All Posts from August 20, 2021

BHP Green-Lights Jansen Stage 1 Potash Project, Scraps Dual Listing

Featured, News, Potash

BHP Ltd., Melbourne, has approved US$5.7 billion in capital expenditure for the Jansen Stage 1 (Jansen S1) potash project in Saskatchewan, Canada.

First ore from Jansen S1 is targeted in the 2027 calendar year, with construction expected to take approximately six years, followed by a ramp-up period of two years, the mining group said in an Aug. 17 statement. Stage 1 is expected to produce some 4.35 million mt/y of potash.

BHP’s green-light for Jansen S1 had been widely expected by market players and analysts alike in recent weeks. The mining group in June gave what analysts believed was its strongest indication to date that it intended to go ahead with Jansen. In the 56-page Potash Outlook investor and analyst presentation and briefing on June 17, BHP laid out the pro-case for the potash project, and for the mining group to a become a major new global supplier of the nutrient (GM June 18, p.1).

CEO Mike Henry, who has made no secret he is a fan of the nutrient, reiterated on Aug. 17 Jansen “is aligned with BHP’s strategy of growing our exposure to future facing commodities in world class assets, which are large, low cost and expandable.”

On the same day, BHP announced it would offboard its petroleum business in a merger with Woodside Petroleum Ltd., which it said would allow a greater proportion of capital in BHP’s remaining portfolio to be allocated towards future facing commodities and enhanced shareholder returns. On completion of the transaction, which remains subject to confirmatory due diligence, negotiation and shareholder and other approvals, the expanded Woodside would be owned 52 percent by existing Woodside shareholders and 48 percent by existing BHP shareholders. The mining group this week put the valuation of its petroleum division at US$15.4 billion.

“We anticipate that potash demand growth will progressively absorb the excess capacity currently present in the industry, with opportunity for new supply expected by the late 2020s or early 2030s. This is broadly aligned with the expected timing of first production from Jansen,” said Henry.

Beyond the 2020s, the industry’s long run trend prices are expected to be determined by Canadian greenfield solution mines, he said.

“In addition to consuming more energy and water than conventional mines like Jansen, solution mines tend to have higher operating costs and higher sustaining capital requirements,” said the CEO.

The global potash market is well-positioned to “easily absorb” Jansen capacity, said Alexis Maxwell, Green Markets Research Director. “Potash utilization rates are forecast to remain firmly above 78 percent until at least 2030, even as BHP brings on more than 4 million mt/y in capacity in the latter half of this decade,” she said. 

“Robust demand growth, along with trade restrictions that limit supply gains, support rising utilization rates,” said Maxwell.

“While capacity growth remains a higher risk, since 4 million mt/y of expected expansion is from Belarus, U.S. and E.U. sanctions on the east European country limit Belaruskali and Slavikaliy’s financing options and may push Belarus closer to financing from Russia and China,” she said.

Crucial to BHP taking the final investment decision for Jansen S1 to its Board for approval was having a port solution locked in (GM June 18, p.1).

That came only late last month, when BHP Canada Inc., a subsidiary of BHP Group, inked an agreement with Vancouver-based Westshore Terminals LP, a wholly-owned subsidiary of Westshore Terminals Investment Corp., for the terminal company to provide port services to the proposed Jansen Potash Mine (GM July 23, p.1). The agreement was conditional on BHP making a final investment decision on Jansen S1.

Following BHP’s announcement that it was going ahead with Jansen SI, Westshore Terminals Investment Corp. in an Aug. 17 statement confirmed the potash handling contract it had inked with BHP would proceed.

Westshore is designing and will construct the necessary infrastructure to handle potash, including a potash dumper, storage building and associated conveying systems, at the terminal company’s Westshore terminal in Delta, BC. In addition, it said, certain existing infrastructure at its Westshore terminal will be modified to support handling potash. Potash will be loaded at the terminal’s berth 2. The Westshore terminal comes under the auspices of the Vancouver Fraser Port Authority.

Westshore anticipates the required permits to start construction will be issued in the first half of 2022. Under the agreement with BHP, the potash infrastructure must be ready for mid-2026.

