Maumee, Ohio-The Andersons Inc. on July 31 announced it has closed the purchase of the fertilizer division of Hartung Brothers Inc. (GM May 11, 2009) as an addition to its Plant Nutrient Group. “The acquisition of HBI’s fertilizer division enhances the core business of our Plant Nutrient Group (PNG) and extends our geographic footprint beyond the Eastern Corn Belt,” says CEO Mike Anderson. “This well-respected organization brings with it a quality customer base that we are looking forward to serving.” The acquisition of this leading regional wholesale supplier of liquid fertilizers includes strategically-located facilities with 145,000 tons of storage capacity in Wisconsin and Minnesota that generated $60 million in revenue in 2008. This acquisition increases the overall Plant Nutrient capacity by nearly 20 percent. The Andersons Plant Nutrient Group formulates, stores, and distributes 2 million tons of liquid and dry nutrients (fertilizer) to agribusiness and industrial accounts through 19 wholesale distribution terminals in Ohio, Michigan, Indiana, Illinois, Florida, and Puerto Rico. The Group also operates 11 full-service retail farm centers serving Michigan, Ohio, Indiana, and Florida. In other news, The Andersons on July 29 said it has increased its grain storage capacity in Michigan by nearly 4 million bushels. The company recently signed agreements with Mason Elevator Co. Inc. and Woodbury Grain LLC for grain storage at two south-central Michigan facilities in the communities of Mason and Woodbury. The Andersons will merchandise the grain at both facilities and will also conduct grain originations at the Woodbury facility. The additional bushels bring total Anderson capacity to more than 101 million bushels. Capacity expansion work is also underway at the company’s facilities in Delphi, Indiana, and White Pigeon, Michigan. Each facility will increase its capacity by 750,000 bushels within the next few months.
U.S. Gulf/Tampa: The markets were quiet last week except for speculation that higher international prices would soon find their way to Tampa. Direct Hedge, as of Aug. 6, was reporting Tampa at $260-$270/mt for August and $270-$290/mt for September. However, there was a drop for Oct.-November to $250-$270/mt.
Eastern Cornbelt: Anhydrous ammonia pricing remained at $320-$345/st FOB for spot tons, with forward contract ammonia for September through December referenced at $365/st FOB in Illinois and Indiana. One Illinois source reported fall prepay ammonia at the $345/st FOB level in early August.
Western Cornbelt: Anhydrous ammonia was steady at $305-$325/st FOB regional terminals, with the low in Nebraska and the upper end in Iowa. Forward contract ammonia for September through December continued to be referenced at $325/st FOB in Nebraska, $350/st FOB in Iowa, and $360/st FOB in Missouri.
Northern Plains: Sources pegged the anhydrous ammonia market at $375-$385/st DEL in North Dakota for fall prepay, with the terminal market at $345-$355/st FOB in the region. Forward contract ammonia for September through December was referenced at $355/st FOB Glenwood and Pine Bend, Minn., and $360/st FOB Grand Forks and Velva, N.D.
Eastern Canada: One source put the dealer market for fill tons of anhydrous ammonia at the $400/mt level FOB Courtright, Ont., last week, though new sales were few to test that market.
Black Sea: Asian sources report at least one sale at $250/mt FOB. The price was worked out by backing off estimated freight from a Nitrochem deal to OPC/Morocco. Other deals to Turkey also confirmed a rising price level from Yuzhnyy.
The strength in the market is coming from Turkey and the U.S., say Asian observers. One trader noted that major players were out looking for cargoes to feed U.S. buyers.
At the same time, production in the area remains limited because of the high cost of natural gas compared to the ammonia-selling price.
One Asian source said he was surprised the price only jumped to $250/mt FOB. A North American source said with $235/mt FOB done late last month, a new price of $250/mt FOB is not unreasonable.
Middle East: Contract sales continue to keep supply and demand in balance. Sources report the latest bit of business between Sabic and an Indian buyer at $231/mt CFR is based on a formula plan and is significantly below non-contract sales.
One Asian trader said the market has moved into the $240s/mt FOB on strong demand from East Asia and the U.S. Reportedly, one trader looking for tons for a U.S. buyer came knocking in the area and left empty handed because the bid – in the upper $230s/mt FOB – was not high enough.
Sources report production remains operating at full capacity. Helping the producers raise prices is the continued shutdown of a number of Black Sea facilities. Buyers who would normally look to Yuzhnyy for their material are now forced to look to the Middle East.
With strong and steady demand from India and East Asia, producers have no reason to offer discounts to new buyers.
