All Posts from January 1, 2007

Market Watch

AMMONIA

U.S. Gulf/Tampa: Ammonia prices were up across the board at major price points. First half Tampa was up a good $10/mt to $350/mt DEL, with reports that another $10/mt jump was in seller sights last week.

In the meantime, across the Gulf, Yara was reported to have sold 25,000 mt for delivery to PCS at Geismar at $362/mt DEL. The product was to load in Yuznhyy in late December for January delivery. In the meantime, the NOLA market kept moving up, with a report of $345/st FOB.

Eastern Cornbelt: Anhydrous ammonia pricing in the region was quoted higher, at $385-$395/st FOB terminals. One supplier was offering forward contract tons for February at $395-$405/st FOB in the region. Effective Dec. 20, Agrium’s ammonia postings in Illinois firmed again to $405/st FOB E. Dubuque/East, Niota, Meredosia, and Marsielles, while postings FOB Cincinnati and Finney, Ohio, moved up to $415/st. Those prices represent a $20/st increase from the company’s Dec. 11 ammonia postings at those locations.

Western Cornbelt: Ammonia pricing was on the rise, but sources said some suppliers actually dropped their ammonia list prices by $5/st last week after a round of increases in the second half of December. The regional market was quoted at $370-$380/st FOB terminals, with the upper end for prepay. One supplier was offering forward contract tons for February in the $380-$395/st FOB range in the region.

Ammonia postings from Agrium will move on Jan. 1 to $335/st FOB Borger, Texas, $380/st FOB Mocane, Okla., $385/st FOB Conway, Kan., $390/st FOB Clay Center, Kan., and $395/st FOB Early, Iowa, Garner, Iowa, Whiting, Iowa, Mankato, Minn., Greenwood, Neb., and Hoag, Neb. Agrium’s delivered ammonia postings in Oklahoma and Texas will move on Jan. 1 to $360/st north of Interstate 40 and $365/st south.

On Dec. 20, Agrium’s reference price for ammonia FOB E. Dubuque/West, Iowa, firmed to $400/st. On Dec. 15, the company’s ammonia pricing out of the Leal, Grand Forks, and Beulah sales area in North Dakota firmed to $427/st FOB and $445/st DEL.

California: Ammonia pricing was up slightly in the wake of new postings. Sources tagged the market at $400-$410/st DEL in the state. Agrium’s truck-DEL anhydrous ammonia postings firmed on Dec. 20 to $410/st in Central California and $415/st in Northern California.

Pacific Northwest: In Montana, delivered ammonia was quoted in a broad range of $400-$430/st, with the upper end reflecting new reference levels. Elsewhere in the region, most sources reported delivered ammonia in the low- to mid-$420s/st DEL. One supplier was offering forward contract ammonia for February at the $405/st level FOB Washington terminals.

Effective Dec. 15, Agrium’s anhydrous ammonia postings moved to $430/st truck-DEL in Montana and northern Wyoming, and $445/st rail-DEL in Idaho, Oregon, and Washington. When compared with the company’s Dec. 1 postings, those levels represent a $25/st increase in Montana and northern Wyoming, and a $10/st increase in Idaho, Oregon, and Washington. Agrium’s aqua ammonia postings FOB Central Ferry and Finley, Wash., moved on Dec. 15 to $116/st, up $7/st from the Dec. 1 reference level.

Western Canada: Sources pegged the Western Canada anhydrous ammonia market at $586-$631/mt DEL after a mid-December pricing increase.

UREA

U.S. Gulf: Urea barge prices surged at the end of 2006, with prices easily topping the $300/st FOB mark. Most were putting the market within the $305-$315/st FOB range last week, and calling the latest done business at the higher end of the range. Why the increase? Sources reported very good demand in wheat country, with extremely optimistic views for corn come spring. Many are betting that with increased demand, there simply may not be enough urea to meet demand.

Major sellers also point to good demand around the world, including urea-hungry India and others as keeping the pressure on the urea market. That said, higher prices in the U.S. market now have NOLA prices back in vogue, if not parity with world prices. As a result, sources say NOLA prices may be enough to pull in a few more extra cargoes in the coming months, but sellers say demand elsewhere will compete for the tonnage.

While importers note that the U.S. is behind in imports from last year, it is also up in terms of domestic production, with U.S. producers feeling the warmth of low gas prices.

