AMMONIA
U.S. Gulf/Tampa: The Tampa market moved up last week with word that Yara had concluded new business at $260/mt DEL for August with major customers. In addition, traders were reported to have struck a deal at $270/mt DEL. Sources attributed the higher prices to outages in Europe, and the U.S., i.e. Donaldsonville in particular, which Terra now says will likely come back up in August due to higher prices. Another positive factor for ammonia sellers is the positive phosphate market, which has been seeing better export sales and increased production levels.
Eastern Cornbelt: Sources tagged the regional dealer market for ammonia in the $320-$340/st FOB range, depending on location and time of delivery. “Everyone is trying to be a little more bullish as everyone is a little short,” said one source. In fact, low inventories were prompting some suppliers to talk of $400/st FOB dealer pricing for the next round of sales.
Forward contract ammonia for August through December was posted last week at the $365/st level FOB regional terminals from one supplier.
Western Cornbelt: The anhydrous ammonia market was quoted at $305-$320/st FOB regional terminals, with the low in Nebraska and the upper end reported in Iowa. Forward contract ammonia for August was referenced at $325/st FOB in Nebraska, $350/st FOB in Iowa and $360/st FOB in Missouri.
Southern Plains: The anhydrous ammonia market was quoted at $245-$260/st FOB regional production points and roughly $280/st FOB Kansas pipeline terminals for cash market tons. One producer was reportedly trying to raise its price last week to $275/st FOB plant gate, but sources reported no new sales at that level.
South Central: The anhydrous ammonia market was tagged at $300/st FOB Memphis, Tenn., and Henderson, Ky. Sources said suppliers were trying to firm to the $320/st FOB level for the next round of sales, however, particularly in the wake of news last week that major players had concluded Tampa ammonia business at $260/mt DEL, reflecting an $80/mt increase from the previous level.
Black Sea: Industry observers were waiting for the Tampa market to move and it finally did. With purchases of ammonia at $260/mt CFR into Tampa confirmed late last week, sources say the Yuzhnyy market moved accordingly.
Asian sources report that as the week closed, bids of $220/mt FOB were being left on the table. Suppliers are now looking at $235/mt FOB – at least as this week begins.
Observers say increased demand for ammonia in the States and Europe combined with the continued strong demand in Asia should provide a solid basis for steady price increases.
The price moved quickly. Last week began with unconfirmed reports of deals near $200/mt FOB. By mid-week, the price had shot to $205-$210/mt FOB. Then came reports that Yara did deals in Tampa at $260/mt FOB and that a trader concluded business at $270/mt CFR. And everyone scrambled to do the math to figure out freight rates and a Yuzhnyy equivalent.
Finally, by the time Green Markets went to press late last week, sources were saying $235/mt FOB was the lowest producers would accept.
For Ukrainian producers the price increase is good news but not good enough. Asian sources maintain the break-even price for these producers is $320/mt FOB.
The issue facing players on both sides of the negotiating table is figuring out how long this bull market will run. If the price gets close to the production cost, sources say the Ukrainian plants will come back online. The subsequent influx of more ammonia could soften prices unless demand remains firm. And it is the strength of the demand that has people puzzled.
The strength in Asia is coming primarily from the industrial buyers. Sources say American and European demand is more from the fertilizer industry, with better-than-expected demand for the export phosphate market in the U.S.
The seasonality of the fertilizer business could mean the producers will only have a few weeks to grab what benefits in pricing they can. For now, however, the price is on an upward trajectory. Sources peg the price at $220-$230/mt FOB from last week with higher prices expected as this week opens.
Middle East: Producers in this area have been comfortable with their contracts and occasional spot deals. Helping keep prices healthy in the Middle East has been steady business from Indian phosphate producers and exceptionally strong demand from Asia.
Traders covering Asian business have had to resort to spot purchases instead of the swapping of cargoes.
Earlier this month Mitsui and Mitsubishi had to buy tons to cover their contracts. Last week, Mitsubishi was back in the market.
