All Posts from August 10, 2015

Nitrogen Solutions

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

U.S. Gulf: No new trades were reported last week, leaving the range at $197-$210/st FOB ($6.16-$6.56/unit).

The East Coast vessel price was called $225/mt CFR, if not lower.

June imports were off 26 percent, to 209,366 st from the year-ago 282,559 st, while July-June imports were up 17 percent, to 3.59 million st from the prior year 3.08 million st.

Eastern Cornbelt: The UAN-28 market ranged broadly from $225-$245/st ($8.04-$8.75/unit) FOB in the region, depending on location, with the low reported for fill tons in the Cincinnati, Ohio, market and the upper end FOB Burns Harbor Ind. The UAN-32 market out of Illinois terminals remained at $256-$270/st ($8.00-$8.44/unit) FOB.

“There are still people willing to sell fill tons, but there are no buyers interested,” said one contact.

Western Cornbelt: UAN-32 remained at $260-$275/st ($8.13-$8.59/unit) FOB in the Western Cornbelt, depending on location and time of delivery, with the low reported by Iowa sources for fill ton offers.

Northern Plains: The UAN-28 market remained in a broad range at $250-$290/st ($8.93-$10.36/unit) FOB in the Northern Plains, with the low quoted in the Twin Cities and the upper end FOB Harvey, N.D.

Northeast: Sources quoted the UAN-32 market at $220-$225/st ($6.88-$7.03/unit) FOB Baltimore, Md., for fill or prompt tons in early August. One source said, however, that there are “some indications that we could move a little higher as domestic producers have taken enough fill tons to make them comfortable.”

Out of terminals in upstate New York, the UAN-32 market had reportedly slipped to $280/st ($8.75/unit) FOB, down another $5/st from last report.

Eastern Canada: UAN-28 pricing in Eastern Canada remained at $338-$345/mt ($12.07-$12.32/unit) FOB regional terminals. “The Canadian dollar in relation to the U.S. dollar is causing us some grief, adding over 30 percent to our costing fertilizer that is purchased in the U.S.”, said one source.

Agrium revises Borger plans

News, News Briefs

Calgary, Alberta — Agrium Inc. said Aug. 6 that it has changed its plans with respect to its Borger, Texas, expansion. While the company will continue with the 610,000 mt/y urea facility, it has opted against a 145,000 mt/y ammonia debottleneck. “We have decided not to expand the existing ammonia plant given the high cost and the significantly longer downtime required to complete this portion of the project than was originally planned,” Agrium President and CEO Chuck Magro told analysts Aug. 7. The company anticipates completion of an ammonia facility refresh in the first quarter of 2016 and expects the urea plant to be mechanically complete by the end of 2016. Agrium said the CAPEX for the project remains within 5 percent of the original $720 million estimate.

PotashCorp sticks to €41 per share

News, News Briefs

Kassel, Germany — K+S Group reported Aug. 7 that Potash Corp. of Saskatchewan Inc. again sent an unsolicited letter to the company in which it proposed a takeover at an unchanged price of €41 per share. “Jointly with the supervisory board we are still convinced that the proposed price of 41 Euro per share does not at all reflect the fundamental value of K+S,” said Norbert Steiner, K+S CEO. “This is true for our existing business, but in particular for the value contribution of our Legacy Project. For this reason alone, also the new proposal of PotashCorp is not in the best interest of the company.” K+S went on to say that the documents show that the commitments proposed by PotashCorp do not provide reliability. It said they are foiled by far-reaching restrictions in essential parts and are not effectively enforceable. As a result, K+S said its concerns remain unchanged that the transaction proposed by PotashCorp puts jobs at risk and that sites and raw material production in Germany might not be maintained.

Agrium 2Q income up 10 percent; guidance lowered on crop and P&K prices

News, News Briefs

Agrium Inc. reported a 10 percent uptick in second-quarter net income, to $675 million ($4.71 per diluted share) on sales of $7 billion, up from the year-ago $616 million ($4.28 per share) and $7.3 billion, respectively.

