All Posts from September 16, 2016

Honeywell’s AdvanSix in spin-off mode

Featured, News

Honeywell’s spin-off of new company AdvanSix is well underway, with the company declaring a pro rata dividend of AdvanSix common stock to be made effective at 11:59 p.m. EDT on Oct. 1, 2016, to Honeywell’s shareowners of record as of 5:00 p.m. EDT on Sept. 16, 2016, the record date. Each Honeywell shareowner of record will receive a distribution of one share of AdvanSix common stock for every 25 shares of common stock, par value $1.00 per share, of Honeywell, that it holds on the record date. When-issued trading commenced Sept. 14, and regular-way trading starts Oct. 3 for AdvanSix common stock on the New York Stock Exchange under the symbol “ASIX.”

AdvanSix expects to lease corporate headquarters space in Parsippany, N.J. Erin Kane, the company CEO, was most recently Honeywell Resins and Chemicals vice president and general manager. She has been with Honeywell since 2002.

Honeywell announced the planned spin-off of AdvanSix, its $1.3 billion Resins and Chemicals division, earlier this summer (GM May 13, p. 1). Major AdvanSix businesses include (2015 revenues): Nylon at $598 million, Ammonium Sulfate $338 million, and Chemical Intermediates $393 million.

Honeywell Chairman and CEO Dave Cote said the spin-off represents another step in the evolution of the Honeywell portfolio, and is consistent with Honeywell’s focus on businesses that offer high growth potential through differentiated technologies and software capabilities. He noted that over the past 15 years the company had made 90 acquisitions and divested approximately 70 businesses.

“AdvanSix is favorably positioned to continue to achieve global growth as a standalone enterprise,” said Honeywell President and Chief Operating Officer Darius Adamczyk. “It will now have the added flexibility to make capital investments to enhance its offerings and service to customers and drive value to shareowners.”

Company-wide, AdvanSix financials have been on a downward trend for the past three years.

$/millions         2015      2014       2013
Sales    1,329     1,790      1,766
EBITDA 136.6 165.6     221.5
Net Income  63.8 83.8 118.7

Despite the lower numbers for 2015, the company said figures for the last 12 months (LTM) are better, with net income of $78.1 million, EBITDA of $161 million, and revenues of $1.26 billion.

AdvanSix 2016 second-quarter net income 2016 was $15 million on sales of $308.4 million, down from the year-ago $25 million and $367.4 million, respectively. However, six-month income was up at $42.4 million on sales of $608.2 million from the year-ago $28 million and $677 million, respectively.

Analysts have observed that while the AdvanSix businesses are profitable, their margins are being stressed, particularly by Chinese competition. They do not offer the premium performance of Honeywell’s technology businesses.

AdvanSix AS is a co-product of the integrated caprolactam manufacturing process. For each pound of caprolactam that it manufactures, it produces approximately four pounds of AS. By comparison, AdvanSix said its competitors in the caprolactam market typically produce only two pounds or less of AS for each pound of caprolactam.

As for caprolactam, AdvanSix said most of the capacity increase since 2012 has come from China. It said announced capacity increases have been curbed, and that cost curve dynamics present potential for meaningful rationalization of high costs plants. The company said prices have firmed in 2016.

The spin-off will include Honeywell’s Sulf-N® ammonium sulfate production at Hopewell, Va., put at 1.6 million mt/y, according to the Green Markets Global Ammonium Sulfate Report, with anhydrous ammonia capacity at 530,000 mt/y, according to the Green Markets Global Nitrogen Supply & Demand Model.

The Hopewell site is the world’s largest single-site ammonium sulfate plant as of Dec. 31, 2015, according to the company. Most of the product is marketed to North and South America.

AdvanSix lists major AS customers as Brazil’s Heringer Fertilizantes, CHS Inc., Agrium’s Crop Production Services, Growmark, and Southern States Cooperative. It said it has long-time relationships with AS customers of between 15-40 years. It said over 70 percent of North American sales are to cooperatives and integrated retailers, and that the connection to the grower enables value added pricing.

AdvanSix lists major AS competitors as Chinese companies, BASF, and Pasadena Commodities International, the latter of which has brought antidumping trade against Chinese AS producers.

