AMMONIA
U.S. Gulf/Tampa: New NOLA barge business was reported last week at the $285/st FOB mark. Tampa imports are $318/mt DEL for April.
Natural Gas: The Henry Hub NYMEX price for April closed at $3.631/mmBtu, which is reportedly the lowest close for a prompt month in nearly seven years – since September 2002.
Eastern Cornbelt: Anhydrous ammonia remained in the $440-$480/st range FOB terminals to the dealer, with the low out of spot Illinois River locations and the higher numbers in the Indiana/Ohio market. One supplier was referencing forward contract ammonia for May and June at $550-$560/st FOB regional terminals.
Western Cornbelt: The anhydrous ammonia market remained at $400-$450/st FOB most regional terminals for spot tons to the dealer.
Northern Plains: Cash market pricing for ammonia was quoted as low as $450/st FOB in Minnesota, while North Dakota sources reported reference levels at $620/st DEL. One supplier was referencing forward contract ammonia for May and June at $580/st FOB Pine Bend and $610/st FOB North Dakota terminals.
Black Sea: Despite efforts by producers who have product to raise the price, sources say the Yuzhnyy market remained flat last week. Producers have been pushing hard to get the price past $300/mt FOB for a while. Asian sources say most producers need $320/mt FOB just to break even.
Sales from OPZ and some Russian plants have occurred in the past month, but at levels that most facilities cannot handle. Those plants that need netbacks above $300/mt FOB remain closed.
One Asian source noted that in the past the current level of available material would have been matched with strong demand and the price would have gone up. Unfortunately for the producers, demand is not strong enough to sustain any increase in prices.
One observer noted that instead of talking about $300/mt FOB, some producers are now asking $290/mt FOB in the hopes that a steady incremental increase would follow. So far, there are no takers at that level.
Middle East: Indian buying remains the major force for price changes in the area. And last week was quiet.
Sources report rumors of a deal at $289/mt CFR. The netback is estimated at $265-$270/mt FOB. Some argue the price could be as low as $260/mt FOB.
Some area plants are down or are operating at reduced levels to avoid a build-up of excess material. The reduction in output, combined with steady demand from India and other contract buyers, is helping hold prices at their current level.
Sources add that Asia remains a strong buyer as well. Strong demand in Asia means tons from Indonesia and Malaysia will not find their way into markets normally dominated by the Arab Gulf producers. At the same time, said one source, that demand means traders occasionally have to cut deals with a Middle East producer to satisfy a spot sale to Asia.
Asia: The Mitsui/KPA plant in Indonesia went down briefly last week, but was up and running by Thursday. Sources say the issue was a minor hiccup and did not affect the overall performance of the facility.
The KPA plant and the Mitsubishi KPI facility are operating at full capacity and have full order books. Sources say April demand from South Korea and Taiwan remains strong. Some of the buyers are said to be looking at May purchases as well.
For the producers, buyers looking for May tons at the end of March is a hopeful sign steady sales will follow.
UREA
U.S. Gulf: Continued wet weather across much of the heartland was given as the main reason for a quiet barge market last week. The most recent prompt granular sales were reported as $287-$290/st FOB, with some buyers eyeing $280-$285/st FOB for the next round of business.
Eastern Cornbelt: Granular urea was steady at $330-$350/st FOB, with the low out of spot Illinois River locations and the high in Ohio. One southern Illinois source tagged the dealer market at the $340/st FOB level last week.
Western Cornbelt: Granular urea remained at $325-$340/st FOB most regional terminals to the dealer, with the low out of spot Mississippi River locations. The Catoosa/Inola urea market in Oklahoma had reportedly dropped to the $315/st FOB level, but sources said wet conditions in Oklahoma and Kansas have also limited spring field activities.
Northern Plains: Granular urea was quoted at $340-$345/st FOB the Twin Cities. North Dakota sources pegged the dealer market at $390/st FOB and $415-$425/st DEL in the state, depending on supplier and location. “No one has any room until stuff gets moving,” said one source.
Northeast: The granular urea market was quoted at $355-$364/st FOB regional terminals to the dealer. Sources pegged delivered urea in the $375-$380/st range in the region.
