All Posts from April 22, 2022

Belarus Woos Brazilian Investors for Proposed Russian Port

Belarus, Brazil, Featured, News, Potash, Russia

Belarus is inviting investors from Brazil to participate in building a new port in Russia for the transshipment of Belarusian potash, Interfax reported late last week, citing the Belarusian Ambassador to Brazil, Sergey Lukashevich, in an interview with Brazilian online news outlet GlobalFert. The interview has also been published on the website of Belarus’ Foreign Ministry.

Belarus previously has spoken about its plans to build its own port on the Russian Baltic Sea. Last month, Belarus claimed it would have its own ports on the Russian Baltic Sea in two years, according to a report by Belarusian state news agency BelTA, quoting Belarus President Alexander Lukashenko on March 5 (GM March 11, p. 31).

According to the Interfax report, citing Belarus Prime Minister Roman Golovchenko late last month, Minsk and Moscow have agreed on “a number of arrangements” for the use of Russian ports for the export of Belarusian products, including potash. Belarus earlier said it was in talks with Moscow for the use of certain Russian ports for the transhipment of Belarusian potash, and on occasion, had claimed deals had been struck (GM Feb. 18, p. 1; Feb. 11, p. 1).

Following Western sanctions on Belarus as of midnight on Jan. 31 this year, Lithuania stopped accepting Belarusian trains loaded with potash heading for the Lithuanian port of Klaipėda for export using its railways, effectively blocking the export shipment of around 90 percent of Belarusian potash (GM Jan. 14, p. 1).

Lukashevich, as cited by last week’s Interfax report, said Belarus is prepared to make “interesting offers” for Brazil’s main purchasers of potassium chloride, “which, according to Belarus’ estimates, is around 17 major companies that previously bought potash through intermediaries.

“In light of the new realities, Belarus is ready to work in an unconventional manner,” the ambassador was cited as saying. Belarus foresees changes in the methods of payment, delivery, and is prepared to offer “attractive prices,” he said.

Concerns are ratcheting up among Brazilian buyers about how potassium chloride supplies will be affected as the last of the pre-sanction cargoes from Belarus and Russia are seen docking and unloading at Brazilian ports (GM April 15, p. 15). However, sources were reporting this week that Russian potash is still in the pipeline for delivery to Brazil (see Markets).

Brazil relies on international suppliers for most of its potassium chloride requirements, and this need is increasing in line with its drive to increase agricultural output. The country historically has produced around 0.4-0.5 million mt of its own potassium chloride per year, according to Green Markets’ Potash Quarterly. Currently, there is only one producing potash mine in the country – owned by The Mosaic Co. – and the operation has only a few more years of reserves remaining. Furthermore, it is understood that Mosaic expects to close the mine in 2024.

Brazil in calendar 2021 imported 12.8 million mt of potassium chloride, up 13.7 percent on 2020’s 11 million mt, according to Trade Data Monitor (GM Jan. 14, p. 15). In 2021, Belarus and Russia between them supplied some 47 percent of the Brazilian potassium chloride import market.

In the first quarter of 2022, the two countries provided half of Brazil’s potassium chloride imports, Trade Data Monitor data showed.

Selected Brazilian Potassium Chloride Imports (million mt)

  Calendar year 2021 Percentage of total 1Q 2021 Percentage of total
Total imports 12.8   2.5  
         
Belarus 2.4 18.7 0.613 24.5
Russia 3.6 28.0 0.659 26.4

Amid concerns that the country will not have enough potash and other fertilizer inputs for its agriculture due to Western sanctions on Belarus and Russia, Brazil’s President Jair Bolsonaro has asked the World Trade Organization (WTO) for help, according to a Deutsche Presse-Agentur report, citing a Brazilian Ministry of Foreign Affairs statement issued on April 19, following a visit to the country by WTO Director-General Ngozi Okonjo-Iweala.

According to the report, Bolsonaro highlighted to the WTO Director-General the importance of trade in agricultural products and inputs such as fertilizers to ensure global food security. The president earlier highlighted Brazil’s dependence “in large parts” on fertilizers from Russia and Belarus.

Waggaman Plant Restarts

Ammonia, Australia, Featured, News

Incitec Pivot Ltd. (IPL), Southbank, Victoria, on April 19 said production at its 800,000 mt/y Waggaman, La., ammonia plant had successfully restarted following a rupture in a section of pipe announced on Feb. 18, and the facility is now operating at nameplate capacity.

The rupture resulted in a release of hydrogen, but following extensive investigations, the company said it found only minor damage to surrounding equipment (GM Feb. 18, p. 1).