In 2015, the Mexican government imposed an antidumping duty of $0.0759 per kilogram on U.S. AS. Honeywell filed an appeal with the bi-national panel under the North American Free Trade Agreement.

As for AS, the company concedes that it sees weak agriculture fundamentals ahead of the 2016-17 season. Historical AS revenues have slowly dropped in recent years, from $389 million in 2013, $358 million in 2014, $338 million in 2015, and for the last 12 months of $315 million. The company said AS is a $3.5 billion global market.

The company noted that AS tracks the overall nitrogen market. However, it notes that it has a high conversion rate and utilization rate to premium granular product. It also noted that an anti-caking coating was launched in 2016 with strong customer acceptance. The company has also partnered with the J.R. Simplot Co. in producing a product that can be used as a substitute for ammonium nitrate.

AdvanSix argues that for AS, size and uniformity are the most important customer quality needs. Domestic producers have often used this analogy versus imports. AdvanSix said it has continuous efforts and trade secrets in place to drive granular quality and output. The company offers granular, mid-grade, and standard product.

AdvanSix estimates that AS represents 4 percent of the total nitrogen consumed, providing both nitrogen and sulfur. It said the AdvanSix AS price correlates with urea prices over the long-term, with a premium due to added sulfur value. The company said reduced sulfur depositions due to reduction of SO2 emissions have increased grower awareness of the need to include sulfur in fertilizer.

As for AS, while noting that the application is seasonally limited, the company said this is mitigated by the company’s reach to both North and South America, so as to participate in a “year-round” growing season.

USDA forecasts record corn, soybean production

News, News Briefs

Washington—The USDA on Sept. 12 released its updated Crop Production report, projecting U.S. corn production for 2016 at 15.1 billion bushels, up 11 percent from last year, but down less than one percent from the August forecast. Corn yields are expected to average 174.4 bushels/acre, down 0.7 bushel from the August forecast, but up 6 bushels from 2015. If realized, USDA said this will be the highest yield and production on record for the U.S, with record state yields expected in Idaho, Illinois, Iowa, Kentucky, North Dakota, South Carolina, Washington, and Wisconsin. Soybean production is also forecast at a record 4.20 billion bushels in 2016, up 3 percent from August and up 7 percent from last year, with yields expected to average a record 50.6 bushels/acre, up 1.7 bushels from last month and up 2.6 bushels from last year. All cotton production in the U.S. is forecast at 16.1 million 480-pound bales, up 2 percent from August and up 25 percent from last year, with cotton yields expected to average 802 pounds/acre, up 36 pounds from last year. U.S. rice production is forecast at 237 million cwt, down 3 percent from the August forecast, but up 23 percent from last year. If realized, rice production for 2016 would be the second highest on record for the country, with average yields projected at 7,569 pounds/acre, down 90 pounds from the August forecast, but 99 pounds higher than the 2015 average. Sorghum production in the U.S. is forecast at 488 million bushels, up 3 percent from last month but down 18 percent from last year, with average yields forecast at 75.7 bushels/acre, up 2.2 bushels from last month but down 0.3 bushels from last year. If realized, USDA said this will be the second highest sorghum yield on record for the U.S.

 

Urea

Black Sea, Eastern Cornbelt, Great Lakes, India, Market Watch, Middle East, Nepal, Northeast, Northern Plains, U.S. Gulf, Urea, Western Cornbelt

U.S. Gulf: Granular prompt barges spanned a broader range last week at $180-$187/st FOB. Sources said that the week began at the low end of the range and worked its way up to $186-$187/st FOB by week’s end. October was called $180-$185/st FOB.

Very little was heard on prills, with the market remaining in the $200-$205/st FOB range.

Eastern Cornbelt: The granular urea market was reported at $215-$230/st FOB in the Eastern Cornbelt, with the low end of the range confirmed in the Cincinnati, Ohio, market and the upper end out of Illinois River terminals on a spot basis.

Western Cornbelt: Granular urea pricing was reported at $215-$225/st FOB out of most terminals in the Western Cornbelt, with the St. Louis, Mo., market pegged at the $220/st FOB level for new business.

Sources reported urea pricing FOB Catoosa/Inola, Okla., in the $215-$220/st FOB range for any available tons at mid-month.

