Phosphates

Central Florida: Prices on the Central Florida phosphate market remained flat last week thanks to a lack of new transactions. Rail-loaded DAP cars were called $435/st FOB based on Mosaic’s posted price, while product shipped by truck brought an added $5/st FOB. The dealer price was static at $445/st FOB for DAP.

As in recent weeks, sources called MAP unavailable in the region.

Traders continued to monitor prices on the NOLA barge market, which industry players considered uncomfortably close to Florida levels. Traders expected a downward price adjustment in Central Florida should NOLA DAP drift below $435/st FOB.

Florida rail transit saw minor delays when a CSX freight train locomotive derailed near Sanford, Fla., on Sept. 4. Two sets of tracks were closed while crews labored to return the locomotive to the rails, and no injuries were reported.

The price of DAP in Central Florida was $435-$440/st FOB, unchanged from the week before. MAP prices were posted $20/st FOB higher.

U.S. Gulf: Trading on the NOLA barge market was sluggish last week. Few physical trades were reported, but prices generally held steady in the range quoted in the previous report.

Freight continued to be a factor, and a number of buyers have all but given up on FOB pricing for the near term. Calculating net prices from DEL quotes was turning into a sport of sorts, and netbacks ranging from $435/st FOB through the low-to-mid $440s/st FOB were seen. Sources called the average transaction price around $339-$440/st FOB.

Traders described little price difference between open origin and domestic product. Open origin offers were roundly pegged at $435-$440/st FOB for the week. Domestic producers were said to be offering DAP in the $445-$455/st FOB range, but concluded domestic sales were reported to be comparable to imports. Again, freight played a significant role.

“Most of the import vessels were booked prior to the tight freight rates hitting,” one source said. Better freight costs on import barges meant a potentially enhanced netback relative to domestic product, another source reasoned, especially on domestic barges offered with uncompetitive shipping rates.

Market watchers were divided on the direction of the market. Some saw it subject to continued downward pressure, largely based on reduced demand from end-users contemplating the December corn crop’s price inching closer to $3.00/bushel.

Others pointed to low inventory levels nationwide as potentially sparking a market rebound. With grain prices causing farmers to wait until absolutely necessary to make large phosphate purchases, some traders anticipate an eventual run on inventory as growers rush to make last-minute buys.

Throw in a significantly lighter-than-expected fall import lineup – now estimated to total roughly two-thirds of the 900,000 mt of DAP, MAP, and TSP expected earlier in the season – and demand is likely to outstrip supply, those sources added.

Prices on the NOLA barge market were steady at $435-$443/st FOB, unchanged from the previous week. MAP prices dipped slightly, to $470-$475/st FOB from $475-$480/st FOB the week before.

Eastern Cornbelt: DAP warehouse prices were pegged in the $480-$490/st FOB range in the Eastern Cornbelt, with MAP quoted at $510-$530/st FOB, depending on location.

10-34-0 remained at $460-$480/st FOB in the region.

Western Cornbelt: DAP was unchanged at $480-$490/st FOB terminals in the Western Cornbelt, with MAP pegged in the $510-$530/st FOB range, depending on location.

Out of the Twin Cities and Catoosa, Okla., sources tagged the market at roughly $485/st FOB for DAP and $515/st FOB or higher for MAP.

10-34-0 remained at a nominal $480-$500/st

ICL negotiating jv

Israel Chemicals Ltd. is negotiating to form a joint venture for mining and selling phosphates to emerging markets. The company said the potential deal would involve the investment of hundreds of millions of dollars.

ICL said that the deal involved investment in a mine and the construction of downstream fertilizer plants. The company has been looking to expand its fertilizer business abroad specifically in the phosphate field as the Israeli government has so far refused to approve mining operations at the Sde Barir field in the northern Negev region. Israel’s Health Minister Yael German has expressed opposition to mining in the area due to its proximity to the town of Arad and the potential health implications for residents of the region.

Last year ICL signed a memorandum of understanding with Vietnam’s Duc Giang to build and expand a phosphate mine in Vietnam. The agreement calls for the project to include a phosphate mine as well as factories to process the material in Bao Thang province in Vietnam. The production facilities would be for a variety of downstream products. ICL is Israel’s largest chemical manufacturer focusing on potash, phosphates, fertilizers and industrial chemicals.

Duc Giang is a producer of thermal acid and is in the process of expanding its fertilizer activities and produce phosphoric acid for the fertilizer and food industries.

The announcement by ICL was made in conjunction with plans to go public on the New York Stock Exchange later this month.  The Israel Corp, ICL’s parent company said it planned to sell 62 million shares in ICL for $522.4 million on Sept. 24.  ICL currently trades only on the Tel Aviv Stock Exchange.   Morgan Stanley and Barclays are the lead underwriters for the ICL offering.

