All Posts from September 1, 2014

Urea

Bangladesh, China, Eastern Canada, Eastern Cornbelt, India, Market Watch, Middle East, Northeast, Northern Plains, Southeast Asia, U.S. Gulf, Urea, Western Cornbelt

U.S. Gulf: Granular barges remained strong last week, reported between $347-$360/st FOB for prompt material. Prices appeared to start off strong and ended weaker. Freight rates continued to be major factor in price discussions. All of September was called $343-$353/st FOB, though most were nodding toward the lower end of that range at the end of the week.

Recent prill trades continued to be called $345-$348/st FOB.

Eastern Cornbelt: The urea market in the Eastern Cornbelt was pegged at $420-$440/st FOB regional terminals for limited tons.

Western Cornbelt: Many regional terminals were reportedly out of urea in late August. For any tons that were available, the dealer market was reported in a broad range at $390-$430/st FOB, down from last report, with the low reported out of spot river locations in Iowa.

Iowa sources also quoted rail-DEL urea tons at the $415/st level last week, while the market FOB St. Louis, Mo., was reported firmly at the $420/st FOB mark for new sales.

Northern Plains: The granular urea market was pegged in a broad range at $380-$400/st FOB the Twin Cities last week. The Midwest urea market was described by one source as “situational,” depending on supply and demand, with spot pricing much higher in areas of tight supply.

In St. Louis, for example, the urea market last week was quoted at a firm $420/st FOB, even though pricing there would typically be lower than the Twin Cities due to less freight. North Dakota sources reported rail-DEL urea tons at the $420/st level as well, with that same number also quoted on an FOB basis out of Carrington, N.D.

Northeast: The granular urea market remained at $410-$420/st FOB for limited tons in the Northeast.

Eastern Canada: The granular urea market was quoted at $570-$575/mt FOB regional terminals in Eastern Canada, up $45-$50/mt from last report.

China: Prilled prices keep moving up, while granular now seems to be slowing down and even retreating.

Sources report the latest offers from Chinese prilled urea producers at $310/mt FOB. Traders are quick to point out that nothing at that level has yet been done, but it indicates where the producers are heading.

Last week saw a batch of traders stepping up and buying material to cover their IPL/India tender awards, knowing they will take a financial hit.

The surest sign that the traders are grudgingly accepting the Chinese prices is the increase in vessel nominations for India-bound material.
Sources say the vessel lineup was pegged at 650,000-800,000 mt last week. More ships are expected to be named in the next week. Winners of the IPL tender have until the end of September to load their material.

Reportedly, some traders are buying small quantities – 10,000-15,000 mt – to test prices and to hedge against running up the price with large orders. Sources report that many of the deals concluded last week were centered on $295/mt FOB.

Buyers for the Indian market are beginning to face more competition. Sources say some Southeast Asian buyers are now showing interest in Chinese product, with some claiming they secured tons in the low-$290s/mt FOB.

Domestic demand for prilled urea is picking up in spite of existing Indian demand, the expectation of another Indian tender in the first half of September, and the Southeast Asia market heating up. Sources say domestic buyers are looking for tons to get into the domestic pipeline as soon as possible.

Granular urea, however, appears to have stalled. Sources say offers are now at $350-$355/mt FOB, with bids coming in lower than that.

Producers are reportedly working out what kind of demand their product will

Sulfur

ADNOC - Abu Dhabi, Benelux, Market Watch, Sulfur, Tampa, U.S. Gulf, Vancouver, West Coast

Tampa: Coming on the heels of $400 million in improvements to its 339,000 barrel/d Pine Bend refinery in Rosemount, Minn., Flint Hills Resources (FHR) announced an additional $300 million investment in the facility.

The new projects will include a combined heat and power system expected to generate roughly half of the refinery’s electricity needs, as well as a new process for enhanced sulfur extraction designed to meet EPA’s Tier 3 gasoline sulfur content requirements, set to begin in 2017.

The announced sulfur removal improvements will also allow the refinery to produce and sell ammonium thiosulfate fertilizer. FHR expects to begin construction in 2015.

U.S. refinery capacity increased for a second consecutive week, according to the U.S. Energy Information Administration (USEIA). Total utilization was put at 93.5 percent for the week ending Aug. 22, the nation’s highest August refinery output since 2005. The level was up just slightly from the previous week’s 93.4 percent, and also beat the 91.2 percent posted for the same period in 2013 and the five-year average of 90.4 percent.

