Research Triangle Park, N.C.-Neither Vogel Seed & Fertilizer Inc. nor NuFarm Americas Inc. had any public response to a lawsuit filed by Bayer CropScience claiming infringement of Bayer’s patented use of the pesticide imidacloprid on fertilizer. The suit, filed in U.S. District Court for the Eastern District of Virginia, seeks to halt NuFarm’s and Spring Valley’s joint actions to formulate and sell imidacloprid on fertilizer. Bayer contends these actions violate the Bayer-owned patent and seeks to have the court uphold its patented uses. Bayer says in the suit that it is the inventor of the mixture of imidacloprid on fertilizer, sold under the brand name Merit Plus Turf Fertilizer; and claims users have enjoyed the benefits of the patented technology for over 10 years. The company says the technology revolutionized insect control on lawns and golf courses while providing significant application convenience to users.
U.S. Gulf/Tampa:With the Tampa DEL price set for the entire month of July, there was no movement in prices for either the Gulf or Tampa. However, as a result of the shutdown of Mississippi Phosphate’s sulfuric acid plant, which halted production, vessels of ammonia bound for there will have to find new homes – and that could weaken the market. Last week, sources said ammonia prices were still steady but trending softer.
Eastern Cornbelt: Fall prepay programs were generally over, and pricing quotes were for very limited spot business last week. The ammonia market continued to be quoted in the $460-$470/st FOB range for cash sales. Agrium’s anhydrous ammonia postings firmed on July 9 to $465/st FOB E. Duqubue/West, serving Iowa; $470/st FOB Niota, Ill., and E. Duqubue/East, serving Illinois and Wisconsin; $475/st FOB Meredosia and Marseilles, Ill.; and $485/st FOB Cincinnati/Finney, Ohio.
Western Cornbelt: Sources reported few changes to spot fertilizer markets as the region slid into the summer lull. The ammonia market was pegged in a broad range at $430-$460/st FOB, depending on location and supplier. One supplier was offering forward contract ammonia for August at $455/st FOB in Nebraska, $465/st FOB in Iowa, and $470/st FOB in Missouri.
Agrium’s anhydrous ammonia postings moved on July 9 to $430/st FOB Early, Garner, and Whiting, Iowa, and Greenwood, Neb.; $425/st FOB Hoag, Neb.; $420/st FOB Clay Center, Kan.; $415/st FOB Conway, Kan.; $410/st FOB Mocane, Okla.; and $400/st FOB Borger, Texas. Agrium’s delivered ammonia postings in Texas firmed on that date to $425/st north of Interstate 40 and $430/st south.
Northern Plains: The ammonia market was quoted at $430-$450/st FOB in the region for spot tons, with the low representing Agrium’s July 9 posting FOB Mankato, Minn. One supplier was offering forward contract ammonia for August at the $465/st FOB mark in the region.
Delivered ammonia was tagged at the $465/st mark in North Dakota. Sources said fall prepay ammonia programs were now off the table. There were reports of wind damage at an ammonia terminal in Murdock, N.D., but the extent of the damage was unavailable.
Great Lakes: With most fall prepay programs now officially off the table, sources tagged the anhydrous ammonia market at $460-$480/st FOB for spot tons in the region, with the low in Wisconsin and the high in Michigan.
Western U.S.: Effective July 9, Agrium reposted anhydrous ammonia at $440/st rail-DEL in most of Washington, Oregon, and northern Idaho; $460/st truck-DEL in Oregon and Washington east of the Cascades, and in Idaho north of and including Idaho County; and $475/st truck-DEL in Montana and northern Wyoming. Also effective July 9, Agrium’s aqua ammonia postings moved to $115/st FOB Central Ferry and Finley, Wash.
Black Sea: Even the Ukraine government thinks the price of ammonia has more to come off. The KIP remains at $225/mt FOB at a time of falling prices.
In the past, the KIP was lowered only after it was clear the market had moved below the official price level. For now, however, the price has not yet hit the KIP, but sources in Asia are convinced it should hit the $225/mt FOB level unless something big happens.
Even the up tick in demand from Yuzhnyy from American buyers due to shortages from Trinidad is not expected to help strengthen the price, observers said. One Asian trader noted that inventories have been building up in Yuzhnyy, and even with an upsurge in orders, it will take a while to work through the excess tons on hand.
While most in the industry are ready to call the market soft and none will be surprised to see sub-$230/mt FOB material this month, as of last week none were prepared to point to any hard and firm business below $230/mt FOB. Sources in Asia peg the market at $230-$235/mt FOB, with room for further softening.
Middle East: FACT/India settled a tender with QAFCO for two cargoes at $300/mt CFR for July and $303/mt CFR for August. Sources said these prices reflect a dramatic softening to $260-$265/mt FOB. The Middle East producers had been struggling to hold on to higher prices, but the global situation was not helping them at all.