Sources peg the Middle East market at $240-$245/mt FOB.
Asia: Just a couple of weeks ago, buyers and traders were not willing to look at any September business. Now, however, buyers are not only ready to book cargoes for September, they are asking their suppliers for any extra tons that can be added to the August shipments.
Most of the demand is coming from industrial buyers rather than the fertilizer industry. Buyers in Taiwan and South Korea – with the exception of Namhae – are taking as many tons as suppliers can send.
Swaps and outright purchases are being made to ensure each buyer is fully covered.
Sources report Mitsubishi sold 6,000 mt to Nitrochem for an Asian buyer at $300/mt CFR.
UREA
U.S. Gulf: Granular barges were hard to find last week, and if you really needed one, sources said you had to pay up. Delayed imports continued to be cited.
Most were calling the market in the $290-$292/st FOB range. Sources said there is also a rush to buy because of upcoming lock work on the Arkansas River later this month. Sources noted that prices have been moving up in wheat country, with higher postings of $320/st FOB at major points.
While wheat country players remain interested, other sources said the rice season is waning. Those looking down the road 60 days or so fear that the current strength in the market will not hold up.
While many have argued that prills have been in lock step with granular for some time, several said recent sales of what is called a fairly rare commodity have been concluded in the $300-$305/st FOB range, if not higher.
As of Aug. 6, DH was showing August at $285-$290/st and September at $280-$290/st; thereafter, there was a sharp drop to $255-$258/st for Oct.-December.
Eastern Cornbelt: Granular urea was pegged at $315-$325/st FOB regional terminals, reflecting an increase from last report based on firming urea barge numbers at the U.S. Gulf. Sources reported no movement to test the market, however.
Western Cornbelt: While some sources said spot urea deals could still be had for as low as $285/st FOB out of some Mississippi River warehouses, most sources put the dealer market at $310-$320/st FOB for prompt tons in the region. The posted urea price FOB Enid, Okla., was reported at the $320/st level last week.
Northern Plains: Granular urea was pegged at $310-$320/st FOB regional terminals, reflecting an increase from last report. Delivered urea in North Dakota was reported in a broad range at $315-$360/st, depending on location and supplier. One regional supplier was referencing forward contract urea for September through December at $330/st FOB Pine Bend and $350/st DEL in North Dakota and northern Minnesota.
Northeast: UAN and urea inventories remained very low in the region. “Everyone is empty and we’re sitting and waiting,” said one regional supplier. “Our take is that people will be playing it very hand-to-mouth.”
The only pricing quote for urea came from a source who pegged the market last week at $340-$345/st DEL to his location. “The inventory is a little thin in the East, but product is available,” he said. There were reports that new tons were coming into Baltimore by the first of September.
Eastern Canada: The granular urea market was quoted at $415-$485/mt FOB in the region, depending on location and supplier, reflecting a sizable drop from spring pricing levels.
India: Various stories are circulating as to how many tons MMTC bought from its July 29 tender. Officially, talks were to have ended August 5, but an Indian holiday in the middle of the talks may have allowed for a few extra days.
The quantity purchased ranges from 300,000 mt to 350,000 mt. So far, the following purchases are confirmed at prices of $281-$282/mt CFR.
Company
Quantity (mt)
Helm
145,000
Dreymoor
25,000
Gavilon
30,000
Agora
25,000
Rare Earth
30,000
Swiss Singapore
50,000 in two lots of 25,000
Reports also abound that PIC/Kuwait settled for an additional 25,000 mt at $270/mt FOB. Also in the rumor mill are reports that Sinochem may have also inked a deal with MMTC.
Matching the Helm price meant offering companies had to come down almost $18/mt. But, as one trader said, it was worth the effort to nail down the deal.
Indonesia: PIM closed a selling tender July 31 for 40,000 mt of prills and 20,000 mt of granular urea.
Prices were not as high as PIM had hoped for, said one trader.
The top bid came from Universal Harvester of the Philippines at $268/mt FOB for prills and $278/mt FOB for granular. The prill bid is $3 lower than the previous Indonesian sale.
The tender was for lots of 10,000 mt, with bids made through local traders.
As the tender date neared, some in the area were speculating that industrial buyers might set the price higher.
In the end, sources report Universal Harvester bought one cargo each of prills and granular. Helm took the second granular lot, also at $278/mt FOB, and Swiss Singapore took two lots of prilled urea at $265/mt FOB.
At first there was speculation PIM might be ready to dump the tender in the hopes of getting higher prices, but in the end they settled.
