All Posts from September 13, 2019

Russia Wins Ukraine AN Antidumping Appeal

Ammonium Nitrate, Featured, News, Russia, Ukraine

The World Trade Organization’s (WTO) Appellate Body on Sept. 12 ruled in favor of Russia in an appeal brought by Ukraine over antidumping duties for ammonium nitrate (AN) coming from Russia. Russia, which brought the case in 2015, essentially won it in 2018, but Ukraine appealed (GM July 27, 2018; Nov. 9, 2018).

The 2018 panel agreed with Russia’s allegations that Ukraine had violated the WTO rules by failing to acknowledge Russian prices for gas and provide reasonable grounds for the decision, and that Ukraine had acted inconsistently in its price effects’ analysis, which formed part of the determinations of injury and its dumping determinations.

According to Interfax, the Russian Economic Development Ministry told reporters that the Appellate Body decision is good news for it going forward, as it has similar gas arguments in four other cases against the European Union before the WTO, those involving ammonium nitrate, UAN, welded pipes, and seamless pipes. “The decisions of the panel and the Appellate Body indicate that the E.U.’s method is not compliant with WTO norms either, and they improve Russia’s chance of successfully challenging European antidumping measures,” said a Ministry official.

The 2018 WTO panel also upheld Russia’s claim that the Ukraine authorities acted inconsistently with the Anti-Dumping Agreement by including Russian fertilizer group EuroChem AG in the scope of the original antidumping investigation, citing the minimal margin of dumping.

However, while the WTO findings largely favored Russia, the panel rejected certain of Russia’s allegations, such as the claim that Ukraine relied on an injury not established within the provisions of the Anti-Dumping Agreement.

Ukraine has had antidumping duties in force on imports of Russian AN since 2008. In July 2014, it decided to maintain the duties following a review, setting the rate at 20.51 percent for Acron Group subsidiary Dorogobuzh and 36.03 percent for other Russian exporters to the country for a period of five years.

In March 2018, Ukraine raised the antidumping duties on Russian AN (GM March 30, 2018). The duties increased to 29.25 percent for Dorogobuzh and to 42.96 percent for other Russian exporters. Later in 2018, Ukraine cancelled its import ban on AN with an N content above 28 percent from Russia (GM May 25, 2018). The ban was imposed in March 2018 as part of the wider temporary embargo on the import of mineral fertilizers from Russia.

Compass Minerals – Management Brief

Management Briefs, Specialty

Compass Minerals, Overland Park, Kan., has named Jenny Hood as the company’s new Vice President, Supply Chain. The company said she brings a breadth and depth of industry knowledge, not just in supply chain management, but also in international transportation and logistics.

Before joining Compass, she served as Vice President of Transportation at Contura Energy in Bristol, Tenn., where she focused on strategies to maximize product availability while minimizing costs. Earlier, she was Vice President of Marketing and Logistics at Bowie Resource Partners, Louisville, Ky.

Hood holds an Executive MBA from Virginia Commonwealth University and a B.A. in technical writing from Christopher Newport University.

MAP, DAP Imports Continue Uptick

DAP/MAP, Featured, News, U.S. Imports

While phosphate producer Mosaic Co., Plymouth, Minn., has announced another round of U.S. production cuts (see above), imports of DAP and MAP into the U.S. were up in July, according to U.S. Department of Commerce statistics. During the month, Moroccan tons were at the forefront, with the country shipping some 163,864 st of MAP/Other to the U.S., up from the year-ago 26,455 st. Moroccan tons made up the lion’s share of the total MAP/Other imports of 180,966 st, which were up 160 percent from the year-ago 69,514 st.

Overall July DAP imports were up 96 percent, to 69,843 st from the year-ago 35,721 st. Of this, Morocco was again the major player, contributing 57,924 st, up 69 percent from the year-ago 34,340 st.

July’s figures were nothing new, as phosphate imports were up for the fertilizer year ending June 30, 2019, with Russian and Saudi Arabian product playing a larger role for the year. MAP/Other was up 43 percent, DAP 32 percent.

MAP/Other 2018-19 2017-18
Mexico 149,322 25,839
Russia 744,411 458,707
Saudi Arabia 121,051 35,105
Morocco 953,031 887,812
Total 2,069,265 1,443,800

 

DAP 2018-19 2017-18
Mexico 29,157 8,676
Russia 444,456 209,506
Saudi Arabia 80,742 55,144
Morocco 779,428 684,779
Total 1,385,009 1,052,385

*Only major exporters are listed

Anuvia Plant Nutrients – Management Brief

Management Briefs, Specialty

Anuvia Plant Nutrients, Zellwood, Fla., announced on Sept. 10 that Don Neyhouse is joining the company as Regional Sales Manager – Agriculture. In this new position, Neyhouse will be responsible for developing Midwest sales of SymTRX™, Anuvia’s enhanced efficiency slow-release plant nutrient products developed for the agricultural markets. Anuvia said he will work directly with the company’s distributor and retail partners in the Midwest.

