Boise-The J.R. Simplot Co. has requested that the Idaho Department of Environmental Quality allow it to modify the air quality permit for its No. 300 sulfuric acid plant west of Pocatello by replacing its 1,750 tons per day production limit with an annual production limit of 640,000 tons per year. Simplot officials say that modification would provide for improved operational flexibility at its Don Plant, an integrated fertilizer manufacturing complex that produces nitrogen, phosphate, and sulfate commercial products. The sulfuric acid plant is equipped with a scrubber system that recovers unconverted sulfur dioxide. Simplot was given a permit to construct in September 1996 and a subsequent permit in June 2001 for modifications to the plant. The 1996 permit established an annual production limit of 640,000 tons per year. The 2001 permit replaced the annual limit with the short-term limit of 1,750 tons per day. In June 2006, Simplot submitted an application requesting deletion of the short-term limit. A draft permit was issued for the proposed permit revision in March 2008. Simplot subsequently withdrew its application, and a final permit to construct was never issued. “Replacement of the 1,750 ton per day production limit with a 12-month rolling total limit could result in an incremental increase in actual production and an insignificant increase in emissions from the No. 300 Plant and other affected emissions units,” Simplot’s request states. A public comment period on the modified permit will be provided if a written request is submitted to IDEQ by 5 p.m. Tuesday, June 23, MDT.
U.S. Gulf/Tampa: April ammonia imports were off 30 percent, according to the U.S. Department of Commerce, to 549,428 st compared to the year-ago 780,899 st. July-April imports were off 23 percent to 5.5 million st, down from 7.13 million st.
Eastern Cornbelt: Sources reported some movement of ammonia, UAN, urea, and coated urea products for corn sidedressing, at least in those areas where weather conditions were cooperative.
The ammonia market was pegged at $320-$340/st FOB regional terminals for prompt tons, with the low confirmed in Illinois. One source said $310/st FOB is being offered for fall prepay in the Illinois market. One regional supplier was referencing forward contract ammonia for the July-August shipping period at $330/st FOB Illinois terminals and $335-$355/st FOB in Indiana.
Western Cornbelt: Sources put the spot market for prompt ammonia tons in the low-$300s/st FOB out of regional terminals, while fall prepay was generally pegged at the $310/st FOB level. Forward contract ammonia for July-August was referenced at $300/st FOB in Nebraska, $310-$315/st FOB in Iowa, and $330/st FOB Palmyra, Mo.
New ammonia postings were announced in the Northern Plains region. Effective June 15, Agrium’s anhydrous ammonia postings will move to $405/st FOB and $425/st DEL in the Leal, Velva, Grand Forks, and Beulah sales area in North Dakota.
Southern Plains: Anhydrous ammonia pricing out of regional production points was pegged at $260-$280/st FOB, with the low quoted for summer fill tons. Out of Kansas pipeline terminals, the dealer market for ammonia was tagged at $295-$300/st FOB for prompt shipments.
South Central: Cash market pricing for anhydrous ammonia was tagged at $330-$350/st FOB regional terminals to the dealer, but sources said the season is over. Reference levels remained as high as $375/st FOB the Memphis market. There were some reports of retailers offering fall ammonia contracts to growers at the $400/st level.
Pacific Northwest: Effective July 1, Agrium’s anhydrous ammonia postings will move to $405/st rail-DEL in Oregon, Washington, and northern Idaho; $425/st truck-DEL in northern Idaho and in Oregon and Washington east of the Cascades; $430/st rail-DEL in southern Idaho and Utah; and $455/st truck-DEL in Montana and northern Wyoming. Also effective July 1, Agrium’s aqua ammonia postings will move to $104/st FOB Central Ferry and Finley, Wash.
Black Sea: Sources report that high natural gas prices and low ammonia prices are keeping many facilities shuttered.
Yara did a deal for $185/mt FOB for Russian tons. This price represents a further decline in the market. For a while – mostly due to lack of business – the price had hovered in the low-$200s/mt FOB, with some observers placing the low end of the market in the mid-$190s/mt FOB.
With U.S. and European demand being covered by other sources and the Middle East easily handling Indian product needs, sources say there is little evidence of anything to spark a price rally.