Eastern Canada: Granular urea pricing remained at $615-$623/mt FOB in Ontario, with the upper end reflecting list prices to the dealer. Sources reported tight urea inventories out of Montreal.
Pakistan: TCP issued a tender in the middle of March that will close April 20 for 25,000 mt. While waiting for this tender to close, the company issued another tender for 160,000 mt to close April 14. The tender is for bagged urea to be shipped to the TCP facilities at the Korangi industrial area. It is unclear if the urea will be for industrial or agricultural use. Normally TCP buys its agricultural urea in bulk.
Sources were speculating last week that TCP will soon begin a series of 25-50,000 mt tenders for a total of 250-260,000 mt.
One trader noted that TCP apparently wants to do what India did a few years back – buy smaller lots in a steady manner. The idea is to avoid shocking the market to jump on news of a one-time purchase of a quarter of a million tons.
Some sources said the purchases would be to build buffer stock for the next application season. Others argued, however, that Pakistan still needs tons for the current season.
Middle East: Reports are circulating that Sabic is ready to seal a deal with contract buyers in Australia significantly below posted prices. Traders note that contracts usually offer substantial savings to the spot price.
The Sabic-Australia deal is said to be centering on $285/mt FOB for granular, which would make it $20 lower than what producers say they will accept for a spot deal.
Actually, said one trader, the Middle East producers are asking well above $300/mt FOB, but no one is ready to sign on.
The only tons that are moving are those under contract. So some cargoes are heading off to the U.S. and others to cover some deals for Thailand and the Philippines.
The TCP/Pakistan tender for bagged urea could help draw off any excess tons that might be sitting around and tighten the market further.
The new Oman plant is slated to be up and running soon, say Asian sources. The facility is expected to have an annual output of 1.4 million mt. Sources say about two-thirds of the output will be handled under long-term contracts. The remaining tonnage will be offered on the open market.
Black Sea: Traders moved in last week to cover shorts and take positions. The result was a quick move-up in prices. Once the wheeling and dealing was done, however, the market slipped back to the same levels it had been stuck in for the past few weeks. Sources report the apex of the deals was at $260/mt FOB. By week’s end, however, the price settled back into the low $250s/mt and upper $240s/mt FOB.
One trader said he would not be surprised if serious bids were laid on the table in the low $240s/mt FOB this week.
Bangladesh: BCIC called a tender for 200,000 mt to close April 15. The tender is for 100,000 mt each of prills and granular urea. Sources say the country needs the tons. One trader commented that BCIC has gotten better about issuing awards in a timely manner. Others are still hesitant about participating.
In the past, some companies that got awards did not perform. In other cases, BCIC took so long to issue the award that the validity dates of the offers had expired.
India: The general consensus is that the market will not hear from Indian buyers until after the dust settles from the national elections. That means, said one source, the first real shot at a new tender being called will be the first week of May.
NITROGEN SOLUTIONS
U.S. Gulf: Barges were reported at $180-$185/st FOB ($5.62-$5.78/unit), with rumors of $175/st FOB.
Eastern Cornbelt: The UAN market was quoted in a broad range at $7.00-$8.50/unit FOB, with the low out of spot river locations in Illinois for immediate pull. One Illinois source pegged the common dealer price at the $8.00/unit FOB level for what he described as spring prepay. Forward contract UAN-32 for May was referenced at $276-$286/st ($8.63-$8.94/unit) FOB regional terminals.
Western Cornbelt: Iowa sources continued to report the UAN market at a solid $8.00/unit FOB to dealers for spring bookings. Sources confirmed as well that prompt tons could be had for as low as $7.00/unit FOB spot river locations, but buyers have to take it immediately. “There’s really no open space, so it’s somewhat of a moot point,” said one. As for dealer referenced prices, postings remained as high as $280/st ($8.75/unit) FOB in the region.
Northern Plains: The UAN market was pegged at $8.50-$8.75/unit FOB regional terminals, with delivered UAN-28 reported at $270-$275 ($9.64-$9.82/unit) in North Dakota.
Northeast: The UAN-30 market was down from last report, with most pegging the price at $230-$237/st ($7.67-$7.90/unit) FOB Baltimore and Philadelphia. Delivered UAN to points in southern Pennsylvania was quoted at the $250/st ($8.33/unit) mark, while Delaware sources pegged the UAN-32 market at $261.33/st ($8.17/unit) FOB to the dealer.