Northern Plains: Granular urea was quoted solidly at the $220/st level FOB the Twin Cities. Delivered tons were pegged at $235-$255/st in the Northern Plains, depending on location, with the upper end reported for Canadian tons shipped to western North Dakota.

Great Lakes: The granular urea market was pegged at $225-$255/st FOB in the Great lakes region, with the low in Wisconsin on a spot basis. Michigan sources pegged the urea market at $250-$255/st FOB out of warehouse locations in the state, with pricing to U.S. customers FOB Courtright quoted at the $235/st level last week, up $15/st from early August levels.

Northeast: Granular urea pricing was pegged at $225-$235/st FOB in the Northeast, down $5-$10/st from last report, with the low at East Liverpool, Ohio, and the upper end FOB Fairless, Pa.

India: The waiting is over as MMTC called for a tender to close Sept. 22, with shipping to conclude by Nov. 4. Industry watchers were surprised when MMTC reverted to the traditional open-ended format rather than calling for specific tonnage to specific ports.

Sources said MMTC officials were talking about importing 1-1.5 million tons of product in this tender. These same sources doubted, however, that so many tons could be purchased because of the price differences between India’s traditional urea suppliers.

Iran is expected to once again dominate the tender. Sources speculate the price could be around $195-$197/mt CFR. At that price, the Chinese suppliers would have to drop their netback price about $10/mt, something they have indicated they are reluctant to do.

Other suppliers, including Arab producers and west-of-Suez producers, must also seriously drop their prices to be competitive with the expected Iranian offers.

If it all boils down to Iran, one trader said the best India could get is 500,000 mt, but most likely 350,000-400,000 mt. Other sources agreed that the lower numbers are the most likely awards to be issued to Iranian suppliers through trading houses. If that is all MMTC takes, sources said, another tender will have to be called by mid-October to ensure a steady supply of urea for local distributors.

Dreymoor continues to have problems getting India to accept two cargoes of granular urea, one from Egypt and the other from China. The company appealed and is now awaiting an umpire ruling. Sources said the dispute is over the condition of the granular product rather than its chemical composition.

Sources expressed concern over India’s action. One trader noted that in the past, issues over caking or the chemical composition of the product were the main reasons for a challenge. Another trader said that if the Indian government continues to challenge imported product on strict technical grounds, some suppliers and traders will stop doing business with the country.

The government continues to promote the idea of increasing domestic production. The latest announcement is that groundbreaking for a plant in Madhya Pradesh is expected later this year. The new facility output, which will be rated at 1.3 million mt/y, should be up and running by 2019.

Middle East: Sources expect Iran to run the table in the MMTC/India tender. Arab producers in the area and North African suppliers are expected to sit out the tender.

The last bit of public business from the Arab producers puts the price at $193-$196/mt FOB. At that level, sources said the product would not be competitive into India against the Iranian product.

One trader noted that Arab producers would most likely be unwilling to be aggressive in the tender because any lowering of the public price would directly affect the formula-based contracts that are the lifeblood of most producers in the Gulf.

For now, four key international traders are handling the bulk of Iran’s exports, and there are no apparent attempts by other trading houses to step in to compete. Sources said many international traders are still leery about doing business with Iran. Even though the international sanctions against the country have been lifted, sources said there are still enough sanctions from the U.S. that make banks nervous about backing deals with Iran.

The Egyptian price is holding steady at $196-$197/mt FOB. Sources said the pending European business is helping hold up the price.

Black Sea: Prices remain steady at around $192/mt FOB. Sources said the main basis for support is coming from European buyers getting ready to purchase for the next season.

The CIS product is in direct competition with Egypt’s plants. Sources noted, however, that the 500,000-600,000 mt demand in Europe between now and March 2017 will be adequate to provide both supplying nations with enough orders to hold the line on pricing.

Nepal: A tender for 25,000 mt of urea will close Sept. 26. The tender calls for bagged product to be delivered to Nepalese warehouses. Sources expect the price to be determined by the results of the MMTC/India tender, which closes Sept. 22.

