U.S. Gulf: Not much had changed in the ammonium nitrate market from the previous week. Sources continue to report the last done business at $238/st FOB, with others saying prices should fall if NOLA granular urea is $244/st FOB.
Western Cornbelt: Ammonium nitrate continued to be quoted at $305-$310/st FOB in the Western Cornbelt.
Eastern Canada: The ammonium nitrate market was tagged at $460-$465/mt FOB for available spot tons in Eastern Canada, down significantly from last report.
U.S. Gulf: Shippers reported wait times of 8-10 hours at Algiers Lock for the week. Vessels continued to detour through Algiers while Bayou Sorrel Lock remains offline, and backups have been commonplace while lock operators wrestle with the increased traffic entering and exiting the West Canal. Bayou Sorrel is closed through Nov. 15 for dewatering, maintenance, and repair operations.
Transit time through Industrial Lock was reported at about an hour for the week on an average of two boats queued, and passage through Port Allen Lock was estimated at an hour or less, with one boat in line for locking.
Heavy rain along the Gulf Coast lifted water levels at Baton Rouge, canceling the Low Water Safety Advisory previously in place at Miles 167-303. Levels at Baton Rouge were 10 feet and falling on Oct. 29, well above the 8-foot mark needed to lift the advisory. The New Orleans river gauge showed 4.4 feet and holding.
High water levels in the West Canal closed Harvey Lock on Oct. 28. The lock had reopened as of Oct. 29, though the Corps required a minimum of two deck hands on tows through the lock while the river stage remained at 10 feet or higher.
Calcasieu Lock dolphin construction was scheduled to wrap up on Oct. 30, shippers reported. Traffic through the lock mostly normalized on Oct. 20, although the Corps noted that intermittent interruptions remain possible until construction concludes. Shippers reported an approximate four-hour transit delay on Oct. 29.
Clearance at the West Port Arthur Bridge is reduced to 69 feet through Apr. 30 for maintenance and painting.
Brazos Lock was closed for the week due to high water conditions, and transit through Colorado Lock was restricted to a single barge at a time. Shippers reported 13 boats and 23 tows in line for locking on Oct. 28.
Shoaling was reportedly blocking the entire channel near Corpus Christi Bay and Laguna Madre on Oct. 28, with no traffic able to pass until dredging is completed.
Lower Mississippi River: Southbound travel through Miles 480-490 was closed early last week due to vessel groundings resulting from low water levels. Shippers expected daylight-only southbound traffic to resume on Oct. 28, and an estimated 50-55 boats were reported waiting to pass.
A Low Water Safety Advisory was in effect for Miles 480-869 for the week, including tow-size restrictions and a maximum barge draft of 10.5 feet. River levels deteriorated further in the Memphis area last week, sinking to (-)4.5 feet. Mile 418 is scheduled for mat-laying and weir dike construction on Nov. 7-17, with shippers expecting intermittent daytime delays.
Upper Mississippi River: Vessels waited 2-4 hours to transit Lock 20 on the Upper Mississippi River last week on an average four boats queued. Wait times through Lock 27 were reported at about an hour.
Repairs shut down the Lock 27 auxiliary chamber during the mornings of Oct. 28 and 29. Sources described slow transit due to ongoing low water levels, although conditions were slightly improved. The St. Louis gauge read 2.5 feet and rising on Oct. 29, up from 1.7 feet the week before, and levels at St. Paul had risen to 3.6 feet from the last reported 3.16 feet. The Dubuque river gauge showed 5.2 feet and holding on Oct. 29, an increase from the previous week’s 4.9 feet.
Shippers advised southbound vessels leaving from St. Paul and Minneapolis to release no later than Nov. 14. Boats departing from McGregor have through Nov. 23. Lock 9 is set to close for the season on Dec. 7. Locks 14 and 17 will shutter Dec. 14, and Locks 13 and 21 will go dark on Jan. 4, 2016. The locks are tentatively scheduled to reopen for the spring navigation season in first-half March 2016.