Producers had been hoping that Indian buyers would step up their buying program now that the phos acid contracts are settled and shipments have begun. Sources point out, however, that buyers are holding back. One trader noted that buyers are waiting for prices to soften further before making a commitment for future ammonia purchases.
One trader figured that QAFCO was ready to push the price down quickly in an attempt to get other buyers to step in again. As Green Markets went to press that maneuver was not working, as buyers spoke up for even lower prices.
India: The FACT tender did not begin the rush to buying expected by ammonia producers. FACT paid $300/mt CFR and $303/mt CFR to Qafco for July and August deliveries, respectively. Additional purchases are expected as the phosphate industry gears up now that the phos acid shipments are arriving. Sources report buyers are still holding off, however, in the hopes of pushing the price down further.
Asia: Sources report buyers are currently content with the shipments scheduled. Customers in Taiwan and South Korea continue to take their contracted tons, and appear to be satisfied enough with delivery quantities and times that no requests for additional tons are being made.
Production remains strong at KPI and KPA in Indonesia. The only downturn in ammonia availability comes from Kaltim, which is concentrating on producing urea for export.
UREA
U.S. Gulf: Granular urea barge prices slipped last week. Sources quoted the range for most of the week at $312-$318/st FOB, with the upper level reported early in the week. Many sources talked of $315/st FOB as a commonly quoted number, but confirmation came very late in the week that a sale was concluded as low as $310/st FOB.
Several sources pointed out that with UAN prices on the rise urea was becoming a bargain in comparison, and that farmers may switch to urea over UAN when they learn about the price difference. If and when that happens, the price of urea may head north. Still, more vessels are due to arrive in August and September and world prices were well below the U.S. market, so supply will not be a problem and the price may remain stable. Lower prices from China were also said to be putting pressure on the market.
Trading for prills was thin last week. Barge prices were in the range of $280-$285/st FOB, with most quoting toward the lower end of the range.
Eastern Cornbelt: Granular urea was pegged at $350-$360/st FOB in the region, with the low out of spot river locations in early July. Several sources pegged the dealer price commonly at the $350-$355/st range FOB Ohio River terminals last week.
Western Cornbelt: Granular urea was quoted at $350-$360/st FOB in the region for spot tons, with some dealer reference levels up at the $365/st FOB level.
Northern Plains: Granular urea was quoted at $350-$360/st FOB the Twin Cities, with delivered urea pegged in the $370-$375/st range in North Dakota. One supplier was referencing forward contract urea for August at the $385/st DEL level in North Dakota and northern Minnesota. Sources reported some interest due to concerns about ammonia availability for the fall.
Effective July 9, Agrium’s granular urea postings moved to $370/st FOB Shakopee, Minn., and North Dakota terminals at Alton, Carrington, Colfax, Marion, and Scranton. The company’s rail-DEL urea postings moved on that date to $375/st in Minnesota and the Dakotas.
Great Lakes: Granular urea pricing covered a wide range. Wisconsin sources tagged the low end of the market at $350/st FOB and $360/st DEL last week, while dealer pricing out of Michigan warehouses remained as high as $400-$405/st FOB. Sources reported few new sales to test the market, however. Effective July 9, Agrium’s granular urea postings moved to $375/st rail-DEL in Wisconsin.
Northeast: Granular urea was quoted at $365-$368/st FOB Baltimore or Philadelphia to the dealer. The market FOB Savannah, Ga., was quoted at the $360/st mark.
Western U.S.: Agrium’s granular urea postings firmed on July 9 to $370-$385/st DEL in Montana and Wyoming, depending on location; $395/st FOB Washington warehouses at Glade, Kennewick, Warden, and Wilson; $400/st DEL in Washington, Idaho, Oregon, and northern Nevada from plants and/or warehouses in Alberta and Oregon; $410/st DEL in northern and central Utah; and $415/st DEL in southern Utah.
India: While MMTC and IPL take delivery of the tons purchased in the past few months, sources said at least MMTC is expected back in the market next month. The results of the last tender showed a soft market, with a three-way competition between China, Yuzhnyy, and the Middle East. MMTC took about 600,000 mt in its last tender when everyone expected them to take closer to 1 million mt.
When the next tender is called, sources again expect to see 800,000 mt to 1 million mt ordered for September and October loadings.
The big advantage for MMTC is the expected drop in the Chinese export duty beginning Oct. 1. Once the duty is halved, sources said Chinese suppliers will either force down their competitors’ prices or take all the October business. Either way, Indian buyers should see prices at least $10/mt lower than the last tender.
Black Sea: Increases in shipping rates from Yuzhnyy to India may put shipments from this area to Indian buyers at risk, sources said. When the MMTC tender closed earlier this month, the freight was about $32-$35/mt for a panamax to India. Late last week, sources pegged the market in the low $40s/mt. That increase may be enough for some winners of the tender to shift their purchases from Yuzhnyy to China.
