U.S. Gulf: The long-time $305/st FOB barge number was reportedly under pressure, with sources now putting the market in the $302-$305/st FOB range, if not lower. While sellers have higher price ideas for February and March, some sources wondered if demand will be enough to move prices higher. Some also argue that the after-effects of the West Fertilizer tragedy may be starting to catch up with the NOLA market.
Western Cornbelt: Ammonium nitrate was steady at $350-$360/st FOB in the region, with the low in Missouri and the upper end in the Iowa market.
Southern Plains: The Tulsa ammonium nitrate market remained at $350/st FOB.
South Central: Ammonium nitrate remained at $350-$360/st FOB terminals in the South Central region, with the low FOB Memphis and the upper end reported in the Arkansas market on a spot basis.
Southeast: The Tampa ammonium nitrate market was pegged at $360-$365/st FOB, down $5/st from December levels. Sources reported steady movement and well supplied inventories at Tampa, with some speculating that the Tampa market would see no more AN imports this season.
Washington — The U.S. Environmental Protection Agency (EPA) has failed to examine the economic impacts on low-income and minority populations of its recently proposed phosphoric acid air regulations, PCS Phosphate Co. Inc. said in a letter sent to the agency in December. EPA extended the comment period on the proposed rule to Jan. 21 after receiving requests from The Fertilizer Institute, The Mosaic Co., PCS Phosphate and a testing company that serves the phosphate industry (GM Dec. 22, 2014). PCS Phosphate also said the proposal lacked any analysis of how increased environmental compliance costs might affect the community surrounding its Aurora, N.C., phos acid plant. That area includes a higher percentage of poor residents than the national average. The failure to “adequately address” the economic effects of the proposal does not comport with a 1994 Executive Order on environmental justice, PCS said. The letter was sent by the law firm of Covington & Burling. “EPA is only considering ‘risks’ from pollution, which it found to be negligible, while ignoring the economic and employment effects on minority and low income communities from setting the [National Emission Standards for Hazardous Air Pollutants] ‘below the floor’ even where not necessary to do so for health reasons,” the letter said, adding that PCS’s phos acid plant in Aurora “will be adversely affected by the portion of the rule that sets a ‘below the floor’ NESHAP for mercury from calciners.” The lawyers called on EPA to perform a separate analysis of the impacts and effects on low-income populations, “since a large population living around the Aurora facility, located in Beaufort County, N.C., for example, live below the poverty line (20.6 percent), exceeding the national average (14.9 percent). Any workforce reductions caused by the proposed rule, if adopted, at this facility could potentially increase those living below the poverty line.”
U.S. Gulf/River: Significant ice flows were reported on the Illinois River last week. Shippers moved to reduce tow sizes as a result, and the use of ice couplings was required at locks. Some shipping operators reported transit length increases of 4-5 days resulting from the frosty conditions.
Locking resumed at the Illinois River’s Marseilles Lock on Jan. 14, though operations remained hampered by ice coverage and reduced operating width, estimated at 89 feet. An ice gorge located between Meredosia, Ill., and LaGrange Lock halted operations at that location, and additional frozen masses were reported at Miles 25 and 35. O’Brien lock is scheduled to shut down for the navigation season on Jan. 21.
Lock 27 on the upper Mississippi River was tabbed to go offline Jan. 17-18 for protection cell maintenance, and delays of 4-6 hours were experienced prior to the closure. Additionally, the lock will be closed to daytime transit Jan. 29 through Feb. 15 while a second round of work is conducted. Locks 21 and 22 faced 70-foot width restrictions for the week due to heavy ice conditions.
Sources kept an eye on the Cape Girardeau, Mo., river gauge, which stood at 12.4 feet on Jan. 15. The U.S. Army Corps of Engineers will resume its perennial rock removal project at Thebes, Ill., when Cape Girardeau flows drop to the 10-foot mark. Officials plan to keep navigational impacts to a minimum throughout the duration of the project.
Ice flows were reported near Montgomery Lock on the Ohio River, and wait times of about an hour were described at R.C. Byrd and Lock 52. Daytime transit restrictions will be instituted at the Belleville auxiliary chamber from Feb. 9-27 for lock repairs, but boats will have access to the main chamber for the duration.
Significant ice flows hampered operations on the Allegheny River last week. Shipping operators anticipated construction at the Hulton Bridge replacement project will force a complete river closure from Jan. 15-17.