Eastern Cornbelt: The surge in urea pricing remained the topic of choice among dealers in the region in late December. As is often the case in times of market volatility, several sources said retail urea costs to the farmer are now well below current wholesale replacement costs. While some expressed incredulity about the pricing spike in the wake of falling natural gas prices, others observed that the current market is being driven by supply and demand and not raw material costs. Sources continued to talk of tight inventories and supply concerns for the spring planting season.

Most sources tagged the terminal market for urea at the $325-$340/st FOB level in the region last week. Effective Dec. 18, Agrium’s granular urea postings firmed to $330/st FOB Garrett, Ind., $335/st FOB Saginaw, Mich., and railDEL in Illinois, Indiana, and Ohio, and $340/st rail-DEL in Michigan. Those levels were up $15/st from the company’s Dec. 13 urea postings in the region.

Western Cornbelt: Sources reported some year-end buying activity last week, but one commented that sales were down from normal due to a number of factors. One of these, he suggested, was that many growers have contracted a lot of grain for after the first of the year, so the need to spend money before Dec. 31 was diminished. Added to this was an incredibly volatile urea market, which saw additional and significant price increases in the last two weeks of the year. This price spike was being viewed by dealers with caution, sources said, in spite of predictions of product shortages for the spring season.

Sources tagged the urea market in a broad range at $325-$345/st FOB regional terminals last week, with dealer sales confirmed at the upper end of that range in Iowa. Effective Dec. 18, Agrium’s granular urea postings firmed to $325/st FOB Shakopee, Minn., and North Dakota warehouse locations at Alton, Carrington, Colfax, Marion, and Scranton, and $330/st rail-DEL in Minnesota, the Dakotas, and Wisconsin. Those postings reflected a $15/st increase from the company’s Dec. 13 urea postings in the region.

Urea pricing also took a dramatic upswing in Oklahoma, with product reportedly on allocation at Enid and priced at a firm $320-$330/st FOB Arkansas River terminals.

California: Granular urea was pegged at $315-$325/st FOB and $327-$335/st DEL, which was up from last report. Urea postings from Agrium firmed in December to $325/st FOB West Sacramento, Calif., $345/st truck-DEL in Central California, and $350/st truck-DEL in northern California.

Pacific Northwest: Several dealers reported a flurry of year-end activity. One source said many retail accounts are well aware of the volatile nitrogen markets and are viewing their December commitments as a form of price protection, while others cited the end of the tax year for the traditional late-December market activity.

Several sources said urea sales were particularly hot in late December, and the market remained strong. Pricing was up significantly from last report, fueled by “weekly, if not daily” pricing changes in December, according to one source. A Montana source tagged the market at $322/st DEL last week, with forward sales quoted as high as $350/st DEL for March/April.

Sources elsewhere in the region pegged the urea market at $335-$340/st DEL, which one source noted was up dramatically from purchases he secured the first week of December at the $305-$310/st DEL level. Sources continued to talk of very limited domestic supplies and startup delays after turnarounds at some plant locations in November.

Agrium released another round of granular urea postings in the region, effective Dec. 18, which reflected a $30/st increase from the company’s Dec. 1 postings and a $15/st increase from the Dec. 13 postings. Urea postings moved on Dec. 18 to $335/st FOB Glade, Wash., Warden, Wash., and Wilson, Wash.; $322-$327/st DEL in Montana and Wyoming, depending on location; $340/st DEL in southern Idaho and Oregon’s Malheur County, and from the company’s warehouse and plant locations in Alberta and Oregon to points in Washington, northern Nevada, northern Idaho, and Oregon excluding Malheur County; $345/st DEL in northern and central Utah; and $350/st DEL in southern Utah.

Western Canada: Granular urea was reported at $405-$430/mt DEL in the region last week, up roughly $20/mt from last report.

Black Sea: One trader noted that as the year ended, so did dreams of sub-$190/mt FOB urea. The strong opening 2007 price in Yuzhnyy is the result of many factors, say industry observers. The main force, said one trader, is demand increased greatly over supply, and is expected to remain that way for the rest of the year.

India has shown a 10 percent growth in demand in each of the past three years and should have an equal growth this year. Turkey and Iran will also call for more tons. Asian buyers have also been relentless in their pursuit of urea.

At the same time, production of prilled urea has not kept up pace. Even with more buyers willing to take granular instead of prills, the price is still heading up.