Sources in Asia and Europe appear to disagree on where the market has moved, but they all agree the price is falling. The difference between the two is more on how one judges the market.
No business has been done below $270/mt FOB, said one trader; therefore the market remains at $270-$275/mt FOB, because that is where the last deal was concluded. Another source countered that a firm bid at $265/mt FOB would be accepted in a New York minute, and that bids of $260/mt FOB are being considered. Therefore, he argued, the market is $260-$265/mt FOB even though nothing has been done at that level.
Arguments are strong for the sub-$270/mt FOB business. When producers are willing to talk to potential buyers at the low-$260/mt FOB level and when no sales are on the books for August, industry observers say the lower pricing idea is the new market level. Adding to the argument that the price is softening away from the prices set by the last Indian tender are reports the Baltic and Chinese prices have dropped.
For purposes of general planning, sources now peg the market at $265-$270/mt FOB with further room to drop.
One major trading house is saying India – most likely MMTC again – will come back into the market in August. At that time, the conventional wisdom believes the price will have slipped into the low $260s/mt FOB. That, sources said, should make the nadir of the market.
Working against a major increase in the price of Yuzhnyy material at the time of the next Indian tender will be the continued presence of Chinese material. Even now, Chinese urea is a serious competitor. Sources said October loadings from China will be even more competitive when the export duty on urea drops to 15 percent from the current 30 percent.
Middle East: Being iced out of the last Indian tender has not helped the Middle East producers hold firm on prices. Sources said the market has moved into the $290s/mt FOB – exactly where is still up in the air. Some argue the price is in the upper $290s/mt FOB, while others claim the level is at the lower end.
Reports that the producers are willing to talk to buyers bidding at $290/mt FOB reinforce the idea that the price has slipped dramatically. Traders using Chinese material as a benchmark for pricing say the price will have to go lower than $290/mt FOB to be competitive. One estimate put the competitive price at $285-$287/mt FOB.
At this time, however, no one is talking about current tons being discussed below $290/mt FOB. Still, one producer reportedly told a trader that as long as the price is above $200/mt FOB, they are making money.
In general, prills are driving the price down. With no other major buyer around for prills except India, sources said the prill warehouses are rapidly filling. Granular supplies remain strong, but Sabic, PIC, and Qafco have all begun their shipments to the United States.
For now, with only some slight fluctuation in price, prills and granular remain at parity at $290-$300/mt FOB.
Even with contracted tons in the process of being shipped to the States, sources said the movement is not enough to provide a serious floor on the price. Industry observers are betting that MMTC representatives will begin talks with the Middle East producers for material before the Indian firm calls its next tender. Pre-tender deals are not unheard of, and often secure the buyer a reasonable price while at the same time the producers can fill their short-term order books.
Just as the Black Sea producers face a threat from China, so also do the Middle East suppliers. Chinese producers offer flexibility in shipping options that is difficult for the other producers to match. If the Chinese market remains on its current downward slide, sources said Chinese urea could either dominate the next Indian tender or force a further drop in prices from the Middle East.
China: With the image of another Indian tender on the horizon, sources say Chinese urea remains a deciding factor in the market. Currently, Chinese urea has a 30 percent export duty levied on each ton. Beginning Oct. 1, that tax will drop to 15 percent. Sources said there is nothing in the market dynamic that argues for an increase in the Chinese price. If October cargoes are offered in the Indian tender, sources say Chinese material could take the day.
Production in China has grown to a level that no longer just matches domestic needs. Sources said China has easily become an exporter of urea year-round. Chinese exporters also have the flexibility to load a variety of different-sized vessels. This flexibility allows Chinese urea to compete favorably against Black Sea and Middle East tons.
Domestic prices in China remain soft. Sources said the price has now dropped into the $260s/mt FOB.
Indonesia: Delays in new selling tenders are a sign that finding buyers is getting more difficult, sources said. Reportedly, several previously awarded lots have yet to be lifted because buyers are getting difficult to find.
The last business done was pegged at $267/mt FOB bulk. Any future tenders will be lower, say sources. Despite the dropping price, observers said the Indonesian producers are anxious to keep exporting because of the hard currency that is earned with each sale.
Vietnam: Asian sources keep reporting Vietnamese traders offering urea for export. Officially, the tons are supposed to be from the Phu My plant, though some observers are not so sure about that claim.
At first the tons were identified as re-exported Chinese material, and then as Phu My product. One trader suggested the urea is material that entered Vietnam via the land border with China and “bypassed” the normal customs regime.
Whatever the source, observers note the Vietnamese traders are able to secure a few deals with neighboring countries.
