Riyadh—Saudi Arabian Mining Co. (Ma’aden) has announced that it is developing its third project for the manufacture of phosphate fertilizers. The project is expected to be implemented in phases and eventually will add a further 3 million mt/y of production capacity. Costs are currently estimated approximately at 24 billion Saudi Riyals, and full capacity could be reached in 2024. This project is subject to the completion of feasibility studies and necessary consents. The company said further information will be released in due course. Ma’aden’s existing two plants each have a capacity of approximately 3 million mt/y. Neither Ma’aden or The Mosaic Co. responded to inquiries as to the ownership stakes in the proposed plant. Mosaic has a 25 percent stake in Ma’aden’s second plant, Ma’aden Wa’ad Shamal Phosphate Co. (GM Aug. 12, 2013).
Oslo—Yara International ASA recently announced the completion of its 250,000 mt/y upgrade at its NPK plant in Uusikaupunki, Finland. The new capacity, which is aimed at the export market, will take total capacity at the facility to 1.3 million mt/y. Yara said the new production NPK granules are dried by using recovery heat from the nitric acid production instead of oil-fired heating, reducing the plant’s carbon footprint. It also said test runs show that the unit has the capability to improve Yara’s product quality.
U.S. Gulf: Granular prompt urea prices steadily firmed last week, moving up to $224-$236/st FOB from the prior week’s $215-$220/st FOB.
Sources said the 47 percent drop in fertilizer year-to-date (July-October) urea imports, or 1.2 million st, was catching up with the market, and was being intensified by spot vessels being diverted to other destinations and away from NOLA
Eastern Cornbelt: Granular urea was quoted at $250-$260/st FOB in the Eastern Cornbelt, with the low at Cincinnati, Ohio, and the upper end out of spot river locations in the Indiana market.
Western Cornbelt: The granular urea market remained at $255-$275/st FOB in the Western Cornbelt, with the lower end reported in Missouri and the upper end in Iowa on a spot basis.
Southern Plains: Granular urea pricing had reportedly slipped to $255-$260/st FOB Catoosa and Inola, Okla., for prompt tons, down $10/st from last report, with forward pricing pegged in the $265-$270/st FOB range for first-quarter 2017. “Deals are still available on urea, but it needs to move now as the replacement tons are higher,” said one regional contact.
South Central: Urea prices have been volatile in the South Central region for the past few weeks. After climbing to the mid-$260s/st FOB in mid-November, terminal values reportedly slipped to as low as $245-$250/st FOB in early December. By mid-December, however, sources were nearly unanimous in quoting the regional terminal market at $260-$265/st FOB for new business, although there were few new sales to test the market.
Southeast: Granular urea pricing had reportedly firmed to $270-$280/st FOB port terminals in the Southeast, up another $5/st from last report.
China: National production numbers remain soft because supplies of coal are problematic and demand is off. The upside for those still producing is that prices are strong.
Granular and prilled urea are now pegged at $245-$250/mt FOB. The outlook for January is also bright. Sources report that some traders are going long on Chinese product at $245/mt FOB.
The coal availability issue is a major one for the producers. Coal costs had begun to impact production earlier this year, forcing some plants to shut down because the sales price of urea did not meet the input costs. As urea prices moved up, the price of coal played less of a role, but access to the coal became more critical.
Chinese output remains just under 50 percent of rated capacity.
Sources report that the export duty of RMB80/mt (US$11.50/mt) will be dropped with the New Year. The duty on exports has gradually been dropped over the years to help Chinese producers remain competitive in the global market, especially against Iran, which has started to sell to more markets.
Middle East: Calculating back from sales to Brazil, sources peg the current market at $220-$225/mt FOB. Producers, however, are asking $240-$245/mt FOB.
Traders seem to think the price will be coming up in the New Year. Reports are circulating of at least one major trading house taking a position on January product at $240/mt FOB.
Egypt and Algeria are taking a breather from sales after Helwan sold 30,000 mt of granular product at $242/mt FOB. Ameropa took 20,000 mt of the lot, with Agrium taking the remaining 10,000 mt. The sale was concluded Monday from a Dec. 8 tender. Loading is slated for the second half of this month.
The initial response to the sale was that Europe would be the most likely destination. Sources have said that with the right freight rate, however, at least the Ameropa cargo could end up in the Americas, and most likely in Brazil.
Black Sea: Traders put the Yuzhnyy market at $215-$220/mt FOB for prills. Granular product out of the Black Sea is pegged at $230/mt FOB. The larger-than-usual gap between granular and prilled product is put off to the current demand for granular over prill in some markets.
India: The crisis created by the removal of Rs500 and Rs1,000 notes appears to be easing. Local distributors, with backing from national urea companies, are offering credit to farmers until new currency is put into circulation. While demand is not strong, it is getting better, said one trader.
