All Posts from December 18, 2006

Market Watch

AMMONIA

U.S. Gulf/Tampa: Anhydrous ammonia saw a significant price spike within the past week at major price points. At Tampa, second-half December business was reported at $337-$340/mt DEL, a $17-$20/mt jump from the first half of the month. Across the Gulf at Donaldsonville, a cargo was reportedly sold at $345/mt DEL. Sources said the higher import numbers were spurred by increased prices at Yuzhnyy, which had topped the $280/mt FOB mark.

In the meantime, the long sluggish NOLA barge market was also reported to have finally moved up to reflect both import and natural gas prices. New barge business was called $315-$320/st FOB.

Eastern Cornbelt: While urea was leading the charge, sources continued to talk of upside potential for other nitrogens last week as well, and some new postings were coming out to reflect this. With all forecasts pointing to a sizable increase in corn planting in 2007, along with increases in fertilizer rates after cutbacks in nitrogen, phosphates, and potash in 2006, the supply and pricing outlook remained uncertain.

As of last week, anhydrous ammonia pricing in the region remained firm at $375-$385/st FOB terminals, with the upper end quoted for spring prepay. Agrium’s anhydrous ammonia postings in Illinois moved up again on Dec. 11 to $385/st FOB E. Dubuque/East, Niota, Meredosia, and Marseilles, while postings FOB Cincinnati and Finney, Ohio, moved up $5/st on that date to $395/st.

Western Cornbelt: Most sources continued to quote ammonia fill at $360-$370/st FOB regional terminals to dealers, with prepay quoted at $370-$375/st FOB. There were reports from some sources of cash tons moving at lower numbers out of spot locations earlier in the month, but no actual prices were confirmed at these levels last week. Agrium’s ammonia postings firmed again on Dec. 11 to $380/st FOB E. Dubuque/West, Iowa, while other terminals in the region remained referenced at the $375/st FOB mark.

Southern Plains: Price quotes for anhydrous ammonia varied widely in the region last week, depending on location and whether the quote was for prepay or spot tons. An Oklahoma source said he was offered spot ammonia for as low as $300/st FOB Enid last week. Other sources, however, placed the cash market out of regional production points in Oklahoma and Kansas at the $325-$330/st FOB range, with dealer pricing out of pipeline terminals in Kansas quoted at $350-$360/st FOB. Prepay was said to be available at $345/st FOB regional production points.

Agrium’s ammonia postings moved on Dec. 1 to $370/st FOB Clay Center, Kan.; $365/st FOB Conway, Kan., and Mocane, Okla.; and $315/st FOB Borger, Texas. Delivered ammonia postings in Texas and Oklahoma out of the Borger location moved on that date to $340/st north of Interstate 40 and $345/st south of the interstate. Terra was accepting spring prepay orders for ammonia through Dec. 15 at $360/st FOB Woodward, Okla., and Verdigris, Okla., and $385/st FOB Clay Center and Conway.

South Central: Anhydrous ammonia was reported at $355-$370/st FOB, with the low for cash tons FOB Memphis, Tenn., and the upper end FOB Henderson, Ky. Terra was reportedly accepting spring prepay orders for ammonia through Dec. 15 at $370/st FOB Blytheville, Ark., and $375/st FOB Henderson.

Western U.S.: Effective Dec. 1, Agrium’s anhydrous ammonia postings moved to $405/st truck-DEL in Montana and northern Wyoming, and $435/st rail-DEL in Idaho, Oregon, and Washington. The company’s aqua ammonia postings FOB Central Ferry and Finley, Wash., moved to $109/st FOB.

Western Canada: Fertilizer pricing was also on the rise in Western Canada. As of Dec. 14, anhydrous ammonia pricing in the region moved to $586-$631/mt DEL. Those numbers were up from Nov. 30 levels, which included $560-$595/mt
DEL for ammonia.

Black Sea: Apparently, the combination of demand from the United States and Morocco has caused the price to jump.

Sources pegged the Yuzhnyy range at $280-285/mt FOB at the beginning of the week, based on business slated for Morocco. Keytrade apparently nailed down a cargo for Morocco at a premium. As other buyers – including many of the big names in ammonia buying and selling – moved in for their tons, the price moved up from the Keytrade deal.

Sources say OCP/Morocco was in need of additional tons quickly, because demand for Moroccan DAP from China is up. This increased DAP demand is expected to keep the ammonia demand up as well.

