AMMONIA
U.S. Gulf/Tampa: Major players concluded August Tampa business last week at $380/mt, up $25/mt from July’s $355/mt.
While prices are generally up internationally, there has been at least one outage in Trinidad, where Potash Corp’s #3 plant has been in the midst of a one-month turnaround. The plant, which was expected to come back up July 23, came back up July 28 instead.
Eastern Cornbelt: The ammonia market was quoted at $480-$500/st FOB regional terminals last week.
Western Cornbelt: Ammonia pricing to the dealer was tagged in the $475-$500/st FOB range last week, with reference prices at the $500/st FOB level or higher at some Iowa locations.
California: Anhydrous ammonia pricing remained at $520-$525/st truck-DEL in California, with aqua ammonia steady as well at $142/st FOB.
Pacific Northwest: Anhydrous ammonia pricing in the Pacific Northwest had reportedly moved to $500-$550/st DEL to the dealer, reflecting a sizable jump from last report. One supplier was referenced at $450/st FOB in Alberta for truck-delivered tons to the U.S.
Western Canada: Fertilizer prices in the region were ramping up throughout the second half of July.
At mid-month, anhydrous ammonia to the dealer was pegged at $496-$540/mt DEL, with the low in Manitoba and the higher numbers in Alberta. By July 19, that range had firmed to $522-$567/mt DEL. On July 23, the market took another increase, with ammonia quoted at $567-$576/mt DEL in Manitoba, $576-$585/mt DEL in Saskatchewan, and $585-$612/mt DEL in Alberta. Producer reference prices for ammonia ranged from $577-$622/mt DEL in the region, depending on location.
Black Sea: Reports keep coming out that the tanks are nearly empty, and that limited material is making it to the port. And yet the price is not moving up as rapidly or as strongly as producers would like.
The new price in Tampa of $380/mt DEL calculates back to about $320/mt FOB. Even with the influence of more aggressive sellers now hawking $400/mt DEL to Tampa, the best price industry analysts can figure in Yuzhnyy is $340-$350/mt FOB.
As last week closed out, no one could point to any Yuzhnyy business above $330/mt FOB. Producers are asking $340/mt FOB, largely as a stepping-stone to higher sustained prices. And $340 is also now reported to be the new break-even price for ammonia production.
The Ukrainian producers are all down for repairs and upkeep. The maintenance work is being extended as long as possible in hopes that the market price will go above the production costs.
Sources say the producers are looking for a sustained price at or above $350/mt FOB so they can restart their facilities. The problem will be that once the plants are back online, the supply side of the market equation will get larger and could force down prices once again. Asian sources say the most likely scenario will be that when the plants do restart, they will do so gradually and in a limited manner.
For now, sources say the price remains in the $320s/mt FOB.
Middle East: Mitsubishi bought a cargo from Iran at $320/mt FOB. At the same time, Fertil is offering a cargo at $330/mt FOB. And other area producers are saying the new starting price for talks is $335/mt FOB.
Industry observers note that demand for ammonia has gone up only incrementally. They say the increase in the price for Middle East ammonia is equally the result of steady strong demand in India and East Asia and the psychology of the market that the price needs to go up.
The Mitsubishi purchase will reportedly go to an Asian buyer.
At the same time, the contracts between Indian buyers and their Arab suppliers continue. Sources say some of the buyers are once again asking for some additional tons to be included in each shipment.
Sources pegged the market solidly in the $320s/mt FOB last week. This week, however, the price might easily move into the $330s/mt FOB, and no one will blink.
The Iranian sale indicates that producers from that country are getting serious about being a regular supplier of ammonia. At the same time, they seem to be unwilling to accept discounts on their product.
Previous sales of Iranian ammonia have been at large discounts to the Arab producers’ prices. In some cases the FOB discount was because loadings took place at the top of the Gulf, thereby requiring longer steaming time. Other times, discounts were forced on the producers because of spotty deliveries. And lastly, buyers often demanded lower prices because they had to go through intermediaries to handle the transaction to ensure U.S. dollars were not paid to Iran for the product.
New facilities further down the Gulf Coast and improved production have eliminated some of the discount arguments. The currency transaction issue is still around, but is becoming more standardized as more Iranian ammonia and urea reach the open market.
