“I’m still perplexed why farmers aren’t coming to the table,” said one source, referring to the poor year-end ammonia prepay sales at the retail level. “I just don’t think they are believers in the market.”
Western Cornbelt: Anhydrous ammonia was pegged in the $640-$670/st FOB range out of regional terminals, depending on location and time of delivery.
Northern Plains: Minnesota sources quoted the ammonia market at $673/st FOB for cash market or prepay tons on the low end. Delivered ammonia in the North Dakota market was pegged in the $720-$725/st range for limited prompt or prepay tons.
Great Lakes: The anhydrous ammonia market was quoted at $685-$690/st FOB in the region, with the low reported by southern Wisconsin sources for spring prepay offers.
Black Sea: Industry observers are still waiting to see what happens in the Tampa talks. Demand is just strong enough to keep the price stable, with a slight push upward.
Just two weeks ago the top end of the market was seen at $460/mt FOB, with a $10 spread to the low end. By the middle of last week, $460/mt FOB was seen as the bottom of a narrow price spread.
Sources peg the market at $460-$465/mt FOB. Sources said sellers are now quoting $470/mt.
UREA
U.S. Gulf: Granular urea barge prices continued to erode last week, with most calling recent trades in the $375-$378/st FOB range. Sources speculated that if you really wanted a barge, you could buy it at a lower price. Indeed, later in the week came reports that $365/st FOB was done for second half February. One source said that buyers come into the market for two reasons demand and prices going up. Right now, he said, neither is happening.
The recent flush of imports has put pressure on the market, say sources. Sources say that right now there is some concern that too much product may be available, but they say that once the season hits, there may not be enough.
As evidence of the current market situation, there was some speculation that one trader might be looking to re-export some product out of NOLA to South America.
Eastern Cornbelt: Granular urea remained in the $420-$440/st FOB range in the region, with the low reported in the Illinois market and the upper end on a spot basis in Ohio. One Illinois source said delivered urea could be had for as low as $410/st in late January, but tons at that level were limited.
Western Cornbelt: Granular urea was steady at $410-$440/st FOB in the region, with the low in southern Missouri and the upper end reflecting dealer reference prices in the Iowa market.
Northern Plains: Granular urea was quoted at $420-$425/st FOB Minneapolis for spring tons. North Dakota sources tagged the urea market at $460/st FOB warehouses or on a delivered basis.
Great Lakes: The granular urea market was pegged at $425-$445/st FOB, with the upper end in Michigan and the low quoted in the Wisconsin market for spring tons.
Northeast: The granular urea market was tagged at $425-$430/st FOB Philadelphia and $450/st DEL to locations in southern Pennsylvania.
Pakistan: The only real item of discussion among traders was speculation on how Pakistan was going to get the 225,000 mt it needs right away. Last month after the central planners realized the country was going to be nearly 250,000 mt short of demand for the current Rabi season, bureaucrats went into high gear to secure the needed urea. The first step by government committees was to figure out how to bypass the scandal-ridden Trading Corporation of Pakistan (TCP).
After reviews of the demand and stockpiles, the figures showed a gap of 225,000-250,000 mt for the current season. The shortfall came because natural gas that was diverted from industrial use to consumer use early last year was never returned to the factories. The earlier estimates of urea that should have been on hand were done on the assumption that the natural gas would be returned for urea production by the fourth quarter of 2010. When it wasn’t, the industry told the government the lost production would be about 250,000 mt.
The government moved to renew a loan agreement with Saudi Arabia to buy the needed urea from Sabic. At the same time, ministerial level meetings were held to discuss changing the import rules to allow private sector importers to handle the purchase.
After all the private companies turned down the government, the job was sent to TCP. The government buying house has been under fire the past six months, with allegations of corruption and incompetence. Many of the political leaders did not trust TCP to handle the urea purchases properly. In the end, they had no choice.
Even as the accountants and buyers at TCP were gearing up to make arrangements with Sabic to import the urea, the Saudi government turned down the Pakistani government’s request for a urea-specific loan. At the same time, Sabic said it could not ship 225,000 mt in the short timeframe laid out by the ministerial committee. The situation continued to look gloomy for farmers who needed urea.