Normal operating conditions were observed on the Monongahela River for the week. The Braddock Lock and Dam river chamber, still suffering from unspecified equipment failure, was expected to remain offline indefinitely.
Shippers expect “major delays” beginning Feb. 25 at Winfield Lock on the Kanawha River as lock repairs are scheduled to push the main chamber offline. The work is projected to run through April 30.
On the lower Mississippi River, transit through Mile 634 will be closed daily between 6:00 a.m. and 6:00 p.m. for channel revetment efforts, which are expected to continue through April 1. Numerous delays were also reported at Gulf-area locks, including Industrial Lock (28-32 hours), Port Allen Lock (14-16 hours), Algiers Lock (6-8 hours), and Bayou Sorrel Lock (1-2 hours).
Grain Futures: As of 4 p.m. on Jan. 15, corn, soybean, and wheat futures were all lower compared to the week before.
March 2015 corn was posted at $3.80/bushel, down from the previous week’s $3.9425/bushel, and corn for May 2015 was $3.8725/bushel, a decrease from $4.0275/bushel the week before. Contracts for December 2015 corn were $4.075/bushel, down from $4.1725/bushel one week earlier.
Soybean prices for March 2015 were $9.91/bushel, substantially lower than the prior week’s $10.4825/bushel. May 2015 soybeans were put at $9.9725/bushel, down from $10.5375/bushel the week before, and November 2015 soybeans were $9.765/bushel, a decrease from $10.17/bushel in the previous week.
March 2015 wheat punched in at $5.3275/bushel, down from $5.67/bushel the week before, while May 2015 wheat contracts traded at $5.3575/bushel, also below the previous week’s $5.72/bushel. Wheat for July 2015 was $5.40/bushel, down from $5.7675/bushel one week earlier.
Eastern Cornbelt: Winter storms continued to impact much of the Eastern Cornbelt early in the week, with reports of snowfall, ice, and cold temperatures in all three states. Central and northern Indiana were hit with freezing rain on Jan. 11-12, and light ice accumulation was also reported in Ohio as Winter Storm Hektor pounded the Northeast.
Western Cornbelt: Weather conditions in the Western Cornbelt had moderated after the prior week’s arctic chill, but sources continued to report cold temperatures in many areas, along with wet or frozen field conditions.
“It has been very quiet,” said one Missouri source at midweek. “There is no interest this week, other than staying warm. Since the ground is freezing, we may start to see some winter application next week.”
Southern Plains: Temperatures were starting to warm up in the Southern Plains after bitterly cold weather conditions earlier in January. The frosty weather was accompanied by precipitation throughout Texas and Oklahoma, and sources continued to report scattered snowfall and freezing rain in northern New Mexico early in the week.
Sources reported some topdress activity on winter wheat in parts of Kansas last week, and applications were also taking place on rowcrop acres. Overall the application pace was very slow, however. “Chock it up to the cold weather,” said one contact. Added another, “It’s supposed to warm up, so things might pop next week.”
South Central: Much of the South Central region was experiencing winter weather conditions in mid-January.
The week began with freezing rain and winter weather advisories in northern Arkansas and eastern Kentucky, with below-freezing temperatures extending all the way down to Louisiana and Mississippi. Another weather advisory was posted for central and southern Kentucky late in the week, with snow and sleet in the forecast.
Sources reported minimal new buying activity in the region last week. “Prepay was slow-to-average in our area,” said one regional contact. “Growers are watching the commodity prices closely and are reluctant to make decisions unless they have to have it.”
Southeast: Ice and sleet were reported in parts of eastern Virginia and North Carolina at midweek. Northern Alabama was also bracing for a dusting of snow and sleet at midweek, while rain and fog were reported across southern Georgia and into northern and central Florida.
The previous week brought very chilly temperatures to the Southeast, including some light snowfall in Jacksonville, Fla. Sources in the Carolinas also reported “very wet and cold” weather conditions in early January.
Tampa: Negotiations for the first-quarter contract price of molten sulfur delivered to Tampa continued last week amid a backdrop of rapidly firming international spot levels.
With worldwide prices pointed up, most market watchers expressed confidence in an increase from the fourth-quarter price of $129/lt CFR. Until now, few in the market were eager to offer potential numbers for Q1, but a rise of $15-$20/lt was widely touted as a likely first-quarter landing spot for the updated contracts.
Many also speculated that negotiations could see a later-than-usual settlement date for the quarter, as consumers were seen as likely to seek added time for spot prices in the Chinese sulfur market to cool. The Chinese market has been universally recognized as the primary driver of the international price run-up.
