All Posts from March 16, 2015

Crops/Weather

Eastern Cornbelt, Great Lakes, Market Watch, Northeast, Northern Plains, Western Cornbelt

Grain Futures: As of 4 p.m. on March 12, soybean and wheat prices were higher compared to the week before, but corn was down.

Corn contracts for May 2015 clocked in at $3.885/bushel, a fall from the previous week’s $3.905/bushel. July 2015 corn slipped to $3.9575/bushel from the prior week’s $3.9825/bushel, and corn for December 2015 was quoted at $4.1175/bushel, down from $4.14/bushel the week before.

The May 2015 soybean price rose to $9.905/bushel from $9.855/bushel the week before. Soybeans for July 2015 were $9.94/bushel, up from the last-reported $9.91/bushel, and November 2015 soybeans were posted at $9.675/bushel, up from the previous week’s $9.66/bushel.

Wheat for May 2015 was $5.0725/bushel, up from the previous week’s $4.805/bushel. July 2015 wheat firmed to $5.095/bushel from the prior week’s $4.8775/bushel, while contracts for September 2015 wheat were listed at $5.185/bushel, up from $4.9875/bushel the week before.

Eastern Cornbelt: The arrival of warmer weather to the Eastern Cornbelt region last week prompted some flooding concerns, with warnings posted in parts of Illinois, Indiana, Ohio, and Kentucky as the week advanced.

“The last few days have been in the 50s, so we’re about to enter the flood zone after a big snowmelt since last weekend,” said one Ohio contact at midweek. “We’ve got a real mess going on, and more rain is likely by Friday.”

As the week advanced, officials reported rising water levels on the Rocky, Vermilion, Grand, and Chagrin Rivers in northern Ohio. Heavy rains were also expected in southern Indiana late in the week, and sources reported flooding along multiple tributaries of the Ohio River in southwestern Indiana. High water levels on the Ohio River were also restricting discharges of the Green River, which was expected to cause moderate flooding near Calhoun, Ky.

Western Cornbelt: Temperatures climbed to the 50s and 60s across Iowa last week, signaling the first signs of spring after a long, cold winter for much of the Western Cornbelt.

Mild temperatures were also reported in Missouri and Nebraska last week. The warm weather, coupled with below-normal winter precipitation in western Nebraska, resulted in much of the state being placed in a “high” or “very high” risk of grass fires at mid-month.

“Warm weather has got people starting to think about spring,” said one Iowa contact last week. “The ground is muddy so nothing is going to the field, but it’s 60 degrees here this week.”

Northern Plains: Much warmer weather was reported in the Northern Plains last week, and sources said some early fieldwork was starting in parts of South Dakota. The spring-like conditions came just one week after a fast moving winter storm dumped up to 6.5 inches of snow in western Minnesota, with eastern South Dakota reporting 3 inches of snowfall on March 3.

Even in areas still covered with snow, last week’s mild temperatures produced some enthusiasm. “We’re very happy to finally be in the 50s and 60s,” said one source. “There is no movement of tons yet, but guys are getting excited,” added another. “We will not see much happen until April 6 if the weather holds, however.”

Great Lakes: The Great Lakes region enjoyed mild temperatures in mid-March, which came as welcome relief from the intense cold of recent months. “Warmer weather this week, so hopefully that will translate to an earlier spring,” said one Wisconsin contact. “It looked like it was going to be later when we were in the deep freeze of February.”

Michigan sources reported temperatures in the 50s last

LSB seeks president for Chemical unit – Alert

Breaking Industry News

LSB Industries Inc., bowing to pressure from activist shareholder Starboard Value LP, said March 16, that it has retained Spencer Stuart, a prominent global executive search and consulting firm, to launch a search for a president of its LSB Chemical business. This newly created position will be responsible
for maximizing the operational performance of the company’s Chemical business by driving process, maintenance, safety and marketing best-practices throughout the organization.
 
Barry Golsen, president and CEO of LSB, stated, “Over the past several years, we’ve made significant enhancements to our chemical operations by adding new management in key corporate and plant-level positions, augmenting our engineering support and investing in technological and mechanical upgrades
to our facilities. Additionally, we currently have major capital projects underway that will reduce our production costs, expand our capacity and improve our product mix.  Hiring an experienced senior level executive to lead our Chemical business is an important next step in taking the progress we’ve made to the next level in order to drive world class levels of on-stream time, production volume and safety across all of our chemical facilities.  The individual we plan to hire will have a track record of success in managing multi-plant chemical operations, as well as a strong background in managing effective sales and marketing programs. We are pleased to be working with Spencer Stuart, one of the world’s leading executive search firms, to find the ideal candidate.”

The president of the Chemical business will be a member of the company’s senior management team.

