Trumann, Ark.-Local fire investigators still haven’t been able to determine what caused a fire that destroyed two separate warehouses late last month at Poinsett Fertilizer Co. “We haven’t been able to determine the cause ourselves,” Assistant Trumann Fire Chief Ernie Link told Green Markets. “So we’ve turned it over to the insurance investigators.” Link said that there was definitely no suspicious activity. He said when firefighters arrived the wind, combined with cold temperatures, was whipping up the flames so there wasn’t much that could be done to save the buildings. “Both structures were so old and dried out it was just like a big kindling fire,” Link reported. Workers had just stocked one of the buildings a day earlier with potash, phosphate, urea, and ammonium sulfate, which Link assumed was a total loss because the fertilizer ended up at the bottom of a lot of building debris. David Box, one of Poinsett managers, declined to put a figure on the damage, but said it was substantial and both buildings were a total loss. Fire Chief Rick Winkles told the local press, “When the guys got there it was already on the roof area.” Winkles said it appears the fire may have started in the southeast corner of one of the buildings, both of which date back to the 1970s and were used for storage and blending of fertilizer.
U.S. Gulf/Tampa: There was little word in new Tampa business last week, leaving sources to speculate. With significant cutbacks in both phosphate and ammonia production, sources said the industry is trying to find a balance. Right now, they said, it appears that no one is too anxious to conduct any new business, especially if it would significantly move prices in either direction.
Eastern Cornbelt:The ammonia market continued to be quoted at $450-$525/st FOB in Illinois, with the low for cash market tons and the upper end for spring prepay. One supplier was referencing forward contract ammonia for February through June in the $910-$915/st range FOB regional terminals.
Western Cornbelt:Delivered prepay ammonia in Missouri continued to be quoted in the $400-$500/st range, while sources tagged the regional terminal market at $450-$485/st FOB for cash or prepay tons. One supplier was referencing forward contract ammonia for February through June as high as $900-$910/st FOB in the region.
Northern Plains:Agrium’s Dec. 12 anhydrous ammonia postings in the Leal, Velva, Grand Forks, and Beulah sales area in North Dakota included $520/st FOB and $540/st DEL. On a forward contract basis, one supplier was referencing ammonia for the February through June shipping period as high as $910-$930/st FOB in the region last week.
California:Effective Jan. 6, Calamco’s anhydrous ammonia posting in the California market dropped to $575/st truck-DEL and $620/st rail-DEL, reflecting a drop of $180/st from the company’s previous postings. Calamco’s aqua ammonia posting moved on Jan. 6 to $155/st FOB in California, down from the previous $185/st FOB level.
Black Sea:The cutoff of natural gas through and to Ukraine by Russia will begin to have a major impact on the ammonia business, say Asian sources. Plants that were already shut down because of the softening price of ammonia may not be able to re-open because of the Russian action. Even though some material is still in storage, once the tanks in Yuzhnyy are empty, sources say it will be a while before supplies recover.
Observers say the price for ammonia will begin to come out of the basement because of the disruption in CIS and European production.
No one is talking about prices from Yuzhnyy at this point because the consumer market is still soft. But other ammonia producers, notably in the Middle East, are already trying to move the price up.
One Asian trader said that as European and American buyers begin to look for their spring supplies, they may face only one set of producers that will be able to deliver ?Çô those in the Arab Gulf.
A recent deal into Turkey at $125/mt CFR, together with Tampa prices around $150/mt CFR, indicate prices have gone below $100/mt FOB. But getting a firm price that does not rely solely on estimated netbacks is difficult.
Middle East: Sources report that producers are moving on news that Russia is cutting off natural gas that passes into and through Ukraine. The resulting disruption in production in eastern Europe is providing encouragement to the producers to move up prices.
While no one has been able to point to any business beyond the current rate in the $130s/mt FOB, traders are now saying producers are starting their talks at $160/mt FOB.
Even producers won’t admit to having secured $160/mt FOB yet, but they are hopeful. One observer said it is just a matter of time until the price goes up, and the longer the Black Sea producers have problems with their feedstock, the sooner the Middle East price will go up.
For now, the price is hovering in the $130s/mt FOB.
UREA
U.S. Gulf: Granular barge prices shot up last week from $210-$215/st FOB to the high $230s/st FOB, with sources expecting new business might be concluded as high as $240-$245/st by week’s end. Offers for new sales were in the latter range.
Why the quick uptick? There were both domestic and international arguments. The domestic was that demand had heated up in wheat country, with barges needed in Oklahoma. Those buyers were reported to have stepped into the market to meet bonafide demand. Sources said they needed product and could not wait any longer for more price erosion. Much erosion has already occurred, as both NOLA and Southern Plains prices are now about half of what they were last year at this time. In addition, sources in the region continue to report that Koch’s Enid, Okla., urea plant is down.
