are expected in March. Calamco was referenced at $675/st truck-DEL and $690/st rail-DEL, while Agrium’s truck-DEL postings included $675/st in Central California and $680/st in Northern California.
Aqua ammonia was posted at $185/st FOB Stockton and Colusa, Calif. Sources said rice growers will start flood irrigating heavily with aqua in April, provided weather conditions allow it.
Pacific Northwest: Anhydrous ammonia was pegged at $715-$730/st DEL in the region, with reference prices quoted as high as $750/st DEL and higher last week. Sources quoted aqua ammonia at the $176/st level FOB Ritzville, Wash.
Western Canada: Anhydrous ammonia pricing was quoted at $853-$889/mt DEL in the region, unchanged from last report.
Black Sea: The Ukrainian government is confident prices will remain strong. It raised the KIP to $500/mt FOB.
The current market is much higher than the KIP right now. While sources expect to see the price soften as we move into spring, observers note that by designating the new level at $500/mt FOB, the government and producers are looking to hold onto most of the gains made in the past year.
One Asian source said the Yuzhnyy price has little room for further advances. He cautioned against using European or American prices to estimate a Black Sea netback. Freight rates, he said, are moving up. Higher delivered prices are expected without a corresponding increase in the FOB price.
Prices also received some support when the flow of natural gas to plants was cut back.
The Russian gas supplier Gazprom cut supplies to Ukraine by half when the energy giant and the Ukrainian government could not reach an accord on payments for past debts. Early last week Gazprom said the action was needed to get Ukraine back to the negotiating table to discuss $600 million in unpaid debt.
The earlier talks were halted when Gazprom bumped the price from $179/thousand cubic meters to $314. The Ukrainian prime minister said the country’s industries could not easily absorb such a dramatic price increase.
The hardball tactics by Gazprom came as Russia completed its election for president.
The winner was Gazprom chairman Dmitry Medvedev.
The move, media analysts said, indicated Medvedev will follow the same hardline policies of his mentor and predecessor, Russian president Vladimir Putin. Part of the policy, these analysts said, is aimed at punishing Ukraine for its turn to the West and its bid for NATO membership.
By late March 6, reports were that Gazprom and Ukraine had come to terms.
For now, sources say the price in Yuzhnyy remains at $560-$575/mt FOB.
Middle East: Producers in this area are perhaps the most confident of all ammonia manufacturers in the world. To underscore that confidence, Qafco announced it would participate in the just-called FACT tender and that it would be offering at $530/mt FOB. For industry watchers the Qafco move carried a couple of messages.
In the first place, it showed that Qafco, unlike other area producers, had sufficient tons available to cover the 2×7,500 mt request from FACT. In the second place, its announced asking price is at the high end of the current market price range.
In the past Qafco has always offered material at lower-than-market rates to ensure a sale. This time, said one source, either the market has moved way beyond $530/mt FOB or Qafco is showing support for the current price regime in the area. This observer said the latter is more likely than the former.
Even with the threat of $530/mt FOB becoming the low end of the price range, buyers in Asia have a much greater threat posed for this month.
A large number of vessels are out of position to service Eastern markets such as India, the Philippines, Korea or Taiwan.
It seems the lucrative American market is pulling shipload after shipload of material.
In addition to vessels going off their traditional routes for the month, sources say routine maintenance will take others out. Nitrochem, for example, will be pulling its main vessel into dry dock for routine work.
Until the FACT tender is awarded, sources say the price will remain at $520-$530/mt FOB.
India: FACT called a tender to close March 10 for two cargoes of 7,500 mt each. The tender will call for April and May deliveries. So far only Qafco/Qatar has expressed an interest in the tender. With ever-tightening supplies, sources say Qafco may become the only offering firm in the tender.
Overall, Indian demand is climbing. Sources report contracts have been issued for more phos acid and sulfur. With these purchases the DAP producers will need more ammonia to turn out their product.
UREA
U.S. Gulf: Cold, wet weather continued to plague the NOLA barge market, putting pressure on some sellers to let go of barges at lower numbers. While most sellers were still trying to hold prices in the $370s/st FOB, others last week reported sales as low as $360/st FOB.