IPL estimates the impact to earnings associated with the downtime at Waggaman to be approximately US$128 million (A$173 million) on an earnings before interest and tax (EBIT) basis and US$92 million (A$124 million) on a net profit after tax (NPAT) basis. Both of these latest estimates are higher than the initial estimates of US$95-$125 million (EBIT) and US$68-$90 million (NPAT) (GM Feb. 25, p. 35).

The company said approximately 75 percent of the impact on earnings will be in its first-half financial results.

IPL continues to work with its insurers to progress a claim under its comprehensive property insurance policy. But it said the first-half results will not include any adjustments for potential insurance recoveries.

The company experienced major problems at the relatively new Waggaman plant during its last fiscal year ended Sept. 30, 2021 (GM Nov. 19, 2021), including an extended turnaround and unplanned outages. The facility produced 437,200 mt of ammonia in FY2021, 40 percent less than FY2020’s 729,000 mt, while sales of ammonia from the plant were 23 percent lower year-over-year at 563,000 mt (FY2020: 730,000 mt).

IPL will release its first-half FY22 financial results on May 23.

Martin Midstream Results Beat Guidance; Sulfur Services Income Up 96 Percent

Earnings, Featured, News, Sulfur, Texas

Martin Midstream Partners LP, Kilgore, Texas, reported first-quarter adjusted EBITDA of $40 million, which exceeded the high end of the company’s guidance by some $10 million. The company said much of the outperformance came from its Sulfur Services segment, which includes both fertilizer and sulfur, as well as its Transportation segment. Year-ago adjusted EBITDA was $31 million.

“The partnership experienced an exceptional quarter benefiting from increased refinery utilization and strong demand for our products and services,” said Bob Bondurant, President and CEO of Martin Midstream GP LLC, the general partner of the partnership.

“During the quarter, we successfully managed supply chain challenges, labor availability, and fluctuating commodity prices as the Russian invasion of Ukraine created global market instability,” he continued. “Looking forward, the outlook remains solid for our refinery services business model, and as a result we are increasing our 2022 adjusted EBITDA guidance range to $110-$120 million.”

Full-year guidance had previously been $100-$110 million.

First-quarter net income was $11.5 million ($0.29 per unit) on revenues of $279.2 million, up from $2.5 million ($0.06 per unit) and $201 million, respectively.

The Sulfur Services segment saw a 96 percent increase in operating income, to $12.7 million from the year-ago $6.4 million. Revenues were up 70 percent, to $59.1 million from the year-ago $34.8 million. Adjusted EBITDA for the segment was $15.3 million, up from $9.2 million.

While total sales volumes were up 18 percent, sulfur volumes were up 56 percent at 114,000 lt from 73,000 lt, while fertilizer was off 12 percent, to 84,000 lt from 95,000 lt.

Mosaic 1Q Results Expected to Climb

Earnings, Featured, News

The Mosaic Co.’s first-quarter net income is expected to climb to $900.3 million compared to the year-ago $157 million, according to the Bloomberg Consensus, which averages the projections from major analytical firms. The actual range given by analysts was $799-$994 million.

Sales are expected to see a boost to $4.1 billion ($3.8-$4.5 billion) from the year-ago $2.3 billion.

Adjusted EBITDA is forecast at $1.44 billion, up from the year-ago $560 million. The analyst range was $1.33-$1.6 billion.

Mosaic’s first-quarter results are expected to be released after markets close on May 2.

Nutrien Ag Fire Reported in Kansas

News, News Briefs

A fire was reported at a Nutrien Ag Solutions facility in Leoti, Kan., on Tuesday afternoon, April 19. Those in the immediate vicinity were evacuated, but were allowed back in their homes Tuesday night.

“There was a fire at the Nutrien Ag Solutions’ Leoti branch on April 19, 2022, and we cooperated with emergency responders,” a company spokesperson told Green Markets. “Fortunately, no injuries have been reported. We will continue to assess the situation and should know more once the investigation concludes.”

Local firefighters answered the call, and the Ford County Regional Hazardous Materials Team was deployed to remove hazardous materials. Fire Chief Charlie Hughes said the fire was contained to a forklift and nonhazardous materials, according to KSN, a local television station.

A Feb. 28 fire at the Nutrien Ag Solutions facility in Sunnyside, Wash., in the Yakima Valley, destroyed a 13,000-square-foot storage building at the site and prompted the evacuation of residents within a half-mile radius of the plant (GM March 4, p. 1). The local fire chief said the building contained 1.75 million pounds of “mixed components for fertilizer,” including sulfate of potash, muriate of potash, MESZ, ammonium sulfate, urea, and boron.