NITROGEN SOLUTIONS
U.S. Gulf: A combination of the flooding situation at Coffeyville and low warehouse inventories worked to push up solutions prices last week. Gulf barges moved from the previous week’s $250-$255/st FOB ($7.81-$7.97/unit) range up to $260-$265/st FOB ($8.12-$8.28/unit) last week. In addition, demand was said to be increasing.
Strong demand from Australia and Argentina was also said to be a factor in the strengthening solutions market. However, the higher prices were out of line in comparison with urea, which could be an alternative for farmers. Several sources speculated that either UAN would push the price of urea up or urea will pull the price of UAN back down.
Eastern Cornbelt: UAN remained in very tight supply, with some suppliers sold out through fall and others simply not quoting prices for replacement tons. The Coffeyville situation only added to the supply concerns. Illinois sources quoted terminal pricing for UAN-32 in the $295-$300/st ($9.22-$9.38/unit) FOB range last week for limited quantities. One supplier was offering forward contract UAN-32 for August in the $9.30-$9.75/unit FOB range in the region.
Western Cornbelt: UAN remained in very tight supply, and dealer prices were firming. The dealer market for UAN-32 was quoted in the $295-$305/st ($9.22-$9.53/unit) range FOB regional terminals for limited spot tons, with no prepay offers reported. Some suppliers were reportedly referenced as high as $310/st ($9.69/unit) FOB to the dealer last week.
Northern Plains: UAN pricing, provided product was available, was pegged at a firm $9.40-$9.70/unit FOB to the dealer for prompt tons. Availability was the key question, with several sources describing the terminal system as empty in the region. North Dakota sources said the last in-season sales of UAN-28 took place at the $270-$275/st ($9.64-$9.82/unit) DEL range, but were not sure what current replacement costs would be. One supplier was offering forward contract UAN-32 for August at the $310.60/st ($9.71/unit) level FOB Pine Bend, Minn.
Great Lakes: Sources reported a “flush of interest” in June for fall UAN, with some even fielding inquiries for spring 2008 solutions supplies. UAN was described as very tight, and cash market pricing was up to reflect this limited availability. The regional market was quoted at $9.38-$9.75/unit FOB terminals, with the low also reported for limited supplies of rail-DEL fill tons in Wisconsin. One Wisconsin supplier was referenced at the $9.70/unit FOB mark for prompt tons, and Michigan sources tagged the dealer market for UAN-28 firmly at $269/st ($9.61/unit) FOB Schoolcraft and $273/st ($9.75/unit) FOB Muskegon.
Northeast: The UAN market was “smoking hot,” according to one source, with “very few tons to be had.” Tight supplies were reportedly prompting some calls from Ohio Valley dealers hoping to source tons from East Coast suppliers. The Baltimore market for UAN-30 was quoted at $248-$250/st ($8.27-$8.33/unit) to the dealer, and sources said supplies were tapped out at Philadelphia. Rail-delivered pricing for UAN-32 ranged from the high-$280s/st to the low-$290s/st ($9.00-$9.13/unit) in the region, and dealer pricing out of tanks in upstate New York was pegged at the $292/st ($9.13/unit) FOB level.
The UAN-32 vessel market had reportedly strengthened to the high-$280s/mt C&F for the next round of business, up more than $20/mt from three weeks earlier.
AMMONIUM NITRATE
U.S. Gulf: The barge market continued to be quiet last week, but prices were said to be firm at $255-$260/st FOB and no change was expected anytime soon. Warehouses along the river system were not likely to make buys during the hot summer months, sources said.
Western Cornbelt: Ammonium nitrate remained at $315-$325/st FOB, where available, with the low reported in southern Missouri.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate remained at $230-$240/st FOB for the last sales. While reference prices continued to be reported as low as $205/st FOB, sources said those fill numbers were followed by a “call for availability” caveat.
Western Cornbelt: Granular ammonium sulfate pricing remained at $225-$240/st FOB for the last sales. Several regional suppliers were sold out of product.
Northern Plains: Granular ammonium sulfate was pegged at $205/st FOB and $210-$215/st DEL in the region, depending on location and supplier, with inventories described as tight. Some sources talked of a price increase likely in August, with product allocation for the fall season.
Great Lakes: Ammonium sulfate was quoted at $200-$210/st FOB in the region, but supplies were limited, especially at the bottom of that range. A Wisconsin source quoted mid-grade sulfate at the $185/st FOB mark for the last sales, but said the market may have firmed $20/st from in-season levels.
Northeast: Granular ammonium sulfate remained at $200-$215/st FOB in the region, with limited availability. No delivered prices were reported for ammonium sulfate in the region.
PHOSPHATES
Central Florida: Although prompt phosphate sales out of Central Florida were far from abundant last week, they did occur. Mosaic sold 5,000 st of rail-delivered DAP at $380/st FOB, and had a small amount still available for prompt delivery. That price was $5/st FOB below its asking price, but $8/st FOB above the previous week’s high in the range.
