All Posts from June 10, 2013

Agrium suspends engineering work on greenfield N plant, awaits decision on Borger expansion

Featured, News

Agrium Inc. announced on June 3 that it has decided to suspend engineering development on its proposed $3 billion nitrogen greenfield project in the U.S. Cornbelt, and focus instead on efforts to secure a strategic partner and a gas contract for the project at this time.

The facility, which Agrium said would produce approximately 1.8 million mt/y of primarily urea and UAN, was first announced one year ago (GM June 18, 2012). Agrium said then that the greenfield project was needed because of tight nitrogen supplies in the Midwest, where the company operates many retail facilities. Initial plans called for the plant to be fast-tracked for a startup in early 2017, pending board approval.

Agrium’s Richard Downey stressed last week that the project is still alive for the company. “We have taken the engineering as far as we need to at the moment and are focusing on looking at a potential partner and potential for an associated gas contract for now,” he told Green Markets.

Ron Wilkinson, Agrium senior vice president and president of Wholesale, said back in June 2012 that the Midwest facility would fill “a fairly big market gap” for the company. “We’re in the west, we’re in the east, but we’ve got a little bit of a gap in the middle, especially when it comes to urea and UAN,” Wilkinson said. “This would really fit that market very well for us. And obviously, our retail is very, very big there.”

While numerous companies have announced plans for new nitrogen facilities in North America (GM Dec. 31, 2012), Agrium’s Midwest project was viewed by many in the industry as one of the more likely to be brought to fruition. Wilkinson acknowledged back in June that Agrium was “in a race” with the other proposed projects, but he touted Agrium’s “proven track record” on project development. “We know how to do it, and we’ll be right in there,” he said at the time.

Agrium also announced on Monday that it expects to reach a decision in the second half of 2013 on its proposed brownfield expansion at the company’s Borger, Texas, facility. The $500 million Borger expansion calls for an ammonia debottleneck and a urea brownfield, which would add approximately 120,000 mt/y of ammonia and 640,000 mt/y of urea production and also allow the company to better flex between the two products. That project, also announced in June 2012, initially called for a startup in 2016.

It was reported last week that Agrium had also suspended plans for an expansion at its Redwater facility in Alberta, but Downey told Green Markets last week that the Redwater project is not off the table. He said Agrium is giving the Borger expansion priority over Redwater “for the next six months.”

The Redwater project entails a $150 million urea debottleneck that would have added 170,000 mt/y of urea for a planned startup in 2015. Current urea capacity at Redwater is 700,000 mt/y. The facility also produces ammonia, MAP, and ammonium sulfate, with total annual capacity of 2.2 million mt of finished fertilizer products.

Agrium had said back in June 2012 that its goal was to have full board approval within the year for its Midwest greenfield project and the expansions at Borger and Redwater.

Former JPMC CEO sentenced

News, News Briefs

Amman — Former CEO of the Jordan Phosphate Mines Co. (JPMC) Walid Kurdi has been sentenced in absentia by the Amman Criminal Court on two charges. In the first case he was given 22 and half years of hard labor and $357 million in fines and in the second case 15 years of hard labor and $43.7 million in fines. Kurdi, who is an uncle of Jordan’s King Abdullah, reportedly fled to England earlier this year. The Jordanian government said it has issued an international arrest warrant. Jordanian media reports said that he refuses to return unless prosecutors from Jordan’s Anti-Corruption Commission drop the case against him. He also was said to have offered $700 million to settle the case out of court. The Anti-Corruption Commission had previously frozen his assets in connection with fraudulent marketing and shipping deals JPMC signed with foreign firms. The commission’s investigation showed that following the 2006 privatization of the company JPMC signed shipping contracts with a foreign company at substantially higher rates than prevailed in the market at the time. The commission estimated the difference in the contracts between 2008 and 2011 at more than $40 million. The investigation uncovered that the Aqaba Development and Marine Services company with which JPMC signed a deal to ship 250,000 mt of phosphates to Turkey in 2010, was owned by Kurdi and family members. The marine company also held about 70 percent of the contracts signed by JMPC for phosphate shipments from Aqaba port.

