Bartow, Fla.-An employee of a contractor for The Mosaic Co. was killed after the bulldozer he was operating Nov. 11 apparently overturned in shallow water. The company, Moretrench Contracting, was hired to reclaim mined land. The victim was identified as Charles Lanier, 53, of Bartow.
| SPOT BARGE PRICES | st/FOB U.S. Gulf |
| Ammonia | 500 |
| Urea (g) | 270-300 |
| Urea (p) | 270-300 |
| DAP | 500-550 |
| Producer | Symbol | Price | Week Ago | Year Ago |
| Agrium | AGU | 35.68 | 36.38 | 55.51 |
| CF Industries | CF | 60.45 | 55.22 | 86.91 |
| Intrepid Potash | IPI | 19.11 | 19.46 | N/A |
| Mosaic | MOS | 33.91 | 33.88 | 66.42 |
| PotashCorp | POT | 74.19 | 78.99 | 112.76 |
| Terra Industries | TRA | 17.10 | 18.72 | 35.20 |
| Terra Nitrogen | TNH | 101.01 | 99.36 | 91.16 |
| Distribution/Retail | ||||
| Andersons Inc. | ANDE | 18.98 | 22.74 | 40.62 |
| Deere & Co. | DE | 35.78 | 35.81 | 71.89 |
| Scotts | SMG | 27.81 | 24.98 | 37.50 |
U.S. Gulf/Tampa: Tampa prices dived last week to $350/mt DEL for second half November. Earlier sources had reported that all of November was concluded at $575/mt DEL. However, large buyers were not to be denied the benefit of the quick-paced drop in global ammonia prices. As a result, some sources last week speculated that Tampa prices in the near term may be negotiated on a two-week basis, rather than monthly.
In the meantime, the continued erosion at Tampa leaves no doubt that NOLA will also fall. Sources said the thinly traded barge market was being discussed at $500/st FOB early in the week; however, buyers scoffed at such a number, citing the new Tampa price. Green Markets was awaiting news of a much lower trade at press time.
Eastern Cornbelt: While sources continued to quote ammonia prices in the $900s/st FOB as the official dealer market for cash tons, there were reports of prompt sales concluded in the upper $700s/st FOB in Illinois last week. At the other end of the spectrum, forward contract ammonia for December was referenced at $1,095-$1,100/st FOB, with January-May forward contract postings as high as $1,150/st FOB regional terminals to the dealer.
Western Cornbelt: Sources continued to quote the anhydrous ammonia market in the mid- to upper-$700s/st FOB terminals for cash tons, with no new sales. “There’s so much ammonia prepay out yet that guys are dragging their feet to lower the price,” said one source. Missouri dealers talked of delivered ammonia tons at the $590-$600/st range from southern production points in Kansas and Oklahoma, where pricing was reported in the $490-$510/st FOB range.
On a forward contract basis, one supplier was referencing ammonia for December at $1,090/st FOB Nebraska terminals and $1,100/st FOB in Iowa, with a $50/st increase for January tons.
California: Effective Oct. 27, Calamco lowered its ammonia price in California to $825/st truck-DEL and $870/st rail-DEL. That was down from the Oct. 12 list prices of $1,025/st truck-DEL and $1,060-$1,070/st rail-DEL in the state. The company’s aqua ammonia price in California also dropped on Oct. 27, to $216/st FOB from the previous $266/st FOB level.
Pacific Northwest: Anhydrous ammonia continued to be quoted by Washington sources at $900-$940/st DEL last week, with little new business to test the market. One supplier was offering forward contract ammonia at Ritzville, Wash., at $995/st FOB for December and $1,160/st for January-May, 2009.
Western Canada: Anhydrous ammonia remained at $1,584-$1,629/mt DEL in the region, with no sales to test the market.
Black Sea: Rumors are running wild about pricing ?Çô and none of them are good for producers.
Sources in Asia reported the latest bidding price is $150/mt FOB, with only slight pushback from the producers. Others say the $150/mt FOB is a price only being used to negotiate, rather than for any real expectation of closure at that level.
Asian observers tend to hold to the idea that the price is closer to the $225-$240/mt FOB range. Reportedly, some bids offered last week at $230/mt FOB were rejected by producers, but not in a way that closed any doors for further talks.
The only bit of firm business was the second-half November deal by Yara at $350/mt CFR into the U.S. Asian sources estimating the netback say the price could be as low as $225/mt FOB to as high as $250/mt FOB. Others have argued the price could be even higher.
The trend, however, is for lower but stable prices.
