AMMONIA
U.S. Gulf/Tampa: The Tampa import market remains at $355/mt DEL. Nothing new has been reported on the NOLA barge market for some time.
Eastern Cornbelt: October 2009 was turning out to be one of the wettest on record for the region, and harvest delays were getting critical. Fall fertilizer movement also remained stalled in the region.
Spot ammonia pricing was quoted at $335-$360/st FOB in the region, but “no one is asking,” according to one source. Forward pricing for spring was reported as high as $430-$435/st FOB, depending on location.
Western Cornbelt: More precipitation hit the region at midweek, compounding harvest delays and prompting flood warnings for some locations. “All fertilizer movement looks remote at this point,” said one dealer. “You hate to be negative, but that’s how it looks.” He noted as well that little fall winter wheat was seeded in his location because of the wet conditions and late harvest.
Anhydrous ammonia remained at $320-$350/st FOB in the region, with no movement and no new sales to test the market. Delivered ammonia was pegged at $350-$360/st in Missouri from southern production points.
Northern Plains: Most of the region remained wet last week, although several locations saw some harvest activity early in the week. With little activity to test the spot market, sources reported few changes to fertilizer prices. Delivered ammonia remained at $375-$380/st in North Dakota, with spot tons reported at the $350/st FOB level out of regional terminals.
Middle East: Producers continue to ask $350/mt FOB ?Çô and buyers keep turning them down.
The latest indication of settled prices came when FACT/India awarded Qafco and PIC awards for end-November and early-December cargoes. Qafco got the November award at $340/mt CFR and PIC the December cargo at $345/mt CFR.
Asian sources peg the netbacks for the deals at $305-$315/mt FOB.
For the past month or so, demand for product from the area has been strong enough that producers could easily raise their prices with each new cargo. Now, however, sources say demand from India appears to be evening out.
Weather conditions in India have begun to slow down demand for DAP. In turn, Indian producers need less ammonia.
So far, say sources, the softening is not enough to lower prices, but it is enough to put a halt to buyers being willing to take tons at almost any price. There is now more resistance to the higher prices offered by the producers.
One source said higher prices could easily play against the producers. If the price gets too high, some of the closed Ukrainian plants might come back online. Should that happen, the large influx of ammonia could easily crater prices again.
One observer noted that producers are walking the fine line of trying to wring out as much money as possible from each buyer while holding the price low enough to keep many of the Black Sea plants closed.
Black Sea: After the run-up late last month, sources say the price has once again stabilized in the upper $290s/mt FOB.
Sources say people will be watching the U.S. application demand as an indication of which way the price will move.
Another area people are watching is the Middle East. Increased prices in that market could have a rollover effect on the Yuzhnyy market, said one trader. If the price from the Middle East gets too high, sources say it might become feasible for some of the closed plants in the Black Sea area to re-open.
To stay open, however, sources say the price from Yuzhnyy has to hold at $320/mt FOB or above.
If more plants open, said one trader, the price could easily crash with the influx of extra tons.
Asia: Taiwan and South Korea continue to buy as many tons of ammonia as their suppliers can ship.
One source described the situation as well balanced. Production in Southeast Asia, along with material from other sources, is just enough to keep up with demand. Any disruption in the regional output, said one trader, would be enough to send the buyer scrambling to get a cargo at almost any price.
The main suppliers into the area, KPI and KPA of Indonesia, are operating at full capacity. There are reports that at least one of the plants will soon take a routine turnaround.
UREA
U.S. Gulf: Most players last week said granular urea barges have rebounded. While several put the market within the $255-$258/st FOB range, others said business was still concluded as low as $250/st FOB.
Eastern Cornbelt: Granular urea remained at $295-$305/st FOB in the region. One source reported some interest in urea and UAN for spring, but most attention was focused on the late harvest.
Western Cornbelt: The granular urea market continued to be quoted at $295-$305/st FOB terminals to the dealer, depending on location. Koch’s reference levels moved on Oct. 30 to $285/st FOB Inola, Okla., and $290/st FOB Enid.
Northern Plains: Granular urea was pegged at $310/st DEL in North Dakota and $305/st FOB the Twin Cities and Carrington, N.D.
