Moscow—Russia’s Vnesheconombank (VEB) has put up for sale its 20 percent minus 1 share holding in Verkhnekamsk Potash Co. (VPC), the Acron subsidiary developing the Talitsky potash project, according to Vedomosti business daily.
The starting price for the stake is pegged at RUB10.6 billion ($184.3 million), and bids will be accepted until May 11, Vedomosti reported. The results are to be announced on May 22. Acron holds a 60.1 percent stake in VPC. It has the right of first refusal for the Russian-government development bank’s holding but has not yet decided whether to use the option, according to the Russian news agency Interfax, citing Acron Board Chairman Alexander Popov.
Acron had not responded to inquiries by press time. The group said earlier this month that while it remains committed to its long-term goal to achieve vertical integration in potash feedstock and intends to complete the Talitsky mine project in Russia’s Perm region, “due to global market changes, it needs to shift its priorities” (GM April 7, p.17). Popov indicated last December that the group may postpone the 2 million mt/y KCl project until prices recover (GM Dec. 16, 2016). Russia’s Sberbank Investments is believed to own the remaining interest in VPC.
U.S. Gulf: Prompt NOLA granular barge prices continued to crater last week. Most put the low at $183/st FOB. A report of $182/st FOB could not be confirmed. The high for the week was put in the $196-$200/st FOB range. With falling prices, sources said buyers appear to be waiting until the very last minute to pull the trigger. The same sentiment was reported in regional markets.
Prills last week were being pulled into the granular hole, with new trades called $191-$193/st FOB. Product was reportedly being snapped up for re-export.
Eastern Cornbelt: The granular urea market was pegged at $225-$245/st FOB in the Eastern Cornbelt, with the low end reported out of spot river locations and reflecting a $5/st drop from the previous week. The slide was attributed to further declines in NOLA barge values at mid-month, although sources reported no new buying at the terminal level.
Western Cornbelt: Urea prices in the Western Cornbelt were once again under pressure as NOLA barge values slipped for the week. Sources quoted the low end of the range at $220-$225/st FOB out of spot river terminals, including St. Louis, Mo., and Minneapolis, Minn. The upper end of the regional market was pegged at $235-$240/st FOB at mid-month, but sources reported no activity to test the market.
The Catoosa, Okla., urea market had also reportedly fallen to $220-$225/st FOB for the week.
California: Granular urea had reportedly slipped to $315-$325/st FOB port terminals in California, although reference prices remained in the $330-$350/st FOB range, depending on location and supplier. Sources reported no confirmed rail-DEL urea pricing in the state in mid-April.
Pacific Northwest: Sources reported a generally steady urea market in the Pacific Northwest. “We did not have the earlier run-up on urea and UAN that the NOLA market experienced, and therefore I don’t anticipate a large decline until distributors start landing the lower-priced products from the east,” said one regional contact.
While reference prices for granular urea remained at $320/st FOB port terminals in the Pacific Northwest, sources quoted the low end of the market at the $305/st FOB level after netbacks. Rail-DEL urea was reported at $310-$320/st in the region at mid-month, but sources said most dealers had already positioned tons earlier in the $320-$340/st DEL range.
Western Canada: Sources tagged the granular urea market at $465-$480/mt DEL in Western Canada, depending on location. The lower numbers were quoted in the eastern prairies, which sources said is more heavily influenced by the Minneapolis market.
Although there were reports of delivered urea tons being quoted for as low as $450/mt in early April, actual business at that level could not be confirmed. “You could probably get that from the Minneapolis market even with higher freights, so the Canadian manufacturers may make some changes as the spring unfolds,” said one regional contact.
India: Eight companies were awarded a total of about 720,000 mt in the MMTC urea tender. The bulk of the tonnage will go to West Coast ports at $229.80/mt CFR, with about 175,000 mt to East Coast ports at $231.50/mt CFR.
Sources said MMTC was unwilling to offer a range of prices for each coast. One trader said MMTC was already paying more than the last tender and apparently had no desire to pay anything higher than the lowest offer for each coast.