The Canadian terminals company said BHP will substantially fund the construction, with Westshore being responsible for construction costs in excess of the agreed budget. The terminal company will also contribute up to an aggregate $33 million to costs related to specific infrastructure or unexpected permitting conditions that are encountered.

The potash handling services deal with BHP will run until 2051, subject to an extension, and provides for potential Jansen S2 production as well as Jansen S1 production. 

BHP had been considering two options, one of which was the commercial option in the port  that it is now proceeding with. The other was a greenfield option at Vancouver port, which would have seen BHP joining the development of the proposed West Coast Terminal expansion. 

The mining group said in June it was advanced on its rail plans to move potash the approximate 2,000 km from Jansen to the port (GM June 18, p.1), and said this week it would operate with a dedicated fleet of railcars.

BHP already has got US$4.5 billion (pre-tax) sunk into the potash project, including US$2.972 billion to finish the current investment program to complete the two shafts at Jansen and for associated infrastructure and utilities at the site, as well as engineering and procurement activities, and preparation works related to Jansen S1 underground infrastructure.

The construction of the two shafts and associated infrastructure at the site is now 93 percent complete and is expected to be completed in the 2022 calendar year, the mining group said this week.

BHP said Jansen S1 includes the design, engineering and construction of an underground potash mine and surface infrastructure, including a processing facility, a product storage building, and a continuous automated rail loading system.  

BHP said to date approximately 50 percent of all engineering required for Jansen S1 has been completed, “significantly de-risking” the project.

At consensus prices, BHP expects the go-forward investment on Jansen to generate an internal rate of return (IRR) of 12-14 percent, an expected payback period of seven years from first production and an underlying EBITDA margin of approximately 70 percent given its expected first quartile cost position, the group said. 

BHP conceded that if the investment to date in Jansen were to be included, the full cycle project would yield “a much lower internal rate of return.”

The group on Aug. 17 reiterated its previous acknowledgement the US$4.5 billion (pre-tax) of capital investment to date has resulted “in a significant initial outlay” and “our approach would be different is considering the project again today.”

As part of its FY2021 financial results, released on Aug. 17, the mining group has assessed the carrying value of the existing potash asset base as at June 30, 2021, and has recognized a pre-tax impairment charge of US$1.3 billion (US$2.1 billion after tax).

The group said the impairment charge against the potash assets reflects “an analysis of recent market perspectives and the value that we would now expect a market participant to attribute to our investments to date.”

BHP made no comment this week on its future plans to add further production capacity at Jansen after the initial stage is completed, except to remind that Jansen has a basin position with the potential for further expansion, “subject to studies and approvals”.

In June, BHP’s Mineral Americas President Ragnar Udd had told investors and analysts at the group’s presentation and briefing on June 17 “there is no set date on that,” and each stage of the project “will need to wash its face at that time” and the mining group would make an assessment based on the supply/demand fundamentals for stages two, three, and four in the future (GM June 18, p.1).

Under previous announced plans, the four stages, if fully implemented, would take production capacity at Jansen to 16 million mt/y.

BHP plans to scrap its primary listing in London and move its main stock market listing to Sydney, after announcing its intention to simplify its listing structure.

The group on Aug. 17 said it intends to unify is dual listed company (DLC) structure under its existing Australian parent company, subject to final Board and other approvals. BHP’s DLC structure has two parent companies (BHP Group Ltd. and BHP Group Plc), operating as a single economic entity and was established with the BHP and Billiton merger in 2001.

“Today’s announced plans, combined with changes in recent years to our portfolio, a significant reduction in earnings contribution from Plc assets as well as a material reduction in the expected costs of unification, have prompted a renewed assessment of the continued suitability of the DLC structure,” BHP said.

Henry told analysts at a company earnings call on Aug. 17 less than 5 percent of BHP’s profit is now being generated on the Plc side of the business.

The group said the key benefits of unification comprise a simplified corporate structure and enhanced strategic flexibility for undertaking future portfolio changes.

Unification will enable one market capitalization and one global pool of liquidity, with the same share trading via BHP Group’s listing on the Australian, London and Johannesburg stock exchanges and its NYSE listed ADR program, the mining group said.