Grain Futures: As of 4:00 p.m. on Oct. 29, corn and wheat futures were higher compared to the week before, but soybeans were down.
Corn contracts for December 2015 clocked in at $3.80/bushel, up from the previous week’s $3.7825/bushel. March 2016 corn was $3.8975/bushel, an increase from $3.88/bushel the week before, while corn for December 2016 firmed to $4.065/bushel from the prior week’s $4.0225/bushel.
The November 2015 soybean price fell to $8.7875/bushel from the previous week’s $8.9875/bushel. Soybeans for January 2016 were $8.8025/bushel, down from $9.01/bushel the week before, while November 2016 soybeans slipped to $8.845/bushel from the prior week’s $8.9875/bushel.
Wheat for December 2015 was $4.8825/bushel, up from the previous week’s $4.755/bushel, while July 2016 wheat firmed to $5.2475/bushel from $5.1075/bushel the week before. Contracts for July 2017 wheat were listed at $5.74/bushel, up from $5.6325/bushel at last report.
Eastern Cornbelt: The remnants of Hurricane Patricia brought gusty winds and rainfall to parts of the Eastern Cornbelt during the final days of October, with up to 2 inches of rain reported in parts of Ohio at midweek. Wind advisories were in place for some locations, with 55 mph wind gusts reported along the southeastern shores of Lake Erie and Ontario.
The low pressure system also ushered in lower temperatures for some locations, with areas of wet snowfall reported in Wisconsin as the week progressed.
Harvest was progressing rapidly in the Eastern Cornbelt ahead of the precipitation. The corn harvest was estimated at 93 percent complete in Illinois by Oct. 25, compared with 76-82 percent in Indiana and Ohio. Progress in all three states was tracking well ahead of the average pace, with Ohio’s corn harvest pace running a full 30 percentage points ahead of normal.
The regional soybean harvest was also ahead of normal at 91-93 percent complete in the region by Oct. 25.
Western Cornbelt: The season’s first significant cold blast hit northwestern Iowa last week, with wind chills dropping into the 20s as a strong cold front brought gusty winds and heavy rains to some locations. More than two inches fell in some areas of Iowa, with 1.5 inches reported in Dubuque at midweek. High temperatures climbed back into the 50s in Iowa as the week progressed.
Missouri and Nebraska could have used some of that moisture. The Oct. 27 U.S. Drought Monitor showed abnormally dry to moderate drought conditions covering nearly all of the state, as well as all of western Nebraska.
The regional corn harvest surged to 94 percent complete in Missouri, 73 percent in Iowa, and 57 percent in Nebraska by Oct. 25. Progress in Iowa and Missouri continued to track ahead of the five-year average, with Iowa growers seeing a 21 percent jump from the previous week.
The soybean harvest was 90-92 percent complete in Iowa and Nebraska by Oct. 25, compared with 67 percent in Missouri. Missouri growers also had 60 percent of the cotton crop in the bin, up from 39 percent the week before. The regional sorghum harvest was 73 percent complete in Missouri and 55 percent complete in Nebraska by Oct. 25.
Northern Plains: Minnesota sources reported last week that fall applications were “picking up more speed every day,” although wet weather slowed the pace as the week advanced. The fall fieldwork pace was slower in the Dakotas. "Some fall fieldwork is underway, but not what we want,” said one North Dakota contact. “We will need a big November to catch up.”
Rain and gusty winds were reported in eastern Minnesota at midweek, along with much cooler temperatures. Sources even reported a wintry mix of rain a
U.S. Gulf: The Gulf sulfuric acid import market remained in a range of $60-$65/mt CFR for the week.
Rumors of replacement levels dipping into the $50s/mt CFR went unconfirmed. “That (price level) implies European smelters being in the high single digits or low teens for spot business, and I haven’t heard of those levels yet,” one source said.