Northeast: Wet conditions continued to slow the harvest pace across the Northeast region. Sources reported minimal interest in fertilizer pricing. “Growers are focused on harvest, so there’s not a big enthusiasm for talking about next year,” said one. Buyers remain extremely cautious at both the wholesale and retail levels. “There’s no sense in buying anything if you don’t need it tomorrow,” commented one source. Others, however, were expressing concern about logistics next spring due to the current hesitancy. “Come January forward to April, you just can’t get the volume of product moved to the marketplace,” said one source.
The UAN market was up slightly from last report. Sources pegged the Baltimore market at $5.34-$5.47/unit FOB, while UAN-32 pricing out of terminals in upstate New York had reportedly firmed to $200-$208/st ($6.25-$6.50/unit) FOB. Sources said the dealer price would firm to the upper end of that range on Nov. 1.
Eastern Canada: Fertilizer activity remained on the back-burner in Eastern Canada due to a late harvest, uncooperative weather, and reductions in winter wheat acreage.
The granular urea market remained at $415-$450/mt FOB in the region, depending on location and supplier, with the upper end representing the common dealer reference level.
Pakistan: After TCP finished its purchase of 600,000 mt in nine tenders, the company scrapped two additional tenders that were slated for Oct. 24 and 27.
In addition to picking up the tonnage the country needed on order by the end of October, Pakistan will also get $100 million worth of urea from Saudi Arabia.
At the current Middle East market price of $270-$275/mt FOB, Pakistan would receive 364-370,000 mt of urea. Sources point out, however, that the tonnage will most likely not start shipping until December or January. At that time, one trader noted, the price will most likely be much softer.
Media reports in Pakistan cite government sources in claiming that Pakistan will need an additional 300-400,000 mt of urea to start the spring application. Sources say the Saudi deal is most likely designed to cover that need.
Saudi Arabia has given Pakistan similar soft loans in the past. This current package has been talked about for more than three months.
The Saudis rejected an earlier request by the Pakistan government for $400 million in aid.
Previous packages have ranged from $130 million to $240 million.
Sources say the Saudi loan will provide enough money to ensure a strong supply of material for the opening of the main 2010 application season.
The tons purchased under this program, combined with increased domestic production, should ensure Pakistan will not have to re-enter the international market next year. Government sources told local media that upgrades to existing plants and new facilities will make Pakistan self-reliant in urea next year.
Area observers question whether full self-sufficiency will be achieved in 2010, but they do say the recent tenders and the Saudi aid package should keep TCP out of the global urea market.
India: As November starts, so do the annual rumors of an Indian urea tender.
Sources in Asia say buying agents from India are reportedly making the rounds. No one could confirm the nature of any talks, but reports are circulating that a tender could be called as early as Nov. 15.
A number of traders say India will need material shipped in December and early January. With that time schedule – and reports that China is sold out for the first three weeks of November – sources say the most likely time for a tender will be by Nov. 15 at the earliest, and most likely during the last week of the month.
A delay until the end of November would give the market a chance to cool off following the large purchases by STC and Pakistan.
A late-November or early-December loading time will ensure Chinese material will be a large part of offers made in any tender at that time. Even though the Chinese price is edging up, sources say offers from China could easily beat Middle East and Yuzhnyy offers.
China: Sources report that now that the export duty has dropped to 10 percent, the industry should expect to see lots of urea flowing out of the country – particularly to India.
Domestic prices remain firmly in the mid $250s/mt FOB, but domestic demand appears to be growing. Producers are now asking $265/mt FOB for late-November export loadings. And sources say that price might just be achieved.
Helping push up the Chinese prices are reports that demand from the U.S. and Latin America is making producers look to raising prices for exports.
Black Sea: Everyone seems to be taking a deep breath now that the Pakistan series of tenders are over, and Indian buyers are thinking about their next move.
The line-up in Yuzhnyy to cover Indian and Pakistani business is strong. Sources say the loadings are proceeding without any major difficulties.
After watching the netback price move steadily up, with producers now saying they will not discuss any price under $245/mt FOB, sources say the market is stagnant in the low $240s/mt FOB.
Despite all the talk of $245/mt FOB material, sources say the only deals at that level have been top-off tons. One trader said nothing has been done to indicate that the large-scale market has moved up to or beyond $245/mt FOB.
