Sulfuric Acid
U.S. Gulf: Sulfuric acid market players called the Gulf import market in a range of $45-$50/mt CFR, down from $45-$55/mt CFR at last report.
All Posts from January 15, 2016
Tampa sulfur prices settling down $15/lt – Alert
Both major Tampa sulfur buyers are settling first-quarter 2016 business at $95/lt, down from the fourth-quarter level of $110/lt. Initially word was that The Mosaic Co. had settled at that level (GM Jan. 15, 2016). However, it now appears that Potash Corp. of Saskatchewan Inc. has also begun settling contracts at the same number.
Potash Corp. of Saskatchewan Inc. – Management Brief
Potash Corp. of Saskatchewan Inc. announced Jan. 15 that David Delaney, executive vice president and COO, will retire effective Jan. 31, 2016. He was named to his current position in 2010. “David’s contribution to the company’s success spanned almost two decades,” said Jochen Tilk, president and CEO. “Having spent the majority of his career at PotashCorp leading our Sales team – and more recently our Operations group – David built many strong relationships with his colleagues and others within the industry, and will be missed.”
With Delaney’s departure, the presidents of the company’s business units – Potash, Nitrogen, and Phosphate – will now report directly to Tilk.
Iowa governor proposes tax extension to address water quality issues in the state
Iowa Gov. Terry Branstad on Jan. 5 announced a proposal that would extend a school infrastructure sales tax in the state for 20 years, but the revenue generated by the tax would be shared between schools and water quality programs aimed at cleaning up nitrate pollution and nutrient runoff.
The proposal, which requires legislative approval, comes nearly one year after the Des Moines Water Works (DMWW) utility announced its intention to sue three neighboring counties for violating the Clean Water Act by polluting the Raccoon and Des Moines Rivers with high levels of nitrates from farm runoff (GM Jan. 19, 2015).
Branstad, who was joined by USDA Secretary Tom Vilsack in making the announcement, said the one-cent sales tax would be extended from 2020 to 2049, with the first $10 million in new revenue each year going to schools and the remainder to water quality programs. Branstad said the proposal “is probably the biggest and boldest” he’s ever made during his 20-plus years as Iowa’s governor, and would generate $7.5 million for water quality programs in the first year and $4.7 billion over the next 32 years.
The proposal was criticized by several Iowa democrats who objected to the diversion of funds earmarked for schools, and by William Stowe, CEO and general manager of DMWW. In a Jan. 9 op-ed in the Des Moines Register, Stowe said the proposal “extends the myth that cleaning up Iowa’s polluted waters is the public’s obligation, not the polluter’s obligation. More ribbon cuttings for uncoordinated publicly funded projects without specific agricultural accountability for abating agricultural pollution of Iowa’s waters will not protect the public health and environment of Iowa.”
DMWW reported in early January that it operated its nitrate removal equipment for a record 177 days in 2015 to provide safe drinking water for Des Moines residents, at a cost of $1.5 million. The previous record was 106 days in 1999, DMWW said.
DMWW’s lawsuit against the boards of supervisors for Sac, Buena Vista, and Calhoun counties charges that the elevated nitrate levels are caused by the “extensive system of drainage infrastructure,” or field tiles, used on fertilized farmland in these districts, which “quickly transport nitrate by groundwater to the nearest waterway, bypassing natural absorption and de-nitrification processes that would otherwise protect the watersheds.”
The suit has been criticized by opponents as an attack on agriculture, and represents a pivotal test for the Clean Water Act’s provision that exempts agriculture as a non-point source polluter. Both state and national organizations have weighed in on the case (GM March 16, 2015), including the Agribusiness Association of Iowa, numerous state crop and livestock associations, and The Fertilizer Institute (TFI).
Federal Judge Mark Bennet on Jan. 12 filed an order sending key questions in the case to the Iowa Supreme Court, citing the “novelty” of the DMWW’s legal arguments. Bennet wrote that he feels “the interests of the parties and the public are best served” with rulings from the Iowa Supreme Court on whether the 10 drainage districts cited in the lawsuit are immune from damages and cannot be forced to pay DMWW’s costs to remove excess nitrates.
K+S reported to be mulling Morton Salt listing
Kassel, Germany — K+S Group is internally mulling the possibility of a partial initial public offering (IPO) for its U.S. Salt division, Morton Salt, according to a report in the Frankfurter Allgemeine Zeitung. Reasons for the move were reported to be creation of a “poison pill” to make an acquisition of K+S more difficult, as well as a means to make the value of the company’s Salt segment more visible.
Marubeni moves into Myanmar market
Tokyo — Marubeni Corp. said Jan. 15 that it will commence a manufacturing fertilizer and repackaging business with a local partner in the Myanmar Thilawa SEZ this month. Marubeni plans to sell 30,000 mt, primarily for the Yangon Delta area, in the first year of operations in 2017, and expects to expand this volume to 150,000 mt across Myanmar in 2020, while also increasing the number of products in accordance with domestic market growth.
