Minneapolis-Target Corp. has announced that it is getting out of the garden center business and hanging close-out signs on all the fertilizer and live plant merchandise at garden centers nationwide, including 90 in Florida. “After careful review and consideration, Target has decided to close our Garden Centers,” spokeswoman Jenna Reck advised Green Markets. “This is no longer a profitable business for us and does not provide significant value to our guests. We currently operate 262 Garden Centers, primarily in Florida, California, Arizona, and Nevada.” Reck said the effective close date for the centers will be late September 2010, and it will be business as usual throughout the summer season. Target will continue to carry lawn and patio items in the seasonal section of the stores from January through mid-September. Live plants have not been a profitable business for Target given stronger competition from home-improvement stores, Walmart, and independent garden centers. In some stores, Target is expected to create more room for expanded fresh food, meat, and produce departments that are being added to 350 of its 1,150 stores this year.
Eastern Cornbelt: The anhydrous ammonia market was tagged at $540-$560/st FOB in the region, with the low out of spot Illinois locations for prompt tons. One source also reported fall prepay ammonia being offered at the $555/st FOB level in Illinois on a spot basis.
Western Cornbelt: The ammonia market was tagged at $540-$560/st FOB regional terminals, with the low in Nebraska and the upper end out of Iowa terminals. Postings remained as high as $580/st FOB at some locations. Out of production points in Oklahoma, ammonia pricing had reportedly moved to the $495/st FOB mark or higher, depending on location.
Effective Aug. 23, Agrium’s ammonia postings will move to $560/st FOB Mankato, Minn., and Iowa terminals at Early, Garner, and Whiting; $555/st FOB Greenwood, Neb.; $550/st FOB Hoag, Neb.; $545/st FOB Clay Center, Kan.; $540/st FOB Conway, Kan.; $535/st FOB Mocane, Okla.; and $495/st FOB Borger, Tex.
California: Anhydrous ammonia was steady at $520-$525/st truck-DEL in California, with aqua ammonia pricing unchanged at $142/st FOB.
Pacific Northwest: Truck-delivered ammonia was quoted firmly at the $550/st level in the Pacific Northwest region last week. Effective Aug. 11, Agrium’s anhydrous ammonia postings moved up to $530/st rail-DEL in Washington, Oregon, and northern Idaho; $550/st truck-DEL in Washington and Oregon east of the Cascades, and in northern Idaho; $555/st rail-DEL in southern Idaho and Utah; and $580/st truck-DEL in Montana and northern Wyoming from the company’s Carseland, Alberta, plant.
Western Canada: Anhydrous ammonia to the dealer had reportedly moved up to $612-$656/mt DEL in Western Canada, with the low in Manitoba and the higher numbers in Alberta. Most spot pricing quotes in Manitoba and Saskatchewan fell in the $612-$626/mt DEL range last week. Producer reference prices for ammonia ranged from $622-$666/mt DEL in the region, depending on location.
Southern Plains: Agrium reported that the restart of its Borger, Texas, ammonia plant began on Aug. 13, and that the facility was at 90 percent capacity with the temporary tower in place. The company reported in early August (GM Aug. 9, p. 13) that the plant had gone down unexpectedly due to a structural failure on the west side of the cooling tower.
Black Sea: Sources report Ukrainian producers are coming back online. The steady increase of prices in the international market is making it possible for the producers to start looking at firing up their plants again. Sources say a slow and steady return to production would not drastically affect the price. Demand, they say, is strong across the globe.
The Ukrainian producers had been taking extended turnarounds to avoid returning to the market place at a time of soft ammonia prices and higher natural gas prices. Even with the expected increase in natural gas costs, sources say the current ammonia market can guarantee plants will be able to operate and sell at a profit.
As the market entered the third quarter, the break-even price was pegged at $320/mt FOB. Now, sources say the price is closer to $350-$360/mt FOB.
The most recent estimate for prices out of Yuzhnyy is $360-$370/mt FOB, with higher prices expected in the coming weeks.
Middle East: Mitsui reportedly bought a cargo from Iran at $345/mt FOB late last week. The deal shows a continued increase in the market price.
The Arab producers reportedly showed some joy over the Iranian price. Most of the Arab producers are tied to formula-priced deals. Often these deals are at a discount from the spot market. The only problem is there have been few spot sales recently.
