All Posts from May 13, 2013

Yara North America – Management Brief

Management Briefs

Effective May 1, Dr. Steve Petrie joined Yara North America as the new director, agronomic services, on the West Coast. Petrie was previously with Oregon State University (OSU) as the director of the Columbia Basin Agricultural Research Center and professor of soil science. Before OSU, he was with Unocal Agri Products. Petrie holds a PhD in soil science with minors in crop science and physical chemistry. Yara said he “brings a wealth of knowledge, and we are excited to offer and extend his services to our customer base.” Petrie can be reached at Steve.Petrie@yara.com.

ICL 1Q earnings and sales up

Breaking Industry News, China, Phosphate Rock, Potash Muriate

Strong fertilizer demand especially from China has led to improved first quarter results for Israel Chemicals Ltd. ICL reported a 9 percent rise in revenues of $1.64 billion versus $1.5 billion in the corresponding quarter last year. Net profit was up by 6 percent for the quarter to $305 million versus $289 million. Net profits were higher than analyst predictions.

ICL said increased volumes of potash and phosphate fertilizer compensated for lower prices. Its fertilizer unit accounted for 57 percent or $1.009 billion out of total revenues of $1.640 billion. During the quarter ICL Fertilizers produced 1.3 million mt of potash and sold 1.309 million mt of potash.

Agrium 1Q income off 9 percent; adds 17 retail locations, more to come

Featured, News

Agrium Inc. announced today consolidated net earnings of $141 million ($0.94 diluted earnings per share) for the first quarter of 2013, compared with net earnings of $155 million in the first quarter of 2012 ($0.97 earnings per share). The 2013 first-quarter results included a $16 million ($0.09 earnings per share) share-based payments expense. Excluding this item, net earnings would have been $153 million ($1.03 earnings per share).

Sales were down 10 percent, reflecting reduced volumes due to a late spring season this year and an early one last year. Sales were $3.22 billion, compared to the year-ago $3.57 billion.

While Retail fertilizer volumes were down at 1.41 million mt from the year-ago 1.71 million mt, Wholesale were up slightly at 2.28 million mt from 2.24 million mt.

The Retail segment reported negative earnings before income tax (EBIT) of $28 million on sales of $2.1 billion for the quarter, down from the year-ago positive $57 million on sales of $2.45 billion.

Agrium said Retail selling expenses were up due to recent acquisitions. This included some 17 new facilities acquired in the first quarter with annual sales of $100 million, as well as 59 locations acquired in 2012 with sales of $477 million. The company is on line to soon close on the some 17 Viterra Inc. Australian outlets as authorities in that country have given a green light to the deal. Agrium still awaits approval from Canadian regulators on its acquisition of some 232 Canadian Viterra outlets.

Retail crop nutrient sales were $802 million, down from the year-ago $1 billion. Gross profits were $121 million, down from $155 million.

Wholesale EBIT was $327 million on sales of $1.13 billion, down slightly from the year-ago $329 million on sales of $1.15 billion.

Wholesale nitrogen sales were up at $382 million from $348 million. Gross profits were $173 million, up from $155 million. Tons sold were 746,000 mt with an average selling price of $510/mt compared to the year-ago 728,000 mt ($477/mt). While less ammonia was sold – 193,000 mt, prices were up at $606/mt compared to the year-ago 226,000 mt ($519/mt). Urea volumes were up and prices level – 322,000 mt ($543/mt) versus 271,000 mt ($542/mt).

Potash sales were $152 million, up from $139 million. Gross profits were $84 million, down from $87 million. Potash volumes were 378,000 mt ($404/mt), up from 279,000 mt ($497/mt). International volumes were 180,000 mt ($327/mt), up from 117,000 mt ($397/mt), while domestic were 198,000 mt ($473/mt) versus 162,000 mt ($570/mt).

Phosphate sales were down at $162 million from $189 million. Gross profits were $37 million, down from $63 million. Volumes and prices were down at 232,000 mt ($698/mt) versus 243,000 mt ($780/mt).