The Japanese trading house ended up paying Sabic $225/mt FOB for about 7,000 mt.
About the same time FACT in India sealed a deal with Sabic for $253/mt CFR for an estimated netback of $223-228/mt FOB.
Prices in the area have been edging up, as Asian demand remains stronger than many had expected.
The jump in price last week—$10-$15/mt—came as European and American demand began picking up.
Sources say the producers are more than comfortable through August. Some are now talking about September being another good month for sales.
The area market is now pegged at $225-$230/mt FOB.
Asia: Industrial demand for ammonia remains strong. This demand is having an effect on prices as far west as Yuzhnyy.
Sources report that by reaching into the Arab Gulf to satisfy Far East demand, other buyers have had to go to Yuzhnyy to get the ammonia they need.
Even with the Indonesian-based exporters KPA and KPI running at full capacity, sources say Mitsui and Mitsubishi have had to enter the spot market to satisfy their contract buyers.
Sources report MITCO in Malaysia is up and running again but at reduced capacity.
UREA
U.S. Gulf: The urea market continued to strengthen last week as sources said anyone needing to buy is having a hard time finding a barge. There were unconfirmed reports that CF was sold out for August and was in the market for August itself. There were also reports of vessels coming in later than expected.
Add to this several reports that Koch is taking its Enid plant down for a 10-14 day turnaround Aug. 15. Both inland and at-NOLA prices were moving up.
Most put new urea barge trades within the $270-$280/st FOB range with $285/st FOB being quoted at the end of the week. There were a few who still argued that barges could be had sub-$270/st early in the week, but most sources said those were gone.
Eastern Cornbelt: Granular urea pricing continued to firm as NOLA barge values crept up. Sources tagged the regional terminal market at $300-$315/st FOB, with delivered urea reported at the $325/st level in Indiana and Ohio.
Western Cornbelt: Granular urea pricing was up from last report, with sources tagging the dealer market at $300-$315/st FOB most regional terminals last week. There was speculation that pricing out of some inland warehouses might firm to the $330/st FOB level as movement for winter wheat planting approaches.
Southern Plains: Urea pricing was moving up on the heels of higher postings. Sources said interest is heating up for the next winter wheat crop, and inventories are reportedly low. “The cupboard is bare,” said one, who noted that delayed cargoes of import tons at the Gulf could impact the wheat run. Inventory concerns were also raised by news that Koch will take its Enid, Okla., plant down on Aug. 15 for a 10-14 day turnaround.
As a result, Koch’s urea posting at Enid firmed from $300/st to $315/st FOB last week, and sources said that level was setting the tone. Sources said reference levels at Inola, Okla., had firmed from $315 to $320/st FOB. “There’s not much physically moving, but a lot of talk at the producer to trader level mainly, not much at the dealer level although you’re starting to get a few more farmers pushing the dealer, which will pick up speed as winter wheat planting approaches,” said one source.
South Central: Urea continued to dribble on rice in the region, with some sources speculating that movement could stretch into early August due to the wide range of crop development. Urea pricing out of regional terminals ranged from $285-$300/st FOB, with the low reported in Arkansas. Supplies were described as tight, with barge and terminal values creeping up every day.
Southeast: Granular urea was quoted at $300-$310/st FOB port terminals, with delivered urea pegged at the $320/st level on a spot basis in North Carolina. Several locations remained out of product last week.
India: In a surprise move, MMTC called a tender to close July 29 for August shipping. That the tender was called was not a surprise. That it was by MMTC instead of STC is what surprised traders. Sources expected STC to call the tender because it was the next company on the standard rotation. MMTC and IPL had each called tenders earlier this year. Only STC remained.
The tender documents did not specify how many tons MMTC was ready to buy. Sources say this is normal procedure for the Indian buyers.
If the price is right, said one trader, MMTC will attempt to secure as many tons as possible. If, however, the price is higher than MTMC feels is fair, the buyer may take only a token cargo or scrap the tender entirely.