Sources report Black Sea producers are sold out for January, with traders reportedly holding onto February tons as well.

The last deal for an end user was just before the holidays began, to Turkey for an estimated $255-$257/mt FOB. Reportedly, material in traders’ hands is closer to $260/mt FOB. This has led producers to turn away anyone who bids less than $260/mt FOB for first quarter tons.

The line up in Yuzhnyy reflects a mixed view of the market. A number of big trading houses have vessels booked into the port this week for loadings of 3-20,000 mt. At the same time, other companies are looking for ships to haul out 15-50,000 mt in the coming weeks. Reportedly, Transammonia is looking to load 50,000 mt for the Far East, and Toepfer is lining up a ship to take 40,000 mt to cover an Indian purchase.

Adding to the strengthening market are reports that Brazil and Mexico will be coming in this month. While sources are quick to point out that even the combined purchases of these two countries cannot move the market, they are able, at a minimum, to provide a psychological floor.

Lastly, Asian sources report India is getting ready to come back into the market later this month.

While some sneer at the idea that IPL or MMTC will make additional purchases this soon, especially given reports that the Indian ports are still having a hard time clearing the tons already delivered, others say political pressure may force the buyers’ hand. If these two major buyers do reenter the market, sources in Europe expect to see the price spike in the run up to the tender calls.

As the year closed, sources pegged the market in the mid $250s/mt FOB for end users and upper $250s/mt FOB for traders. One source called the market $255-$260/mt FOB, with the upper amount the starting price for a prompt purchase.

Middle East: Producers remain comfortable well into the new year. Sources say Egypt is sold out through March, and many of the Arab Gulf producers are booked through February. Reportedly, Sabic is just about fully booked for the quarter. One source noted the company may have a barge or two available for U.S. buyers as Spring arrives.

Sources say a cargo from Egypt was sold into the States for $305/st CFR for an estimated netback of $290/mt FOB. With a slight freight advantage for Egyptian product, sources say a similar deal from the Arab Gulf would come in around $280-$285/mt FOB.

This estimate matches what producers are saying at this time. Industry observers say producers are now saying $285/mt FOB is the starting point for discussions.

This price jump is dramatic given the last publicly recorded deal was to Iran at $270/mt FOB. Sources say the jump is even more telling when the usual premium of $5/mt is subtracted from the price.

Still, said one European source, once the prices of cargoes being loaded this month are compared to new deals for later loading, the price spread is large.

All agree that the estimated $260-$265/mt FOB from the Iranian deal is long gone – producers will not consider any new deals for less than $280-$285/mt FOB. At the same time, say sources, product in the upper $260s/mt FOB is still sitting in warehouses waiting to be shipped. Actually, said one Asian observer, there are still even cheaper tons waiting for shipment to India, but no one is taking those tons into account when calculating the price of the next order.

Granular urea has surged ahead of prills, largely because of buying from the United States. Sources now peg the Middle East granular market at $265-$285/mt FOB.

Prilled urea has yet to hit the $280s/mt FOB, say sources. The best bet puts the price at $265-280/mt FOB.

Bangladesh: Each of the companies that offered in the first BCIC tender received an award from the buyer. Sources say the bagged orders that included Chinese tons will either have been picked up before Jan. 1 or fill the order from elsewhere. Each of the offers indicated Chinese or Middle East tons could be used.

The second tender that closed Dec. 18 was also reportedly awarded. Sources say cargoes from that deal are expected to ship Jan. 6.

Local reports are that gas demand is outstripping supply. As a result, urea units are producing below normal capacity and are forcing the country to import more urea and other fertilizer. As a result, the interim government will import 200,000 mt of urea and 25,000 mt of wheat, according to a decision by the Cabinet Purchase Committee Dec. 24.

Pakistan: The country will need to import 100,000 mt of urea in January to partly meet the requirement of 3 million mt of urea for Rabi season (Oct.-March), according to government sources, who say there are concerns spot shortages may develop after January.

India: Sources report Indian buyers may soon return to the market. These reports are seen with a certain degree of skepticism. Sources say the urea subsidy fund is already overextended for the remainder of the fiscal year. New subsidy levels will not be announced until the new budget is in place. Generally, this happens in March.

One trader noted it would not make sense to commit to purchasing tons at this time when there is no guarantee of making at least a small profit. Conventional wisdom has IPL and MMTC waiting until February or March before calling new tenders.