For now, the market is pegged at $185-$195/mt FOB.
Middle East: Sources report demand from India is expected to step up following an agreement between Indian phosphate producers and Tunisia on phos acid.
Indian phosphate producers are expected to operate at full capacity once the acid reaches the plants. That will mean more and steady purchases of ammonia from the Middle East.
Helping keep the market balanced are rolling shutdowns of facilities. Just as the Qafco plant came back online, an Iranian plant shut down.
Sources report Qafco did one deal with IFFCO/India at $200/mt FOB. Whether it was a one-off break in price or a trend setter is a matter of debate for observers.
For now, sources say prices are settling in the low $200s/mt FOB.
Asia/Pacific: MITCO is shut down because of feedstock supply problems, say Asian sources. The closure is expected to last two weeks.
The joint-venture operations in Indonesia – KPA and KPI – continue to run at 100 percent, with full order books. The state-run plants seem to be dedicating their facilities to urea production. The usual excess tons of ammonia are nowhere to be found.
Reportedly, low freight rates are helping move ammonia to Australia from as far as Trinidad. Sources report that one vessel that shipped a cargo to Australia came with a freight rate of about $40/mt. One observer said the ship was getting ready to be decommissioned anyway, so the owner was happy to have a cargo for the vessel before it hit the scrap yard.
Namhae in South Korea is reportedly slowing down its ammonia purchases.
The cutback appears to be a direct result of the growing tensions between South and North Korea. Namhae had regularly supplied the North with 300,000 mt of urea or NPK each semester under a program sponsored by the Seoul government.
The South Korean government cut off the fertilizer shipments because of the nuclear weapons tests and missile firings by Pyongyang.
Industrial buyers in South Korea, as in the rest of Asia, continue to take tons at a steady pace. Sources say demand looks to remain strong through July.
Some observers were concerned that the industrial buyers would ease off by mid-July. So far, the demand seems to remain strong.
UREA
U.S. Gulf: Price ideas spanned a broad range last week, with the general consensus being that prices were starting to edge back up. Some players reported prices as low as $235-$237/st FOB, but others said they had moved up to $240-$242/st FOB toward the end of the week, with offers at $242-$245/st FOB. Sources say the first wave of rice buying has occurred and much more buying is expected into early August, with increased acreage expected this year.
April urea imports were about level with year-ago numbers, with the current April being 422,049 st versus the year-ago 420,470 st. July-April urea imports are off 15 percent to 5.1 million st, down from 6 million st. July-April numbers are suspect due to what TFI regards as an erroneous report of 176,278 st coming into the U.S. from China in March.
Eastern Cornbelt: The urea market was tagged at $275-$285/st FOB regional terminals for prompt tons, with the low FOB Cincinnati and other river locations in the region. Ohio sources quoted the E. Liverpool market at the $285/st FOB level last week.
Western Cornbelt: Granular urea was pegged at $265-$275/st FOB regional terminals, with the low reported out of river warehouses in southern Missouri. Effective June 15, Agrium’s granular urea postings will move to $310/st FOB Marion, S.D., and out of North Dakota terminals at Alton, Carrington, Colfax, Scranton, and Grand Forks. Agrium’s rail-delivered urea postings will move on that date to $315/st in Minnesota, Wisconsin, and the Dakotas.
Southern Plains: The granular urea market was quoted at $275-$280/st FOB, with the low out of the Tulsa market and the upper end reflecting the list price FOB Enid, Okla.
South Central: Urea was moving on rice in the first of two applications, though movement was not heavy. While applications were just starting in parts of Arkansas and Tennessee, sources in Louisiana and Mississippi said the first application was nearly finished in many areas last week, and growers will come back with the second later in the month. One issue is that rice development is all over the board in the region due to the rain delays experienced during spring planting. An Arkansas source said growers were still planting rice in a few areas last week. As a result, urea demand will be spread out this summer and rice acreage is unquestionably up in the region, prompting some to speculate that the market may have upside potential in the coming weeks.