The buyer faces a strengthening market. On the positive side for them, TCP/Pakistan cancelled its two remaining tenders for 50,000 mt each.
An observer noted that with TCP out of play, there is less competition for the urea available in August and September.
The tender was most likely called at this time, said one trader, to ensure the participation of traders offering Chinese urea.
The window on low-cost Chinese urea ends September 15. After that date, the export duty is slated to jump from 10 percent to 110 percent.
Pakistan: In an announcement dated July 16 but not released until July 21, TCP cancelled its two remaining urea tenders for 50,000 mt each. The cancellation was disappointing but not surprising.
The government made it clear that it wanted to arrange for the importation of 300,000 mt by the end of July. In the tenders TCP held between June 30 and July 14, the company arranged for 325,000 mt to arrive by the end of August.
Many in the industry looked at the purchases more as buffer stock rather than absolute necessity. Media reports from Pakistan referred to complaints by local political leaders of shortages in important constituencies.
The central government, in making it clear the tons would be purchased one way or another, threatened to give permission to private companies to import urea if TCP could not deliver. At the same time, the finance ministry worked with private banks to ensure letters of credit issued by TCP would be honored.
One big fear was that any attempt to purchase the whole 300,000 mt at once would cause a dramatic spike in prices.
The first two tenders were for 100,000 mt each, but TCP only took 85,000 mt from three suppliers from those tenders. Subsequent deals showed higher prices but no dramatic spike.
The issue facing the local buyers of the urea slated to come in is making sure the internal delivery infrastructure works. Local governments have expressed their concern that urea ordered earlier is still piled up at the Gwadar port because sufficient inland transportation was not arranged. Central government agencies argue the local complaints are groundless.
Black Sea: With Pakistan finished and India coming in, sources expected to see a steadying in prices. That was not to be. Sources reported last week that deals in the upper $240s/mt FOB were concluded. They add that producers started asking $260/mt FOB but quickly bumped their asking price to $265-$270/mt FOB when traders nibbled at the new price level.
Sources say one buyer – reportedly Transammonia – concluded a deal for 10,000 mt at $260/mt FOB late last week.
The increase in pricing has more to do with strong demand for urea from other sources rather than directly from Yuzhnyy.
Latin America reportedly came in strong for granular cargoes from China and moved up the export price.
At the same time, the Middle East suppliers remain comfortable with full order books through August.
With the Indian business looming and prices firming, Yuzhnyy cargoes became attractive to a number of trading houses.
The biggest drawback for Black Sea tons making it to India, say Asian sources, is still higher freight rates. Vessel owners are wary of sending their ships through the Suez Canal because the vessels must then pass near Somalia and the nearby pirate-infested waters. Avoiding the Horn of Africa means taking more time to go around the Cape. Either way, say sources, freight rates will be the determining factor in any deal involving Black Sea urea.
As the week closed, sources said the price range from the area was $250-$260/mt FOB with this week looking to settle in the mid-$260s/mt FOB.
Middle East: Producers remain comfortable. Sources say the area order books are full through August. Because the material moving out of the Arab Gulf is based on previously announced business and because no spot tons are available, sources say the price in the region remains in the low $270s/mt FOB.
One observer noted that with Egypt coming in at $270/mt FOB, the Arab Gulf producers feel confident claiming their new price – if anyone were to ask – would start at $275/mt FOB and go up from there. The problem is nobody asked last week.
Sources say producers will most likely actively participate in the upcoming MMTC/India tender. Middle East suppliers have always had an advantage selling to the Indian market. The proximity of India allows producers to offer a wider variety of shipping options from panamax to 7-10,000 mt lots.
Purchases from China and the Black Sea usually involve only panamax vessels. These orders limit where the material can be off-loaded.
Sources do not expect the producers to be aggressive in their offers this time around. One trader said the issue for the producers is not to be too greedy.
