Urea
U.S. Gulf: Prompt granular urea prices dropped last week to as low as $246/st FOB. Sources said it was now too late to get barges very far north before river close, and price ideas were lower as a result. Another contact suggested an unexpected and unconfirmed import from Venezuela.
Regardless, new trades were reported as high as $254-$256/st FOB by the end of the week. Still higher prices were also heard, but these were for moving barges that were already upriver.
Prills were reported weaker at $250-$260/st FOB.
Eastern Cornbelt: Urea pricing continued to be quoted in a broad range at $290-$310/st FOB in the Eastern Cornbelt, with the low end reported at Cincinnati, Ohio, and the upper end out of spot Illinois River locations.
Western Cornbelt: The regional urea market remained at $300-$315/st FOB in the Western Cornbelt for prompt tons, with spot pricing at the $300/st FOB level or lower for first-quarter tons.
Southern Plains: Urea prices continued to fall in the Southern Plains. Although there were some reports of prompt and first-quarter urea tons being offered for as low as $285/st FOB Catoosa, Okla., most pegged the urea market in the $290-$295/st FOB range at the port last week “with nothing going on.”
South Central: Granular urea pricing had slipped to $295-$310/st FOB terminals in the South Central region, with the low reported FOB Convent, La. The Memphis urea price was pegged at $310/st FOB, down $15/st from mid-September pricing levels.
Southeast: The granular urea market had reportedly slipped to $320-$325/st FOB most port terminals in the Southeast, down some $10/st from last report, although postings remained as high as $335/st FOB at some locations in the region.
India: By the time the MMTC tender closed Oct. 9, the industry was already back in a gloomy mood.
The announcement of the tender came in September as the TFI World Conference in Boston closed. Most in the business said the tender would not stem the downward slide in prices, but it might slow the decline. Sources said at a minimum it would absorb some excess tonnage produced in China, and allow prices to fall at a more structured rate instead of a freefall.
The lowest offers were in the $257-$258/mt CFR range, and surprised many. Just days before the tender closed, sources said they expected the price to drop at least $20/mt from the Sept. 9 IPL $274/mt CFR level.
In the end, about 3 million mt were offered in the tender. Of that amount, 1.4 million mt were offered below $261/mt CFR. The market price had indeed fallen, but not as much as many had predicted.
Results of the tender follow:
|
Offering Company |
Quantity (MT) |
US$/mt CFR |
Discharge Po Index to exclude Uralkali – AlertRussian potash producer Uralkali announced Oct. 19 that Morgan Stanley Capital International (MSCI) index provider has made a decision to exclude the company’s shares from MSCI Global Standard Indexes Russia, effective from Oct. 21, 2015. The decision comes after the proportion of Uralkali’s outstanding shares available for purchase by international investors fell below the required threshold after a stock buyback by the company, which was completed Sept. 25. The potash producer repurchased 22 percent of its shares, including a 12.5 percent stake held by China’s Chengdong Investment Corp. The $2-billion buyback reduced the ‘free float’ to approximately 13.9 percent of Uralkali’s share capital, the potash producer said Oct. 16. This latest stock repurchase follows another buyback of around $1 billion in June. It is understood that passively-managed funds that track the MSCI indexes are forced to sell Uralkali shares once the company is dropped from the index. Bloomberg Business quoted Russia’s VTB Capital as saying the exclusion from the MSCI index could drive as much as $30-$35 million of investment away from the stock. Uralkali in August warned the reduction in the free float may also lead to a de-listing of its shares from the London and Moscow stock exchanges. Encanto signs MOU with MMTCVancouver — Encanto Potash Corp. said Oct. 15 that it has entered into a Memorandum of Understanding (MOU) with Metals and Minerals Trading Corp. (MMTC) of India to define the framework for a long-term potash supply agreement. Encanto is a TSX Venture Exchange listed and traded Canadian resource company engaged in the development of potash properties in Saskatchewan. Through a joint venture agreement with Muskowekwan Resources Ltd. on its flagship property, Encanto has a project land package which totals approximately 61,000 largely contiguous acres. Encanto says a 2013 pre-feasibility study confirms proven and probable KCI reserves totaling 162 million mt grading 28 percent, which supports primary and secondary mining for over 50 years at an assumed annual rate extraction rate of 2.8 million mt. Encanto also has an interest in another potash property in Saskatchewan – a 20 percent interest in the 55,000-acre Ochapowace/Chacachas property. CHS, UFA announce jv; new Alberta facility under constructionCHS Canada, a unit of CHS Inc., Inver Grove Heights, Minn., and UFA Co-operative Ltd., Calgary, Alba., have announced they will form a new 50-50 joint venture, to be named Bridgeland, which is designed to serve ag producers in the Peace Country area of Alberta. They identify the area as Alberta’s number two crop-producing region and the province’s largest producer of canola. The partners say the jv will serve UFA members and customers with a comprehensive offering of crop inputs (seed, crop chemical, and access to dry and NH3 