BHP reported a 42 percent increase in attributable profit of US$11.30 billion for its 2021 financial year ended June 30, 2021, up from the year-ago US$7.96 billion. 

The attributable profit for the current reporting period includes an exceptional loss of US$5.8 billion (after tax) relating to the impairment charge in relation to potash of US$2.1 billion – as mentioned above – as well as impairment charges in relation to the group’s energy coal assets (US$2.2 billion) and COVID-19 related costs of US$0.4 billion, and the current-year impact of the Samarco dam failure in Brazil of US$1.2 billion. 

FY2020 attributable profit included an exceptional loss of US$1.1 billion. 

FY2021 underlying attributable profit came in 88 percent up on the year, at US$17.08 billion, up from the previous year’s US$9.06 billion, reflecting higher commodity prices and strong operational performance.

The Board has determined to pay a final dividend of US$2.00 per share or US$10.1 billion, and equivalent to a 92 percent payout ratio (2020:72 percent).

In total, dividends of US$15.2 billion (US$3.01 per share) have been determined for the 2021 financial year, including an additional amount of US$6.7 billion above the group’s minimum payout policy.

Crops/Weather

Crops/Weather, Eastern Canada, Eastern Cornbelt, Market Watch, Northeast, Northern Plains, Western Cornbelt

Eastern Cornbelt:

Hot, humid weather continued across much of the Eastern Cornbelt in mid-August, along with scattered thunderstorms. Heavy moisture from Tropical Depression Fred hit parts of northeastern Ohio at midweek, pushing monthly rainfall totals to more than five inches for some locations.

Highs in the mid- to upper-80s continued to benefit corn and soybeans at mid-month. USDA on Aug. 15 rated 75-81 percent of the Ohio corn and soybean crops as good or excellent, compared with 71-74 percent of the acreage in Illinois and 68-71 percent in Indiana.

Western Cornbelt:

Most of the Western Cornbelt experienced high heat and humidity in mid-August, although forecasts called for slightly cooler weather and an increased chance of showers by the coming weekend.

Midweek temperatures across Nebraska and Iowa were reported in the upper-80s to low-90s, with head index values climbing into the mid-90s. Sources also reported hazy skies in western Nebraska from wildfires burning in the western states.

Areas of severe-to-extreme drought were expanding across northern Iowa in mid-August, with much of Nebraska also experiencing some form of drought at mid-month. While crop conditions remained generally favorable in the region, ratings were down from the previous week for most crops.

USDA rated 58 percent of the corn and soybeans in Iowa as good or excellent on Aug. 15, compared with 65-67 percent in Missouri and 69-72 percent in Nebraska. Missouri’s cotton was 66 percent good or excellent, while 68 percent of the state’s rice crop fell into those two categories. Nebraska’s sorghum crop remained at 59 percent good or excellent, unchanged from the prior week.

Northern Plains:

High heat and humidity persisted across the Northern Plains in mid-August, along with a thick layer of smoke in parts of the Dakotas. Highs in Minnesota were reported in the upper-80s and low-90s during the week. Temperatures in the Dakotas climbed to the mid-90s at midweek, with heat index values near or in the low-100s.

The entire Northern Plains region was experiencing drought conditions ranging from moderate to exceptional in mid-August, with the worst drought reported across North Dakota, northern Minnesota, and north-central South Dakota. The parched conditions speeded the harvest of small grains in the region, but crop conditions were deteriorating rapidly.

Good or excellent ratings on Aug. 15 were assigned to 29-35 percent of the soybeans and corn in Minnesota, compared with 22-24 percent in South Dakota and 14-20 percent in North Dakota. The corn and soybean acreage rated as poor or very poor totaled 26-28 percent of the crops in Minnesota, 39 percent in South Dakota, and 47-52 percent in North Dakota.

Minnesota growers already had 86-92 percent of the oats, barley, and spring wheat harvested by Aug. 15, compared with 80-88 percent in South Dakota and 43-57 percent in North Dakota. USDA placed 16-19 percent of Minnesota’s spring wheat and barley in the good or excellent categories at mid-month, with 37-40 percent of the acreage rated as poor or very poor.