Last year, when sales were low, the area producers offered tons into a tender significantly below the market rate. By undercutting all the other competition, the Middle East suppliers were able to secure large orders for several months. This time, say sources, the producers are not under the same pressure. The price is down more by more than $500/mt since last year at this time and buyers have been stepping up to fill order books without a great deal of arm twisting.
China: A flurry of buying from Central and South America has a large number of vessels hauling out urea and moving up the price.
Sources report that Chinese granular – the most popular item last week – moved up from parity with prills into the mid-$260s/mt FOB. At the same time, prills remain in the upper $250s/mt FOB.
Even with the sales, sources say many ports still have plenty of urea available for export with more being railed in from the plants.
Sources expect to see Chinese urea play an important part in the upcoming MMTC/India tender. Sources say the window of opportunity to make large-scale sales will close Sept. 15 when the export duty jumps back to 110 percent.
Indonesia: Area media report the government is rethinking its urea export policy. In the meantime, it will not issue any new export licenses. Area sources say, however, this does not mean that old export licenses have been revoked.
The sale of 20,000 mt earlier this month for $268/mt FOB bagged came under an old license.
Traders say PIM is looking to offer another 40,000 mt in four 10,000-mt lots this week.
Chances are, said one trader, PIM will get a few dollars more than the last price.
The most likely buyers will be Asian industrial users rather than buyers looking to sell the urea as fertilizer.
Bangladesh: Government ministries were still talking with BCIC about the results of the June 30 tender.
In the meantime, BCIC issued another tender. This one is for 150,000 mt each of granular and prilled urea. The tender closes July 29.
Chinese material is expected to have a major presence in the upcoming tender.
Sources say Bangladesh needs the urea it is asking for but the bureaucratic process BCIC must follow often makes issuing an award in a timely manner difficult.
Sources say one of the issues being addressed between the government and BCIC over the last tender is what to do with some offers that came from “non-traditional” suppliers. In the past, when BCIC issued awards to these “non-traditional” firms, some were unable to perform. This left BCIC with a need to issue another tender to make up for the cargoes they need but never got.
NITROGEN SOLUTIONS
U.S. Gulf: Most players last week reported that price ideas are up, probably following urea. While most continue to put the market between $130-$135/st FOB ($4.06-$4.22/unit), $135/st FOB was more commonly heard, with quotes of $137/st FOB being common for the next piece of business.
Eastern Cornbelt: The UAN market remained at $5.25-5.75/unit FOB regional terminals to the dealer, depending on location. Forward contract tons for August-September continued to be referenced at $174.40-$190.40/st ($5.45-$5.95/unit) FOB in the region.
Western Cornbelt: The UAN-32 cash market remained at $168-$185/st ($5.25-$5.78/unit) FOB regional terminals, depending on location.
Southern Plains: The UAN-32 market was quoted at $140-$155/st ($4.38-$4.84/unit) FOB regional terminals. One source put the Hoag market at the $147/st ($4.59/unit) FOB level last week.
South Central: Sources reported little activity regarding UAN, but several said that market is likely to firm on the heels of urea. The UAN-32 dealer market was quoted in the $175-$190/st ($5.47-$5.94/unit) range FOB terminals to the dealer, but sources reported no sales to test the market.
Southeast: The UAN-30 market remained at $160/st ($5.33/unit) FOB Wilmington, N.C., and Norfolk, Va., while the low end of the UAN-32 regional range remained at $5.16/unit FOB on a spot basis in Georgia.
AMMONIUM NITRATE
Western Cornbelt: Ammonium nitrate remained at a nominal $265-$270/st FOB in the region.
Southern Plains: Ammonium nitrate remained at $250-$255/st FOB Catoosa, Okla.
South Central: Precipitation early in the week sparked some ammonium nitrate and CAN-27 movement on pasture ground in Arkansas. Sources pegged the ammonium nitrate market at the $270/st FOB level to the dealer, while the last sales of CAN-27 were reported at the $205/st FOB level in Arkansas.