The international argument for higher prices was two-fold. The major reason was natural gas disputes between Russia and Ukraine, which could significantly alter Ukrainian production. Polish production was also an issue. In addition, gas was also a problem in India, with urea plants offline. Sources said these new offshore concerns about capacity, combined with existing curtailments, added further to the argument for stronger prices.
Eastern Cornbelt: At the wholesale level, sources quoted the granular urea market at $275-$295/st FOB regional terminals to the dealer, with some saying the higher numbers were more prevalent as NOLA barge values inch upward. One Ohio source quoted the dealer market last week at the $287/st FOB level for new tons.
Western Cornbelt: Sources tagged the urea market at $255-$290/st FOB regional terminals, with the higher numbers finding support for spring prepay sales as the week advanced. Prompt urea sales reportedly firmed from the $255/st level early in the week to $275/st FOB by Wednesday. In the Southern Plains, the Tulsa urea market was pegged at the $270/st FOB mark last week, while low inventories at Houston were reportedly prompting a price hike from $250/st to $260-$270/st FOB as the week progressed.
Northern Plains: The granular urea market was pegged at $290-$300/st FOB the Twin Cities, with Dakota sources pegging the market at $320-$330/st FOB terminals or DEL.
Northeast: Granular urea was quoted at $287-$300/st FOB, with the low reported FOB Philadelphia, Pa., and E. Liverpool, Ohio, to the dealer.
Eastern Canada: Sources tagged the granular urea market at $610/mt FOB in Ontario to the dealer for spring prepay, reflecting a drop of up to $250/mt from last report. Others reported much lower numbers being quoted for prompt shipments, but no one has any room to take prompt tons.
China: Rumors are running strong that come Feb. 1 the export duty regime will once again be changed. As of late last week three versions of the rumors were circulating. The first is the easiest to understand: All export duties on fertilizers will be repealed.
The second removes only the “extra” duties that were to have been imposed beginning Feb. 1. That would mean exported urea would only be taxed at the current 10 percent instead of the planned 110 percent.
And the third extends the lower 10 percent rate for one month. This option, sources say, is being discussed to encourage short-term exports before the domestic season kicks into high gear. By holding off an increase in export duties just one month, urea sold in upcoming tenders will be able to be loaded in February without paying the higher rate.
As Green Markets went to press there was still no official word from Beijing, so everything at this point is still speculation. Just when a decision will be made is up in the air.
One Asian observer noted that the Lunar New Year begins the last week of January. The holiday period will make any changes hard to announce and implement, he said. Chances are Beijing will announce the changes before Jan. 20.
Asian sources said the move to reduce the export duties is largely a reaction to the softening Chinese economy. The Beijing economic planners want to continue the economic growth they have had in previous years. With tightening credit around the world and reduced orders for other finished goods, many Chinese factories have had to cut back or close.
By removing the duty from Chinese urea, sources say the product will once again become competitive in the global market.
Right now, at $270/mt FOB Chinese product is not competitive against Yuzhnyy. But with shutdowns in Ukraine and Europe expected because of the natural gas dispute between Russia and Ukraine, Chinese product could fill the expected void nicely.
Beijing imposed massive export duties on many of their fertilizers, but especially urea, because the international price provided a better netback than the domestic price. Eventually the domestic price of urea became linked to the international price and farmers complained.
The duty, which reached as high as 185 percent at one point, broke that link.
The price of domestic urea did fall sooner than the international market and did make the farmers happy. Unfortunately for the producers, the falling domestic price and non-competitive international price meant reduced profits. Some plants were still paying much higher costs for inputs and were depending on local government subsidies to stay alive.
The changes in the export duties that took effect late last year were in response to a falling global market and growing concern that some urea plants would have to close or reduce output. If the plants closed or reduced production, massive layoffs would most likely occur and cause further political problems for the leadership in Beijing.
Pakistan: TCP called a tender for 250,000 mt to close Jan. 17. The tender call came on the heels of another tender that awarded at least 100,000 mt for late January delivery.
Sources say the move came as the government estimated the country was short by 600,000 mt for this season. Added to the problems of the government are local media reports that trucks laden with fertilizer are being hijacked. The stolen material then ends up in a urea black market at a cost of almost double the subsidized rate.
Opposition political party leaders complain the existing urea stocks are being distributed to areas friendly to the ruling party instead of to areas of greatest needs.
Dreymoore reportedly received an award for 100,000 mt based on the previous tender. Sources report that Keytrade also received an award.
Asian traders expect to see more offers of Chinese urea in the upcoming tender.
In other news, the local media continues to report demonstrations by farmers due to urea shortages. Some 600 farmers were reportedly arrested early in the year in Punjab Province.