Out of terminals in upstate New York, the UAN-32 market was referenced at $290/st ($9.06/unit) FOB to the dealer.
UAN vessel tons were being indicated in the $205-$210/mt C&F range for new business, but actual transactions at those levels were not confirmed.
Eastern Canada: The UAN market was quoted at $14.22-$14.39/unit FOB Ontario warehouses to the dealer, down considerably from last report. The UAN-28 market was referenced at $400-$403/mt ($14.29-$14.39/unit) FOB in the region.
AMMONIUM NITRATE
Western Cornbelt: Ammonium nitrate remained at $270-$280/st FOB in the region. Iowa sources tagged the dealer market at the $275/st FOB level last week. The Catoosa/Inola market was reported at the $250/st FOB level.
Eastern Canada: Ammonium nitrate remained at $655/mt FOB to the dealer.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate pricing remained at $225-$245/st FOB in the region. Effective March 30, Honeywell moved its ammonium sulfate postings to $245/st for granular and $235/st for mid-grade FOB warehouse and/or rail-DEL in Illinois, Arkansas, and Mississippi. Those levels reflect a $20/st increase from the company’s March 23 listings.
Western Cornbelt: Granular ammonium sulfate remained at $225-$245/st FOB in the region. Honeywell raised its ammonium sulfate prices $20/st on March 30, with granular pricing moving to $245/st FOB or rail-DEL and mid-grade to $235/st FOB or rail-DEL in Iowa, Missouri, and Omaha, Neb. In the rest of Nebraska and Kansas, postings moved to $255/st FOB or rail-DEL for granular and $245/st FOB or rail-DEL for mid-grade ammonium sulfate.
Northern Plains: Granular ammonium sulfate pricing was up from last report at $235-$245/st FOB and $245-$255/st DEL in the region. Agrium’s granular ammonium sulfate postings moved on April 1 to $255/st DEL in North Dakota, Minnesota, and Wisconsin, up $20/st from the March 1 reference level.
Effective March 30, Honeywell moved its ammonium sulfate postings to $245/st for granular and $235/st for mid-grade FOB warehouse and/or rail-DEL in Wisconsin and Minnesota, and $255/st for granular and $245/st for mid-grade FOB or rail-DEL in the Dakotas. Those levels were up $20/st from Honeywell’s March 23 postings.
Northeast: Delivered granular ammonium sulfate was quoted in a broad range at $200-$265/st, with the upper end reportedly reflecting new postings for rail-delivered tons into New England. The low end of the range was quoted in Pennsylvania, but other sources said the delivered market may have firmed to posted levels at the $255/st mark as of April 1.
Eastern Canada: The granular ammonium sulfate market was quoted at $545/mt FOB in the region. Fine-grade ammonium sulfate reportedly firmed on April 1 to $272/mt FOB from the previous level of $180/mt FOB.
PHOSPHATES
Central Florida: In normal times (a long, long time ago), the price of phosphate from Central Florida was $10-$15/st FOB below the price of a NOLA DAP barge. Currently, the Central Florida price is about $10/st FOB higher than the river. To make matters worse, rail rates have pushed the delivered cost far above that of barges, so sales out of Florida do little to set the overall market. None of that would matter much if the product was moving, but it is not. With the exception of drought-stricken Florida most of the country has had far too much precipitation, and spring has remained more a distant dream than a selling point.
Hopes of an early spring faded at the end of early spring, and now hopes that spring will be the salvation were fading for some in the industry. The U.S. Department of Agriculture said last week that around 85 million acres of corn would be planted this year, but the Corn Belt has been stymied by wet weather. Dealers do not know what farmers are really going to do and were making no moves to fill their warehouses beyond the nearly full levels they already have. Still, the December price for corn was more than enough to encourage farmers to plant – if they only could.
In the meantime, prices in Central Florida were not likely to change, and trucks for delivery to nearby destinations will fill what little spot business pops up.
Production has picked up from year-end lows, but that may not continue much longer if the domestic market does not find a breath of life.