Still, said one Asian source, the Indians have surprised the market in the past – and could do so again.

The return of IPL and MMTC could mean a temporary spike in prices. However, if old patterns repeat, immediately following the tender the Black Sea price should fall dramatically.

Industry observers had been expecting to see Indian buyers back in the market later in the quarter. Reportedly, there are still plenty of tons to be delivered to the ports and plenty of tons at the ports trying to get inland. Politics appears to be driving the push for buying sooner than later. Opposition party candidates and farmer advocates argue the government is bungling the arrival and distribution of urea.

At the same time, near riots are breaking out across the country by farmers desperate for urea.

In one instance, farmers stopped and looted trucks carrying fertilizer. In another, rioters stopped a train and emptied it of its urea cargo. The local media report at least two dozen similar incidents around the country.

Sources say the problem of getting urea to the farmers is multi-layered. Securing the transportation necessary to get the urea from the ports to the fields has been difficult, because many of the railcars and trucks were booked to handle wheat and other high-valued commodities. As a result, warehouses at the ports began to fill rapidly.

At the same time, the receiving ports were congested with ships hauling not only fertilizer, but also the same commodities that exacerbated the inland transport problems. The delays in unloading the urea vessels led IPL and MMTC – but mostly IPL – to ask suppliers to hold off on additional shipments until the ports could be cleared.

There were reports of vessels sitting for more than a week at anchorage last month and in November.

Some industry players feel India will have to buy significant amounts of import urea in coming months. They can cite complaints by the domestic industry that demand has steadily grown for the product over the years, while there have been no major domestic urea capacity additions since 1999.

China: International urea dealers all got the same notice late last week: The export duty on Chinese urea will increase to 30 percent effective Jan. 1. The higher rate will remain in effect through September. Come Oct. 1, the duty will drop to 15 percent for the remainder of the year.

Sources say all material shipped after the first of the year will be charged the higher duty.

In the past, the Beijing authorities had allowed a lower duty rate for tons contracted prior to the date of the tax increase. However, apparently a number of “questionable” contracts and invoices appeared late in the first quarter of the year that allowed for lower-priced exports. Therefore, in late 2005, to stop what one trader called, “creative paperwork” from happening again, Beijing made it clear that after the stroke of midnight Jan. 1, all exported urea will be charged the higher rate. The same rule applies again this year.

Exports from China were way down and, say sources, it had little to do with the export duty. When the tax dropped to 15 percent Oct. 1, many in the industry expected about 1.5 million metric tons to be exported. Sources now say the actual amount of tons sent offshore will be closer to 900,000 mt.

The lower number is reportedly a result of stronger domestic demand and higher domestic prices.

In the past, producers were fiercely competing with each other to nail down export business and the higher netbacks and hard currency such deals would mean. Last year, however, local demand was strong enough to ensure producers a healthy profit without having to deal with the problems of finding rail or truck transportation for their product from the factory to a port.

At the same time, international buyers were having difficulty lining up vessels for urea loadings in China. It seems other commodities were getting priority for loadings, often leaving a urea ship waiting for days, and even weeks.

NITROGEN SOLUTIONS

U.S. Gulf: UAN barges were reported to be moving up at the end of 2006, with sources reporting the most recent sales within the $175-$185/st FOB range ($5.47-$5.78/unit), heading toward quotes of $187-$190/st FOB. While prices were higher, sources said the spike was less than with urea due to larger inland UAN inventories.

Eastern Cornbelt: UAN pricing was being dragged up by the strong urea market, although at a slower pace. The solutions market was quoted at $6.25-$6.60/unit FOB terminals, with the upper end reflecting reference pricing to dealers.

Western Cornbelt: UAN pricing was up from last report, with the regional market quoted at $6.20-$6.60/unit FOB. The upper end reflected new reference pricing to dealers, although sources were not aware of any actual sales at that level.

California: UAN-32 was quoted at $205-$215/st ($6.41-$6.72/unit) FOB and $225-$235/st ($7.03-$7.34/unit) DEL, with the upper end reflecting reference levels. UAN-32 postings from Agrium firmed on Dec. 20, with truck-DEL pricing moving on that date to $230/st ($7.19/unit) in Central California and $235/st ($7.34/unit) in Northern California.