Trial, mediation dates set in two N lawsuits

News, News Briefs

Davenport, Iowa, and Atlanta, Ga.—Parties have agreed to tentative dates for a trial and mediation in two contractor-related lawsuits (GM Aug. 19, p. 14; May 6, p. 1 ), pertaining to nitrogen plants currently under construction. The case, styled Maintenance Enterprises LLC v. Orascom E&C USA Inc. and Iowa Fertilizer Co. LLC, is set for trial Jan. 16, 2018. Maintenance Enterprises initially sued Orascom and Iowa Fertilizer for their failure to pay. Orascom later countersued, citing Maintenance Enterprises’ performance. Iowa Fertilizer’s Wever plant is expected to be operational in the fourth quarter. Meanwhile, in Atlanta, in the suit of U.S. Nitrogen LLC v. Weatherly Inc., concerning USN’s Mosheim, Tenn., plant, which is still in startup, the parties are eyeing mediation on or before Sept. 2, 2017.

Sulfur

ADNOC - Abu Dhabi, Aramco, Market Watch, Sulfur, Tampa, Tasweeq, U.S. Gulf, Vancouver, West Coast

Tampa: With the calendar edging toward the fourth quarter, discussion regarding the state of the domestic molten sulfur market began to gather steam.

Talk tended to focus on the Tampa supply landscape. Viewpoints varied between short-to-balanced and balanced-to-long, and some observers focused attention on an expected dearth of molten imports to the U.S., including reduced cargoes from Mexico.

“I understand that outside of (an 80,000 mt cargo) they did early in the year, Mexico will not be coming anymore this year,” said one source. “(The market) will not be getting anywhere close to the normal 300,000-400,000 mt volumes.”

Canadian imports are also down from previous years, sources claimed. With netbacks to Alberta producers quoted as low as (-)$55/mt FOB in the second quarter, the additional $5/lt FOB third-quarter Tampa price cut prompted many sellers to redirect product offshore via Vancouver.

“(The difference) is over $20/mt alone on the currency exchange, then Vancouver pricing is roughly another $10/mt premium to that of the Tampa index,” one market player argued.

Combating the lower import numbers, one major sulfur consumer was said to have imported 10 cargoes of formed sulfur so far in 2016, with expectations that the material would be processed into molten form for use in phosphate production. The loads ranged in size from 5,000-55,000/mt, sources confirmed.

The third-quarter contract price of molten sulfur delivered to Tampa was $65/lt.

Domestic refinery utilization fell last week, according to the U.S. Energy Information Administration (EIA). The EIA logged capacity at 92.9 percent for the week, a 0.8 percent decline from the prior week’s 93.7 percent and also trailing the year-ago 93.1 percent, but ahead of the 92.1 percent five-year average.

The EIA data also revealed reduced daily inputs. Refiners processed an average 16.730 million barrels/d of crude for the week, a decline of 200,000 barrels/d from the previous week’s 16.930 million barrels/d.

U.S. Gulf: The Saudi Arabian Oil Co. (Aramco) has entered a bid to buy the LyondellBasell Ind. refinery located at Houston, Texas, according to multiple reports. Estimates put the refinery’s value near $1.5 billion, although Aramco’s offer price was not immediately made public.

Some observers previously speculated that Aramco would bid for the 268,000 barrel/d facility through Motiva Enterprises, a corporate partnership co-owned by Aramco and Royal Dutch Shell Plc. Shell and Aramco had earlier announced plans to dissolve Motiva in 2016, however, casting doubt on reports of a new acquisition by that entity.

The sale comes amid a string of unplanned shutdowns at the facility in 2016. Most recently, a system-wide power failure cut production on Sept. 1, and reports described a 91,000 barrel/d vacuum distillation unit breakdown on Sept. 13, which was reportedly caused by a pump failure.

An “unplanned compressor shutdown” at ExxonMobil Corp.’s Baytown, Texas, refinery triggered a brief work stoppage and flaring last week, according to an Exxon filing with the Texas Commission on Environmental Quality. The event lasted approximately six hours, with minimal effect on production. The second-largest refinery in the U.S., Baytown has a stated capacity of 568,000 barrels/d.

Sulfur exports rose for July, according to data released by The Fertilizer Institute (TFI). Offshore sales were recorded at 223,948 st, a 120 percent increase from the year-ago 101,910 st.

Formed sulfur sold from the Gulf was called $60/mt FOB, unchanged from the previous report.