One trader in Asia said the drop into the $230s/mt FOB is a likely development as the global ammonia market softens. Asian buyers are reportedly worried that a drop to $150/mt FOB this soon could only lead to rapid closures of production facilities – and an equally rapid rise in prices.
And plant closures are exactly what people were talking about. Sources say at least two producers will be shutting down for maintenance work in the next week or so. How long the plants will remain closed is still up in the air.
Observers say as long as the price keeps falling, there is no incentive to come back online anytime soon.
One Asian source noted that at the $230/mt FOB level, the Ukrainian producers have to be getting very close to their production cost. Observers note there is little reason to keep running when the best the plant operators can hope for is a break-even price.
For now, the order books for November are full.
Despite all the talk of sub-$200/mt FOB material, sources are pretty sure the market is currently hovering around $230-$250/mt FOB.
Middle East: Producers are working hard to keep the price from going below $300/mt FOB. And Transammonia, Kissan, and IFFCO are doing their best to foil them.
Reports came out last week of a 23,000 mt deal by Transammonia via Kissan to IFFCO at $240/mt CFR from Dubai. The netback on that deal would be about $180/mt FOB, if everyone can agree on the price. Many in the industry believe the deal was done at that level. Few believe that is where the market really is.
Sources are skeptical that Kissan – a joint venture with IFFCO – is suddenly so talkative about the price of a cargo to one of its owners. One Asian trader said it was odd that Kissan and IFFCO were so willing to talk so freely about the purchase when they are usually reticent to discuss their dealings.
Efforts by other buyers to get a deal similar to the IFFCO business are being rebuffed, say sources. Reports keep circulating that a number of suppliers in the area are anxious to sell tons to keep from having to shut down any plants.
And yet producers continued to try to keep the price from dipping below $300/mt FOB.
Traders from Asia are comfortable in calling the Middle East market at $300-$310/mt FOB until business other than Kissan to IFFCO comes along.
Asia: Buyers were once able to pass on the high cost of ammonia along the production line. Now with credit tight and consumers pushing back against higher prices, sources say ammonia buyers are no longer willing to pay a premium for the product.
For many of the Asian buyers, the situation is more difficult than just consumers refusing to accept higher prices. Consumers are staying away.
Sources report large-scale closures of factories across Asia as the credit crunch winds its way through the region.
The Indonesian joint ventures, KPA and KPI, are both down now, as is the state-owned Kaltim. The closures for routine maintenance were announced back when ammonia prices were at record high levels.
Now, with prices falling, Mitsubishi says its plant will remain shuttered for the rest of the year. One source said the facility could stay closed well into January, depending on the ammonia market.
The Mitsui plant is only slated to be closed for 15-20 days. An Asian trader noted that the plant could stay shut longer if prices don’t rebound.
One trader noted that if Mitsui and Mitsubishi did not take their plants down as scheduled, the price of ammonia in the area would be in a freefall. As it is, said one source, it is steady, with only an occasional dip.
U.S. Gulf: Early week banter within the urea barge market was that prompt barges were starting to find some footing at the $300/st FOB mark – perhaps a floor had been found. However, that floor lasted about a day. Sources reported that when word leaked out that the Chinese wanted to stimulate their economy by reducing export duties, NOLA barge prices started to give way. Soon $290-$295/st FOB was heard – and then $270-$275/st FOB. Not everyone in the market was cowed by fears of Chinese exports flooding the market, but enough apparently were to have an impact.
As for China, on Nov. 13 the country announced major initiatives to stimulate its economy, including the cutting of export duties. This will include lower duties on some fertilizer products, according to the Chinese press. No official word was available at press time; however, sources were keying in on reports that fertilizer duties would be 110 percent in season and 10 percent off season.
Eastern Cornbelt: The urea market was pegged at $365-$390/st FOB in the region, reflecting another drop from the previous week. The low end of the range was quoted out of spot river locations in Illinois and Ohio, with the upper end to the dealer FOB E. Liverpool, Ohio.
Western Cornbelt: The granular urea market was quoted at $360-$390/st FOB regional terminals to the dealer. Sources reported pricing out of the Catoosa/Inola market in Oklahoma in the $340-$350/st FOB range last week.
California: The availability of cheaper railed tons from Midwest producers such as Terra and Koch was prompting some urea pricing adjustments in California last week. As of Nov. 13, Yara’s urea postings had reportedly dropped to $450/st FOB in California, which sources said was matching $450/st rail-DEL tons from the Midwest. Before the latest downward pricing adjustment, some dealers reported offers of rail-delivered tons at the $630/st level, although actual sales were few and far between.