The Pakistani government estimated there was only 55,000 mt in reserve. And those tons were earmarked for the victims of the flooding that took place last year.
The latest attempt to get the needed tonnage as soon as possible came up at a session of the Economic Coordination Committee (ECC) of the cabinet. A proposal was laid on the table to divert natural gas back to the urea producers for one month.
The producers assured the ECC that with full supplies of gas they could produce the needed urea within that one-month period. The ECC also looked at importing the necessary natural gas to run the plants.
In the end, the final issue to resolve is the money. Pakistan is short on convertible currency. Loans for specific purchases from Arab countries have helped Pakistan meet many of its import needs, especially fertilizer. But this time, the Saudis refused to play ball with the Pakistani government.
Sabic, like other Arab producers, is sufficiently booked with orders that it does not see a need to offer its material at a slight discount or in a rushed manner.
The agriculture experts said the missing tons would have to be delivered by the first week of February to ensure no shortages in the fields. Industry watchers say Sabic may have a cargo or two available sometime in February, if the price is right. So far, Sabic has been unwilling to lower its prices for TCP.
In the end, TCP will have to call a tender, say sources. The government will have to find the money from somewhere – or face the wrath of angry farmers.
India: People talk about India coming back in, but not until late March or early April. For now, the discussion focuses on the potential changes the government may put in place for urea purchases. The main focus of the treasury ministry is to cut back on how much is paid out in subsidies.
During the past few months everything from removing subsidies to making no changes in the plan was floated. Now, say reports in local media, the government may be zeroing in on a compromise.
Limited subsidies will be provided up to a certain level. After that, the price will be allowed to rise.
Needless to say, representatives of the end users are not happy with any plan that could mean their constituents will have to pay more for urea.
Another part of the suggested plan is to allow for more companies to import urea for direct application.
The government panels are still working on the plan. Government sources assure local media that a new plan will be hammered out by the end of the fiscal year in March. After April 1, once the new plan is in place, sources expect to see aggressive buying and bargaining from India.
Middle East: Sources report producers are under no pressure to lower their prices. All producers appear to have full order books. And yet, the pricing situation is a mixed bag.
Prills from the area are sliding ever so slightly. Sources peg the current price at $370-$380/mt FOB.
Granular, on the other hand, seems to be strengthening. Sources say that despite a few cargoes heading to Brazil and African countries, bidders are pushing for lower prices while producers point to tight supplies and steady demand. The price for granular from the area is now placed solidly in the $390s/mt FOB, with some traders saying the price is just a hair’s breadth from $400/mt FOB.
One trader noted that besides the steady contract orders, the upward price pressure is also coming from rising oil prices. The producers of petroleum are also urea producers. The global rise in oil prices is directly affecting urea production costs.
Sources speculate that the prilled price is coming off because of a growing softness in the Yuzhnyy/Black Sea market. At the same time, granular remains highly popular in the Americas, Africa, and with most Asian buyers.
Black Sea: The impact of the Fedcominvest giveback of tons earlier this month is still being felt. The last reported set of bids came in at $360/mt FOB.
Some cargoes for Latin America, Africa, and Turkey helped slow the slide, but not enough, say sources.
Traders and producers are quick to point out that so far nothing has sold for less than $365/mt FOB. At the same time, they add that little can be seen above $370/mt FOB as well.
Helping prevent a freefall in prices, say sources, are a steady demand and reports of natural gas diversions from industrial to consumer use.
In the end, traders agree the price range is $365-$370/mt FOB.
China: Sources report that a number of traders are trying to move out whatever tons they still have in bonded warehouses.
Traders are quick to point out that no one is holding a fire sale on Chinese urea. What are being sold are largely small quantities to places such as Taiwan and Sri Lanka.
Sources report one small cargo was sold from China to Taiwan Fertilizer last week at $425/mt CFR. The netback to the Chinese bonded warehouse was pegged at $400/mt FOB. Hardly a cheap price, but one that could have been higher in a stronger market.
Sources say the holders of the Chinese tons are under pressure from their banks to sell off some of their holdings to help reduce storage fees.
Nepal: The government awarded its Jan. 12 urea tender to IPL, but for only 25,000 mt instead of the proffered 35,000 mt. The Indian trading house offered at $507/mt CIF.