Southeast: The Tampa market for ammonium nitrate remained at $305-$315/st FOB, while sources said spot tons out of the Wilmington market could be had at the $290/st FOB level.
AMMONIUM SULFATE
Eastern Cornbelt: Sources reported placing additional orders for granular ammonium sulfate fill tons at the $160/st FOB or DEL levels from Honeywell last week. Several resellers said they will be also be at that level when they get more tons in, but some sources continued to peg the upper end of the regional range at $180-$190/st FOB from secondary suppliers last week.
Western Cornbelt: Granular ammonium sulfate was pegged at $160/st FOB or DEL on the low end, reflecting the Midwest fill level from Honeywell. “Most everyone will follow Honeywell at that level,” said one source, but there were still reports last week of spot values at the previous $225/st FOB level to the dealer from some suppliers.
Southern Plains: Ammonium sulfate postings from American Plant Food Corp. dropped roughly $40/st on July 6, before the company issued an updated price list effective July 27. July 6 postings in Texas included granular ammonium sulfate at $150/st FOB Freeport, $160/st FOB Galena Park, $175/st FOB Fort Worth and $190/st FOB Littlefield; coarse grade at $140/st FOB Freeport, $150/st FOB Galena Park, $165/st FOB Fort Worth and $180/st FOB Littlefield; standard grade at $135/st FOB Freeport and $175/st FOB Littlefield; and N-Pac Compacted at $165/st FOB Galena Park.
Effective July 27, however, those levels will increase $25/st, putting the granular ammonium sulfate market at $175/st FOB Freeport, $185/st FOB Galena Park, 200/st FOB Fort Worth and $215/st FOB Littlefield. Coarse postings will move on that date to $165/st FOB Freeport, $175/st FOB Galena Park, $190/st FOB Fort Worth and $205/st FOB Littlefield, and standard grade ammonium sulfate will move to $160/st FOB Freeport and $200/st FOB Littlefield. The N-Pac Compacted posting will move on July 27 to $190/st FOB Galena Park.
Out of Plainview, Texas, ammonium sulfate was referenced at $190/st FOB for granular, $180/st for coarse and $175/st for standard.
South Central: Granular ammonium sulfate pricing remained at $220-$225/st FOB for the last tons sold, but sources said demand was over and some locations were out of product.
Southeast: Granular ammonium sulfate remained at $190-$195/st FOB, with the upper end reflecting the Augusta, Ga., reference price. Sources said product continued to move on cotton. Delivered granular sulfate was steady at $205-$229/st in the region, depending on location and supplier. Standard grade was pegged at the $165-$178/st DEL in the region.
PHOSPHATES
Central Florida: Mosaic upped its asking prices for phosphate at Central Florida from $250/st FOB to $265-$270/st FOB, after PhosChem announced it had signed an agreement to extend its 1.25 million mt DAP contract with Indian customers by another 500,000 mt at market prices. Obviously, that will affect its inventories.
The Fertilizer Institute issued its report for June, which showed phosphate inventories fell about 200,000 mt. Sources said Mosaic has increased its production in Central Florida to meet the demand from both domestic customers and the export market. PotashCorp was operating its granulation facility at White Springs, but the plant was producing only relatively small quantities there, and the bulk of its production was being done at its Aurora plant in North Carolina.
As a result of the run up and resulting fall of phosphate prices last year, dealers were continuing to show reluctance to make purchases to replace phosphate in their bins. Generally, the reason given was that farmers have not told them their plans. It appeared probable that some phosphate deals would be done at the Southwest Conference this week, but more interest may be shown for potash, said some sources.
Phosphate will cost more to produce, after ammonia prices increased $80/mt and it appeared the cost of sulfur would raise $5/lt for molten to Tampa, assuming the price Mosaic agreed to pay increased to $10/lt. However, that price will not become official until all sulfur contracts for Tampa are finalized, which should happen this week.