As Green Markets went to press, sources reported a sale of $290/mt FOB deal for January tons. Reportedly, the tonnage was not large – but, said one observer, it was big enough to signal that prices continue to move up.

By week’s end, the price range had opened up to $280-$290/mt FOB.

On top of the Moroccan business, Asian sources report the U.S. Gulf price moved up at least $15/mt. One source pegged the actual increase at $17/mt, to $337/mt CFR. Moreover, by the end of the week sources in Asia say $345/mt CFR was being reported.

Additional delays are expected out of the Black Sea as fog continues to plague the Bosporus Straits. Sources in Asia say the waiting time is now about one week for ammonia carriers to clear the 19-mile pass that connects the Black Sea with the Mediterranean. The Turkish government is holding firm to its rules that ammonia and natural gas carriers may only pass one at a time, with no other vessels in the passage and only during daylight hours.

Middle East: A deal between Mitsubishi and IFFCO/India earlier this month set pricing levels that were hard to test last week. The IFFCO purchase was pegged at $$320/mt CFR. Sources say the netback on that deal to the Middle East was $270-$280/mt FOB.

Sources say confirming that new level – about a $5/mt increase – may not come until the first part of January. At present, the only business that is taking place is the loading of material contracted some time ago. One observer noted that a tender from a major buyer could add some transparency to the current market, but so far no one looks to be on the horizon for that.

In fact, said one Asian source, spot tons are not expected until February.

Even with the return to 100 percent capacity production at the SAFCO IV plant, sources say material will remain tight. It seems Sabic borrowed tons from other producers while it worked on getting the SAFCO IV facility up and running. Now it needs to pay back those swapped tons as well as cover any commitments it already has on the books. Once all is said and done, Sabic/SAFCO is not expected to have any spot tons until well into February.

Sources in Asia also report lining up vessels is becoming more difficult. Prices have gone up enough in recent weeks to cause bumps in prices for buyers in India and Asia.

Indonesia: With the return of KPI to full production, sources were hoping that ammonia shortages from this country were at an end. Unfortunately, an explosion in a natural gas feeder line to Gresik caused the state-owned plant to shut down.

The initial loss of ammonia production was not expected to be severe. Reportedly, the gas company and Gresik worked to establish a bypass line for the natural gas so production could resume at Gresik as soon as possible.

Now, say Asian sources, the bypass is not working as well as it should and may have to shut down soon. Shutting down the line – and by extension the Gresik facility – is more than just an issue for the engineers. Sources say government officials are objecting to any plan that would cause the urea and ammonia producer to shut down.

Gresik is one of many state-owned plants in Indonesia.

Reportedly, word has come out of Jakarta that the bypass line needs to be strengthened so the plant can continue to operate. At the same time, repairs on the main pipeline also need to proceed with all due haste. One gloomy estimate put the time for repairs at nearly 10 months. Others did not think the damage was that great, and felt that the pipeline should be back in full operation in less time.

East Asia: CPDC/Taiwan is reportedly looking at rearranging its demands for its downstream buyers. Sources say this could result in fewer tons being required by the company. At the same time, the manufacturing users of ammonia in South Korea are also said to be looking at taking the minimum amount of tons allowed under the contracts.

UREA

U.S. Gulf: Granular urea prices continued to move up last week, with most sources agreeing that late week business had occurred within the $270-$280/st FOB range. Sellers were confident the next trade would easily top the $280/st FOB mark and move on to $285/st FOB and beyond. Still, several players said that earlier in the week, granular barges actually sold as low as $265/st FOB, if not lower.

Why the uptick? It depended on who you were talking to. Some said it was simply speculative hype by traders, but others said large buyers and retailers were seeing the demand that was coming and were stepping into the market to buy. Another source said that while Cornbelt buyers can still wait or buy forward tons, those in wheat country need to get product into position within the next 30-60 days. As a result, sources said these buyers were some of the ones last week that were having to pay up for prompt tons. In the meantime, there were several reports of forward trading in the January-March period. It almost seemed like prices were going up $5/st with each new phone call. By late Thursday, sources were talking about a possible $300/st FOB for March.

Also by late Thursday, sources called the last done deal $280/st FOB, and were confident $285/st FOB would come soon.

As expected, there was less heard on prills – even less than in recent weeks. Sources said it was trying to keep up with granular, but far back in the pack. The only number being bandied about was a quote of $265/st FOB, but there was no firm confirmation that that had been achieved.

