All Posts from April 11, 2011

WA to spend A$83.5 M to aid Collie urea plant

News Briefs

Collie, Western Australia-The Western Australia government will spend A$83.5 million over the next four years to secure land and upgrade vital water and road infrastructure for the massive A$3.5 billion Perdaman Chemicals & Fertilisers Collie Urea Project. At full production the plant will produce 2 million mt/y of urea. In related news, BOC Ltd. recently secured a long-term industrial gas supply contract valued at A$1 billion with Perdaman. BOC will supply nitrogen and oxygen over a 20-year period with an additional 5-year option to the Perdaman project, which will transform sub-bituminous coal into urea using clean coal gasification technology. The Collie project will take three years to complete and is expected to start construction in the third quarter of 2011, post the conclusion of Perdaman’s project financing.

The Week in Fertilizer Stocks

Fertilizer Stocks
Symbol Price Week Ago Year Ago
Producer
Agrium AGU 92.36 92.26 68.30
CF Industries CF 139.75 136.79 91.23
Intrepid Potash IPI 34.32 34.82 28.40
Mosaic MOS 79.14 78.75 56.99
PotashCorp* POT 58.95 58.93 37.69
Terra Nitrogen TNH 115.10 116.90 76.77
Distribution/Retail
Andersons Inc. ANDE 48.42 48.72 33.29
Deere & Co. DE 96.47 96.89 60.40
Scotts SMG 59.12 57.85 46.45
*represents three-for-one stock split

Market Watch

Black Sea, Eastern Cornbelt, India, Market Watch, Middle East, Southern Plains, U.S. Gulf, Western Cornbelt

AMMONIA

U.S. Gulf/Tampa: Nothing new was reported in the market last week.

Eastern Cornbelt: Sources reported brisk movement of preplant ammonia in Illinois, Kentucky, and parts of the Indiana market last week. Ammonia pricing was pegged at $675-$695/st FOB in the region, with the low out of Illinois terminals and the upper end in Indiana. Suppliers continued to field inquiries for fall ammonia tons, and some were reportedly offering fall ammonia at the $675/st FOB level in the Illinois market. Any actual buying for fall was limited to small blocks only, however.

Western Cornbelt: Sources said preplant ammonia was moving briskly in parts of the region last week, with long lines reported at some truck terminals. The ammonia market was tagged at $635-$660/st FOB, with the low out of Nebraska terminals and the upper end quoted in the Iowa market to the dealer.

Southern Plains: The anhydrous ammonia market remained at $590-$605/st FOB regional production points for prompt tons, depending on location. The dealer market out of pipeline terminals in Kansas was pegged at the $620/st FOB level for prompt tons. Sources reported long truck lines as preplant movement on corn ground kicked into gear in the Kansas market.

Sources reported brisk preplant fertilizer movement on corn ground in the Kansas market, and on corn and cotton ground in parts of Oklahoma and Texas. A northern Kansas source said growers started planting corn in his location on April 4, and the pace picked up steadily as the week progressed. Several sources said planting in eastern Kansas was limited to areas north of Kansas City, as weekend storms left fields too wet in areas south.

South Central: The anhydrous ammonia market was steady at $660-$675/st FOB terminals, with the low reported out of Memphis, Tenn., and the high at Henderson, Ky.

Fieldwork was slowed by rain in many locations last week. “We’ve gotten a couple attempts at a pretty good start, but then rain slows things down,” said one contact. Newly planted corn was coming up in some southern locations in the region. Fertilizer application activity had transitioned from wheat topdressing to preplant movement, and sources said growers continued to fertilize pastures in the region.

Trinidad: Sources report that that gas supplies have returned to normal in Trinidad. However, Yara does have one plant (900 mt/d) offline for a turnaround from March 20-April 20.

Black Sea: Ammonia prices remained strong. Sources report there is nothing from Yuzhnyy available below $500/mt FOB. One Asian trader said the market is now pegged at $500-$510/mt FOB.

To back up the idea that Yuzhnyy has strengthened, sources pointed to prices from the Baltic ports at $515/mt FOB, and referred to the latest prices out of the Arab Gulf, which are also put at $500-$515/mt FOB.

>All in all, the ammonia market is expected to remain strong for the next month or so.

Middle East: Sources pegged the Arab Gulf price at $500-$515/mt FOB based on the results of the FACT/India tender that closed at the end of March.

Even though the Indian buyer has not yet made an award, sources say the public declarations of pricing from the producers is a fair assessment of where the market has moved to.

Until the FACT tender, industry sources only had speculation and guess work when talking about the price from the area. As a result, the official price was stuck in the doldrums around $460/mt FOB.

Now, with the FACT tender in hand, sources say their earlier speculation that the price was moving into the $500s/mt FOB is vindicated.