Molten sulfur delivered to Tampa was $136/lt for the third quarter.

U.S. Gulf: Sulfur exported from the Gulf of Mexico was quoted in a range of $145-$150/mt FOB.

Vancouver: Sources believe the Chinese sulfur market has found a bottom in the upper $160s/mt CFR. Sentiment was divided on what effect that might have on the Vancouver spot price, though most agreed the picture was unlikely to clarify ahead of the upcoming TFI World Conference.

In the meantime, Vancouver spot continued to be quoted in a range of $140-$170/mt FOB.

Hampered for most of the year by issues thought to stem from faulty load-out equipment, Alberta’s Syncrude 21 refinery announced plans to suspend loading for 10 days in early September to institute permanent fixes or replacements to the equipment in question.

The price of Alberta sulfur was called (-)$20-$80/mt, unchanged from the previous period.

West Coast: The price of sulfur sold from the West Coast was called $140-$145/mt FOB.

Benelux: Benelux sulfur was $158-$172/mt for the third quarter.

ADNOC: The August price of ADNOC sulfur was $175/mt.

Potash

Eastern Canada, Eastern Cornbelt, Market Watch, Northeast, Northern Plains, Potash Muriate, Sulfate of Potash Magnesia, U.S. Gulf, Western Cornbelt

U.S. Gulf: Recent potash barge business remained in the $367-$375/st FOB range.

Eastern Cornbelt: The potash market was firm at $400-$417/st range FOB regional warehouses, depending on grade, location, and supplier, with inventories continuing to be described as tight.

Western Cornbelt: The potash market in the Western Cornbelt remained at $400-$410/st FOB for red and $407-$417/st FOB for white granular tons.

Northern Plains: Delivered potash in North Dakota continued to be quoted in the $390-$400/st range from Saskatchewan, where FOB mine prices remained at $345/st for standard, $350/st for granular, and $357/st for soluble sales to U.S. customers. Out of regional warehouses, however, the potash market had reportedly firmed to $400-$410/st FOB for limited tons.

Northeast: Sources said the potash market had firmed to $400-$415/st FOB regional warehouses in the Northeast, depending on grade and location, with supplies getting “tighter and tighter,” according to one source.

“Lots of shipments planned for spring were late, so now they’re showing up for fall,” he continued. “This railcar thing is not even close to an end. It’s a nightmare.”

Eastern Canada: Potash pricing had reportedly firmed to $470-$480/mt FOB Eastern Canada warehouses, with supplies described as very tight and demand strong.

The SOP Magnesia market was quoted at $535-$580/mt FOB in the region, with tight supply due to production issues and rail backlogs.

Sulfate of potash was reported at a firm $880/mt FOB for any available tons in Eastern Canada.

NPK

Market Watch, NPK 10-34-0, NPK 16-20-0, Southeast Asia

Malaysia: Sumitomo has taken a 60 percent ownership of Union Harvest Ltd., up from its previously held 20 percent. Area traders see the move as an effort by Sumitomo to not only take a larger share of the Malaysian NPK market, but to also position itself to better step into the larger Asian market.

Union Harvest has long been a supplier of special mixtures for the palm oil plantations in Malaysia. With the palm oil market showing steady and strong growth, sources speculate that Sumitomo wanted to cash in on that rise as quickly as possible.

Besides provided much-needed funds to Union Harvest, the Sumitomo investment is expected to allow for existing Union Harvest plants to be upgraded and for new plants to be built.

Phosphates

Bangladesh, Central Florida, China, Eastern Canada, Eastern Cornbelt, India, Market Watch, Northeast, Northern Plains, Pakistan, Phosphate Rock, Triple Superphosphate, U.S. Exports, U.S. Gulf, Western, Western Cornbelt

Central Florida: Rail delays continued to drag on the Central Florida phosphate market. Domestic shale oil, shipped to refineries predominantly via rail lines, is on pace to post its highest production total in 27 years. The bumper grain crop was also taxing rail capacity.

Rail operators were reportedly planning to increase average train velocities, and were also adding personnel and boosting locomotive numbers in hopes of shortening delivery times. Such measures were unlikely to pay dividends in the near term, however.