The Week in Fertilizer Stocks

Fertilizer Stocks

The Week in Fertilizer Stocks

Producer Symbol Price Week Ago Year Ago
Agrium AGU 90.55 94.77 78.21
CF Industries CF 192.88 194.68 168.92
CVR Partners UAN 24.26 24.07 20.86
Intrepid Potash IPI 18.86 19.15 20.30
Mosaic MOS 60.03 61.90 47.95
PotashCorp* POT 41.52 42.48 39.07
Rentech Nitrogen RNF 31.30 32.80 22.87
Terra Nitrogen TNH 205.25 212.60 191.33
Distribution/Retail
Andersons Inc. ANDE 52.22 52.53 44.15
Deere & Co. DE 86.09 87.41 73.51
Scotts SMG 45.91 48.65 43.18
* represents three-for-one stock split

Ammonia

Ammonia, Asia, Black Sea, Eastern Cornbelt, Great Lakes, India, Market Watch, Middle East, Northern Plains, Tampa, U.S. Gulf, Western Cornbelt

U.S. Gulf/Tampa:  

Eastern Cornbelt: Illinois growers were able to peck away at corn and soybean planting despite experiencing the state’s 12th wettest May on record.

As of June 2, 91 percent of the state’s corn crop and 49 percent of the soybeans were seeded, both still trailing the five-year average. Planting progress was more advanced in Indiana and Ohio, with both corn and soybeans tracking ahead of the average pace for each state.

Sources continued to report pressure on ammonia as demand shifts to UAN for the sidedress run.

Ammonia pricing covered a very broad range in the region last week. In Illinois, spot quotes ranged from $655-$710/st FOB last week, with the low reported out of the East Dubuque market. At the upper end of the regional range, sources quoted the dealer market FOB Huntington, Ind., at the $755/st FOB mark.

Western Cornbelt: Heavy rain during the first days of June pushed several rivers in eastern Iowa to the flood stage last week, and also caused rapid rises in the Mississippi, Missouri, and Illinois Rivers.

With the exception of Nebraska, planting progress in the region had changed little from the previous week. Just 44 percent of Iowa’s soybean crop was seeded by June 2, well behind the five-year average of 91 percent. Soybean planting was also lagging in Missouri at just 36 percent complete last week, while Nebraska growers had fully 81 percent of the crop seeded by June 2.

Corn planting in the region was rated at 99 percent complete in Nebraska by June 2, compared with 86-88 percent in Missouri and Iowa. One western Iowa source estimated that growers in his trade area were 95 percent planted on corn and 50 percent on soybeans, “but it rains every day it seems.” He estimated that 3-5 percent of the corn crop may need to be replanted because of excess moisture and poor germination.

“Growers may be done planting corn for the year and may just take prevented planting,” he added, noting that fields with heavy soils were “ponding or very muddy” last week. “They will stay on soybeans for a couple more weeks but are asking to switch to lower yielding, shorter season varieties now,” he said. “The forecast is for wet weather for the foreseeable future.”

With demand over, ammonia pricing continued to slip in the region. Iowa and Nebraska sources pegged the terminal market in the $640-$680/st FOB range for prompt tons out of regional terminals last week, down some $40/st from last report.

Northern Plains: Wet, cool weather continued to limit field activities and spring planting in parts of Minnesota and North Dakota. South Dakota, by contrast, was closer to its five-year average for planting progress.

Ammonia prices in the Northern Plains were “slipping every day with the rain,” according to one regional contact. Delivered ammonia was quoted in the $740-$760/st range in North Dakota last week for cash tons, while spot pricing out of Minnesota terminals had reportedly fallen to $650-$670/st FOB.

Great Lakes: Sidedress activity was “just kicking into gear” in the Great Lakes region last week, according to one Wisconsin source. Growers were also trying to wrap up corn and soybean planting, but rainfall and wet field conditions continued to limit activity in some locations.

Sources reported some ammonia demand in the Michigan market in early June, but spot prices were falling. The dealer market out of Courtright, Ontario, and Huntington, Ind., was tagged at $755/st FOB last week, down $20/st from a week earlier. Wisconsin sources pegged the low end of the regional ammonia market at $705-$710/st FOB.

India: Mitsui booked a cargo of 12,000

Urea

Black Sea, China, Eastern Cornbelt, Great Lakes, India, Market Watch, Middle East, Northeast, Northern Plains, Pakistan, U.S. Gulf, Urea, Western Cornbelt

U.S. Gulf: Granular urea appeared to be edging downward last week. While many called the prompt NOLA market in the high $320s/st to low $330s/st FOB, others said trades were slipping into the low $320s/st FOB by late in the week. Upriver trades were called $330-$337/st FOB.

Prills continued to be called $335-$345/st FOB, but sources said they are now hard to find, with the last done business at the top end of the range.

Eastern Cornbelt: The granular urea market in the Eastern Cornbelt was pegged at $380-$385/st FOB spot river terminals on the low end, with the upper end of the range quoted at $400-$420/st FOB inland warehouses in Ohio. Sources pegged the Maumee, Ohio, urea market last week at $400/st FOB.