At the time, the cause of that fire was not determined, however, workers at the plant reportedly identified a smoldering supply of sulfur – part of approximately 200 tons of sulfur at the site – that had been unloaded in a concrete bin in the building earlier in the day.

Itafos Inc. – Management Brief

Houston, TX, Management Briefs

Isaiah Toback and Stephen Shapiro have been appointed Directors by Houston-based Itafos Inc.

Toback replaces Rory O’Neill as a nominee to the company’s Board by CL Fertilizers Holdings, its principal shareholder. As a Castlelake partner since 2020 and its Deputy Co-Chief Investment Officer, Toback guides and executes the company’s global investment strategy. He previously was a Goldman Sachs investment banker and holds a B.A. in Economics from Vanderbilt University.

Shapiro is CFO at Cellview Imaging Inc., an emerging medical device company. He has 30 years of experience in investment banking, most recently with Wells Fargo Securities Canada. A chartered financial analyst, Shapiro spent 13 years with BMO Capital Markets, leading its agriculture and fertilizer group. He holds degrees in Commerce from McGill University and Business Administration from the University of Chicago.

Chemtrade Eyes Sale-Leaseback

Canada, News, News Briefs

Chemtrade Logistics Income Fund, Toronto, announced plans on April 19 to actively pursue the sale of land at its North Vancouver, B.C., site through a sale-leaseback structure. The portion of the company’s North Vancouver operating facility that Chemtrade is offering for sale includes approximately 40 acres (16 hectares) of industrial zoned and rail served land.

The remaining portion of the site is currently leased from the Vancouver Fraser Port Authority. Chemtrade plans to continue to operate its North Vancouver facility following the completion of the proposed sale-leaseback arrangement.

“We are excited about the financial flexibility that this opportunity could create for Chemtrade,” said President and CEO Scott Rook. “The anticipated proceeds of the transaction could provide significant liquidity for investments in organic growth while also helping to reduce debt.”

Chemtrade has launched a formal process to evaluate options for this transaction and cannot guarantee that any transaction will take place, nor provide guidance on the interest in or likelihood of any sale. Chemtrade said it will not issue any further updates until material terms of an agreement are reached or the process is terminated.

Kugler Introduces Green Reaper

News, News Briefs

Kugler Co., McCook, Neb., has introduced Green Reaper, an adjuvant that it said is the perfect carrier to deliver herbicides onto the leaf surface and into the bloodline of targeted weeds. Kugler said it is especially effective on resistant weed strains.

Kugler said the product is a non-ionic adjuvant that extends the ability of the product to stay on the leaf for an extended period of time, which dynamically improves the ability to penetrate the leaf’s surface for an enhanced penetration and a complete kill.

It said in field trials that Green Reaper along with glyphosate has shown the ability to kill weeds in as little as five days in proper weather conditions. It said Green Reaper mixes quickly and easily with any herbicide, fungicide, or insecticide at recommended rates, and can be utilized on any crop.

Other benefits include that it can be used on any crop; is rain fast within an hour of application; is an excellent surfactant; increases chemical effectiveness; and contains no oils or solvents.

Compass Completes Sale

News, News Briefs, South America, Specialty

Compass Minerals reported on April 20 that it has completed the sale of the company’s South America chemicals business to a subsidiary of Cape Acquisitions LLC. The sale includes all remaining Compass Minerals operations in Brazil, concluding the company’s previously announced plan to exit the South American market.

Upon closing of the all-cash transaction, Compass Minerals received gross sale proceeds of approximately R$236 million, or $51 million based on current exchange rates, subject to a post-closing adjustment. The company intends to use the proceeds from the sale to pay down debt.

“We are pleased to have taken this final step in our Brazil sale process, further optimizing our asset base and enabling additional debt reduction,” said President and CEO Kevin Crutchfield. “Our board and senior management team remain acutely focused on maximizing value within our core Salt and Plant Nutrition businesses, while strategically pursuing organic opportunities to accelerate the growth of our essential minerals portfolio into adjacent markets.”

Compass completed the sale of its South America specialty plant nutrition business to a subsidiary of ICL Group, Tel Aviv, last year (GM July 2, 2021).

Biden Announces Ban on Russian-Linked Ships

News, News Briefs, Russia, U.S.

President Joe Biden on April 21 announced that the U.S. will ban Russian-affiliated ships from American ports. These include vessels with a Russian registry, vessels that are Russian owned, and vessels that are Russian operated. The prohibition takes effect April 28, 2022.

Biden has been considering the measure since March, and the move joins Canada and European nations. The move does not seek to ban the shipment of all Russian cargo.

In 2021, Russian vessels accounted for less than 3 percent of all traffic, according to a report by the Associated Press, which said 90 percent of that traffic was oil imports and have already been banned.

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