As of last week, however, sources tagged the dealer market for urea at $260-$270/st FOB regional warehouses, with the upper end in Tennessee and Arkansas and the low in Arkansas and Mississippi
Southeast: Granular urea pricing was down from last report at $280-$290/st FOB port terminals to the dealer. Some East Coast suppliers were reportedly sold out of urea in early June.
Pacific Northwest: Effective June 15, Agrium’s granular urea postings will move to $310-$325/st DEL in Montana and Wyoming, depending on location; $330/st FOB Acequia and Pella, Idaho, and Washington warehouses at Glade, Kennewick, Warden, and Wilson; $335/st DEL in Washington, northern Nevada, Idaho, and Oregon; $345/st DEL in northern and central Utah; and $350/st DEL in southern Utah.
India: MMTC came into the market late last week. The buying house called a tender for an unspecified quantity to close June 16. Shipment is for July 15 – Aug. 15. The announcement came quickly on the heels of rumors that MMTC closed a deal with Fertil at $261.50/mt FOB. The deal is said to be a pre-tender agreement that needs to be validated by the tender itself.
MMTC and IPL used pre-tender deals in the past to set a pattern for pricing closer to their liking before each tender. IPL did not enter into pre-tender talks before its most recent tender, sources say, out of fear such talks could rapidly move an otherwise dormant market up quickly.
Sources say Middle East producers have an edge in the tender.
Yuzhnyy tons will have to pass by the pirate-infested waters around the Gulf of Aden. More and more vessel owners are not allowing their ships to be booked for trips that pass through the area.
With prices in China holding steady and no relief on the export duty expected, Chinese urea will most likely also be out of the running.
That leaves the Middle East suppliers who negotiate directly with MMTC and who have greater flexibility in shipping.
Pakistan: Last week was busy for urea buyers. The government allowed private importers the ability to import up to 200,000 mt of urea, and TCP, the government buying house, issued a tender to buy 50,000 mt.
The move to allow the private sector to import urea, said one Asian source, appears to be part of an effort to increase competition among buyers and – hopefully – reduce the cost of imported urea.
The government’s bean counters have been complaining about prices inching upwards. Higher prices in imported urea mean more expenditures in subsidies to the farmers for the product.
Just as last year when the Indian budget was thrown into chaos as the subsidies required were to ease the rapid rise in urea prices for farmers, the Pakistani government is also concerned about the growing cost to the treasury of higher-priced urea.
Observers have also noted that TCP is under growing observation by opposition political leaders. The former chief executive of TCP was reportedly forced from office, and local media report on-going investigations of possibly corrupt practices within some non-fertilizer portions of the company.
The TCP practice of negotiating a better price from the lowest offering companies in a tender and then trying to get other companies to match that price came under fire from legislators. One legislator complained that too many “blue eyed” companies were securing awards from TCP.
The TCP tender will close July 11.
Middle East: Producers are looking at the upcoming MMTC tender as a way to ensure steady business through August.
The orders from the IPL/India and the earlier TCP/Pakistan tenders put a lot of sales on the regional order books, but those sales were done when a number of plants were on turnaround. And, in the case of the IPL tender, just as a major granular operation was opening in Oman.
The Arab Gulf producers have a benefit for sales to areas east of the Suez over any supplier that has to pass through the Suez Canal.
Material passing through the Canal must later pass through the dangerous, pirate-infested waters around the Horn of Africa. Ship owners are reportedly becoming more leery about allowing their vessels to go through that area. And those that do are charging higher freight rates.
At the same time, it does not appear as if China will reduce to zero the export duty on its urea. At the present rate of $270/mt FOB, Chinese product is too expensive to compete with the Middle East for business into India or Pakistan.
Even with all the advantages, sources say the producers have not been able to move up the price.
The big stumbling block to higher prices is ever-increasing production. Besides the new Oman plant, facilities around the area came off turnarounds late last month. Most plants are operating at full capacity.
And demand is not keeping up with production.
Producers argue $270/mt FOB should be the new price going into July and August. But that idea was thwarted by a reported pre-tender deal between Fertil and MMTC at $261.50/mt FOB.
This price represents the best price producers could get in the IPL tender. It now serves as the basis for talks with MMTC for its tender.