Philadelphia Energy Solutions, the East Coast’s largest refinery, was operating at reduced capacity following a Jan. 10 fire at its Girard Point crude distillation unit, sources said. The incident, along with an explosion and fire at the Husky Lima Refinery in Lima, Ohio, an unplanned outage at the massive BP Whiting refinery, and a third refinery fire, was said to affect roughly 20 percent of the refining capacity in the eastern U.S. for the week.
The timing of the incidents raised speculation that refiners’ efforts to maintain record production quotas were to blame for the occurrences. However, most analysts pointed instead to cold weather as the likely culprit. All four afflicted refineries were expected to resume normal production on or around Jan. 17.
U.S. refinery operations fell again last week, according to data from the U.S. Energy Information Administration (EIA). The domestic utilization rate dropped to 91.0 percent of capacity for the week ending Jan. 9, down from 93.9 percent in the previous week. Despite the fall, the rate remained higher than last year’s 90.0 percent logged for the same week, as well as the five-year average of 87.1 percent.
Average daily refinery inputs dipped as well, registering 15.893 million barrels/d for the week, a decrease of 527,000 barrels/d from the previous week’s 16.420 million barrels/d average.
U.S. Gulf: Spot prices in the Gulf of Mexico increased to a range of $160-$170/mt FOB, according to industry sources. Previous levels were quoted in a range of $135-$140/mt FOB.
Vancouver: The Vancouver spot price continued to soar last week, with seemingly insatiable Chinese demand giving legs to offshore markets worldwide. Delivered prices at China, which bottomed at $185/mt CFR and were approaching or possibly exceeding the $200/mt CFR level last week, supported Vancouver levels averaging $170/mt FOB or above, traders said.
Alberta refiner Syncrude 21 was up and loading again last week, drawing cautious optimism from a number of industry insiders. The facility boasts an approximately 2,000 t/d production capacity.
Sulfur sourced from Alberta fell in a range of (-)$10-$75/mt.
West Coast: Following the rise at Vancouver, sources quoted prices from the West Coast as $160-$170/mt FOB.
Contracts for the price of molten sulfur at California rolled over for first-quarter 2015, and were quoted at $90-$130/lt FOB.
Benelux: Sulfur at Benelux was quoted in a range of $158-$172/mt FOB in the fourth quarter.
ADNOC: The January price of Abu Dhabi sulfur was $158/mt FOB.
Aramco: Aramco set its February price at $180/mt FOB, a jump of $22/mt from January’s $158/mt FOB. The price increase came amid heavy demand, sources said, with Aramco’s sulfur stocks said to be sold out through February.
U.S. Gulf: Potash barge prices were lower at $360-$365/st FOB, with sources citing new imports as putting pressure on the market – most notably a new Israeli import – as well as three Belarusian vessels in late January and February. In total, sources estimate that as much as 150,000 mt of potash will come on the three Belarusian vessels.
As for sanctions, sources noted that there are no sanctions against Belarus per se, but against certain Belarusian individuals and companies. As long as the trades cannot be tied to those entities, the Treasury Department will likely stay out of it.
Belaruskali hit record-high output of potash fertilizers in 2014, according to the Belarusian News Agency. Some 10.33 million mt was produced in 2014, up 48 percent from 2013.
Eastern Cornbelt: Potash was steady at $400-$415/st FOB in the Eastern Cornbelt, depending on grade and location.
Western Cornbelt: Potash pricing was flat at $410-$417/st FOB regional warehouses, with the low for red and the upper end for white granular tons.
Southern Plains: Potash was level at $405-$410/st FOB regional warehouses. The Carlsbad, N.M., potash market remained at posted levels of $405/st FOB for 60 percent standard, $410/st FOB for 60 percent granular and 62 percent standard, and $417/st for 62 percent granular.
Sulfate of potash magnesia was reported at $375-$390/st FOB Carlsbad, up $10/st from December pricing levels, with the low for standard, the upper end for premium grade, and the granular market quoted at $385/st FOB.
South Central: Potash pricing remained at $405-$410/st FOB warehouses in the South Central region.
Southeast: Sources quoted rail-delivered potash in the Southeast at $410-$418/st for Canadian tons, depending on location. The regional warehouse market was pegged at $395-$410/st FOB, with the low reported for discounted import tons out of port terminals.