Sources said this week that the chances for a new urea tender either late this month or early next month have now improved to 50-50. The buyer – most likely IPL – will probably go for purchases totaling 500,000-600,000 mt.
Indonesia: All December product is spoken for. Export licenses for 2017 are expected to be issued in the next week or so. No product will be shipped until Jan. 1, and prices are expected to be a bit higher than the current $230/mt FOB.
Exports for next year are estimated at 1 million mt.
U.S. Gulf: Industrial Lock remained shut down last week after a set of newly installed hydraulic valves failed to open lock gates on Dec. 8. The Corps began replacement valve installation on Dec. 14, and shippers expected boats to begin locking on Dec. 16.
Industrial Lock has been closed to marine traffic since Aug. 1 for dewatering, maintenance, and repairs. Shippers have reported considerable delays while detouring through Bayou Baptiste Collette and Chandeleur Sound. Work was originally scheduled to conclude Nov. 27, but unseasonably high river levels and inclement weather slowed efforts, sources said.
Daytime transit closures continued in the West Canal at the Galveston Causeway Railroad Bridge (Miles 357-358). Dredging and debris removal crews operating on a 12-days on, two-days off schedule will force traffic to pass during overnight and non-working hours through January 2017.
Shippers reported average Algiers Lock delays in the 2-5 hour range for the week, and Port Allen Lock waits were called three hours on Dec. 14. Shippers reported five-hour delays at Bayou Sorrel Lock, while transit through Calcasieu Lock was quoted at nine hours on Dec. 14.
Pipeline dredging at the Brazos River Floodgates, originally scheduled to conclude Nov. 11, has been extended until further notice, according to a Corps posting.
Lower Mississippi River: Persistent low-water conditions on the Lower Mississippi River extended navigation restrictions last week, shippers said. Tows have been capped at 35 barges since Nov. 30. Forecasts called for the Baton Rouge gauge to crest at 13.6 feet on Dec. 17.
Stack Island dike work is projected to force slowdowns in the Lake Providence area through Feb. 10.
Upper Mississippi River: A planned 70-foot width limit will complicate Lock 21 navigation between Dec. 15 and Feb. 28, shippers warned.
The limit should theoretically allow doublewide tows to make passage, but a lack of tow haulage equipment expected to be available during the project will require captains to rely on industry self-help to maneuver into and out of the lock. Longer tows will be required to stage barges and make multiple passes while work is underway.
The upstream and downstream tow haulage systems at Lock 22 will also be unavailable on Jan. 2-24. Length and width restrictions will be in effect.
Repairs are scheduled to close the Mel Price Lock main chamber on Jan. 17-25, leaving vessels to transit via the auxiliary chamber. Delays are anticipated.
Rock removal at Thebes, Ill., is slated to begin when river levels sink below 15 feet at Cape Girardeau, Mo. The Cape Girardeau gauge read 18.85 feet and falling on Dec. 14, and was expected to hit 15 feet on Dec. 20-21. Shippers are bracing for daylight-hour navigation restrictions once work gets underway.
Illinois River: Dive operations were scheduled to close Starved Rock Lock from 8:00 a.m. through 4:00 p.m. on Dec. 13-15, with delays expected. Inspections at Dresden Island Lock shuttered navigation on Dec. 15-16. Peoria Lock resumed locking last week, but LaGrange Lock continued to pass vessels freely.
Ice formation in the Chicago area will likely trigger navigation delays throughout Illinois in the next 7-10 days, shippers predicted.
Ohio River: A Dec. 12 hydraulic failure at the Ohio River’s New Cumberland Lock (Mile 54) caused massive backups last week. Sources believed a full repair would require a complete dewatering and minimum four-week shutdown. Both the lock’s main and auxiliary chambers were limited by the hydraulic failure.
Instead, the Corps announced plans to install a temporary hydraulic bypass requiring an estimated two weeks of work, with lock operators planning to manually open and close lock gates until the bypass is completed. Shippers estimated transit delays of at least 48-72 hours for the week.
Falling water levels required the raising of wickets at Lock 52, with subsequent transit times quoted in the 7-17 hour range. Wickets remained down at Lock 53, allowing vessels to pass without locking.
The auxiliary chamber at R.C. Byrd Lock is closed through Jan. 30 for repairs. Minimal delays have been reported.
The Cumberland River’s Old Hickory Lock resumed daytime operations on Dec. 11. Repairs had limited navigation since Dec. 5.
On the Monongahela River, the Braddock Lock and Dam river chamber remained unavailable due to an ongoing mechanical failure, forcing boats to pass via the land chamber instead.