Eastern Cornbelt: Sources continued to talk of strengthening urea prices, along with concerns about product availability for the spring planting season. Added to this, sources said, is the reluctance of dealers to build long positions for any products due to caution after the spring 2006 season, when in-season prices fell. With farmers expected to prepay some of their 2007 fertilizer needs over the next few weeks, several sources expressed concerns that dealers are lacking sufficient positions to fill these orders.

Granular urea pricing was generally quoted at the $300/st FOB mark or higher in the region last week, up dramatically from last report. Fueled by daily increases in barge pricing at the U.S. Gulf, most attributed the surging market to limited imports and domestic production, along with increased fall usage for a bigger winter wheat crop. Agrium’s urea postings moved up again on Dec. 13 to $315/st FOB Garrett, Ind., and $320/st FOB Saginaw, Mich., up $15/st from the company’s Dec. 1 prices.

Western Cornbelt: “The roller coaster continues” for urea, as one source put it, with spot pricing up markedly from last report. Sources pegged the low end of the range last week at $295/st FOB river terminals, with numerous reports of $300/st FOB being quoted for new tons. One source confirmed very recent spot business for as much as $310/st FOB in Missouri, and a Nebraska dealer quoted delivered urea from Oklahoma shipping points firmly at the $305/st level.

Agrium’s urea postings moved again on Dec. 13 to $310/st FOB Shakopee, Minn., and North Dakota terminals at Alton, Carrington, Colfax, Marion, and Scranton. Rail-delivered postings from the company firmed on that date to $315/st in Minnesota, Wisconsin, and the Dakotas.

Southern Plains: Granular urea pricing continued to firm in the wake of tight supplies and strengthening barge prices at the U.S. Gulf. Most sources tagged the urea market at $290-$295/st FOB Inola and Enid, Okla., with the upper end reflecting dealer postings that reportedly went into effect early in the week. One source described Arkansas River inventories as “very thin.”

South Central: Urea pricing continued to experience rapid increases due to a combination of factors, including heavy global demand, limited imports, and short domestic supplies. Granular urea out of regional terminals was quoted at $295-$300/st FOB to dealers, with the low end reported at $290/st FOB Vicksburg, Miss., to national accounts.

Southeast: Several dealers reported sending out letters to farmer customers advising then to secure spring prepay purchases as soon as possible. “There’s only one word about the nitrogen markets, and that is ‘up’,” said one regional source last week, noting that few in the Southeast – on either the wholesale or retail level – have made their spring commitments yet.

Granular urea pricing had taken the biggest leap since last report. Out of port terminals, the urea market was quoted at $290-$300/st FOB last week, with several suppliers referencing the upper end of that range as of Dec. 11. Urea delivered into the interior was pegged in the $315-$320/st range.

Western U.S.: Agrium’s granular urea postings took several recent increases. On Dec. 1, published prices moved to $305/st FOB Glade, Wash., Warden, Wash., and Wilson, Wash.; $292-$297/st DEL in Montana and Wyoming, depending on location; $310/st DEL in southern Idaho and Oregon’s Malheur County, and from the company’s warehouse and plant locations in Alberta and Oregon to points in Washington, northern Nevada, northern Idaho, and Oregon excluding Malheur County; $315/st DEL in northern and central Utah; $320/st DEL in southern Utah; $325/st FOB West Sacramento, Calif.; $345/st truck-DEL in Central California; and $350/st truck-DEL in northern California.

Urea postings firmed again on Dec. 13, with pricing moving up $15/st on that date to $320/st FOB Glad, Warden, and Wilson; $307-$312/st DEL in Montana and Wyoming, depending on location; $325/st DEL in southern Idaho and Oregon’s Malheur County, and from the company’s warehouse and plant locations in Alberta and Oregon to points in Washington, northern Nevada, northern Idaho and Oregon excluding Malheur County; $330/st DEL in northern and central Utah; and $335/st in southern Utah.

Western Canada: As of Dec. 14, Agrium granular urea pricing moved to $405-$430/mt DEL, up from the Nov. 30 posting of $385-$410/mt DEL.

Bangladesh: BCIC closed its tender for 100,000 mt each of prilled and granular urea Dec. 13.

Sources say the netbacks reflect a slight increase in Middle East pricing.

Because the tender calls for bagged material, sources say, the suppliers for the granular tender were limited. Only two offers came in, with both companies offering Egyptian, Saudi, and Chinese material. These are the main three sources for bagged urea.