Ammonium sulfate/Other was up slightly to $80 million from $79 million. Gross profits were $28 million, down from $30 million. AS volumes were down but prices up – 72,000 mt ($434/mt) from the year-ago 86,000 mt ($420/mt).
Advanced Technologies broke even on EBIT with sales of $133 million, which bested the year-ago negative $5 million EBIT on sales of $135 million.

Going forward, Agrium says Egyptian authorities have given the nod for the resumption of construction of idled projects in the country. As for existing production, the company expects the country to be short on gas this summer, with possible constraints on nitrogen production.

Agrium said it has enough sulfuric acid for its Conda, Idaho, phosphate facility for the first-half, but it may need to go onto the spot market after that as its long-term supplier, Kennecott, has had to declare force majeure due to a rock slide that impacted its operations.

Agrium expects two major turnarounds in the third quarter – Carseland for 45 days and Redwater for 30. As a result, it does not expect excess inventories in the second half.

Agrium is p

Rentech 1Q income off 23 percent

News, News Briefs

Los Angeles — Rentech Nitrogen Partners LP was impacted in the late spring season, with first-quarter net income falling to $15 million ($0.38 per common unit) on sales of $59.6 million, compared to the year-ago $19.4 million ($0.51 per unit) on sales of $38.5 million. The company continues to expect a full-year cash distribution of $2.60/unit. Sales were up due to the acquisition of the Pasadena, Texas, facility. Pasadena added $25 million in revenues and $1.9 million in operating income. The East Dubuque, Ill., nitrogen facility had $17.3 million in operating income on sales of $34.5 million, compared to the year-ago $20.8 million and $38.5 million, respectively. UAN was the big mover during the quarter, though prices were off − 61,000 st (average delivered price $301/st) versus 34,000 st ($327/st), while ammonia prices were up and volumes were off − 11,000 st ($739/st) versus 30,000 st ($673/st). At Pasadena, ammonium sulfate volumes sold were 54,000 st ($320/st), sulfuric acid at 41,000 st ($99/st), and ammonium thiosulfate at 15,000 st ($198/st).

The Week in Fertilizer Stocks

Fertilizer Stocks

The Week in Fertilizer Stocks

Producer Symbol Price Week Ago Year Ago
Agrium AGU 94.86 89.55 83.15
CF Industries CF 194.99 183.96 175.19
CVR Partners UAN 26.50 27.35 24.45
Intrepid Potash IPI 18.16 17.12 21.37
Mosaic MOS 63.84 60.50 49.49
PotashCorp* POT 43.56 41.77 41.57
Rentech Nitrogen RNF 33.55 37.00 24.70
Terra Nitrogen TNH 222.52 204.63 219.99
Distribution/Retail
Andersons Inc. ANDE 54.25 53.60 47.42
Deere & Co. DE 92.19 89.54 79.05
Scotts SMG 47.54 45.12 46.08
* represents three-for-one stock split

Site selected for nitrogen plant

Breaking Industry News

Northern Plains Nitrogen (NPN) plans to build and operate a $1.5 billion nitrogen fertilizer production facility near Grand Forks, N.D. The world-scale production facility will include a 2,200 st/d anhydrous ammonia plant as well as urea and UAN production facilities. The facility will be located on land adjacent to the Grand Forks Wastewater Treatment Plant.

For more details, see the Green Markets Web Edition May 10.

Ammonia

Ammonia, Aqua Ammonia, Asia, Black Sea, California, Eastern Cornbelt, Market Watch, Middle East, Pacific N.W., Western Canada, Western Cornbelt

Eastern Cornbelt: Drier weather allowed regional growers to peck away at spring planting last week, but another round of thunderstorms was expected in Indiana and Ohio as the week advanced. Cooler weather was also in store again, with weekend highs expected to reach only into the 50s and 60s in many areas.

USDA reported that 7-8 percent of the regional corn crop was seeded by May 5, well behind the five-year averages of 48 percent in Illinois, 41 percent in Indiana, and 39 percent in Ohio. Soybean planting had yet to start in Illinois and Indiana by that date, while Ohio growers had just 1 percent of the crop in the ground.