Pacific Northwest: Granular urea pricing had reportedly dropped to the $430-$435/st rail-DEL range in the region for prompt tons. On a forward contract basis for December, reference prices included $415-$420/st DEL in Montana, $440/st DEL in Washington, Oregon, and Idaho, and $440-$445/st DEL in Utah.
Western Canada: The lack of movement to the field and virtually no spot business made the regional fertilizer markets difficult to peg last week. Producer postings remained unchanged, but sources recognized that these values were outdated due to plummeting replacement costs. Added to this was the fact that dealer inventories remain full of high-priced inventory.
“Suppliers aren’t giving us prices,” said one dealer. “I’ve been in this business for 44 years, and I’ve never seen anything like this. I’ve seen price changes before, but never so rapidly and so great.”
With no updates to report, spot prices were unchanged. Granular urea was a nominal $970-$985/mt DEL in the region.
Pakistan: The main game in town is the TCP tender for 100,000 mt. A dozen companies reportedly sent in offers, but only six met the standards set by TCP. The prices offered by the remaining qualified companies indicate the slide in the urea market has halted.
TCP Offers |
||
| Offering Company Source | Quantity ‘000 mt | US$/mt CFR |
| Dreymoor/Open | 25 | 284.90 |
| 25 | 297.90 | |
| 25 | 289.90 | |
| 25 (s/o) | ||
| Sabic/Saudi Arabia | 50 (2 lots) | 285.00 |
| Toepfer/Open | 25 | 287.45 |
| 25 | 298.45 | |
| Keytrade/Open | 2 x 20-22 | 304.95 |
| 2 x 25-30 | 329.85 | |
| Transammonia/Open | 25-30 | 309.75 |
| 25-30 | 315.75 | |
| Swiss Singapore/Open | 25 | 380 |
| * industry sources | ||
Dreymoor, Toepfer, and Transammonia each received awards at $284.90/mt CFR.
Dreymoor will supply 30,000 mt. Toepfer will send 30,000 mt, and Transammonia will ship 40,000.
Earlier reports had Sabic getting an award for 25,000 mt with an option for an additional cargo at $284.90/mt CFR. In the end, however, Sabic would not meet TCP’s shipment schedule and was excluded from the final deal.
Sources say even as awards are being handed out, the buying committee looked at ways to purchase more without having to pay higher prices with each order.
At least two more tenders of 100,000 mt each are expected to be called by the end of the year to fill out the country’s demand.
India: With urea prices stabilizing, sources expect to see MMTC or IPL come back into the market within the next couple of weeks. Even if a tender is called, sources do not expect to see any major bump in prices. Reportedly, reserves are still too high in the Middle East and Black Sea to warrant a major jump in prices.
Black Sea: Prices have begun to edge upward following purchases made by India and Pakistan. Sources report the last of the $220-$230/mt FOB material is booked and ready to be loaded. Any new deals are expected to be closed at $240-$250/mt FOB.
One source reported that at least one deal was indeed done at $240/mt FOB. Details of the transaction are fuzzy at best, he said.
If any Yuzhnyy tons end up in the Pakistan orders, sources say the price would most likely be in the upper $230s/mt to low $240s/mt FOB.
Officially, the price is set at $250/mt FOB, but no one is aware of any business at that high level. Asian sources are comfortable in calling the market at $240-$250/mt FOB.
Middle East: The Sabic offer into the TCP/Pakistan tender pushed prices back up even though no award was given.
Sources say freight rates are so low that the shipping is almost free these days. People are pointing to $10/mt freight for Arab Gulf to west coast India or Pakistan.
With that rate in mind, sources say the initial Sabic offer of $285/mt CFR now puts the Middle East market at $275/mt FOB. With a few other deductions, the price could be as low as $270/mt FOB.
Asia: PIM/Indonesia will be closing a selling tender Nov. 19 for two lots of 5,000 mt each. The move was a mild surprise to those in the industry who expected Indonesia to sit out the rest of the year. One source noted, however, that the 10,000 mt will have little impact on the global or regional market, but will help PIM whittle down its reserves.
One observer said the Indonesian government must be confident that the domestic market is properly covered. No more export permits were expected this year, so the local demand could be covered before international opportunities.
Overall, demand for urea within the area is way down. Sources report most countries have sufficient reserves to handle their immediate needs. Many are more than willing to eat away at those reserves before committing to new purchases.
Buyers are waiting to see what happens in the next week or so. Many in the industry expect to see prices remain soft into 2009.