Domestic phosphate prices were strengthened last week when Mississippi Phosphates announced that a component failed at its sulfuric acid plant and the facility would have reduced production of 1,000-2,000 st/d for approximately 30 days. That situation will primarily affect the Gulf market, but will probably have some carryover to Central Florida and possibly the export market. On the plus side, the summer has been and will likely continue to be slow for phosphate sales, so the impact will not be dramatic.
The DAP price range changed to $372-$380/st FOB based on actual sales, from $370-$372/st the previous week. Mosaic’s asking price was $385/st FOB for DAP and $381/st for MAP. CF was listing a price of $375/st FOB for prompt, $378/st FOB for September, and $382/st FOB for October. PotashCorp’s Central Florida reference price remained at $385/st FOB. In Texas, Agrifos was asking $410-$415/st FOB for truck sales and $410/st FOB for railcars. Agrifos was sold out into late September.
U.S. Gulf: The Arkansas River was closed to commercial traffic last week, not because of flooding or lock maintenance, but rather due to fast flows. Water was reportedly building up in the reservoir behind the Keystone Dam and had to be released to prevent an overflow. The normal flow was about 22 million cubic feet/second, but by Wednesday it had been increased to 59 million cf/s, and had reached 70 million cf/s by Thursday. That effectively closed the river to barge traffic, and it was expected to remain closed until sometime in the coming week, at least.
Barges on their way upriver were forced to fleet at Rosedale as a result. That situation created an opportunity for some buyers. Rather than pay fleeting costs, at least one of the phosphate barges was sold at $398/st FOB, which was the price range for the previous week but a couple dollars below current levels. In the meantime, warehouses along the river will go unsupplied, but that should not be much of a problem because sales are slow at this time of year.
The situation on the Arkansas might have the effect of slowing the price rise of phosphate barges. Prices began to move up shortly after the July 6 announcement by Mississippi Phosphates of its sulfuric acid plant problems as Pascagoula (see news briefs).
Confirmed barge sales took place as high as $401/st FOB last week in the wake of the announcement, and by late in the week sellers were asking $403-$405/st, but no sales could be confirmed at those levels. A source said sellers were no longer soliciting business, but that buyers were calling them instead. Demand was relatively low, but so was supply.
The DAP barge price range was $398-$401/st FOB, based on actual sales. Mosaic’s asking price last week was $403/st FOB for prompt sales, but quantities were limited.
Correction: DAP and MAP barges traded at a flat $398/st FOB for the Green Markets dated July 9. While this was reported in the text on page 8, the change was not made on the price scan pages.
Eastern Cornbelt: DAP and MAP were quoted at $425-$435/st FOB in the region, with the low out of spot river locations in Illinois. The dealer market FOB Cincinnati had reportedly firmed to the $430/st FOB mark as of July 9. Several sources said they were well positioned for fall plowdown demand, and some even reported booking out phosphate fill for the spring 2008 season. One supplier was referencing forward contract DAP for August at $432/st FOB Peoria, Ill., and $435/st FOB Cincinnati.
10-34-0 remained at $335-$350/st FOB in the region for the last sales.
Western Cornbelt: DAP and MAP remained at $420-$430/st FOB most river warehouses in the region. 10-34-0 was unchanged at $325-$350/st FOB.
Northern Plains: DAP and MAP were quoted at $425-$430/st FOB warehouses in the region, with rail-DEL MAP reported at the $450/st mark in North Dakota. Forward contract pricing for August FOB Pine Bend was referenced by one regional supplier at the $438/st mark for DAP and $435/st for MAP. The 10-34-0 market was reported at the $325-$335/st FOB level in Minnesota for spot tons, with no prepay offers available.
Great Lakes: DAP was pegged at $430-$443/st FOB regional warehouses, with the upper end in Michigan and the low quoted by Wisconsin sources. Truck-DEL DAP was quoted at the $440/st mark by one central Wisconsin source. MAP was pegged at $430-$439/st FOB, with the upper end again in Michigan to the dealer. No current prices were reported for TSP.
10-34-0 was pegged at $335-$351/st FOB, with the low in Wisconsin and the high in Michigan. Sources in both states said a price increase is imminent based on new, higher replacement costs for acid.
Northeast: DAP and MAP pricing were up from last report. Sources tagged the dealer market at $430-$437/st FOB the warehouse, with the upper end FOB E. Liverpool, Ohio. 10-34-0 pricing was also up, with the market quoted at $315-$325/st FOB. The upper end of the range was reported out of tank locations in upstate New York.
