AMMONIA
U.S. Gulf/Tampa: Nothing new was reported in the Tampa or NOLA markets. Mosaic told analysts last week that it expects there to be continued pressure on Tampa ammonia in the near-term, citing increased production that has come up due to prices at $400/mt and above.
Railcars of ammonia reportedly destined for CF derailed in Tampa on March 31. The ammonia was being moved from CF’s storage facility to its processing plant at Plant City at the time of the mishap. One person was injured when he jumped from the runaway cars, but he was not in serious condition. None of the product was spilled, and CSX Transportation was working to put the cars back on the tracks late in the week.
Eastern Cornbelt: Although rain over the previous weekend put a stop to limited field activities in the region, a stretch of dry, warm days last week allowed growers back in the field in many locations.
Growers in northern Illinois took advantage of last week’s warm spell to get some preplant fertilizer down. Sources talked of brisk demand for ammonia, phosphates, and potash, though one source said most of the activity was confined to areas north of Interstate 80. Sources also reported field activities in northern Ohio at midweek, with some talking of an earlier-than-normal start to corn planting if weather conditions remain favorable.
Spot ammonia pricing had reportedly ticked up to the $430-$440/st FOB range out of regional terminals, with both numbers reported out of Illinois and Indiana shipping points, depending on location.
Western Cornbelt: Warmer weather and dry conditions allowed growers to get in the field in many areas of the region last week. Several sources on April 1 said most of Iowa was starting to roll, with reports of long lines at ammonia truck terminals as the week advanced.
Ammonia pricing was quoted in the $390-$415/st FOB range in the region last week, depending on location. One source talked of lower numbers out of Nebraska terminals, but actual sales at the $365/st FOB level were not confirmed. Most of the ammonia being pulled was prepay tons, observed one source, so sales to test the cash market were relatively few.
Northern Plains: Fertilizer movement remained on the backburner in much of the region last week. “Even though it’s dry, things are not rolling out the door,” said one Minnesota source. North Dakota sources said preplant ammonia movement could be underway in parts of the state by early April, but most areas are looking at April 15 or later due to wet ground. “There is still snow – more in some places – and we may get more moisture tonight, so that will also make a difference come next week,” said one North Dakota source at midweek.
North Dakota sources continued to quote delivered ammonia in a broad range at $450-$485/st, depending on supplier and location. Out of terminals in Minnesota, the ammonia market was tagged at $405-$415/st FOB.
Great Lakes: Beautiful weather sparked a flurry of fieldwork in the Great Lakes region in late March as growers planted sugar beets, oats, and alfalfa. Some were reportedly even dusting off their corn planters last week, and preplant ammonia was going down on corn ground in Wisconsin, along with phosphates, potash, and lime.
Several Wisconsin sources said the anhydrous ammonia market had firmed to a solid $440/st FOB out of upper Mississippi River terminals.
Black Sea: Industry sources keep looking to the Tampa price to figure out what is happening in Yuzhnyy. Backing off freight and other costs, sources say the Yuzhnyy equivalent price from Tampa is in the $350s/mt FOB.
Despite all the arguments from buyers, producers continue to make offers in the low $380s/mt FOB.
Neither price out of Yuzhnyy works for the hottest market – Asia.
How the market in the Black Sea moves, said one Asian source, depends on the application season in the U.S. He noted reports of field applications starting is good news for the global market. The big issue will be sustaining the growth.
No matter how much producers claim the market should be edging close to $400/mt FOB, sources say the price remains in the $350s/mt FOB.
Middle East: Reports of producers swapping tons were dismissed by industry watchers as “routine business.” One trader explained that the producers regularly swap with each other as material and vessels match up with contractual shipments.
Arab producers continue to argue the price should be $400/mt FOB, but is prevented from reaching that level because of Iran.
As March closed, sources say Iran was blameless for the failure to reach the $400 level.
Demand remains strong in India, which is driving a lot of the Arab producers’ sales, and Iranian tons are pretty well sold out for a while.
Unless demand picks up for Middle East tons and producers play hard ball on the price, some in the industry see the price holding steady for a while.
One glimmer of hope for the producers to get the price moving are reports that earlier tons pegged at $370/mt FOB are pretty well nowhere to be found this month. This removes the soft bottom of the market, said one observer. But while the bottom level moved up, the upper end of the price range remained steady.
Sources now peg the market at $380-$390/mt FOB.
Asia: Sources report the Mitsui KPA facility is now back up and running. The plant was slated to have been back online by the third week of March, but a few minor “hiccups” delayed the opening. The plant was closed for routine maintenance in early March.