Moscow—Uralchem and Uralkali are looking to develop a distribution network, according to a Bloomberg report, citing Uralchem owner and Uralkali shareholder Dmitry Mazepin, who attended the Sberbank CIB Metals and Mining Conference in Moscow this past week. According to the news provider, Mazepin said the network will help make profits sustainable amid volatile fertilizer prices. No further details were available, and it was unclear whether the distribution network will be a domestic or an export-oriented scheme. Spokespeople for both companies declined to provide further comment.
The long-delayed Summit Power Group’s Texas Clean Energy Project (TCEP) has again gone back to the drawing board (GM Jan. 8, p. 1) to refashion its plans for the its coal gasification plant planned for Odessa, Texas. TCEP has now dropped electricity from the product mix. The project was initially to use coal and produce urea, electricity, CO2, and a small amount of sulfuric acid.
The company has confirmed that the U.S. Department of Energy (DOE) has pulled funding from the project, and TCEP is now looking at a product mix that is more likely to attract additional investment. DOE had previously warned TCEP about missing project deadlines (GM Sept. 21, 2015). Electricity can be cut from the project now as its production was a DOE requirement.
TCEP hopes to finalize its plans in first-quarter 2017 and be ready to break ground in midyear.
TCEP told the Odessa Development Corp. Dec. 8 that one option under consideration is to double the current urea capacity from the original plan of 760,000 st/y. The company sees increased urea production as a way to attract additional investors. Currently, United Suppliers Inc., Ames, Iowa, has an offtake agreement for the urea from the plant (GM Sept. 21, 2015), however, whether that will continue is reportedly up for negotiation. TCEP confirmed that an agreement made long ago for Shrieve Chemical Co., The Woodlands, Texas, to take the approximate 50,000 st/y of sulfuric acid from the plant has expired (GM Oct. 28, 2011).
TCEP told Green Markets that major contractors and technology providers remain onboard (GM Jan. 8, p. 1). Those included engineering, procurement, and construction (EPC) contracts with SNC-Lavalin Engineers & Constructors Inc. and China Huanqui Contracting & Engineering Corp. (HQC).
TCEP was before the ODC to request that its land deal for its 600-acre site near Odessa be extended another year. ODC approved the extension, but asked that TCEP give it another update in six months.
ODC Chairman Richard Browning expressed “fatigue” with the project’s long delay. While it has been in the works for some eight years, ODC members wanted to proceed if there was any chance it would succeed, according to the Odessa American. Had ODC denied the land extension, TCEP would have been required to pay some $480,000 to retain the land. Should the plant be completed, ODC has promised TCEP a $5 million incentive.
DOE was to pay TCEP up to $450 million from a 2010 award, which comprised funds from both the Clean Coal Power Initiative (CCPI) and the America Recovery and Reinvestment Act (ARRA).
The TCEP project is expected to use some 1.5 million st/y of coal. Former Governor Rick Perry, who has been nominated to head up the DOE, has been supportive of the TCEP project, and President-elect Trump campaigned on a platform of helping the coal industry.
Backers of Hydrogen Energy California (HECA), a similar coal/petroleum coke-to-electricity/fertilizer project planned for California, pulled the plug on their project earlier this year (GM March 4, p. 15), citing fears it would not receive adequate federal funding to continue with the project.
The International Plant Nutrition Institute (IPNI), Peachtree Corners, Ga., has named Dr. Ismail Cakmak as the winner of the 2016 IPNI Science Award. IPNI cited his major contributions to scientific knowledge through his leadership role in alleviating the micronutrient malnutrition problem in developing countries. It noted this has led to international recognition for his efforts in zinc biofortification of cereal crops.
He directed a multi-institutional project on the issue of zinc deficiency in Turkey (1993 to 1998). Following the identification of the zinc deficiency, zinc-containing NPK fertilizer use has increased from 0 to 600,000 mt/y in Turkey.
The “HarvestZinc” international project was developed by Cakmak under the HarvestPlus Program to improve grain concentration of zinc and iodine in nine different countries (e.g., Asia, Africa, and several South American countries). The focus was on using innovative application methods and micronutrient fertilizer combinations. Cakmak and his team found that foliar zinc application is significant in improving grain zinc concentrations, which can improve zinc-related health complications that affect over two billion people.
Dr. Cakmak received his B.Sc. from Cukurova University in 1980, his M.Sc. from Cukurova University in 1981, and his Ph.D. from Hohenheim University in 1988. Since 2000, he has worked as a Professor of Plant Physiology at Sabanci University in Istanbul, Turkey.
U.S. Gulf: Observers and market players continued to call the Gulf vessel import market in a $40-$45/mt CFR range, with perceived supply tightness reportedly providing price support. Sources quoted Northwest European smelter offers at $5-$10/mt FOB.