U.S. Gulf: Price ideas continue to plummet, though sources say no one has room to place new product anyway. The last done business was reported at $270-$275/st FOB ($8.44-$8.59/unit), with sources indicating offers of $250/st FOB last week.
Eastern Cornbelt: UAN pricing was down from last report. Ohio sources quoted UAN-28 spot market values as low as $280-$300/st ($10.00-$10.71/unit) FOB Cincinnati, while Illinois sources reported a $12.00/unit FOB dealer price last week. One supplier was referencing forward contract UAN32 for December at $428.80-$444.80/st ($13.40-$13.90/unit) FOB regional terminals.
Western Cornbelt: UAN remained at $12.00-$13.28/unit FOB regional terminals, with no new sales reported to test the market. Suppliers at the upper end of that range acknowledged that a pricing adjustment was necessary, with some speculating that drop of at least $100/st to the $325/st ($10.16/unit) mark might be the next step.
California: Sources noted UAN-32 pricing adjustments to the $400/st ($12.50/unit) FOB mark at midweek, with Yara making the move on Nov. 13. Rail-delivered tons from Midwest producers were said to be at that level or possibly lower, so the adjustment is being driven by these rail delivery offers even though new sales are very limited. Sources noted that the downward move was greeted with anger from some dealers with long positions on higher-priced tons, while others said the new postings were still not low enough to reflect the rail market.
Pacific Northwest: UAN-32 postings remained in the $500-$520/st ($15.63-$16.25/unit) FOB range in the region, although sources said rail-delivered tons could be had at significantly lower levels from Midwest shipping points. The lack of new sales, however, made that delivery market difficult to peg last week.
Western Canada: UAN-28 was unchanged and untested at $542-$557/mt ($19.36-$19.89/unit) DEL in the region.
U.S. Gulf: It is hard to find word of a new barge transaction. Most agreed that it would be hard to repeat recent reports of $470-$475/st FOB. Sources suggested that something closer to the $400/st mark might get buyer attention.
Western Cornbelt: Ammonium nitrate was quoted in a broad range at $400-$510/st FOB in the region, with the low confirmed by Iowa sources for new dealer pricing levels that took effect Nov. 14.
California: No market was reported for ammonium nitrate in the state. The CAN-17 market, however, was unchanged at $325-$330/st FOB.
Pacific Northwest: Ammonium nitrate remained at a nominal $605-$629/st DEL in the region for the last done business. CAN-17 was steady at $360-$365/st FOB.
Eastern Cornbelt: Granular ammonium sulfate remained at $200/st FOB in the region.
Western Cornbelt: Granular ammonium sulfate remained at the $200/st FOB mark from most locations.
California: Ammonium sulfate was reported at $375-$410/st FOB in the state, with the upper level reflecting Oct. 27 reference pricing from Simplot in desert areas of the state. Other locations were consistently in the $375-$380/st FOB range last week, with one source also confirming rail-delivered granular ammonium sulfate at the $360/st level from Texas shipping points.
Pacific Northwest: The ammonium sulfate market was quoted at $385/st FOB or DEL in the region, with some suppliers reportedly still referenced as high as $465/st.
Western Canada: Granular ammonium sulfate was steady at $555-$560/mt DEL in the region.
Central Florida: Offers for export and NOLA DAP dropped a couple of hundred dollars in a week, but in Central Florida no offers were even made, which makes it much more difficult to find a range.
The problem is demand – no domestic demand at all. Farmers in the Midwest have reduced applications of DAP and most other fertilizers by between half and nothing at all. In some areas, wet weather has meant crops have gone unharvested and could be lost. That would help push the price of grain back up and farmers would have money in their pockets. However, it may just stay there. Most used heavy applications of DAP in the previous season and were relying on what was left to get them through the next. In Oklahoma and parts of Kansas, many were choosing to put nothing down but urea.
In the meantime, inventories continued to grow in Central Florida despite curtailments by producers. Mosaic’s current plan was to reduce production by 500,000 st to 1 million st by January, but some of its raw material suppliers said it may be as much as a total reduction of 40 percent. CF has stopped buying extra sulfuric acid, which means it will produce about 10,000 st less. PCS Sales reduced production of P205 at one of its plants at White Springs. Opinions vary about how much phosphate was in warehouses around the country, but most believed levels were very high.
So, when will product begin to move? The most optimistic guesses were around the beginning of December, while others thought March or April. In the meantime, inventories will build and prices will fall. One source said a trader told him it was possible that the trader would make zero sales of fertilizers during the entire month of November, which was not very promising.