Company
Quantity (mt)
Source
Discharge
Comzest
240,000
Iran
West Coast
TransAgri
150,000
Iran
West Coast
Transglobe
55,000
Iran
West Coast
Fertil
45,000
UAE
West Coast
Keytrade
44,000
Oman
West Coast
Swiss Singapore
60,000
China
East Coast
Sinochem
60,000
China
East Coast
Aries
55,000
China
East Coast
Reportedly, MMTC stopped issuing awards earlier than expected. Sources said the 720,000 mt it booked is expected to be enough to last well into the summer. One trader noted that between the two tenders so far, India has more than 1 million tons coming in by the end of June.
Sources are now looking to the next tender in mid- to late-May. One option is to also wait until June. One source noted that the end of May is the annual IFA conference. The Indian buyers – most likely STC – may want to assess the condition of the market at the IFA event and then make appropriate buying plans, he said.
Sellers may have some help making their case for imported urea. Domestic producers in India have been talking about how the low international price is hurting them. They now predict annual production will dip to 24.3 million mt, compared with earlier estimates of 24.7 million mt.
China: Producers are ready to make the switch from the domestic to export seasons. Sources said the domestic season is beginning to wind down, but it is still too early to make plans for exports. Several companies are reportedly looking to take some plants down for routine maintenance in May.
The awards of Chinese product in the Indian tender have a netback of $219-$220/mt FOB. The general view is that these tons are some leftover granular that has been homeless for a while. Traders said prilled urea remains a few dollars more expensive in the domestic market.
Industry watchers said the Chinese producers will continue to hold a firm line on prices even as the market focus shifts from domestic to international. One trader said that if the Indian buyers push prices too low for the producers, the Chinese makers will shift their focus to closer buyers who are willing to make smaller, but more lucrative, deals.
Indonesia: The deals Kaltim hoped to nail down last week all fell through.
Sources reported that Radiance, which won the bids for 60,000 mt of granular urea at $230/mt FOB, walked away from the deal. At the same time, sources said rumors are circulating that Quantum also walked from the long-term deal for 50,000 mt.
The Indonesians are now reportedly ready to hold another auction for the spot tons and a series of long-term lifting orders on a formula basis. One trader noted, however, that the floor price for the Indonesia goods is too high to find a buyer in the area.
Middle East: The awards made in the Indian tender helped form a temporary floor on prices. Sources said the Arab Gulf price has been on a downward slope for several weeks. The $221/mt FOB price offered by Fertil to MMTC has now become the lowest amount producers will accept in any talks.
The move comes after industry watchers were calling the late-April and May price closer to $205/mt FOB. Sources expect to see prices remain stable for the next several weeks.
Pakistan: The government is once again allowing about 300,000 mt of urea to be exported. Sources said the word coming out of Pakistan is that the country has more than enough for the upcoming season, with producers able to turn out more if necessary.
One international trader said the exports will only occur if the price is right. The recent uptick in pricing into India prompted the Pakistan government to look at exports again. Sources added that as long as the domestic producers get all the natural gas they require to run their plants at full capacity, Pakistan could become a small-quantity exporter on a regular basis.
U.S. Gulf: A river swell working from the Lower Mississippi into the Gulf is expected to trigger slowdowns in the region. High water levels were likely to delay transits by 1-2 days, sources said.
Industrial Lock waits were noted at 15-20 hours. In a reversal from recent weeks, most of the delay was traced to a backlog in the canal-side queue.
The Brazos River Floodgates were closed daily between 7:00 a.m. and 7:00 p.m. for dredging and repairs. The dredge is scheduled to run through April 20, after which repair operations will limit Monday-through-Friday traffic to overnight hours only through May 31. Sources estimated total Brazos-area delays at 2-4 days for the week.
Additional dredging is underway on a 24-hour, seven-day schedule at Miles 395-400 in the West Canal. The Corps is requiring vessels to contact the dredge for passing instructions prior to arrival.
A 60-day Harvey Lock closure will kick off on Sept. 30. Bayou Boeuf Lock is tentatively scheduled for a similar closure, but that project could be rescheduled for 2018.