Results of the tenders follow:

The prilled tender brought in more offers, but the Middle East was still the dominant area.

Offers follow.

Some sources in Asia are still doubtful that BCIC will actually take delivery on any of these tons. The tender calls for December-January shipment. If BCIC accepts any of the offers based on Chinese material, it will have to move smartly.

Reportedly, the Chinese tons are waiting at ports to be picked up, but getting vessels remains the main problem. In addition, after Jan.1 the Chinese government is scheduled to impose a higher export tax, even if the contract was signed in December.

The tender is one of two called for this month. The second, for the same quantities, closes Dec. 18.

BCIC reports that production of urea at Jamuna Fertiliser Co. in Jamalpur and the Chittagong Urea Fertiliser Factory has suffered by about 20 percent due to a gas shortage for the last few weeks. BCIC says it will likely miss the urea production target as a result, and that the combined daily capacity of the urea plants was around 3,200 mt. It is said the total annual demand for urea in the country is around 2.8 million mt; the six plants of the BCIC produce about 1.7-1.8 million mt, and the rest is imported. Declining gas production, especially in the offshore Sangu gas field, has triggered the gas problem.

Black Sea: End users and traders are unanimous in their opinion that the Yuzhnyy market is overpriced. With the Middle East price coming in around $255-$265/mt FOB, there is no reason, they say, that Yuzhnyy should be getting prices in the low $250s/mt FOB. Adding to their argument are reports that the Baltic price is about $240-$245/mt FOB, with no appreciable difference in freight for now.

Bottom line for buyers is they think the market needs to come off at least $10/mt to put it back in the traditional differential between the Middle East prices. Still, at this point producers are claiming the mid-$250s/mt FOB was done, and that the new price is $260/mt OFB.

Sources in Asia say the producers can ask for $260/mt all they want, but at that price, there are no markets. Traders in other parts of the globe concur.

Reportedly, at least one trader rolled over a long position in the $220s/mt FOB while agreeing to take a smaller cargo in the $250s/mt FOB. Once the numbers were crunched, sources say the trader should be sitting with a $235/mt FOB January position. And, said one player, that is not a bad price.

Expectations are that the Yuzhnyy price will start coming off during the holiday break. If traditional patterns are followed, prices should settle in the $240s/mt FOB for January. The reason for the fall-off is not just to maintain the traditional gap between the Middle East and Black Sea on pricing, but because there are very few selling opportunities for January.

Sources say Latin American buyers will most likely come back in, but not until late January or early February. Much of the material that will be loaded the rest of this month and early next month is for orders placed back in October and November. Sources say that new orders for January are rare.

One observer noted that if the producers maintain they will only talk if the price starts at $260/mt FOB, they will have no one to talk to. End users and traders are holding off on making any commitments until the latter half of January. Sources say at that time Mexican and Brazilian buyers may begin testing the waters.

For now, the market is pegged at $245-$255/mt FOB, with end users claiming the lower number.

Middle East: As last week wound down, sources say ASSC/Iran bought at $265-$270/mt FOB. While area producers are more than happy to toss those numbers out as the new level, most in the industry automatically discount $5/mt on any Iranian deal.

Still, even at $260-$265/mt FOB, the price has moved up in a hurry.

Few in Asia agree that prices are firmly in the $260s/mt FOB at this time, but they could believe January will see that level hit. Other players have also looked at the Middle East market, and concur prices have settled firmly in the $250s/mt FOB.

The offers in the BCIC/Bangladesh tender show price levels in the $270s and $280s/mt FOB. However, few in the industry think this is the current level. Chances are, said one observer, that the price will most likely come down before any final deal is consummated.

Reportedly, a lot of the cargo being loaded this month and cargoes scheduled for early next month are tons booked by Indian buyers months ago. Slowly, the urea is being shipped, as the congestion in Indian ports eases.

Granular and prills continue to run at parity. Sources say it is because more large buyers – notably India – are willing to mix and match now that it makes more sense for the two to run parallel. Sources now peg the market at $255-$260/mt FOB, but with strong resistance at the upper level.

Latin America: Sources report buyers are expected to keep a low profile for the next few weeks. Some buyers may come out to kick a few tires during the last week of January, but few are expected to make large commitments just yet.

Mexico and Brazil will most likely be the first ones out of the box, with inquiries being sent out late January. Sources say those inquiries may even be delayed into February if the price out of Yuzhnyy does not come down appreciably.