"Agrium’s solid second-quarter earnings were supported by the strong competitive advantages across our product portfolio, the diversity of our product and geographic mix, and our continued focus on operational excellence,” said Chuck Magro, Agrium president and CEO. “Wholesale delivered impressive results across all products, supported by lower costs and higher volumes. Retail earnings held up well despite approximately a 5 percent decline in crop input expenditures across the North America market and the impact of the severe weather conditions across this region. We believe we outperformed against our U.S. retail peers, achieving an increase in U.S. normalized comparable store sales in a down market, a demonstration of the strength of our business model and market position."

Agrium’s second-quarter gas cost dropped to $2.39/mmBtu from the year-ago $4.51/mmBtu.

Agrium adjusted its annual guidance to $7.00-$7.50 EPS from the previous $7.00-$8.25 per share, citing the impact of low crop prices on grower decisions and expected potash and phosphate pricing in the second half. The company assumes a normal fall season, recognizing a risk to nutrient applications in regions with drought or delayed harvest.

Other guidance includes Retail EBITDA of $1-1.05 billion and crop nutrient volumes of 9.7-10.2 million mt. Wholesale Nitrogen production is put between 3.5-3.7 million mt, and Potash at 1.9-2.2 million mt.

Second-quarter Wholesale gross profit was $409 million on sales of $1.17 billion, up from the year-ago $227 million and $1.21 billion. Total tons were 2.64 million mt, down from 2.78 million mt.

Nitrogen gross profits soared to $270 million on sales of $553 million from the year-ago $101 million and $421 million, respectively. Tons were 1.22 million, up from 906,000 mt.

Potash profits were $68 million on sales of $166 million, down from $72 million and $175 million, respectively. Tons were 509,000 mt, down from 566,000 mt. North America took 334,000 mt ($371/mt) versus the year-ago 372,000 mt ($358/mt). International was down at 175,000 mt ($243/mt) from the year-ago 194,000 mt ($218/mt).

Phosphate profit was $29 million on sales of $192 million, up from $6 million and $161 million, respectively. Volumes were up at 290,000 mt from 268,000 mt.

Second-quarter Retail gross profit was $1.26 billion on sales of $6.2 billion, down from $1.35 billion and $6.4 billion, respectively. Within Retail, crop nutrient gross profit was $454 million on sales of $2.6 billion, down from the year-ago $505 million and $2.71 billion, respectively. Total crop nutrient tons were 4.86 million mt, down from 4.92 million mt.

Six-month net earnings were up 11 percent to $689 million ($4.78 per share) on sales of $9.9 billion, compared to the year-ago $619 million ($4.29 per share) and $10.4 billion.

Six-month Wholesale gross profit was $643 million on sales of $2.04 billion, up from the year-ago $398 million and $2.3 billion, respectively. Total tons were 4.7 million mt, down from 5.4 million mt.

Nitrogen gross profit was $413 million on sales of $868 million, up from $191 million and $757 million. Total nitrogen tons were up at 1.98 million mt from the year-ago 1.7 million mt.

Potash profits were off at $75 million on sales of $233 million from the year-ago $118 million and $303 million. Total volumes were 694,000 mt, down from 994,000 mt. North American volumes were 483,000 mt ($378/mt), down from 664,000 mt ($351/mt). International were 211,000 mt ($240/mt), down from 330,000 mt ($213/mt).