Mississippi River: Shippers described transit difficulties throughout the Mississippi River. Flooding continued between Hannibal and Cape Girardeau, Mo., with the latter gauge registering 34.33 feet on April 11, well above the 32-foot threshold for minor-stage flooding. The National Weather Service (NWS) predicted levels would drop below action stage on April 17-18.
In the St. Louis area, tows were cut by five boats, resulting in 2-3 day navigation delays. The high levels prompted bridge restrictions in St. Louis, limiting bridge crossings to daylight hours only until levels recede below 25 feet. The St. Louis gauge read 26.97 feet and falling on April 11.
Southbound tows were slashed by 5-10 barges at Cairo, Ill., adding an additional 2-3 days to transits. The Lock 15 auxiliary chamber closed for repairs on April 4. The work is set to run through Aug. 3. Shippers quoted Lock 27 wait times at five hours for the week.
Illinois River: Flooding on the Upper Illinois Waterway has effectively closed the upper river, shippers said. Many shippers reported tows held to little or no movement since March 31, with no immediate relief in sight. Delays were tentatively estimated at a minimum 11 days based on the hold time so far, but some admitted navigation could be frozen for much longer.
Tow lengths were cut to 12 barges on the middle and lower spans of the river, leading to additional delays in the 3-4 day range.
The Beardstown gauge showed moderate-flood stage depths at 19.94 feet on April 11. NWS forecasted levels to recede into the minor-flood stage on April 18-19, but offered no predictions on a return to restriction-free transit.
Ohio River: Fast flows continued to slow transits on the Upper Ohio River last week. Some southbound vessels were capped at eight-barge tows, while rising levels south of Pittsburgh added further delays. Shippers estimated a total 3-5 day delay on transits through the region.
The Corps cut southbound tows by 5-10 barges at Cairo due to flooding in the region. The Cairo gauge registered levels at 40.39 feet on April 11, above the 40-foot moderate-flood stage.
The auxiliary chamber at Markland Lock is closed for repairs through April 26. Markland Lock will shutter its main chamber May 1 through Sept. 29, with delays expected. Ironton-Russell Bridge demolition will close the river to daytime transit at Miles 326-328 on May 17, May 29, and June 15.
Tampa: Mosaic and PotashCorp announced a second-quarter settlement with sulfur suppliers on April 13, agreeing to contracts valued at $70/lt DEL, $5/lt lower than the first quarter’s $75/lt.
The $70/lt figure was the end result of a slow shift in sentiment that began with expectations of a $5-$10/lt increase in late March. While some observers described the contract as “in line” with expectations, many market players expressed shock at the outcome.
Despite recent U.S. Gulf export sales in the $80-$85/mt FOB range heading into Q2, buyers were reportedly more focused on recently declining prices at China and Vancouver, viewing the softer markets as likely long-term indicators of direction.
“The prognosis is that Q2 will weaken, and thus the U.S. must remain at a discount in advance of the industry’s projections that Q2 will weaken,” one source commented. “It’s a moving target out there. The lines keep changing.”
Predictions were slanted heavily toward a price rollover from Q1 levels as recently as the prior report. In addition to the U.S. Gulf market, bulls pointed to Middle East producer levels in the mid-$80s/mt FOB as grounds for an increase or rollover.
Some talked of North American supply, which was described as “snug” in recent weeks, as incongruent with the second-quarter contract. “It’s frustrating that we can’t find any supply out there to meet our demand,” said one source. “And all the while, prices are coming down.”
The Houston and NOLA sulfur markets tracked the Tampa index lower, landing at $55/lt and $59/lt, respectively.
Refinery utilization edged higher last week, according to the U.S. Energy Information Administration (EIA). Refiners operated at a combined 91.0 percent capacity for the week ending April 7, a 0.2 percent increase from the prior week’s 90.8 percent and the fourth consecutive period of increased utilization. Current-week numbers compared favorably both to the year-ago 89.2 percent and the five-year average of 89.4 percent.
Daily crude inputs rose commensurately and averaged 16.697 million barrels/d, a 268,000 barrel/d jump from the prior week’s 16.429 million barrels/d.
Vancouver: Market watchers continued to call last-done Vancouver spot in an $83-$88/mt FOB range.