Sources speculate the Universal tons will be for Philippine buyers. One trader opined that the company might have to take a loss on the deal because of the current soft nature of the market.
The other tons could most likely end up going to industrial buyers in the region.
Middle East: Rumors abound that PIC accepted an MMTC/India bid of $270/mt FOB for 25,000 mt from the July 29 tender.
This price would represent an $11-$12/mt drop in the price the Kuwaiti company initially offered. It also represents another failure by the producers in the area to move the price out of the low $270s/mt FOB.
Even if the rumor remains a rumor, sources say there is nothing else around to justify a jump in prices from the area. Sources report the producers had hoped to use the recent buying spree of Pakistan, and now the Indian tender, to get prices back up.
One Asian source speculated that if the PIC offer was real, it might have involved an extra cargo that needed to move in order to clear out storage space. To back up this view, sources point out that PIC offered 50,000 mt firm and 25,000 mt as an option, but is only sending 25,000 mt.
For now, because of the lack of any other business, the area prilled and granular markets remain in the low $270s/mt FOB.
Black Sea: Sources say the Yuzhnyy market is holding in the mid- to upper $250s/mt FOB.
Even though the netback on the Helm business to India comes out to a netback closer to the upper $240s/mt FOB to low $250s/mt FOB, Asian sources say that material was most likely picked up earlier before the market started to move.
Once the MMTC buying concludes, industry watchers do not expect to see much more activity for a while. One Asian trader said the market should go quiet for at least another month. Depending on how many tons MMTC settles for in this go around, Indian buying could be delayed even more, he said.
China: Producers appear to be more willing to shut down rather than accept lower prices.
Sources say the prill market remains in the $260s/mt FOB even as material begins to back up at the ports.
Granular urea is a different story. Sources report healthy sales to the United States and Latin America. Prices remain firm in the mid $270/mt FOB.
All told, about 800,000 mt of Chinese urea – prilled and granular – has been shipped offshore in the past couple of months. The window of opportunity for additional sales will close September 15, when the export duty jumps back to 110 percent.
For many of the smaller urea producers the current market is just at the breakeven point. One trader said some are already at the point where they are losing money on international deals.
Pakistan: Industry watchers are keeping a close eye on the Pakistan ports.
Sources report delays in offloading and growing congestion problems are causing problems for traders and vessel owners. Even with three ports to choose from, some in the industry say the delays in moving the urea from ship to land are becoming a problem.
The delays are said to be cutting into the razor-thin profit margin many suppliers had with their awards from TCP. One trader said for some the small profit is already turning into a loss.
Bangladesh: Sources report BCIC made at least one award in its recent tender. Liven reportedly got awards for 12,500 mt of granular and 25,000 mt in two lots of prilled.
Reports are circulating that other awards have been made.
One source noted that all told, BCIC would most likely only take a total of 120-130,000 mt from the prilled and granular tender. The company had asked for offers for 150,000 mt of each type of urea.
Once the dust settles on this tender, sources say BCIC should call another one soon.
NITROGEN SOLUTIONS
U.S. Gulf: Most players continued to put the market in the $135-$137/st FOB ($4.22-$4.28/unit) range. While some said sellers were quoting $140/st FOB and above, others argued that the market may have topped out and is starting to retreat.
As of Aug. 6, Direct Hedge reported August at $130-$135/st, with a drop to $125-$130/st for September. DH prices rebounded for Oct.-Dec. to $135-$145/st.
Eastern Cornbelt: UAN was quoted at $5.50-$5.78/unit FOB regional terminals to the dealer, depending on location. Forward contract tons for September were referenced by one supplier at $180.80-$190.40/st ($5.65-$5.95/unit) FOB in the region.
CF’s postings for the Aug. 1-7 order and shipping period included $5.60/unit FOB Cahokia, Ill.; $5.80/unit FOB Mt. Vernon, Ind.; $5.90/unit FOB Kingston Mines and Peru, Ill., and Louisville, Ky.; $5.95/unit FOB Albany, Ill., and Cincinnati, Ohio; $6.10/unit FOB Terra Haute, Ind.; and $6.30/unit FOB E. Liverpool, Ohio.
Western Cornbelt: The UAN-32 cash market remained at $170-$185/st ($5.31-$5.78/unit) FOB regional terminals, depending on location, with several sources putting the common dealer market at the $5.50/unit FOB level out of river locations last week.
Northern Plains: The UAN market was quoted at $5.78-$6.61/unit FOB regional terminals, depending on location. Forward contract UAN-32 for September was referenced at the $192/st ($6.00/unit) level FOB Pine Bend. Delivered UAN-28 in North Dakota was pegged at $200/st ($7.14/unit), reflecting a slight increase from last report.