North Dakota’s spring wheat and barley was in considerably worse shape, with just 8-12 percent rated as good or excellent and 60-61 percent as poor or very poor. South Dakota’s spring wheat crop was just 7 percent good or excellent, with fully 73 percent of the acreage rated as poor or very poor on Aug. 15.

Northeast:

Temperatures in the 80s were reported across much of the Northeast during the week, with high humidity giving way to an increased chance of thunderstorms later in the week.

Flash flood watches were in effect for portions of central, northern, and northeastern Maryland on Aug. 17 after multiple bands of thunderstorms developed across the central and upper Chesapeake Bay coastal areas.

More rain was expected across Pennsylvania and New England on Aug. 19 as the remnants of Tropical Depression Fred pushed into the region. The storm dumped heavy rain over portions of the Florida panhandle and southern Georgia, prompting widespread flood watches. Forecasts warned of 1-2 inches possible in parts of southern and central New England, along with flash flooding.

Crop conditions remained favorable across the Northeast, thanks to plentiful rain and summer heat. Some 37 percent of Pennsylvania’s corn crop was in the dough by Aug. 15, slightly behind the average for this time of year, with fully 87 percent of the crop rated as good or excellent.

Eastern Canada:

High heat and humidity were reported across Eastern Canada at mid-month, along with an influx of moisture from Tropical Depression Fred.

Heat warnings were issued for all of the Maritimes over the previous weekend. Highs in the upper-20s C were reported in southern Ontario at midweek, with humidex values climbing to the mid- to upper-30s C. In southern Quebec, temperatures were expected to reach 30 C again late in the week, with humidex values reaching 40 C in some areas.

The remnants of Fred moved into the region at midweek, producing heavy rainfall in parts of southern Ontario and Quebec. Many of those areas have already experienced an unusually wet summer, which has benefited corn crops but hampered the harvest of winter wheat in some locations.

CommoditAg Acquired by Farmers Edge

Featured, News, U.S.

Online farm inputs retailer CommoditAg, Effingham, Ill., has been purchased by Farmers Edge Inc., a pure-play digital agriculture company based in Winnipeg, Man., according to an Aug. 12 announcement from Farmers Edge.

The purchase price was reported at US$4.6 million of cash on closing, normal closing adjustments, and an earn-out to a maximum of US$7.2 million of additional cash based upon the business meeting certain performance targets over the next three years. Under terms of the deal, CommoditAg will function as a wholly-owned subsidiary of Farmers Edge, led by the existing CommoditAg leadership team.

“We are thrilled to join a company that shares our vision and mission,” said John Demerly, CommoditAg CEO. “Farmers Edge brings together all parties in the supply chain to the digital ecosystem, so farmers get seamless, transparent, and secure connections to their vendors and trusted advisors. We look forward to growing together, bringing new digital capabilities to the market, and driving innovation that supports our customers’ success.”

Subscription-based Farmers Edge said the acquisition will allow it to expand and diversify its revenue, while also significantly expanding its roster of services to growers and advancing the company’s connected digital ecosystem strategy. At the company’s Aug. 13 earnings call, Board Chair R. William McFarland said the acquisition accelerates acre growth in the U.S. and will add new customers to the company’s Progressive Growers Program and capabilities to the FarmCommand digital platform.

“As a farmer myself, I know how important relationships with vendors are in the agriculture business,” said Wade Barnes, Farmers Edge CEO and Founder. “CommoditAg is a trusted marketplace that thousands of farmers rely on every day, and we are incredibly excited to welcome them to the Farmers Edge family. By combining its robust e-commerce solution with the FarmCommand platform, we can deliver a best-in-class omnichannel experience, bring more value to our customers, reach a wider footprint, and accelerate Farmers Edge growth.”

Farmers Edge was founded in 2005 as a digital agriculture company that uses connected field sensors, artificial intelligence, big data analytics, and agronomic expertise to provide growers with field-level analysis and predictive modeling on its FarmCommand digital platform.