A Taiwanese prill tender concluding at a reported $83/mt FOB was rumored to be destined into the Chinese market. Shipping estimates varied based on the expected port of delivery, but sources generally put delivered pricing in the “mid-$90s/mt CFR.” Coupled with additional recent sales, sources called the Chinese market $90-$95/mt CFR, down from $97-$101/mt CFR at last report.
Sources described ongoing supply tightness in Alberta as stemming from a mid-March fire and explosion at Syncrude Canada’s Mildred Lake project, located north of Fort McMurray. An August 2015 fire at the facility forced an 80 percent production curtailment lasting approximately two months.
Alberta producer netbacks were called flat at (-)$55-$20/mt FOB.
West Coast: The PBF Energy Inc. refinery at Torrance, Calif., began shutting down a handful of systems on April 6 ahead of a planned three-month turnaround, local news outlets reported. The $100 million effort is geared toward reducing unplanned operational upsets, several of which have occurred since PBF assumed ownership of the facility in 2016. Full operations at the 155,000 barrel/d facility are slated to resume on July 10.
Sources put the West Coast solid sulfur market at $80-$83/mt FOB, unchanged from the week before. Second-quarter molten contracts were quoted at $55-$77/lt FOB, flat from first-quarter levels.
U.S. Gulf: Sources called the Gulf sulfuric acid market at $45-$50/mt CFR, an increase from the last reported $45/mt CFR level. “Nothing below $45/mt CFR is possible, and I suspect $45/mt CFR isn’t either,” said one contact.
The firmer pricing was traced to $10-$15/mt FOB pricing at Northwest European smelters, up from $5-$15/mt FOB at last report. Observers correlated the increase with perceived supply tightening in a number of markets, both international and domestic.
The firmer producer numbers were predicted to push Brazil-delivered tons higher in the next round of business, but for the moment observers called last-done unchanged in the $45-$50/mt CFR range.
The West Coast domestic market was described as steady at $110-$110/t DEL, while Gulf-delivered tons were quoted at $85-$95/t DEL, unchanged from the week before. Midwest sulfuric acid fell in the $80-$90/t DEL range, flat from the prior week.
U.S. Gulf: Prompt potash barges that were ready to move were called $223-$225/st FOB for the week. However, players willing to wait a week or two could get a better deal, with $218/st FOB reported.
Buyers were reportedly bidding $205/st FOB for late April/early May barges.
Eastern Cornbelt: Potash was unchanged at $245-$265/st FOB in the Eastern Cornbelt, with the low reported out of spot river locations and the upper end at inland warehouses. Several sources put the common warehouse pricing level at $250-$255/st FOB at mid-month, with reports of steady potash movement taking place in the region.
Western Cornbelt: Potash was steady at $245-$265/st FOB in the Western Cornbelt, depending on location. Although sources continued to quote the low end of the market out of St. Louis, some contacts said $250/st FOB was a more common pricing level out of that location at mid-month. Brisk potash movement was reported in the region, thanks to more favorable weather conditions.
California: The California potash market was pegged at $390-$400/st FOB and $395-$405/st rail-DEL for Canadian tons, with the low for red and the upper end quoted for 62 percent white granular potash. There were reports earlier in the month of imported tons available for as low as $350/st FOB on a spot basis, but several sources described this as low-quality product that was attracting little business, and therefore not a true reflection of the market.
Sulfate of potash (SOP) had reportedly firmed to $580-$610/st FOB in the state, depending on grade, with reports of tight supplies in early April.
SOP Magnesia was quoted at $308-$310/st FOB in California.
Crystalline potassium nitrate remained at $830/st FOB for bulk tons and $920/st FOB for 50-pound bags.
Pacific Northwest: Potash was steady at $338-$350/st FOB warehouses in the Pacific Northwest, with rail-DEL tons quoted in the $348-$358/st range. Potash postings FOB mine locations at Moab and Wendover, Utah, remained at $290/st for 60 percent granular and $285/st FOB for 60 percent standard.
The sulfate of potash (SOP) market was quoted at $565-$570/st FOB in the Pacific Northwest, with delivered tons pegged at the $580/st level in parts of Washington. Sources said supplies remained tight.