Bangladesh: Talks were continuing in the BCIC tender. Sources say the buyer wants to conclude the purchases as quickly as possible.
One Asian trader said he hoped the talks would be concluded by the end of last week.
BCIC had tendered for 75,000 mt of prilled and granular urea.
The prilled material was offered at $269-$307/mt CFR bagged.
Offers in the granular tender follow:
Supplier
Origin
QTY. MTS
US$/MT FOB
Freight US$/MT
Total US$/MT C&F
Gavilon
China
12,500 12,500
264.09 269.09
35.00 35.00
299.34 304.34
Bulk Trade
China – Indonesia – Russia – Ukraine
12,500 12,500 12,500
287.20 284.20 282.20
30.00 30.00 30.00
317.20 314.20 312.20
Ameropa
China
12,500
278.73
30.00
309.23
Liven
China – Malaysia
12,500
289.37
30.00
320.37
Asian sources point out that the validity dates for many of the offers made in the prilled and granular tenders expired by the middle of last week. What BCIC will do with these offers is unclear. One trader noted BCIC regularly fails to meet most of the validity dates in accepting an offer. They tend to either go back to the offering companies to ask for an extension or issue another tender.
What will happen in the aftermath of this latest round of tenders is unclear.
Black Sea: The cutoff of natural gas to Ukraine by Russia is expected to hit the Yuzhnyy urea market. Sources say prices in the area have begun to firm up. A realistic range coming into the new year was $205-$220/mt FOB. Now, say sources, the current price is closer to the $220/mt FOB level.
Traders are united in the idea that the last real business was no higher than $220/mt FOB, but are equally united in reports that trader-to-trader business is nearing $235/mt FOB. These paper trades are being seen as the new level once new deals are made for shipment.
Even though the natural gas has been turned off from Russia, sources say the stockpiles of natural gas and urea should be enough to cover the contracts that are already on hand. Just how much longer the producers can hold out is up to the Russian and Ukrainian governments to work out.
Some Asian sources say a dramatic increase in price because of the potential loss of product from Yuzhnyy may not happen. The relaxing of Chinese export duties could make more Chinese tons available just as the Black Sea material wanes.
One trader noted that the price out of Yuzhnyy would still have to come up significantly to make the Chinese material competitive. Yet at this point the difference between the two is only $50/mt. No one is talking about a run-up in prices similar to what happened last year, when prices hit $400/mt FOB at this time and a record high later in the year of $800/mt FOB.
Middle East: The previous Indian and Pakistani tenders still set the price for the area at $240-$245/mt FOB.
Producers are anxious to move the market up. Observers say the price may come up in the pending TCP/Pakistan tender. With the re-introduction of Chinese urea to the market place, sources say, any price increases will be marginal at best.
India: Sources report STC is slated to call a tender as early as Jan. 9. What surprised Asian sources were reports that STC will be asking for 500,000 mt in the tender.
In past Indian tenders, the buyers – STC, IPL and MMTC – have not specified the quantity they wanted to buy. This time, said one source, STC is making it clear they want a half million tons. One reason for this, opined one observer, is that political pressure is increasing to ensure adequate urea supplies in restive agricultural areas.
NITROGEN SOLUTIONS
Eastern Cornbelt: The UAN-32 market was pegged at $275-$296/st ($8.59-$9.25/unit) FOB for spring prepay, with both the high and the low reported in Illinois. An Indiana source pegged the UAN-28 prepay market at the $245/st ($8.75/unit) FOB level last week.
Western Cornbelt: The UAN-32 market was quoted at $260-$280/st ($8.13-$8.75/unit) FOB regional terminals for prepay sales to the dealer, reflecting another drop from the previous week. New sales were confirmed at the low end of the range last week.
Northern Plains: The UAN market was pegged at $8.75-$9.25/unit FOB in the region, down considerably from December pricing levels, with the upper end quoted by Minnesota sources for spring prepay tons. The low end was also reported for delivered cash tons in North Dakota.
Northeast: The UAN-30 market was quoted at $252-$255/st ($8.40-$8.50/unit) mark FOB Baltimore, Md., or Philadelphia, Pa. Out of river locations in Delaware, UAN-30 was reported at $262.50/st ($8.75/unit) FOB to the dealer, with a posted hike to the $270/st ($9.00/unit) mark scheduled for Jan. 9. In upstate New York, UAN-32 pricing to the dealer was referenced at $308.80/st ($9.65/unit) FOB terminals.
Eastern Canada: Although postings for UAN-28 remained as high as $553-$559/st ($19.75-$19.96/unit) FOB in the region, sources said spot tons to the dealer could be had for as low as $350-$400/st ($12.50-$14.29/unit) FOB for prompt ship. One source quoted prompt UAN-32 at the $400/st ($12.50/unit) FOB mark on the low end as well.