The Central Florida DAP price range remained unchanged last week at $250-$260/st FOB but prices will rise for new sales. PCS Sales had no published Central Florida reference price. Mosaic had no list prices for Central Florida, but made DAP sales within the current price range of around $250/st FOB with a $10/st FOB bump for MAP last week. Mosaic’s new sales will be at higher prices. CF’s price for DAP was $260/st FOB and $10/st FOB more for MAP. Agrifos was no longer posting prices, but was charging based on market conditions.
U.S. Gulf: After PhosChem reached an agreement to deliver an additional 500,000 mt of DAP to India last week; Mosaic hiked its prices for NOLA DAP barges by $20/st FOB. Shipments to India under the existing 1.25 million mt contract have been the biggest factor in drawing down inventories, which fell about 200,000 st in June. Mosaic has increased its production at Central Florida, but its Donaldsonville plant was operating at only about half its normal rate. However, the turnaround there was nearing completion and the plant will return to full service sometime soon.
Meanwhile, CF had no barges available for the balance of July and was seeking $275/st FOB for August. That price may increase after the Southwest Conference this week, if buying activity is strong. Overall, DAP prices were likely to increase during the next several weeks, primarily due to buyers seeking to fill empty bins. Farmers may not buy as much as in the past, but they will still buy.
Most sources said NOLA DAP barge prices began to increase last week, after Mosaic hiked its price to $285/st FOB. Early in the week, transactions were done in the $260-$263/st FOB range, but then took a sharp jump upward after Mosaic announced its change.
Not only were inventories down but the number of available prompt DAP barges was sharply reduced. Last week, warehouse prices were relatively stable, in the $290-$295/st FOB range depending on location, but the pressure was on to rise because they cannot support current barge prices.
The NOLA DAP barge price range widened from $260-$264/st FOB the previous week to $260-$270/st FOB last week, with the lowest prices all at the beginning of the period and the highest from mid-week on. Both Mosaic and CF were charging a $10/st FOB premium for MAP.
Eastern Cornbelt: The DAP market remained at $295-$310/st FOB regional warehouses, with the low in Illinois. Several sources said they expect the lower numbers to firm in the near term. Delivered DAP in Indiana and Ohio was pegged at the $325/st level on the upper end. Forward contract DAP for August was posted at $305/st FOB Peoria, Ill., and $310/st FOB Cincinnati.
MAP was $10/st higher than DAP. 10-34-0 was steady at $350/st FOB in Indiana and Ohio, with the low end of the range at $315-$325/st FOB in Illinois. Some sources talked of delivered 10-34-0 as high as $450/st in the Ohio market, but no business was reported to test that level.
Western Cornbelt: DAP pricing remained at $295-$310/st FOB warehouses to the dealer, with MAP $10/st higher. Forward contract DAP for August was referenced at $305/st FOB St. Louis and $310/st FOB Pine Bend, Minn.
MAP was $10/st higher than DAP. 10-34-0 was steady at $310-$350/st FOB in the region.
Southern Plains: The DAP market was pegged at $290-$300/st FOB Catoosa and Inola, Okla., with the upper end now reflecting the common reference level to the dealer. MAP was $10/st higher than DAP. One source said he doesn’t think there are a lot of tons out there, so prices might be working their way up on the river system.
10-34-0 was quoted at $325-$350/st FOB, with the upper end reported in the Wichita, Kan., area.
South Central: The DAP market was quoted at $295-$310/st FOB out of regional warehouses, with reports that some suppliers were trying to get $320-$325/st FOB with no new sales to test that level. MAP was $10/st higher than DAP. TSP was in low supply, with the dealer market reported in a broad range at $290-$315/st FOB regional warehouses, if available.
U.S. Export: Phosphate production will increase for the next couple of months in order to meet the needs of both the domestic U.S. market and the additional 500,000 mt PhosChem agreed to supply India under an extension of the 1.25 million mt deal, which was nearing completion. Prices for the India deal will be market based. In addition, PhosChem sold another 22,000 mt of MAP into Brazil at a new high price of $300/mt FOB.