Next up in late February or early March should be Ecuador and Peru.

Even though Brazil will need just more than 100,000 mt when it comes in, one source noted that will not be enough to sustain higher Yuzhnyy prices.

India: With all the back-ups at the ports and with more tons still sitting in producer warehouses around the globe, sources don’t think there will be any early calls for purchases. Sources say IPL or MMTC will most likely step up to the table sometime mid-February. The most likely time will be closer to March if the shipping and unloading of the material already under contract keeps going at the current rates.

Lastly, said one source, the national budget won’t be announced until late February. He said it would be difficult to make purchasing plans before the amount of money available for the material is known.

NITROGEN SOLUTIONS

U.S. Gulf: UAN barges last week were reported to be slower moving than urea, but still going up. Most players put barges within the $168-$173/st FOB range ($4.25-$4.40/unit).

Eastern Cornbelt: UAN-32 was quoted at $195-$200/st ($6.09-$6.25/unit) FOB terminals for cash tons, with prepay reportedly being offered at higher levels.

Western Cornbelt: UAN-32 was quoted at $195-$203/st ($6.09-$6.34/unit) FOB regional terminals, with the upper end reported by Nebraska sources for spring prepay.

Southern Plains: UAN-28 was tagged at $160-$166/st ($5.71-$5.93/unit) FOB regional production points.

South Central: UAN-32 was generally quoted at $185-$195/st ($5.78-$6.09/unit) FOB regional terminals to dealers, up slightly from last report.

Southeast: UAN-30 was tagged at $175-$178/st ($5.83-$5.93/unit) FOB Norfolk, Va., Wilmington, N.C., and Savannah, Ga., up from the prior week’s $170-$175/st ($5.67-$5.83/unit) range. The vessel market was described by one source as “hot, hot, hot,” with new business reportedly being quoted at the $200/mt C&F level or higher. Though some sources doubted that any actual business had been concluded at that number, they were also doubtful that new sales had taken place at sub-$200/mt levels. One source described the import tonnage lineup in the near-term as light.

Western U.S.: Agrium’s Dec. 1 UAN-32 postings included $218/st ($6.81/unit) DEL in northwestern Oregon excluding Malheur County, Washington, and northern Idaho.

Western Canada: As of Dec. 14, Agrium’s UAN-28 posting moved to $259-$274/mt ($9.25-$9.79/unit) DEL, up from Nov. 30’s $247-$262/mt ($8.82-$9.36/unit) DEL.

AMMONIUM NITRATE

U.S. Gulf: The normally slow AN barge market was picking up speed last week. Sources said it was simply following urea, as a smaller batch of buyers chased a smaller batch of sellers. Prices were put in the $210-$220/st FOB range, and still moving up.

Western Cornbelt: Ammonium nitrate remained at $250-$260/st FOB in the region. Delivered nitrate in Nebraska was pegged at $263-$265/st from Oklahoma shipping locations.

Southern Plains: Ammonium nitrate was steady at $240-$245/st FOB the port of Catoosa, Okla., with some sources claiming numbers slightly above and below that range last week.

South Central: Ammonium nitrate was quoted at $245-$255/st FOB, up $5/st from last report. Effective Dec. 4, Terra’s list prices for nitrate firmed to $250/st FOB Yazoo City, Miss., and $260/st FOB McComb, Miss.

Southeast: Ammonium nitrate was unchanged at $265/st rail-DEL in the Carolinas for import tons.

AMMONIUM SULFATE

Eastern Cornbelt: Granular ammonium sulfate was tagged at $160-$165/st FOB in the region.

Western Cornbelt: Granular ammonium sulfate remained at $160-$165/st FOB in the region. Granular sulfate postings from Agrium firmed on Dec. 15 to $175/st DEL in Nebraska.

Southern Plains: Granular ammonium sulfate was unchanged at $150-$180/st FOB Texas shipping points, with the low at Freeport.

South Central: Granular ammonium sulfate was quoted in a broad range at $170-$185/st FOB in the region, with the low in Arkansas and the upper end reflecting dealer list pricing FOB Vicksburg. The market FOB Memphis was pegged at a firm $175/st FOB last week.

Southeast: Granular ammonium sulfate continued to be quoted at $147-$152/st FOB in the region, with the low at Hopewell, Va., and the upper end at Augusta, Ga. Increases are slated for Dec. 20-22, however, with both the Hopewell and Augusta price reportedly moving to $157/st FOB at that time. On a delivered basis, sulfate was pegged at $167-$185/st in the region last week, depending on grade and location.