ICL completes Chinese equity investment
Tel Aviv — Israel Chemicals Ltd. (ICL) has completed a 15 percent equity investment in Yunan Yuntianhua Co Ltd. (YTH) as part of its investment in China. YTH is the parent company of its joint venture partner Yunan Phosphate Chemicals Group Corp. Ltd., which is China’s leading phosphate producer. As part of the agreement, YTH issued ICL 199,249,088 new shares through a private placement for RMB8.24 per share. The deal was concluded following the approval of China’s Ministry of Commerce and its Securities Regulatory Commission. Under the terms of the agreement, ICL will have the right to appoint two out of the 11 board members, one of whom will be ICL President and CEO Stefan Borgas. The agreement also grants ICL representation on the company’s phosphate business committee, which is to be established to provide advice and make recommendations related to YTH’s phosphate business. ICL sees the jv as a means to penetrate the Asian specialty phosphate markets. Over the next five years ICL and YTH plan to build specialty plants and triple the jv’s white phosphate acid capacity. The partners have also established a phosphate research and development platform in Kunming that is focused on developing the next generation of phosphate-based products and process technologies for the joint venture. ICL will invest $180 million in the jv out of a total investment of $340 million. The phosphate mine currently produces 2.5 million mt/y, and the plan calls for upstream and downstream operations. The jv includes an increase in phosphoric acid production from 600,000 mt/y.
Ammonia
U.S. Gulf/Tampa: Sources last week said it was too early for February business at Tampa. International price ideas continue to weaken, adding to speculation that another drop at Tampa might be in the works.
News of new spot business at NOLA remained elusive, suggesting that a Tampa equivalent for NOLA might be a more appropriate number for this market, absent any fresh trades.
February NYMEX natural gas closed Jan. 14 at $2.139/mmBtu, down from Jan. 7’s $2.382/mmBtu.
Eastern Cornbelt: Sources continued to describe the ammonia market as “slow and quiet” in the Eastern Cornbelt last week, with fill tons quoted at $440-$460/st FOB in Illinois and Indiana. Prepay was trading at a $10/st premium to fill.
Western Cornbelt: Sources continued to report minimal fertilizer sales and weak markets. “Lots of people are holding out for the bottom,” said one contact. “Everyone is in a wait-and-see attitude.”
The ammonia market remained at $405-$425/st FOB terminals in western Iowa, with the lower numbers for fill tons and the upper end for spring prepay. Ammonia pricing out of Nebraska terminals was quoted at $415/st FOB for fill and $425/st FOB for prepay, while the market FOB terminals in central and eastern Iowa remained at $445/st FOB for fill and $465/st FOB for spring prepay.
Missouri sources tagged the ammonia market at $400-$435/st DEL from southern production points, with the Palmyra market quoted at $440-$450/st FOB for fill and $455-$465/st FOB for prepay.
Southern Plains: Anhydrous ammonia fill tons in the Southern Plains were reportedly being offered as low as $325-$345/st FOB out of regional production points on a spot basis, while dealer pricing at Kansas pipeline terminals was pegged at the $400/st FOB level last week.
Fertilizer activity remained sidelined in the region last week, with spot markets continuing to soften. “Reports from traders are that activity is very slow,” said one contact. “Year-end buying interest from the farm was conservative, with some activity but not near what we normally see.”
South Central: The anhydrous ammonia market was quoted at $405-$435/st FOB for fill and/or prepay tons in the South Central region, with the low at Memphis, Tenn., and the upper end FOB Henderson, Ky.
The year-end buying pace in the region was also described as very slow. “We could just as well have been closed,” said one source. “With all the negative environment out there, no one is ready to buy.” With the start of spring application just 30-45 days away, however, some sources expressed optimism that the regional markets “should find some liquidity soon.”
California: Calamco announced a drop in ammonia postings last week. Anhydrous ammonia is now referenced at $570/st DEL in California, down $25/st from the previous list price, while aqua ammonia has dropped to $157/st FOB, down from $163/st FOB. The company’s AN-20 price remains unchanged at $310/st DEL in California.
Black Sea: Prices have begun to stabilize in the low $270s/mt FOB. European demand is solid but not exciting, said one source. North African demand is also surpassing what local producers can supply, so companies are looking at Yuzhnyy to fill their tanks.
Baltic: Producers are claiming the same price as Yuzhnyy, but sources said the most likely prices are a few dollars less. One trader said buyers would seriously push back against any effort to raise prices at a time when all fertilizer-related markets are falling. The estimated price from Baltic ports to Europe is about $5/mt off the Yuzhnyy price.
Urea
U.S. Gulf: Granular prompt barges dipped below the $200/st mark last week for the first time since December 2008, a time when fertilizer and other major commodities were in meltdown mode after the financial crisis.