U.S. Export: Prices on the export phosphate market appeared to have become firm at $440/mt FOB, which was still highly profitable for producers. Last week, PhosChem made a sale of 8,000 mt to an undisclosed customer in an undisclosed country at that price. PhosChem was also holding discussions with the Indians, who will need a great deal more phosphates this year. In addition, PhosChem made an offer to Pakistan, but the prospects of a sale appeared dim because Pakistan wants to obtain product for $500/mt DEL or less, which will make it difficult for PhosChem or any other North American company due to the high cost of ocean freight.
POTASH
Eastern Cornbelt: Potash supplies remained very tight, with reports that producers are no longer accepting new orders for October forward shipment. Strong export demand is expected to keep the pressure on domestic prices and supplies, with allocations continuing through fall. The regional warehouse market was quoted at $235-$245/st FOB for limited spot tons, depending on grade and location.
Western Cornbelt: Potash pricing continued to firm on very tight inventories. The market last week was quoted at $237-$245/st FOB warehouses to the dealer, depending on grade and location.
Northern Plains: Potash supplies remained tight and firm at $202-$212/st FOB Saskatchewan mines, depending on grade, with granular muriate quoted at the $207/st FOB mark or higher at the mine. Granular potash FOB the Twin Cities was pegged at the $245/st FOB level for limited spot tons; one source said no large volumes were being offered at that level.
Effective June 19, Agrium reposted 60 percent red premium potash at the $220/st mark FOB Vade, Saskatchewan, with rail-DEL postings at the $247/st mark in northern Minnesota and $249/st in southern Minnesota.
Great Lakes: Potash pricing was up from last report. The warehouse market was quoted at $234-$254/st FOB in the region, with the low end reportedly available only from some suppliers, reserved for existing customers, and limited to fill ton quantities of past purchases. Several Wisconsin sources pegged the spot warehouse market in the low- to mid-$240s/st FOB last week, with limited availability and nothing being offered on a prepay basis for fall.
Northeast: Tight supplies continued to push up potash prices in the region. Sources pegged the market last week at $242-$245/st FOB E. Liverpool for red granular tons. Delivered potash was pegged at $257-$284/st, depending on grade and location, with the upper end reported for soluble potash.
SULFUR
Tampa: Mosaic announced last week that it had settled third-quarter sulfur pricing at $17/lt up from the previous quarter with one of its major suppliers, but that may not be the end of the game. Sulfur industry sources described the possibly record price increase as “soft,” considering inventories and supply shortages. A phosphate source said that although not all of the contracts had been settled, they were getting closer. At least one of the sulfur suppliers was said to be pushing for a bump of between $25-$30/lt for sulfur delivered to Tampa.
Historically, sulfur negotiations have been concluded on the Friday before the beginning of the Southwest conference, and that may be the case again this round.
Several refineries were operating below normal – and some not at all – last week. Naturally, the flood-damaged Coffeyville facility was a casualty and will remain down for some time. In addition, Valero’s refinery at Texas City also experienced flooding from extremely heavy rain, although not as serious as at Coffeyville. The Texas City plant was just beginning a turnaround and some of its sulfur supplies would have been curtailed as a result, but the flooding will stop all sulfur production until the situation is corrected. Valero’s Houston ultra-low-sulfur diesel plant, which was still having problems with the switchover to the new product, went down on July 9 for three days. The amount of lost production from those three refineries was not available, but will be felt in an already tight market.
West Coast: A sulfur vessel will be leaving from Long Beach bound for China in early August, and another will leave soon after from Stockton. Prices for sulfur on both of those vessels will be in excess of $100/mt. Negotiations for new contracts for the West Coast had yet to begin last week, but prices will go up substantially.
Vancouver: Sulfur suppliers in Vancouver settled second semester contracts with South African customers last week at prices between $105-$110/mt FOB, and those new, much higher prices will be the benchmark for other contracts up for negotiation. Some contracts will be settled at later dates, so the spread on the Vancouver price range became very wide last week – $57-$110/mt FOB, but that situation was only temporary.
India: Steep hikes in sulfur prices have forced FACT to close down its caprolactum plant. The ailing company may also be forced to close down its ammonia plant in the coming days, sources said. The company expects to be able to continue producing other fertilizers. FACT consumes about 200,000 mt sulfur and 300,000 mt phos rock annually as raw material for its main plants. For production of caprolactum, FACT requires oleum, a variant of sulfuric acid, for which sulfur is needed, company sources said. Sulfur prices have increased by 100 percent in four months, from $89/mt to $168/mt. The price of phos rock had also gone up from $79/mt to $125/mt. FACT depends on sulfur imports from the Middle East, the US, and Canada. The company has at present a stock of ammonium sulfate equivalent to two months production and does not see a shortage in the near future.