AMMONIUM NITRATE
Western Cornbelt: The ammonium nitrate market remained at $250-$300/st FOB in the region.
Eastern Canada: Ammonium nitrate pricing remained at the $635/mt FOB dealer reference level in the region.
AMMONIUM SULFATE
Eastern Cornbelt: Following a downward pricing adjustment from Honeywell, sources pegged the granular ammonium sulfate market at $150-$155/st FOB or rail-DEL in the region, down $50/st from last report. Mid-grade was reportedly referenced at the $130/st FOB or rail-DEL level from Honeywell.
Western Cornbelt: Ammonium sulfate prices were falling, with Honeywell now referenced at $150/st rail-DEL or FOB in the region. Effective Jan. 5, American Plant Food Corp.’s granular ammonium sulfate postings in Texas dropped to $200/st FOB Freeport, $215/st FOB Galena Park, $230/st FOB Fort Worth, and $250/st FOB Littlefield. APF’s coarse grade sulfate postings were $10/st lower than granular at those locations, and the company’s standard grade postings moved on Jan. 5 to $180/st FOB Freeport and $230/st FOB Littlefield. APF’s Jan. 5 N-Pac Compacted posting FOB Galena Park was $220/st.
Northern Plains: North Dakota sources pegged the granular ammonium sulfate market at $215/st DEL, while postings in Minnesota as of Jan. 5 were reported as low as $150/st FOB or DEL.
Northeast: Ammonium sulfate pricing was down from last report following a $50/st posted price reduction on Jan. 5. Sources pegged the market at $155/st FOB Hopewell, Va., with delivered tons reported at the $172/st level in southern Pennsylvania. In the Southeast market, DSM Chemicals reposted ammonium sulfate as well, with granular ammonium sulfate referenced at $140/st FOB Augusta, Ga., and $179/st DEL in Florida, and standard grade at $120/st FOB Augusta and $158/st DEL in Florida.
Eastern Canada: Ontario sources continued to peg the granular ammonium sulfate market at $545/mt FOB to the dealer. Fine grade ammonium sulfate pricing, however, was said to be as low as $215/mt FOB in the region.
PHOSPHATES
Central Florida: The new year brought new life to the Central Florida DAP market last week, as both sales and prices sprung upward. After a dismal end of the year, it was welcome news in depressed times. The highest prices were achieved by traders.
“I think everyone was looking for the bottom and decided it had been found,” said one source.
Spring was just down the road and large traders were averaging the prices of their high and low cost inventories and accepting reality, while many small dealers, who could not afford to buy into the higher-priced market several months ago, began making their move and starting to fill their bins. One producer said they had finally begun to receive inquiries about unit train shipments, although none had actually been consummated late last week.
Meanwhile, phosphate processing plants remained either curtailed or shut down, and that will not likely change until some of the backlogged inventory built during the past few months begins to vanish.
PCS was scaling back operations at its Aurora processing plant in North Carolina due to reduced demand. In December it idled its DAP and DFP feed plants, and beginning Jan. 15 through the end of February, its sulfuric-acid, phosphoric-acid, purified phosphoric-acid, and MAP operations will continue at reduced rates. However, mining operations will continue at a full rate. Maintenance, which was scheduled for later in the year, will be conducted during that period. As a result, there will be no layoffs.
The biggest problem dealers will face during the next several months will probably be getting supplied in time for the beginning of their spring seasons. Although product was abundant last week, transportation logjams will become a problem in the near future.
The Central Florida DAP price range increased last week from $300-$305/st FOB to a much higher and wider $300-$390/st FOB. CF had not issued a new asking price. PCS Sales was still holding at $1,070/st FOB, and Mosaic had no posted price for Central Florida. However, a market source said Mosaic was offering railcars at $300/st FOB for January and February, $315/st FOB for March, and $325/st FOB for prepaid business for April and May. Mosaic may have posted new prices as early as late last week. The most recent price from Agrifos was $350/st FOB for trucks $345/st FOB for rail shipments.
U.S.Gulf: The DAP barge market awoke from hibernation last week and went on a rampage as buyers and sellers found new life. A sign of the direction of the market was the low price that occurred early in the week, but by mid-week prices hit the $300/st FOB range and kept going up.
Sales of urea were much more brisk and DAP was following close behind, while the fate of potash was still uncertain – but definitely not moving.
One of the big factors on delivered pricing last week was freight rates. Rates took a big drop on Jan. 1, but some were stuck with fourth-quarter contracts, which were significantly higher. The main reason from the drop in freight cost was the lack of business during the fourth quarter and a fall in the cost of fuel since the last contracts were signed. Buyers should look for deals with new freight rates for lower prices.