Contract tons are being sold at a much lower rate, but even those cargoes are beginning to run thin.
An occasional spot deal at higher levels will also be inked.
Sources say neither the contract nor the spot tons represent the current market. For the time being – at least until the MMTC tender offers are opened – the market for granular and prills sits at $260-$263/mt FOB.
Black Sea: Prices remain stagnant. Now that Fedinvestcom is done securing tons to cover its commitment to IPL/India, sources report nothing more is happening in the area.
Producers are said to be ready to offer more tons as the MMTC tender approaches.
Asian sources say all the producers in the Black Sea face the obstacle of having to send their cargoes through the main pirating area along the Gulf of Aden.
One Asian trader noted that freight rates are much higher because of the threat to the vessels. Any increase in freight rates means the producers will have to settle for a lower netback.
Until new business is concluded, sources say all the market has to work with is the previous price range of $240-$245/mt FOB.
China: Sources are now more convinced than ever that the Chinese government will not alter the export duty regime announced late last year. Earlier announcements from Asian sources appear to have been based on closely-held discussions in Beijing. As Green Markets went to press, no announcements were posted on official Chinese government web sites.
As of July 1, the duty on exported urea will drop from 110 percent to 10 percent through August. Sources had hoped the lower rate would be extended through September.
The current level is pegged in the low $270s/mt FOB. At this level, Chinese urea will not be competitive in the MMTC tender if the Middle East price of $216.50/mt FOB holds.
Sources say that producers seem to be more willing to sit on their inventories with the expectation that domestic prices will rise rather than lower their prices to take advantage of opportunities on the international market.
The producers are expected to slow down production while their warehouses fill during the current off season.
Bangladesh: BCIC closed its tender for 100,000 mt of granular and 75,000 mt of prills June 8. The prilled offers came in at $288.89/mt CFR or $258.89/FOB for 62,500 mt of Chinese urea from Wilson Trading, and 50,000 mt of Chinese material from Liven at $288.17/mt CFR or $262.17/mt FOB. BCIC is mulling over the offers.
Sources say both offering companies will be hard-pressed to secure Chinese tons at those levels under current market conditions.
BCIC announced another tender late last week for 125,000 mt each of prills and granular urea to close June 30.
NITROGEN SOLUTIONS
U.S. Gulf: Recent barge business was put in the $120-$130/st FOB range ($3.75-$4.06/unit).
April UAN imports were off 59 percent, to 90,830 st from the year-ago 223,100 st. July-April imports were off 52 percent, to 1.44 million st from 2.98 million st.
Eastern Cornbelt: UAN remained at $6.25-$6.50/unit FOB terminals for prompt ship, with the low confirmed at Cincinnati and at other river locations in the region. Forward pricing, however, was quoted at markedly lower numbers, with pricing for the July-August fill period reported in the $5.25-$5.75/unit FOB range in the region, depending on location. One source said he had picked up a UAN-28 offer at the $150/st ($5.36/unit) level FOB Cincinnati for delayed shipment.
Western Cornbelt: In areas that missed last week’s rains, sources said UAN was moving for corn sidedressing. Sources said there were two markets for nitrogen solutions. The first was quoted for prompt delivery for sidedress demand, with dealer pricing in the $6.00-$6.50/unit FOB range out of regional terminals. The second market was quoted in the $165-$185/st ($5.16-$5.78/unit) FOB range for summer fill tons with later shipping dates.
Southern Plains: The UAN-32 market was quoted at $175-$185/st ($5.46-$5.78/unit) FOB regional terminals for cash market tons. There were reports of fill tons being offered out of some production points for as low as $135-$140/st ($4.21-$4.38/unit) FOB last week, but that was not confirmed.
South Central: UAN-32 pricing covered a broad range in the region. Louisiana sources confirmed the low end of the range at $155/st ($4.84/unit) FOB for confirmed prompt business to the dealer, while sources in the northern half of the region continued to quote the dealer market in the $190-$200/st ($5.94-$6.25/unit) FOB range. The UAN market FOB Donaldsonville, La., was said to be at the $135/st level.