Northeast: With supplies reportedly sold out at Philadelphia and Baltimore, one regional source reported pulling UAN from Chesapeake, Va., at $188/st ($5.88/unit) DEL, which he said backed up to $165.30/st ($5.17/unit) FOB. Out of tanks in upstate New York, sources quoted the UAN-32 market at $208/st ($6.50/unit) FOB.
Eastern Canada: UAN-28 was pegged at $195-$220/mt ($6.96-$7.86/unit) FOB, with the upper end reported FOB Courtright to the dealer. One Ontario source put the dealer market last week at $195/mt ($6.96/unit) FOB for fill and $205/mt ($7.32/unit) FOB for a stored fall prepay program. UAN reference pricing from some regional suppliers was quoted as high as $9.21-$9.39/unit FOB terminals to the dealer.
AMMONIUM NITRATE
U.S. Gulf: Recent indications are that prices may be firming. What was called $200-$210/st FOB in the last few weeks is now being called $210-$220/st FOB. Actual barge business has been hard to find, but sources say barge-quantity business, via railcars, has been moving at higher numbers. Direct Hedge last week reported AN barges at $200-$210/st for August and September.
Western Cornbelt: Ammonium nitrate was steady at $265-$270/st FOB in the region.
Eastern Canada: Ammonium nitrate was reported at $385-$400/mt FOB in Eastern Canada, with list pricing reported as high as $600/mt FOB in the region.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was reported at $160-$180/st FOB.
Western Cornbelt: Granular ammonium sulfate was pegged at $160-$180/st FOB in the region, with limited inventories.
Northern Plains: Granular ammonium sulfate remained at $225/st FOB or rail-DEL in the region.
Northeast: Granular ammonium sulfate was reported at $200/st FOB and DEL in the region last week.
Eastern Canada: The granular ammonium sulfate market was tagged in a broad range at $330-$425/mt FOB regional shipping points, with dealer postings pegged as high as $475/mt FOB.
PHOSPHATES
Central Florida: Phosphate inventories were at near historic lows last week, even though sales out of Central Florida have been less than spectacular in recent months. Contract sales, a cutback in production, and relatively heavy export sales were the primary reasons for the low levels of product.
Phosphate producers finalized their third-quarter prices with major sulfur suppliers for molten deliveries to Tampa last week, up $5/lt to $10/lt. At the same time, phosphate producers were coming off their voluntary curtailment programs and increasing production. Although the fall season has had all the excitement of white bread, four-to-six weeks remain – and buyers appeared on the verge of buying.
Activity actually did increase a bit last week, with railcar sales by both producers and traders. However, the bulk of the activity will likely occur during the next month, and that should create problems arranging railcars to transport the product.
Sometime this week, say sources, the USDA will issue a new corn estimate. If it indicates corn yields will be up, fertilizer stays stable and corn prices will decrease. If the government’s guess is for less corn, phosphate prices will rise along with corn futures. However, phosphate prices will likely have only moderate increases at best, and that would be good news for buyers and sellers. At the recent Southwest Conference at San Antonio, many dealers indicated their loyalty to North American fertilizer producers no longer existed, because they felt they suffered unfairly when the market collapsed last year and got no relief from domestic producers.
The Central Florida DAP price range increased last week from $260-$265/st FOB the previous week to $265-$270/st FOB, based on actual sales. Both Mosaic and PCS Sales had a $10/st FOB additional charge for MAP. Agrifos was no longer posting rail prices, but was selling truckloads at $280/st FOB for DAP and $285/st FOB for MAP.
DH last week reported $260-$270/st for August all the way through December.
U.S. Gulf: Last week, loaded NOLA DAP barges floating on the river system were hard to find. Because Mosaic’s phosphate processing plant at Donaldsonville was partially curtailed for a month due to a turnaround, the company was well behind just loading barges it had already sold, or were under contract. Nothing was just sitting around looking for a buyer. Traders who get their barges from producers said they could only promise to offer the next ones to be loaded. By the way, inventories were tight – really tight – and at nearhistoric lows. CF was said to have no cross-gulf shipments of phosphates scheduled for the near future, which will not help the supply side.
A source said it might be possible to buy a NOLA DAP barge for $275/st FOB or a few dollars lower.
Meanwhile, dealers were hitting terminals in larger numbers last week and prices were rising – with the lowest found around $300/st FOB, but some as high as $315/st FOB. Ordering for the fall season will have to be completed during the next six-to-eight weeks, and prices will probably be climbing upward during that period.