To underscore Iran’s new role in the market, the latest phase of the Pardis Petrochemical plant started operations last week. The PPC facility is now set to produce 1.3 million mt of ammonia each year. Press reports indicate a large portion of that output will be for export.
UREA
U.S.Gulf: After weeks of huge price run-ups, prices finally stalled in San Antonio, according to most sources. Most were reporting barge trades within the $290-$295/st FOB range. Sources said that those who really needed product had bought, but for now, others were timid about these higher numbers. There were rumors of $300/st; however, some said those were probably forward trades.
PotashCorp’s Trinidad urea plant went down July 24 with a mechanical problem, but was expected to be back up within a week.
Eastern Cornbelt: Granular urea was pegged in a broad range at $300-$330/st FOB, with the low out of spot river locations and the upper numbers inland.
Western Cornbelt: Granular urea was quoted at $300-$325/st FOB regional terminals to the dealer, with the low out of spot river locations and the upper numbers inland. One Iowa source said dealer pricing in his location had firmed to a solid $320/st FOB last week.
Effective July 23, Agrium’s urea postings in the Northern Plains market moved to $345/st FOB North Dakota warehouses at Alton, Carrington, Colfax, Scranton, and Grand Forks, and $350/st rail-DEL in Minnesota, Wisconsin, and the Dakotas.
California: Rail-delivered urea remained at $360-$380/st in California. Effective Aug. 1, Simplot was slated to move its urea price to the $395/st FOB mark in the state.
Pacific Northwest: Effective July 23, Agrium’s urea postings firmed to $345-$355/st DEL in Montana and Wyoming, depending on location; $360/st FOB West Woodburn, Ore.; $365/st FOB Acequia and Pella, Idaho, and Washington terminals at Glade, Warden, and Wilson; $370/st DEL in Washington, Idaho, Oregon, and northern Nevada; $380/st DEL in northern and central Utah; and $385/st DEL in southern Utah. Those levels reflect a $30/st increase from the company’s July 1 urea postings in the region.
Simplot’s urea price FOB the Rivergate terminal in Oregon was slated to move on Aug. 1 to $340/st.
Western Canada: On July 13, urea pricing to the dealer was quoted in the $371-$396/mt DEL range in the region. On July 19, those numbers had firmed to $386-$411/mt DEL, and by July 23, urea was pegged at $411-$416/mt DEL in Manitoba, $416/mt DEL in Saskatchewan, and $421-$436/mt DEL in Alberta. Dealer reference levels from producers ranged from $420-$445/mt DEL in the region.
Pakistan: TCP closed its tender, and with it left the international market. The buying arm for the Pakistan government accepted the Transammonia offer of 50,000 mt firm and an optional 50,000 mt at $287.89/mt CFR. As last week closed, industry sources were convinced Transammonia would accept the optional bid from TCP.
With a purchase of 100,000 mt, Pakistan will not have to re-enter the international market, say sources. Domestic production is expected to be strong enough by the end of the year to allow Pakistan to be self-sufficient in urea.
Pakistan was forced into the international market when the government ordered natural gas away from industrial customers to residential needs – including power generation.
The denial of inputs for the urea plants meant the country would face a 400,000-mt shortage this application season. The series of tenders by TCP during the past month were designed to fill that gap.
The Pakistan industry has requested that the government not extend its gas curtailment plan, which is expiring July 31, in order to avoid a hike in urea prices and urea plants losses. Local sources say if it is extended for another two to three months, it could mean an additional need to import 150,000 mt of urea.
Middle East: Producers remain comfortable with plenty of contract sales on the books. The lack of the need to sell means producers can continue to call for higher prices.
One trader said that if a buyer were desperate enough to buy, he would likely be desperate enough to pay whatever price the producers are asking.
So far, say sources, no one has been that desperate.
India passed on the offers from the Arab Gulf producers in the latest round of tenders. The signal that prices should not go too high too fast was clear, said sources.
Reports of some deals, however, show that prices are edging upward.
One Asian trader noted that the going price for granular urea in the area is now in the low $270s/mt FOB. Prills – when available – are said to be going at a $5-$10 premium.
The apparent reversal in the granular-prill price differential is explained by the fact that ever-fewer plants in the area make prilled urea.
