All Posts from March 17, 2014

MMTC awards 675,000 mt in urea tender

MMTC issued awards in its urea tender over the weekend totaling more than 600,000 mt. Most of the tonnage appears to be coming from China.

In addition to the awards, MMTC set port-specific prices. The move is in keeping with past practices by Indian buyers to avoid lengthy individual negotiations. Companies willing to accept the prices offered by India usually get an award. The basis for the awards is $325/mt CFR to Mundra and the West Coast and $328/mt CFR for Vizag and the East Coast.

The awards follow:

Sources report that Fertisul and MTPL also received awards for 50,000 mt and 60,000 mt, respectively. For most suppliers, the port-specific prices represent a drop in the offered price of $2-$4/mt.

Part of the award to Global is expected to come from Iran. Sources say the 60,000 mt will be unloaded at Mundra and the rest at Kandla. The rest of the awards are expected to come from China.

At $325/mt CFR for the East Coast deliveries, sources put the netback at $307-$310/mt FOB. If the material is all prills, as some traders have claimed, the price represents a slight drop from the last bit of public business. If, however the material is granular, the netback represents a significant drop from the $330s/mt FOB claimed by the producers.

CF completes sale of phosphate business to Mosaic

CF Industries Holdings Inc., Deerfield, Ill., announced on March 17 that it has completed the sale of its phosphate business to The Mosaic Company for $1.4 billion, or approximately $1 billion net of taxes and other adjustments. The sale follows the terms of the definitive agreement announced on Oct. 28, 2013 (GM Nov. 4, 2013).

“We are pleased to have completed the sale of our phosphate operations to Mosaic,” said Tony Will, CF president and CEO. “The net proceeds from the sale will be redeployed to execute the strategic initiatives we already have in progress, namely our nitrogen capacity expansions and completing our share repurchase authorization. Additionally, the supply agreements we have put in place with Mosaic will provide us a steady base of ammonia demand with attractive economics.”

In conjunction with the close of the sale transaction, CF will begin to supply Mosaic with its share of the ammonia produced by the company’s 50 percent-owned production facility in the Republic of Trinidad and Tobago. Additionally, CF has a long-term supply agreement with Mosaic to supply 600,000-800,000 tons of ammonia per year for up to 15 years from its Donaldsonville, La., nitrogen complex. Deliveries of ammonia will begin no later than Jan. 1, 2017, and will be priced at a defined margin over the cost of natural gas at Donaldsonville.

H.J. Baker completes upgrade to Atmore facility

H.J. Baker, Westport, Conn., announced on March 17 that the company is now operating a third specially customized rotoformer production belt at its Atmore, Ala., fertilizer plant. H.J. Baker said this upgrade will enable the facility to significantly increase production of its Tiger-Sul products and meet customer demand during critical peak seasons.

“This new customized production belt is part of H.J Baker’s ongoing capital improvement plan at our Atmore facility,” said CEO Christopher Smith. “It is another clear example of H.J. Baker’s continued commitment to innovate using the latest technology and to ensure our facilities meet and exceed today’s market demands.”

H.J. Baker said the new rotoformer went through a customized refurbishment that included both Sandvik and Berndorf technologies, as well as the addition of other features to allow employees to customize its mechanics based on individual customer needs.

“The belt will give our facility an overall 50 percent increase in production capacity to better serve our customers during increased seasonal volumes,” said Atmore Plant Manager Matt Kimes. “Our employees can influence and customize the direction of the belt and make changes to meet specific customer requests.”

H.J. Baker’s Atmore facility manufactures Tiger-Sul’s sulfur bentonite fertilizer products, including boron, iron, zinc, and magnesium, which are specifically formulated for row crops in the southeastern U.S., including corn, cotton, soybeans, and peanuts. The facility also manufactures fertilizer for specialty crops such as citrus, vegetables, sugar cane, blueberries, and forage and turf grass. The plant was recently upgraded, adding a 1,500-ton molten sulfur storage tank.

“Customer demand for our fertilizer products is growing throughout the country and around the globe,” said Smith. “In addition to the Atmore upgrades, we recently purchased a production facility in Irricana, Alberta, which will be operating soon. This will increase manufacturing capacity to address customer needs domestically and internationally, and add capabilities such as sulfur forming in the future.”

CHS to acquire 16 Canadian retail locations from Agrium

CHS Inc., St. Paul, Minn., has agreed to acquire selected Canadian retail assets from Crop Production Services (Canada) Inc., a wholly owned subsidiary of Agrium Inc. Under the agreement, 16 retail agronomy locations in the provinces of Alberta and Saskatchewan will become part of the Country Operations division of CHS.

The transaction is expected to be completed on or about April 1, 2014. Financial terms were not disclosed.

"We look forward to expanding our ability to serve farmers and ranchers in Canada, and to being a strong partner in their communities," said John McEnroe, executive vice president, CHS Country Operations. "Our goal is always to add value for our customers through local experts with global connections."

CHS said the newly acquired businesses will be able to take advantage of a 42,000-ton fertilizer plant outside Shelby, Mont., that is in its final stages of construction. The new facility offers 110-car shuttle loader access to the BNSF line, and is expected to open for the spring 2014 season.