Phosphate profits were up at $74 million on sales of $373 million f

LSB 2Q income off on Chem performance

News, News Briefs

Oklahoma City, Okla. — LSB Industries Inc. reported a drop in second-quarter net income to $417,000 ($0.02 per share) on sales of $182.6 million, compared to the year-ago $11.1 million ($0.47 per share) and $201.7 million, citing the performance of its Chemical segment. “Our second-quarter results were impacted by both internal and external factors,” said Barry Golsen, LSB president and CEO. “Chemical Business sales declined primarily as a result of a 17-day unplanned outage at our Pryor facility ammonia plant during May, which was caused by the need to replace a failed heat exchanger and, to a lesser extent, a water main break in the industrial park where the facility is located. Additionally, the lower Chemical sales as compared to prior-year second quarter reflects the previously discussed April 2015 expiration of our contract with Orica for low-density ammonium nitrate. A final factor negatively affecting second-quarter Chemical Business results was the impact of unfavorable weather in our agricultural markets, which shortened the spring fertilizer application season, reducing our volumes and depressing prices for ammonia, UAN, and AN in the quarter.” LSB reported solid growth in LSB’s Climate Control business, though operating profits were off due to lower sales for some products and increased personnel costs. Second-quarter Chemical operating income was $6.8 million on sales of $112.8 million, down from the year-ago $23.6 million and $135.7 million, respectively. Six-month LSB income was $7.1 million ($0.29 per share) on sales of $376.5 million, down from $22.7 million ($0.96 per share) and $380.2 million. Six-month Chemical operating income was $23.5 million on sales of $239.6 million, down from $52.4 million and $251 million, respectively.

Transportation

Market Watch, U.S. Gulf

U.S. Gulf: Elevated water levels in the Gulf shipping region continued to recede last week. The New Orleans gauge read 14.8 feet and falling on Aug. 6, and high-water restrictions limiting tow lengths were expected to persist for another two weeks, leading shippers to warn of extended delays picking up and dropping off barges.

Industrial Lock wait times were called 24-26 hours for the week on 21 vessels queued. Boats navigating Algiers Lock required 10-12 hours for passage, and guide wall repairs at Bayou Sorrel Lock, slated to run through Aug. 15, pushed waits to 10-12 hours for the week. Daylight transits will be unavailable at Bayou Sorrel Monday through Thursday while work is underway. Port Allen Lock delays were pegged at 2-4 hours.

The Bayou Sorrel Locks system will be offline Aug. 15 through Oct. 15 for dewatering, repairs, and maintenance operations. Navigation will be rerouted through Algiers lock while the work is performed, and significant delays are expected due to the extra traffic entering and exiting the West Canal.

Westbound traffic through the West Canal’s Calcasieu Lock was restricted to singlewide tows thanks to ongoing dolphin construction on the east side of the lock. Delays are to be expected Monday through Friday through Sept. 15.

Lower Mississippi River: Minor-to-moderate stage flooding was described at Natchez, Red River Landing, and Baton Rouge.

Persistent high water extended an Extreme High Water Safety Advisory for Miles 303-869. Restrictions included a minimum of 280 towing horsepower per barge and a maximum of 36 barges per tow.

Baton Rouge levels continued to descend slowly last week, and were called 37.3 feet and falling on Aug. 6. High-water restrictions setting a minimum 240 horsepower per barge tow threshold on no more than 36 barge per tow were expected to remain in place for an additional two weeks. Sources reported barge pickup and drop-off delays resulting from the restrictions.

Mat-laying and weir dike construction at Mile 643, scheduled to run through Oct. 8, caused intermittent closures. Similar work is expected to trigger sporadic daytime navigation hiccups at Mile 893 on Sept. 5-12, at Mile 714 on Sept. 17-22, and at Mile 418 on Nov. 11-17.

Weir construction at Big Island Bendway, expected to kick off during the first week of August, will last 25-30 days, shippers said. Daylight navigation will be unavailable, necessitating vessels to transit the area nightly.

Upper Mississippi River: A weeks-long nighttime restriction on tows greater than 600 feet traveling through the St. Louis harbor was lifted last week thanks to river levels falling below the 25-foot mark. However, tow sizes were still being reduced by up to five barges between Cairo and St. Louis on a boat-by-boat basis. The St. Louis gauge read 21.3 feet and falling on Aug. 6.

Navigation delays of 2-4 hours were reported at Lock 20, and shippers estimated Lock 27 wait times at one hour for the week.

The main chamber at Mel Price Lock will be offline 9:00 a.m. through 3:00 p.m. on Aug. 11 for lift gate wire inspection. The site’s auxiliary chamber will be unavailable as well.

Illinois River: Navigation conditions on the Illinois River were much improved last week, shippers reported, despite reports of minor-stage flooding at Havana, Beardstown, and Valley City. Much of the river’s recent congestion had also thinned.

The Peoria and LaGrange Locks were not locking last week, allowing vessels to pass freely.