SOP Magnesia was quoted at $305-$325/st FOB in the region, depending on location, with delivered tons reported in the $330-$340/st range.
Western Canada: Potash was quoted at $325-$335/mt FOB Saskatchewan mines, down some $5/mt from last report, depending on grade. Warehouse pricing in Western Canada remained in the $345-$365/mt FOB range, depending on location.
India: Imports of potash for direct application in fiscal 2016/17 (April 1-March 31) reached 3.74 million mt, some 15 percent more than the 3.24 million mt imported in the previous year. Deliveries from both Canada (Canpotex) and Israel (ICL) in particular were sharply up year-on-year at the close of the fiscal year.
Indian potash1 imports by loading port country
‘000 mt
Fiscal 2016/17
Fiscal 2015/16
% change
Canada
758
499
+52
Israel
706
400
+77
Russia
678
912
-26
Lithuania
489
491
-0.4
CIS (excluding Russia & Uzbekistan)
541
427
+27
Jordan
485
378
+28
Germany
55
106
-48
Uzbekistan
24
30
-20
TOTAL
3,736
3,243
+15
1 Potash for direct application and includes contract volumes and tons bought under tender
Data Source: Department of Fertilizers
Indian potash1 imports by offtaker
‘000 mt
Fiscal 2016/17
Fiscal 2015/16
% change
IPL
1,876
1,420
+32
IFFCO
620
567
+9
ZIL
404
365
+11
Chambal
169
128
+32
CIL
120
65
+85
PPL
115
111
+4
MCF
74
97
-24
TCL
72
67
+7
RCF
71
251
-72
Mosaic
71
27
+163
MCFL
59
0
–
Deepak
33
32
+3
MFL
28
20
+40
FACT
24
0
–
Shriram
0
63
–
Kribhco
0
30
–
TOTAL
3,736
3,243
+15
1 Potash for direct application and includes contract volumes and tons bought under tender
Data Source: Department of Fertilizers
The 20 percent reduction in the potash subsidy to Rs12.395/kg ($191.61/mt) for fiscal 2017/18, which was announced on March 31 (GM April 7, p. 17), could well impact demand if Indian fertilizer companies raise retail prices to farmers to offset the subsidy reduction.
Much depends on at what level the new annual contract price is settled at with international suppliers, although IFFCO, India’s largest producer of fertilizer, said last week that it would not raise any prices for DAP and NPK phosphate fertilizers to farmers even after the new revised and reduced subsidy rates. Some Indian industry officials had previously said they doubted that potash imports would exceed 4 million mt in fiscal 2017/18 if the subsidy cut went through. At the time, a subsidy cut of 17 percent was widely anticipated.
Certainly, the subsidy reduction will give weight to Indian potash import buyers’ push for a lower price in their contract negotiations with international suppliers.
No awards are reported to have been made under RCF’s March 31 tender for 75,000 mt of potash or National Fertilizer Ltd.’s (NFL) outstanding tender for 35,000 mt. Sources said RCF received two offers under its tender, both from MMTC, with one backed by BPC and the other by Uralkali, but price offers have still to be opened. MMTC separately tendered for the supply of 75,000 mt.
Offers under RCF’s tender are requested to remain valid for 30 days from the tender closing date, and the delivery window for the shipments of 30,000 mt of pink material to Krishnapatnam and 45,000 mt of white potash to Mundra was extended from the original first-half April request.
China: Suppliers were hopeful of a new round of contract negotiations getting under way with the Consortium of Chinese buyers (Sinochem, CNAMPGC, and CNOOC).
Supplier-side sentiment remains supportive of securing price increases. Canpotex CEO Ken Seitz said this week that the Canadian potash export organization is not interested in “some kind of ratcheting down,” and is looking for Chinese buyers to pay a “material price increase” in their annual supply contract, according to a Reuters report. Seitz cited a much-improved global market from a year ago, with spot price gains and supply cuts by some producers. He did not, however, specify the actual price increase Canpotex was seeking in China.
The Mosaic Co., speaking at its 2017 Analyst Day on April 12, said it also believes there is room for further potash price appreciation. Although the comment wasn’t specifically directed at the Chinese market, Mosaic said it does see “upside potential” in the country’s potash use.