Starboard is seeking to name five members to LSB’s ten person board. It has been very critical of LSB management and argued for new management.

K+S income off for year, up for 4Q

News, News Briefs

Kassel — K+S Group reported improving results in 2014, with much of that seen in the second half of the year. As a result, K+S expects the momentum to continue, with a significant increase in earnings for 2015. Fourth-quarter operating income (EBIT) was up 31 percent, to €130.4 million on revenues of €1 billion from the year-ago €99.6 million and €978 million, respectively. EBIT from the Potash and Magnesium segment was up 55.4 percent, to €84.4 million on revenues of €464.5 million from the year-ago €54.3 million and €407.1 million, respectively. Company-wide, full-year EBIT was off 2.2 percent, to €641.3 million on revenues of €3.8 billion from 2013’s €655.9 million and €3.95 billion, respectively. Potash/Mag EBIT was off 11.5 percent, to €488.8 million on revenues of €1.88 billion from 2013’s €552.5 million and €2.04 billion, respectively.

Associated Terminals buys St. James Stevedoring

News, News Briefs

Reserve, La. — Associated Terminals (AT) announced on March 11 that it has completed the acquisition of the assets of St. James Stevedoring Co. (SJS), Convent, La. AT said the acquisition makes it “the largest and most diverse stevedoring and terminal services provider operating on the Lower Mississippi River,” with a combined fleet of 14 high capacity Gottwald crane barges, 21 deep draft berths capable of facilitating ocean vessel transloading, and multiple dockside and in-plant service locations along the Gulf Coast in Louisiana and Texas. “The additions to our fleet, berthing locations, and personnel integrates well with Associated’s existing footprint and will significantly strengthen our market position,” said Todd Fuller, AT president. “Having a larger footprint will give us greater flexibility and logistical solutions to service our existing customer base while providing enhanced prospects and resources to bring new business opportunities.” SJS senior management will join the AT team as a result of the transaction, and SJS proprietary technology will be deployed throughout AT’s operating footprint, which now stretches from mile 55 AHP to mile 228 AHP on the Lower Mississippi. The transaction also includes a strategic alliance between AT and St. James Technologies LLC, an SJS subsidiary based in Convent.

Ammonia

Ammonia, Asia, Black Sea, Eastern Cornbelt, Great Lakes, Market Watch, Middle East, Northern Plains, Tampa, U.S. Gulf, Western Cornbelt

U.S. Gulf/Tampa: Nothing new was reported in the Tampa or NOLA markets.

Ammonia imports were up in January, which may reflect a return by Mosaic to full phosphate production in Florida. January imports were up 25 percent, to 500,429 st from the year-ago 401,804 st, according to the U.S. Department of Commerce. July-January imports were down 1 percent, however, to 3.32 million st from 3.34 million mt.

April NYMEX natural gas closed March 12 at $2.734/mmBtu, down from March 5’s $2.841/mmBtu.

Eastern Cornbelt: The anhydrous ammonia market remained at $610-$625/st FOB Illinois terminals, depending on location. Spot pricing out of Indiana terminals was approximately $10/st higher, with the Huntington, Ind., ammonia market pegged at the $635/st FOB level.

PCS Nitrogen confirmed that its production facility at Lima, Ohio, which is undergoing a major capacity expansion, experienced mechanical problems on Feb. 25 that resulted in seven days of lost production. The Lima facility resumed normal operating rates on March 4.

Western Cornbelt: The anhydrous ammonia market remained at $575-$610/st FOB regional terminals in the Western Cornbelt, with the low reported in Nebraska and western Iowa, and the upper end in eastern Iowa and Missouri.
Delivered ammonia from southern production points was steady at $580-$615/st in the region, depending on destination.

Northern Plains: The anhydrous ammonia market was pegged at $600-$625/st FOB in the Northern Plains, with the low reported in the Twin Cities and the upper end FOB Velva and Grand Forks, N.D. Delivered ammonia was reported at the $630-$647/st level in North Dakota for limited tons, although some regional suppliers were reportedly sold out until May.

Great Lakes: The anhydrous ammonia market was quoted at $615-$635/st FOB in the Great Lakes region, with the low reported by Michigan sources FOB Courtright, Ont., and the upper end FOB Huntington, Ind. Wisconsin sources pegged the common dealer price at the $625/st FOB level.

Black Sea: Sources say prices are correcting upward after a major drop, and are now pegged at $400-$410/mt FOB after several weeks in the $390s/mt FOB.

Traders say attempts this week to secure tons under $400/mt FOB were rebuffed at every level. Sources say the driving force for the price change was not so much stepped-up demand or dramatic losses in supply, but rather buyers and sellers reaching a new equilibrium. Industry watchers say the market overshot when it dropped below $400/mt FOB, and is now trying to correct itself. What seems clear is that the sub-$400/mt FOB product is now a thing of the past.