Pacific Northwest: UAN-32 was pegged at $220-$230/st ($6.88-$7.19/unit) DEL in the region, also up from last report. One source said he was able to purchase tons earlier in the month at the $217/st ($6.78/unit) DEL level, but doubted that deals could still be had at that level. Agrium’s UAN-32 postings moved on Dec. 20 to $240/st ($7.50/unit) DEL in Washington, northern Idaho, and Oregon excluding Malheur County. That price was up from the company’s Dec. 1 reference level of $218/st ($6.81/unit) DEL to those locations.

Western Canada: UAN-28 pricing was on the rise in the region, with most sources tagging the market last week at $259-$274/mt ($9.25-$9.79/unit) DEL in the region. That range was up from early December levels reported in the $247-$262/mt ($8.82-$9.36/unit) DEL range.

AMMONIUM NITRATE

U.S. Gulf: Barge prices followed the other major nitrogens up. AN barges were called $220-$230/st FOB, with most toward the higher end of the range by late in the week.

Western Cornbelt: Ammonium nitrate was pegged at $255/st FOB and $265/st DEL in the region last week.

California: No market was reported for ammonium nitrate in the state. CAN-17 was unchanged at $205-$210/st FOB in California.

Pacific Northwest: Ammonium nitrate remained at $275-$280/st rail-DEL in Idaho and Washington. CAN-17 was unchanged at $215-$220/st DEL in the region.

AMMONIUM SULFATE

Eastern Cornbelt: Granular ammonium sulfate remained at $160-$165/st FOB in the region.

Western Cornbelt: Granular ammonium sulfate was unchanged at $160-$165/st FOB in the region, with the upper end reflecting new list pricing from Honeywell out of regional warehouses. Granular sulfate postings from Agrium firmed on Dec. 15 to $175/st DEL in Nebraska.

California: Ammonium sulfate pricing was steady at $165-$170/st FOB and $170-$180/st DEL in the state, with the lower numbers for standard or coarse and the upper end for granular sulfate.

Pacific Northwest: Ammonium sulfate remained at $160-$170/st FOB and $165-$175/st DEL in the region. Some claimed deals were available at still lower levels in early December, but nothing was confirmed at these numbers last week.

Western Canada: Granular ammonium sulfate was unchanged at $270/mt DEL in the region in late December.

PHOSPHATE

Central Florida: It appeared last week that phosphate producers will have a very happy new year. Although activity trailed off during the last week of the year, there was a surprising boost in sales the previous week and prices increased dramatically. One source said that he would not be surprised to see the price of DAP rise to as much as $260/st FOB, which would be a nice present for the industry.

With inventories drawn down more than 100,000 tons in the past month, and Mosaic’s Donaldsonville plant still operating at about 25 percent capacity, producers were in the driver’s seat. While the Louisiana plant was expected to go back to full or nearly full capacity around the first of January, that extra production will not be enough to boost inventories sufficiently to cause prices to fall – at least not anytime soon. PotashCorp was not taking new orders until February, CF was either out of product or about to be, and Mosaic was struggling to keep up with demand.

Many future sales were already being placed on the books, and at prices even higher than the current high. The main stimulus for the increase in buying was still said to be the bright outlook for corn next season – perhaps as much as 7 million additional acres – and increased output per acre. Farmers in many areas have been mining their soil for fertilizers for the past couple of years, but when there is money to be made, they aren’t about to scrimp on fertilizer this spring season.

The one negative for producers was another increase in the price of ammonia for Tampa. However, negotiations on new lower pricing for the first quarter sulfur contracts could help offset ammonia increases.

Prices for Central Florida phosphates continued to rise. Discounts were no longer available, and MAP was exceptionally difficult to find. The Central Florida DAP range last week increased from $220-$221/st FOB two weeks earlier to $228-$231/st FOB. PotashCorp’s Central Florida reference price was $230/st FOB. In Texas, Agrifos’ truck prices for DAP or MAP were $250/st FOB for either. That company also matches the rail prices of other producers.

Agrifos was sold out through the middle of February.

U.S. Gulf: NOLA DAP barge prices for prompt delivery jumped last week from $224-$231/st FOB to $236-$240/st FOB. When business resumes this week, prices were expected to continue an upward climb.

Mosaic’s Donaldsonville processing plant was scheduled to return to normal production levels some time this week, which will help supply. Last year at this time, more than a hundred phosphate barges were on the river looking for a home, but that was not the case last week, when anything on the water was up for grabs and didn’t last long.