Certainly, some analysts appear less bullish. BMO analyst Joel Jackson in an April 4 client note factored in a $5/mt price increase in China and a similar increase in India, which would take the annual contract price to $224/ mt CFR.
It has been past practice for the first contract to set the benchmark price for other suppliers to follow. For the past two years, Belarusian Potash Co. (BPC) has surprised its competitors by reaching a deal with China first.
Brazil: Mosaic told analysts on April 12 that it sold a record amount of MicroEssentials in Brazil and Paraguay in 2016 – totaling 750,000 mt – and it expects 2017 volumes to grow to over 1 million mt/y now that it has increased its New Wales, Fla., capacity to 3 million mt/y.
The company reported that over a third of its overall sales in Brazil are single products, such as potash, MAP, and SSP. The rest are customized blends of NPK and micronutrients.
Overall, Mosaic said it has the highest volume of premium products on the market today.
Junior miner Potash Ridge Corp., Toronto, has announced the appointment of Petra Decher as CFO and corporate secretary. She has over 15 years of experience, most recently as vice president, finance, of Franco-Nevada Corp., and president and CFO of Geoinformatics Exploration Inc.
Decher replaces Ross Phillips, COO of Potash Ridge, who has served as CFO since 2015. He continues as COO.
U.S. Gulf: Recent NOLA barge prices were put in the $175-$182/st ($5.47-$5.69/unit) FOB range, although others predict the next trades to be down in the $170-$173/st FOB ($5.31-$5.41/unit) FOB range.
The last done East Coast business was called $185/mt CFR, with $180/mt just around the corner.
Eastern Cornbelt: UAN-28 remained at $180-$185/st ($6.43-$6.61/unit) FOB Cincinnati, Ohio, with the upper end of the regional market quoted at $184-$193/st ($6.57-$6.89/unit) out of inland terminals in Ohio and Indiana. The UAN-32 market was pegged at $200-$215/st ($6.25-$6.72/unit) FOB out of river terminals in the Eastern Cornbelt.
Western Cornbelt: UAN-32 was steady at $200-$220/st ($6.25-$6.88/unit) FOB in the Western Cornbelt, depending on location, with the low confirmed out of production points in the Iowa market.
California: UAN-32 had reportedly slipped to $215-$235/st ($6.71-$7.34/unit) FOB port terminals in California, with the lower end of the market confirmed by multiple sources for “new spot orders.”
Pacific Northwest: UAN-32 pricing remained at $237-$242/st ($7.41-$7.56/unit) FOB and $237-$247/st ($7.41-$7.73/unit) rail-DEL in the Pacific Northwest. Sources had little confidence in solutions pricing going forward, however.
“We’re telling our bulk customers not to purchase right now, and to wait until mid- to late-May before committing to new tons,” said one supplier.
Western Canada: UAN-28 was quoted in a broad range at $280-$305/mt ($10.00-$10.89/unit) DEL for spring tons in Western Canada, depending on location.
Central Florida: DAP trucks sold on the Central Florida phosphate market softened to $335/st FOB, a $15/st drop from the last reported $350/st FOB level. Taking a cue from DAP, MAP fell to $355/st FOB from the prior week’s $370/st FOB.
U.S. Gulf: Unexpectedly thin supply supported prompt NOLA DAP pricing last week, with market players confirming loaded sales in the $305-$315/st FOB range. Domestic producer transactions accounted for the top of the range, while imports tracked lower. Barge sales rumored in the $302-$304/st FOB range remained unconfirmed on April 13.
Market watchers pointed to an uptick in demand in the Midwest and Arkansas River regions. Busy warehouses inspired a “mad scramble” for DAP barges from Lower Mississippi River, Kentucky, and Tennessee customers, one source said. Much of the demand was focused on barges positioned upriver, although loaded NOLA barges also drew interest.
Ill-timed supply woes supported pricing as well. With the next wave of import barges described as having a week or more remaining until loading, those staring into quickly emptying bins were compelled to pay the prompt premium, sources said.
Full-April tons saw reduced demand, and market players generally called the April DAP spread closer to $305-$310/st FOB. May DAP slipped to $300-$305/st FOB with little interest. April MAP was called $315-$320/st FOB, while May MAP was quoted at $310-$315/st FOB with “no interest.”