Ohio River: The second round of repairs at Emsworth Lock began Aug. 3, and are scheduled to run through Sept. 18. Main chamber operations will be unavailable during that time, forcing traffic through the auxiliary chamber instead. Delays of

Crops/Weather

Eastern Canada, Eastern Cornbelt, News, News Briefs, Northeast, Northern Plains, Western Cornbelt

Grain Futures: As of 4 p.m. on Aug. 6, wheat futures were higher compared to the week before, but corn and soybeans were down.

Corn contracts for September 2015 clocked in at $3.6975/bushel, a fall from the previous week’s $3.7175/bushel. December 2015 corn was $3.805/bushel, a decrease from $3.8225/bushel in the previous period, and corn for March 2016 was $3.915/bushel, down from $3.93/bushel reported last.

The November 2015 soybean price fell to $9.4325/bushel from $9.4925/bushel a week earlier. Beans for January 2016 were $9.48/bushel, a decrease from the last-reported $9.5375/bushel, and March 2016 soybeans were posted at $9.4375/bushel.

Wheat for September 2015 was $5.07/bushel, up from the previous period’s $4.9775/bushel, and December 2015 wheat was $5.1125/bushel, higher than $5.0525/bushel at the previous report. Contracts for July 2016 wheat were listed at $5.2625/bushel, above the $5.1925/bushel they traded at the week before.

Eastern Cornbelt: Most of the Eastern Cornbelt enjoyed sunshine during the first days of August, although severe thunderstorms hit northern and central Illinois on Aug. 2, causing widespread power outages.

The drier weather benefitted corn and soybeans in the region, but crop development continued to lag just slightly behind the average pace due to cool, wet weather conditions during the early growing season. “The early crops look better, the later crops need to catch up,” said one source.

USDA assigned good or excellent ratings to 56 percent of the Illinois corn crop last week, compared with 46-47 percent in Indiana and Ohio. The regional soybean crop saw a similar spread, with 50 percent of the Illinois crop rated as good or excellent, compared with 43 percent in Indiana and Ohio.

Western Cornbelt: A band of strong thunderstorms produced at least one tornado in Iowa on Aug. 2, and also caused strong winds that damaged crops in some locations.

Despite the areas of severe weather, sources reported generally improving crop conditions in the region last week. “It’s drier now, and crops look pretty good,” said one Iowa contact. “Some of the double-crop soybeans don’t look so great, but cotton is finally getting the heat it needs and is looking good,” added a Missouri source. “Corn looks really good in our area.”

USDA assigned good or excellent ratings to fully 83 percent of Iowa’s corn crop last week, compared with 75 percent in Nebraska and 52 percent in Missouri. The variance in soybean conditions was even more pronounced, with good or excellent ratings assigned to 73-79 percent of the acreage in Nebraska and Iowa, compared with just 29 percent in Missouri. Missouri’s cotton crop was 36 percent good or excellent as of Aug. 2.

Northern Plains: Some early harvest activity was underway in the Northern Plains in early August, with combines moving on spring wheat, peas, and barley. South Dakota growers were also well advanced on the winter wheat harvest and oats harvest, but wet weather was threatening to slow the pace as the week advanced.

The spring wheat harvest was 24 percent complete in South Dakota and 5 percent in Minnesota, with good or excellent ratings assigned to 79-81 percent of the acreage in Minnesota and North Dakota, compared with 62 percent in South Dakota. Barley rated as good or excellent covered 64 percent of the acreage in Minnesota and 82 percent in North Dakota.

The region’s corn and soybean crops continued to benefit from ideal growing conditions, with good or excellent ratings assigned to 76-87 percent of the acreage last week.

Northeast: Strong thunderstorms left more than 150,000 residents without power in southern New England on A

Potash

Eastern Canada, Eastern Cornbelt, Market Watch, Northeast, Northern Plains, Northwestern Europe, Potash Muriate, Southeast Asia, U.S. Gulf, Western Cornbelt

U.S. Gulf: The NOLA granular potash market continued to be called $305/st FOB or lower. Sources predicted that a buyer bid of $295-$300/st FOB might find a willing seller.