The Central Florida DAP price range remained unchanged from the previous week’s $315-$320/st FOB. PCS Sales had no published price. Mosaic’s price was $315/st FOB for DAP and $325/st FOB for MAP. CF was at $315/st FOB for DAP and $20/st FOB higher for MAP. The price from Agrifos remained at $350/st FOB for trucks and $340/st FOB for rail shipments.
U.S. Gulf: As the calendar moved deeper into spring last week hopes for redemption for the domestic market faded, as wet weather prevented farmers from getting into their fields to prepare for planting. Floods and threats of floods inundated the Midwest in areas of North Dakota and Minnesota, and wet weather was cited as the culprit for lagging sales elsewhere.
Sources said dealers and farmers had not renewed their relationships, and dealers were avoiding making costly mistakes by not ordering replacement phosphate for what they were expected to sell. The USDA said last week farmers will plant 85 million acres, but little in the way of preparation had begun. When it does start the draw will be primarily from warehouses, which were more than adequately stocked to meet that hoped-for demand.
Some areas, such as Oklahoma and Kansas, where wheat is king, were nearly done with their spring seasons, but the Corn Belt had not even started preparations. Stockpiling in the northern areas of the country had already been accomplished, in part because of the lackluster fall season.
Late last week the December price of corn was over $4.25/bushel, which should encourage farmers to plant the USDA crop estimate, so the big question was – when?
“It’s surprising how many phosphate traders don’t know the market (price of DAP),” a source said last week, “but they haven’t been in the market for awhile.”
With a lack of serious selling going on during the past month, the NOLA DAP barge market was adrift, which amounted to drifting downward. Dealers were said to be selling off the newer material they had received in order to avoid writing down the cost of their high-priced inventory. There was absolutely nothing on the horizon that would make that a winning proposition.
The NOLA DAP barge price range last week faltered and sales were made in the range of $305-$308/st FOB, compared to $315-$319/st FOB the previous week. Mosaic has a $10/st FOB additional charge for MAP, while CF’s MAP was $20/st FOB higher than its DAP price.
Eastern Cornbelt: DAP was unchanged at $360-$375/st FOB, with the low out of spot Illinois River locations and the upper numbers in Ohio to the dealer. MAP was $10/st higher than DAP. Forward contract DAP was referenced at $375/st FOB Peoria and Cincinnati. 10-34-0 pricing remained in a broad range at $650-$750/st FOB in the region, with the low in Illinois and the upper end in Ohio.
Western Cornbelt: DAP was unchanged at $360-$370/st FOB river terminals to the dealer, with the upper end reported at the $390/st FOB level out of some warehouse locations in western Missouri. MAP remained at $370-$380/st FOB river terminals and up to $400/st FOB inland warehouses, while 10-34-0 was pegged at $600-$700/st FOB in the region.
Northern Plains: DAP remained at $370-$375/st FOB the Twin Cities, with MAP $10/st higher. One Dakota dealer reported delivered MAP at $415-$440/st from western U.S. shipping points. 10-34-0 was pegged as low as $595-$640/st DEL in North Dakota, again from western locations. In Minnesota, the 10-34-0 market was quoted in a broader and higher range at $650-$730/st FOB.
Northeast: The DAP market was reported at $375-$395/st FOB, with MAP $10/st higher. Most quoted the top end of those ranges as the common dealer values in early April. Delivered DAP was quoted at $408/st in Delaware, with delivered MAP reported at the $426/st level in southern Pennsylvania.
10-34-0 postings remained as high as $950/st FOB the tank in upstate New York, but sources quoted a wide range in delivered pricing as of early April – from a low of $880/st to a high of $1,000/st DEL in the region, depending on location and supplier.
Eastern Canada: MAP was quoted at $945-$954/mt FOB in Ontario, with the upper end reflecting the dealer list price. No current prices were reported for DAP or TSP in the region.
U.S.Export: India was said to have made several purchases of DAP from North American traders last week, but prices on the world market were in decline. Transammonia sold about 100,000 mt of offshore phosphate into India at a price that would net $350/mt FOB Tampa. Shortly after, KeyTrade and Gavilon each sold roughly another 30,000-40,000 mt into India for about $10/mt FOB less. The product sold by KeyTrade was believed to have been produced by CF, while Agrifos produced Gavilon’s load.
PhosChem made no new sales last week.
Meanwhile, India reached a deal to purchase phosphoric acid from Morocco and other providers at $630/mt.