Area sources now speculate that Mitsubishi will be taking its KPI plant down for a routine turnaround. One observer noted that in the past, whenever one plant went down for maintenance work, the other usually followed within a week or so.
With Asia sitting as the strongest regional ammonia market, none of the producers who feed material to industrial and agricultural buyers is anxious to shut down.
UREA
U.S. Gulf: While a few players last week were reported to have concluded business within the $295-$300/st FOB range, most sellers were still holding out for $305/st FOB or more. They said there was no need to panic and cut prices, as the industry is on the brink of the season. Indeed, most players were very optimistic, saying that good weather has been touching much of the nation, and they were predicting that farmer activity would be at a good pace the week after Easter.
Eastern Cornbelt: The granular urea market remained at $350-$360/st FOB, with the low out of river locations in Illinois and the higher numbers reported out of spot Ohio locations.
Western Cornbelt: Granular urea was pegged at $345-$350/st FOB in the region. Some suppliers continued to reference urea as high as $360/st FOB to the dealer, but any sales taking place were at the lower numbers. Sources quoted the dealer market out of Enid and Inola, Okla., in the $330-$335/st FOB range last week.
Northern Plains: The granular urea market was quoted at $345-$350/st FOB the Twin Cities, down slightly from last report. Delivered urea remained at $375-$385/st in North Dakota, with the low end of that range also reflecting dealer reference pricing FOB warehouse locations in the state. One source said there is not a lot of urea in the Twin Cities market, and suppliers “don’t want to run the shed dry” before the first barges arrive on April 12-15.
Great Lakes: The granular urea market was quoted in a broad range at $350-$380/st FOB regional terminals to the dealer. The low end of the range was reported by southern Wisconsin sources out of river terminals. One Wisconsin source quoted delivered urea at the $360/st level to his location in late March.
Northeast: A massive storm broke rainfall records and pummeled the Northeast region with high winds on March 29-30, causing widespread flooding. A Delaware source said his location had received 4 inches of rain in less than a week, putting a stop to some limited field activities that took place in late March, including some nitrogen and lime movement. “Farmers are getting discouraged,” he said.
Granular urea was tagged at $350-$360/st FOB in the region, down slightly from last report. One source put the Philadelphia market at the $360/st FOB level to the dealer.
India: The IPL tender closed with about 1.8 million mt in firm offers and another 700,000 mt in options.
At first blush, the tonnage offered below the high-water mark set by India of $310/mt CFR could be enough to get the country well started in the next application season. Even better for India, the tons came in at $305/mt CFR and below.
Sources report the freight costs from the UAE and Kuwait is pegged at $20/mt. That would put the 140,000 mt offered by PIC and Fertil at $305/mt CFR. Add in the 600,000 mt from Rahma at $302/mt CFR and the 100,000 mt from Transammonia at $304.47/mt CFR, and IPL could have 840,000 mt delivered by June 1.
If IPL further accepts the sellers’ options, an additional 250,000 mt could be shipped for a total of just more than 1 million mt, all within the targeted price.
Sources are not sure about the Rahma offer, but say it does offer an interesting twist in the tender.
The tally of the tender follows at the bottom of the page.
Sabic, KeyTrade, and Qafco sent regrets.
The absence of Sabic is no surprise. Sources say the Sabic order books are full thanks to the government aid package between Saudi Arabia and Pakistan, as well as other longterm contracts.
Industry watchers suspect the Transammonia offer will
come out of their sales contract from Oman.
Sources expect IPL to take the weekend to look over the offers and start talking to companies about lower prices Monday morning. Sources say the talks will have to move quickly, because India needs the product.
One trader noted that even with rapid talks, IPL should be able to get lower prices once the dust settles.
Pakistan: TCP awarded 50,000 mt to Mekatrade at $311.39/mt CFR from its tender of last month. Rather than talk to the next lowest offering company – Multicommerce – to see if it would lower its offer from $311.49/mt CFR to match the Mekatrade price, the state buyer immediately called another tender to close April 10 for the remaining 75,000 mt it needs.
One source noted that had TCP talked to Multicommerce, it probably could have had it match the lower price and fulfilled its needs in one shot.
The results of the Indian tender, however, could lead to an even lower price in the April 10 tender.