Producers have been arguing that the increase in prices elsewhere in the world should be reflected in the local market as well. But without specific deals to nail down a spot price, sources were hard-pressed to firmly call a price. The recent Iranian deal helped end the stalemate.
One source noted that the $345/mt FOB should be considered the low-end of the regional market because Iran often offers its product at a discount. The need to process the sale through a third party to handle currency exchanges – to avoid penalties based on the U.S. and European sanctions against Iran – often means the product needs to be offered at a slightly lower price than its Arab counterparts.
The discount was once as much as $10/mt, but in recent weeks the gap has closed to only a couple of dollars.
Without any other public deals to confirm the price, even one producer said the best guess is to call the market in the low $340s/mt FOB.
Asia: Buying remains firm and brisk. Sources say the most likely reason Mitsui went to Iran for a cargo was to satisfy an Asian buyer.
Sources report production in Malaysia and Indonesia remains in top form.
UREA
U.S. Gulf: Most sources last week pegged the granular urea barge market within the $303-$308/st FOB range for prompt trades. While some claimed little activity in the market, others said there was plenty as buyers moved to assure product was in place for wheat country.
Eastern Cornbelt: Granular urea prices actually eased back last week after the previous week’s rapid escalation. Sources tagged the dealer market in a broad range at $325-$345/st FOB, with the low end in the Cincinnati market.
Western Cornbelt: Most sources tagged the granular urea market at $330-$345/st FOB in the Western Cornbelt region, down slightly from the previous week. The upper end of the range was reported in Iowa, with the low out of river terminals in Missouri on a spot basis.
California: Urea had reportedly moved up to $385-$405/st FOB California warehouses, with the upper end reflecting reference levels from Simplot at certain locations. That range reflected a $25/st increase from last report. No current delivered urea prices were reported in the region.
Pacific Northwest: Sources tagged the granular urea market at $365-$385/st DEL in the region, up $15-$20/st from last report. On an FOB basis, the granular urea market was tagged at $350-$380/st FOB, depending on location and supplier.
Agrium’s urea postings firmed on Aug. 13 to $365-$375/st DEL in Montana and Wyoming, depending on location; $380/st FOB West Woodburn, Ore.; $385/st FOB Washington warehouses at Glade, Warden, and Wilson, and Idaho warehouse locations at Pella and Acequia; $390/st DEL in Washington, Oregon, Idaho, and northern Nevada; $400/st DEL in northern and central Utah; and $405/st DEL in southern Utah. Those prices were up $20/st from Agrium’s July 23 urea postings, and $50/st from July 1 reference levels.
Western Canada: Urea pricing in Western Canada was on the upswing. As of Aug. 13, urea pricing had reportedly firmed to $436-$441/mt DEL in Manitoba and Saskatchewan, with Alberta pricing quoted in the $446-$461/mt DEL range. Those levels were up some $25/mt from last report, and up a full $65/mt from mid-July dealer prices in the region. Dealer reference levels from producers ranged from $445-$470/mt DEL in the region.
India: The IPL tender closed early last week, with more than 1.5 million mt of material offered.
Prices showed that just about everyone was looking at higher prices. Offers from the Black Sea showed sellers at $285-$300/mt FOB and from the Middle East at $310-$315/mt FOB.
For the first time, IPL demanded all offers be made in FOB and CFR. Many of the offers appeared to show freight rates of $10-$15/mt. Such rates are difficult to accept, said one source.
Most of the CFR prices came in higher than the target price of $310/mt CFR. Sources said last week the $310/mt CFR price is the highest the government was willing to go for the subsidy program.
The offers made in the tender follow on page 6.
In the end, IPL made counter bids at $308/mt CFR for the port of Krishnapatnam, $310/mt CFR for Vizag, and $311/mt CFR for Paradip and Tuticorin. IPL issued letters of intent Thursday to the following companies.
Company
Quantity mt
Source
Ameropa
90,000
China
Quantum
50,000
China
Amber
50,000
China
Sinochem
55,000
China
Rare Earth
60,000
China
Helm
50,000
China
Dreymore
50,000
China
Continental
50,000
China
Swiss Singapore
25-40,000
China
Wilson
25-30,000
China
Transglobe
20,000
Iran
Reportedly, Helm and Quantum were initially also asked to supply an additional 50,000 mt each under a seller’s option.
Industry sources were surprised to see so many tons offered from China. One trader speculated that some of the offers may not have been made with the Chinese tons already under contract.