China: Canpotex on Jan. 13 announced that it had entered into a new three-year Memorandum of Understanding (MOU) with Sinochem Fertilizer Macao Commercial Offshore Ltd. to supply a minimum of 1.9 million mt of red standard grade potash during the term of the MOU. In addition, Sinofert has the option to purchase up to 2.4 million mt (800,000 mt/y) of other grades of Canpotex potash during the term. Pricing will be negotiated every six months (January to June and July to December), based on market conditions.
The MOU covers the period Jan. 1, 2015, to Dec. 31, 2017, and is designed to encourage future growth in new Canpotex product grades and new market regions in China. It provides exclusivity to Sinofert for Canpotex red standard grade potash only, provided Sinofert exercises the annual minimum purchase requirements.
Steve Dechka, Canpotex’s president and CEO, said this agreement signifies Canpotex’s ongoing commitment to the growing Chinese market. “Canpotex is proud of its long-term trusting relationship with Sinofert, and this agreement demonstrates the confidence we continue to have in that partnership. We have been supplying Saskatchewan potash to China since 1972, and with this agreement we will continue to be a leading supplier to this growing market,” Dechka said. “Canpotex is committed to making an important contribution to global food security and meeting China’s growing potash needs.”
Market watchers would have been happier had there been news about a price for the first half of 2015. Sellers had started out suggesting a 10 percent increase over 2014’s $305/mt CFR. Those price ideas have been under pressure in recent months, however, with Russian supplier Uralkali fearing that Belarusian Potash Co. might have a negative
Central Florida: Following a busy lead-up to the New Year, business in the Central Florida DAP market has been slow in 2015, traders said. “There’s no interest right now,” said one contact. “It’s been insanely quiet.”
Despite the demand dip, however, many expect prices to tick up in the near term, citing supply competition from the firming Tampa export market.
Truck-loaded DAP was called $435/st FOB for the week, up from $430-$435/st FOB previously. DAP delivered by rail was quoted around $430/st FOB, though some believed $425/st FOB was still possible.
Recent hikes in the price of railcars out of Florida may also have served to tamp down demand, one source reasoned. The increases were said to add $5-$10/st to interstate transactions.
DAP in the Central Florida phosphate market was quoted in a range of $425-$435/st FOB last week, unchanged from the previous report. MAP, said to be a nonfactor, was quoted at a $20/st FOB premium to DAP.
U.S. Gulf: NOLA activity was quiet last week. Offers abounded, sources said, though few barges actually changed hands. More buyers than sellers were present in the market for a second consecutive week, some noted, and despite the imbalance, barge pricing was supported by the perception of thin supply.
Mosaic reported that it was sold out of spot material for January and February loading, despite having returned to full production as of Jan. 1. With a “modest” expected lineup of import vessels slated for arrival in the first quarter, near-term phosphate availability was seen as tight.
The barge price was called $440-$445/st FOB for January and February, and benefitted from ongoing strength in the international market, said one industry veteran, who predicted that domestic levels would shadow the international price arc upward. With some domestic producers reportedly giving the international market supply preference in the current climate, NOLA players will be forced to keep closer pace with international price swings if they hope to attract adequate supply, the source said.
With that in mind, the barge market remained stuck in no-man’s land, some said: undersupplied for the short term, with too little price strength to attract foreign imports to make up the difference. The current $445/st FOB DAP ceiling was shy of the $450/st FOB or so needed to begin drawing international interest. “That price is close, but (it) doesn’t hunt yet,” one contact said.
Little activity was reported out of terminals last week. However, one contact remarked on a modicum of “application going on in the Midwest where the weather has allowed.” Additionally, others spoke of scattered wheat field application.
Some mentioned the reappearance of Chinese DAP and MAP offerings at NOLA, priced respectively at $430 and $435/st FOB. Sources believed the material was left over from a fall vessel, however, and did not represent an impending discharge.
The price of MAP continued to erode relative to DAP. Most traders called MAP slightly higher than DAP for the week, at $440-$450/st FOB.
The NOLA DAP barge market was quoted in a range of $440-$445/st FOB, a change from the prior week’s $435-$447/st FOB. DAP for March loading was put at $445/st FOB, and nearby domestic MAP was called $440-450/st FOB.
Eastern Cornbelt: DAP was quoted at $470-$480/st FOB regional warehouses in the Eastern Cornbelt, with MAP pegged in the $485-$500/st FOB range in the region.
10-34-0 was tagged at $540-$550/st FOB for limited tons in the region.