No new phosphate sales were made out of Central Florida last week, and that situation appeared likely to continue for at least another month. The Central Florida DAP price range last week remained at $765/st FOB. CF had the lowest asking price of $765/st FOB; PCS Sales was at $1,070/st FOB. Mosaic had no posted price for Central Florida. Agrifos’s most recent price was $755/st FOB for trucks and $750/st FOB for rail shipments.
U.S. Gulf: Although prices for phosphate raw materials have dropped to the point producers could still make a profit even at the lower price range, it won’t help unless somebody makes a buy. So far, nobody was blinking. Offers were made last week, but were rejected or ignored. No one was certain how low the price will go, but somewhere below $500/st FOB seemed almost certain.
A trader hoping to put an export deal together started asking for prices on barges and may have been a little surprised at the results, which came in between $525/st FOB and $550/st FOB – well below the previous week’s price range. A couple of others reported even lower offers, as low as $500/st FOB, although one was for possibly wet DAP from Agrifos’s damaged warehouse.
Wet weather in the Western Cornbelt was part of the problem. As much as 40 percent of the corn crop was still sitting in the fields, and farmers had no way to harvest what remained. In Oklahoma, wheat farmers were relying on phosphate unused from the previous harvest, and may need little or none this season.
The only possible market has been overseas, but credit problems were hampering even that dim hope. Traders were looking to buy NOLA DAP barges for export, because no domestic demand existed. Earlier this year most traders and dealers stocked up on phosphates along with potash, but the product was simply not moving out to the fields, so warehouses continued to be full or very nearly full.
In Iowa some farmers were doing prepay, but that didn’t lessen the load of overstocked bins. Curtailment of production was continuing, but that may have to be extended later into the season, considering the lack of demand.
Based on confirmed offers last week, the NOLA DAP barge range fell from $700-$720/st FOB the previous week to $500-$550/st FOB. Mosaic had no posted price.
Eastern Cornbelt: The DAP market was pegged in a broad range at $750-$800/st FOB regional warehouses, with MAP $25/st higher than DAP. The upper end of both ranges was reported out of inland warehouses in Ohio. One supplier was referencing forward contact DAP at $860/st FOB Peoria, Ill., and $865/st FOB Cincinnati, with a $30/st drop for January tons. Sources continued to talk of drastic usage cutbacks this fall, along with growing inventories in Central Florida despite production curtailments.
No current prices were reported for 10-34-0 in the region.
Western Cornbelt: Phosphate pricing continued to slip, with sources quoting the regional warehouse market last week at $700-$760/st FOB for DAP and $725-$780/st FOB for MAP. The low end reflected new dealer levels as of Nov. 14 from some regional suppliers. Sources continued to talk of drastic cutbacks in fall phosphate and potash rates. One said many dealers are indicating that they have enough product positioned to get them through the spring 2009 season.
10-34-0 pricing was also slipping with lower acid and ammonia costs; sources pegged the 10-34-0 market at $900-$950/st FOB last week, with some speculating that spot deals could be had at even lower numbers.
California: Phosphoric acid pricing was down from last report, reflecting pricing adjustments from Simplot and Agrium. On Oct. 24, Simplot moved its superphosphoric acid (SPA) and merchant grade acid (MGA) postings down to $17.50/unit DEL, and credited that level back to Oct. 1 on SPA alone. Simplot’s new FOB price for MGA in California is $17.70/unit. Simplot’s SPA and MGA postings will move to $18.00/unit DEL in December and $18.50/unit DEL in January.
Effective Nov. 1, Agrium’s posted prices for SPA and MGA dropped to $1,750/st rail-DEL in the continental U.S., down from October pricing levels at the $2,500/st rail-DEL level for both products. Agrium’s reference levels for December include both SPA and MGA at $1,800/st rail-DEL, with January pricing moving to $1,850/st rail-DEL.
10-34-0 pricing was also down, with Simplot reposting at $732-$742/st FOB in California. Those levels reflect a $260-$270/st drop from the previous price range.
Sources had no new prices to report for dry phosphates, however, with reference levels still at the $1,120/st level for MAP and DAP. 16-20-0 pricing remained at $675-$690/st FOB. Suppliers acknowledged meeting lower rail-DEL numbers on a spot basis, but were reluctant to say what those numbers were. Some are waiting as long as they can for high priced inventories to be cleaned out before coming out with a new pricing structure that reflects lower replacement costs.
Pacific Northwest: SPA and MGA pricing had dropped to $17.50/unit DEL from the previous $25.00/unit level. Simplot was slated to move to $18.00/unit DEL in December and $18.50/unit DEL in January, while Agrium’s postings included $1,800/st DEL in December and $1,850/st DEL in January.