In the past, some Chinese producers have backed multiple traders in tenders. How many of the tons IPL is looking to buy are unique to each seller is up in the air, said one trader.
Some traders are also wondering how many tons will actually be able to be delivered by the October 15 deadline.
China bumps up its export duty to 110 percent beginning Sept. 16 through Oct. 15. Only urea in a bonded warehouse with a vessel already nominated by Sept. 15 will be allowed to be shipped under the current 7 percent duty.
One trader said the scramble for ships in such a narrow window could have interesting consequences for the freight market.
Another trader speculated that IPL could still walk away from some of the deals. In the past, he noted, some of the Indian buying companies have rejected cargoes because of the quality of the vessel.
A rush for ships could lead to some problems with the IPL inspectors.
The offers were to remain valid until Aug. 22. Sources say IPL could still issue more LOIs within that time frame if the companies are willing to fit the delivered price into the Indian pricing formula.
Even accepting tons at $311/mt CFR stretches the number set by the Indian government to qualify for a subsidy.
One source said that allowing cargoes to come in just over the line confirms the view by some in the industry that the government, despite its hard-line statements, is willing to stretch the rules to ensure enough urea reaches farmers during the application season.
Already, Indian media are reporting of complaints by some farmers that supplies in their areas are not high enough for their needs. In turn, local politicians are leaning on the central government to get urea into the country. None are yet reported as saying the imports should come in “at any cost,” but the pressure is growing.
Middle East: Arab producers offered tons in the Indian tender more to show where they think the market should be for their product rather than having any hopes of winning an award.
Offers at $300-$315/mt FOB ensured the producers would not get an award as long as they held to those prices.
The Indian goal of $310/mt CFR means that nothing higher than $295/mt FOB with a very good freight rate could be considered by the Indians.
Sources say the small quantities offered from the area also point to the producers’ intent of sending a message rather than making a deal.
Reports from the area say production in the area remains steady, but not at full capacity. The order books are reportedly full into September, with orders from a number of long-term clients.
Any spot deal would have to be in the low-$300s/mt FOB, say sources. But one producer said the contract/formula tons are still moving out at levels just under $300/mt FOB.
Egypt reportedly concluded a deal at $320/mt FOB.
The Transglobe offer into the Indian tender showed that Iran is looking at $302/mt FOB, based on last week’s exchange rate between the UAE dirham and the US dollar.
With the Iranian business at the low end of the market and Egypt at the upper end, sources say the price range is $305-$325/mt FOB for prills and granular.
IPL Urea Tender
Company
Source
Quantity (mt)
US$/mt FOB
US$/mt CFR
Discharge Port
Comments
Wilson
China
25-30,000
284.75
308.75
Kakinada
Open
309.00
Vizag – Tuticorin
Valency
Open
25-30,000
284.00
319.00
Vizag
YUC
China
40,000
285.00
320.00
Vizag
JSC
Odessa
30,000
287.00
Aug. – Sept. shipment
Sinochem
China
55,000
288.98
309.48
Krishnapatnam – Gangavaram
25,000 (SO)
Ameropa
Open
60,000
293.23
308.23
Krishnapatnam
311.73
Mundra
25-30,000
291.23
312.23
Vizag
85-90,000 (SO)
Same terms
Helm
China
50,000
294.00
314.00
Kakinada – Vizag
50,000 (SO)
Yuzhnyy
200,000
(SO)
300.00
328.00
Mundra – Vizag – Kakinada
China
200,000 (SO)
308.00
328.00
Mundra – Vizag – Kakinada
Dreymore
China
40-60,000
297.71
312.71
Krishnapatnam
Shipment Oct. 15
Yuzhnyy
285.76
Iran
302.76
Egypt
298.76
China
297.71
40-60,000 (SO)
Same terms
Rare Earth
Open – China
50-55,000
295.00
309.75
Krishnapatnam
25-30,000 (SO)
Same terms
Quantum
Open
50-100,000
300.00
317.90
Krishnapatnam – Gangavaram
Amber
China – Open
50,000
300.00
314.90
Krishnapatnam – Gangavaram
Swiss Singapore
Open
25-40,000
304.31
314.76
Kandla – Mundra
25,000 (SO)
Keytrade
Open
25,000
304.00
322.00
Vizag
Valid until Aug. 18
Transammonia
Oman
25-50,000
310.00
Sept. – Early Oct.
China
300.00
319.50
Pipavav
Oct. 15 arr.