India: FACT closed a 7,500 mt tender March 31

Management Briefs – April 11, 2011

Management Briefs
Dr. Robert E. “Bob” Wagner, who served as President of the Potash & Phosphate Institute (PPI) from 1975 to 1988, passed away March 31, 2011, at age 90. PPI was the forerunner organization of the International Plant Nutrition Institute (IPNI). Wagner is survived by his wife, Bernice; three sons, Bob Jr., Jim, and Doug, and their wives; and five grandchildren.

“Dr. Wagner will be remembered as an energetic and forward-looking leader, one who understood the importance of agronomic research, the fertilizer industry, and production agriculture,” said Dr. Terry L. Roberts, IPNI President. “He practiced and believed in the power of positive thinking and he leaves a great legacy in the many people whose lives he improved.” Dr. Wagner received his B.S. degree in Agronomy from Kansas State University, and his M.S. and Ph.D. from the University of Wisconsin. In 1959 he joined the staff of the American Potash Institute (forerunner of PPI and IPNI) and became a vice president of the organization. Dr. Wagner remained active with many interests after retiring from PPI, including fulfilling a lifelong dream in developing a top quality herd of purebred cattle on his farm south of Atlanta. Additional details on Dr. Wagner’s accomplishments and honors can be found on the IPNI Web site at www.ipni.net.

Vale S.A. reports that Murilo Pinto de Oliveira Ferreira has been nominated to succeed Roger Agnelli as Vale’s CEO, effective May 22, 2011. The nomination was by Vale’s controlling shareholders and is still subject to approval by the board of directors. Ferreira, 58, has a degree in Business Administration from Fundação Getúlio Vargas (FGV) in São Paulo and a post-graduate degree in Business Administration from FGV in Rio de Janeiro, and an executive education program in M&A at the IMD, Lausanne, Switzerland. Murilo has more than 30 years of experience in the mining industry. He began work for Vale in 1998, acting in several senior management positions until his leave in 2008, when he was CEO of Vale Inco (currently Vale Canada) and Vale executive director of nickel and base metals sales.

CF Industries Holdings, Inc. announced that Douglas A. Hoadley has joined the company as Director, Agribusiness Analysis. He succeeds Glen N. Buckley, who retired in September 2010. In this position, Hoadley is responsible for leading the department that monitors the global agricultural and fertilizer market environment and provides data, insight, and analysis to internal and external constituents. Prior to joining CF Industries, Hoadley held executive positions with The Mosaic Company, serving as Vice President, Investor Relations from 2004 to 2007, and most recently as Director, Marketing. Prior to 2004, he held research, marketing, consulting, and economist positions with IMC Global, British Sulfur Consultants, and the U.S. Department of Agriculture. Hoadley earned a B.S. in Agricultural Economics and Business at the University of Wisconsin in Madison. He also holds an MBA from the George Mason University in Fairfax, Va.

Laura Gagnon joined The Mosaic Co. as vice president, investor relations, in March. Mosaic says she is an accomplished financial executive who brings a wealth of IR experience to Mosaic, most recently as vice president – investor relations at Ameriprise, where she established the IR function upon the spinoff of Ameriprise from American Express. Prior to joining Ameriprise in 2005, Gagnon held a number of positions with The St. Paul Companies, Inc./Travelers. She is a graduate of Winona State University, has an MBA degree from Vanderbilt University, and holds a CFA designation.

Gagnon succeeds Christine Battist, who is moving on to anoth

FIPR eyes sulfur for energy source

News Briefs

Bartow, Fla.-FIPR, formerly the Florida Institute of Phosphate Research, changed names and expanded its mission to become Florida Industrial and Phosphate Research when it became part of the University of South Florida Polytechnic. According to Executive Director Paul Clifford, the change, which occurred in June 2010, allows FIPR to broaden its areas of research. In addition to ongoing work on phosphate mining and processing, FIPR has begun working on using sulfur as an energy source. Clifford said the plan was to find a catalyst for the sulfur, but “we’re very close to having a system to test.” Details of the research were proprietary and were not released. FIPR was created in 1978 as an independent agency, with its own board of directors for the research agency. In 1994 it was administered by USFP, but remained an independent agency. However, that switched last year, when the state legislature approved the change. “It was an idea that had been discussed between the institute and the university. We both felt it was beneficial, and the legislature saw the benefit to the local area. There was no downside, so it happened quickly.”