Western Cornbelt: Granular urea continued to be quoted in the $380-$400/st FOB range in the Western Cornbelt. An Iowa contact pegged the common dealer market at the $390/st FOB level last week.

Urea pricing out of the Tulsa, Okla., market continued to slip. Sources quoted the dealer market there at $355-$365/st FOB, down $5-$10/st from the previous week.

Northern Plains: Granular urea pricing continued to cover a wide range in the Northern Plains region.

The Twin Cities market was quoted at $360-$370/st FOB on the low end, while Dakota sources reported spot pricing ranging from $420/st to nearly $500/st FOB or DEL, depending on “who you are asking.”

Great Lakes: Urea pricing in the Great Lakes region was also down considerably from last report, and demand was virtually over.

Michigan sources quoted the dealer market in the $400-$420/st FOB range last week, depending on location, while Wisconsin contacts reported spot pricing at $390/st FOB mark, give or take. Those numbers were down $50-$60/st from April pricing levels.

Northeast: May went out like a lion for parts of New England and northern New York, with snowfall and cold temperatures reported over the Memorial Day weekend. Weather conditions had fortunately improved by early June, however, allowing regional growers to make strides on spring planting.

Granular urea pricing was quoted at $420-$430/st FOB in the Northeast region, down $15-$20/st from last report. Urea pricing out of port terminals in the Southeast had reportedly fallen to $410/st FOB.

India: The MMTC award team settled on awarding 1.07 million mt from its June 3 tender.

The winning price was $331.50/mt CFR, set by Swiss Singapore. Unlike previous tenders, there is no price differential for different ports.

Sources say the low prices offered in the June 3 tender were surprising.

Leading into the tender, many in the industry were predicting prices in the low-$340s/mt CFR or upper-$330s/mt CFR at best. The approximate 500,000 mt offered for less than $333/mt CFR surprised many.

Sources say the amount of urea offered told the whole story about the state of the current market. All told, about 3.5 million mt was presented in firm offers. Another 2.1 million mt were put forward in optional offers.

MMTC Urea Tender June 3, 2013
Offering Company Source Quantity (‘000mt) US$/mt Discharge Port
    Firm Optional FOB CFR  
Fertil Abu Dhabi 50   33

Nitrogen Solutions

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

U.S. Gulf: UAN barges continued to be called in the $290-$300/st ($9.06-$9.38/unit) FOB range. While sellers were still eyeing $305/st ($9.53/unit) FOB, buyers believed they could pull product at $285/st ($8.91/unit) FOB.
Others speculated that producers were eyeing more exports to help shore up the market. Regardless, players were tossing around much lower numbers for the fill season – $220-$250/st ($6.88-$7.81/unit) FOB.

Eastern Cornbelt: The UAN-28 market remained $318-$335/st ($11.36-$11.43/unit) FOB in Ohio and Indiana, with the low reported out of the Cincinnati market and the upper end out of inland tanks. Illinois sources quoted UAN-32 pricing at the $365/st ($11.41/unit) FOB level on the low end last week.

Western Cornbelt: Sources continued to quote the UAN-32 market in the Western Cornbelt at $360-$380/st ($11.25-$11.88/unit) FOB regional terminals, with most locations reported in the $365-$375/st ($11.41-$11.72/unit) FOB range. One source said UAN demand for sidedress was about half done in his trade area.

Northern Plains: The UAN-28 market remained at $340/st ($12.14/unit) FOB the Twin Cities and $370/st ($13.21/unit) DEL to certain locations in North Dakota.

Great Lakes: Michigan sources continued to quote the UAN-28 market in the $340-$350/st ($12.14-$12.50/unit) FOB range, while UAN-32 pricing in the Wisconsin market was tagged at roughly $375/st ($11.72/unit) FOB on the low end.

Sidedress work on corn was steady in the region last week, and sources in both states said they expect a brisk run in the coming weeks. One Michigan source said cool weather has limited corn growth in the state, so growers aren’t panicking about a narrow window for completing sidedress applications.

Northeast: UAN pricing continued to slide in the Northeast, with sidedress demand yet to start in most locations.

Sources tagged the Baltimore, Md., market at $315/st ($10.50/unit) for UAN-30 and $336/st (10.50/unit) for UAN-32.

Ammonium Sulfate

Ammonium Sulfate, Eastern Cornbelt, Great Lakes, Market Watch, Northeast, Northern Plains, Western Cornbelt

Eastern Cornbelt: Granular ammonium sulfate pricing ranged from a low of $375/st FOB in Illinois to a high of $410/st FOB in the Ohio market last week. Sources quoted the ammonium thiosulfate market in the $355-$360/st FOB range in the region.