fertilizer), agronomic expertise, and a consulting/advisory model delivered locally. The jv will be governed by a board consisting of two leaders from UFA and two from CHS. The jv already has a new fertilizer facility under construction south of Sexsmith in the RedTail Business Park. This high-speed blending facility will provide UFA members and customers in the Peace Country area with local access to a range of dry fertilizer products. This project is expected to be completed in early 2016. Observers see the facility as a new fertilizer hub for northern Alberta, which will better assure product availability. A grain elevator is also on site, with a UFA source quoted as saying this will allow farmers to drop off their grain and pick up fertilizer. “The new venture brings new capabilities to both organizations and will position us more competitively in the marketplace,” said Carol Kitchen, UFA CEO. “Ultimately, this will help farmers in the Peace Country grow and prosper … This regional partnership will allow us to support agricultural investment and enhance the services we provide here.” "CHS is always looking for partnerships that will enhance our efforts to help farmers grow their operations," said Lynden Johnson, executive vice president, CHS Country Operations. “This new venture blends the best of both organizations to strengthen what our local experts with global connections can deliver for producers in Peace Country.” CHS has been growing its presence in Canada over the past few years. CHS CEO Carl Casale was recently quoted as saying CHS would take a look at grain handling assets of commodities trader Glencore should they become available at the right price. Swiss-based Glencore, which has been seeking to reduce debt, has indicated it might be willing to sell a minority stake in its agriculture business, which includes Viterra assets in Canada it purchased in 2012. Founded in 1909, UFA has more than 120,000 member-owners. UFA’s network comprises more than 110 bulk fuel and Cardlock Petroleum locations and 35 Farm & Ranch Supply stores. Independent Petroleum Agents and more than 1,200 UFA employees provide products, services, and agricultural solutions to farmers, ranchers, members, and commercial customers in Alberta, British Columbia, and Saskatchewan. UFA also owns and operates Wholesale Sports Outdoor Outfitters. With 13 locations and more than 600 employees, Wholesale Sports is the largest multi-channel retailer in Western Canada dedicated to the outdoor industry. River Bend Ag LLC – Management BriefEddie Barnhill, president and general manager of River Bend Ag LLC in New Madrid, Mo., announced that he will retire, effective January 2016. Barnhill has served in his present management position at the company for the last 14 years. Before that, he spent 20 years working in retail for a local farm cooperative. “My professional career of 34 years has all been devoted to the world of agriculture,” he said in an Oct. 6 letter to customers. “I have had a blessed experience to have worked with the best farmers and ranchers in the world, and those that drive the latest innovations in crop nutrients around the globe.” Josh Miller, currently serving as assistant manager at River Bend, will take over as president and general manager upon Barnhill’s retirement. Miller has been with River Bend for eight years. “River Bend Ag takes a lot of pride in the partnerships we have built with our customers and vendors, and Josh will continue to work closely with each of you to build that partnership even stronger,” Barnhill said. Barnhill said his retirement plans including spending more time with his wife, Mary, and his grandkids, more visits to the golf course, “renewing my friendship with my boat and fishing pole,” and continuing disaster relief work through his local church. Uralkali – Management BriefUralkali said Oct. 15 that Oleg Petrov will resign from his position as sales and marketing director, effective Nov. 1. Uralkali said the decision was driven by career opportunities. Petrov is reportedly joining Alrosa, the Russian diamond mining firm. He will continue his work for Uralkali as the senior advisor to the CEO on sales and marketing while necessary. Observers say his continued participation, even in an advisory role, is important as Uralkali will soon be entering major contract negotiations with China and India. The company announced that Vladislav Lyan will be responsible for Uralkali sales overseas, effective Nov. 1. He has over 15 years of experience in export sales, including successful export sales work at EuroChem and Uralchem. Brandt – Management BriefBrian Haschemeyer, 39, has been promoted to manager of chemistry and laboratory services for Brandt’s Specialty Formulations division. Haschemeyer has been with Brandt for nine years, most recently as senior chemist on the Discovery & Innovation team. Haschemeyer’s new responsibilities include quality control, domestic and international regulatory support, and field research services. Brandt has technical laboratories in its Pleasant Plains, Ill., and Fresno, Calif., plants. A native of Central Illinois, Haschemeyer has a B.S. in Chemistry from Western Illinois University. He recently authored Brandt’s inaugural patent application for a humic-acid product he helped develop. Arbiters award EuroChem $140 MZug, Switzerland — EuroChem Group AG reported Oct. 13 that its subsidiary, EuroChem-VolgaKaliy LLC, has won its fraud claim in the Swiss Arbitration Court of the Swiss Chambers’ Arbitration Institution against