316.00
Krishnapatnam
25-50,000 (SO)
Same terms
Emmsons
40-50,000
311.31
331.31
Mundra
40-50,000 (SO)
Uzuagro
Open
45,000
310.00
355.00
Vizag
3 lots in containers
335.00
Kandla
308.00
333.00
Mundra
Fertil
UAE
25,000
312.00
PIC
Kuwait
50,000
312.00
Sept. – Oct. shipment
311.00
Qafco
Qatar
50,000
312.00
Sept. – Oct. shipment Oct. ship
Sabic
Saudi Arabia
25-30,000
315.00
Continental
Open
40-45,000
318.50
Krishnapatnam
320.50
Vizag – Kakinada – Tuticorin
Transglobe
Iran
15-20,000
1110.25 UAE DH
1143.75 UAE DH
Kandla – Mundra
Gavilon
China – FSU – Malaysia – Middle East
25-55,000
315.00
337.00
Gangavaram
Valid until August 17
Black Sea: Just before the IPL/India tender closed, sources were reporting a lot of activity in the Yuzhnyy market. The speculation was that traders were looking to grab as many low-priced tons as possible to offer in the tender.
The results of the tender as Green Markets went to press showed no winners from the Black Sea.
Prices had moved up smartly in the past month. In early July the price was at $240-$245/mt FOB, with some mild indications the price was ready to move up.
Late last week sources were quoting deals done at $290/mt FOB, with strong indications the price will continue to rise.
Sources say the market can easily be called at $280-$290/mt FOB, with room to expand.
One trader said the producers will have to hope for a sustained higher market price. The cost of natural gas is expected to go up in the fourth quarter. Without a corresponding increase in urea prices, the producers may have to follow the example of the region’s ammonia producers and shut down.
The Black Sea producers are facing some serious challenges to keeping the price up.
With IPL issuing awards for almost nothing but Chinese tons, and with the fires around Moscow affecting the country’s agriculture belt, two major sales venues are closed off.
Some traders say the producers are beginning to show some signs of concern that the run-up in prices may be at an end.
Still, said one Asian trader, there are possibilities into Latin America and Europe that could provide a reasonable floor for the Black Sea price.
Indonesia: Late last week Kaltim announced a selling
tender for 60,000 mt to close Friday, August 20. In the end,
the company sold 100,000 mt.
The tender is an important indicator of how Asian buyers see the market. And the evidence is that the market is stronger and more willing to accept higher prices. Even the lowest bid showed a $10/mt increase in pricing ideas from the previous tender.
Kaltim awarded 70,000 mt to Fertcomm Trading with its bid of $293.25/mt FOB. Brio and Summit each received 15,000 mt for their tie bids of $291/mt FOB.
The last tender price from Indonesia was $267/mt FOB.
Kaltim said it would accept bids for granular or prilled urea. One source said because the company can deliver in either flavor, it will take the highest bid for whatever type of urea the buyer wants.
In the end, it looks as if everyone wanted granular material.
Company
US$/mt FOB
Type of urea
Fertcomm Trading
29325
Granular
Brio Agrichem
291.00
Granular
Summit Prakasa
291.00
Granular
Indevco
287.50
Granular
Trada
287.25
Granular
Liven
286.25
Granular
Universal
286.00
Granular
Feitra Ltd.
284.00
Granular
Parna Artha
283.00
Granular
OE
282.50
Swiss Singapore
281.25
Granular
Samsung
280.50
Granular
Helm
279.00
Granular
RCL
278.00
Granular
Late Friday Pusri announced its own selling tender, to close August 23 for 60-70,000 mt. Industry watchers will look to see if the higher prices hold over the weekend.
Pakistan: The flooding that has left an estimated 4 million people homeless may have also washed out the nutrients from the farmland.
Sources said once the water recedes the farmers may need to replace the fertilizer that was spread just before the flooding, and then some extra to jump-start the revitalization process.
A lot will depend on the final analysis. If fertile topsoil was dropped onto the affected farms, the fertilizer needs will be less. If, as is expected by sources outside the country, the topsoil was just removed, more fertilizer will be needed.
Ironically, Sabic had just sent the last cargo of 300,000 mt to the country under the government-to-government deal signed earlier this year.
Sources had expected Sabic to stretch out its deliveries into September to ensure a continued stream of sales. A trader noted, however, that the company moved as quickly as the Pakistan buyers had hoped.