And yet people argue the price should really be in the mid-$260s/mt FOB. The main argument for the lower price is not what has been offered in past tenders or what the producers say should be paid, but rather industry analysts looking at the Black Sea price and then assuming a difference of $10-$15/mt.
New production in the area has focused exclusively on granular urea. Some companies have even phased out their prilled production in favor of granular in the past several years.
Adding to the growth of available material in the area, the Pardis Petrochemical plant in Iran inaugurated its second phase last week. The upgraded facility will now have a capacity of producing 2.1 million mt of granular urea each year. Press reports indicate a large portion of that output will be used for exports.
Black Sea: Sources say once all the costs are removed from
the deals signed and ready to be delivered to India, the netback
on Yuzhnyy material is in the upper $240s/mt FOB.
Product is flowing without any problem say Asian
sources.
The STC/India tender that closed last month could involve a lot of CIS material. Sources speculate that at least 100,000 mt of the Transammonia award, and all of the 110,000 mt from Dreymoor, will come from Yuzhnyy. Other offers may also include CIS material.
For now, say sources, the producers are comfortable.
Indonesia: Gresik called – and then cancelled – a selling tender for 15,000 mt. Sources say the tender was scrapped because Gresik had not completed some tax-related paperwork with the government. One source said the company called the tender before its export permit was approved.
Whatever the reason, the tender is on hold until the government gives the producer permission to sell its cargo offshore.
The Gresik managers are said to be hoping the paperwork moves quickly. Kaltim and PIM are expected to call tenders as early as next week.
The 15,000 mt offered by Gresik might get easily lost in the 120,000 mt the other two producers are expected to offer.
The Indonesian producers are looking forward to the tenders. The Asian price has firmed up a bit. Sources add that once the Chinese export duty goes back up to 110 percent in September, Indonesian material will look very good to regional buyers.
But the producers will only have 45 days to take advantage of the Chinese limits on exports. After October 15, the duty drops back to 7 percent.
China: The domestic price remains in the low $260s/mt FOB.
Sources report domestic and export demand is strong enough that there is little reason for producers to lower their prices.
Even at the current price level, however, producers are complaining that the price is too low. The cost of inputs for the plants has been rising. At the same time, the factories are under pressure from national and local government leaders to keep operating to ensure full employment. Sources report the plant managers are complying by reducing the output with no layoffs.
The reduced output keeps the urea supply limited, but not so limited that domestic buyers are worried about getting their allotments.
NITROGEN SOLUTIONS
U.S. Gulf: Most last week were calling the barge market $190-$200/st FOB ($5.94-$6.25/unit) and beyond. Reports circulated that domestic producers were out of product, and that if you really needed product you might have to get it from a reseller.
Eastern Cornbelt: The UAN market in the Eastern Cornbelt was reported in the $6.88-$7.34/unit FOB range to the dealer in late July, depending on location. Sources said there would be no UAN loading at Rentech’s E. Dubuque, Ill., facility from 7 p.m. July 30 through 7 a.m. Aug. 4.
Western Cornbelt: UAN-32 was pegged at $215-$230/st ($6.72-$7.19/unit) FOB to the dealer for prompt tons, with dealer reference prices from some suppliers in the $230-$245/st ($7.19-$7.66/unit) FOB range out of regional terminals.
California: UAN-32 was pegged at $245-$250/st ($7.66-$7.81/unit) FOB in the state, up slightly from last report. Delivered UAN-32 was quoted at $240-$260/st ($7.50-$8.13/unit), with the low for railed tons and the upper end for truck-delivered product. Simplot was scheduled to move its UAN-32 pricing FOB Stockton up to the $260/st ($8.13/unit) level on Aug. 1.
Pacific Northwest: UAN-32 pricing remained at $250-$260/st ($7.81-$8.13/unit) DEL in the Pacific Northwest region in late July.
Western Canada: UAN-28 pricing was on the rise in Western Canada. Dealer prices moved on July 19 from $221-$237/mt ($7.89-$8.46/unit) to $230-$246/mt ($8.21-$8.79/unit) DEL in the region. The market took another increase on July 23, to $246-$249/mt ($8.79-$8.89/unit) DEL in Manitoba, $249/mt ($8.89/unit) DEL in Saskatchewan, and $252-$261/mt ($9.00-$9.32/unit) DEL in Alberta. Dealer postings ranged from $256-$271/mt ($9.14-$9.68/unit) DEL in the region, depending on location.