Middle East: Problems with production at a few facilities did little to boost the price out of the region. Sources say Arab ammonia remains in the $440s/mt FOB, with a slight nod to $450/mt FOB.

Asia: Buying remains steady, offering little excitement in the market. Reports are circulating that some buyers have invoked the “minus 10 percent” clause in their contracts. Sources say, however, that just a short while ago, these same buyers were asking for a bit more in their shipments.

Industry watchers say such ups and downs are normal in a basically flat market.

The South Koreans reportedly have been pushing for lower prices, but with no luck. Sources say every attempt to get the price below $500/mt CFR has been turned back.

Urea

Asia, China, Eastern Cornbelt, Great Lakes, India, Market Watch, Northeast, Northern Plains, U.S. Gulf, Urea, Western Cornbelt

U.S. Gulf: While granular prompt barge prices bounced around last week, they ultimately settled in the prior week’s range of $288-$298/st FOB. Most trades, however, were put in the $290s/st FOB. One player said most sellers were holding firm on prompt product toward the high end of the range.

April was reported in the $280s/st FOB, with May falling off into the $270s/st FOB.

Prills spanned a broader range, with some arguing that the prill market was following granular down. Prilled urea was called $300-$320/st FOB.

July-January urea imports were up 1 million st over the year-ago period, or 27 percent, to 4.64 million st from the year-ago 3.64 million st. January imports were up 29 percent, to 774,394 st from the year-ago 602,617 st.

YTD Chinese imports were 889,242 st, up from the year-ago 526,955 st. Other countries with big increases were from the Middle East: Qatar at 976,131 st versus the year-ago 802,367 st; UAE at 487,510 st versus 235,414 st; Oman at 223,118 st versus 34,232 st; and Bahrain at 291,004 st versus 241,895 st. Even Egypt was up, at 117,279 versus the year-ago 44,525 st.

Eastern Cornbelt: The granular urea market was reported in a broad range in the Eastern Cornbelt last week, from a low of $340/st FOB Cincinnati, Ohio, to a high of $360-$370/st FOB out of inland terminals.

Western Cornbelt: Urea was a “hot topic” in the region last week, according to one source, with terminal prices remaining under pressure due to a softer NOLA barge market.

“Some of the low urea prices you hear are April/May quotes,” he said, adding that some regional suppliers with inventories were “matching up” to meet the lower levels, while others are pricing “tons that are not here yet.”

The granular urea market was pegged at $345-$365/st FOB in the Western Cornbelt last week, depending on location, with the low end reported out of spot Mississippi River locations.

Northern Plains: The granular urea market had reportedly slipped to $335-$355/st FOB the Twin Cities for river-open tons. Delivered urea was reported in the $390-$405/st range in the Dakotas, with the upper end also reported on an FOB basis at Carrington, N.D.

Great Lakes: The granular urea market had reportedly slipped to $375-$385/st FOB in the Great Lakes region, with the low reported in Wisconsin and FOB Maumee, Ohio. Michigan sources pegged the dealer market at $380/st FOB Courtright and $385/st FOB Webberville, Mich.

Northeast: Granular urea pricing had dropped significantly in the Northeast, fueled by a softening NOLA barge market. Sources quoted the urea market at $370/st FOB Fairless, Penn., down some $10-$15/st from last report. Out of East Liverpool, Ohio, the urea market had reportedly slipped to as low as $350-$355/st FOB last week.

China: Sources say producers have become resigned to prices in the $270s/mt FOB for prills, and right around $290/mt FOB for granular. Unfortunately for the producers, traders report that bids are coming in for much lower prices.

Early last week, producers were saying April prilled tons would be sold at $280-$285/mt FOB. Sources say this pricing idea seems based on the notion that India will be calling a tender by April 15. Adding to the bullish attitude is the growing number of phone calls and emails by end-users looking for cargoes.

As optimistic as the producers are, however, sources say prices are now on a downward trajectory. One trader noted that the fate of the Chinese urea producers is currently in the hands of the Indians. No matter how many sales China has to other buyers, he said, India is the one big buyer that will set the tone for prices and availabi

Nitrogen Solutions

Eastern Cornbelt, Great Lakes, Market Watch, Northeast, Northern Plains, U.S. Gulf, UAN, Western Cornbelt

U.S. Gulf: UAN barges continued to be called $260-$265/st ($8.13-$8.28/unit) FOB, with April business reported at $255/st FOB.

Vessels continued to be called somewhere between $280-$285/mt CFR.

July-January imports were up 26 percent, to 1.97 million st from the year-ago 1.56 million st. January was up 16 percent, to 332,839 st from the year-ago 287,801 st.