MOP imports were off 13 percent in June, to 883,471 st from the year-ago 1.01 million st. However, for the fertilizer year, imports were up 14 percent, to 12.2 million st versus the year-ago 10.7 million st.

Eastern Cornbelt: Potash fill remained at $345-$355/st FOB for red and $362/st FOB for white granular tons in the Eastern Cornbelt. Rail-DEL potash fill was quoted at $360-$367/st in the region.

The sulfate of potash (SOP) market was pegged at $740/st FOB Toledo, Ohio.

Western Cornbelt: Sources reported the potash market at $345-$355/st FOB out of warehouses in the Western Cornbelt, depending on grade and location.

Northern Plains: Potash fill tons were pegged at $355-$362/st FOB regional warehouses in the Northern Plains, with the low for red and the upper end for white granular tons. After netbacks, the market FOB Saskatchewan mines was pegged at roughly $305-$315/st for standard, $310-$320/st for granular, and $317-$327/st for soluble to U.S. customers.

Northeast: Potash fill tons remained at $352/st FOB Baltimore for red, with the upper end of the regional range reported at $362/st FOB for white granular and/or soluble potash fill. Rail-delivered potash was pegged at $360-$367/st in the Northeast.

Eastern Canada: Potash was quoted at $510/mt FOB regional warehouses in Eastern Canada for fill tons, down $45/mt from spring pricing levels.

Sulfate of potash (SOP) remained at $925-$946/mt FOB in the region.

The SOP Magnesia market remained steady as well at $675-$700/mt FOB in Eastern Canada.

Northwest Europe: Potassium sulfate prices continue to move up amid tight supply and increasing demand in the region. Prices now are seen in the range of €480-€525/mt FCA. The market for granular potassium chloride remains seasonally quiet, with price levels assessed as remaining at €305-€310/mt bulk CIF Northwest Europe.

Southeast Asia: The market remains largely out of season, with demand at a low level. Consequently, price levels are largely untested.

Prices for standard material remain assessed in the $305-$330/mt CFR range and for granular at $325-$340/mt CFR. Prices for standard potash in the region’s larger markets of Malaysia are seen at as low as $305-$310/mt CFR and in Indonesia at $315-$320/mt CFR.

It would seem doubtful that the higher prices being targeted by both Canpotex and BPC, if not other major suppliers, are currently achievable, particularly given the weakness of many of the region’s national currencies against the U.S. dollar.

BPC recently said it is targeting $335-$350/mt CFR for new potash sales throughout the region. Canpotex earlier this month announced new price levels of this order for its potash sales, setting its prices for standard material at $335/mt CFR and granular at $350/mt CFR for new business in all markets in the Southeast Asian region.

Phosphates

Brazil, Central Florida, China, Eastern Canada, Eastern Cornbelt, India, Market Watch, Middle East, North Africa, Northeast, Northern Plains, Phosphate Rock, U.S. Exports, U.S. Gulf, U.S. Imports, Western Cornbelt

Central Florida: DAP trucks out of Central Florida continued to fetch $430/st FOB. MAP was listed at $450/st FOB.

U.S. Gulf: Sales of domestic phosphate lagged last week as the market braced for the arrival of a Chinese DAP vessel.

Sources described the material as a mix of DAP and MAP totaling just over 31,000 mt. The vessel was originally destined for discharge in Paranagua, Brazil, an observer said, but was diverted to NOLA.

Transactions of imported material were described in a range of $426-$430/st FOB, considerably below domestic prices quoted in the $432-$435/st FOB range. MAP from the vessel was called as low as $427/st FOB, while U.S.-produced product generally fell in the $437-$445/st FOB range.

While the quality of Chinese-produced phosphate has greatly improved in recent years, some in the market professed wariness at purchasing the material sight unseen. The producer believed responsible for the material, Guizhou KaiLin Group Co., generally manufactures a quality product, one trader said, but conditions present at the time of the vessel’s loading gave some potential buyers pause.

“It was raining during loading,” the trader said of the product. “I won’t touch it until I hear what it looks like from others.”