Western Cornbelt: Granular ammonium sulfate was steady at $355-$365/st FOB in the Western Cornbelt region. The ammonium thiosulfate market remained at $325-$365/st FOB, depending on location.

Northern Plains: The granular ammonium sulfate market was quoted at $365-$375/st FOB in Minnesota, with delivered tons quoted at the $402/st level in North Dakota.

Ammonium thiosulfate was tagged at $360/st FOB and $370/st DEL in the region.

Great Lakes: Great Lakes sources quoted a broad range for granular ammonium sulfate last week, with the low pegged at $375-$385/st FOB in Wisconsin and the upper end at $405-$415/st FOB in Michigan.

The ammonium thiosulfate market was quoted at $355-$360/st FOB in the region.

Northeast: Sources quoted granular ammonium sulfate pricing at $400-$410/st DEL in the Northeast, with terminal pricing pegged at $365/st FOB Hopewell, Va., $405/st FOB Philadelphia, Penn., and $410/st FOB East Liverpool, Ohio.

Phosphates

Central Florida, Eastern Cornbelt, Great Lakes, Market Watch, Northeast, Northern Plains, Phosphate Rock, U.S. Exports, U.S. Gulf, Western Cornbelt

Central Florida: Late last week, Tropical Storm Andrea was just beginning to hit the West Coast of Florida, from the Tampa Bay area south to Sarasota.

Phosphate producers were not expected to be significantly impacted, but the storm will bring very heavy rain and a high likelihood of tornados. After drenching the phosphate mining and processing facilities owned by The Mosaic Co. and CF Industries, it was expected to move inland and across the White Springs area, where PCS Sales mines phosphate and makes MAP in northern Florida.

The Central Florida DAP market last week fell to $435-$450/st FOB from the previous week’s range of $450-$520/st FOB. Large customers were receiving the best prices. Mosaic was listed at $465/st FOB for rail and $480/st FOB for trucks, with CF posted at $520/st FOB, but both companies were selling at below their posted prices.

MAP continued to bring a $20/st premium over DAP at Central Florida.

U.S. Gulf: Barge traffic on the Mississippi River was stalled north of St. Louis last week after numerous locks were closed due to high water.

The U.S. Army Corps of Engineers reported that 10 locks were closed between Muscatine, Iowa, and Granite City, Ill., early last week, stalling at last eight tow vessels with a combined total of 63 barges. At least two levees in the St. Louis area had also given way, and local residents were using sandbags to protect property.

Despite those transportation problems, a fairly large number of NOLA DAP barges changed hands on a prompt, spot basis last week. The lowest prices were paid at the beginning of the period, with higher numbers reported as the week advanced.

Terminals and inland warehouses were seeing less activity as the spring planting season winds down. With the exception of only a few states, virtually all of the U.S. corn crop had been planted as of June 2, according to USDA.

Corn prices for July were higher at $6.6325/bushel last week, compared with $6.5075/bushel a week earlier. Corn for December 2013 fell to $5.4825/bushel from the previous week’s $5.585/bushel, however, while corn for December 2014 fell to $5.6050/bushel from the previous $5.645/bushel.

Soybeans for July were at $15.2725/bushel, up from $14.98/bushel a week earlier. Soybean prices for November 2013 were also up, at $13.0575/bushel from the previous week’s $12.8525/bushel, while soybeans for November 2014 fell to $12.2775/bushel from the previous $12.75/bushel.

Wheat for July 2013 increased to $6.9775/bushel from the previous week’s $6.9675/bushel, while wheat for July 2014 was listed at $7.885/bushel last week, up from $7.5025/bushel the week before.

Based on a fairly large number of trades, especially for the time of year, the NOLA DAP barge price range moved up to $418-$435/st FOB last week from the previous week’s $417-$425/s FOB. MAP barges, which had a lower availability, were in the range of $440-$450/st FOB NOLA, with the most recent offers as high as $460/st FOB.

Overall, most in the industry claimed to have had a relatively good spring season. Summer fill will be the next objective. Last week, prices for July forward were in the $420-$425/st FOB range for NOLA DAP. That price could rise as the price range for prompt spot barges goes up.

Eastern Cornbelt: Most sources put the DAP market commonly within the $480-$490/st range FOB river terminals in the region last week, with the upper end pegged in the low $500s/st out of inland warehouses in the Ohio market. Although there were lower numbers quoted out of Cincinnati in late May, sources were unsure last week if spot tons could still be had at those levels.

MAP was quoted at $500-$525/st FOB in the Eastern Cornbelt, depending on location.

10-34-0 remained at $525-$550/st FOB in the region, with the low

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