Shaft Sinkers (Pty) Ltd., a company then controlled by International Mineral Resources BV (IMR). A three-member Swiss arbitration panel unanimously confirmed a pattern of fraud and bribery by Shaft Sinkers and awarded VolgaKaliy around $140 million, including $112 million in damages and $8 million in legal costs. According to EuroChem, the panel determined that for more than two years Shaft Sinkers deliberately withheld critical information from tests and studies that established that Shaft Sinkers’ proposed method to construct a shaft at VolgaKaliy’s potash project in Kotelnikovo, Russia, would not work in the wet soil conditions, and that Shaft Sinkers’ written guarantee that such method would work was fraudulent. Additionally, the panel determined that Shaft Sinkers bribed VolgaKaliy’s senior project manager, who took action to protect and favor Shaft Sinkers while concealing its mistakes and fraud. EuroChem believes that the Swiss arbitrators’ decision clearly showed that Shaft Sinkers lied, cheated, and bribed to win and retain a contract to build a mine shaft with a method that it knew was likely to fail, while purposefully and deliberately withholding information that confirmed the likely failure. EuroChem said Shaft Sinkers is currently trying to avoid liability by pursuing what VolgaKaliy believes is a fraudulent bankruptcy scheme in South Africa. EuroChem says VolgaKaliy will pursue all available legal means to recover the $140 million award from Shaft Sinkers and IMR. It is currently pursuing additional damage claims in other legal proceedings before the International Chamber of Commerce and elsewhere. With the award and the additional evidence disclosed of IMR’s involvement, VolgaKaliy believes claims against IMR in the Netherlands will be upheld in an ongoing action in Amsterdam, where the court’s 2013 ruling granting VolgaKaliy a $1 billion attachment order against IMR remains in place. JIFCO starts up Eshidiya sulfuric acid plantEshidiya, Jordan — Jordan India Fertiliser Company (JIFCO) commissioned the world’s largest single stream sulfuric acid plant at Eshidiya in southern Jordan on Oct. 10. The output from the 4,500 mt/d capacity unit will supply an onsite phosphoric acid plant, which produced its first acid in late May 2014 with commercial production beginning Dec. 1, 2014. The phos acid unit has a capacity of 1,500 mt/d P2O5 (about 495,000 mt/y P2O5), and until now has been running on bought-in sulfuric acid. Indian Farmers Fertiliser Cooperative Ltd. (IFFCO) and its affiliates own a 52 percent equity stake in JIFCO, which was established in March 2008, and Jordan Phosphate Mines Co. (JPMC) holds the remaining 48 percent. JPMC is supplying up to around 2 million mt/y of phosphate rock to the JIFCO operation as well as the sulfur requirements. The two joint venture parties are buying back all the phos acid produced at the plant. IFFCO said the phos acid supply will "ensure full utilization" of its Kandla and Paradeep plants, and in turn reduce India’s imports of phosphate fertilizers. IFFCO Managing Director U.S. Awasthi said the JIFCO complex is expected to operate at above 80 percent capacity in the first year of full commissioning. Construction began in October 2010 and originally was expected to start operations before the end of 2012, but ran into delays and consequent cost over-runs. Canada’s SNC-Lavalin was awarded the engineering, procurement, and construction management (EPCM) contract to build the grassroots sulfuric and phos acid complex, as well as utilities and a power plant at the site (GM May 24, 2010). Built at a cost of $860 million, the project secured loans from the International Finance Corp. ($215 million) and the European Investment Bank ($120 million). The original project cost had been estimated at $625 million. ICL steps up lobbying; contests ôcartelö remarkTel Aviv — Israel Chemicals Ltd. (ICL) management has stepped up its lobbying efforts in an attempt to prevent passage of a new tax law on natural resources (GM Oct. 12, p. 14), with a senior official at Israel’s Finance Ministry saying that he does not remember such a massive lobbying effort by a company in Israel. In addition, the chairman of the union at Dead Sea Magnesium told the Knesset Finance Committee that the plant was facing a renewed threat of closure if the proposed tax law is passed. He called on the Knesset to come to the company’s rescue and prevent the firing of 800 workers. In response, Knesset Finance Committee Chairman Moshe Gafni strongly criticized ICL’s management for the use of workers in its battle to prevent the proposed changes from being implemented. He said the Knesset would not allow ICL management to harm workers and use them to threaten the government. Earlier, ICL Chairman Nir Gilad said the proposed taxes would lead to a drop in investments by the company in Israel and the laying off of workers. Gilad also took issue with comments before the committee by Professor Eitan Sheshinski, who alleged that ICL subsidiary Dead Sea Works (DSW) is part of a potash cartel. Gilad said DSW has never been a direct or indirect party to any cartel, and that no such allegation has ever been brought up by any third party or authorized government agency. Thereafter, Sheshinski withdrew his allegation. “Unfortunately, Prof. Sheshinski is no expert in competition law and has not performed any investigation, based on which he could have reached this wrong conclusion,” an ICL source told Green Markets.
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