“We welcome Don to Anuvia,” said Anuvia Chief Commercial Officer Hugh MacGillivray. “His credentials are outstanding and well-suited for introducing SymTRX to new geographic areas. Don comes to us at a very exciting time as Anuvia expands production to take SymTRX to Midwest markets. His sales and marketing skills will be a tremendous asset to our growth.”

Neyhouse has more than 20 years of experience in the agricultural and pharmaceutical industries, most recently with Bayer Crop Science in southwestern Indiana. Prior positions include seven years with Syngenta/Dupont Pioneer in recruiting seed dealers and in training and management roles, and earlier with Pfizer/Sanofi Pharmaceuticals as a sales rep and field sales trainer. He holds a B.S. in agricultural sales and marketing from Purdue University.

 

Nutrien to Cut 4Q Potash Production By Up to 700,000 mt

Featured, News, Potash, Saskatchewan

Nutrien Ltd., Saskatoon, announced on Sept. 11 that it expects to proactively take up to eight-week inventory shutdowns at its Allan, Lanigan, and Vanscoy potash mines in Saskatchewan during fourth-quarter 2019. The production downtime is in response to a short-term slowdown in global potash markets. If all three potash facilities were to remain idled for the full eight weeks, potash production could be reduced by approximately 700,000 mt, and potash annual EBITDA could be reduced by US$100-$150 million.

Despite the current short-term market conditions, the company said it remains positive on potash demand for 2020, as well as the medium- to long-term potash fundamentals. Nutrien said it “remain[s] focused on a gradual ramp up of production to meet demand and to ensure we operate the safest, most reliable, and efficient Potash business in the world.”

Nutrien told Green Markets that the announcement was in response to some temporary softness, mainly in offshore standard grade demand as it negotiates the India and China agreements. “We are still planning for a big fall application period in North America and remain committed to increasing the price for new in season Q4 sales,” a company spokesman said on Sept. 12. “Even if corn does not rally today (after the WASDE report), we see potash and dry phos as still very affordable, and (if weather allows) expect growers will apply P&K strongly this fall.”

“Classic curtailments at Nutrien’s potash mines are an ominous sign for a fertilizer whose prices have fallen 11 percent since February,” said Jason Miner, Bloomberg Intelligence Senior Market Analyst. “At most, the 1 percent (700,000 mt) of global capacity potentially offline could sap 7 percent of Potash-segment EBITDA vs. 2019 guidance. Yet the move shows Nutrien is still responsive, post-merger, and remains the global supply-demand steward. While broadly bearish for fertilizers, we expect conditions could quickly tighten, should 2019 U.S. corn supply begin to look thin.”

Nutrien shares were off 1.35 percent, closing at $51.07 on Sept. 12.

Nutrien told Green Markets on Sept. 12 that it is still assessing the number of layoffs to occur at the three mines. It said it will vary by site, and could be as low as 160 or as high as 250 per site. In total, the company said it could range between 600-700 over all sites for the two-month period.

Kore Potash plc – Management Brief

Australia, Management Briefs

Junior miner Kore Potash plc, Perth, Australia, has announced the appointment of Andrey Maruta as CFO, effective Sept. 23, 2019. Kore said he is a Fellow Chartered and Certified Accountant with over 16 years’ experience in the mining industry, including a stint as CFO at Petropavlovsk Plc. He was also an auditor at accountancy firm Moore Stephens International in both the U.K. and the Russian Federation.

He will report directly to CEO Brad Sampson, and is not joining the company’s board. Current CFO John Crews opted to step down for personal reasons, but will remain available into November to facilitate a smooth transition.

Kore’s flagship asset is its 97 percent-owned stake in the Sintoukola Potash Project in the Republic of the Congo (GM Sept. 28, 2018).

Mosaic Cuts Phosphate Production, Repurchases Stock, Touts Brazil Synergies

Featured, News, Phosphate

The Mosaic Co., Plymouth, Minn., on Sept. 9 made three major announcements: the idling of its Louisiana phosphate operations, a $250 million stock repurchase, and plans to meet and exceed synergies at Mosaic Fertilizantes in Brazil.