Last week, TFI released its export report for June, which shows India continued to be the world’s largest customer. India took another 412,112 mt in June from the U.S., which brought its total for the calendar-year-to-date to 1,684,169 mt, more than half the total amount exported by the U.S. through the period. In June, Mexico was the second biggest importer of DAP, 38,846 mt, and has taken a total of 123,207 mt during the past six months. Last month, Uruguay was the third largest DAP customer at 25,462 mt. For June, a total of 628,722 mt of DAP was exported, an increase of 13.6 percent more than the same period the previous year. For the calendar-year-to-date, 2,275,292 mt of DAP had been exported, an increase of 20.4 percent over last year.
TFI said Brazil was the major importer of U.S. MAP in June and during the first six months of 2009 — 61,840 mt in June and 236,572 mt for the calendar-year-to-date. Canada was second for both periods, 22,574 mt for the month and 221,491 during the last six months. Japan came in third for MAP in June at 12,645 mt. MAP exports were 114,351 mt in June, an increase of 3.9 percent, but were down 4.2 percent so far this calendar-year-to-date at 762,026 mt.
The export DAP/MAP price range last week increased to $296-$300/mt FOB, up from the previous week’s $290-$296/mt FOB.
Pakistan: The country has reportedly placed orders to import over 120,000 mt of DAP to partly meet the requirements during Kharif 2009 season (April-September). Sources say Engro Chemical bought three cargoes from Australia, U.S., and Morocco, about 40,000 mt each, with a price in the vicinity of $355-$360/mt August/September shipment. Also, Pak-American Fertilizer bought one cargo of 40,000 tons from Australia around $360/mt level for August shipment.
Dreymoor was also reported to have sold a cargo though further details were not available.
Meanwhile, according to a revised estimate of the National Fertilizer Development Center (NFDC), Pakistan would import about 140,000 mt of DAP to meet requirements in Kharif season. The country would consume about 570,000 mt of DAP which includes a domestic production 323,000 mt of DAP and 204,000 mt of DAP in inventory, with the balance imported.
POTASH
Eastern Cornbelt: PCS Sales announced new potash postings, effective July 24. The company’s reference levels dropped some $300/st from its last official postings back on Sept. 1, 2008. As a result, potash postings FOB Saskatchewan mines dropped to $467/st for standard, $472/st for granular, and $480/st for soluble and white granular.
Out of warehouse locations in the region, PCS’s granular potash postings fell to $515/st FOB, while rail-delivered granular potash postings moved to $530/st.
Agrium’s July 16 red premium potash postings included $560/st FOB and $575/st rail-DEL in the region.
Western Cornbelt: Potash was pegged at $515-$560/st FOB regional warehouses, depending on grade and supplier. Agrium’s July 16 postings included 60 percent red premium potash at $560/st FOB Dubuque, Iowa, with rail-delivered tons at $575/st in the region.
PCS’s July 24 granular potash postings included $515/st FOB and $530/st rail-DEL in the region.
Southern Plains: Granular potash pricing FOB Carlsbad, N.M., had reportedly dropped to the $527/st level. Out of regional warehouses, sources put the spot market from brokers or resellers in the $560-$595/st FOB range to the dealer. Interest remained very low. “I don’t know the last time I sold any potash, and I don’t expect any sales going forward,” said one source. “I don’t know that I’ve ever gone into the fall without owning any potash, and I don’t plan to own any.”
Others concurred, with one reporting that he is seeing “no buying interest coming from the farm.” If grain prices continue to erode, he added, “it will be impossible to predict what will happen. The American farmers will decide the fate of the fertilizer industry.”
South Central: Potash pricing for brokered tons out of regional warehouses was pegged at $560-$595/st FOB last week. Agrium lowered its postings for 0-0-60 muriate of potash to U.S. customers on July 16 to $595/st rail-DEL in Kentucky and Tennessee.