Vancouver: Last-done on the Vancouver spot market continued to run $65-$70/mt FOB for the week, traders said. Chinese spot was also unmoved at $81-$82/mt CFR.

Alberta netbacks were quoted steady at (-)$55-$20/mt FOB.

West Coast: West Coast prills were called $60-$65/mt FOB. Third-quarter molten contracts ran $50-$75/lt FOB, sources said.

ADNOC: The Abu Dhabi National Oil Co. price for September loading was quoted at $77/mt FOB Ruwais, a $7/mt increase from the August price of $70/mt FOB.

Aramco: Saudi Aramco offered tons at $74/mt FOB Jubail for September, $8/mt above the previous month’s $66/mt FOB.

Tasweeq: Solid sulfur produced and sold from Qatar was listed at $74/mt FOB Ras Laffan for the current month, $9/mt higher than Tasweeq’s official price of $65/mt FOB for August.

Sulfuric Acid

Market Watch, Sulfuric Acid, U.S. Gulf

U.S. Gulf: Sulfuric acid traders quoted price ideas in the $45-$50/mt CFR range for vessels delivered to the Gulf of Mexico, unchanged from the previous report. The current Gulf market is largely dependent on the Brazil import price, some argued, where recent transactions were quoted in the $45-$55/mt CFR range.

Material offered from smelters in Northwest Europe was priced in the $10-$15/mt FOB range, with freight to the U.S. Gulf called $30-$35/mt. Supply in the European market will reportedly remain limited through October. Cargoes destined for Chile carried $55-$65/mt CFR pricing, sources said.

In the domestic sphere, West Coast-delivered acid was quoted at $110-$115/mt DEL, flat from the prior week, with the Gulf region quoting levels in the $90-$95/mt DEL range. For the Midwest, prices were noted at $80-$90/mt DEL.

U.S. sulfuric acid exports were higher for the month of July. TFI put sales at 15,087 st, up 7 percent from the July 2015 total of 14,152 st.

Zinc values softened on the London Metal Exchange last week, trading at $2,232.00/mt on Sept. 14, a 4.6 percent decline from the prior week’s $2,334.00/mt.

Transportation

Arkansas River, Illinois River, Lower Mississippi River, Market Watch, Ohio River, Transportation, U.S. Gulf, Upper Mississippi River

U.S. Gulf: Port Allen Lock continued to experience delays last week, with transit queues noted at four hours or more. Some tied the waits to the recent devastating Louisiana floods, citing a persistent 10.9-foot differential between the lock’s river and canal gauges. Additionally, the Charenton, East Calumet, and West Calumet floodgates reported high water-related navigation closures.

Machinery upgrades and repairs were in progress at Industrial Lock last week. The Corps is now targeting a Nov. 27 completion date, sources said, two days ahead of the previous Nov. 29 estimate.

Dredging continued at Baptiste Collette Bayou last week, extending beyond earlier estimates that the work would conclude by Sept. 5. Navigable width in the channel has been reduced to 75 feet as a result, delaying transits and necessitating additional logistical acrobatics for vessels with doublewide tows. Vessels were requested to contact the dredge prior to passage to confirm compliance.

The Houston Ship Channel was open to traffic last week after a Sept. 6 diesel fire shuttered navigation, according to a Coast Guard press release. An estimated 90,000 gallons of diesel fuel were spilled in the event, most of which was consumed in the fire.

Daytime navigation remained unavailable at the West Canal’s Galveston Railroad Bridge. Dredging and debris removal work at Miles 357-358 is slated to follow a 12-days on, two-days off schedule through January 2017, with work slated to run 7:00 a.m. to 7:00 p.m. Shippers described normal transit flows during overnight and nonworking hours.

Lower Mississippi River: The Corps pushed the start of dike work in the Lake Providence area to Sept. 26 from the original Sept. 15 date. Delays are anticipated through the project’s late-January 2017 end date. Shippers warned that work could be extended based on stoppages stemming from unsafe river levels.

Upper Mississippi River: Locks 14 and 15 remained closed Sept. 14. An ammonia barge with 2,400 st of product grounded near Campbell’s Island, Mile 491, on Sept. 3. It was finally freed Sept. 13. (See Ammonia, U.S. Gulf/Tampa.)