NITROGEN SOLUTIONS
U.S.Gulf: The market remained quiet, with barges continuing to be called $285-$290/st FOB ($8.91-$9.06/unit).
EasternCornbelt: UAN-32 was quoted in the $340-$350/st ($10.63-$10.94/unit) FOB range out of regional terminals, with delivered tons in the $350-$360/st ($10.94-$11.25/unit) range for prompt or prepay.
Western Cornbelt: UAN-32 was unchanged at the $325-$340.80/st ($10.16-$10.65/unit) range FOB regional terminals, with the low in Missouri on a spot basis and the high in Iowa.
NorthernPlains: UAN was reported in the $10.94-$11.25/unit FOB range in the region, depending on location and time of delivery. North Dakota sources quoted delivered UAN-28 at $310-$320/st ($11.07-$11.43/unit) last week, with the low for prompt tons and the upper end for spring prepay in a defined delivery zone.
Great Lakes: Rail-delivered UAN-32 was quoted in the $350-$360/st ($10.94-$11.25/unit) range in the region in late January for either prompt or prepay tons. Out of regional terminals, the market was pegged in the $340.80-$353.60/st ($10.65-$11.05/unit) FOB range for cash tons last week.
Northeast: The UAN-30 market continued to be quoted in the $290-$295/st ($9.67-$9.83/unit) range FOB Baltimore, with the low for prompt and the upper end for prepay tons. One source also reported that UAN-32 prepay tons out of Baltimore were being referenced at the $320/st ($10.00/unit) FOB level last week. Out of terminals in upstate New York, the UAN-32 market was steady at $340/st ($10.63/unit) FOB to the dealer.
The UAN vessel market had firmed to $325/mt CFR for new indications, although sources said there might still be some cheaper tons available.
AMMONIUM NITRATE
U.S. Gulf: The most recent barge trades continue to be called $330/st FOB, with quotes at $332-$355/st FOB for the next round of business.
Western Cornbelt: Ammonium nitrate pricing remained at $365-$385/st FOB in the Western Cornbelt region.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate prices continued to firm for limited tons. Sources quoted the dealer market in the $325-$340/st FOB range for any available product last week.
Western Cornbelt: Tight supplies contributed to a still strengthening ammonium sulfate market in the region. Sources quoted the dealer market for granular ammonium sulfate in a broad range at $310-$340/st FOB, with the low in Missouri and the upper end in the Iowa market.
Northern Plains: Sources continued to report tight ammonium sulfate inventories in the region. Some Dakota sources reported zero ammonium sulfate tons available last week, while Minnesota contacts tagged the spot market at a solid $330/st FOB for any available product.
Effective Jan. 14, Agrium’s granular ammonium sulfate postings firmed to $330/st DEL in North Dakota and Minnesota.
Great Lakes: Granular ammonium sulfate was pegged as high as $325-$340/st FOB in the region for limited tons, with the low quoted in the southern Wisconsin market. Effective Jan. 14, Agrium’s granular ammonium sulfate postings firmed to $330/st DEL in Wisconsin.
Northeast: Granular ammonium sulfate was quoted in a broad range at $305-$330/st DEL in the region, depending on location and supplier.
California: Simplot’s ammonium sulfate postings moved on Jan. 20 to $275-$310/st FOB in California, depending on location, not to the $265-$280/st FOB range as reported in the Jan. 23 issue of Green Markets.
PHOSPHATES
Central Florida: Late last week Mosaic had already settled with its sulfur suppliers on a first-quarter price $25/lt up from the previous quarter, but PotashCorp was still negotiating. No new prompt sales were found last week, and sources said that dealer inventories were high. They believe the season will not become busy until farmers begin to pull material from dealers’ bins.
The Central Florida DAP price range was unchanged from the previous week at $540-$550/st FOB. Smaller lots from traders could cost $5-$10/st FOB more. CF’s price was $540/st FOB. Mosaic’s price was $550/st FOB. MAP was listed at a premium of $10/st FOB in comparison to DAP in Central Florida. PCS Sales was making sales at comparable prices to the market. Agrifos’ price for truck sales was $585/st FOB for DAP and $595/st FOB for MAP, but was $5/st FOB less by rail.