AMMONIUM NITRATE
Western Cornbelt: Ammonium nitrate remained at $290-$300/st FOB in the region.
California: No market was reported for ammonium nitrate in California. CAN-17 remained at $242-$255/st FOB in the state.
Pacific Northwest: No current prices were reported for ammonium nitrate. CAN-17 was steady at $235-$245/st DEL in the region.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate remained at $170-$180/st FOB or rail-DEL in the region.
Western Cornbelt: Granular ammonium sulfate was tagged at $170-$185/st FOB in the Western Cornbelt, with the upper end of the range reported in Iowa.
California: Ammonium sulfate was unchanged at $220-$247/st FOB in California in late July, with the low for standard grade and the upper end for granular product in desert locations.
Pacific Northwest: Ammonium sulfate was steady at $220/st FOB and $225/st DEL in the Pacific Northwest.
Western Canada: Granular ammonium sulfate was pegged at $285-$290/mt DEL in Western Canada in late July, with dealer reference prices roughly $5/mt higher.
PHOSPHATES
Central Florida: The Central Florida phosphate business remained quiet last week, especially compared with the NOLA phosphate barge market. One of the primary reasons was a lack of inventory, although demand in the areas of the eastern part of the country is considerably less than on the river.
Phosphate producers were running as hard as possible, but earlier sales – mainly for export – have gulped down supplies, and inventories remain low. A trader said he was unable to obtain product from either CF or Mosaic.
Tropical Storm Bonnie rolled across Florida the previous weekend, but caused no serious damage before breaking apart in the Gulf of Mexico – and before it hit the spill areas from BP’s Deepwater Horizon disaster.
The Central Florida DAP price range was unchanged from the previous week’s $410-$415/st FOB. CF’s price increased another $10/st FOB to $425/st FOB, but the company was said to have nothing available. Mosaic had no posted price and was not making prompt sales last week. PCS was making sales at “competitive prices.” Agrifos also increased its asking price to $465/st FOB for MAP and $450/st FOB for DAP, and railcars were about $5/st FOB less.
Correction: The Central Florida Price Scan price for this product in last week’s issue (GM, July 26) should have matched the text at $410-$415/st FOB.
U.S. Gulf: The bulls were loose at the Southwest Conference at San Antonio last week, but whether they were running or just wandering around was hard to determine. Certainly, NOLA phosphate barges were traded and prices rose from the previous week.
At least one NOLA DAP barge was sold and at a high price – $448/st FOB – but sources called it forward and not prompt. Early during the meeting deals were few and far between, but trading activity picked up toward the end of the event.
Confidence in the phosphate market was probably the major result; almost everyone believed the price would remain strong through the fall season, and there were no signs of a reversal. The main reason was a lack of supply availability. Another was demand, which was projected to remain strong, because dealers have large gaps in what they have on hand and what they have coming to meet their customers needs. The number of barges available for delivery on a prompt basis was limited, and that helped push up prices.
Corn was yo-yoing last week, dropping early in the week and then rising back to around where it had been earlier. By mid-week, the futures board was around $3.90/bushel, a good price for farmers and for the phosphate industry. Meanwhile, the U.S. Department of Agriculture was expected to release another corn report soon, and speculation was mixed on whether it would show more or less being produced. Regardless, it will affect prices of both corn and phosphate.
Sources said warehouse prices were adjusting to reflect the higher price of phosphate barges.
Early last week at the conference, NOLA DAP barges were purchased as low as $440/st FOB, but toward the end of the conference barges were bringing as much as $442/st FOB. Based on confirmed sales last week, the NOLA DAP range was $440-$442/st FOB, compared to the previous week’s range of $431-$436/st FOB.
Eastern Cornbelt: DAP was tagged in the $465-$475/st FOB range, with the low in Illinois and the upper numbers reported in the Indiana and Ohio market. MAP was $10/st higher than DAP. One regional supplier moved its DAP postings up on July 30 to $470/st FOB Peoria, Ill., and $475/st FOB Cincinnati, Ohio.