Nepal: The AIC tender closed last week with four offers. The tender was only for 25,000 mt of bagged prilled urea. But, said one trader, it does offer a small window into the pricing ideas of regional players.
The offers were to be based on delivery to the seaport of Haldia or the river facility Kolkata in northeast India.
Tender results follow.
Company
Source
Quantity (mt)
US$/mt CFR Bagged
Wilson International
China – Vietnam
12,500
352.37
12,500
36187
Trading
China
25,000
355.00
Indian Potash Ltd.
UAE – Kuwait – Iran
25,000
362.00
Samsung
China
25,000
374.99
An award in the tender is not expected for a while, said one trader.
The urea sales to Nepal usually involve some sort of international development aid money that is handled through a trading house.
NITROGEN SOLUTIONS
U.S. Gulf: New business was reported last week at $215/st FOB ($6.72/unit), with offers now at $220/st FOB ($6.87/unit). Product continues to be in short supply.
Eastern Cornbelt: UAN remained in the $7.50-$8.13/unit FOB range in the region, with the low reported by sources in Indiana and Ohio out of spot river locations at midweek.
Western Cornbelt: UAN-32 pricing was unchanged at $245-$260/st ($7.66-$8.13/unit) FOB in the Western Cornbelt for limited tons. One supplier said he was out of product last week, but would likely repost as high as $275/st ($8.59/unit) FOB when solutions inventories are restocked.
California: UAN-32 was quoted at $270-$285/st ($8.44-$8.91/unit) FOB in California last week, up some $25-$35/st from last report. Aug. 15 reference levels from Simplot included $275/st ($8.59/unit) FOB Stockton, $280/st ($8.75/unit) FOB Helm, and $285/st ($8.91/unit) FOB El Centro.
Agrium’s UAN-32 postings in California moved on Aug. 2 to $268/st ($8.38/unit) FOB Sacramento, $290/st ($9.06/unit) truck-DEL in Central California, and $295/st ($9.22/unit) truck-DEL in Northern California. Agrium’s UAN-32 postings moved up $15/st on Aug. 13, to $283/st ($8.84/unit) FOB Sacramento, $305/st ($9.53/unit) truck-DEL in Central California, and $310/st ($9.69/unit) truck-DEL in Northern California.
Pacific Northwest: Sources quoted delivered UAN-32 commonly at the $275/st ($8.59/unit) level at mid-month, up some $15-$25/st from last report, but higher postings were in effect. Agrium’s UAN-32 postings firmed on Aug. 2 to $275/st ($8.59/unit) DEL in Washington, Oregon excluding Malheur County, and northern Idaho; $280/st ($8.75/unit) rail-DEL and $285/st ($8.91/unit) truck-DEL in southern Idaho; and $285/st ($8.91/unit) DEL in Montana and northern Wyoming.
Agrium’s UAN-28 posting also moved on Aug. 2 to $249/st ($8.89/unit) DEL in Montana and northern Wyoming. Agrium’s UAN-32 postings took another increase on Aug. 13, moving up $15/st from the company’s Aug. 2 reference prices. As a result, new postings from the company include $290/st ($9.06/unit) rail-DEL in Washington, Oregon excluding Malheur County, and northern Idaho; $295/st ($9.22/unit) rail-DEL and $300/st ($9.38/unit) truck-DEL in southern Idaho, Oregon’s Malheur County, and Nevada; and $300/st ($9.38/unit) DEL in Montana and northern Wyoming. Agrium’s UAN-28 posting also moved on Aug. 13 to $263/st ($9.39/unit) DEL in Montana and northern Wyoming.
Western Canada: UAN-28 pricing was up significantly from last report. Sources quoted the market at $261-$276/mt ($9.32-$9.86/unit) DEL in the region, with the low end in Manitoba and the higher numbers to dealers in Alberta. Producer postings ranged from $271-$286/mt ($9.68-$10.21/unit) DEL in the region, depending on location.
AMMONIUM NITRATE
U.S. Gulf: New barge business was reported last week at $252/st FOB, with offers now at $255/st FOB.
Western Cornbelt: Ammonium nitrate was tagged at $290-$305/st FOB in the region, with the low in Iowa and the upper end in Missouri.
California: No market was reported for ammonium nitrate in California. CAN-17 was unchanged at $242-$255/st FOB in the state.