Sellers expect that once the weather breaks in favor of spring, that urea barge demand will be enough to cause a price bounce. Others disagree, claiming that inland purchasing was done very early and is well stocked. Sellers also cite rebounding prices in the Black Sea as well as more demand in the international market, particularly India, as other reasons for NOLA to turn around.
Eastern Cornbelt: Granular urea was pegged at $415-$430/st FOB in the region last week, with few sales to test the market.
Western Cornbelt: Granular urea was quoted at $410-$420/st FOB regional terminals, down slightly from the previous week. The low was reported in Missouri, with the upper end to dealers FOB Clinton, Iowa.
California: Granular urea remained at $490-$510/st FOB and $510-$515/st DEL in the state.
Pacific Northwest: Granular urea remained in a broad range at $485-$535/st DEL in the region, depending on location, with the low end reported for some limited tons on a rail-DEL basis.
Western Canada: Granular urea was steady at $575-$600/mt DEL.
India: After much waiting a major Indian buyer has stepped forward. MMTC announced a tender March 6 just as the Asian markets closed. The tender will close March 12. Delivery of the material is slated for April through September. The buyer wants the offers split into cargoes for April to June and July through September.
As usual, MMTC did not specify quantities. Traders, however, were busy last week looking to take positions on cargoes from Yuzhnyy to China.
Buyers from MMTC and IPL were reported moving among the major urea suppliers during the waning days of February. Sources reported at the time that no deals were struck.
With the announcement of a tender, however, observers are beginning to wonder if some deals were actually made.
Some Asian sources were sure Middle East suppliers will have a taste of the upcoming tender. Given the high price of Middle East urea claimed by producers and a continued strong freight market, observers speculate that any deal would have to be below current market rates.
In the tender documents, MMTC already cleared as pre-approved suppliers six major trading houses: Helm, Transammonia, Toepfer, Keytrade, Ameropa and ConAgra.
Black Sea: The combination of a temporary cutback in natural gas supplies, traders covering shorts and the MMTC/India tender pushed prices back up. Sources now report the price has moved to $350/mt FOB with every likelihood it will move up some more. Adding to the price increases are reports that buyers in Africa and Egypt will take enough to support higher prices.
The natural gas cut-off came as a dispute between Russian supplier Gazprom and Ukraine came to a head. The reduction – by as much as 50 percent – was a tactic to get the Ukrainian government back to the negotiating table.
Ukraine owes about $600 million in back payments of Russian gas.
Kiev objected to a 43 percent increase in the price of the gas and sought a way out of having to pay the full price all at once. As negotiations stalled, Gazprom and the Russian government got frustrated, leading to the closing of the gas valves to Ukraine.
The newly elected president of Russia is Gazprom chairman Dmitry Medvedev, so Ukraine does not expect any sympathy from Moscow for its plight.
Middle East: Sources say the market remains in the $520-$530/mt FOB range for granular and prills. But that should change after results from the MMTC/India tender become known.
Sources are torn about what will happen. If MMTC buyers were successful in securing pre-tender contracts with Middle East suppliers, observers say we might see a slight softening of area prices for at least the first half of the tender period, April to June.
If the buyers were unsuccessful, as many in Asia claim, then no discounts are expected. Prices will remain high and might even be pushed higher.
For the Indians they will have to balance ease of shipment – advantage to the Middle East – against lower prices – advantage to China.
Hiccups in production in Saudi Arabia have apparently been cured.
Sources report production is back to normal after a number of small problems popped up in the Safco IV facility.
Indonesia: Asian sources expect to see export tenders issued by the end of March. Reportedly, domestic demand was not as strong as government experts estimated. The state-owned producers were also able to stretch their supplies to farmers by mixing granular with prills.
Indonesian farmers prefer prills and will generally refuse to use only granular.
To avoid building stockpiles of unwanted granular the producers began mixing the two flavors of urea several years ago. So far there have been no complaints.