Sales into Brazil were noted in the $40-$50/mt CFR range, unchanged from the week before, and cargoes destined for Cuba were called $50-$60/mt CFR, also flat from the previous report.
Domestic sellers reported U.S. Gulf delivered rates in the $85-$90/mt DEL range, with Midwest tons commanding $80-$85/mt DEL, both unchanged from a week earlier. West Coast pricing was noted in the $105-$115/mt DEL range, also flat from the previous report.
Tampa: Fourth-quarter Tampa contract speculation firmed slightly last week, with more market chatter centered on a potential $10/lt or larger increase from the $69.55/lt third-quarter contract.
International strength fueled market players’ bullish notions, although some intimated that U.S. Gulf exports failing to keep pace with Pacific-market sellers through the fourth quarter could limit the Tampa market’s upside.
Settlement talks will begin “post-New Year,” sources confirmed.
A fire reported at the Philadelphia Energy Solutions Inc. (PES) refinery in Philadelphia on Dec. 10 was extinguished in about an hour, local news outlets reported. While PES referred to the fire as a “small operations upset,” it was not immediately clear whether production had been impacted at the 335,000 barrel/d facility. The refinery announced a planned shutdown of an 18,000 barrel/d alkylation unit on Dec. 1.
PES is the East Coast’s largest refinery. Protesting a dearth of information provided to nearby residents regarding the fire, a group of demonstrators briefly blocked vehicle access to the refinery on Dec. 12.
Refinery capacity utilization ticked higher for the week, according to U.S. Energy Information Administration (EIA) data. Refiners employed 90.5 percent of capacity for the week ending Dec. 9, a 0.1 percent increase from the prior week’s 90.4 percent. The rate fell shy of both the year-ago 91.9 percent and five-year average of 91.8 percent, however, and represented the lowest second-week December utilization number since 85.1 percent was logged on Dec. 9, 2011.
Average daily crude inputs rose to 16.474 million barrels/d, a 57,000 barrel/d increase from the previous week’s 16.417 million barrels/d.
U.S. Gulf: The Phillips 66 refinery at Borger, Texas, suffered a fluid catalytic cracking unit shutdown on Dec. 11, according to a notice filed with the Texas Commission on Environmental Quality.
The shutdown was triggered by an emissions surge exceeding allowable levels. A restart begun on Dec. 11 could require multiple days to complete, sources speculated. The Borger refinery is rated at 146,000 barrel/d capacity.
Marathon Petroleum Corp. reported a brief outage at its Galveston Bay, Texas, refinery on Dec. 13. Operations at the 459,000 barrel/d facility were back to normal on Dec. 14.
Last-done on the Gulf prill market was quoted in the $70-$71/mt FOB range, unmoved from the previous report. Some speculated that international market firming would trickle down to the Gulf market in the next round of business.
Vancouver: Recent Vancouver sales levels registered netbacks in the $85-$88/mt FOB range, market players said. Observers traced the levels to the strengthening Chinese import market, where last-done trades were generally called $101-$106/mt CFR.
Alberta producer netbacks continued to be quoted in a range of (-)$55-$20/mt FOB, encompassing both contract molten sales into the U.S. and prilled sulfur sold on the Vancouver export market.
Intense polar cold has hindered sulfur transported by rail in recent weeks, sources said. “Railroads are having difficulty keeping up with the forming plant production,” said one observer.
West Coast: Formed sulfur offered from the West Coast followed Vancouver higher to $80-$85/mt FOB, sources said. The market was last called in the $75-$80/mt FOB range.
Molten sulfur contracts were valued at $50-$75/lt FOB for the fourth quarter.
Santiago—Chilean billionaire Julio Ponce on Dec. 15 called off a year-long process to sell an indirect stake in Sociedad Quimica & Minera de Chile SA (SQM), according to Bloomberg. Sociedad de Inversiones Oro Blanco SA, one of the holding companies through which Ponce controls SQM, said in a regulatory filing that bids received for its stake in another holding company, Sociedad de Inversiones Pampa Calichera SA, failed to “contribute to the social interest of shareholders,” and that the board had unanimously decided to call off the sale. SQM shares fell after the news was announced.
SQM is locked in an arbitration process with the Chilean government over rights to extract lithium and other minerals from brine in northern Chile’s Salar de Atacama, a concession that accounts for more than 30 percent of the company’s earnings before items. The government argues that SQM had underpaid taxes and fees, an accusation that SQM has denied. Ponce is also appealing a $70 million fine for illegal trading in the holding companies that Chile’s regulator imposed in 2014. Chile’s securities regulator ruled this month that whoever bought the Pampa Calichera stake would have to present a public tender offer for all SQM shares if the buyer gained effective control of SQM’s board through any shareholder pacts. Potash Corp. of Saskatchewan Inc. owns a 32 percent stake in SQM.
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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.