Southeast: Sources continued to report pressure on spot UAN prices in the region. The UAN-30 market was tagged at $166/st ($5.53/unit) FOB Norfolk, Va., and Wilmington, N.C., while UAN-32 out of spot terminals in Georgia was quoted as low as $170/st ($5.31/unit) FOB last week. Rail-delivered UAN-32 was quoted in the $165-$168/st ($5.16-$5.25/unit) range in Georgia.
Pacific Northwest: Effective July 1, Agrium’s UAN-32 postings will move to $240/st DEL in Washington, northern Idaho, and Oregon excluding Malheur County; $245/st rail-DEL and $250/st truck-DEL in southern Idaho, Nevada, Utah, and Oregon’s Malheur County; and $260/st DEL in Montana and northern Wyoming. Agrium’s UAN-28 postings will move on that date to $228/st DEL in Montana and northern Wyoming.
AMMONIUM NITRATE
U.S. Gulf: April imports were off 19 percent, to 37,378 st from the year-ago 46,064 st. July-April imports were off 40 percent, to 559,395 st from the year-ago 924,771 st.
Western Cornbelt: Ammonium nitrate remained at $265-$270/st FOB in the region.
Southern Plains: Ammonium nitrate remained at $250-$260/st FOB Catoosa, Okla., with reports of limited tons available at the port.
South Central: The ammonium nitrate market was steady at $255-$260/st FOB regional terminals to the dealer. CAN-27 pricing remained at $205/st FOB in Arkansas.
Southeast: The Tampa market for ammonium nitrate was steady at $305-$315/st FOB. Sources said spot tons out of the Wilmington market were at the $290/st FOB level.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was steady at $225-$235/st FOB. Rail-delivered ammonium sulfate was also reported at the $225/st level in the region.
Western Cornbelt: Granular ammonium sulfate was unchanged at $225-$245/st FOB.
Southern Plains: Granular ammonium sulfate pricing remained
at $190-$230/st FOB Texas shipping points, with the
low FOB Freeport. Coarse grade sulfate postings were $10/st
lower, with standard grade ammonium sulfate referenced at $170-$210/st FOB in Texas, depending on location.
South Central: Granular ammonium sulfate pricing was reported at $220-$225/st FOB in the region.
Southeast: Granular ammonium sulfate pricing was down slightly from last report, with sources quoting the market at $195/st FOB Hopewell, Va., and Augusta, Ga. Delivered granular ammonium sulfate continued to be quoted in the $214-$249/st range in the region, with the upper end reflecting postings for railed tons into Florida. Standard grade ammonium sulfate was pegged in the $165-$178/st range DEL range in Florida.
PHOSPHATES
Central Florida: In Florida, tourist season was over last week – and the phosphate market was on the same page. A trader made a sale of a single truckload during the week, but trains were a thing of the past.
On the curtailment front, CF continued going full steam, but it is the smallest of the phosphate producers and has an export deal with KeyTrade, of which it is a part owner, to help keep its inventories down. PotashCorp has not announced any plans to restart its White Springs plants, and Mosaic was still mum about its actual production, which it has said was down, but not how much.
The Central Florida DAP price range was unchanged last week at $250-$260/st FOB. PCS Sales had no published price. Mosaic had no list prices for Central Florida. Two weeks ago, CF dropped its price to $250/st FOB from $270/st FOB for DAP and was $10/st FOB higher for MAP. Agrifos was no longer posting prices, but was charging based on markets in various areas.
U.S. Gulf: Buyers were still looking for cheap phosphate barges last week, but those appear to have dried up during the past month or so. With the decrease in supply and some fill in the process, prices began to edge upward last week on the gulf’s river system.
Both producers and traders said it appeared there was more interest in buying phosphate for fill than there had been in the past month. Several said it appeared the market had reached its bottom and was beginning to creep upward. One good indicator was that the lowest sale during the period was for the highest price of DAP barges the previous week, although the top of the new range was not that much higher – one of the tightest in months, a mere $3/st FOB. All of that seemed logical, because both the fall season last year and the spring season this year were extremely slow, and inventories in dealers’ storage bins had to be running low. As the price appeared to stabilize, confidence in the market was returning, and buyers were beginning to take steps to prepare for the fall season.