Traders said the railcar logjam would likely put off some phosphate buyers from prompt purchases. Prices on the Central Florida DAP market were called $435-$440/st FOB, unchanged from the previous week. MAP continued to be unavailable, traders said, with posted prices running $20/st FOB over DAP.

U.S. Gulf: The NOLA barge market continued its slow streak last week, thanks in part to the Labor Day holiday and The Fertilizer Institute’s (TFI) upcoming World Conference. “Must be August,” one source quipped.

Despite relatively stable prices recently, diminished trade volumes contributed to some price confusion last week. The uncertainty was centered on a barge sale with a reported value of $455/st DEL and fueled by the still-convoluted freight situation.

The transaction was said to include $30/st shipping to the Twin Cities area, which would put the barge’s NOLA FOB price close to $425/st. However, many industry watchers cried foul, claiming the actual contracted shipping cost, which the seller was believed to pay, was closer to $17.50/st, placing the transaction’s netback in the neighborhood of $437.50/st FOB.

The trade could have sizable implications for a market divided on price direction, and its accuracy as a barometer of market sentiment was vigorously debated by industry observers. At least one other trade was recorded at a $435/st FOB netback, and a handful of sales were reported in the upper $440s/st FOB, representing the market’s top end.

Delivered price quotes remained a preferred pricing structure, as the murky freight climate made FOB prices unreliable in the opinion of many traders. “The freight market is a mess, and everyone is trying to ‘game’ it,” one trader said.

A lack of price agreement was evident in the market. On one side were producers holding tight to $455/st FOB NOLA offer levels for September shipping, while a significant segment of the market pushed DAP bids in the $435-$440/st FOB range, based on a number of factors.

Low grain prices nurtured doubts about farmers’ willingness to pay top-dollar phosphate prices, and ongoing logistics concerns have made the spot market less palatable for some potential buyers in the short term, sources said.

According to one source, however, one thing helping to support the domestic market was its low price relative to international levels. “Right now, U.S. prices are the lowest netback in the world (for foreign sellers),” he said. “Hesitance by international producers to send anything beyond contracted amounts to the U.S. is keeping supply leaner than it might otherwise be.” This, he said, was “contributing to keeping the price up.”

While earlier fears held that the river market would be flooded by cheap Chinese phosphates, one source said Chinese producers now claim to be out of stock, preferring instead to direct new product to higher-netting markets such as India.

The price of DAP sold on the NOLA barge market softened to $435-$447/st FOB, down from $445-$450/st FOB at last report. MAP levels were said to remain firm in a range of $475-$480/st FOB.

Eastern Cornbelt: Sources quoted the DAP market at $480-$490/st FOB regional warehouses in th

Ammonium Sulfate

Ammonium Sulfate, Eastern Canada, Eastern Cornbelt, Market Watch, Northeast, Northern Plains, Western Cornbelt

Eastern Cornbelt: The granular ammonium sulfate market was steady at $270-$280/st FOB in the Eastern Cornbelt, with rail-delivered tons quoted in the $276-$290/st range.

Ammonium thiosulfate remained at $345-$350/st FOB in the Eastern Cornbelt.

Western Cornbelt: Granular ammonium sulfate remained at $270-$280/st FOB. Ammonium thiosulfate was unchanged at $320-$345/st FOB in the Western Cornbelt.

Northern Plains: The granular ammonium sulfate market was tagged at $280/st FOB in the Northern Plains, with delivered tons in North Dakota quoted at $290/st for fill and $300/st for fall prepay.

Ammonium thiosulfate remained at a nominal $330-$340/st FOB in the region for prompt pull, although North Dakota contacts reported that delivered tons could still be had on a spot basis for as low as $300/st from Canadian shipping points.

Northeast: Granular ammonium sulfate remained at $275-$280/st DEL in the Northeast, but sources said they anticipate a $10/st increase effective Sept. 1.

Eastern Canada: Granular ammonium sulfate was quoted at $410-$420/mt FOB in Eastern Canada.

The ammonium thiosulfate market was pegged at the $418/mt FOB level in Ontario.

Ammonium Nitrate

Ammonium Nitrate, California, Eastern Canada, Market Watch, U.S. Gulf, Western Cornbelt

U.S. Gulf: The market was called quiet, with the last done business at $300-$310/st FOB.