New information obtained late in the prior trading week recast the April 7 DAP range. A domestic DAP barge was confirmed to change hands at $322/st FOB on March 31, stretching prompt DAP to $304-$322/st FOB in the April 7 issue
For the current week, sources quoted nearby DAP at $305-$315/st FOB. With no confirmed transactions, MAP was left unchanged at $316-$325/st FOB. Price ideas for TSP were flat at $280-$290/st FOB.
Eastern Cornbelt: DAP pricing remained at $350-$365/st FOB in the Eastern Cornbelt, with the low confirmed for prompt tons out of spot river locations and the upper end out of inland warehouses. MAP was steady at $378-$395/st FOB in the region.
10-34-0 was quoted at $365-$380/st FOB in the Eastern Cornbelt.
Western Cornbelt: Sources reported steady movement of phosphates in the Western Cornbelt at mid-month. The low end of the DAP market was reported at $243-$245/st FOB St. Louis, with the upper end of the regional market pegged at $355-$360/st FOB out of inland warehouses. The Twin Cities DAP market was quoted at $347-$350/st FOB for the week.
MAP was $370-$390/st FOB in the region, with the lower end of the range reported at St. Louis.
10-34-0 remained at $355-$385/st FOB in the Western Cornbelt, depending on location.
California: MAP was generally quoted at $465-$470/st FOB or DEL in California from Western U.S. producers, although there were reports of railed tons available in the Central Valley for as low as $455/st in early April.
The 16-20-0 market remained at $362-$375/st FOB or rail-DEL in the state, while TSP (0-45-0) was quoted at $415/st FOB French Camp.
Agrium’s April 1 reference prices for phosphoric acid firmed to $880/st of P2O5 for delivered SPA and MGA in California and Arizona. Simplot also hiked its postings on April 1 to $8.80/unit for rail-DEL SPA and MGA in California, with MGA also referenced at the $9.00/unit level FOB Lathrop and El Centro.
10-34-0 was quoted at $420-$425/st FOB in California, up $3/st from last report, while 11-37-0 had reportedly firmed to $455-$460/st FOB in the state.
Pacific Northwest: MAP was quoted at $440-$455/st DEL in the Pacific Northwest, reflecting a slight decrease from last report, with the low end quoted for railed tons. The market at Aurora, Ore., remained at $452/st FOB. “The late start has given everyone way too much time to target and to shop,” said one regional contact, who said retailers are shopping around and suppliers are targeting specific customers with low-ball prices.
Some sources even talked of rail-DEL MAP from the Midwest being quoted at sub-$400/st levels in the Pacific Northwest, but actual new business at that level was not confirmed. “You hear these things from time to time, and there may probably be some of those numbers floating around, but if the tons are coming from the Midwest or the Gulf, it’s going to take three weeks at a minimum for the cars to arrive,” said one regional contact. “So maybe in three or four weeks some of these numbers may become real.”
The TSP (0-45-0) market was unchanged at $400/st FOB Pocatello, Idaho, with pricing out of Aurora quoted at the $457/st level
16-20-0 remained at $352-$360/mt DEL in the Pacific Northwest, with the Aurora market quoted at the $351/st FOB level.
Sources reported stronger pricing for phosphoric acid and ammonium polyphosphate in the Pacific Northwest. Simplot’s reference price for SPA and MGA firmed $0.10/unit on April 1, moving to $8.30/unit FOB Pocatello, Idaho, and $8.80/unit rail-DEL in the Pacific Northwest. Agrium’s reference price for phos acid also firmed on April 1 to $880/st of P2O5 for delivered SPA and MGA in Washington, Idaho, Montana, and Oregon.
As a result of the acid increase, the 10-34-0 market firmed to $380-$402/st FOB in the Pacific Northwest, depending on location. 11-37-0 was reported at $413-$428/st FOB at mid-month, up $3/st from last report.
Western Canada: MAP had reportedly inched up $10/mt, to $635-$645/mt DEL in the region, with one Saskatchewan sources quoting the warehouse market at $625/mt FOB.