Sources reported no updates to dry phosphate prices, with DAP and MAP remaining at posted levels in the $1,100-$1,120/st FOB or DEL range. One Washington source reported rumors of offers taking place at significantly lower numbers to meet rail quotes from the Midwest. Based on Central Florida and Midwest DAP warehouse values, those delivered levels should be in the $825-$875/st range in the region, although no actual business was reported to confirm that range last week.
16-20-0 remained at $675-$685/st DEL in the region. 10-34-0 pricing in the region had reportedly dropped to $752-$762/st FOB from Simplot, with other suppliers holding to earlier levels at the $972/st FOB mark.
Western Canada: MAP pricing remained in the $1,335-$1,345/mt DEL range based on the most recent postings and sales.
U.S. Export: Ethiopia released bids from a 150,000 mt tender it recently issued, and an offer of U.S. DAP by Ameropa/Phosagro came in at about $530-$535/mt FOB. However, an offer to Kenya by another trader with U.S. DAP was said to be around $513/mt FOB. Offers from other suppliers were also far below the last sales levels. PhosChem was not listed among the bidders, and has made no sales in recent weeks.
That could be good news for India, which may still need another 300,000-400,000 mt before the end of the year. India is embroiled in a dispute with its phosphoric acid suppliers, which will cut its domestic production of DAP; the lower DAP prices could provide an economical alternative.
With the news from Ethiopia and Kenya, Africa may be the top possible market for DAP sales this month.
The biggest problem facing exporters to third-world countries was credit. Sales could be made but letters of credit were hard to find, and considering the state of the world’s economy, it will remain difficult.
China was preparing to reduce its export tariffs, including those on fertilizers. Depending on the time of year, the tariff on DAP could be reduced from 125 percent to 10 percent. While no specific dates were available, that would most likely be in July, when it would be needed the least. It could also mean more competition for U. S. producers, which was hardly needed.
Based on recent tenders, the export DAP price range last week nosedived to $513-$535/mt FOB from the previous week’s $1,013-$1,015/mt FOB.
Eastern Cornbelt: Potash was reported at $800-$875/st FOB in the region, with the upper end reported FOB E. Liverpool.
Western Cornbelt: Potash was reported in the $800-$860/st FOB range.
California: Muriate of potash remained at $849-$900/st FOB and $875-$900/st DEL in the region. One Central Valley source said potash applications on trees should be brisk at this time of year, but nothing is going on. “I’ve never seen it like this,” he said.
Sulfate of potash remained at $1,105-$1,195/st FOB, depending on grade and supplier.
Potassium nitrate was steady at $1,310-$1,380/st FOB in the state, with the low for bulk and the upper end for bagged product.
Pacific Northwest: Potash remained at $840-$900/st DEL in the region, with no business to test the market.
Western Canada: No current prices were reported for potash in Western Canada.
Tampa: As world market conditions for sulfur continue to flounder, it appeared almost certain prices on the Gulf would go down in the next quarter – and by a lot. U.S. phosphate producers were paying only a fraction in the fourth quarter compared to the previous quarter, but $150/lt is out of line with the rest of the world. China was looking at – or may have already reached – a delivered price of between $55/mt and $60/mt, and the transportation costs are much higher than for Tampa.
Refineries were operating at near capacity to produce fuel, using primarily high-sulfur crude oil, so sulfur production was increasing rapidly. Prillers on the Gulf were building inventory but had no place to send the completed product. Phosphate producers were scaling back and needed less sulfur than earlier in the year, which was now referred to as the good old days.
Transportation was not a major problem, but railcars were said to be building up in Central Florida because of lack of need for the product.
West Coast: Negotiations for fourth-quarter contract prices were underway, but a source said prices would ultimately be negative – and possibly very negative. The California market is primarily for export, and that market is in far worse shape than the Gulf.
Vancouver: China either had settled or was about to settle its supply agreements with Canadian suppliers somewhere around $55-$60/mt DEL. That would mean the FOB price at Vancouver would be almost nothing. The primary benefit to the suppliers is simply getting rid of what they have had on hand, because contract prices from longer-term deals with Brazil and South Africa were around $200/mt FOB, which will help keep them going.
India: The government may rope in foreign companies for the revival of eight closed fertilizer units, which require investments worth Rs 360bn. “We are exploring all options for the revival of these plants, including allowing foreign companies, apart from encouraging the domestic firms,” said a top government official. The Cabinet had, on Oct. 30, approved the creation of an Empowered Committee of Secretaries under the chairmanship of Fertilizer Secretary Atul Chaturvedi to come up with possible financial models for the revival of the closed plants at Barauni, Haldia, Talcher, Ramagundam, Durgapur, Gorakhpur, Korba, and Sindri.