The Week in Fertilizer Stocks

The Week in Fertilizer Stocks

Producer Symbol Price Week Ago Year Ago
Agrium AGU 90.99 93.86 88.27
CF Industries CF 250.77 254.47 198.21
CVR Partners UAN 15.21 15.51 18.92
Intrepid Potash IPI 15.34 14.84 14.24
Mosaic MOS 46.16 46.90 44.93
PotashCorp POT 33.69 34.31 31.98
Rentech Nitrogen RNF 14.14 14.25 26.09
Terra Nitrogen TNH 144.90 149.92 203.05
Distribution/Retail
Andersons Inc. ANDE 67.15 68.39 68.48
Deere & Co. DE 82.08 83.11 84.31
Scotts SMG 56.33 56.77 54.78

KBR signs on to Koch project

Houston — KBR Inc. reports that it has been awarded a reimbursable contract by Koch Nitrogen Co. LLC to provide engineering, procurement, and construction (EPC) services for a new grassroots urea plant, part of a $1.3 billion expansion project by Koch Nitrogen at its Enid, Okla. facility. In addition, KBR will provide construction management services for expansion of the existing ammonia plants and site utilities and infrastructure to support the project. The expansion will increase the plant’s urea and ammonia production capacity by more than 1 million st/y. The new urea plant will have an annual urea production capacity of 900,000 st. The contract value was not disclosed.

Topsoe to assist with Turkmenistan project

Lyngby, Denmark — In collaboration with Mitsubishi Heavy Industries Ltd. (GM Aug. 25, p. 12), Haldor Topsoe A/S has been selected for the design of a new ammonia plant for a major fertilizer project in Turkmenistan. The project also includes project partners Mitsubishi Corp. and the Turkish construction company GAP İnşaat. The plant is scheduled to go onstream in June 2018 in the city of Garabogaz on the coast of the Caspian Sea. Using Turkmenistan’s abundant natural gas reserve as feedstock, the plant will have a daily capacity of 2,000 mt/d of ammonia and 3,500 mt/d of urea. Besides engineering design and licensing, the delivery from Haldor Topsoe also includes proprietary hardware related to the ammonia process technology, as well as catalysts. The fertilizer plant represents one of two major contracts in Turkmenistan that has been awarded to Haldor Topsoe this month. On Aug. 26, it won a contract for the construction of a plant focused on the conversion of natural gas into synthetic gasoline.

Idaho Power overpays Simplot nearly $2 M

Boise — Nearly $2 million in overpayments made by Idaho Power Co. to the J.R. Simplot Co. for power generated by Simplot’s cogeneration plant at its phosphate fertilizer complex west of Pocatello will be paid back to the utility’s customers. The Idaho Public Utilities Commission (IPUC) is accepting, with some modifications, a confidential settlement agreement reached last February by Idaho Power and Simplot to repay $1.88 million to the customers. Under the agreement, Simplot will repay Idaho Power $1.56 million, and Idaho Power shareholders will pay the remaining $320,000. When the power exchange contract between the two companies was finalized in February 2006, Simplot agreed to sell the power generated as a byproduct of its Pocatello plant’s manufacturing process to Idaho Power in accordance with the Public Utility Regulatory Policies Act (PURPA) of 1978. The Boise-based company was required to deliver no less than 90 percent or no more than 110 percent of its contracted monthly amount of power. Any power delivered outside that range would be accepted by Idaho Power, but at a lower rate. When the contract ended in 2013, Idaho Power discovered it did not lower its monthly payments to Simplot during the months when power deliveries fell outside the 90/110 performance band. “We are pleased that the PUC has made a decision on resolving this contract matter. We continue to look forward to working with Idaho Power as both a customer and electrical power generator,” Simplot spokesman David Cuoio told Green Markets. IPUC agreed that Idaho Power bears partial responsibility for the overpayment by failing to adequately monitor the payments over the course of the seven-year contract.