The recent sales to India dropped the export phosphate price range to $340-$350/mt FOB last week, down from the previous $375-$380/mt FOB.
POTASH
Eastern Cornbelt: Potash was steady at $680-$750/st FOB regional warehouses from brokers or resellers. Most sources pegged the dealer market commonly at the $700/st level on the secondary market last week.
Western Cornbelt: Potash remained at $680-$720/st FOB warehouses to the dealer, depending on grade and location, with most sources quoting $700/st as a common dealer price from brokers or resellers.
Northern Plains: Potash pricing FOB Saskatchewan mines remained at reference levels of $767/st FOB for standard, $780/st FOB for soluble, $772/st FOB for granular, and $780/st FOB for white granular. Delivered potash in the region was reported at $800-$830/st, depending on location.
Northeast: Delivered granular potash was pegged as low as $750/st in the region last week from secondary suppliers, while producer postings remained as high as $835-$840/st DEL in the region. Soluble potash was pegged at $886/st DEL in Pennsylvania. Dealers continued to report expected cutbacks in spring usage, with one estimating a 50 percent reduction in his trade area.
Eastern Canada: Potash remained at posted levels of $988-$1,023/mt FOB the mine, with the upper end reflecting reference pricing FOB Sussex, N.B. Out of Ontario warehouse locations, sources quoted red granular potash at $1,025/mt FOB and white granular at $1,034/mt FOB.
The K-Mag market was quoted at $629/mt FOB in Ontario, up $18/mt from last report.
Sulfate of potash was reported at $1,075/mt FOB for reference pricing to the dealer in Ontario.
Colombia: PotashCorp has struck a new deal out of New Brunswick with its major customer in Colombia for the second quarter at a price of $750/mt CFR for standard. One cargo has already left, and four or five more are expected. While this is the same price that Brazil is paying for granular, sources say the standard will go on smaller vessels, which is the reason for the same price.
Vancouver: Canpotex has reportedly sold new cargoes into Indonesia and Malaysia for April and May shipment. The price is put at $735/mt CFR for standard product.
SULFUR
Tampa: Prices for the second quarter, which began last week, were in the very early stages and the usual had been accomplished – which was nothing. Don’t expect a quick settlement, because the picture remains cloudy.
While supply and demand were nearer equilibrium, that may not continue for long. In the U.S., the phosphate market was faced with a delayed spring starting date due to wet weather. Sources say if that trend continues and the season dies on the vine, phosphate production, which accounts for about 75 percent of sulfur consumption, will be curtailed once more and sulfur will fall into an abyss at the same time refineries are hitting maximum production for the summer driver season. With the world economy in the tank, industrial production, as well as that of fertilizer, may soon follow.
Transportation was not a problem on any front last week, and refineries were running around normal.
MARKET NOTE
India: With commercial production of natural gas from the Krishna-Godavari block just days away, Reliance Industries Ltd. (RIL) has signed the much-awaited gas sales and purchase agreement (GSPA) with fertilizer companies for a supply of natural gas to be produced from the KG-D6 block. The GSPA was signed with 12 customers in the fertilizer sector for supplying approximately 15 million standard cubic meters (mmscmd) of natural gas at 15 different urea manufacturing facilities.
RIL was to start producing gas from the KG field by the end of March 2009. The duration of contract under the GSPA is five years. The gas price in the GSPA is as per the formula approved by the government, and the supply of gas is expected to commence shortly. The East-West Pipeline built by Reliance Gas Transportation Infrastructure Ltd. (RGTIL) would be used to transport gas from KG-D6 block to the fertilizer companies by inter-connecting with pipelines of GAIL and GSPL.
Fertilizer companies also signed a gas transportation agreement (GTA) with RGTIL. The fertilizer companies that will be supplied natural gas from KG D6 include Nagarjuna Fertilizers & Chemical Ltd., Rashtriya Chemicals & Fertilizer Ltd., IFFCO, KRIBHCO, GSFC, GNFC, Tata Chemicals, National Fertilizer Ltd, Chambal Fertilizer & Chemicals Ltd., KRIBHCO Shyam Fertilizers Ltd., IndoGulf Fertilizer, and Shriram Fertilizer & Chemicals Ltd.