U.S. Gulf:
NOLA potash barges continued to step up, with the market quoted at $635-$655/st FOB compared to the week-ago $625-$655/st FOB. There were reports of $660/st FOB being offered, but no firm conclusions. Nutrien has posted NOLA barge equivalent prices at $715/st FOB, up from $690/st FOB.
Eastern Cornbelt:
Potash pricing was quoted at $710-$725/st FOB for prompt tons in the Eastern Cornbelt, up slightly from last report. Michigan sources pegged the market at $735/st FOB Toledo and $738/st FOB Webberville for prompt.
Nutrien closed its order book for 1Q potash sales on Feb. 14 and increased prices across North America by $25/st for 2Q. This takes the reference price to $750/st FOB in the Midwest for 60 percent red granular potash, and $765-$795/st to U.S. terminals and rail direct destinations outside of the Midwest, based on geography and logistics costs. The company said a $20/st premium will apply for all 62 percent white granular grades.
Nutrien said potash supply and demand fundamentals are strong, fueled by firm corn, soybean, wheat, cotton, and crude palm oil futures prices. The company added that demand continues to outstrip supply in key potash destinations.
Western Cornbelt:
Potash pricing was quoted at $690-$720/st FOB in the Western Cornbelt, with the St. Louis market confirmed in the $690-$700/st FOB range. The Catoosa/Inola market was pegged at $685-$695/st FOB. Regional sources were quick to note that the 2Q pricing increase from Nutrien won’t show up in the market for a while.
“I think it will be a hard sell unless there are very strong applications this spring, as I have seen growers cutting usage rates at prices of this level,” said one market source. “If they have good fertility levels, they can cut rates for a while, and the same regarding phosphates.”
Intrepid also announced higher potash prices late in the week. New postings FOB Carlsbad, N.M., include $805/st FOB for 60 percent white granular and $825/st FOB for 62 percent white standard, up $25/st from the company’s last postings in mid-December.
Intrepid’s potash prices at FOB Moab and Wendover, Utah, also jumped $25/st, to $800/st for 60 percent white standard and $805/st for 60 percent white granular.
Western U.S.:
Nutrien’s postings for 60 percent red granular potash in the Western U.S. also jumped $25/st for 2Q, to $800/st FOB in Idaho and $830/st FOB in Washington and Oregon. In California, the market firmed to $895/st FOB for 62 percent white granular tons.
Northern Plains:
Sources quoted potash offers at $700-$720/st FOB St. Paul, although new reference prices from North American producers for 2Q tons had reportedly firmed to $750/st FOB. The market FOB Saskatchewan mines for 2Q tons was reported at $720-$730/st after netbacks, depending on grade and destination.
Northeast:
Potash pricing firmed to $750-$760/st FOB in the Northeast for limited prompt or 2Q tons, with the low confirmed at Lancaster.
Eastern Canada:
Sources reported new potash pricing offers up to C$1,040-$1,056/mt FOB in Eastern Canada for 2Q tons, up significantly from the last reported range of C$990-$1,030/mt FOB for 1Q.
Nutrien reported that it has closed its 1Q order book and is now referenced at C$1,010/mt FOB Saskatchewan mines and C$1,040-$1,050/mt FOB warehouse locations in Eastern Canada for 2Q shipment.
“Time will tell if we see support for the new potash numbers, but I have a feeling that we will not and will start to see usage cuts,” said one regional contact. Added another source: “We expect some pull-back on usage, but the real determinant will be the grain market. A strong market going into spring will focus growers on profitability, not cost.”
Belarus:
JSC Belarusian Potash Co. (BPC) notified customers that potash producer Belaruskali OAO on Feb. 16 declared force majeure after it could not find alternatives to railing product to the Lithuanian port of Klaipėda, according to reliable sources, citing a notice from BPC.
While widely anticipated by most market participants since Lithuania halted the transit of Belarusian potash through its territory at midnight on Jan. 31, the Belarusian declaration of force majeure has ratcheted up global supply anxieties that were already being driven by U.S and E.U. sanctions on Belarus, pushing soaring global potash prices still higher.
Belarus potash accounts for around 15 percent of global potash exports, but is now effectively out of the market.
China/India:
Canpotex on Feb. 14 announced that it had agreed to a new potash supply contract with Indian Potash Ltd. (IPL), India’s biggest potash importer, for potash shipments through Dec. 31, 2022, at a price of $590/mt CFR. The following day, Canpotex reported that it had also reached a deal with China’s potash buying committee for shipments of standard grade potash through to Dec. 31, 2022, at the same price of $590/mt CFR.
The new price reflects an increase of $145-$310/mt over last year’s Indian potash contract price, and a $343/mt increase on the 2021 China contract price.
Canpotex did not comment on the delivery volumes, but shipments are expected to take place April through December, according to Nutrien Ltd. Interim President and CEO Ken Seitz, speaking at a company earnings call on Feb. 17.
Rumors had been circulating suggesting the new price for India and China could be somewhere between $500 and $600/mt. Offers into RCF’s tender for the supply of 170,000 mt of standard potash that closed on Jan. 28 (GM Feb. 4, p. 15) were reportedly “north of $600/mt CFR.”
The first agreement on new supply contracts to India and China traditionally sets the price for other suppliers and buyers in those countries. Indeed, ICL Ltd. announced on Feb. 17 that it had signed framework agreements for the supply of potash with its customers to China for the next three years (2022-2024).
As part of these agreements, ICL said it had signed contracts with its customers in China to supply an aggregate amount of 700,000 mt of potash, with mutual options for an additional 250,000 mt, to be supplied by the end of 2022. ICL confirmed the selling price in the contracts at $590/mt.
The new contract price set for India will now act as a benchmark for awards in the outstanding RCF tender, and also for FACT, which closed a tender on Feb. 14 for two 40,000 mt lots of standard potash for delivery to Tuticorin port in March and April (GM Feb. 11, p. 16).
Meanwhile, National Fertilizers Ltd. (NFL) on Feb. 17 issued a Request for Proposal (RFP) for entering into a long-term agreement/MOU with producers of potash for the supply of 200,000 mt of standard pink/red potash.
Of this total, 125,000 mt is required with the tentative shipments from the load port set for March 15 and June 15, and the balance of 75,000 mt for shipment between Aug. 1 and Sept. 30. Delivery is to both East Coast and West Coast ports. The deadline for submissions was set at March 21.
Brazil:
The MOP market remains steady, even as concerns grow over the potential of Belarus material no longer being available. Sources put the price at $770-$815/mt FOB.
The April 1 effective date of the sanctions against Belarus has raised some anxiety among buyers. To add to their concern, Belaruskali declared a force majeure on their shipments out of the Lithuanian port of Klaipeda. To top it off, China and India settled their major purchases for the year, locking up tons.
Inland trading showed a bit of movement as prices tightened. Sources put the market at $900-$930/mt FOB ex-warehouse.
Following a visit to Moscow that included a meeting with Russian President Vladimir Putin, Brazilian President Jair Bolsonaro said potash imports from Russia will soon double.
According to Trade Data Monitor, Brazil imported 3.6 million mt of MOP from Russia in 2021. Imports of Belarus material were reported at 2.4 million mt. Based on this data, if the Brazilian-Russian deal goes through, Brazil will not have to worry about the sanctions imposed on Belarus by the U.S.