“We will come up with the best possible model and best partner for the revival within six months. We may select prospective investor on tendering or competitive bidding basis. However, we have kept all options open and it will be a very transparent process,” the official said. He added that state-owned engineering and Consultancy Company Projects and Development India will advise on this matter, and that the units need Rs 45bn each for revival. The official pointed out that each plant has a capacity of producing 1.15 million mt/y of urea. Sources said that the Finance Ministry is not inclined to give money for the revival of these eight closed plants, and both public sector undertakings and cooperative majors like IFFCO and KRIBHCO have their limitations to generate financial resources. The official also said that a gas supply contract with state-owned GAIL will be entered into in next six months, as the availability of gas will be key to the revival of any unit.
Terra Industries Inc. has named Edward Dillon its vice president and controller. He will be responsible for all internal and external financial reporting, budgeting, analysis, and internal accounting controls. He earned a B.S. in Accounting from Boston College in 1990 and is a Certified Public Accountant. He was most recently finance director with Koch Industries Inc., and previously worked for Koch subsidiary Invista, as well as General Electric Co. and Arther Andersen LLP. Dillon will be relocating to Sioux City.
H.J. Baker & Bro. Inc., Westport, Conn., said Nov. 11 that David Smith, president of business development, will be pursuing new opportunities and challenges outside of the day-to-day operations of H.J. Baker. Smith, who remains a shareholder and director, has been an integral part of the H.J. Baker team for nearly 29 years. During his tenure he was extremely active in expanding H.J. Baker’s fertilizer and sulfur businesses. He was instrumental in the purchase of Tiger-Sul, a wholly-owned subsidiary of H.J. Baker, and the recent expansion of the company’s Stockton, Calif. facility. He served on the board of The Sulphur Institute (TSI) and The Fertilizer Institute (TFI).
Smith’s position has not been filled. H.J. Baker has been in business since 1850, and some four generations of the Smith family have been involved in its management.
Phosphate Holdings Inc. reports that Coley Bailey resigned as a member of the board of directors, effective Oct. 29. He had served as a member of the board since 2004 and was chairman at the time of his resignation. Rex Deloach, who has served as a director since 2007, has been named to succeed Bailey as chairman. Deloach has served as president and CEO of Financial Insights Inc., a financial consulting firm, since 2002. From 1980 to 1997, Deloach was a partner with the accounting firm Arthur Anderson LLP. Deloach is a member of the board of trustees of three affiliated registered mutual funds: Longleaf Partners Fund, Longleaf International Fund, and Longleaf Small Cap Fund, all managed by Southeastern Asset Management, Inc., Memphis, Tenn.
Phosphate Holdings is the sole stockholder of Mississippi Phosphates Corp.
The Andersons Inc. has named Gerard Anderson to the company’s board of directors effective Dec. 19, 2008. He moves into the seat vacated by Dr. Sidney Ribeau, president of Howard University, Washington, DC, who served on the board since 1998. Although an Anderson family member, the company said he will qualify as an independent director for corporate governance purposes.
Anderson currently serves as the president and chief operating officer of DTE Energy, a Detroit-based diversified energy company involved in the development and management of energy-related businesses and services nationwide. Anderson oversees all of the company’s electric, gas, and nuclear operations encompassed in its two main operating subsidiaries, Detroit Edison and MichCon, as well as its non-utility businesses focused on power and industrial projects; gas, pipelines, and storage; unconventional gas production; and energy trading. Anderson joined DTE Energy from the consulting firm McKinsey and Co. in 1993. He holds a B.S. degree in civil engineering from University of Notre Dame, and an MBA and a Master of Public Policy degree from the University of Michigan.
Dasco Inc., Monument, Colo., added Todd Nicklaus to their sales team in October 2008 as director of animal feed products. Todd has been in the agricultural business since 1988. A graduate of Iowa State University, he was formally with Cargill for 16 years, and also spent 4 years with Continental Nitrogen.
Arden Hills, Minn.-Land O’ Lakes Inc. reported a ten-fold increase in third-quarter earnings, to $59.9 million on sales of $2.9 billion, up from the year-ago $5.2 million and $2.1 billion, respectively. Nine-month net earnings were $224 million on sales of $9.4 billion, up from $137.4 million and $6.3 billion. Third-quarter agronomy earnings totaled $142.2 million, versus the year-ago pretax $6.8 million. Nine-month results were pretax $168.4 million, versus the year-ago $18 million. LOL notes that it took over the Agriliance LLC crop protection business in September 2007, thereby significantly impacting these results. Even so, it said agronomy is having a strong year, with sales and earnings ahead of expectations. Crop protection sales through September were reported at $2.2 billion.