MARKET NOTES
India: The Department of Fertilizers has projected the gas requirement for the sector to increase from 41.02 million standard cubic meters per day (mmscmd) in 2007 to 55.889 mmscmd by 2009-10, and further to 79.36 mmscmd by 2011-12. The demand is expected to hit 95.36 mmscmd – assuming a 5 percent per annum increase in the demand for urea – by 2016-17. DOF has made it clear that if the demand for gas is suitably met, production capacities in existing units would increase, closed fertilizer units would be revived, and non-gas-based fertilizer plants would be converted into gas. This would lead to an increase in the overall production capacity of urea to more than 30 million mt by 2011-12, and further to 38 million mt by 2016-17. Sources say government officials indicated that gas allocated to fertilizer production would have priority.
The country’s monsoon rains were above normal in June and have covered most parts of the country, likely spurring the sowing of crops such as rice, cotton, and soybeans. Rainfall since June 1 has been 7 percent above the average recorded between 1941 and 1990, said the director at the India Meteorological Department’s National Climate Centre.
The government-owned Rashtriya Chemicals and Fertilizers Ltd (RCF) has told the DOF that it wants to build two greenfield fertilizer projects – a coal-based urea and chemical unit, and a greenfield urea plant based on natural gas as feedstock. RCF is keen on setting up the coal-based urea and chemical plant in collaboration with the Gas Authority of India Ltd. (GAIL). RCF has zeroed in on a site where a defunct unit of the Fertilizer Corp. of India at Talcher in Orissa is located. The site for the gas-based unit has not been decided, but it could possibly be Durgapur, where FCI had a urea unit.
In other news, RCF plans to get into making alternative building materials from gypsum that will subsequently make load-bearing panels to substitute bricks. The project, claimed by RCF to be the first of its kind in India, will produce 1.4 million square feet of panels every year that can be used to build up to 10,000 houses. “This will revolutionize mass housing projects in the country,” said the company chairman. Gypsum comes as a byproduct when rock phosphate is processed to make phosphoric acid. RCF produces up to 150,000 mt/y of gypsum. RCF claims houses built from these panels are also resistant to earthquakes of magnitude 8.5 on the Richter scale.
South Africa: Recent problems with Chinese products have reached the fertilizer industry, with claims by South African pineapple growers that the government allowed highly-contaminated zinc sulfate from China into the country. The product was reportedly sold to farmers via Protea Chemicals, a unit of Omnia Holdings. Farmers found out about the problem only after they shipped their pineapple to Switzerland, which rejected them. Later tests revealed high levels of cadmium, arsenic, and lead in the fertilizer.
Saudi Arabia: The Saudi Arabian mining company Ma’den has signed a contract for building a factory for the production of ammonia with a capacity of 3,300 mt/d within the framework of the phosphate project, which is considered the largest in the world. The SR 3.6 billion contract was signed with the Korean company Samsung. The factory completion date is December 2010.
Jacobs Engineering Group Inc. reports that it received a contract to provide the basic design package for a 900 mt/d sulfur recovery unit (SRU) for the Khursaniyah Gas Plant. Officials did not provide the contract value. The new SRU will use Jacobs’ proprietary SUPERCLAUS® technology to recover sulfur from acid gas feed streams to produce molten elemental sulfur. It will be designed to achieve 99 percent sulfur recovery at the end of a two-year run. This 900 mt/d SRU train will be added in parallel to three SUPERCLAUS® trains now under construction. Together, the four units will recover 3,600 mt/d.
Steve Markey joined Agrium Inc. as director of purchasing July 9. He is based in the company’s Denver office, and was most recently with CF Holdings Inc. and Agriliance LLC.
John (Jack) W. Lewis retired on June 15 after 54 years of service with Southern Stevedoring Co. LP, a limited partnership of Kinder Morgan Inc. Lewis handled the potash movement into Houston and Beaumont, Texas, since 1961, and was president of Southern Stevedoring Inc. until May 1, 2005, when Kinder Morgan bought the company and changed its name. Since then, he served as general manager of the new company.
The Yara Foundation has awarded the African Green Revolution Yara Prize for 2007 to Josephine Okot and Akinwumi Adesina for their pioneering work with agricultural inputs and agrodealer networks. The Yara Foundation recognizes their contributions to boosting agricultural productivity and creating livelihood opportunities for communities across Africa. As the founder and managing director of Victoria Seeds Ltd, Yara said Josephine Okot is ably demonstrating how to develop new markets and a local private-sector agricultural inputs industry in her native Uganda. Akinwumi Adesina is widely known for his efforts to make farm inputs available to poor smallhold farmers. He developed a rural agrodealership model to allow owners of small village shops to develop into agrodealers selling agricultural inputs. He helped the Rockefeller Foundation develop a program that provides technical training and certification to this network of agrodealers. Adesina is currently associate director, Food Security and Africa Regional Program, at the Rockefeller Foundation.