Tampa: Sources reported that Gulf Coast refineries experienced no major production difficulties stemming from heavy rains last week. The region experienced up to 10 inches of rainfall from the remains of Hurricane Patricia, raising anxieties that the unusual weather might hinder production.
Mosaic made good on plans to begin production at its New Wales, Fla., solid sulfur melter in October, with sources confirming that the facility was scheduled to go online Oct. 29. “The melter is starting movements today,” one source said.
Molten sulfur delivered to Tampa is priced at $110/lt for the fourth quarter.
U.S. refinery utilization ticked higher for a second consecutive week, according to data released by the U.S. Energy Information Administration (EIA). Domestic capacity was reported at 87.6 percent for the week ending Oct. 23, a 1.2 percent jump from the prior week’s 86.4 percent.
Current-week numbers beat both the year-ago 86.6 percent and the five-year average of 86.9 percent. Sources expect utilization to continue its rise into November as more refineries exit fall turnarounds.
Average daily crude inputs rose to 15.616 million barrels/d, an increase of 271,000 barrels/d from the previous week’s 15.345 million barrels/d.
U.S. Gulf: Last-done from the Gulf prill market remained in the $105-$110/mt FOB range, source said.
Expectations persisted that recent China spot market strengthening would translate to firmer bids from Brazil in the next round of business.
Vancouver: Driven by Chinese port inventories pegged around 900,000 mt, the Chinese spot market was said to hold gains from the previous week’s mid-$130s/mt CFR.
Rumors of Vancouver sellers taking advantage of the improved market conditions went unconfirmed, leaving last-done transactions in the neighborhood of $110/mt FOB, sources said.
Market watchers were keeping an eye on fourth-quarter negotiations for sulfur supplied from Alberta. Despite the decrease in Tampa, some Alberta refiners were said to balk at returning to negative netbacks using the new Tampa price as a guide.
“Alberta dropped some, but not the full $27/mt,” one source said. “A lot of the Oil Sands guys won’t go negative (again).”
Netbacks were called around (-)$5-$85/mt, unchanged from the previous week.
West Coast: West Coast formed sulfur was unchanged at $105-$110/mt FOB. Fourth-quarter molten contracts fell in a range of $65-$115/lt FOB.
ADNOC: September ADNOC pricing was $135/mt FOB Ruwais, sources said.
Aramco: Saudi Aramco’s offer price for November formed sulfur was $115/mt FOB Jubail, a decrease of $8/mt from October’s $123/mt.
Tasweeq: Following the recent bounce at China, Tasweeq raised its price of November prill to $124/mt FOB Ras Laffen, a $21/mt increase from the $103/mt FB October price.
U.S. Gulf: Most continued to put last-done NOLA potash somewhere in the $265-$275/st FOB range, although market bears argued that the market would likely drift to $260/st FOB or lower in the next round of business.
Eastern Cornbelt: Sources continued to quote the potash market at $310-$325/st FOB regional warehouses in the Eastern Cornbelt, depending on grade and location. The Cincinnati market was pegged in the $314-$320/st FOB range last week, depending on grade and supplier.
Western Cornbelt: Potash pricing in the Western Cornbelt remained at $315-$325/st FOB most regional warehouses in late October. Although off to a slow start, some sources remained confident that fall volumes will still be applied. “I anticipate a close-to-normal season as I can currently see, although anything can happen or change,” said one Midwest contact.
Northern Plains: Potash pricing out of regional warehouses had reportedly slipped to $315-$320/st FOB in the Northern Plains, down another $10/st from last report.
North Dakota sources quoted delivered potash in the $310-$325/st range last week, also down $5-$10/st, with the market FOB Saskatchewan mines pegged at $280-$290/st for standard, $285-$295/st for granular, and $295-$300/st for soluble after netbacks.