Although the price of corn was nowhere near the $8/bushel mark at its height last year, it was still lingering near $4/bushel last week, and that should be enough to prompt farmers into buying DAP and other fertilizers. One thing to watch was the faltering ethanol market. As the price of oil drops the demand for the alternative fuel and its price have also declined, and some ethanol plants were seeking to renegotiate the price they pay for corn. Still, the lower cost farmers pay for fuel may help offset possible losses.
Business at terminals and warehouses was robust in comparison to recent months and prices were ranging between $350/st FOB and $380/st FOB, depending on location. Even at $350/st FOB, warehouses would be in a good position to make a profit if NOLA DAP barges remain in the low $300/st FOB range.
Based on actual transactions last week, the NOLA DAP barge price moved up from $275-$300/st FOB the previous week to $290-$312/st FOB. Look for prices to firm or rise this week, say sources. Mosaic had no posted prices last week, but a source said he had been told the company was offering DAP barges at $300/st FOB for January and February, $310/st FOB for March, and $325/st FOB for prepaid business for April and May. Mosaic may have posted new prices as early as late last week.
Eastern Cornbelt: Phosphate pricing out of regional warehouses continued to slip, with sources quoting the DAP market last week in a broad range at $350-$450/st FOB in the region. The low was reported out of spot river locations in Illinois, while the upper end was quoted out of inland warehouses in Ohio to the dealer. One source tagged the Cincinnati DAP market in early January at the $425/st FOB level, while reference prices for forward contract tons for February were quoted as high as $506/st FOB Cincinnati.
MAP was $375-$475/st FOB regional warehouses. 10-34-0 was pegged in a broad range at 650-$850/st FOB, with the low reported in Illinois for prepay tons and the upper end quoted by Indiana sources FOB local terminals.
Western Cornbelt: Sources continued to report softening phosphate prices last week, with DAP reported as low as $350/st level FOB some river warehouses for spot or prepay tons to the dealer. The upper end of the range was pegged at the $400/st FOB mark last week. MAP was reported in the same range as DAP or at a $10-$20/st premium, depending on location and supplier. One supplier was referencing forward contract DAP for February at $496/st FOB St. Louis, Mo., and $501/st FOB Inola, Okla., with forward contract MAP referenced at $526/st FOB Inola.
The 10-34-0 market was quoted at $550-$675/st FOB in the region, with the low in western Iowa and Nebraska and the upper end in eastern Iowa. Agrium lowered its phosphoric acid postings on Jan. 1 to $950/st rail-DEL for both super phosphoric acid and merchant grade acid in Iowa, Nebraska, Minnesota, the Dakotas, Wyoming, Colorado, Kansas, Oklahoma, Texas, and New Mexico.
Northern Plains: The DAP market was tagged at $450-$506/st FOB in the region, with MAP at a $25/st premium. A North Dakota source quoted rail-DEL MAP in the $550-$565/st range last week. 10-3-0 pricing covered a wide range, from $525/st DEL in North Dakota for prompt tons to $650/st FOB in Minnesota for spring prepay.
Northeast: MAP pricing was down again from last report at $457-$460/st FOB Philadelphia or E. Liverpool to the dealer. DAP, where available, was pegged at $447-$460/st FOB. No current prices were reported for 10-34-0 in the region last week.
Eastern Canada: The almost complete absence of new business left the phosphate market difficult to call in early January. One Ontario source quoted MAP at $1,048/mt FOB to the dealer for new business, which reflected a drop of some $250-$300/mt from last report. Others said it was simply too difficult to put a value on current tons due to inactivity. No current prices were reported for DAP or TSP in the region.
Western U.S: Effective Jan. 1, Agrium’s phosphoric acid postings dropped to $1,000/st rail-DEL for both super phosphoric acid and merchant grade acid in California, Arizona, Nevada, Utah, Washington, Oregon, Idaho, and Montana.
U.S. Export: Although PhosChem made no new export DAP sales last week, both India and China were said to be in the market. India was believed to have purchased several hundred-thousand mt around $375/mt DEL, mostly from China, and China was said to have bought 50,000 mt from Tunisia and another 150,000 mt from Morocco in government-to-government deals.
A rumor contended Keytrade sold 20,000-25,000 mt of DAP to Vietnam at about $330/st FOB, which would have been inventory supplied by CF Industries, but a couple of sources said it was urea. The rumor could not be confirmed.
At its conference call, Mosaic said half the world’s phosphate production was shut down. Others also reported last week that OCP was extending its shutdown in Morocco, and there were reports of shutdowns in Jordan as well.