Mosaic will idle its Louisiana phosphates operations, effective Oct. 1, to reduce production by approximately 500,000 mt in 2019. This includes the company’s ammonia plant, which feeds the phosphate operations.

Mosaic said the move is expected to accelerate the reduction of high phosphate fertilizer inventories. Mosaic continues to expect strong fall fertilizer application in North America, and expects a more balanced global supply-and-demand picture to emerge by 2020.

“Phosphate prices have declined further through the summer, with excess imports continuing to enter the U.S. on top of high channel inventories,” said President and CEO Joc O’Rourke. “We expect our move to idle production to tighten supply and rebalance the market. Mosaic will prioritize shipments to meet key customer needs through the idling period.”

DAP/MAP prices at NOLA firmed almost immediately, but industry skeptics wondered if this would only be temporary, until imports could take their place. Mosaic cut production some 300,000 mt in March (GM March 8, p. 1) and idled the Plant City, Fla., plant (2 million mt/y capacity) in late 2017, finally to announce its permanent closure this summer (GM June 21, p. 1). While prices did firm afterwards, imports eventually increased, particularly from Morocco and Russia.

Mosaic also plans to initiate $250 million in stock repurchases under its existing share repurchase authorization, which has $850 million of remaining capacity.

“Mosaic’s stock currently presents an exceptional opportunity to deploy capital,” said O’Rourke. “We believe that these repurchases are the best use of our capital in today’s environment, and we will continue to evaluate the amount we repurchase based on expected cash flow.”

In addition, Mosaic Fertilizantes, the company’s Brazil-based business unit, has implemented actions necessary to meet or exceed its previously announced synergy target of $275 million in 2019. It has also announced that it intends to drive an additional $200 million in annual value through ongoing business transformation efforts by the end of 2022.

“We believe taking these steps now will further enhance Mosaic’s ability to benefit from expected strong business conditions in 2020,” added O’Rourke.

Wall Street reacted well to the news. Mosaic shares closed on Sept. 10 at $21.38, up 6 percent from the prior day close. Mosaic shares have been on a roll, moving up 23 percent from Sept. 3’s $17.87 to close at $21.99 on Sept. 11. In the meantime, the company also announced on Sept. 5 that its Mosaic Fertilizantes phosphate mines had returned to full production (GM Sept. 6, p. 27).

As for the Louisiana idling, over 370 employees will be furloughed, according to The Advocate, receiving 70 percent of pay as well as benefits. Mosaic had not responded to inquiries at press time.

P&H Acquires Louis Dreyfus Locations in Canada

Canada, Featured, News

Canadian agribusiness Parrish & Heimbecker Ltd. (P&H), Winnipeg, Man., announced in early September that it has acquired ten Louis Dreyfus Company (LDC) locations in Western Canada to “significantly expand” its grain and crop input offerings across new geographies. Financial terms of the deal were not disclosed.

The new locations include four in Saskatchewan (Tisdale, Wilkie, Alberdeen, and Kegworth), three in Alberta (Joffre, Lyalta, and Rycroft), two in Manitoba (Rathwell and Virden), and a final site in Dawson Creek, B.C. P&H said the acquisition will provide farmers with “increased access to more competitive offerings in grain trading, handling, and merchandising, as well as full-range crop input products backed by leading agronomic solutions.”

“This is an incredibly exciting day as P&H continues its investment in assets and terminals to provide farmers with local, best-in-class products and support, backed by a growing national grain asset network,” said CEO John Heimbecker on Sept. 4. “This is a win-win for farmers seeking a more competitive grain and crop inputs offering, as well as for the stakeholders within P&H and LDC who work to support them.”

Family-owned P&H said it has invested heavily in assets and terminals to create a National Grain Asset Network, including new grain elevator construction and export terminal expansions and upgrades. The LDC acquisition adds to its existing footprint in Canada, which includes more than 60 locations comprising grain elevators and terminals, retail sites, feed and flour mills, offices, and satellite facilities. The company has 1,500 employees across Canada.

“Providing farmers with increased variety and more powerful combinations of crop input solutions is more important than ever as we look to drive yields and overall performance,” Heimbecker said. “Acquiring geographically strategic assets from a global leader like LDC makes us better and stronger by an order of magnitude.”

The transaction is expected to close in the fourth quarter of 2019, subject to regulatory approvals and customary closing conditions. According to The Western Producer, the acquisition will make P&H the third largest grain handler in Canada, behind Viterra and Richardson International. LDC will continue its presence in Canada with a grain terminal in Port Cartier, Quebec, and a canola crushing plant and refinery in Yorkton, Sask. LDC’s corporate headquarters in Canada is located at Virden, Man.

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