For now, sources say the market remains at $240-$245/mt FOB.
Middle East: The Saudi-Pakistan aid package will ensure that Sabic will not have to go looking for buyers into the first quarter of 2010.
Sabic already has a number of large-scale contracts with American and other buyers. Sources say that if you add to those sales the 364-370,000 mt of material Pakistan will take under the aid package, Sabic is sitting pretty.
Sources report most producers are in good shape for the first half of November. After Nov. 15, however, observers say Middle East tons will be competing with Chinese tons for spot and contract business.
Producers will tell anyone who will listen that bids need to start at $280/mt FOB for consideration. Traders say, however, that the market remains in the low $270s/mt FOB for both prilled and granular urea.
Indonesia: Sources say about 15 of the 18 companies bidding in the Pusri tender were awarded lots of 5,000 mt each.
The tons sold from Pusri have to be in small lots because of the shallow draught of the loading port.
Sources say Pusri will make out all right in the tender on two levels.
The first is the decent – albeit lower than expected – selling price of the urea.
The second is the income Pusri will receive from buyers who will have to rent the Pusri shallow-bottom vessels to get the urea from the plant to the ultimate buyer in the region.
One trader said finding the right-sized vessel to load the cargo is difficult, and for a fee Pusri will make the transfer of product easier.
NITROGEN SOLUTIONS
U.S. Gulf: Players last week called new trades at $142-$146/st FOB ($4.44-$4.56/unit). Sub-$140/st FOB product was said to be history. Sources called the market firm, with producers eyeing $150/st FOB for the next round of sales. To date, however, most said that number was doable for forward, but not prompt.
Producers have argued that UAN values have woefully lagged urea, and sources say they appear to be doing all they can to remedy that situation. A huge drop in recent UAN imports is helping them. Others said urea prices are going to have to keep on moving up in order for UAN to keep its price advantage in buyers’ minds.
As of Oct. 29, Direct Hedge had the paper market at $145-$155/st FOB for November-December. Prices were $160-$170/st FOB for January-March and $150-$155/st FOB April-June.
Eastern Cornbelt: The UAN cash market was pegged at $5.65-$6.05/unit FOB regional terminals, with spring prepay quotes reported in the $6.25-$6.35/unit FOB range.
Western Cornbelt: Regional sources reported a strengthening UAN market. The low end was quoted at $5.60-$5.65/unit FOB on a spot basis, but several sources said dealer pricing had firmed to $190-$195/st ($5.94-$6.09/unit FOB) most regional terminals to the dealer. One Iowa source reported a firm $6.00/unit FOB in his trade area.
Koch’s UAN-32 postings firmed on Oct. 30 to $190/st ($5.94/unit) FOB Enid, Okla., and $200/st ($6.25/unit) FOB Dodge City, Kan. The Oct. 24 reference level at Dodge City was $180/st ($5.63/unit) FOB.
Northern Plains: UAN pricing was up from last report, with sources quoting the dealer market at $5.95-$6.15/unit FOB regional terminals. Delivered UAN-28 was tagged at $175-$180/st ($6.25-$6.43/unit) in North Dakota.
Eastern Canada: Dealer reference levels for UAN remained in the $9.12-$9.21/unit FOB range in the region, with the low end reported at the $8.70/unit FOB level.
AMMONIUM NITRATE
Western Cornbelt: Ammonium nitrate was steady at $255-$260/st FOB in the region.
Eastern Canada: Ammonium nitrate was unchanged at a nominal $385-$400/mt FOB in the region.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was unchanged at $170-$180/st FOB in the region.
Western Cornbelt: Granular ammonium sulfate pricing remained at $170-$180/st FOB or rail-DEL in the region.
Northern Plains: Granular ammonium sulfate was quoted at $180/st FOB in the region, with delivered product at $180-$195/st, depending on location and supplier.
Northeast: Granular ammonium sulfate was steady at $163/st FOB Hopewell, Va., with delivered granular sulfate pegged at $180-$190/st in the region, depending on location.
Eastern Canada: The granular ammonium sulfate market had reportedly dropped to $318/mt FOB in Ontario, with fine grade referenced at the $151/mt FOB level.