The granular producers also cut back on some production. This action allowed them to ship ammonia offshore for significant profits.
Pakistan: The country is estimated to need about 2.5 million mt of urea to meet demand in Kharif 2008 season (April-September). According to the latest report of National Fertilizer Development Centre (NFDC), the country’s total demand would be met through domestic production of 2.28 million mt and carry over stock of 328,000 mt of urea. However, it is pointed out that there might be pocket shortages beyond July, which is expected to be met through imports.
NITROGEN SOLUTIONS
U.S. Gulf: No movement was reported last week, with most players putting prices within the $300-$310/st FOB ($9.38-$9.69/unit) range.
Eastern Cornbelt: UAN remained at $11.41-$11.65/st FOB most regional terminals to the dealer, with postings as high as $12.00/unit FOB.
Western Cornbelt: UAN-32 was pegged at $360-$370/st ($11.25-$11.56/unit) FOB regional terminals.
California: UAN-32 was unchanged at $400-$410/st ($12.50-$12.81/unit) FOB in California.
Pacific Northwest: UAN-32 was up slightly from last report, with sources tagging the regional market at $410-$425/st ($12.81-$13.28/unit) DEL.
Western Canada: UAN-28 was quoted at $362-$378/mt ($12.93-$13.50/unit) DEL in the region.
AMMONIUM NITRATE
Western Cornbelt: Ammonium nitrate was pegged at $385-$395/st FOB, with the low in Missouri and the upper end in Iowa.
California: No market was reported for ammonium nitrate in the state. The CAN-17 market was steady at $310-$320/st FOB. CAN-27 was reported at $385/st FOB from one regional supplier.
Pacific Northwest: Ammonium nitrate was reported at $447-$455/st rail-DEL in the region, actually down slightly from last report. CAN-17 remained at $294-$304/st DEL in the region.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was steady at $290-$300/st FOB in the region.
Western Cornbelt: Granular ammonium sulfate remained at $290-$300/st FOB in the region. Agrium’s ammonium sulfate postings firmed on March 7 to $322/st DEL in North Dakota, Minnesota and Wisconsin, reflecting a $15/st increase from the March 1 postings.
American Plant Food Corp. also announced some price hikes to its ammonium sulfate postings in Texas. Effective March 17, granular ammonium sulfate postings from the company will firm to $245/st FOB Freeport, $270/st FOB Galena Park, $280/st FOB Fort Worth and $290/st FOB Littlefield. Coarse potash postings will move to $245/st FOB Freeport, $255/st FOB Galena Park, $265/st FOB Fort Worth and $275/st FOB Littlefield, while standard grade postings will firm on that date to $235/st FOB Freeport and $265/st FOB Littlefield. APF’s postings for N-Pac Compacted product will move on March 17 to $275/st FOB Galena Park.
California: Ammonium sulfate pricing was up to $310-$330/st FOB, with the low quoted for standard grade and the upper end in desert areas of the state. Sources reported strong movement on winter wheat, orchards and also on fruit and nut trees.
Pacific Northwest: Sources tagged the ammonium sulfate market at $302-$317/st DEL, depending on supplier, but increases were on the way. Agrium raised its ammonium sulfate postings on March 1 to $317/st DEL in Montana, Wyoming, Idaho, Washington, Oregon, Utah and Nevada. Agrium’s ammonium sulfate postings FOB the warehouse firmed on that date to $312/st in Washington, Idaho, Oregon, Utah and Nevada. Last week, however, Agrium announced additional ammonium sulfate increases. Effective March 7, postings firmed $15/st to $332/st DEL in Montana, Wyoming, Idaho, Washington, Oregon, Utah and Nevada, and $327/st FOB warehouses in Washington, Idaho and Oregon.
Some noted that the rapidly climbing elemental sulfur prices were behind the upswing in ammonium sulfate prices. Several sources said Tiger-90 had moved up dramatically to $650-$660/st DEL in the region. 12-0-0-26 ammonium thiosulfate has also reportedly firmed, from $203/st to $243/st FOB.