PHOSPHATE

Central Florida: Apparently, one of the things on the industry’s Christmas wish list this year is phosphate – a few thousand tons under the tree would be nice. For a quick delivery out of Central Florida, Santa was about the only one who could get it to buyers in time, because rail orders for DAP and MAP were taking far longer than anticipated. Producers have actually received more railcars than last year, but the demand at this time of year has outstripped supply. In addition, producers were running low on product. PotashCorp. was said not to be accepting new orders until February, and it hadn’t set the price for that period as of last week. CF was said to be virtually out, and Mosaic was struggling to keep up with the orders it had already received.

Sources said there were several reasons for the high level of activity. One of those reasons was the run-up in price and short supply for urea. Because of that, many buyers were moving to stock up on phosphates instead, to make ready for spring, and will turn their attention to urea when the situation improves – if it does. DAP has a relatively high nitrogen content, which could help replace some of the need for urea. Another reason was that dealers during the fall did not fill their bins, but were buying by the truckload as needed, and now they needed to fill. Another major factor was the high price of corn and the anticipation that not only will millions of additional acres be planted, but farmers were seeking a greater yield per acre in order to take advantage of the market.

Last week, prices for Central Florida phosphates were on the rise. Discounts were no longer available, and MAP was exceptionally difficult to find. The Central Florida DAP range last week increased from $218-$219/st FOB the previous week to $220-$221/st FOB. Mosaic was in the process of moving its price up by $5/st FOB from the $218/st FOB it had been receiving. PotashCorp’s Central Florida reference price was $230/st FOB. In Texas, Agrifos’ truck prices for DAP or MAP were $250/st FOB for either. That company also matches the rail prices of other producers. Agrifos was sold out through the middle of February.

U.S. Gulf: A fire was lit under the NOLA DAP barge market last week, and both sales and prices took a dramatic upswing as demand outstripped supply. As an indication of things to come, forward prices for DAP and MAP were also on the rise. CF was said to have again raised its price for DAP in January from $230/st FOB to $233/st FOB, and February from $235/st FOB to $238/st FOB. It also posted prices for March at $243/st FOB and April-May to $248/st FOB, all without discounts. Mosaic made sales for March at $238/st FOB, and will likely increase its asking price quickly. Prices on the river now exceed the export price by several dollars an adjusted ton, which has not happened in about two years. A source predicted the price of DAP will reach between $245/st FOB and $250/st FOB.

Along the Arkansas River, MAP was virtually nonexistent and little relief was in sight. The MAP shortage was partially the result of producers having lowered the price to be equal to or less than DAP, and many buyers had made the switch to take advantage of the savings. Corn was continuing to make an impact on the phosphate market, and the shortage of urea was helping to push up phosphate prices. Farmers will need DAP, potash, and urea to grow corn, so dealers were stocking up on what they could get – which was DAP, and, if they were lucky enough to find it, potash. With the price of urea nearing $300/st FOB for March and supply thin, buyers were turning to other products. Farmers were not only planting more acres of corn – millions of acres more – but trying to boost yields with heavier fertilizer applications. Meanwhile, with more acres going to corn, the price of soybean futures was also on a sharp rise.

Early last week, NOLA DAP barges sold for as low as $224/st FOB, but by late in the week, prices were $228/st FOB and above. The NOLA DAP barge price range last week was $224-$231/st FOB, with the highest prices coming at the end of the week. The previous week, the range was $222-$225/st FOB. Expect prices to be higher this week, say sources.

Eastern Cornbelt: Sources were starting to talk of tight phosphate supplies giving upside potential to that market as well, due to domestic production interruptions, strong exports, rail rate increases, and delayed buying. Most sources last week continued to tag the regional warehouse market for DAP and MAP in the $260-$265/st FOB range. TSP was pegged at $238-$245/s FOB, with the low on the river and the upper end inland, and 10-34-0 remained at $255-$265/st FOB in the region.

Western Cornbelt: Dealers continued to report steady movement of phosphates and potash in some sections of the region last week. DAP and MAP were commonly quoted at $260-$265/st FOB to dealers, with the upper end FOB Omaha, Neb. TSP, where available, was pegged at $238-$245/st FOB, with the low on the river and the upper end inland. 10-34-0 was unchanged at $255-$265/st FOB, with the low in Nebraska and the upper numbers reported in Iowa.