The big indication of what the spring season will hold came in the prices for future sales. A number of DAP sales for February came in as high as $243/st FOB, and sales for March were running $246-$248/st FOB. One source said he thought the price for the spring could increase to as much as $260/st FOB. A good deal of that future business was said to be prepaid deals, which help the buyers’ tax situation for the current year and will help their profit margin in 2007.

Eastern Cornbelt: Warehouse pricing for phosphates was firming in the wake of stronger sales and pricing in Central Florida and at the U.S. Gulf. River warehouse pricing for DAP and MAP was tagged at $265-$270/st FOB in the region last week, with most new dealer quotes reported at the upper end of that range. TSP was a nominal $240-$245/st FOB, and 10-34-0 remained at $255-$265/st FOB in the region.

Western Cornbelt: DAP and MAP prices were up in the region, with most sources tagging the warehouse market at a firm $265-$270/st FOB. Phosphate inventories were described as tight out of upper Mississippi River warehouses due to the heavy fall run.

TSP was quoted at $240-$245/st FOB, where available. 10-34-0 was reported in a broad range at $255-$275/st FOB in the region, with the low in Nebraska and the upper end quoted as a dealer reference price in Iowa.

California: MAP remained at $315-$320/st FOB warehouse or DEL to the dealer, with the low for rail and the high for truck-DEL product. DAP was $5/st higher than MAP. 10-34-0 was steady at $253-$258/st FOB last week, and 16-20-0 remained at $235-$240/st FOB in the state.

Super-phosphoric acid was tagged at $5.55-$5.65/unit DEL or FOB in the state through December, with ortho-phosphoric acid quoted at $5.55/unit with no discounts.

Agrium issued a revised phosphoric acid price list on Dec. 12, which listed December rail-DEL super-phosphoric acid at $565/st and merchant grade at $555/st in California, Arizona, Nevada, and Utah. Those postings were slated to firm $5/st in January and again in February before topping at $580/st for super-phosphoric acid and $570/st for merchant grade from March through May.

Pacific Northwest: DAP was pegged at $310-$320/st DEL and MAP at $305-$315/st DEL in the region, with the lower numbers reported in Montana. 16-20-0 remained at $235-$245/st DEL, and 10-34-0 was quoted at $245-$250/st FOB and $255-$265/st DEL in the region.

Delivered phosphoric acid was $5.55-$5.65/unit for super and $5.55/unit for ortho grade. Agrium issued a revised phosphoric acid price list on Dec. 12, which listed December rail-DEL super-phosphoric acid at $565/st and merchant grade at $555/st in Washington, Oregon, Idaho, Montana, and Wyoming. Those postings were slated to firm $5/st in January and again in February before topping at $580/st for super-phosphoric acid and $570/st for merchant grade from March through May.

Western Canada: MAP was quoted at $405-$440/mt DEL in the region last week, up from $395-$430/mt at last report.

U.S. Export: The export phosphate market took a break for the holidays the past two weeks and no new sales occurred, which was hardly unexpected. Overall the export market continued to be robust, and indications were that when sales resume this week, or soon thereafter, the price will go up between $5/mt and $10/mt FOB.

The most likely markets this month will probably be Argentina, Brazil, Uruguay, and Ethiopia, while India will likely do some more buying during the next couple of months. With no new sales, the export DAP price range remained at $250-$255/mt FOB.

Bangladesh: BCIC has issued a tender to import 12,000 mt of phos acid with 150 day deferred payment. Offers are to be received up to Jan. 15.

POTASH

Eastern Cornbelt: Potash remained at $201-$207/st FOB regional warehouses. Sources reported some Russian potash tons trading earlier in the month at $193/st FOB the warehouse and $188/st on a DT’d basis, but most speculated that new import tonnage will see a higher price point in the new year.

Two potash producers have announced price increase for January. One of them, PCS Sales, will raise prices $10/st FOB mine for all grades, effective Jan. 1. The old price was available through Dec. 31 for specified volumes shipped no later than Feb. 15. The $10/st increase will be for all orders placed as of Jan. 1, and also for orders shipped after Feb. 15.

Western Cornbelt: Potash was generally quoted at $204-$208/st FOB regional warehouses last week, although producer increases were on the books for January. Depending on supplier, orders would reportedly be taken at the old levels through Dec. 31 or until mid-January, with the shipping period extending into February.