Sources said CF was not making much of an effort to bring phosphate across the Gulf for sale on the river system. Trans-gulf shipments add about $8/st FOB to the price of phosphate, and the company was finding success in export sales through KeyTrade.
Not that it matters much anymore, but the Arkansas River was back to normal after high water and fast currents slowed barge traffic earlier, following heavy rains in the area. However, the season was essentially over in Oklahoma, and replacement barges were and will be rare for some time.
Early in the week’s reporting period sales were made at $255/st FOB, but by the end of the week transactions were done in the $256-$258/st range, and most sellers were seeking $260/st FOB. Assuming that trend will continue, the range will be higher next week.
The NOLA DAP barge price range last week moved up, from $250-$255/st FOB to $255-$258/st FOB. Both Mosaic and CF had a $10/st FOB additional charge for MAP.
Eastern Cornbelt: The DAP market was quoted at $300-$320/st FOB regional warehouses, with the low reported for summer fill tons and the upper number for prompt material out of river locations. MAP was $10/st higher than DAP. One regional supplier was referencing forward contract DAP for July-August at $300-$305/st FOB Peoria, Ill., and $305-$310/st FOB Cincinnati.
10-34-0 was reported at $500/st FOB in the region.
Western Cornbelt: Sources put the regional DAP market at $285-$315/st FOB warehouses to the dealer, with the low for summer fill tons and the upper end for prompt pull. While sources earlier in the month had talked about delayed shipping dates for the summer fill program, several last week speculated that the shipping differences were generally no longer applicable as spot demand dwindles.
MAP was $10/st higher than DAP. 10-34-0 pricing remained in the low-$400s/st FOB in the region.
Southern Plains: DAP cash market pricing was reported in the $305-$315/st range FOB Catoosa, but sources said summer fill tons were being referenced for as low as $275-$285/st FOB the Tulsa market. MAP was $10/st higher than DAP.
10-34-0 pricing had reportedly slipped to as low as $380-$400/st FOB in the region for spot tons, reflecting another sizable drop from last report due to cheaper ammonia and acid pricing.
South Central: The DAP market was tagged at $310-$325 st FOB regional warehouses to the dealer for prompt spot tons, with MAP $10/st higher. TSP, where available, was reported at the $315-$320/st level FOB regional warehouses to the dealer. TSP was said to be in very tight supply, however.
One regional source said fall phosphate movement depends on what happens to potash. He added that if potash pricing drops into the low- to mid-$500/st out of the warehouse, that could spark some fall phosphate demand. Without the potash pricing drop, however, he said fall phosphate usage might suffer in the region.
U.S.Export: Worldwide, inventories of phosphate products appeared to be lower than for most of the past year, and buyers were making moves to stock up. PhosChem made a sale of 40,000 mt to Pakistan at $274/mt FOB, and did another deal for 6,000 mt into Central America for the same price. Transammonia sold 15,000 mt into Argentina at that same price, which was the big surprise of the week, because that country was believed to be out of the market for some time.
Late last week, PhosChem made a sale to Peru – 20,000 mt at $281/mt FOB – which was another pleasant surprise for the market, because that country tends to purchase only at the lowest possible price.
Pakistan was said to have also made purchases from Australia and another country in the same range as the PhosChem deal. Around the time of the recent IFA meeting at Shanghai, Chinese trading companies were believed to have made a deal to supply Pakistan with up to 450,000 mt of phosphate. India may have also made a buy of 35,000 mt from Mexico. Turkey may have completed a deal to buy 250,000 mt from Tunisia, although details were not available.
One source said his company sought to buy onsite phosphate in five different European countries last week with no luck, and would have to build its inventories from other sources.
Other Latin American countries were also said to be in the market for phosphate, including Brazil and Uruguay. Inventories in the region were believed to be low.
After sales last week, PhosChem raised its asking price for export phosphate from the $274/mt FOB the previous week to $285/mt FOB.
Based on sales last week, the export DAP price range crept up from $270-$273/mt FOB to $274-$281/mt FOB, but the range this week was expected to be wider and higher.
India: MMTC issued a tender for 50,000 mt of DAP in two lots of 25,000 mt and 30 day validity.