Synagro looking at biosolids as energy source

News Briefs

Houston, Texas-Synagro Technologies, whose reputation was blemished a few years ago when the company was caught up in the Detroit biosolids contract scandal, is under a new chief executive officer and is developing a new image, with emphasis on producing renewable energy by turning waste products into something usable. “We made a hard turn right to address this market,” explained Tom Maestri, who is directing that program. “When Bill Massa took over the company last year we put together a new strategy plan with a number of focus areas, with renewable energy being one of those areas.” Of course Synagro is not giving up on turning wastewaters into fertilizer, but is also looking at new opportunities, such as recovering the methane that contains about 14 million BTUs in each ton that can be captured and used as a fuel. Synagro is very active in FOG (fats, oil, and greases) from wastewater treatment that can be used to offset the need to burn fossil fuels and syngas from gasification processes. The corporate change was also apparent late last month when Massa goodnaturedly took part in the popular TV network reality show Undercover Boss, where executives trade places with frontline workers. As part of his appearance, Massa swapped his business attire for boots, heavy gloves, waterproof slicker, and protective headgear at a Baltimore plant to help with cleaning out a wastewater lagoon. “It’s part of his very personable and outgoing personality,” Maestri commented. “We’ve had a lot of very positive feedback about it.”

Agrium plant has lower emissions in its sights

News Briefs

Redwater, Alberta-Agrium Inc. will be doing the “neighborly thing” starting sometime next year by voluntarily going to a lower emissions catalyst for the two sulfuric acid plants at its Redwater nitrogen and phosphate-based fertilizer plant here. Plant Manager Ted Sawchuk said the changeover is anticipated in 2012 and 2014 from the normal catalyst, and will reduce SO2 emissions at the plant by 215 metric tons a year from the current 690 metric tons. Sawchuk said that for the larger acid system it will mean a reduction to 50 percent, and the smaller system will be around 27 to 28 percent. Although Redwater operates below its license limit, the lower emissions had been included in plans for improvements that had been provided to local authorities. Helping clean up the air has also been an Agrium corporate objective. “The first unit is planned with our 2012 turnout,” he said. “We’ll order it this year and possibly do it sooner.” Agrium acquired Redwater in its merger in December 1996 with Viridian Inc., which operated plants at Fort Saskatchewan and Redwater.

Bayer to close MIC production sites in U.S.

News Briefs

Institute, W. Va.-Bayer CropScience has decided not to restart the transitional production of methyl isocyanate (MIC), an ingredient in its Temik® brand insecticide, at the company’s production facility in Institute, W.Va. As a result, the company will start immediately to decommission the MIC production units at Institute, and to close its MIC production facility in Woodbine, Ga. Bayer was planning to restart the newly reconfigured MIC unit at Institute earlier this year, but “uncertainty over delays” had led it to the conclusion that a restart could no longer be expected in time for the 2011 growing season. Temik® is used by growers of cotton, soybeans, and peanuts for nematode control. The plant’s restart had been complicated by a civil lawsuit filed by several West Virginia residents, and a restraining order issued by a federal judge while the case was being investigated. “This was a very difficult decision, particularly as our employees did everything possible to ensure the operational safety of our newly-constructed MIC unit during the remaining production period,” said Achim Noack, member of the board of management of Bayer CropScience. “Our business case was based on our ability to supply the market needs beginning in 2011, and with the recent delays, that plan is no longer economically viable.” The decision means 220 jobs will be cut at Institute and 80 at Woodbine, and growers will be left with only existing stockpiles of Temik® to use this season. Growers were aware that the insecticide’s days were numbered following a 2010 agreement between Bayer and the U.S. EPA to phase-out Temik® production by 2012, allowing sales of the insecticide through 2014 and its use until August 2018. The agreement came in the wake of a new dietary risk assessment conducted by EPA. The closure of the Institute and Woodbine production sites comes earlier than expected, however. “We regret that the decision taken today to not restart production of MIC will not allow farmers access to Temik® anymore”, said Bill Buckner, president and CEO of Bayer CropScience in the U.S. “However, we are committed to delivering the right solutions from our innovation portfolio in support of modern agriculture for our customers.”

FAS approves Uralkali, Silvinit merger

News Briefs

Moscow-The Federal Antimonopoly Service (FAS) of Russia has approved the proposed combination of Uralkali and Silvinit. As a prerequisite to the approval, FAS has issued to Uralkali a set of conditions aimed at maintaining competition in the domestic market. The company will have to regulate its potash sales across various consumer categories in Russia (including agricultural producers, compound fertilizer manufacturers, and trade customers). It will also need to impose consistent pricing practices applicable to each consumer group, as well as other practices to enable potash shipments to domestic customers. According to another condition of the FAS, Uralkali has to develop and sign off on the Corporate Code of Conduct to be able to meet its unilateral commitment concerning the proposed deal. Uralkali says the deal is still expected to be completed at the end of the second quarter of 2011, despite a partial injunction (GM March 28, p. 14) in a case brought by Silvinit shareholders seeking to scuttle the merger. A hearing on that matter is slated for April 12. “Our success in obtaining the FAS approval for the combination of Uralkali and Silvinit is the most crucial stage of the deal,” said Vladislav Baumgertner, Uralkali CEO. “The FAS approval means that the Service was satisfied with [the] domestic market support package developed by Uralkali. Uralkali is committed to the progress of the domestic MOP market. The goal of the package is to meet the domestic customer demand and support national agriculture.”

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