The company launched an initial public offering in March, and continues to add Digital Agronomy acre subscriptions, mostly through its Progressive Grower Program, which does not add revenue until a one-year free period expires. Over the first six months of 2021, Farmers Edge said it added 2.4 million new Digital Agronomy acres in North America, 0.5 million new Digital Agronomy acres in Brazil, and 0.2 million in Australia.

Since its launch in December 2017 (GM Jan. 8, 2018) by founding partners The Equity in Effingham, Ill., and Sunrise Cooperative in Norwalk, Ohio, CommoditAg has grown its e-commerce platform to include 14 retail distribution partners with more than 500 locations in the U.S., servicing approximately 170,000 customers representing a 70-million-acre footprint.

CommoditAg’s digital platform offers a broad portfolio of more than 200 brand and products from more than 25 suppliers, including crop protection, seed, fertilizer, micronutrients/biologicals, agricultural lubricants, and animal nutrition. CommoditAg currently has more than 40 local fulfillment centers covering 13 states, with plans to expand its footprint to over 75 percent coverage of the U.S. business by the end of 2021.

Farmers Edge said it and the current owners of CommoditAg are concurrently entering into agreements committing the group of partnering cooperatives, on a best-efforts basis, to provide introductions to farmers with the goal of signing at least 14.5 million new Progressive Grower Program acres to the company’s FarmCommand platform by Dec. 31, 2023. Farmers Edge said the owners will be paid a commission incentivizing them to identify strategic farmers and for the conversion of such farmers to paid acres after the one-year free period.

Farmers Edge launched a Smart Carbon program in June in Canada, and it expects to have an equivalent program for U.S. customers operational in 2022.

“The launch of our Smart Carbon program has been a significant event for the company, positioning us as a leader of aggregating agricultural carbon offsets and supporting our digital platform subscriptions,” said Barnes. “The June launch has created a lot of interest which is evident from having 1.5 million acres under contract for Smart Carbon and we expect to sign up over 1 million more Smart Carbon acres in Canada over the next couple of months. Most growers will also have access to multiple years of carbon offsets to serialize, aggregate and sell in the coming months. This program will generate significant revenue while supporting the environment. It is a win-win as growers will get a new carbon revenue stream that may exceed the cost of our top subscription fertility products.”

Farmers Edge recently released second-quarter results, showing a net loss of C$10 million ($.024 per diluted share) on revenues of $6.15 million, compared to the year-ago loss of $19 million and $9.05 million, respectively. Adjusted gross profit was a positive $3.06 million, up from the year-ago loss of $2.8 million. EBITDA was a negative $9 million, an improvement over the year-ago negative $13.5 million.

The company reported a six-month net loss of $27.3 million ($0.86 per share) on revenues of $16 million, compared to a year-ago loss of $47.7 million ($4.84 per share) and $16.4 million, respectively. Adjusted gross profit was a positive $2.7 million, up from the year-ago negative $7.9 million. EBITDA was a negative $17.4 million, compared to the year-ago negative $30.2 million.

Ammonium Thiosulfate

Amthio, Eastern Canada, Eastern Cornbelt, Northern Plains, Specialty, Western Cornbelt

Eastern Cornbelt: 

Ammonium thiosulfate pricing remained at $400-$455/st FOB in the Eastern Cornbelt, with the high reported out of inland tanks in Ohio and the low at Terre Haute, Ind.

Western Cornbelt: 

The ammonium thiosulfate market was steady at the $400/st FOB level in Iowa at mid-month.

Northern Plains: 

The last ammonium thiosulfate offers remained at the $405/st FOB level in central North Dakota.

Eastern Canada: 

Ammonium thiosulfate pricing in mid-August ranged broadly at C$460-$535/mt FOB in Eastern Canada, depending on location.

Calcium Ammonium Nitrate

Benelux, Calcium Ammonium Nitrate, Germany, Specialty

Germany/Benelux:

Yara on Aug. 16 posted its list prices for October deliveries of its CAN 27 percent (YaraBelaNitromag) in Germany and Benelux. The October deliveries’ price was set at €307/mt bulk CIF for both destinations, effective immediately. The new posted price is a €9/mt increase on its September deliveries price for the two countries, announced a month ago.

Once again, the supplier warned that only limited volumes would be available. Demand is reported to be minimal currently, and product on offer limited.