Pakistan: The private sector will soon enter into the market to buy DAP, according to local sources, who said Dawood Corp., United Agro, and others are in the market for DAP imports for July onward.
POTASH
Eastern Cornbelt: Potash was quoted at $590-$650/st FOB warehouses from brokers or resellers, depending on grade and location.
Western Cornbelt: The dealer market for potash was tagged at $585-$630/st FOB regional warehouses for brokered tons, depending on grade and location. One Iowa source tagged the market in his area at $600/st FOB, but acknowledged hearing of fill offers for as low as $580/st FOB some river warehouses.
Southern Plains: Potash pricing FOB Carlsbad, N.M., remained in the $720s/st FOB, depending on grade. Out of regional warehouses, however, sources put the spot market from brokers or resellers in the $595-$605/st FOB range to the dealer, with some suppliers still reportedly holding to the $630/st FOB level.
South Central: Potash pricing for brokered tons out of regional warehouses was pegged at $590-$600/st FOB last week.
Southeast: Delivered potash continued to cover a broad range, with sources reporting numbers ranging from the low-$600s/st up to the $750/st level, depending on grade, location, and supplier. A Carolina source quoted delivered white granular potash at $678/st last week from broker or resellers, or, as one source put it, from anyone with inventory. “The big question is, what will the producer do,” he added. “They have yet to realize the demand destruction they have created in the market. They think it will recover, but not at their price.”
U.S. Imports: Potassium muriate imports were down 84 percent in April, to 220,380 st from the year-ago 1.4 million st. July-April imports were off 38 percent, to 6.3 million st from 10.2 million st.
SULFUR
Tampa: For the most part, refineries were running hard producing fuel for the summer driving season, and that meant plenty of sulfur was being made at the same time. Supply and demand was closer to equilibrium last week, but supply was still greater than demand – just not as much.
Prillers on the Gulf Coast were running hard and Martin’s plant at Beaumont had five vessels due to be loaded in June, which will reduce its inventory by around 150,000 mt. Export shipments were helping to alleviate the oversupply of sulfur on the gulf coast.
A source said inventories of both priller and molten sulfur were expected to be relatively low by the end of the month, but that will not likely have a major impact on quarterly negotiations, which were scheduled to begin in July. Prices will probably remain low for the next quarter.
West Coast: Contracts between refiners and prill operations on the West Coast were not necessarily being based on set quarterly prices any longer, due to the volatility of the market. Most recent agreements called for prices of between minus $10/mt and minus $15/mt, a slight drop from the previous pricing system.
U.S. Imports: April imports were off 74 percent in April, to 42,000 st from the year-ago 161,322 st. July-April imports were off 28 percent, to 1.33 millon st from 1.84 million st.
MARKET NOTES
Pakistan: According to Economic Survey 2008-09, released June 11 by the Minister of Finance, the domestic production of urea, DAP, and other fertilizers during the first nine months (July – March 2008-09) of the current fiscal year 2008-09 (July-June) was up by 3.6 percent as compared with the corresponding period last year. On the other hand, the import of urea, DAP, and other fertilizers decreased by 51 percent, and the total availability of fertilizer also decreased by 11.9 percent during the same period last year – hence total use of fertilizer was lower by 6.5 percent. The consumption pattern of nutrients also changed. Nitrogen use decreased by 3.3 percent, while that of phosphate decreased by 21 percent. The main reason for the reduction in the consumption of fertilizers was the high price of DAP and delayed imports of urea.
Caracas-The government of Venezuela is considering the nationalization of some major chemical companies, requiring all offshore owners to hold only a minority stake. To date, it is unclear if the plans would impact all chemical companies, or most notably FertiNitro, the giant nitrogen plant that is 35 percent owned by Koch Industries Inc. Koch had not responded to inquiries last week. Other owners include Venezuela’s Pequiven at 35 percent, Snamprogetti at 20 percent, and 10 percent by a Cerveceria Polar, C.A. subsidiary. The move is similar to a one taken a few years ago with respect to oil companies.