In Morocco, new phosphate rock prices were said to be between $250-$290/mt FOB. Although that does represent a sizeable reduction from past pricing, it would still make it difficult for its buyers to make a profit in the difficult market. Both Miss Phos and Agrifos use Moroccan rock, but the terms of their contracts were confidential. Miss Phos reported last quarter that it was still working through considerable rock inventories.
Because no new export DAP sales from North America could be found last week, the price range remained at $390-$395/mt FOB.
India: Indian fertilizer companies are engaged in a battle of nerves with overseas suppliers of phosphoric acid over pricing of this crucial ingredient used to manufacture DAP.
The suppliers – mainly OCP Group of Morocco and Groupe Chimique Tunisien (GCT) of Tunisia, besides Foskor of South Africa and Industries Chimiques Du Senegal of Senegal – are reportedly demanding $1,200 mt C&F. The importers – Indian Farmers Fertilizer Cooperative, Coromandel Fertilizers, Gujarat State Fertilizers Co., and Zuari Industries – are not willing to pay more than $650 mt. For 2007-08, Indian companies had jointly negotiated $566.25 mt C&F. But as international prices rose in tandem with other commodities, the suppliers – who account for bulk of the 2.2-2.5 million of yearly phosphoric acid shipments into the country – began jacking up rates.
During April-June 2008, Indian companies had to shell out $2,200-2,300 mt, which then eased to around $1,985-2,100 mt and $1,200-1,310 mt in the subsequent two quarters. “They are not prepared to bring them down further, whereas we are saying that anything above $650 is not acceptable given the recent all-round slump in commodity prices,” an industry source said.
The bigger suppliers – OCP and GCT, which produce an estimated 3.5 million mt and 1.5 million mt, respectively, every year – have even shut down their plants since November. “They want to keep global supplies tight so as to maintain high prices. But this is not sustainable when the final product (DAP) is currently quoting at $390 mt, FOB U.S. Gulf. After factoring in freight, it comes to $420 mt C&F, against the peak $1,300 mt plus levels of September,” the source pointed out. He noted that if you take $1,200 mt phos acid and add other costs, the DAP production cost would be $675/mt for Indian produced DAP. He noted that import DAP costs only $441/mt, after adding a five percent duty.
Pakistan: Pakistan has a good stock of DAP and would not import it during Jan-March 2009, according to brokerage house InvestCap Research Ltd., which estimates that heavy DAP imports, along with domestic production at Fauji Fertilizer Bin Qasim Ltd. (FFBL) and sluggish offtake, has translated into high inventories. It estimates the industry’s year-end DAP inventory at 315,000 mt, of which 74 percent is contributed by FFBL and ENGRO. Hence, it does not see any further DAP imports in the first quarter despite relatively low international prices. It also noted that monetary tightening makes financing of imports more difficult, especially for smaller DAP importers.
POTASH
Eastern Cornbelt: Potash was quoted at $750-$815/st FOB regional warehouses, depending on grade and location, with the low in Illinois and the upper numbers out of warehouse locations in Indiana and Ohio.
Western Cornbelt: Potash was quoted at $700-$760/st FOB in the region, with the low in Iowa and the upper end in Missouri. Sources reported few new sales to test the market, however. One source said he anticipates strong resistance at the retail level if potash pricing stays high this spring.
Northern Plains: Potash pricing FOB Saskatchewan mines remained at reference levels of $767/st FOB for standard, $780/st FOB for soluble, $772/st FOB for granular, and $780/st FOB for white granular. Out of regional warehouses, the market was quoted at $780-$840/st FOB, depending on grade and location. Delivered potash in North Dakota was pegged at $830-$850/st for prompt tons.
Northeast: Sources quoted the potash market at $822-$842/st FOB regional warehouses for red granular tons, with the low FOB E. Liverpool and the high out of Philadelphia to the dealer.
Eastern Canada: Potash remained at posted levels of $1,023/mt FOB Sussex, N.B., and $988/mt FOB Saskatchewan mines to Canadian customers. Out of Ontario warehouse locations, sources quoted red granular potash at $1,056/mt FOB and white granular at $1,065/mt FOB. Those warehouse levels were up some $100/mt from November pricing levels.
The K-Mag market was quoted at $525-$611/mt FOB in Ontario, and sulfate of potash was reported at $1,021-$1,075/mt FOB.
SULFUR
Tampa: The new quarter began nearly two weeks ago, but as of late last week negotiations for first quarter prices had not even begun. A source said both Mosaic and PotashCorp would not need any new sulfur supplies for two months, so the price may be irrelevant. That doesn’t give oil companies much in the way of leverage for negotiations. When the talks do start, the price will probably not be in double digits. A source, who normally buys under contract but not since the first of the year, said based on what he was currently paying, the Tampa price would be in single digits.