Yara also set the list price for October deliveries of its YaraBelaSulfan in Germany and Benelux, posting a price of €317.50/mt bulk CIF for Germany and €319/mt bulk CIF for Benelux, with immediate effect. The prices are also a €9/m hike on the price for September deliveries, posted on July 16.

Sulfate of Potash

Eastern Canada, Specialty, Sulfate of Potash, U.S. Exports, U.S. Imports

U.S. Imports: 

July-June SOP imports firmed 18.8 percent year-over-year, to 107,097 st from 90,169 st. Imports were up 260.9 percent in June, lifting to 13,367 st from the year-ago 3,704 st. 

U.S. Exports: 

June exports totaled 3,724 st, a 52.9 percent decrease from 7,905 st logged in June 2020. Exports were counted at 51,798 st in July-June, down 49.0 percent from the year-ago 101,494 st. 

Eastern Canada: 

The SOP market was pegged at C$965-$975/mt FOB in Ontario, unchanged from last report.

DAP/MAP

Brazil, Central Florida, China, DAP/MAP, Eastern Canada, Eastern Cornbelt, India, Northeast, Northern Plains, Saudi Arabia, U.S. Exports, U.S. Gulf, U.S. Imports, Western Cornbelt

Central Florida: 

DAP trucks loading from Central Florida remained posted at $620/st FOB, sources noted, unchanged from one week earlier. Players quoted MAP trucks steady at $655/st FOB, also flat from the prior report.

U.S. Gulf:

Players reported minimal action in the NOLA DAP and MAP barge markets for the week.

Nearby lows continued to be voiced at $595/st FOB for imported DAP, while imports were most recently noted changing hands up to a $605/st FOB high. Domestically produced DAP continued to be offered at $615/st FOB. Reports of firming terminal demand at prices comparable to a $615/st FOB NOLA-equivalent suggested strengthening values in the next round of business, some argued.

Last-done MAP volumes continued to be heard even with week-ago lows at $640/st FOB, with some suggesting sentiment firming closer to a $645/st FOB floor during the week. Recent sales and offers were noted at a $650/st FOB high for domestic tons.

In a week of muted trading, sources noted NOLA barge DAP values rolling over from week-ago levels in a $595-$605/st FOB range. MAP barges were similarly unchanged from the prior week at $640-$650/st FOB.

U.S. Imports: 

June DAP imports were noted at 91,727 st, firming 129.6 percent from the year-ago 39,947 st. July-June totals stood at 1.30 million st, up 25.3 percent from the year-ago 1.04 million st.

The list of top DAP imports looked very different from years past, thanks to the DOC’s late-2020 and early-2021 rulings in favor of added duties applied to material imported from Morocco and Russia.  

Saudi Arabia led 2020-2021 fertilizer year imports with 546,235 st, up 499.5 percent from the year-ago 91,117 st, while Jordan directed 337,857 st of DAP for the period after sending none in the prior fertilizer year. Tons from Australia totaled 181,817 st against zero tons for the year-ago, while both Egypt (44,659 st) and Lithuania (44,659) guided more DAP to the U.S. than either Russia (37,996 st) or Morocco (24,251 st).

July-June MAP/Other imports were noted at 1.04 million st, dropping 39.5 percent from the year-ago 1.72 million st. June imports climbed 268.5 percent, however, to 62,251 st from 16,895 st in the prior year. 

Mexico led July-June MAP imports, recording 361,363 st for the period, up 409.5 percent from 70,922 st in the year-ago. Saudi Arabia’s 243,762 st was good for 148.9 percent of its year-ago 97,940 st July-June total, while third-place Russia’s 87,834 st stood 62.9 percent off from the prior-year 236,978 st. Lithuania (79,189 st), Australia (79,263 st), Jordan (74,826 st), and Bulgaria (36,376 st) all outpaced Morocco’s 31,491 st fertilizer-year total, a 97.6 percent decline from that Morocco’s year-ago 1.30 million st haul.

U.S. Exports: 

June exports of DAP fell 77.0 percent, to 36,661 st from the year-ago 159,741 st. Exports were counted at 730,843 st for July-June, a 39.0 percent decrease from the year-ago 1.20 million st.