With demand drying up quickly in the region, sources quoted the spot ammonia market in the $750-$760/st range FOB Illinois terminals, with the upper end quoted at $770-$780/st FOB in Indiana.

Western Cornbelt: Sources said improving weather conditions allowed growers to get in the field and begin planting in many areas of the Western Cornbelt region last week, but progress remained well behind the average pace.

USDA reported that just 8 percent of the Iowa corn crop was seeded by May 5, some 48 percentage points behind the five-year average for that date. Nebraska and Missouri corn growers were also well behind the five-year average of 53 percent, with planting estimated at 22 percent complete in Missouri and just 14 percent in Nebraska by May 5.

As for soybeans, Nebraska growers had just 1 percent of the crop seeded by May 5, while soybean planting progress in Iowa and Missouri had yet to register on USDA’s weekly update.

Despite a steady dose of rain and snow in April, the U.S. Drought Monitor continued to show extreme drought conditions across much of Nebraska last week. Nearly all of Missouri, by contrast, was drought free in early May, while Iowa continued to experience abnormally-dry to moderate-drought conditions in the eastern counties.

On the fertilizer front, sources reported only slight changes to the spot market last week.

Ammonia pricing continued to be quoted in the $675-$685/st FOB range out of Nebraska terminals, $700-$720/st FOB in Iowa, and up to $730-$740/st FOB in the Missouri market.

California: Sources reported strong fertilizer movement in the state last week, particularly for liquid products.

Ammonia applications on rice in Northern California were steady but winding down last week. USDA reported that 40 percent of the California rice crop was planted by May 5, while cotton planting was estimated at 90 percent complete in California and 85 percent in Arizona.

Anhydrous ammonia remained at $765-$770/st DEL in California, with aqua ammonia referenced at the $205/st FOB level.

Pacific Northwest: Warm, dry weather allowed growers in much of the Pacific Northwest to make quick progress on spring planting in early May. USDA’s May 6 crop report indicated that planting was ahead of the five-year average for most crops in the region.

Sources continued to report concerns about drought in the region, with reports that rainfall totals for parts of Oregon were already 8 inches behind normal for the year. The May 7 Drought Monitor reported abnormally-dry to moderate-drought conditions across Oregon and southern Idaho. Drought conditions in Wyoming and southern Montana ranged from moderate to severe, although both states contained pockets of extreme drought in early May.

Sources reported some pressure on spot nitrogen prices last week. “We’ll be wrapped up before the Midwest gets cooking,” said one contact.

Anhydrous ammonia pricing was slipping, but sources reported a broad range of pricing. Washington sources quoted the market at $730/st rail-DEL on the low end for tons shipped from the Midwest, while other sources continued to report tr

Urea

Black Sea, California, China, Eastern Cornbelt, India, Indonesia, Market Watch, Middle East, Pacific N.W., Pakistan, U.S. Gulf, Urea, Western Canada, Western Cornbelt

U.S. Gulf: The good news, according to some sellers last week, was that barges were moving. The bad news was that prices were much lower.

Price ideas on Tuesday were in the $330s/st FOB, and by Thursday were in the $320s/st FOB. Generally, recent trades were put between $322-$338/st FOB, with the most recent in the $320s/st FOB. 

Upriver barges were garnering a significant premium, netting back to the $340s/st FOB at NOLA.  

Sources expected the next NOLA prompt trades to be within the $320-$325/st FOB range.

Nothing new was heard for thinly-traded prills. While some felt those numbers would have to come down in order to attract new business, others disagreed, saying it is a small and specialty market. Sources continued to call it $350-$355/st FOB.

Eastern Cornbelt: Sources continued to report slipping prices for urea in the Eastern Cornbelt. The dealer market was quoted at $415-$435/st FOB in the region last week, with the low out of spot river locations and the upper numbers inland.

Western Cornbelt: Granular urea pricing remained in the $390-$400/st range FOB St. Louis, Mo., with the upper end of the regional range pegged in the $410-$420/st FOB range out of inland terminals.
Sources quoted the Tulsa, Okla., urea market in the $380-$390/st FOB range last week.