Perth-Perdaman Chemicals and Fertilisers reports that it has signed a binding Heads of Agreement for the EPC (engineering, procurement, and construction) work for its Collie urea project in Western Australia involving Samsung Engineering Co. Ltd. of Korea and P.T. Inti Karya Tehnik (IKPT) of Indonesia. Perdaman plans to invest A$3.5 billion to develop the facility to transform sub-bituminous coal into urea. The project, south of Perth, is located adjacent to the coal resources required for the production process. The plant is expected to produce 2 million mt/y, mainly for export. It is expected to take four years to complete the project.
Hong Kong-Noble Group Ltd. reports that it has renewed, extended, and upsized its existing US$700 million revolving letter of credit and guarantee facility. The syndication provides Noble with additional credit capacity and further extends the facility’s maturity. The facility was oversubscribed and increased to $800 million to satisfy new participant demand. The tenor of the committed facility is two years. The size of the facility is $800 million for the first year and $770 million for the second year.
Washington-The House of Representatives on June 4 passed an authorization bill (HR 2200) for the Transportation Security Administration (TSA) that includes provisions to enhance pipeline security. The bill, the first to authorize the agency’s activities since TSA was created in 2001, provides $15.6 billion in spending through fiscal 2011 to toughen aviation security, enhance surface transportation security, and provide training for TSP employees. The bill includes measures sponsored by Rep. Gus Bilirakis (R-Fla.) to improve pipeline safety by clarifying federal pipeline safety and security procedures and determining whether additional measures are necessary. A statement from Bilirakis referred to “multiple instances of individuals rupturing pipelines in the Tampa Bay area” over the past six years, noting specifically the November 2007 release of ammonia that resulted when a 16-year-old boy drilled into a section of the Tampa Bay Pipeline Corp. anhydrous pipeline in Riverview, Fla., near the Alafia River (GM Nov. 19, 2007). The 30-mile-long pipeline runs from Port Sutton in Tampa through Hillsborough County to Mosaic Co.’s New Wales phosphate processing plant, and the leak resulted in the evacuation of some 3,700 residents and forced the closure of two schools and several area roads. “The rupturing of pipelines in the Tampa Bay area in recent years should serve as a reminder that federal agencies must remain vigilant to ensure residents are not at risk,” Bilirakis said. “We must do all we can to make certain our nation’s pipeline infrastructure is protected from possible terrorist attacks as well as acts of vandalism.” The authorization bill also includes provisions to reduce multiple background checks and make TransportationWorkerIdentificationCredential (TWIC) enrollment less time consuming. Back in 2006 (GM Aug. 14, 2006), The Fertilizer Institute voiced concerns to TSA, the Department of Homeland Security, and the U.S. Coast Guard that certain elements of the TWIC program, including its enrollment process, would put a financial burden on TWIC applicants and on small fertilizer businesses.
Calgary-Americas Petrogas Inc. (Americas) reports that its wholly-owned subsidiary, Americas Potash Peru SA, has signed a surface rights agreement with the Community Foundation of San Martin de Sechura that permits Americas the unconditional right of surface access in respect of the company’s Ramon and Zapayal potash brine reservoirs and evaporite deposit located on the company’s 82,195 hectare Bayovar concession in the Sechura Desert in Northwest Peru. As part of the deal, Americas has released to the Foundation a payment to be used for local community projects. Americas says as a result of the agreement, all of the requirements contemplated in its option agreement with the Agency for Promotion of Private Investment of the government of Peru to be able to acquire the Bayovar potash brine concession have been satisfied. The company is proceeding with the investments in the concession, such as additional resource assessments, environmental assessments, exploration, and other feasibility work.
Sioux Falls, S.D. and Langbank, Sask.-Raven Industries Inc. and Seed Hawk Inc. have announced a collaboration agreement for developing innovative solutions intended to enhance air-seeder technology. Beginning this fall, a new set of Raven precision application and planter section controls will be offered on the Seed Hawk line of seeders to control multiple functions from a single field computer, the Raven Viper Pro. The first of these solutions combines fertilizer and seed section control from Raven with patent-pending seeder technology from Seed Hawk. Known as Sectional Control TechnologyTM, this system will virtually automatically eliminate costly seed and fertilizer overlaps for the customer.
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