Eastern Cornbelt: The UAN-28 market was quoted at $270-$280/st ($9.64-$10.00/unit) FOB in Ohio and Indiana, with the low in Cincinnati and the upper end FOB Burns Harbor, Ind. UAN-32 remained at $310-$320/st ($9.69-$10.00/unit) FOB in the Illinois market, with rail-delivered tons quoted at $325-$330/st ($10.16-$10.31/unit) in the region.

Western Cornbelt: UAN-32 remained at $305-$320/st ($9.53-$10.00/unit) FOB regional terminals in the Western Cornbelt, with the low reported in southern Missouri. Sources continued to quote the common dealer market in the $310-$315/st ($9.69-$9.84/unit) FOB range out of most river locations last week.

Northern Plains: UAN-28 remained at $290-$305/st ($10.36-$10.89/unit) FOB in the Northern Plains, with the low in the Twin Cities and the upper end for spring tons out of terminals in North Dakota.

Great Lakes: UAN-28 was reported at $285/st ($10.18/unit) FOB Courtright and $297/st ($10.61/unit) FOB Webberville. Wisconsin sources pegged the UAN-32 market commonly in the $315-$320/st ($9.84-$10.00/unit) FOB range to the dealer.

Northeast: Spring fieldwork is still a ways off in the Northeast, sources said, and the harsh winter conditions have reportedly put pressure on UAN pricing due to very slow movement. “As vessels arrive, there is always a ‘deal’ available as someone tries to make room for new tons,” said one source.

The UAN-32 market was pegged at $282-$285/st ($8.81-$8.91/unit) FOB Baltimore, Md., down some $3-$5/st from last report, with UAN-30 quoted at the $265/st ($8.83/unit) FOB level at that location.

Out of terminals in upstate New York, the UAN-32 market remained at $336/st ($10.50/unit) FOB.

Ammonium Sulfate

Ammonium Sulfate, Eastern Cornbelt, Great Lakes, Market Watch, Northeast, Northern Plains, U.S. Imports, Western Cornbelt

U.S. Imports: July-January imports were up 46 percent, to 220,036 st from the year-ago 150,883 st. January imports were off 35 percent, however, to 19,693 st from the year-ago 30,137 st.

As for YTD imports, China has made a big contribution, at 93,477 st of the total 220,036 st. That compares to a year-ago performance of just 12,011 st and 150,883 st, respectively.

Eastern Cornbelt: Most sources quoted the granular ammonium sulfate market in the $315-$325/st FOB range in the Eastern Cornbelt last week, with rail-DEL tons pegged in the $320-$330/st range.

Ammonium thiosulfate was steady at $340-$350/st FOB in the region.

Western Cornbelt: Granular ammonium sulfate remained in a broad range at $285-$325/st FOB in the Western Cornbelt, with the low reported in Missouri and the upper end in Iowa.

Ammonium thiosulfate was unchanged at $310-$345/st FOB in the region, depending on location.

Northern Plains: The granular ammonium sulfate market was unchanged at $300-$310/st FOB in the Northern Plains, with delivered product referenced in the $320-$325/st range, depending on location. Sources reported limited product available, however, with several suppliers reportedly offering no tons for sale in early March.

The ammonium thiosulfate market was quoted at $320-$330/st FOB for either prompt or prepay tons in the Northern Plains.

Great Lakes: Granular ammonium sulfate remained at $315-$325/st FOB in the Great Lakes region, with the low end reported in the Wisconsin market and the upper end FOB Webberville.

The ammonium thiosulfate market was pegged at $340-$365/st FOB in the region, with the low end of the range quoted by Michigan sources and the upper end in Wisconsin.

Northeast: Granular ammonium sulfate was tagged at $305-$315/st DEL in the Northeast, with the Hopewell, Va., market reported at $280-$285/st FOB for tons shipped to the Northeast.

Mexico: Most sources expect that a decision by Mexico’s Economy Ministry to levy temporary antidumping duties on Chinese and U.S. imports will have more of an impact on China than the U.S.

While China has been recently pumping out a lot of additional product, U.S. export statistics show only 24,173 st of ammonium sulfate going to Mexico from the U.S. in the current fertilizer year. For July-January, total U.S. exports were 790,270 st, with Brazil being the dominant destination at 403,481 st. U.S. ammonium sulfate exports in the year-ago period to Mexico were higher at 62,396 st out of a total 911,458 st.

There were unconfirmed reports last week of ammonium sulfate vessels from China already being impacted. The duty on Chinese product was reported at US$0.1782 per kilogram, and for the U.S. at US$0.1858 per kilogram.

Mexican producers Agrogen SA and Metalurgica Met-Mex Penoles SA lodged complaints about imports nearly a year ago, and the country initiated an investigation last summer.

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