New trades last week were put in the $197-$204/st FOB range, with sources calling prices around $198-$200/st FOB at press time. February trades were called $204-$208/st FOB and March at $208-$210/st FOB.
Prill prices spanned a broad range based on quality. Sources called recent trades in the $220-$239/st FOB range, with quotes now as high as $245-$250/st FOB for the next round of business. However, others said forward sales for late February/March were reported below the $220/st FOB mark.
Eastern Cornbelt: The granular urea market remained at $260-$275/st FOB in the Eastern Cornbelt, with the low reported for prompt tons out of spot river locations and the upper end for spring prepay.
Western Cornbelt: The granular urea market was generally quoted in the $270-$275/st FOB range in the Western Cornbelt last week, with the upper end showing a $10/st decline from last report.
Southern Plains: The granular urea market was reported in a broad range at $250-$265/st FOB Catoosa, Okla., with inventories described as tight and some suppliers “running out” due to river closures and delays of up to 15 days reported for new barges. Sources were more inclined to report prices at the upper end of the range as the week progressed.
South Central: The granular urea market was quoted in a broad range at $250-$275/st FOB terminals in the South Central region, down another $5-$15/st from December levels, with the low at Memphis, Tenn., and the upper end in the Little Rock, Ark., market. Sources pegged the Convent, La., urea market at $255-$260/st FOB.
Southeast: Granular urea pricing had reportedly slipped to $280-$290/st FOB port terminals in the Southeast, down $10-$20/st from last report, with the low quoted at Wilmington, N.C. One source said rail-DEL tons could also be had at sub-$290/st levels on a spot basis last week, down from $300/st rail-DEL in December.
Sources reported minimal fieldwork and limited interest in fertilizer in the region, with spot fertilizer prices continuing to fall. One dealer described his year-end fertilizer business as “quite slow” overall, noting that winter wheat acreage is down and spring prepay bookings were limited to “traditional buyers” only.
China: Producers claim the urea price is getting closer to the break-even point.
While some traders argued that prills and granular were at parity, others said granular is still earning a $10/mt premium. The latest pricing idea out of China put prills at $215/mt FOB and granular either at parity or at $225/mt FOB.
The general view in the international market is that Chinese prices will still fall further. One trader said this may be the third time in his 20 years in the industry that he will see an extended period of sub-$200/mt FOB Chinese product.
Sources said $200/mt FOB has been regarded as the point when producers have to decide if they want to produce at a loss or shut down. Industry watchers are now paying attention to the variable costs to the producers instead of the full cost of turning out urea. Using this method, one trader said the real break-even price is well under $200/mt FOB.
Producers have reportedly told buyers that they will keep turning out product even if the price hits $170/mt FOB. Sources said the statements fit with the growing consensus that the plants will continue to run and take whatever cash deals possible.
Lower crop prices in China are leading sources to anticipate a po
Nitrogen Solutions
U.S. Gulf: Barge product was being quoted last week in the $160-$163/st ($5.00-$5.09/unit)FOB range, with no takers. Sources were wondering if another drop to $155/st FOB might do the trick.
East Coast vessel prices continued to be called $180-$190/mt CFR.
Eastern Cornbelt: UAN-28 was unchanged at $190-$195/st ($6.79-$6.96/unit) FOB Cincinnati, Ohio, and $201-$210/st ($7.18-$7.50/unit) FOB inland terminals in Ohio and Indiana, with the lower numbers for prompt tons and the upper end for prepay at each location.
UAN-32 was tagged at $240-$245/st ($7.50-$7.66/unit) FOB for prompt or prepay tons at Illinois terminals.
Western Cornbelt: UAN-32 was pegged at $235-$245/st ($7.34-$7.66/unit) FOB for prompt or prepay tons out of terminals in the Western Cornbelt, with the low quoted in Nebraska. An Iowa source reported the common dealer market at the $240/st ($7.50/unit) FOB level last week.
Southern Plains: UAN-32 pricing had reportedly slipped to $210-$220/st ($6.56-$6.88/unit) FOB in the Southern Plains, down roughly $10-$20/st from last report, depending on location. “Anyone holding a fill position is hoping that application will start soon and bring some price strength back,” said one regional contact.
South Central: UAN-32 pricing had reportedly slipped $205-$220/st ($6.41-$6.88/unit) FOB in the South Central region, down $5/st from last report, with the low reported in the Memphis market.
Southeast: The UAN-32 market in the Southeast was pegged at $185-$200/st ($5.78-$6.25/unit) FOB, with the low reported out of port terminals and the upper end at inland Georgia locations. The low end of the range reflected a $5-$10/st drop from just one or two week earlier, sources said. “Looks like we’ll just wait and see where it shakes out,” said one contact.
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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.
For additional details visit our Terms of Use.