Western Canada: Granular ammonium sulfate pricing in the region firmed on March 1 to $410-$415/mt DEL, up $20/mt from last report. Sources reported dramatic increases in elemental sulfur prices.
PHOSPHATES
Central Florida: As a result of heavy domestic rail shipments and export business, inventories in Central Florida were rapidly shrinking last week, making prompt deliveries hard to find, and prices were still rising rapidly.
Extremely wet conditions, both rain and snow, continued to be a problem in the Northeast and Midwest last week, and that has kept farmers from working their fields. That factor has also kept dealers’ bins full, making reordering unnecessary. “As soon as the weather cooperates, things will begin moving again,” one source said. Another added, “Mother Nature is still in charge.”
Prices for Central Florida phosphates continued to rise last week and will again this week. Last week, PhosChem announced that it had hit the magic price of $1,000/mt for two sales into Central America, and Mosaic was considering raising its asking price to $900/st FOB Central Florida, although no final decision had been reached as of late last week. The reality is that because there is so little available for prompt deliveries, index prices, which are based on actual, prompt sales, do not reflect the actual market, which was running $50-$75/st FOB over the index. Advance sales were above the current index. Early last week, CF issued a price list putting DAP/MAP at $820/st FOB, up from $810/st FOB, but the price was good only from March 5 to March 7.
Agrifos had planned to begin a turnaround on April 2, but has postponed that work until June, in order to take advantage of the bustling market.
Based on actual sales, the Central Florida DAP price range remained at $745-$795/st FOB last week, but do not expect to find that available from anyone. Mosaic will be asking somewhere around $900/st FOB for prompt shipments of DAP and MAP, after dropping its $4/st FOB discount for MAP. PCS Sales’ Central Florida reference price rose from $79O/st FOB to $820/st FOB beginning March 6, but was subject to change. CF’s asking price increased to $820/st FOB for DAP and MAP through March 7. Discounts for national accounts were no longer available. MAP supplies continued to be scarce. In Texas, Agrifos’ price remained at $830 for truck and $825/st FOB for rail, but the company was less than eager to make new sales.
U.S. Gulf: Cold and wet weather — rain and snow — put a damper on barge and warehouse sales along the river system last week. Last fall, farmers put out heavy applications of phosphates, and dealers’ bins were still full in many areas. Once the weather permits, field work begins and dealers will start reordering.
However, that did not keep prices from increasing last week. The highest prices were paid in the more northern areas of the country, while New Orleans continued to offer better deals. Some companies were working to have barges ready to head north, once the river opens on March 15, and have positioned barges in the St. Louis area.
Terminals on the Arkansas still had plenty of phosphates but the current on the river was so strong last week, barges were unable to make the trip north out of Rosedale. Recent heavy rains and snow were cited as reasons for the heavier flow, and more rain and snow were forecasted for late last week. If the farmers are not able to get to work in the fields before the river is navigable, phosphate supplies will evaporate in about 10 days for most terminal operators.
Warehouse prices were still lagging behind replacement costs, but were on the rise last week. On the Arkansas River, the price was running about $830/st FOB at the terminal, but as low as $800/st FOB in the Deep South. On the Illinois and Mississippi rivers south of Cairo, prices were $830-$845/st FOB, and as high as $850-$860/st FOB in Minnesota. Those prices have been a boon to traders, many of whom were still receiving barges ordered earlier for as little as $405/st FOB. With profits around $400/st on barge tons, “A person could sell two barges and have enough to retire,” one source said.
Several sources said that once the field work has begun, everyone will begin ordering at the same time, and shortages could become a reality in corn country, which will have heavy demand for spring.
Under its summer fill program, Mosaic was asking $830/st FOB, but some were balking at the price. “At those prices, I’m not buying for summer. I’m too chicken,” one trader said. “We’re good for spring. I’m not willing to make that kind of an investment.”