How much dealers order will depend on farmers, who will be closely watching the USDA’s upcoming crop estimate. At the recent Southwest Conference at San Antonio, crop prices, including corn, were down a bit, but last week they jumped back up. Yields in Iowa, which was able to get its crop in the ground far earlier than in most areas, look to be very good so far. However, Iowa farmers normally have better yields than most, and most did not get their crops in until much later. The biggest fear was that frost will take a toll on corn, but prices will spike if that happens. Last week the price for December corn jumped up to $3.70/bushel before retreating a little.
In another couple of weeks preparation for winter wheat crops will begin, and that should have a positive impact on phosphate sales in those areas. There will be a problem getting new supplies, because the U.S. Army Corps of Engineers will be closing locks on the Arkansas River, which will block barge traffic to Inola and Catoosa.
As anticipated, the NOLA DAP barge price range edged upward last week, from $270-$272/st FOB to $270-$274/st FOB. Because of low inventories and a lack of loaded barges, prices will likely continue a slow but steady rise. Both Mosaic and CF were charging a $10/st FOB premium for MAP.
DH reported barges last week at $273-$278/st for August and September, and $275-$280/st Oct.-December
Eastern Cornbelt: DAP was steady at $300-$310/st FOB regional warehouses; an Illinois source pegged the common dealer level at $305/st FOB in his location. MAP was $10/st higher than DAP. 10-34-0 was steady at $350/st FOB in Indiana and Ohio, with the low end of the range at $320-$330/st FOB in Illinois.
Western Cornbelt: DAP was steady at $295-$305/st FOB warehouses to the dealer, with MAP $10/st higher. Forward contract DAP tons for September through October were referenced by one regional supplier at $320/st FOB St. Louis, Mo., and $325/st FOB Inola, Okla., with MAP at $335/st FOB Inola. 10-34-0 was steady at $310-$350/st FOB in the region.
Northern Plains: DAP remained at $300-$310/st FOB in the region, with MAP roughly $10/st higher. Forward contract tons for September through October FOB Pine Bend were listed at $325/st for DAP and $335/st for MAP. Delivered MAP in North Dakota was reported at the $340-$355/st level last week.
10-34-0 was pegged at $320/st FOB and $380/st DEL in North Dakota.
Northeast: MAP was unchanged at $320-$350/st FOB in the region, depending on location. DAP was roughly $10/st less than MAP. 10-34-0 pricing had reportedly fallen to $325/st FOB the tank in upstate New York, while other sources quoted delivered 10-34-0 as low as $340/st into the Northeast market.
Eastern Canada: The DAP market was pegged at $450-$485/mt FOB regional warehouses to the dealer, with MAP reported at $435-$465/mt FOB. Dealer reference levels for MAP were pegged at the $525/mt FOB level on a spot basis in Eastern Canada. No current dealer pricing quotes were available for TSP.
U.S. Export: The export DAP market was on the march last week, at least in terms of prices. A trader made a sale of around 10,000 mt into South America at $306/mt FOB, but PhosChem sold 5,000 mt into Central America at $315/mt FOB.
With its heavy delivery schedule to India, PhosChem has been hit by low inventories, somewhere near the record low, and last week had to pass on offers to sell to both India and Pakistan because it had no panamax-sized vessels available. The organization will only be able to sell small loads for at least the next several weeks. However, phosphate production was on the increase after slow business forced many plants into curtailments or shutdowns during the past few months.
For the next month or two the export market will have to compete with the domestic market for supplies, and that will most likely push prices for all markets upward.
The export DAP price range last week increased from $296-$300/mt FOB to $306-$315/mt FOB. Late last week, PhosChem hiked its asking price to $325/mt FOB, which generally applies to both DAP and MAP.
As of Aug. 6, DH was showing $290-$300/mt for August and $300-$320/mt for Sept.-November.
POTASH
Eastern Cornbelt: Sources pegged the potash market at $510-$520/st FOB warehouses and $520-$530/st rail-DEL in the region, based on reference levels from producers. There was no new buying activity to test the market, however.
Western Cornbelt: The regional potash market was pegged at $510-$523/st FOB and $520-$530/st rail-delivered, depending on location and supplier. “There is very little interest,” said one source.
Southern Plains: Intrepid Potash released new potash postings, effective July 27. Granular 60 percent is now posted at $482/st Carlsbad, N.M., and Moab, Utah, and $490/st Wendover, Utah. Standard 60 percent is posted at $477/st Carlsbad and Moab and $485/st Wendover. Other postings for Carlsbad include Standard 62 percent at $493/st, Fine Standard 62 percent at $496/st, and Granular 62 percent at $498/st.