Another 300,000 mt is being imported through TCP under an aid package between Pakistan and Saudi Arabia.
| Offering Company | Origin | Firm Qty. (‘000 mt) | Option Qty. (‘000 mt) | US$/mt FOB | US$/mt CFR | Discharge Port | Firm Shipment Time | Option Shipment Time | |
| Fertil | UAE | 50 | 20-25 | 285.00 | April-May | ||||
| PIC | Kuwait | 90 | 30 | 285.00 | April-May | ||||
| Uzagro | Uzbekistan | 315.00 | |||||||
| Rahma Ltd | Ukraine | 600 | 302.00 | Any port | |||||
| Transammonia | Open | 100 | 100-200 | 304.47 | Kandla-Mundra | ||||
| Continental | Open | 50 | 25-30 | 308.50 | Kandla | April-May | |||
| 310.00 | Pipavav | ||||||||
| 311.50 | Tuticorin | ||||||||
| 312.75 | Vizag | ||||||||
| Helm | Iran | 100 | 312.00 | Mundra-Kandla | |||||
| Iran-Open | 50 | 312.00 | Mundra- Kandla | ||||||
| Mutual option | 200 | 312.00 | Mundra-Kandla | ||||||
| Ameropa | Open | 50-60 | 314.21 | Mundra-Kandla | April-May | ||||
| 50-60 | 309.00 | Vizag-Pipavav | May-Jul | ||||||
| Gavilon | Open | 55-110 | 308.00 | Mundra-Kandla | |||||
| 25-55 | 312.00 | K’Patnam | |||||||
| Dreymore | Open | 50 | 50 | 309.75 | Mundra | ||||
| 310.75 | Kandla | ||||||||
| Quantum | Open | 40-50 | 329.00 | K’Patnam | |||||
| Chemoinvest | 50 | 325.00 | Kandla | ||||||
| Balderton | CIS | 45-50 | 309.00 | Mundra | |||||
| 312.00 | Kandla | ||||||||
| RJ Health | CIS | 50 | 315.00 | Any port | |||||
| Blue Debbaj | Open | 25 | 311.50 | Kandla-Mundra-New Mangalore | |||||
| 25 | 312.50 | ||||||||
| 50 | 313.50 | ||||||||
| Swiss Singapore | Open | 55 | 311.97 | Kandla-Mundra | |||||
| 50-55 | 311.97 | Kandla-Mundra | |||||||
| 322.40 | Vizag | ||||||||
| Dama Emirates | Ukraine | 250 | 314.00 | Any Port |
Black Sea: The results of the Indian IPL tender were not good news for producers. Until the numbers came out, producers had been holding onto $270/mt FOB as the floor.
Once freight and costs are backed off the CIS offers, sources say the netback is in the mid- to upper-$250s/mt FOB. Reports circulated last week that a number of traders were shorting the Yuzhnyy market in anticipation of the Indian tender.
Shortly after the tender was announced, some in Asia said the Yuzhnyy price would have to come off significantly to meet the pricing expectations of the Indians. Even with the drop from the $270s/mt FOB before the tender to the new estimated range of $255-$260/mt FOB, the decline was not enough.
Middle East: Producers spent March hoping for the price to stabilize. Instead, it moved from just above $300/mt FOB for prills and $315/mt FOB for granular to the current $275-$285/mt FOB for both.
Sources said the PIC and Fertil offers were not unexpected.
India set a target price of no more than $310/mt CFR, with an unofficial target of $305/mt FOB as the global urea price started to fall late last month.
In order to secure the business from India, the producers had to take into account shipping costs of $20-$22/mt and then offer accordingly.
The $285/mt FOB offers put the Arab Gulf material just above the soft $305/mt CFR goal, but below the official $310/mt CFR mark.
Sources say if Transammonia gets awarded tons, it will most likely supply tons from Oman.
Trammo has a long-term contract to market the Omani urea. About half of the output is booked under contracts, but the rest needs to be sold on the spot market.
Based on the Indian tender results, the price range for granular and prilled urea is now at $275-$285/mt FOB.
Indonesia: Pusri closed its selling tender for 20,000 mt in 5,000 mt lots on March 30. Prices showed a dramatic drop from the previous sale at $331/mt FOB. Sources say even at the $312-$315/mt FOB price range, finding a buyer will be difficult.
In the past, industrial buyers were willing to pay more for the Indonesian tons. Now, say sources, the danger of China dumping equally high-quality urea on the market is making some buyers hesitant about paying a premium to Indonesia.
Tender results follow.
| Bidding Company | US$/mt FOB |
| Trada | 315.00 |
| Summit | 312.00 |
| Youngwoo | 311.00 |
| BBSC | 310.00 |
| Diva Trasindo | 310.00 |
| Graja | 308.00 |
| Profeta | 306.00 |
| Liven | 305.00 |
| Consilindo | 295.00 |
| RCL | 290.00 |