Southern Plains: DAP and MAP remained at $250-$255/st FOB Catoosa. Along the Arkansas River, MAP was virtually nonexistent at mid-month, sources said. 10-34-0 was reported at $255-$260/st FOB for cash market tons and $265-$270/st FOB for prepay.

Agrium’s phosphoric acid prices moved on Dec. 1 to $545/st for merchant grade and $555/st for super-phosphoric acid in Colorado, Kansas, Oklahoma, New Mexico, and Texas. A $5/st increase is scheduled for both products in January, and again in February and March.

South Central: DAP and MAP were both quoted at $255-$260/st FOB regional warehouses to dealers, up slightly from last report. TSP was up as well, at $230-$232/st FOB the warehouse to dealers.

Western U.S.: Agrium also issued a revised phosphoric acid pricing schedule, effective Dec. 1, for rail-DEL product in Arizona, California, Idaho, Montana, Nevada, Oregon, Utah, Washington, and Wyoming. Postings moved on that date to $555/st for merchant grade acid and $565/st for super-phosphoric acid, with $5/st increases scheduled for both products in January and February before moving to $570/st for merchant grade and $580/st for super phos in March-May.

Western Canada: As of Dec. 14, Agrium’s MAP posting moved to $405-$440/mt DEL, up from the Nov. 30 posting $395-$430/mt DEL for MAP.

U.S. Export: Although PhosChem did not make any new sales last week, Transammonia made sales to both Mexico and Honduras, using phosphate from Miss Phos. Miss Phos will end its long-running membership in PhosChem at the end of the year; the sales will become effective in January. The Mexican deal was for 10,000 mt, while the sale into Honduras was 6,000 mt, both at prices between $250/mt FOB and $251/mt FOB, which were within the existing range.

Sources said PhosChem will begin seeking a new export price of $260/mt FOB for future sales, which will also benefit Miss Phos and Transammonia.

Interest was coming from Argentina, Brazil, and Uruguay, which do not normally buy at this time of year. In addition, Iran was said to be planning to issue a new tender for phosphate, and while U.S. companies cannot bid on that business, it will still take product out of the market that would have competed with PhosChem. Ethiopia was also in the market last week.

The export DAP price range last week was unchanged at $250-$255/mt FOB.

POTASH

Recent posting: PCS Sales will raise prices $10/st FOB mine for all grades, effective Jan. 1. The old price will be available through Dec. 31 for specified volumes shipped no later than Feb. 15. The $10/st increase will be for all orders placed as of Jan. 1, and also for orders shipped after Feb. 15.

Eastern Cornbelt: Potash remained at $201-$207/st FOB most regional warehouses.

Western Cornbelt: Potash was $200-$208/st FOB regional warehouses, depending on grade and location. One Missouri source pegged the red granular potash market commonly at the $204/st FOB mark last week.

Southern Plains: Potash was unchanged at $192-$198/st FOB Carlsbad, N.M., depending on grade. Warehouse pricing was reported at $200-$202/st FOB in the region, with delivered potash at $208-$210/st on the upper end.

South Central: Potash out of regional warehouses was generally quoted in the $193-$200/st FOB range last week.

Southeast: Dry potash was quoted at $217-$225/st DEL in the region, depending on grade and location. Some sources said they were still taking delivery on potash fill tons ordered earlier in the fall at the $208-$210/st level, but new pricing was said to be up at least $10/st from that level.

SULFUR

Tampa: Negotiations for first quarter sulfur contract prices continued last week, but sources said they did not expect an agreement until early next year. When the dust settles, the betting is that the price will go down about $4-$5/lt, even though PotashCorp had sought a decrease of only $6/lt. One sulfur source said the lower than usual starting position for PotashCorp was likely to avoid shaking up the market too severely.

Even more work was going into finding a home for sulfur for the next calendar year. Sellers were busy lining up their customers and contracts last week. One source described it as an annual game of musical chairs. If everyone does not find a home for their sulfur, the market will be even longer than anticipated.

Canada was still in the process of trying to figure out what it was going to do with its sulfur production, what with higher ocean freight rates, and high rail rates into Florida.

A rumor held that the Aurora, which shuttles sulfur to PotashCorp in both Florida and North Carolina from Venezuela, has had free time during the past two months and other groups were seeking to use it for hauls to Africa. One source said that if the reason the Aurora was available was because PotashCorp did not need the sulfur, “the market is even longer than we had thought.” The other possibility was that not enough sulfur was coming from Venezuela.