Northern Plains: Potash pricing saw a sizable drop in late July, although sources said the new pricing levels were not generating much new business. A North Dakota source pegged the new market at $550-$575/st DEL in the state last week.
Effective July 24, PCS Sales’ potash postings to U.S. customers FOB Saskatchewan mines dropped to $467/st for standard, $472/st for granular, and $480/st for soluble and white granular. The company’s rail-delivered postings for granular potash moved on that date to $530/st in Minnesota and Wisconsin.
Agrium’s July 16 postings for 0-0-60 muriate of potash to U.S. customers included $512/st for standard grade and $517/st for red premium FOB Vade, Saskatchewan; $560/st FOB Shakopee, Minn., and Colfax, N.D.; and $575/st railDEL in Minnesota and the Dakotas.
Northeast: Lower potash prices were the biggest news in the region in late July and early August. Sources quoted the potash market at $520-$550/st DEL in the region, depending on grade and supplier, with the E. Liverpool, Ohio, market tagged at the $510/st FOB level. Those numbers were down dramatically from spring pricing levels, but several sources said they were prepared to wait it out for further pricing cuts before considering new purchases. One dealer said some of his biggest farmer customers had indicated they will not put potash down this fall for wheat, but will wait until spring 2010 instead.
July 24 granular potash postings from PCS Sales included $535/st FOB Baltimore, Md., and Chesapeake, Va., and $550/st rail-DEL in New York, Pennsylvania, New Jersey, Maryland, Delaware, Massachusetts, Connecticut, Rhode Island, Maine, Vermont, and New Hampshire. Agrium’s July 16 potash postings included $595/st rail-DEL in the Northeast region for 60 percent red premium potash.
Eastern Canada: Sources put the warehouse market for potash at $625/mt FOB in Ontario on the low end, reflecting a sizable drop from spring pricing levels. PCS Sales’ July 24 60 percent potash postings in the Eastern Canada market included $610/mt FOB Sussex, N.B., and $630/mt FOB Ontario and Quebec warehouse locations at Belton, Oxford Station, and Cote Ste Catherine. On a rail-delivered basis in Ontario and Quebec, PCS’s July 24 postings included 60 percent granular at $647/mt and 62 percent white granular at $656/mt.
The K-Mag market was quoted at $565/mt FOB in Ontario, down slightly from last report.
India: Under the MMTC potash tender held this week, sources report that the company only received one offer – from its Singapore-based subsidiary MTPL, which offered product ex BPC at reportedly US$460/mt CFR India including 180 days terms. The RCF tender falls due on Aug. 10.
In the meantime, KRIBHCO has issued a tender for the import of 100,000 mt of red MOP. Offers are to be submitted by Aug. 12, to be kept valid for one week. The product is required at the eastern ports of Vizag/ Kakinada/Tuticorin, and should arrive at the latest by Sept. 20-25.
SULFUR
Tampa: Early in the week sulfur suppliers and phosphate producers put the ink to contracts for third-quarter pricing for molten deliveries to Tampa up $5/lt, to a new price of $10/lt. If that doesn’t sound like much, it’s because it isn’t.
Last week, the price at Abu Dubai was posted $2/mt FOB less at $33/mt FOB, which was a reflection of the world market. China was sitting on a sizeable quantity of sulfur and, along with India, was only interested in bargains.
However, in the U.S., phosphate producers were kicking up production, because business in all the major markets was up and inventories were way, way down. Meanwhile, prill operations along the Gulf Coast were humming along, and about 200,000 mt will be exported from there this month. Although the price difference between sweet and sour crude was bringing some refineries back to high-sulfur oil, overall less sulfur was available. That could change during the next two months, but if not, sulfur prices will rise for the fourth quarter – possibly to the point every ton shipped will not be a loss.
Sulfur producers were not exactly pleased with the new price they received for the third quarter, and one large sulfur company was especially disturbed by the low price, according to several sources. The people who were the most pleased were accountants on both sides, who can leave their frustrations at home for the next couple of months.
West Coast: Prices for sulfur leaving refineries in California moved into positive territory recently, which was a positive change for those suppliers. In many cases, contracts have given way to spot pricing due to the volatility of the market.
Vancouver: Netbacks for sulfur shipped from Vancouver slipped a bit recently, because the cost of ocean freight has gone up. The trip to China was said to be up about $5/mt.