California: Sources quoted the terminal market for granular urea at the $480/st FOB mark on the low end in California, with rail-delivered urea pegged as low as $450/st. “Few want to buy even at these levels,” said one source. “People just prefer to buy local tons as needed instead of committing to rail, which they fear will fall further.”

Effective May 2, Agrium’s granular urea postings in California dropped to $485/st FOB West Sacramento; $495/st FOB Hanford and Richvale; $520/st truck-DEL in Central California; $530/st truck-DEL in Northern California; and $540/st truck-DEL in Southern California.

Pacific Northwest: Sources quoted the urea market at $485-$500/st FOB in the Pacific Northwest, down roughly $15-$20/st from last report. Rail-delivered urea pricing had fallen even more, to $480-$495/st in the region, depending on location. “There are traders out there wanting to dump urea,” said one contact. “If you can wait and order rail, just name your price.”

Western Canada: Western Canada sources quoted the granular urea market at $565/mt FOB and $585-$600/mt DEL in the region, while dealer postings remained in the $610-$635/mt DEL range, depending on location.

Pakistan: The only ray of sunshine for the urea industry came from the TCP call for a tender for 50,000 mt to close June 5. The tonnage called for is the remainder of the 130,000 mt the Pakistan government authorized TCP to import for this season.

Sources say the current weakness in the market would make the Pakistan finance ministry happy. At the same time, the relatively small amount being purchased would not affect the global market.

The gamble TCP is taking is that an Indian tender is expected to be called by the end of this or early next month. If the Indian tender closes near the same time as the TCP tender, said one source, TCP may have to face a urea market on the way up.

In other news, Engro Corporation, the parent company of Engro Fertilizers, said on April 30 that continued gas curtailments in Pakistan resulted in low urea production for the first three months of 2013.

While urea production remained stagnant at 1 million mt from January through March, overall industry sales increased from 1 million mt in 2012 to 1.3 million mt this year due to better crop economics driven by enhanced wheat support prices.
Engro said it

Nitrogen Solutions

California, Eastern Cornbelt, Market Watch, Pacific N.W., U.S. Gulf, UAN, Western Canada, Western Cornbelt

U.S. Gulf: Producers are still holding out for a big run on UAN. As a result, UAN prices have not fallen out of bed like urea. Recent UAN trades were called in the $315-$325/st ($9.84-$10.16) FOB range, with others pushing for $310/st ($9.69/unit) or below.

Eastern Cornbelt: UAN-28 pricing remained in the $330-$350/st ($11.79-$12.50/unit) FOB range out of Ohio and Indiana terminals, with the low reported in the Cincinnati, Ohio, market and the upper numbers inland. Illinois sources continued to quote the UAN-32 market at $380-$395/st ($11.88-$12.34/unit) FOB, depending on location.

Western Cornbelt: UAN-32 was steady at $385-$395/st ($12.03-$12.34/unit) FOB in the Western Cornbelt region last week.

California: Sources quoted the UAN-32 market at $385-$400/st ($12.03-$12.50/unit) FOB California terminals, with rail-delivered tons pegged in the $405-$415/st ($12.66-$12.97/unit) range in the state. “I believe most big players are now covered for their May needs and are looking to buy June tons,” said one contact.

Pacific Northwest: UAN-32 was pegged in the $420-$440/st ($13.13-$13.75/unit) DEL range in the Pacific Northwest, with the majority of spot quotes reportedly in the lower half of that range. Producers were said to be holding to the upper end for reference pricing, but were meeting the lower numbers on a spot basis.

Western Canada: UAN-28 remained at $459-$462/mt ($16.39-$16.50/unit) DEL in Manitoba, $462-$465/mt ($16.50-$16.61/unit) DEL in Saskatchewan, and $465-$474/mt ($16.61-$16.93/unit) DEL in Alberta.

Yara’s Belle Plaine facility was producing UAN in early May, but was not yet at full capacity

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