Regardless, sources said refineries would continue to operate. Excess sulfur was still being blocked at Galveston, prilled at Beaumont, and stored on vessels in the Gulf. One oil company in the Midwest was said to be trucking sulfur from its refineries to landfills, which is not allowed in many areas.
Not much will happen with sulfur until phosphate processing plants begin to crank out product again. Many, if not most, were under curtailment plans or were idle. The phosphate business was beginning to pickup last week, and signs were pointing at increased activity for the spring.
Vancouver: A strike by longshoremen in Vancouver was averted when a mediator was assigned to hear the case prior to the deadline on Jan. 2. Meanwhile, the world market appeared to be somewhat more stable, although still slow.
Helm Fertilizer Corp., Tampa, has made the following personnel announcements. Rick Brown, formerly with Ag Distributors, has joined Helm as director, terminal sales and sourcing. He will be responsible for Helm’s owned terminals in Memphis, Tenn., and Helena and North Little Rock, Ark., as well as UAN sales from Cincinnati, Ohio.
Michael Peyton has been named vice president, domestic. He will be responsible for all U.S. sales and trading activities, including UAN from the AUM plant in Trinidad. This plant, with production capacity of 1.4 million mt/y of UAN, is currently under construction and is scheduled to come on stream in the fourth quarter of 2009.
Oliver Koepcke has been named vice president, international, responsible for all Latin American business activities. In addition, Fabian Jung has been transferred to Tampa from Helm’s Hamburg, Germany office. He will assist Koepcke in the company’s international department.
Truth 1 Industries, LP, has formed a new sister company, Truth Worldwide LLC, a specialist in the global, packaged, and bulk food trading business. Patrick Kerim, president of Truth Worldwide, and Joe Newcomb, CEO, Truth Chemical, are partners in the new venture. For more information see www.truthworldwide.com, or call 281-292-6900.
Rentech Inc. has announced organizational changes designed to better align its management structure with the company’s strategy for the commercial deployment of the Rentech Process for manufacturing clean synthetic fuels. Douglas Miller has been appointed executive vice president of Renewable Energy Businesses. In this capacity, he will be responsible for the development of Rentech’s biomass initiatives. He previously served as company executive vice president and chief operating officer.
Richard Penning, executive vice president of commercial affairs, will continue to be responsible for the development of Rentech’s fossil-based synthetic fuels and chemicals facilities and for all domestic and international licensing initiatives, technology, and product development and certification. Dr. Harold Wright, senior vice president and chief technology officer, will continue to report to Penning.
John Diesch, senior vice president of operations, will manage all of the company’s operating assets, including Rentech Energy Midwest Corp. (REMC), which is the company’s nitrogen production facility, the Product Demonstration Unit (PDU), the proposed Rentech Strategic Fuels and Chemicals Complex near Natchez, Miss., and new synthetic fuels plants as they come online. Miller, Penning, and Diesch will all report to Rentech President and CEO D. Hunt Ramsbottom.
Potash One Inc. reports that William Harris has been appointed to its board of directors. Harris received his B.A. in English from Harvard College and his M.B.A in finance from Columbia University. He is a partner of Solo Management Group LLC, an investment and management consulting partnership. Harris was previously on the board of Energy Metals Corp. and was also chairman and executive committee member of the American Fiber Manufacturers Association. He is also the former president and CEO of Hoechst Fibers Worldwide, and held senior level positions with Grupo Celanese S.A., Celanese Canada Inc. and Hoechst Celanese Corp.
Potash One also reports that William Lupien has resigned as a director, effective Dec. 23, 2008. He has opted to retire from all the public company boards and positions he holds to focus on his personal pursuits and family. He remains a shareholder and has been retained as an advisor to the company.
Omaha-Gavilon LLC said Jan. 5 that it has finalized the acquisition of nine grain facilities in Texas from Charlie Myers Grain Co. This marks the first purchase for the company since its inception in June 2008, when a group of investors bought the former ConAgra Trade Group. The purchase of Charlie Myers Grain Co., located in Seymour, Texas, did not include fertilizer, trucking, or feed lots. Gavilon says the acquisition compliments its current footprint in the grain industry by expanding its presence in Texas, a growing market area for the company. The elevators are located in Seymour, Wichita Falls, Weinert, Haskell, Knox City, Red City, Crowell, Benjamin, and Truscott, Texas. Gavilon intends to retain all of the current Charlie Myers Grain Co. grain employees pending the completion of the application and hiring process. Gavilon said the intention is to create a relatively seamless transition, allowing business activity to continue uninterrupted for the local customer base. The Gavilon Group LLC provides physical distribution, merchandising, and trading across basic inputs and outputs, including grains, feed ingredients, fertilizer, and energy products.