U.S. Gulf: It was mid-winter, and activity is normally very slow at this time of year. Many were looking forward to TFI’s meeting in Scottsdale in early February, when they believed an abundance of business would be conducted.
Moroccan and Russian vessels were due to arrive this week, so inventories will not be taking a hit until early spring – after the current influx of imported material is depleted.
Warehouse prices were unchanged last week, still in the $585-$600/st FOB range.
Corn for December was up from the previous week’s $5.705/bushel to $5.89/bushel last week, and corn for December 2012 moved from $5.25/bushel to $5.41/bushel. Soybeans for November were slightly weaker at $13.23/bushel, compared to $13.345/bushel the previous week, and $12.14/bushel for November 2012. Wheat for July was also up from $8.47/bushel to $9.61/bushel, and July 2012 was $8.99/bushel.
Based on actual sales, the NOLA DAP barge price range last week was up at the bottom to $548-$550/st FOB from $546-$550/st FOB a week earlier. MAP was bringing apremium of $15-$20/st FOB for NOLA barges.
Eastern Cornbelt: Sources reported minimal dry spreading activity in the region due to winter weather conditions. DAP was quoted at $590-$610/st FOB in the region in late January, with the low reported out of river locations in Illinois on a spot basis. MAP was $20/st higher than DAP. 10-34-0, where available, was pegged in the $625-$640/st FOB range in the region last week.
Western Cornbelt: DAP pricing remained in a broad range at $585-$600/st FOB regional warehouses, with MAP pegged at $610-$630/st FOB. The 10-34-0 market was tagged in the $625-$640/st FOB range in the region for any available tons, which were limited.
Simplot’s phosphoric acid postings will firm $1.20/unit on Feb. 1, to $12.60/unit DEL for both SPA and MGA in its Midwest sales area. Agrium also announced a phos acid pricing increase for Feb. 1, moving to $1,260/st rail-DEL for both SPA and MGA in Colorado, Iowa, Kansas, Minnesota, Nebraska, New Mexico, North Dakota, South Dakota, Oklahoma, Texas, and Wyoming.
Northern Plains: The DAP market was tagged at $592-$600/st FOB in Minnesota, with MAP quoted in the $612-$620/st FOB range in Minnesota and up to $650/st FOB out of spot North Dakota warehouse locations.
The 10-34-0 market was quoted at a solid $600/st FOB in both Minnesota and North Dakota for any available tons, which were limited.
Great Lakes: DAP was pegged at $605-$625/st FOB in the region, with the low in Wisconsin and the upper end in the Michigan market. Southern Wisconsin sources also quoted delivered DAP at the $605/st level in late January. MAP was $10-$20/st higher than DAP, where available.
The 10-34-0 market was quoted at $625-$650/st FOB for very limited tons. One Wisconsin source said none of his suppliers were pricing any10-34-0 tons in late January.
Northeast: Delivered MAP was reported in the $638-$652/st range in the region, depending on location. Out of regional warehouses, sources quoted the MAP market at $635/st FOB, with DAP in the $610-$620/st FOB range.
10-34-0 pricing was up from last report at $540-$575/st FOB, with the low reported at Mt. Jackson, Va., and the upper end out of terminals in upstate New York.
Western U.S.: Simplot’s phosphoric acid postings will firm $1.20/unit on Feb. 1, to $12.60/unit DEL for both SPA and MGA in the Western U.S. In the California market, Simplot’s FOB price for MGA will firm on that date to $12.80/st.
As a result of that pricing increase, Simplot reported that its 10-34-0 price in the California market would firm $41/st on Feb. 1, while 11-37-0 prices will move up $45/st.
Agrium also announced a phosphoric acid price increase for Feb. 1, moving to $1,260/st rail-DEL for both SPA and MGA in Arizona, California, Idaho, Montana, Nevada, Utah, Oregon, and Washington.