The 10-34-0 market remained at $575-$595/mt DEL in Western Canada, depending on location.
U.S. Exports: No new business was reported in the Gulf export market. Last-done consisted of a small DAP lot sold into Latin America and priced at $370/mt FOB. The load was set to ship in April.
Gulf exports held flat at $370/mt FOB based on the absence of fresh transactions.
Offshore phosphate shipments fell in February, according to The Fertilizer Institute (TFI) data. Combined DAP and MAP exports slipped to 116,670 st for the month, a 25.7 percent decline from 156,929 st sold in February 2016.
Brazil was the market’s No. 1 destination at 40,893 st, down 23.0 percent from the year-ago 53,109 st. Mexico’s 24,432 st fell 18.9 percent from last year’s 30,139 st, and Canada’s 13,413 st represented a 17.3 percent increase from last year’s 11,439 st, narrowly topping the 13,329 st sold to Colombia.
While the reduced numbers to Brazil contributed to the down month, softer demand from Australia and Japan played a larger role. Australia purchased zero tons after buying 26,589 st in February 2016, and Japan’s 7,864 st import total fell 65.3 percent below last year’s 22,667 st.
The market continued its slow start to calendar-year 2017, falling 16.9 percent below the 270,123 st start to 2016. Brazil led the pack with 70,100 st, a 16.1 percent fall from last year’s 83,569 st, and Australia’s 44,263 st represented an 18.0 percent drop from last year’s 53,980 st. Mexico’s 32,409 st was 7.9 percent lower than the 35,197 st received through February 2016.
The market remained ahead in the fertilizer year-to-date, however, running 2.0 percent ahead of last year at 1,215,866 st. Brazil was the largest destination for U.S. product with 367,894 st, topping Canada’s 238,359 st (0.6 percent y/y increase) and the 151,107 st shipped to India (13.5 percent y/y decline).
The second-quarter price of phosphoric acid delivered to India was $590/mt CFR, up from $550/mt CFR in Q1.
India: Buyers keep saying they do not want to pay anything more than $360/mt CFR. These claims fly in the face of offers made in two tenders this month.
The NFL tender that closed last week was scrapped after the prices – never publicly released – were too high. The RCF tender for DAP lite and GMAP showed numbers that were not to the Indian’s liking. The offers of DAP lite (14-86-0) were only differentiated by a few cents at $366/mt CFR. One trader said the equivalent price to DAP (18-46-0) would be about $380/mt CFR. Sources said RCF may also scrap its tender.
The tally for the RCF tender follows:
GMAP tender
Offering Company
US$/mt CFR
Sources
Amber
349.75
China
Aries
351.49
China-Vietnam
Fertrade
354.84
China
Wilson (China) $359.85/mt CFR
359.85
China
Yichang Dongsheng
375.00
China
DAP Lite (14-86-0) Tender
Offering Company
US$/mt CFR
Sources
Ameropa
366.33
China-Vietnam
Aries
366.49
China-Vietnam
Wilson
366.85
China
Buyers are reportedly beginning to make the rounds of producers, looking for a deal on large tonnage. Sources report, however, that the Chinese producers are not budging. The DAP-equivalent price into China, based on the RCF numbers, is in the low-$360s/mt FOB. Even the lowest prices last heard out of China would have deliveries into India in the mid-$370s/mt CFR.
China: The group of DAP producers who said they will stick together to keep prices up seems to be having its way.
The netback on the offers made into the RCF tender show a netback of $332/mt FOB for the GMAP and $348/mt FOB for the DAP lite. One trader said extrapolating the netback for DAP, the netback comes in the low-$360s/mt FOB.
Sources point to a couple of smaller DAP deals at $352/mt FOB from a river port and $355/mt FOB from a southern facility as indications that the Chinese are in no hurry to drop their prices.
Sources reported that even though potential Indian buyers are now indicating that they want to talk about large quantities for June and July deliveries, the Chinese producers are unmoved by their pleas for lower prices.
North Africa: Sources put recent phosphate rock sales out of North Africa at $85-$105/mt FOB, a decline from $85-$110/mt FOB at last report.
Disclaimer of Warranty
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.