Industry players described a spike in dry freight rates on the river last week. Shipping from NOLA to St. Louis, Mo., had increased from $10/st to $16/st, while barges headed to Cincinnati, Ohio, were up by as much as $12/st, to $27/st. Freight to Catoosa, Okla., and St. Paul, Minn., were higher by $13/st and $14/st, respectively, to $32/st for Catoosa and $33/st to St. Paul.

September TSP offers were called $377/st FOB, though last-done prompt transactions were believed to remain $380/st FOB.

Sources quoted the NOLA DAP market at $432-$435/st FOB for the week, a decline from $432-$440/st FOB at last check. MAP was called $437-$445/st FOB, down from the previous week’s $440-$445/st FOB.

Eastern Cornbelt: DAP pricing covered a broad range, from a low of $465/st FOB Cincinnati to a high of $485/st FOB Burns Harbor, Ind. MAP was $5-$10/st higher than DAP, depending on location.

10-34-0 was quoted at $520-$525/st FOB for available tons in the region.

Western Cornbelt: DAP pricing had reportedly firmed to $470-$475/st FOB in the Western Cornbelt, up $5-$10/st from last report, with MAP quoted at $480-$485/st FOB.

10-34-0 was $525-$545/st FOB in the region, but many locations remained out of product.

Northern Plains: DAP pricing was quoted at $465-$470/st FOB the Twin Cities, with MAP at the $470-$475/st FOB level at that location. North Dakota sources quoted rail-delivered MAP in the $515-$520/st range. “MAP is available, but they say the price will get stronger as we move into fall,” said one Dakota contact.

The 10-34-0 market was quoted at $450/st FOB Grand Forks, N.D., and $477/st DEL in North Dakota. Effective Aug. 1, Agrium’s phosphoric acid postings for rail-DEL SPA and MGA firmed to $1,020/ton of P2O5 in Minnesota and $1,035/ton in the Dakotas.

Northeast: MAP had inched up to $480-$485/st FOB in the Northeast, with the low reported at Fairless. DAP was roughly $10/st less than MAP.

10-34-0 was unchanged at $560/st FOB terminals in upstate New York.

Eastern Canada: MAP was quoted at $745-$755/mt FOB in Eastern Canada, up $35/mt from last report.

U.S. Export: Mosaic announced a sale out of Tampa last week totaling 10,000 mt of DAP and MAP. The Latin America-bound cargo was due for August shipping and carried a price of $465/mt FOB.

The Gulf export market was ca

Ammonium Sulfate

Ammonium Sulfate, Eastern Canada, Eastern Cornbelt, Market Watch, Northeast, Northern Plains, U.S. Imports, Western Cornbelt

Eastern Cornbelt: The granular ammonium sulfate market was pegged at $280-$285/st FOB in the Eastern Cornbelt, with rail-DEL tons quoted at the $290/st level before discounts. There were reports of a $40/st posting hike from one supplier, but that pricing increase could not be confirmed.

Ammonium thiosulfate was down slightly at $330-$340/st FOB in the region, with the upper end quoted in the Ohio market.

Western Cornbelt: Granular ammonium sulfate was quoted at $280-$295/st FOB in the Western Cornbelt, with the low in Iowa and the upper end in southern Missouri.

The ammonium thiosulfate market was tagged at $325/st FOB for available tons in the region.

Northern Plains: Minnesota sources quoted the ammonium sulfate market at $270-$280/st FOB, while delivered fill tons in the North Dakota market were reported at $290-$300/st.

The ammonium thiosulfate market remained at $320/st FOB in the region.

Northeast: Granular ammonium sulfate fill tons were quoted at $290-$295/st DEL in the Northeast. The FOB market was reported at $250-$275/st, depending on location, with the low end FOB Hopewell, Va., after netbacks.

Eastern Canada: Granular ammonium sulfate pricing was lower at $430-$435/mt FOB in Eastern Canada for summer fill, down roughly $30-$50/mt from spring levels.

U.S. Imports: June imports were off 81 percent, to only 9,556 st from the year-ago 50,046 st. However, July-June imports were up 18 percent, to 505,583 st from the year-ago 428,935 st.

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