Pacific Northwest: No market was reported for ammonium nitrate in the region last week. Agrium’s CAN-17 posting FOB Kennewick, Wash., firmed on Aug. 2 to $250/st, but industry sources said tons were unavailable. Agrium’s 20-0-0 ammonium nitrate solutions posting FOB Kennewick also firmed on that date to $168/st.
AMMONIUM SULFATE
Eastern Cornbelt: On Aug. 16, Honeywell moved its granular ammonium sulfate postings to $190/st FOB Danville, Ill., and Wisconsin terminals at Amherst Junction and Prairie du Chien, with mid-grade sulfate postings moving to $180/st FOB Danville and Byron, Ill. Honeywell’s raildelivered postings moved on that date to $200/st for granular and $190/st for mid-grade in Illinois, Wisconsin, Arkansas, and Mississippi. Three days later, however, the company notified customers that all of the granular tons available at those prices had been spoken for, while mid-grade remained available at those published prices.
Western Cornbelt: Honeywell moved its granular ammonium sulfate postings up on Aug. 16 to $190/st FOB Dubuque, Iowa, St. Louis, Mo., Omaha, Neb., and Roseport, Minn., with mid-grade sulfate postings moving to $180/st FOB Roseport and Omaha. Honeywell’s rail-delivered postings moved on that date to $200/st for granular and $190/st for mid-grade in Minnesota, Iowa, and Missouri. On Aug. 19 the company notified customers that all of the granular tons available at those prices had been spoken for, but mid-grade remained available at those published prices.
California: Ammonium sulfate remained at $220-$247/st
FOB, with the low for standard grade and the upper end for
granular product in desert locations.
Pacific Northwest: Ammonium sulfate was pegged at $215-$225/st DEL in the Pacific Northwest.
Western Canada: Granular ammonium sulfate was unchanged at $285-$295/mt DEL in the region, with dealer reference prices roughly $5-$10/mt higher.
PHOSPHATES
Central Florida: Inventories were down, but so was demand last week in the Central Florida DAP market. Producers were filling only contract orders, and traders were in no hurry to get rid of the small supplies they were holding onto.
Although it had nothing available for prompt shipment, CF Industries was posting an August price of $440/st FOB, and Mosaic had no posted price and nothing available, but would charge $445/st FOB if it had any to sell.
The pending closing of Mosaic’s South Fort Meade Mine will further cut into supply. Agrifos still plans on operating until the end of the first quarter of next year, and may have enough left to go until June, but it will likely shut down at the end of the quarter. The combined loss from the two closings would amount to about 1.6 million t/y, and should have the effect of driving up prices in an already tight market.
The Central Florida DAP price range changed slightly from the previous week’s $440-$450/st FOB, to $445-$450/st FOB based on recent sales and availability. Neither Mosaic nor CF had anything available for prompt delivery. PCS was making sales at “competitive prices.” Agrifos increased its asking price from $475/st FOB to $480/st FOB for DAP truck sales, while railcars were about $5/st FOB less. Although Agrifos was sold out through August, it did have supply available for September.
U.S. Gulf: Floating NOLA DAP barges on the Gulf’s river system were either gone or very nearly so late last week. At the same time, warehouses and terminals were moving product at a steady pace, depending on the area.
Sales were also way down for the week, and with a fairly wide – $10/st FOB – price spread. Although prompt sales were hard to find, future sales for September were fairly common last week, at $472/st FOB. Asking prices were about $475/st FOB.
Terminal prices for DAP were running $490-$505/st FOB, and MAP was posted $10-$15/st FOB higher, depending on location. Terminal prices will most likely increase during the next month as demand hits and supplies remain tight.
Terminals on the Arkansas were quickly running out of time to get any products upriver, as the Corps of Engineers was preparing to begin maintenance work on locks on the river later this week.
Gavilon has been selling phosphate from Morocco, which was scheduled to arrive and be ready for distribution in late September.
Sources said that although dealers were buying at least a portion of their projected needs for the fall season, growers were only beginning to trickle in. However, that could change relatively quickly, because it appeared the corn crop would be harvested earlier this year. Corn was fetching $4.35/bushel for December and $4.39/st FOB for December 2011. At those prices, farmers cannot afford to skimp on phosphate applications for their crops. Wheat was also doing well, but was down slightly from the previous week.
Based on actual sales last week, the NOLA DAP barge range increased slightly – from $460-$468/st FOB to $462-$472/st FOB – as asking prices for September were between $472-$480/st FOB. Sources expect prices to rise for the next couple of weeks.