Lock 15 was unavailable to navigation between 5:00 a.m., Sept. 14, and 5:00 a.m., Sept 15, closing the river. The Corps’ annual rock pinnacle removal project in the Thebes, Ill., area remains primed for a restart, shippers said. Work is expected to begin when levels at Cape Girardeau hit the 15-foot mark. Daylight-hour transit delays are anticipated seven days per week once the project gets underway. The Cape Girardeau gauge read 25.98 feet on Sept. 15.

Illinois River: Minor flooding continued on the Lower Illinois Waterway, but shippers noted improved conditions on the river’s upper and middle sections. Barge pickup and transit delays were predicted.

The Havana gauge was clocked at 15.02 feet and falling slowly on Sept. 15, above the area’s 14-foot flood stage. Forecasts called for levels to sink below flood stage on Sept. 19-20. Beardstown depths were 14.51 feet and falling, also higher than the 14-foot flood stage.

Ohio River: Delays persisted at Lock 52 on the Ohio River, where a number of stuck wickets have complicated main chamber navigation and rendered the auxiliary chamber inoperable. Regular locking was expected to commence late on Sept. 14, and shippers reported delays of approximately 12 hours on Sept. 15 as transit began to normalize.

Olmsted Lock traffic was routed through the riverside chamber. Tows were limited to 15 barges per pass, with no hip barges permitted. Lock 53 wickets were down for the week, allowing vessels to transit the pass without locking. Shippers quoted an average of five boats queued, with waits up to three hours. Three-hour delays were also reported at the Markland and McAlpine Locks.

A 16-hour daily main chamber shutdown is underway at Montgomery Lock and scheduled through Nov. 17, pushing delays to an average 2-4 hours, sources said. The main unit is closed 8:00 a.m. to 12:00 a.m. daily, forcing daylight travel through the auxiliary chamber instead. Main chamber transit remains available during overnight hours subject to an 80-foot width restriction. The chamber is also scheduled to temporarily reopen Sept. 17-18, Oct. 1-2, Oct. 15-16, and Oct. 29-30 to alleviate queuing.

Repairs caused intermittent delays at Willow Island Lock last week, and work on both chambers is scheduled through Sept. 30. The R.C. Byrd auxiliary chamber will close for repairs and maintenance Oct. 3 through Dec. 9.

The Tennessee River’s Kentucky Lock is slated to see closures on Oct. 4-13. Upstream guide wall repairs will force intermittent shutdowns on Oct. 4-9, after which a complete closure is planned through Oct. 13. The Corps has offered Barkley Canal and Barkley Lake as an alternative route.

Shipping remained stalled on the Allegheny River due to a hydraulic failure at Lock 6, shippers noted. No estimated completion date had been offered as of Sept. 14.

Delays were reported at the Liberty Street Bridge on the Monongahela River. Tow lengths were limited to 800 feet, with widths capped at 105 feet. Vessels were asked to transit at their “slowest safe speed.” The Braddock Lock and Dam river chamber remained closed to transit due to equipment failure, with oats passing via the land chamber instead.

Arkansas River: Navigation resumed at Webbers Falls Lock on Sept. 11, restoring service to Inola, Catoosa, and Muskogee, Okla. The lock had been shut since Aug. 22.

Sinkhole reported at Mosaic site

News, News Briefs

Mulberry, Fla.—A sinkhole has developed at The Mosaic Co.’s phosphogypsum stack at its New Wales location in Polk County, the company has confirmed. It told the local press that some 215 million gallons of slightly radioactive water containing phosphoric acid has gone into the Floridan Aquifer. Mosaic said the stacks are equipped with a comprehensive monitoring system that provides an early warning of irregular conditions. It said on Aug. 27, 2016, water level monitoring showed a decline in the water levels for one of the two cells of the active stack, the west cell. Mosaic said it reported the water level decline to the relevant government authorities. Based on the nature of this water loss and on what it has learned so far, Mosaic said a sinkhole formed under the west cell that it believes damaged the liner system at the base of the stack. The pond on top of the cell drained as a result, although some seepage continues. Mosaic estimates that the hole is approximately 45 feet in diameter and believes the sinkhole did reach the aquifer. Mosaic immediately implemented additional and extensive groundwater monitoring and sampling regimens and has found no offsite impacts. Additionally, when the water loss was detected, Mosaic began pumping water out of the west cell and into an alternative holding area onsite to reduce the amount of drainage. At this time, Mosaic has begun the process of recovering the water by pumping through onsite production wells. Mosaic said it is working closely with regulators and updating them daily, and has called in top experts. It said it is developing a comprehensive corrective action plan to address and rectify the cause of the water loss. Mosaic continues to operate the New Wales facility and manufacture fertilizer. The company said there has been no interruption in operations as a result of this incident.