Northeast: Potash was pegged at $320-$330/st FOB in the Northeast, reflecting another $10/st drop from last report. Rail-delivered potash was quoted in the $330-$340/st range in the region, depending on grade and location.
Eastern Canada: The potash market was reported at $500/mt FOB most regional warehouses in Eastern Canada, reflecting a $5-$10/mt drop from September pricing levels.
Sulfate of potash (SOP) was pegged at $925-$935/mt FOB in the region.
The SOP Magnesia market was $660-$685/mt FOB in Eastern Canada, depending on location.
India/China: Indian potash import buyers appear to have made little progress in their attempt to secure a discount on remaining shipments under current contracts. A number of international suppliers have indicated that they are not reviewing a discount on the $332/mt CFR level that Indian buyers agreed to earlier this year, and sources say that a discount is unlikely ahead of negotiations with China’s contract buyers.
The contract that Sinofert, CNAMPGC, CNOOC, and other major Chinese importers have with international suppliers expires on Dec. 31, while contracts with Indian import buyers run through to March 31, 2016. China’s import contracts were negotiated at $315/mt CFR.
ICL President and CEO Stefan Borgas said last week that suppliers are likely “to push back on requests for bargains,” noting that Chinese and Indian potash buyers are looking for a cut of $10-$20/mt on their next contracts with international suppliers.
Borgas said ICL would “always argue for more stable pricing or an increase.” If the industry is looking for new capacity, which he believes it needs four or five years from now, “then they need to give us an incentive to invest,” Borgas said.
A number of analysts quoted by Bloomberg over the past month, including Bank of Montreal (BMO), CIBC, and Bernstein, believe China’s 2016 contract prices will be tough to settle above $300/mt CFR. Bernstein believes Chinese contract prices for 2016 may come in around $280-$300/mt.
India’s RCF closes a tender for three lots of 35,000 mt of potash on Nov. 3 (GM Oct. 26, p. 9). National Fertilizer Ltd. (NFL) also is tendering for 50,000 mt of pink potash for delivery to Chennai port. This tender closes on Nov. 9.
Central Florida: Phosphate sellers pointed to lower prices on the Central Florida market last week. Truck-loaded DAP transactions were called $425-$430/st FOB, down from $430/st FOB at last report. MAP was listed at a $20/st premium to DAP.
U.S. Gulf: Sources described a softening NOLA barge market last week.
The looming close of the Upper Mississippi River for the navigational season was reportedly limiting interest in tons physically located at NOLA, where prompt barges were unlikely to reach northern terminals before spring.
Loaded NOLA DAP tumbled from the previous week’s $420/st FOB low to around $415/st FOB by midweek, and then reportedly drifted to as low as $410/st FOB as of Oct. 29. Barges located upriver took a similar trajectory, with early week confirmed netbacks from St. Louis-area DAP barges quoted in a range of $426-$430/st FOB NOLA before sinking closer to $420/st FOB by week’s end, sources claimed.
MAP fared even worse, with some observers reporting difficulties maintaining even a slim premium over DAP. “We’re trying to hold a $5/st premium on barges, but (that) may be a challenge with the length,” one trader said. “(There is) more MAP barge length than DAP, it seems.”
DAP barge supply was described as snug, and no further import vessels were expected anytime soon. “No additional imports at the moment, but we could see some in December,” one source said.
The prompt NOLA barge market was quoted in a wide range of $410-$420/st FOB for the week, down from the last-reported $420-$428/st FOB. MAP was generally quoted around $5/st higher that DAP. Last-done TSP was quoted at $376/st FOB.
Eastern Cornbelt: DAP remained at $455-$465/st FOB in the Eastern Cornbelt, with MAP only $5/st higher or less at most locations. The Cincinnati market was pegged at $458-$460/st FOB for DAP and $460/st FOB for MAP last week.
The 10-34-0 market was unchanged at $510-$530/st FOB in the region.