“You know how this goes,” commented one source, noting that dealers will probably lock in tons prior to any increase and then leave the new levels untested until spring.

California: Potash was unchanged at $227-$233/st FOB. Potassium nitrate pricing remained at $485/st FOB for bulk and $540/st FOB for 50-pound bags. Sulfate of potash (SOP) was $343-$348/st FOB for granular and $331-$336/st FOB on standard/soluble.

Pacific Northwest: Potash remained at $215-$230/st DEL in the region, depending on grade and location.

Western Canada: Coarse potash was steady at $242-$257/mt FOB, with the low at plant sites and the high out of regional warehouses. Granular potash remained at $245/mt FOB the mine.

SULFUR

Tampa: Negotiations for first quarter sulfur contract prices were still alive and well last week, but on vacation until after the first of the year. Once the parties are back this week, expect a relatively quick resolution, probably in the range of a $3-$5/lt rollback in prices, say most sources. Those on both sides of the table realize the situation with sulfur, which has been fighting on wobbly legs for most of the past year. That weakness will result in a drop in prices for the first quarter, but there were indications prices the following quarter may stabilize somewhat. Still, more sulfur continues to be produced than used, in part because of a cutback in phosphate production.

Vancouver: The world sulfur market continued to be weak, but prices out of Vancouver appeared to be stabilizing, with some unofficial reports putting the netback price below $40/t. That market should become clearer during the next couple of weeks. The Chinese have agreed to pay more for their larger share of sulfur, but, because of higher ocean freight rates, the netback to sulfur producers shipping out of Vancouver will slide a bit more. The only salvation there would be lower cost of transportation.

West Coast: A winter storm that struck California last week knocked out power to priller operations in the Long Beach area, and that has caused a problem for oil refineries on the West Coast, where there is little room to store sulfur and blocking is not an option. If that situation continues for very long it could cause problems for refineries, but that was not expected to occur.

MARKET NOTES

Western Europe: Nitrogen players last week were closely watching a gas price dispute between Russia’s Gazprom and Belarus which, if left unresolved, could lead to a shutoff of some gas to Europe, with an impact on nitrogen plants. Belarus has reportedly threatened to stop Russian gas shipments on pipelines across Belarus. A similar situation occurred last year with Gazprom and Ukraine, which also has pipelines to Europe. The gas contracts expire Dec. 31. Sources say Gazprom simply wants Belarus to pay prices to get in line with those paid by other major customers in the region.

In other news, the European Union has its own gripes with Belarus. The EU is giving Belarus six months to address labor issues or else risk the removal of privileges given to developing states. The privileges include discounts on full tariff rates. The EU has already taken action against Belarus over human rights violations by imposing visa bans on top officials and freezing assets.

Linz, Austria: Two were killed and another injured in an explosion at Agrolinz Melamine International (AMI) Dec. 21. AMI said the nearby ammonia plant was not damaged, but was taken down. There was no ammonia leak, and AMI said there was no danger to local residents or the environment from the explosion. The cause of the explosion is still being investigated.

Beachwood, Ohio: Zinc manufacturer Aleris International Inc. announced Dec. 19 the completion of the acquisition of the company by affiliates of Texas Pacific Group (TPG), San Francisco. TPG entered into a merger agreement with Aleris last summer to acquire the company for a purchase price of approximately $1.7 billion plus the assumption of or repayment of approximately $1.6 billion of debt. Under the terms of the merger agreement, company stockholders will receive $52.50 per share in cash without interest. Aleris’s common stock ceased trading on the New York Stock Exchange at market close Dec. 19, and was delisted. Aleris is a global leader in aluminum rolled products and extrusions, aluminum recycling, and specification alloy production, and is also a recycler of zinc and a leading U.S. manufacturer of zinc metal and value-added zinc products, including zinc oxide and zinc dust. It operates 50 production facilities in North America, Europe, South America, and Asia, and employs approximately 8,600 employees.

TPG is a private investment partnership that was founded in 1992 and currently has more than $30 billion of assets under management.

Melbourne, Australia: Zinifex Ltd. and Umicore signed a memorandum of understanding Dec. 12 with the objective of combining their respective zinc smelting and alloying businesses. The combination would lead to the creation of the world’s pre-eminent zinc metal producer, with operations on four continents. Combined, the two would produce 1.2 million mt of zinc and zinc alloys per year and employ 4,500.