Potash

Belarus, Brazil, Eastern Cornbelt, Great Lakes, India, Market Watch, Northeast, Northern Plains, Potash Muriate, Southeast Asia, U.S. Gulf, Western Cornbelt

U.S. Gulf: The NOLA barge market continued to firm last week, according to most sources, who put NOLA prompt trades in the $205-$215/st FOB range. Others said these numbers are too high, with terminal prices still as low as $220-$235/st FOB. However, sources said new imports coming in later this fall could pressure the new NOLA numbers.

Eastern Cornbelt: Sources continued to report firming prices for potash in the region, with recent increases from North American producers “working their way into the markets.”

Terminal prices for the week included lows of $225/st FOB Cincinnati, $230/st FOB Burns Harbor, and $230-$235/st FOB out of most Illinois River terminals, and up to $250/st FOB on a spot basis based on recent posting hikes (GM Sept. 9, p. 8).

Agrium Inc. on Sept. 15 announced that its potash prices were going up $15/st FOB in the Cornbelt and at NOLA, effective immediately. PCS Sales also reported on Sept. 16 that it had raised potash postings for all grades by $15/st in North America, citing robust demand. The increases follow a similar announcement from Mosaic, which reported on Sept. 6 (GM Sept. 9, p. 8) that its potash postings were moving up $15/st, to $250/st FOB Midwest warehouses and $220/st FOB NOLA.

“There has been some pricing of consignment tons at pre-increase prices, but producers are now firm with the $15 price increase,” said one regional contact.

Western Cornbelt: Sources said potash prices in the Western Cornbelt had moved up to $235-$250/st FOB regional warehouses, with the low reported at St. Louis. Potash pricing out of Catoosa, Okla., was quoted at $220-$225/st FOB at mid-month.

Northern Plains: Potash was quoted at $230-$235/st FOB on the low end out of Northern Plains warehouses, up $10-$15/st from last report, with the low quoted for imported tons in the Twin Cities market. Warehouse postings from Canadian producers were quoted at $250/st FOB.

Rail-DEL tons in North Dakota were pegged in the $245-$265/st range, also reflecting an increase from last report, with the market FOB Saskatchewan mines quoted at $210-$225/st FOB after netbacks, depending on grade.

Great Lakes: Great Lakes sources reported a firming market for potash in September. Sources in Michigan and Wisconsin quoted the regional warehouse market for red granular tons at $235-$250/st FOB for new sales, depending on location and supplier, with white granular potash reportedly trading at a $4/st premium to red, where available. Those levels reflect an increase of roughly $25-$35/st from summer fill levels back in late July and early August.

Opinions were mixed, however, on whether the higher levels will actually see any business, particularly with crop prices under pressure. “Everyone tells me river potash supplies are thin and we won’t have Russian imports until November, so prices should be firm,” said one contact. “I don’t know, though, how much will sell at $250. Potash may be a good buy, but farm cash flow could easily limit fall (application).”

SOP Magnesia was quoted at $390/st FOB Michigan warehouses, down a full $60/st from last report.

Michigan sources quoted the sulfate of potash (SOP) market unchanged at $575/st FOB Toledo, Ohio.

Northeast: Regional sources reported a stronger potash market in the Northeast. Pricing out of Baltimore, Md., had reportedly moved up to $250/st FOB for new sales, while the potash market FOB East Liverpool, Ohio, was pegged at a firm $235/st FOB at mid-month. Sources also quoted rail-DEL tons at the $255/st level in the Northeast, although some maintained that discounts were possibly available.