Agrium’s phosphoric acid postings are slated to firm another $10/st of P2O5 on Nov. 1, with rail-DEL SPA and MGA moving to $1,050/st in Wisconsin and $1,090/st in Michigan.
Western Cornbelt: DAP was unchanged at $455-$465/st FOB in the Western Cornbelt, with MAP quoted in a broad range at $460-$475/st FOB in the region. One source said the MAP pricing premium has been erased at some river locations as terminals clear room for river-close barges that are on the way.
10-34-0 was steady at $525-$540/st FOB in the region.
Effective Nov. 1, Agrium’s phos acid postings will firm another $10/st of P2O5 from October pricing levels, moving to $1,050/st for rail-DEL SPA and MGA in Nebraska, Missouri, Iowa, Kansas, and Colorado, and $1,065/st rail-DEL in Oklahoma and Texas.
Northern Plains: DAP was reported at $450-$460/st FOB the Twin Cities, with the low end of the range reflecting a $5/st drop from last report. MAP was tagged in a broad range at $460-$495/st FOB in the Northern Plains, with the low reported in the Twin Cities and the upper end out of Hannaford and other North Dakota warehouses.
The 10-34-0 market was pegged at $490-$510/st FOB in the Northern Plains, with the low reported at Grand Forks, N.D., and the upper end in the Twin Cities. North Dakota sources quoted delivered 10-34-0 tons in the $495-$505/st range from Brandon, Man.
Effective Nov. 1, Agrium’s phosphoric acid postings will firm another $10/st of P2O5 from October pricing levels, moving to $1,050/st for rail-DEL SPA and MGA in Minnesota, and $1,065/st rail-DEL in the Dakotas.
Northeast: MAP was steady at $475/st FOB East Liverpool and Fairless, with the DAP marke
Washington — The United States and the European Union both announced Oct. 29 that they have eased sanctions on Belarus, at least temporarily. The U.S. Department of Treasury’s Office of Foreign Assets Control said Oct. 29 that effective Oct. 30, all transactions otherwise prohibited by Executive Order 13405, issued June 16, 2006, involving nine named companies, or any entities that are owned, individually or in the aggregate, directly or indirectly, 50 percent or more by one or more of the entities, are authorized. The nine include Belarussian Oil Trade House, Belneftekhim, Belneftekhim USA Inc., Belshina, Grodno Azot, Grodno Khimvolokno, Lakokraska, Naftan, and Polotsk Steklovolokno. However, the reprieve is only through April 30, 2016, unless extended or revoked. A State Department spokesman termed the suspension as “a limited reprieve … that opens the door to expanded commercial ties for the Belarussian economy.” Opponents, led by Intrepid Potash Inc., have argued that potash imports this year from Belarus into the U.S. have been in violation of these sanctions (GM July 20, p. 1). Reasons giving for the change of position include a release of political prisoners, Belarus’s aid in the mediation of the Russia-Ukraine dispute, and the recent relatively democratic national election, though some opponents boycotted the overwhelming re-election of President Alexander Lukashenko to a fifth term. A Bloomberg headline referred to Belarus as the “darling of the bond market.” Lukashenko, who former president George W. Bush tagged as the “last dictator” in Europe, has positioned Belarus to garner the financial backing of both Russia and the West.
Eastern Cornbelt: Granular ammonium sulfate was reported at $272-$280/st FOB in the Eastern Cornbelt, with the low confirmed in the Cincinnati market. Delivered tons remained at $285-$290/st in the Eastern Cornbelt.
The ammonium thiosulfate market was steady at $310-$335/st FOB in the region. Western Cornbelt: Granular ammonium sulfate was steady at $265-$280/st FOB in the Western Cornbelt, depending on location.
Ammonium thiosulfate remained at $310-$325/st FOB in the region.
Northern Plains: Regional sources quoted the granular ammonium sulfate market at $265-$275/st FOB and $280-$290/st DEL in the Northern Plains. Sources said interest remains low, with movement confined to “small blocks.”