Western Cornbelt: Ammonium nitrate pricing was down in the Western Cornbelt. The dealer market was pegged at $360-$380/st FOB, down $20/st from last report, with the low reported in Missouri on a spot basis.

Eastern Canada: Ammonium nitrate was pegged at $560/mt FOB in Ontario on a spot basis, but tons were described as limited.

California: Agrium’s AN-20 posting is slated to move on Sept. 1 to $300/st DEL in California from West Sacramento. Agrium’s CAN-17 postings in California moved on Sept. 25 to $330/st FOB Woodland and $335/st FOB Helm.

Nitrogen Solutions

Eastern Canada, Eastern Cornbelt, Market Watch, Northeast, Northern Plains, U.S. Gulf, UAN, Western Cornbelt

U.S. Gulf: The last done business in this inactive market continues to be called $235-$245/st ($7.34-$7.66/unit) FOB. Price ideas vary, with players citing both ends of the range for the next round of business.

East Coast vessel business was called $250-$255/mt CFR.

Eastern Cornbelt: UAN-32 remained at $290-$295/st ($9.06-$9.21/unit) FOB Illinois terminals, with the UAN-28 market tagged at $255-$265/st ($9.11-$9.46/unit) FOB in Ohio and Indiana.

Western Cornbelt: The UAN-32 market was quoted at $285-$300/st ($8.91-$9.38/unit) FOB regional terminals in the Western Cornbelt, down slightly from last report, with the low FOB Fort Dodge, Iowa. Nebraska sources pegged the common dealer market in the $290-$300/st ($9.06-$9.38/unit) FOB range, with dealer pricing FOB Sioux City, Iowa, quoted at the $300/st ($9.38/unit) FOB level last week.

Northern Plains: UAN-28 pricing had slipped slightly in the Northern Plains, with the dealer market for fill tons quoted at $270-$280/st ($9.64-$10.00/unit) FOB in Minnesota and $290-$300/st ($10.36-$10.71/unit) DEL in North Dakota, depending on location.

Northeast: The UAN-32 market was pegged at $250-$255/st ($7.81-$7.97/unit) FOB Baltimore, Md., with the top end of the range down $5/st from last report. UAN-32 pricing out of terminals in upstate New York had slipped as well, to the $304/st ($9.50/unit) FOB mark from the earlier $320/st ($10.00/unit) FOB level.

Eastern Canada: The UAN-28 dealer market was pegged at $320-$345/st ($11.43-$12.32/unit) FOB in Eastern Canada.

Midwest Fertilizer Co. LLC – Management Brief

Management Briefs

Midwest Fertilizer Co. LLC, which plans to build a $2.4 billion nitrogen plant in Posey County, Ind., has added two new executives to its leadership team. Rod Oglesby is now vice president, operations, and Bob Ellis is construction executive.

"We are very pleased to have accomplished fertilizer and construction industry veterans like Rod and Bob join Midwest Fertilizer Co," said Mike Chorlton, owner’s representative, Midwest Fertilizer Co. "Their experience will be of tremendous value as we begin work on our state-of-the-art nitrogenous fertilizer manufacturing plant in southwest Indiana."

Oglesby has worked in the fertilizer industry for 22 years in a variety of leadership roles at manufacturing facilities in both the U.S. and Argentina. Most recently, he was plant manager at the Agrium nitrogen expansion project facility in Borger, Texas. During his career, he has held positions as a technical service engineer, plant manager, and vice president of operations. Oglesby also served in the U.S. Navy. He graduated from Mississippi State University with a B.S. in chemical engineering.

Ellis has 35 years in the energy industry with extensive experience in project engineering, construction management, and procurement management. He has been in Evansville, Ind., for nearly four years as vice president of business development with Skanska USA Civil Midwest. As part of his 27 year career with Duke Energy, Ellis spent 20 years at the Gibson Generating Station in Gibson County, Ind. Ellis received a B.S. degree in mechanical engineering from the University of Cincinnati.

Ellis and Oglesby join the Midwest Fertilizer Co. executive management team which includes Chorlton; Les Wright, CFO; Geoff Gailey, VP human resources; and Feisal Beig, director/advisor.

Groundbreaking for the new plant is anticipated in late fall 2014. It is expected to be operational in 2017.

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