10-34-0 pricing had reportedly firmed to $355-$365/st FOB in the region.
Western Cornbelt: Sources quoted the DAP market at $465-$475/st FOB in the region, with the upper half of the range reported in the Iowa market last week. MAP was $10/st higher than DAP. One regional supplier moved its DAP postings up on July 30 to $470/st FOB St. Louis, Mo., and $475/st FOB Inola, Okla., and Pine Bend, Minn., with MAP postings moving to $485/st FOB Inola and Pine Bend.
10-34-0 was pegged in the $345-$365/st FOB range in the region, with the upper end again in Iowa.
Simplot announced last week that phos acid pricing in the Midwest would firm on Aug. 1 to $8.15/unit DEL. That number is up from an earlier announcement from the company that prices would firm $0.10/unit on Aug. 1 to the $7.85/unit DEL in its Midwest sales region.
Agrium also issued a new price list for phos acid, with SPA and MGA moving on Aug. 1 to $795/st DEL in Colorado, Iowa, Kansas, Minnesota, Nebraska, New Mexico, the Dakotas, Oklahoma, Texas, and Wyoming.
California: On July 26, Agrium’s MAP postings firmed to $500/st FOB or rail-DEL in California and Arizona. Simplot also moved its MAP and DAP postings on July 30 to $500/st FOB or rail-DEL in California and Arizona, up from the $485/st level the company had referenced on July 15.
16-20-0 had reportedly firmed to $334-$364 FOB in California, depending on location, with the upper end FOB El Centro. Simplot’s reference price for 0-45-0 SSP was slated to move on July 30 to $442 FOB or rail-DEL.
Phosphoric acid pricing remained at July pricing levels of $8.45/unit DEL for both SPA and MGA. Simplot announced a $0.10/unit increase in its SPA and MGA postings, effective Aug. 1, bringing postings to the $8.55/unit DEL level in California, with MGA moving to $8.75/unit FOB in the state. Agrium also published an Aug. 1 price list for SPA and MGA at $855/st rail-DEL in Arizona and California.
10-34-0 was steady at $370-$390/st FOB in the state, but sources said a $3/st increase would take effect Aug. 1 with the firming phos acid prices.
Pacific Northwest: Effective July 26, Agrium’s MAP postings firmed $20/st to $485/st DEL in Montana and Wyoming; $490/st DEL in southern Idaho, Utah, Nevada, and Oregon’s Malheur County; and $490/st FOB and $495/st DEL in Washington, northern Idaho, and Oregon excluding Malheur County.
On July 30, Simplot’s DAP and MAP postings moved to $485/st FOB or rail-DEL in Montana, $490/st FOB or railDEL in Idaho and Utah, and $490-$495/st FOB or rail-DEL in Nevada, Oregon, and Washington. Those levels were up $15/st from Simplot’s July 15 postings.
Simplot also moved its 11-37-0 postings up on July 21, to $405/st FOB Pocatello, Idaho, and $415/st FOB Ontario, Ore. The company’s 16-20-0 postings were slated to move up on July 30 to $321-$326/st DEL in the region, with 0-45-0 SSP postings from the company firming to $437/st FOB Pocatello.
Sources said 10-34-0 pricing in the region had firmed as well, to $375-$400/st FOB.
SPA and MGA remained at July pricing levels of $8.45/unit rail-DEL in the region. Simplot announced a $0.10/unit increase in its SPA and MGA postings effective Aug. 1, bringing postings to the $8.55/unit DEL level in the Pacific Northwest. Agrium also published an Aug. 1 price list for SPA and MGA at $855/st rail-DEL in Idaho, Montana, Nevada, Oregon, Utah, and Washington.
Western Canada: MAP pricing to the dealer firmed $20/mt on July 23, from $562-$597/mt to $582-$617/mt DEL in Western Canada, with the low in Manitoba and the higher numbers reported in Alberta. Dealer reference levels ranged from $590-$625/mt DEL in the region in late July.
10-34-0 was up some $10/mt, moving on July 23 from $470-$473/mt to $480-$483/mt DEL in the region.