Two prill vessels were scheduled to ship a total of about 55,000 lt of sulfur in December. One of the vessels was destined for Brazil, and the other for Morocco.

India: Under its Dec. 6 tender for three 40-45,000 mt cargoes, PPL received six offers. A final decision is still to be reported. The last business was contracted with Transfert at $67.00mt CFR Paradeep.

MARKET NOTES

Egypt: Indo-Egyptian Fertilizer Co. (IEFC), a joint venture of The Indian Farmers Fertilizer Cooperative Ltd (IFFCO) and the El Nasr Mining Co. (ENMC), is all set to launch a new project in Edfu, Egypt, that would be Egypt’s first major phosphoric acid manufacturing facility. IFFCO will hold a 75.95 percent stake, while ENMC will hold 24 percent. The total project cost is estimated at US$350 million, which would be financed on a 30:70 equity-to-debt basis by the International Finance Corp. and local Egyptian banks. The project will have an installed capacity of 450,000 mt P205 per annum. The project configuration consists of a phosphoric acid plant with capacity of 1,500 mt/d (100 percent P2O5), and a sulfuric acid plant with capacity of 4,500 mt/d, including power generation and related offsite facilities. The project will use phosphate rock and sulfur as raw materials and produce phosphoric acid as output. The entire plant’s production of phosphoric acid will be exported back to IFFCO’s Indian facilities under a long-term off-take agreement.

Pakistan: Engro Chemical Pakistan has received allocation from the government for 100 million cubic feet of gas per day from the Qadirpur gas field in Sindh to set up a new urea plant. The plant would be set up with an estimated cost of $1 billion, with a production capacity of 1.3 million mt/y.

India: Fertilizer Association of India (FAI) sources are critical of the Central Indian Government for not progressing with proposals to expand fertilizer plants in the country. They say that over the last three years CIG has been sitting on 16 proposals for the expansion of capacity for urea and complex fertilizers, to the tune of 9 million mt. The cost of these projects has now increased by about 30 percent. They complain that as a result the country has had to import high-priced urea to make up for the shortfall.

“We are virtually living from hand to mouth,” said one FAI official. Sources say the government has been a mute bystander in light of increased fertilizer demand. Projections are that the requirement of urea and DAP will be at 29 million mt and 10 million mt, respectively, by 2011-2012. Going by the current production of urea and DAP at 20 million mt and about 5 million mt, respectively, a huge gap between demand and supply is envisaged unless adequate additional capacities are created during the period. The short supply during the recent Rabi season was despite the government’s importing an estimated 4.6 million mt of urea, 3 million mt of DAP, and another 4 million mt of potash at high prices. Sources say much of this fertilizer is still stuck at Mundra, Kandla, and Vizaq ports, despite being given temporary priority over food grains for clearing from ships. “But the government’s inability to solve key infrastructural inadequacies, such as bagging and labor shortage, have inordinately delayed delivery,” said one source. “That’s ensured that most wheat sowing has missed the DAP sowing application time deadline.”

In the meantime, representatives of Seoul-based Joongang Chemical Industry Ltd. are expected to visit Fertilizers and Chemicals Travancore (FACT) soon for talks regarding a proposed gypsum-based joint venture. FACT has proposed to convert its huge stock of gypsum into various building materials such as bricks, false ceiling plasterboards, and partition walls. The Kochi-based company has about 5 million mt of gypsum at its two units in Eloor and Ambalamugal.

FACT is also contemplating other projects, including a high-tech park and a joint venture with Adi Establishment of Egypt to set up an ammonia-urea plant in Egypt. The two companies have already approved an expression of interest, and a memorandum of understanding will be signed as soon as the Central Indian Government gives clearance to the first-ever overseas project of FACT. But most of the development projects, such as the capacity expansion of the caprolactum plant, depend on the commissioning of the LNG terminal in Kochi. The company proposes to enhance the production capacity of the plant from 50,000-150,000 mt annually with the active participation of DSM Fertilizers of the Netherlands. The company has already drafted the preliminary report of the project, and the final report will be prepared jointly by the companies. FACT will also go in for a capacity expansion of jv initiative for sulfuric acid and phosphoric acid. A number of private sector companies, including Nagarjuna Fertilizers, have submitted their proposals, and FACT is now in the process of finalizing the project.