Subiaco, Western Australia-Uramet Minerals Ltd. reports that it has entered into an agreement to sell its Barr Creek Project tenements to Legend International Holdings Inc. for A$750,000. The tenements are located north of Mt. Isa, and Uramet says they are highly prospective for phosphate, base metals, and diamonds. Legend already controls substantial phosphate interests in the Mt. Isa area. Uramet said the Barr Creek assets appear to be a natural extension of Legend’s Lady Jane deposit. Uramet noted that Legend is actively developing its phosphate assets with plans to develop infrastructure, mines, and a beneficiation process plant. As a result, Uramet said Legend is in a better position to quickly advance the Barr Creek assets. Uramet said the sale is part of its own strategy to scale back exploration spending and to maximize its cash reserves to ensure that it remains in a strong position to see through the current global financial crisis and take advantage of other opportunities as they arise.
Toronto-Chemtrade Logistics Income Fund said Jan. 5 that all of the equipment necessary to restart the Beaumont, Texas, plant has now been installed. The plant is currently undergoing various pre-startup tests and is scheduled to resume operations by mid-January. “The actual startup of the plant is approximately two weeks late due to a delay in the delivery of certain equipment,” said Mark David, Chemtrade president and CEO. “Everything we need is now in place, and we expect the startup of the plant to commence by mid-January. The work involved to bring the plant to this state within this timeframe was significant, and everyone who worked on the project is to be congratulated for their efforts in achieving a successful outcome.” Davis also provided an update on the Fund’s outlook for 2009. “Clearly, we are living in a time of great economic upheaval and uncertainty which affects our customers and suppliers and makes it challenging to provide financial outlooks. However, we continue to believe that our business model and the initiatives we implemented over recent years will enable us to generate distributable cash after maintenance capital expenditures well in excess of our distribution rate of $1.20 per unit and consistent with our prior disclosure. The speedy, safe and efficient return of our Beaumont plant to full operations will further increase our confidence in achieving our outlook for 2009.” He noted that Chemtrade’s strong cash flow generation in 2008 continued to strengthen its balance sheet. “We have no debt due until 2011 and during 2008 repurchased over $17 million worth of units (approximately 1.8 million units) under our normal course issuer bid, while also reducing our operating line of credit by over U.S. $25 million.”
Melbourne-Incitec Pivot Ltd. said Jan. 5 that it will permanently close its fertilizer manufacturing plant at Cockle Creek, south of Newcastle, on Jan. 16, 2009. Closure of the 95-year old plant will enable the site to be remediated and subsequently sold for non-industrial uses. The site will continue to be used for fertilizer distribution to meet requirements for the 2010 season, or until stocks are depleted. Local estimates were that there might be some 12 months of product in storage. In April 2006, the company announced that it would close the plant by September 2009 to facilitate remediation work. “We will shut the plant earlier than originally anticipated because we have sufficient capacity at our other SSP plants,” said Damian Ziebarth, IPL’s Southern Australia Operations Manager. The phosphate rock grinding mill at the company’s Kooragang Island plant north of Newcastle will also be closed. A total of 20 positions will be made redundant, and seven contractor and casual positions will be lost. IPL is expanding its distribution center at Kooragang Island by building new storage and loadout facilities at a cost of A$14 million. This is expected to be completed by the time distribution stops at Cockle Creek. IPL said it has another distribution center at Port Kembla, as well as a large network of distributors around the state.
Madisonville, Ky.-Four Madisonville firefighters are back on the job after suffering exposure to anhydrous ammonia fumes while attempting to shut off a farm storage tank left open in an aborted theft attempt the afternoon of Dec. 28. Assistant Madisonville Fire Chief John Stewart said the four were taken to the hospital after unsuccessfully trying to shut off the 44,000-gallon tank that had been vandalized by thieves believed to be on a meth trip. “They had set up a little hose running over to their cooler, but once the anhydrous got flowing in was too much for them to handle,” Assistant Fire Chief John Stewart told Green Markets. “My guys got burned and I can’t imagine what those guys look like.” He said his hazmat team was in fully protective gear, but the leak had been there for so long it combined with liquid on the ground to produce vapors that got up the legs of their clothing. Three of them suffered exposure with no ill effects, but one had second-degree burns that resulted in skin blistering. Stewart said the three went right back to work and the fourth missed only one shift. “But you can be assured that we will be taping those boots in the future,” he promised. In the meantime, an evacuation order was lifted after a short while for a one-mile area since the tank, which was about 90 percent full, continued to leak from a frozen valve. The firefighters were taken to Regional Medical Center and later released.
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All information has been obtained by Green Markets from sources believed to be reliable. However, because of the possibility of human or mechanical error by our sources, Green Markets or others, Green Markets does not guarantee the accuracy, adequacy, or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.