Belarus: Belarus will keep its export duty on potash fertilizers unchanged at €55/mt ($61.8) in 2017, Deputy Finance Minister Yuri Seliverstov said at a briefing this week on the country’s national budget for 2017, according to Bloomberg. The export duty was increased to €55/mt from €45/mt on Jan. 1, 2016.

Belarusian Potash Co. (BPC) exported 1.1 million mt of potash in August, and a total of 5.8 million mt in the first eight months of 2016, Prime-Tass reported, citing a BPC representative.

India: Potash deliveries under the new supply contracts are continuing to arrive in the country.

Indian imports1 of potash for direct application in July and August

Country of loading Volume (mt)
Lithuania/Russia/CIS 325,000
Israel 183,000
Canada 126,000
Jordan 98,000
Germany 0
Total Indian imports 732,000

1 Includes deliveries under recent tender awards as well as contract tons
Data source: India’s Department of Fertilizers

National Fertilizers Ltd. (NFL) has reportedly not yet made an award under its tender that closed Aug. 26 for the supply of a single 25,000 mt shipment of potash. Offers were to remain valid until Sept. 2 and the tons were requested for arrival no later than Sept. 15, a date that has now passed.

Meanwhile, RCF has issued a tender for the supply of 225 mt of potassium sulfate (FCO grade) for delivery in 25 kg bags to Nhava Sheva port during the second half of October. The tender closes Sept. 23, and offers are requested to remain valid for 30 days from tender opening.

Southeast Asia: Sentiment continues to tick up, with new season tendering activity starting to surface. Indonesia’s Petrokimia Gresik is reported to have issued a tender for potash supply, although few details have emerged.

Sources noted some slight firming in Malaysian prices from recent lows, with standard material now heard to be changing hands at $225/mt CFR, or even a tad higher. However, it remains to be seen whether the price push announced by Canpotex and BPC last month can be achieved. The potash exporters are looking for $240/mt CFR for standard potash and $260/mt CFR for granular, and other suppliers are said to be supporting these levels.

The Southeast Asian price range for standard is currently reported at $225-$260/mt CFR, with the high end reflecting sales into smaller regional markets, such as Vietnam and Thailand.

Brazil: Sources quoted granular prices as largely stable in the $230-$240/mt CFR range. While some suppliers are said to be targeting prices of $245/mt, this level has reportedly not yet been secured.

Nitrogen Solutions

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

U.S. Gulf: The UAN market continued to move down last week, with most putting it in the $132-$136/st ($4.13-$4.25/unit) FOB range. Others were pulling on the edges, trying to find it at $130/st or sell it at $138-$140/st FOB.

Most continued to call East Coast vessels in the $150-$155/mt CFR range, with sources saying buyers are seeking $145/mt for the next trade.

Eastern Cornbelt: UAN-28 fill tons remained at $151-$155/st ($5.39-$5.54/unit) FOB Cincinnati, with Illinois sources reporting UAN-32 fill offers at $170-$175/st ($5.31-$5.47/unit) FOB. Rail-DEL UAN-32 fill tons were quoted in the $175-$195/st ($5.47-$6.09/unit) range in the region in early September.

Western Cornbelt: UAN-32 fill ton remained in the $170-$180/st ($5.31-$5.63/unit) range FOB Western Cornbelt terminals, depending on location.

Northern Plains: UAN-28 fill tons were steady at $165-$175/st ($5.89-$6.25/unit) FOB regional terminals in the Northern Plains, depending on location, with delivered tons quoted at the $185/st ($6.61/unit) level in central North Dakota.

Great Lakes: Michigan sources quoted the UAN-28 fill market at $158-$167/st ($5.64-$5.96/unit) FOB, depending on location, with the low at Courtright and the upper end out of Michigan terminals. Wisconsin sources reported UAN-32 fill ton offers at the $195/st ($6.09/unit) rail-DEL level, unchanged from last report.

Northeast: The UAN-32 market in the Northeast was quoted at $155-$160/st ($4.84-$5.00/unit) FOB Baltimore, with one regional contact reporting the common dealer level there at $158/st ($4.94/unit) FOB for UAN-32 and $148/st ($4.93/unit) FOB for UAN-30. UAN-32 out of terminals in upstate New York remained at 200/st ($6.25/unit) FOB.

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