U.S.Export: PhosChem made a sale into Central America of a mixed cargo of DAP and MAP at $475/mt FOB, but said it was not making offers late last week due to a lack of inventory. It and other export sellers were looking for a new price of $480/mt FOB for the next deal.
A source said Argentina was looking for supplies, but was offering a price that was about $10/mt FOB lower than what PhosChem did last week. In addition, India and Brazil were believed to be seeking additional product.
A lack of inventory was the strongest factor in the firm price of phosphates on both the export and domestic markets, and prices were likely to increase for the next sale.
Based on the last sale, the export DAP price range last week increased from the previous range of $455-$465/mt FOB to at flat $475/mt FOB.
India: Government buyers have been calling for tenders for DAP – and then rejecting the offers because of high prices.
Sources report that private purchasers of DAP have been able to nail down better deals than the government-run or cooperative buyers.
The big issue is making sure the material comes in under the set price for subsidies. The government companies cannot agree to any deals that are higher than the level set by the government. Private operators, however, can bring in higher-priced material and mix it with earlier tons purchased at a lower price to get an average price still under the government limit.
Asia: Sources report that Chinese producers are making offers to Indian buyers at $460/mt FOB. The only problem is that the Indians do not want to pay more than $470/mt CFR.
The Chinese domestic demand is picking up. Regional and government buyers are beginning to buy tons for shipment to local warehouses for the upcoming application season.
The increase in domestic demand in China is helping shore up prices.
The big issue in the area is not the supply of DAP, but rather the availability of vessels.
With larger urea and NPK orders already on the books, sources say people trying to move DAP are facing a limited number of ships.
At the same time, many ship owners are nervous about having their vessels tied up in port waiting to either be loaded or unloaded. And as the number of fertilizer and grain orders increase, the possibility of delays at the ports also increases.
The big push seems to be trying to get Chinese DAP out before the export duty goes up at the end of the month.
Bangladesh: BCIC has issued a tender for 10,000 mt of phos acid for delivery to Chittagong. Bids are due Aug. 18 and will be valid for 30 days.
POTASH
Eastern Cornbelt: Potash remained at $380-$390/st FOB most regional warehouses, with summer fill postings from producers at the $390/st FOB and $400/st rail-DEL levels in the region.
Western Cornbelt: Potash was steady at $380-$390/st FOB regional warehouses to the dealer, with rail-delivered potash in the $385-$405/st range.
California: Potash was quoted at $415-$425/st in the state. Potassium nitrate remained at $929-$996/st FOB, with the low for bulk tons and the upper end for bagged product. Sulfate of potash (SOP) was quoted at $620-$650/st FOB for bulk tons.
Pacific Northwest: Potash remained at $405-$415/st FOB warehouses and $415-$425/st DEL in the region. Intrepid Potash’s prices for potash FOB Moab and Wendover, Utah, include $355/st for 60 percent white standard and $360/st for 60 percent white granular potash.
Western Canada: Potash was quoted at $397-$406/mt FOB Saskatchewan mines to Canadian customers, depending on grade, producer, and location. Out of Western Canada warehouses, the market was pegged in the $412-$437/mt FOB range, with the lower half reported in Manitoba for 60 percent red potash and the upper end for 62 percent white granular tons FOB Calgary, Alberta.
SULFUR
Tampa: Early last week, phosphate producers and their sulfur suppliers reached an agreement on new pricing for the third quarter, which was down $50/lt for molten delivered to Tampa by oceangoing vessels. The new price was $95/lt FOB.
The international market moved in both directions while the talks were ongoing – first down, then back up. China was the major player in that market, and last week prices in the Middle East were on their way up. China was paying around $110/mt DEL, which was an increase of as much as $30/mt from the low point during the Tampa talks.
Meanwhile, refinery rates remained very high, in excess of 90 percent, which meant there were no shortages in the supply chain. Demand was also strong from both phosphate producers and from industrials, which could mean the economy in general was improving.
Vancouver: Delivered prices of sulfur to China moved up again last week, which was good news for the industry at Vancouver. In addition, oceangoing freight rates were more favorable than in the recent past.
Pakistan: Oil & Gas Development Co. (OGDC) has issued a tender to sell 12,000 mt of sulfur in 15 lots, with bids due Aug. 10.