MARKET NOTES
Abu Dhabi: ConocoPhillips, Houston, and Abu Dhabi National Oil Co. (ADNOC) have signed the Shah Gas Field Joint Venture and Field Entry agreements to develop the Shah Gas field in Abu Dhabi. ADNOC owns a 60 percent interest and ConocoPhillips owns the remaining 40 percent interest in the project. This large-scale project involves the development of sour natural gas and condensate reservoirs within the Shah Gas Field, located onshore approximately 180 kilometers southwest of the city of Abu Dhabi. The project requires the construction of facilities, including gas gathering systems, gas processing trains, and product pipelines designed to process and transport one billion cubic feet per day of gas, associated liquids, and sulfur.
The Shah Project will include one of the largest sulfur removal plants in the world, and will also include a sulfur processing and exporting facility, which will be located in Ruwais Industrial City, U.A.E.
To date, six of 10 major Engineering, Procurement, and Construction (EPC) bid packages have been released for tender to pre-qualified contractors spanning the globe; the remaining EPC bid packages will be released later this year. The complete results from this tender will not be known until early 2010.
Richard Wilson has joined Applied Chemical Technology Inc., Florence, Ala., as marketing manager on ACT’s marketing team. He will report to Alan Nix, director of marketing. Wilson has worked on numerous projects in the fertilizer industry and has over 14 years experience assisting clients in process instrumentation, heat transfer, and plant utilities. He will interact with clients and the ACT engineering staff to assist in the development and execution of new projects.
H.J. Baker & Bro. Inc., Westport, Conn., recently announced that it has appointed Arthur (Art) Bentley to the new position of director, business development. In this role, he will work on strategic initiatives designed to drive H.J. Baker’s customer-focused profitable growth.
He comes to H.J. Baker with 13 years of corporate finance experience in investment banking, commercial banking, and commercial lending. Most recently, Bentley spent seven years at GE Commercial Finance, where he executed mergers, acquisitions, and divestitures, as well as corporate lending, with a focus on corporate and energy financing opportunities. Prior to that, he held merger and acquisition advisory roles with The Dai-Ichi Kangyo Bank and WestMerchant Bank.
Bentley received his B.A. from Niagara University and an M.B.A from Syracuse University. He served for more than 11 years in the United States Army Reserve, ultimately earning the rank of Captain.
Dale Drew joined DASCO Inc., Monument, Colo., in May as the industrial account manager for the southern and western U.S. A graduate of Oklahoma State University with a B.S. in business administration, Drew has 22 years experience in sales and business management.
Don Gressly joined DASCO in March as the director of distribution. Gressly is a graduate of the University of Missouri in Columbia, Mo., with a B.S. in agricultural economics. He has 22 years experience in the merchandising and logistics of grain, animal feed, and chemicals.
Athabasca Potash Inc. has appointed Robert T. Boyd as the company’s new president and CEO, effective immediately. He has also been appointed to the board of directors. API removed Dawn Zhou as president and CEO on June 25 (GM June 29), though she remains on the board.
Boyd is currently lead director of Peregrine Diamonds Ltd. and chairman of True North Gems Inc., and serves on several other corporate and mining association boards. He was formerly CEO of Ashton Mining of Canada Inc. Prior to joining Ashton, he was a partner and principal in Geographe International, a boutique mining advisory firm providing strategic joint venture, mergers & acquisitions, and technical advisory services to mining companies. He spent over a decade with Homestake Mining Co. as director, Canadian Exploration, and later vice president, exploration, of Homestake Canada Ltd., where he was responsible for Homestake’s Canadian exploration, financial, and administrative group. He holds a degree in Geology from the University of Western Ontario.
Charlie Cott has left his position as vice president, plant foods marketing and transportation, with MFA Inc., Columbia, Mo. The company did not comment on his departure, and Cott could not be reached for comment.
Jefferson City, Mo.-State investigators are downplaying reports of suspicious barrels being buried at the St. Joseph tannery plant. Sludge at the plant is produced for use as fertilizer, which is being tested for chromium 6 contamination (GM July 13, p. 14). Missouri Department of Natural Resources spokeswoman Susanne Medley told Green Markets, “The state is investigating a complaint of the barrels being buried. It’s another complaint that we have received and is being looked at in the normal course of things.” MDNR has also participated with EPA in taking and testing samples from farmland that received the processed material, but so far no serious chromium contamination has been detected. Other farm areas are being tested. Medley said a former tannery worker had filed a formal complaint claiming that barrels had been buried at the tannery, but he didn’t know what was inside the barrels. The tannery, operated by National Beef Leathers, is also the object of lawsuits claiming the fertilizer is the cause of brain tumors.