United Suppliers forms conservation partnership

Eldora, Iowa — Wholesale supplier United Suppliers Inc. is collaborating with Agren Inc., Carroll, Iowa, to provide conservation planning services to United Suppliers’ owners and grower customers. United Suppliers has hired Stan Buman, formerly of Agren, to lead the effort by utilizing Agren’s web-based conservation planning software. Services will be provided through United Suppliers’ network of ag retail agronomists, and include soil loss estimates and initial planning of conservation structures, including grassed waterways, water and sediment control basins, ponds, and wetlands. “The new conservation planning service will provide growers assistance in exploring conservation alternatives that best meet their needs,” said Brad Oelmann, United Suppliers president and CEO. “Agren’s software allows us to provide precision ag data-layers for soil loss and steepness that are unmatched by any other program.” United Suppliers, which is comprised of more than 670 agricultural dealers that operate nearly 2,800 retail locations throughout the U.S. and parts of Canada, said the collaboration stems from its commitment to sustainability and water management, and its recognition of the need to reduce the amount of nitrogen and phosphorus discharged into Iowa’s rivers and streams as outlined by the 2013 Iowa Nutrient Reduction Strategy.

Monsanto unit seeks air permit

Boise — The Idaho Department of Environmental Quality (IDEQ) is studying whether to issue a proposed air quality permit to P4 Production, Soda Springs. The proposed permit will allow the Monsanto subsidiary to install and operate a new coke screening system at its elemental phosphorus production plant two miles north of Soda Springs on Highway 34. Replacement of the coke screens will allow P4 to reduce coke fires in the feedstock to three electric arc furnaces that run continuously at 2,550 to 2,732 degrees Fahrenheit. IDEQ has determined that the project will not cause or significantly contribute to a violation of any ambient air quality standard and will not injure or unreasonably affect human, animal life, or vegetation. Recent public comments are now under review.

Three-year cleanup underway at FMC plant

A long-awaited cleanup of FMC Corp.’s abandoned industrial plant property west of Pocatello, Idaho, is now underway after surmounting obstacles and setbacks in recent years. The controversial cleanup project is expected to cost $60 million and take up to three years to complete.

FMC’s massive four-furnace plant converted phosphate ore into elemental phosphorus from 1949 to 2001, leaving behind a contaminated site. Plant demolition commenced in 2006. At its peak, the plant used 1.75 million tons of raw shale/coke and silica annually to produce 250 million tons of elemental phosphorus.

The FMC property and the J.R. Simplot Co.’s adjacent phosphate fertilizer complex share the Eastern Michaud Flats Superfund site covering about 2,530 acres, including more than 1,000 acres of Fort Hall Indian Reservation land. The U.S. Environmental Protection Agency (EPA) created the Superfund site in August 1992 and issued a Record of Decision for it in 1998.

Kevin Rochlin, EPA remedial project manager in Seattle, said site grading for storm water management has started, reducing the size of mountainous piles of slag, which emit gamma radiation – one of three primary contaminants of concern – in addition to toxic arsenic and highly ignitable phosphorus. The phosphorus from spills and process leaks during production, storage, and handling has been detected as deep as 85 feet below the surface.

“The huge amount of earth moving will take 14 months from the time we start the grading to doing the cleanup,” Rochlin told Green Markets. “It’s actually nice when we get to the point we actually clean up.”

EPA issued an Interim Record of Decision (IROD) in September 2002, subject to public review and overseen by the EPA and Shoshone-Bannock Tribes. A Supplemental Remedial Investigation and Feasibility Study (RI/FS) was issued in 2010. FMC will do the cleanup work under an EPA Unilateral Administrative Order (UAO) issued last June that requires FMC to design, implement, and pay actions specified under a September 2012 IROD amendment.

“The issuance of the UAO was a meaningful step,” said Paul Yochum, former FMC plant manager, who now serves as a consultant for the project. Yochum told Green Markets that six qualified companies have been given the opportunity to bid on the project. “We hope to have it all concluded in 2016,” he said.

Requirements include: developing detailed technical plans and specifications for the cleanup actions; constructing caps over contaminated soil; and treating groundwater to prevent contamination from migrating to the nearby Portneuf River. EPA would continue to monitor soil, air, and groundwater to ensure cleanup remedies protect people and the environment.

EPA has endorsed redeveloping the property, which boasts railroad and natural gas lines and a power substation, as long as it complies with actions outlined in the amended record of decision.

The Shoshone-Bannock Tribes have strongly opposed the EPA cleanup plan. EPA has agreed to work with the tribes to facilitate an independent review of technologies and approaches that can be safely and effectively used to excavate and/or treat elemental phosphorus at the property.

Bill Bacon, general counsel for the tribes, told Green Markets the tribes are disappointed in the remedies selected and approved by the EPA. “It’s always been our position that the site should be cleaned up, not covered up,” he said. “In response, EPA and FMC said there’s not the technology out there for cleanup of a site this large.”

FMC will not allow the tribes on the property to do testing, Bacon said. The Shoshone-Bannocks are concerned about 12 waste ponds that are emitting deadly gasses. The EPA cleanup plan calls for five water treatment wells to

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