June-July MAP/Other exports softened 23.8 percent to 2.28 million st, down from the year-ago 3.00 million st. June exports slid 63.7 percent, to 98,965 st from the prior-year 272,567 st. 

No new transactions were reported on the week’s Gulf export phosphate market. Last-done include a DAP cargo priced at $660/mt FOB and MAP load valued at $685/mt FOB.

Eastern Cornbelt: 

DAP remained at $640-$655/st FOB in the Eastern Cornbelt, with the low reported at LaSalle and other river terminals in Illinois. MAP was steady at $675-$695/st FOB, depending on location, with the Ottawa market pegged at the $682/st FOB level. The Cincinnati market was unchanged at $645-$650/st FOB for DAP and $680-$690/st FOB for MAP.

Pricing out of some Michigan warehouses was confirmed at the $675/st FOB level for DAP and up to $715/st FOB for MAP in mid-August.

Western Cornbelt: 

DAP pricing reportedly slipped to $635-$650/st FOB in the Western Cornbelt, with the lower end confirmed at St. Louis. MAP was quoted in the $675-$695/st FOB range in the region, depending on location.

Northern Plains: 

DAP pricing FOB St. Paul was pegged in the $640-$645/st FOB range in mid-August, with MAP quoted at $675-$695/st FOB. Delivered green MAP in western North Dakota remained at the $725/st level.

Northeast: 

DAP remained at a firm $660/st FOB East Liverpool, with MAP pegged at the $710/st FOB level at that location. No phosphate prices were being offered at Fairless Hills in mid-August.

Eastern Canada: 

MAP pricing remained at C$985-$1,045/mt FOB in Eastern Canada, depending on location and supplier. The last DAP business was reported at the C$980/mt level FOB Montreal.

Saudi Arabia: 

Saudi Arabia phosphate exports firmed to a $615-$630/mt FOB range, sources indicated. The market was previously reported at $610-$615/mt FOB.

China:

The DAP market was quiet and steady. Sources reported some deals at $620-$630/mt FOB, but with limited tonnage available for export.

Producers continue to face more expensive inputs, pushing prices up. Buyers face these higher prices and higher freight rates, pushing the final delivered price to ever higher rates. Sources said while producers are willing to talk with overseas buyers, especially Pakistan and India, most of their emphasis is on taking care of the domestic Chinese market. Therefore, the tons that are shipped offshore are limited.

India:

There are rumors the government will soon raise the maximum retail price for DAP. The increase could be $50-$80/mt.  That would take the MRP to $620-$650/mt CFR.

The increase is needed to make DAP purchases attractive in India. However, the price from the producers keeps shifting. Already the Chinese price is pegged at $620/mt FOB and up. At this rate, the price into India would have to be closer to $660/mt CFR for the buyer to make any profit on the deal.

Part of what is hurting the Indian buyers is the rising freight rates that include the costs of waiting at anchorage in Chinese waters to wait for a berthing. The Chinese government is limiting the number of foreign-flag ships allowed in any given port. At the same time, some Chinese ports are experiencing severe labor shortages. All these issues are related to the resurgence of COVID-19 in China.

Brazil:

The MAP price softened and tightened in Paranagua. Sources now put the price at $720-$750/mt CFR. Traders see this move as the beginning of a correction that will lead into softer prices in the fourth quarter.

Rondonopolis is also showing a decline to $830-$850/mt FOB ex-warehouse. The lower price came as more distributors looked to taking care of existing shipping orders instead of looking for more tons for themselves or for regional blenders.

The sellers and buyers inland said they are expecting to see some difficulties in the near future shipping more MAP from the ports to the inland terminals. This concern is expected to slow the downward pressure on prices.

The barter rate for 1 mt of MAP at Sorriso is reported at 100 bags of corn and at Sao Luis at 56 bags of corn.

Disclaimer of Warranty
All information has been obtained by Green Markets from sources believed to be reliable. However, because of the possibility of human or mechanical error by our sources, Green Markets or others, Green Markets does not guarantee the accuracy, adequacy, or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.

For additional details visit our Terms of Use.