Bakersfield, Calif.-Kern County officials expect to be adopting in September a ban on the use of un-composted or raw manure on crops grown for human consumption in response to the e-coli scare with leafy green produce last year. But that doesn’t mean there is lot of unprocessed manure being used in this large agriculture community, since a recent quick survey by the county agriculture commissioner didn’t find any farm use of this type of manure. Brian Pitts, chief of environmental health, told Green Markets after the board of supervisors put off final action last week to allow farmers to provide their input that he is confident an ordnance of some type will be passed on Sept. 11. No word has been received from the fertilizer industry, but Pitts expects support from area growers because “farmers here are increasingly interested in producing a safe product.” Pitts said one change under consideration is to allow raw manure to be used on crops that are grown for pasteurizing, such as canned corn and beans. Kern County was in the news last year when citizens voted to prohibit biosolids from being trucked in from Los Angeles and other nearby areas. That matter has yet to be resolved in the courts, however.
Princeton, Ill.-Ribbon-cutting ceremonies were held last month for a proposed plant that will generate renewable power from soybeans and produce synthetic oil and an organic-based fertilizer from the waste material. The plant, at the site of a former Ag View FS outlet, is the result of a joint venture between U.S. Sustainable Energy (USSE), Natchez, Miss., and Illinois Biofuel Group. USSE officials said the Illinois facility will be similar to the company’s R&D facility at Natchez, where the first four commercial reactors are being completed. General Manager Jerry Brent told Green Markets a 7-3-7 fertilizer is what’s left over after the soybean feedstock is gasified with a proprietary catalyst in a reactor at 800 to 850F. The gas is turned into oil in a condenser, and the leftover vapor is used to operate the power plant. “The fertilizer drops out of a vacuum system used to operate the reactor,” Brent explained. Illinois Biofuel President Dennis Radcliff said the plan is to construct two facilities – one to produce biodiesel fuel, and the other to produce biofuel, electricity, and the fertilizer. “The USSE/SSTP process is groundbreaking because of the enormous yield per bushel of soy it produces,” Radcliff reported. “Because the USSE process is 8-1/2 minutes from bean to fuel, the processing costs are 50 percent less than other competitive methods. Lastly, we can purchase from the farmers off spec soybeans not fit for normal use.”
Lexington, Ky.-A University of Kentucky researcher has found that adding coal ash makes ammonium nitrate less explosive and could be used to treat the entire annual production of this type of fertilizer for $10-$15 million. “We found that not only does it appear to be as effective in agriculture as a fertilizer, but it would have a longer shelf life than pure ammonium nitrate,” said Darrell Taulbee, a research scientist and industrial support coordinator at the university’s Center for Applied Energy Research. Taulbee has been researching ammonium nitrate coating on a $125,000 grant from the National Institute for Hometown Security, a DHS contractor, testing a variety of concentrations and using makeshift bombs to gauge how much of the explosive power was suppressed. He determined that a 20 percent ratio of coal ash to 80 percent ammonium nitrate prevented large blasts, even when the samples were crushed. “So far we have only demonstrated its effectiveness in stopping the propagation of the AN explosion,” Taulbee told Green Markets. “We also conducted some scoping lab studies that indicate the bulk density, particle size distribution and nitrogen-release rate are suitable for agricultural applications using existing farm equipment. However, these would need to be confirmed in the field in crop studies by looking at growth rates, trace element uptake, and application properties.” He said the detonation results would also need independent confirmation by experts in the field such as ATF, DHS, and New Mexico Tech., which have indicated an interest. By the time the funding is secured and the tests are conducted, he estimates that it will be a minimum of two years before the process could be available commercially. The material itself wouldn’t represent a high cost, but increased transportation costs would be a different matter. “However, I personally don’t think that farmers should be asked to bear the added cost for something that would benefit society,” Taulbee suggested. “I think subsidizing the coating of our entire annual production of ag-grade AN for $10 million to $15 million would be a drop in the bucket for the Homeland Security budget.”
Sarasota, Fla.-The Sarasota, Fla., Board of County Commissioners voted on July 11 to table an ordinance that would have restricted the use of fertilizers in the county for both residential and commercial applications. The measure would have regulated the amount, frequency, and distance from waterways of fertilizer applications, which are believed to play a role in the formation of red tide, an algae bloom that can have devastating effects on marine life. The vote was postponed because commissioners and staff could not come to an agreement on enforcement and other legal aspects of the proposal. The proposal could come back for a vote in August.
Washington-Sen. Tom Harkin (D-Iowa) reports that all 99 counties in Iowa now have been provided with tank locks for anhydrous ammonia tanks. The project began in 2002 with $200,000 to buy tank locks in areas with the highest number of meth labs and has since expanded, allowing law enforcement to secure thousands of locks at a cost of about $45 each. Harkin also says Iowa has the strictest pseudoephedrine control law in the country.
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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.