PHOSPHATE
Central Florida: Phosphate producers were closing in on a settlement for fourth-quarter sulfur prices, which sources said appeared likely to increase about $20/lt for molten delivered to Tampa.
Although the domestic fall season, which was getting close to the end, had yet to begin as of late last week, producers and traders were hoping the weather would take a break from the frequent rain and allow farmers to harvest their crops. If that happens this week, buying could start fairly soon. If not, it would be a matter of waiting until the spring season. The big question that still remained was whether phosphate-processing plants in Central Florida would curtail operations, and that had not been answered as of late last week.
With the exception of formula sales under existing contracts, no new prompt sales were found last week.
The Central Florida DAP price range last week was unchanged at $270-$275/st FOB. Both Mosaic and PCS Sales were charging a $10/st FOB premium for MAP. The prices from Agrifos were still $300/st FOB for DAP and $305/st FOB for MAP.
U.S. Gulf: Rain and high winds continued to be a problem in the Midwest last week, as farmers were struggling to find a window to get in their fields and harvest their crops. The good news late last week was for far better weather this week.
Soybeans were fetching just under $10/bushel and corn was running around $3.70/bushel, slightly below a week earlier. However, soybeans were between 50 and 85 percent done, but the corn crop was only 5 to 15 percent harvested. Some fears of crop damage to corn were being expressed, but there was no clear indication that had actually occurred. If the crop does not come out of the field soon, those fears could be realized.
“Farmers aren’t thinking about buying fertilizer now,” one trader said. “They just want to get their crops harvested, then they will think about fertilizer.”
In some areas, phosphate was beginning to move out of warehouses at an increased rate, and prices were holding firm along the Mississippi River and other waterways farther north. On the Arkansas River system, movement of phosphate out of terminals was a nonevent, because the weather has been even worse than in most other areas.
The lack of NOLA DAP barge sales in recent weeks has made the market softer, and some who are required by contract to take barges were lowering their prices. After rumors, which could not be substantiated, of offers to sell in the $250-$255/st FOB range made their rounds, one trader sold a barge at $262/st FOB. However, information that CF Industries was willing to sell at $260/st FOB – and possibly lower – helped push the decision to sell at the lower price. If there is a rush on dealers’ warehouses in the next couple of weeks, NOLA DAP barges prices will probably rebound.
The NOLA DAP barge price range last week sunk from a flat $270/st FOB the previous week to $262/st FOB. Mosaic was seeking $295/st FOB. Both Mosaic and CF were charging a $10/st FOB premium for MAP.
Eastern Cornbelt: The DAP market was tagged at $305-$310/st FOB in the region, with MAP $10/st higher. 10-34-0 was quoted at $310-$315/st FOB to the dealer.
Western U.S.: Agrium’s Nov. 1 phos acid postings include $740/st rail-DEL for both SPA and MGA in Arizona, California, Idaho, Montana, Nevada, Oregon, Utah, and Washington.
Western Cornbelt: DAP pricing continued to be quoted at $300-$305/st FOB in the region, with the low reported in the St. Louis market. MAP was 10/st higher than DAP.
10-34-0 was pegged at $305-$315/st FOB in the region. Agrium’s Nov. 1 phos acid postings include $670/st railDEL for both super phosphoric acid and merchant grade acid in Iowa, Nebraska, Colorado, Kansas, New Mexico, Oklahoma, and Texas.
Northern Plains: DAP was steady at $305-$315/st FOB the Twin Cities, with MAP $10/st higher. Delivered green MAP in North Dakota was reported at the $345/st level by truck or rail from western shipping points.
The regional 10-34-0 market was tagged at $310-$320/st FOB and $315-$320/st DEL. Agrium’s Nov. 1 phos acid postings included $670/st rail-DEL for both SPA and MGA in Minnesota, the Dakotas, and Wyoming.
Northeast: MAP was quoted at $325-$335/st FOB in the region, with the low in western Pennsylvania. DAP was $10/st less than MAP, where available. One source pegged delivered MAP at roughly $350/st in New England, but sources reported no sales to test the market.
10-34-0 was pegged at $320-$325/st FOB the tank in upstate New York. 11-37-0 in that market was pegged at the $350/st FOB level.