Boise-The Idaho Department of Environmental Quality has granted Monsanto a new Tier I air quality operating permit for the company’s P4 Production LLC elemental phosphorus plant north of Soda Springs, Idaho. IDEQ notified Plant Manager Bruce Pallante of its immediately effective decision in a July 14 letter. P4 Production is a wholly-owned subsidiary of Monsanto, which applied for a permit renewal on June 29 to replace a permit issued in December 2002. Monsanto’s Soda Springs plant is the only elemental phosphorus plant still operating in North America after FMC closed its Pocatello, Idaho, plant in December 2001. The P4 Production plant encompasses 800 acres. Phosphate ore, silica, and coke are fed into its three large electric furnaces to manufacture elemental phosphorus used in a variety of products, including the Roundup herbicide. The permit applies to all sources of emissions at the plant, including the three furnaces, kiln and cooler, material handling and drying, nodule crushing and screening, and A/U boiler. It pertains to fugitive emissions, odorous gases, liquids or solids, visible and excessive emissions, nitrogen oxides, sulfur dioxide, carbon monoxide, fluorides, opacity, fuel-burning equipment, sulfur, open burning, and asbestos. About 700 are employed at Monsanto’s mining and processing operations in Southeast Idaho.
Washington-LSB Industries Inc., the owner of El Dorado Chemical Co., has reached an agreement with the U.S. Securities & Exchange Commission pertaining to a 2004 change in inventory accounting from LIFO to FIFO involving approximately $500,000. As a result, LSB had to restate its 2004 results. Under the SEC order, LSB has agreed not to violate Sections 13(a) and 13(b)(2)(A) of the Securities Exchange Act of 1934, as amended, and Rules 13a-1 and 13a-13 thereunder. LSB consented to the order without admitting or denying any wrongdoing. There are no findings of securities fraud, fines, or penalties involved. In addition, Jimmie D. Jones, LSB’s former principal accounting officer and controller, who resigned from those positions on Aug. 15, 2008, but continues to serve as LSB’s senior vice president and treasurer, has consented to the order on very similar terms. However, he has consented not to appear or practice before the SEC as an accountant, subject to submitting application for reinstatement two years after the date of the final order.
Ashland, Ky.-A jury here in July returned a $1.25 million verdict against E.I. du Pont de Nemours & Co. to six plaintiffs for injuries they sustained as a result of DuPont’s Oct. 11, 2004, sulfuric acid release from its Wurtland plant. There are still 173 other plaintiffs with cases to be tried. The plaintiffs were awarded $130,000 in compensatory damages, but the jury found that DuPont was grossly negligent and added punitive damages ten times compensatory damages. Damage claims were for skin burns, eye irritation, and immediate and ongoing respiratory and eye problems. Inquiries to DuPont had not been returned at press time; however, reports are it plans to appeal, although plantiffs’ counsel says the court ruling is that it cannot appeal until all 179 plantiffs’ claims have been resolved.
Paris-The International Fertilizer Industry Association (IFA) last week released a white paper, Fertilizers, Climate Change and Enhancing Productivity Sustainably (see fertilizer.org). The paper’s objective is to provide a review of the fertilizer industry and its global impact, both positive and negative, on climate change. The industry advocates a life-cycle approach encompassing fertilizer production, transport, and use. The fertilizer life-cycle accounts for 2 to 3 percent of total global greenhouse gas (GHG) emissions, yet the paper notes that nitrogen fertilizers are estimated to contribute to feeding as much as half of the world’s population. It says as agricultural production rises to meet food, feed, fiber, and bioenergy demand worldwide, fertilizer use will also increase. Climate change creates an imperative for the fertilizer industry to contribute to mitigation and adaptation in order to achieve a more sustainable path to global food security. Increasing agricultural productivity through efficient fertilizer use is critical to prevent further deforestation, protect biodiversity, and thus reduce the emissions level per unit of agricultural output. IFA said the fertilizer industry recognizes that it contributes directly and indirectly to GHG emissions, particularly carbon dioxide (CO2) and nitrous oxide (N2O), and has made their reduction a priority. The technology and knowledge is available to achieve significant reductions. IFA says efforts by the industry to take responsibility for its greenhouse gas emissions can only be fully effective if policymakers and other stakeholders, such as farmers, also play their part. The fertilizer industry calls on governments to include agriculture in the post-Kyoto negotiations that will take place in December in Copenhagen.
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