Western Cornbelt: DAP pricing had reportedly ticked up to $470-$475/st FOB most warehouses in the Western Cornbelt, with the low end of the range reflecting a $10/st i
Eastern Cornbelt: Granular ammonium sulfate was pegged at $305-$320/st FOB in the Eastern Cornbelt, with the upper end reflecting the Jan. 1 price increase from Honeywell. Rail-delivered product was pegged at $310-$330/st in the region.
Ammonium thiosulfate was steady at $340-$350/st FOB in the Eastern Cornbelt.
Western Cornbelt: Although granular ammonium postings from Honeywell had firmed to $325-$330/st FOB Iowa terminals in early January (GM Jan. 12, p. 6), sources in Missouri continued to quote the market much lower at $290-$310/st FOB, depending on location, with the low reported out of river locations in southern Missouri. Delivered ammonium sulfate was reported in the $310-$330/st range in the region.
Ammonium thiosulfate remained at $310-$320/st FOB in the Western Cornbelt.
Southern Plains: The granular ammonium sulfate market was quoted at $250-$285/st FOB Texas shipping points, depending on location, with coarse grade $10/st lower and standard $20/st lower than granular, where available.
The ammonium thiosulfate market had firmed to $295-$300/st FOB in the Southern Plains region.
South Central: Granular ammonium sulfate pricing was unchanged at $275-$280/st FOB in the South Central region. Ammonium thiosulfate was pegged at $310-$315/st FOB in the region.
Southeast: The granular ammonium sulfate market remained at $265/st FOB Hopewell, Va., and Augusta, Ga., with delivered tons reported at $270/st in the Carolinas, $280/st in Georgia, and $295/st in Florida. Standard grade ammonium sulfate was referenced at $210/st rail-DEL in Florida.
Russian fertilizer company Uralchem Co. and Swiss-based trading firm Ameropa AG have recently launched a war of words in a long-standing feud over Russian nitrogen and methanol producer OJSC Togliattiazot.
Uralchem, a shareholder in Togliattiazot since 2008 with a 9.9 percent stake, alleges that majority holders of Togliattiazot have illegally withdrawn funds and property, and that the company exported ammonia and urea to Ameropa and its related company, Nitrochem Distribution AG, at less than fair value. As a result, Uralchem says minority shareholders lost a significant share of their dividends, and the state lost tax revenues. It said total damage to minority shareholders and the state exceed US$1.5 billion.
Uralchem said Jan. 15 that Evgeniy Korolev, director general of Togliattiazot; Sergei Makhlai, board chairman and a principal beneficiary of the enterprise; Vladimir Makhlai, ex-head and a principal beneficiary; Andreas Zivy, Ameropa board chairman; and Beat Ruprecht, a principal beneficiary of the enterprise and board member of Ameropa and Nitrochem, were all accused by the Investigative Committee of the Russian Federation of fraud, arrested in absentia, and put on an international wanted list.
In a Dec. 31 statement on its website, Ameropa said that Russian oligarch Dmitry Mazepin and his company, Uralchem, have been trying to take over Togliattiazot by any means. Ameropa said as a holder of only 12 percent, it has been a bystander in the fight between Mazepin and the majority owners.
Ameropa said Mazepin launched unfounded criminal complaints in 2012, but more recently was able to increase his pressure so that arrest warrants were issued and Ameropa was pulled into the struggle. “We vehemently deny all of the unfounded allegations of Mr. Mazepin and the unfair means employed by him to achieve his goals,” said Zivy, in the statement on the Ameropa website. “Mazepin obviously intends to force us to surrender, by the use of false allegations, slander, and police pressure. We also underline that whereas Togliattiazot is in excellent financial shape despite the constant harassment by Mr. Mazepin, Uralchem has a huge debt of close to US$4 billion and large losses in the current year. We shall fight with all legal means at our disposal to defend our property.”
Uralchem took offense at Ameropa’s allegations regarding its performance, noting that the debt was due to its fundraising to buy a 20 percent stake in Uralkali. Furthermore, it said that based on its results for January-September 2014, the EBITDA index of the company increased 6 percent, to 18.27 billion rubles with a profitability of 35 percent, one of the highest in the industry. Uralchem went on to say that Togliattiazot’s seven ammonia plants operate less effectively by producing less ammonia as a whole and have a lower average unit capacity than Uralchem’s five ammonia plants.
In the meantime, Togliattiazot says the criminal prosecution of Sergei Makhlai is warrantless and that it will seek a repeal of the decree.
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