Southeast: Effective July 16, Agrium lowered its postings for 0-0-60 muriate of potash to U.S. customers to $585/st rail-DEL in Alabama, Georgia, Florida, Virginia, and the Carolinas, with warehouse postings moving to $580/st FOB Wilmington, N.C., and Georgia locations at Americus, Bainbridge, Savannah and Tifton.
PCS’s granular potash postings dropped on July 24 to $540/st rail-DEL in Alabama, Georgia, Virginia, and the Carolinas, and to $550/st rail-DEL in the Northeast region.
India: According to Indian sources, the IPL contracts shape up as follows:
IPC-Silvinit – 850,000 mt
ICL – 575,000 mt firm + 150,000 mt option
K+S – 100,000 mt
Canpotex – 250,000 mt
BPC – 675,000 mt plus options
Some 2.45 million is firm plus more in options. IPL is expected to finalize quantities with APC, with those to be between 200-400,000 mt.
Canpotex contracted 600,000 mt with private buyers, according to local sources.
SULFUR
Tampa: Mosaic began settling third quarter sulfur contract prices for Tampa at $5/lt late last week. If that price holds, the new Tampa price would become $10/lt. Although the slight bump was not nearly as much as the $25/lt some sulfur producers were seeking, it was probably reasonable. Prices on the world market continued to slump but phosphate production in this country was taking an upturn. Before Green Markets changes its indexed price for Tampa contract sulfur, all major contracts for both Mosaic and PotashCorp must be completed.
Although supply of sulfur continued to outstrip demand, demand has been up and the amount produced has gone down. A couple of factors were beginning to work in favor of the sulfur industry. One was more sweet crude was being used in refining, and production of prill has increased substantially. On the Gulf Coast, only about 300,000 mt of prill was shipped last year, but about two-and-a-half times that amount had already been sold in the first half of this year. The total for 2009 could reach around 1.5 million mt — a five-fold increase.
As PotashCorp began producing some granular phosphate at its White Springs facility, the amount of sulfur it has been taking has increased. A source said that has led to some sulfur railcars becoming stuck there, but that was not considered a problem.
Vancouver: Third quarter contracts for Canadian sulfur out of Vancouver were being settled around $30/mt FOB, which was more uniform than the previous wide range of $5-$200/mt FOB.
MARKET NOTES
Peru: Nitratos del Peru, a consortium of Peru’s Brescia Group and Chile’s Sigdo Koppers is looking at a $650 million nitrogen project near Pisco, Peru, with production starting as early as 2012, according to the local press. The plant would reportedly produce 710,000 mt/y of ammonia and 350,000 mt/y of industrial ammonium nitrate.
CF Industries Holdings Inc. is also eyeing the construction of a major nitrogen plant in Peru (GM Archives).
Brazil: Brazilian fertilizer company Grupo Galvani has signed a 25-year contract with state-owned Brazil Nuclear Industries to develop a phosphate and uranium mine, according to the Estado news agency. The project would be located in northeast Brazil. The target date for operation is 2012 with 180,000 mt of phosphate production and 1,200 mt of uranium concentrate.
Toronto: Chemtrade Logistics Income Fund said July 13 that its supply of sulfuric acid and liquid sulfur dioxide to its customers will not be affected by the labor disruption at Vale Inco’s nickel mining and processing facilities at Sudbury. “Prior to Vale Inco’s announcement in April of an extended shutdown we began building inventory to ensure that supply to our customers was protected,” said Chemtrade CEO Mark Davis. “While Chemtrade’s product supply of acid from Vale Inco ceased on May 9 and will not resume until the smelter is restarted, we will continue to supply our customers from inventory, our own sulfuric acid manufacturing facilities as well as sourcing from other suppliers. We will continue to review the situation but currently anticipate that we will be able to keep our customers supplied until Vale Inco resumes production.”