Eastern Canada: One source said the only fall movement has been a little phosphate and potash on fall wheat, with no plowdown activity taking place in the region. DAP was steady at $450-$475/mt FOB regional warehouses to the dealer, with MAP reported at $435-$460/mt FOB. The upper end of both ranges reflected dealer postings. No current prices were reported for TSP.
U.S. Export: Last week, export phosphate sales increased but prices took a dive.
PhosChem made a sale of a panamax-sized vessel to China in a deal that should net back $290/mt FOB, and another vessel from North Africa was also sold to China on a formula basis. The product will be delivered to the northern part of the country, and higher prices in China were said to have been responsible. Gavilon was also said to have sold a vessel into China, but that was not confirmed.
In addition, Transammonia sent a handymax vessel, about 40,000 mt, into Pakistan at a delivered price of $350/mt FOB, which would result in an FOB price of between $282/mt FOB and $284/mt FOB, depending on freight.
A week earlier, PhosChem sold two vessel loads of MAP into South America – one for Argentina and the other to Brazil. The vessel destined for Argentina was originally intended for warehouses owned by a PhosChem member, but several small buyers made late moves to claim the material, so a second vessel will be sent. The price for the delivery to Argentina was $292/mt FOB, while the phosphate for Brazil will fetch $296/mt FOB.
Based on sales last week, the export DAP price range fell to $282-$290/mt FOB from $310-$312/mt FOB.
POTASH
Eastern Cornbelt: The potash market was pegged at $450-$460/st FOB regional warehouses, reflecting another slight drop from the previous week.
Western Cornbelt: The dealer market for potash was quoted at $450-$467/st FOB in the region, with the upper end quoted for white granular potash out of spot Missouri River locations. An Iowa contact put the red granular potash market at the $455/st FOB level in his area last week. “If we had the opportunity to run, we could sell some product at these levels,” said one source. “But there’s many who still think this market will get cheaper.”
Northern Plains: The potash market had reportedly slipped to $450-$470/st DEL in the region, depending on grade, location, and supplier. Potash postings remained at $467-$480/st FOB Saskatchewan mines to U.S. customers, although several sources said those levels do not reflect the true market – provided there is a true market, given the lack of new business.
Northeast: The regional potash market continued to slide. Sources quoted dealer pricing last week at $485-$495/st DEL, depending on location and grade. Out of warehouse locations in western Pennsylvania, the market had reportedly dropped to $460/st FOB.
Eastern Canada: Ontario sources said potash warehouse pricing had dropped to $520-$560/mt FOB by late October, depending on grade and location. One source quoted dealer pricing at the $550/mt FOB level for red granular potash and $560/mt FOB for white granular, while another said $520/mt FOB was doable for 60 percent muriate of potash in his location.
Posted prices FOB New Brunswick mines had not changed from July 24 levels, when PCS Sales moved its 60 percent Sussex price to the $610/mt FOB level.
“Dealers and farmers are reasonably comfortable with phosphate numbers, but still don’t like the potash numbers,” said one regional contact last week. “That has impaired potential movement. Guys are just taking a holiday from buying potash.”
The K-Mag market was unchanged at $427/mt FOB in Ontario.
SULFUR
Tampa: Late last week, both Mosaic and PotashCorp were in the process of settling fourth-quarter sulfur contracts $20/lt up from the third quarter, which would result in a new price of $30/lt FOB for molten delivered to Tampa. That price bump will be about the cost of transportation, but little in the way of profit for sulfur producers. Still, it will help.
A better deal for refineries was selling prill for the export market from the Gulf, where sulfur was netting about $30-$35/mt FOB.
Refineries continued to take a beating, as demand for gasoline remained very low due to the economy. Some were taking longer turnarounds than they normally would, and others were curtailing operations. However, a source said the amount of sulfur available was slightly greater than a week earlier.
Spot sales of sulfur for the East Coast were said to be running in the $50-$80/lt range, which was significantly more than the new Tampa contract price, if that holds.
Green Markets policy requires that the index not be amended until the major phosphate companies have reached final agreements with all of their major suppliers; the new price will be posted once that occurs.
Vancouver: Contract and spot prices for sulfur out of Vancouver were running between $40/mt FOB and $45/mt FOB, and sales were on the increase, as China is now in the market.