The highest prices paid last week were for three DAP barges at their destination, which brought $820/st FOB plus freight and storage, while the lowest were for several NOLA DAP barges at $804/st FOB. In addition, Mosaic sold a MAP barge at $840/st FOB, and no longer has a price differential for DAP. The NOLA DAP barge price range last week was $804-$840/st FOB. Mosaic had a single DAP barge available for prompt delivery last week at an asking price of $900/st FOB. With the export price hitting $1,000/mt FOB last week, expect NOLA DAP prices to continue rising.
Eastern Cornbelt: Phosphate pricing continued to move up quickly. DAP and MAP were quoted at $830-$845/st FOB Illinois River and Mississippi River terminals south of Cairo, Ill., and up to $850-$860/st FOB north. One regional supplier was referenced at $850/st FOB for DAP and $860/st FOB for MAP late in the week. No current prices were quoted for 10-34-0 in the region due to very limited supply.
Western Cornbelt: Phosphate pricing continued to ratchet up in the region. Sources quoted the warehouse market at $830-$850/st FOB for DAP, with MAP pegged at $840-$860/st FOB. The upper end of both ranges was reported in Iowa.
California: Sources quoted the DAP market at $840/st FOB or DEL, with MAP $15/st less. Those levels were up dramatically from last report. 16-20-0 was also on the rise at $480-$485/st FOB, and 10-34-0 was pegged at $440-$452/st FOB in the state.
Simplot was referenced at $825/st DEL for MAP and $840/st DEL for DAP in California. 16-20-0 pricing from the company was reported at $485/st FOB Lathrop, Calif., and 0-45-0 TSP reference prices were quoted at $655/st FOB warehouses or rail-DEL in California. Effective March 10, Simplot will raise these levels $80/st for DAP and MAP, $35/st for TSP and $30/st for 16-20-0. As a result, postings will move on that date to $920/st DEL for DAP, $905/st for MAP, $690/st FOB or DEL for TSP, and $515/st FOB Lathrop for 16-20-0.
Agrium released two new price lists for ammonium phosphates in late February. The first, which showed an effective date of March 1, pushed the company’s MAP postings to $800/st FOB or rail-DEL in California and Arizona. Agrium followed that price list, however, with another that tacked on an additional $25/st. According to that list, effective Feb. 26, Agrium’s MAP postings moved to $825/st FOB or rail-DEL in California and Arizona.
Agrium announced another increase on March 7, moving the MAP market to $905/st DEL or FOB in California and Arizona.
Effective March 1, super phosphoric acid (SPA) and merchant grade acid (MGA) were quoted at a firm $9.60/unit DEL in the region. In addition, Simplot’s MGA postings FOB local warehouses in California firmed on that date to $9.80/unit. Agrium’s phosphoric acid prices moved on March 1 to $960/st rail-DEL for both SPA and MGA in California and Arizona, with $10/st per-month increases slated for both products in April and May.
Pacific Northwest: Regional sources reported a continually and rapidly firming market for phosphates. Simplot in late February announced a $70/st increase for DAP and MAP pricing in the Pacific Northwest. The company’s postings for Idaho and Utah include MAP at $815/st DEL and DAP at $830/st DEL. In the Washington and Oregon market, MAP pricing was pegged at $820/st DEL with DAP at $835/st DEL. In eastern Montana, MAP was posted at $825/st DEL with DAP at $840/st DEL. In western and central Montana, Simplot’s reference prices were at $810/st DEL for MAP and $825/st DEL for DAP.
Effective March 10, those postings will be firming $80/st across the board, putting the new reference levels at $905-$920/st DEL for DAP and $890-$905/st DEL for MAP, depending on location.
Agrium released two new price lists for ammonium phosphate in late February. The first, which showed an effective date of March 1, pushed the company’s MAP postings to $785/st DEL in Montana and Wyoming; $790/st DEL in southern Idaho, Utah, Nevada and Oregon’s Malheur County; and $790/st FOB and $795/st DEL in Washington, northern Idaho and Oregon, excluding Malheur County.
Agrium followed that price list, however, with another that tacked on an additional $25/st. According to that list, effective Feb. 26, Agrium’s MAP postings moved to $810/st DEL in Montana and Wyoming; $815/st DEL in southern Idaho,