In addition to the new phos acid prices, Simplot also reported some corrections to other fertilizer prices in the California region. Simplot’s 16-20-0 prices in California are $451-$456/st FOB Lathrop and $458-$463/st FOB warehouses in Northern California, $5/st higher than the levels reported in the Jan. 23 issue of Green Markets. Simplot also clarified its 0-45-0 pricing increase in California, noting that the market had firmed $15/st instead of the $20/st increase reported in the Jan. 23 issue of Green Markets.
U.S. Export: No new export sales were found last week, but India should be coming on the horizon for a new contract sometime soon. That country accounted for the majority of exports of phosphate from the U.S. last year, and the same situation was expected to occur this year.
The export DAP price range continued unchanged at the same flat $600/mt FOB, as it has for more than a month.
Nepal: Sources say Wilson Trading took the Jan. 12 DAP tender with 20,000 mt at $719/mt CIF. One observer noted that Wilson was the only company offering tons in the tender, and the price was about $70 lower than a tender just a week earlier that was subsequently scrapped.
Pakistan: The National Fertilizer Development Center reports DAP availability in current season would be 850,000 mt, which included 405,000 mt of inventory, 118,000 mt of imported supplies, and domestic production of 327,000 mt. Expected consumption of DAP during current season is about 804,000 mt. Although no shortage was reported during the season, the inventory stocks with the importers were low.
POTASH
U.S. Gulf: New barge trades were called $475-$485/st FOB. Some said the lower prices were due to lower quality imports.
Eastern Cornbelt: Potash was steady at $505-$515/st FOB regional warehouses at mid-month. Several sources who have attended recent state trade shows said much of the talk at those events was about the possibility of another potash pricing hike in advance of the spring season. Others, however, doubted that there was a lot of potash to move yet. “A lot went down last fall, and warehouses are full or will be after current orders are shipped,” noted one contact.
Western Cornbelt: Potash remained at $495-$515/st FOB regional warehouses, with the low in southern Missouri and the upper end quoted in the Iowa market as the common dealer price for red granular tons.
Northern Plains: Minnesota sources pegged the potash market at $507-$515/st FOB. Delivered potash was quoted in the $525-$535/st range in the Dakotas, although dealers continued to pull tons ordered earlier in the $455-$465/st DEL range
Granular potash FOB Saskatchewan mines ranged from $475-$480/st FOB.
Great Lakes: Potash was steady at $515-$525/st FOB regional warehouses, depending on grade and location.
Northeast: Potash remained at $510-$525/st FOB and $530-$540/st DEL in the region.
SULFUR
Tampa: On Jan. 21, Mosaic settled its first-quarter molten sulfur contract prices with all of its major suppliers at $185/lt, which was $25/lt up from the previous quarter for deliveries to Tampa. However, PotashCorp was still in the process of negotiating nearly a week later. Until both have reached settlements, Green Markets will not change its sulfur index.
Sources said last week that sulfur supplies were continuing to get tighter, and the situation was expected to worsen during the next month or two as refineries begin their turnaround season. The U.S. Department of Energy had not released its refinery operating capacity report for the week at press time, but it was believed rates were down about 3 percent from the previous week.
According to sources Freeport was planning to begin shipping sulfur to its new sulfuric acid plant at Arizona, which will remove another 150,000 tons of sulfur from the supply chain.
Vancouver: With China paying less for sulfur than it had in the recent past, a source said Vancouver was looking for quality sulfur sales rather than large quantity deals.
Vancouver’s costs for sulfur were said to be expensive due to the cost of rail from Alberta, prilling, and storage. South African companies that mine nickel, and possibly Mexico, were said to be targets for that type of sale.
MARKET NOTES
Pakistan: The country’s only DAP manufacturer – Fauji Fertilizer Bin Qasim Ltd. (FFBL) – has declared a profit after taxation of Rs.6.51 billion (US$76.59 million) in FY2010, compared to Rs.3.78 billion in the corresponding period last year, showing a growth of 72.14 percent, according to their financial results sent to Karachi Stock Exchange. FFBL produced 659,556 mt of DAP between January and December 2010, compared to the prior year’s 540,096 mt, reflecting growth of 22.12 percent. However, its urea production was down to 524,356 mt from 627,079 mt in 2009, depicting a fall of 16.38 percent. The company attributed the urea shortfall to non-availability of required quantity of gas and a turnaround during the year.