The last bit of ammonium thiosulfate business remained at $280-$290/st FOB in North Dakota, but sources reported no new business to test the market last week.
Northeast: The granular ammonium sulfate market was pegged at $285-$295/st DEL and $270-$280/st FOB in the Northeast, with the upper end of the FOB range reported at East Liverpool.
Eastern Canada: Granular ammonium sulfate was quoted at $420-$430/mt FOB in Eastern Canada, with the upper end of the range down some $20/mt from September pricing levels.
Ammonium thiosulfate was pegged at $458-$468/mt FOB for the last reported business in the region.
Intrepid in loss column for 3Q and YTD; MOP 3Q sales volumes down 47 percent Citing “challenges” that included softer demand, lower prices, and a temporary production shutdown at its West mine, Intrepid Potash Inc. on Oct. 27 reported a third-quarter net loss of $8.1 million ($0.11 per diluted share) on sales of $53.7 million, compared with a year-ago net loss of $1.2 million ($0.02 per diluted share) on sales of $102.3 million.
For the first nine-months, Intrepid posted a net loss of $6.5 million ($0.09 per diluted share), compared with net income of $4.0 million ($0.05 per diluted share) in 2014. Adjusted EBITDA was of $6.0 million for the third quarter and $53.4 million for the first nine months, compared with $20.5 million and $65.9 million, respectively, in 2014.
Third-quarter potash sales volumes were down 47 percent, to 120,000 st from the year-ago 227,000 st, with Intrepid noting softness in both its agricultural and industrial markets. Nine-month potash sales volumes were reported at 498,000 st, down from 705,000 st for the same period in 2014.
“The third quarter was challenging given the fertilizer pricing and demand environment, our temporary shutdown of West, and the tests we have been running at East,” said Bob Jornayvaz, Intrepid’s executive chairman, president and CEO. “We are addressing these challenges and believe that the long-term market demand fundamentals are intact.”
Intrepid said agricultural customers delayed potash purchases normally made during the third quarter, in part because they entered the fall season with higher inventory levels and were anticipating potash price declines. Potash sales to industrial customers in the oil and gas industry were also impacted by the reduction in drilling rig counts.
Intrepid reported average net realized sales price for potash of $319/st for the third quarter, down 5 percent from last year and an 11 percent drop from second-quarter 2015 levels. Intrepid said “increased imports into the U.S. and greater market supply levels have influenced pricing throughout 2015.” For the first nine-months, average net realized sales prices for potash were reported at $351/st, up from $327/st in 2014.
Cash operating costs for potash was $198/st in the third quarter and $206 for the first nine months, compared with $204/st and $199/st, respectively, in 2014. Intrepid said solar production, most notably from its HB solution mine near Carlsbad, N.M., was higher in the third quarter and year-to-date compared with the same periods last year, while production from conventional facilities was lower.
Total potash cost of goods sold (COGS) was $280/st in the third quarter, compared with $289/st last year. Nine-month COGS was $296/st, compared with $278/st in 2014. Third-quarter and nine-month “costs related to abnormal production” for potash were reported at $43/st and $13/st, respectively. The company said total abnormal costs encompassed $4.9 million associated with the temporary West shutdown, and $2.0 million from production tests performed at the East mine.
Jornayvaz said Intrepid has accelerated efforts to convert its East facility to Trio-only production, which he said “will improve its reliability, remove our highest-cost potash facility from our portfolio, and allow us to grow Trio production as we gradually replace East’s potash tons with Trio tons over time.” As part of this process, Intrepid said it intentionally suspended potash production at the East facility during the quarter while Trio-only production tests were performed.
Potash production totaled 160,000 tons for the quarter and 550,000 tons for the first nine months, compared with 194,000 and 605,000 tons, respectively, in 2014. Intrepid said the year-over-year decreases were driven in part by the 15-day closure of the Wes
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