Moorhead, Minn.-At least 11 motorists driving along a county road in three or four separate cars suffered shortness of breath, watering and burning eyes, and burning feelings in their chests the evening of Oct. 2 when they drove through an anhydrous ammonia cloud drifting from a nearby farm field. The Clay County sheriff’s office said the victims either drove themselves or were taken by ambulance to MeritCare Hospital in Fargo, N.D., where a spokeswoman said none of the injuries were serious. Lt. Bryan Green told Green Markets the mishap occurred around 8 p.m., when the tank became unhitched from a cultivator the farmer was using as a tow vehicle. Green didn’t know how much anhydrous was in the tank to begin with or how much had leaked, but he said the cloud, which spread across the road, was not a gigantic one. He said the safety apparently failed to function, so the farmer took it on himself to move up wind and close the valve on the tank. He said similar problems have occurred with older tanks.
White Plains, N.Y.-Bunge Ltd. said Nov. 10 that its board of directors has voted to terminate the June 21, 2008, merger agreement between Bunge and Corn Products International Inc. Bunge cited the decision of the Corn Products board to withdraw its recommendation of support for the merger agreement. “We remain disappointed with the decision of the Corn Products board to withdraw its recommendation of the merger. While we continue to believe in the long-term strategic benefits of a merger between Bunge and Corn Products, after careful consideration we have determined that it would not be in the best interests of our company or shareholders to pursue the transaction at this time,” said Alberto Weisser, Bunge chairman and CEO. “Moving forward, Bunge will continue to pursue its strategy of investing for growth in its core businesses and in complementary value chains.” Under the terms of the merger agreement, Corn Products is obligated to reimburse Bunge for up to $10 million of its costs and expenses incurred in connection with the transaction.
Quincy, Mass.-A stubborn fire in the ventilation system Oct. 28 has shut down, possibly until late January, biosolids production at the Massachusetts Water Resources Authority’s plant here, MWRA officials confirmed last week. In the meantime, they reported that hundreds of tons are being trucked to landfills in the area, a situation that is causing concern in the community about increased truck traffic. “We’re not sure how long the repairs will take,” MWRA spokeswoman Ria Convery told Green Markets. “The best case situation would be mid-December; the worst case late January.” Convery reported that the plant is still able to dewater and dry but can’t do the palletizing, which leaves a lot of what is called “sludge cake” to dispose of. She said that the MWRA and its contractor, New England Fertilizer Co., are completing a damage assessment and hope to have a better estimate of how long repairs will take. She said a contingency plan has been in place for some time to deal with such an incident by trucking the sludge to predetermined landfills in the New England area and “we’ll be working closely with the community to make sure there’s not a problem. If need be, we’ll explore (transporting by) rail.” Press reports indicated earlier that rail cars were being rounded up to ship to another landfill in central Utah, but the word at New England Fertilizer was that this wasn’t the case. Convery said the fire was caused by “an accumulation of stuff” inside the vent pipe, which is about three feet in diameter and runs horizontally across the ceiling of the plant. That made it difficult for firefighters to extinguish, because it was almost impossible to get into the pipe. “So we got permission from the firefighters to use a sewer cleaning machine to suck out the burning material. But it still smoldered for a couple of days,” she said. One plant worker who was having difficulty breathing because of the smoke was taken to a hospital for observation. New England Fertilizer Co. is responsible for managing and operating the 164 dry st/d solids processing facility at Quincy. The company has contracts with local farmers and also ships biosolids to Florida and other parts of the country.
Marysville, Ohio-Scotts Miracle-Gro Co. said Nov. 11 that it is in discussions with several of its largest retail partners in the U.S. to provide private label lawn fertilizer and growing media products for fiscal 2009 and possibly beyond. The discussions stem from the recent announcement by Spectrum Brands that it intends to exit those segments of the category. “We believe we are uniquely positioned to leverage our supply chain and sales force to help our retailers meet all of their needs,” said Jim Hagedorn, Scotts chairman and CEO. “The discussions we have been having with a variety of retail partners have been productive and, we believe, could be mutually beneficial to both them and Scotts Miracle-Gro.” The company reiterated its previous outlook for fiscal 2009 of adjusted net income of $2.00 per share on nominal sales growth. It does not anticipate updating that guidance during the current fiscal quarter.