Eastern Cornbelt: Sources quoted the regional DAP market at $495-$505/st FOB, up another $10/st from last report. One source reported the low end out of a local terminal at midweek, but said the price was going up the next day. Ohio sources quoted DAP at $500/st FOB Cincinnati.
MAP was in very tight supply, with one source pegging the E. Liverpool, Ohio, market firmly at the $525/st FOB level last week. The 10-34-0 market was pegged at $360-$385/st FOB in the region, with the low in Indiana and the upper end reported in the Ohio market.
Several sources talked of delays in receiving fill phosphate tons for fall. One said he has received only seven railcars of DAP out of a total of 100 ordered.
Western Cornbelt: The DAP market had reportedly moved to $490-$505/st FOB, with MAP $10-$15/st higher. One Missouri source tagged the dealer market firmly at $495/st FOB for DAP and $510/st FOB for MAP in his trade area, while a western Iowa contact put the MAP market at $510-$520/st FOB for limited tons.
10-34-0 was tagged at $360-$370/st FOB in the region.
California: DAP and MAP were quoted at $520-$535/st FOB or DEL based on producer postings. Simplot moved its reference prices for both DAP and MAP to $520/st on Aug. 9. Agrium’s MAP postings in California and Arizona firmed on Aug. 4 to $520/st FOB warehouse or rail-DEL. On Aug. 18, however, Agrium’s MAP postings firmed again to $535/st FOB or rail-DEL in the region, up $35/st from the company’s July 26 posting.
16-20-0 was pegged at $344-$374/st FOB California warehouses, up $10/st from last report. Simplot was reportedly referencing 0-45-0 SSP at $452/st FOB or rail-DEL in California, also up $10/st from late July pricing levels.
Phosphoric acid pricing as of Aug. 1 firmed to $8.55/unit DEL for both super phosphoric acid (SPA) and merchant grade acid (MGA). Simplot was also referencing MGA at $8.75/unit FOB in the state as of Aug. 1, and said another increase is slated for Sept. 1. Agrium’s postings for SPA and MGA moved on Aug. 1 to $855/st rail-DEL in Arizona and California.
10-34-0 pricing in California as of Aug. 1 moved to 373-393 FOB, depending on location.
Pacific Northwest: Phosphate prices were up significantly from last report. Sources pegged DAP and MAP at $510-$520/st FOB or DEL in the region, with the low in Montana and the upper end in Washington. Simplot was referenced at $515/st in the Pacific Northwest and Nevada, and $510/st in Idaho and Utah.
On Aug. 18 Agrium reposted MAP at $520/st DEL in Montana and Wyoming; $525/st DEL in southern Idaho, Utah, Nevada, and Oregon’s Malheur County; and $525/st FOB and $530/st DEL in Washington, northern Idaho, and Oregon excluding Malheur County. Those levels represent a $15/st increase from Agrium’s Aug. 4 postings, a $35/st increase from July 26 postings and a $55/st hike from the company’s July 1 postings, but industry sources said inventories were mostly sold out after a busy July fill period.
16-20-0 was tagged at $331-$336/st DEL in the region, up $10/st from last report. 10-34-0 was quoted at $380-$400/st FOB.
SPA and MGA were quoted at $8.55/unit rail-DEL in the region from Simplot. Agrium also firmed its phosphoric acid prices in August to $855/st rail-DEL in Idaho, Montana, Nevada, Oregon, Utah, and Washington.
Western Canada: MAP to the dealer had firmed to $622-$657/mt DEL in Western Canada, up roughly $40/mt from last report and $20/mt higher than Aug. 13 pricing levels. Sources quoted the low end of the range in Manitoba, with Saskatchewan pricing levels in the $607-$617/mt DEL range. Alberta sources pegged the dealer market in the $612-$637/mt DEL range last week. Dealer reference levels ranged from $630-$665/mt DEL in the region in mid-August.
10-34-0 was pegged at $480-$493/mt DEL in the region last week.
U.S. Export: No new phosphate exports were done last week, so the price range remained unchanged at $496/mt FOB, but it would probably take a price of $500-$505/mt or better to get anything out of this country.
The Fertilizer Institute (TFI) issued its export phosphate report for July. Hardly a surprise, but hungry India came out on top and accounted for the vast majority of U.S. DAP exports – 493,966 mt of the total of 595,361 mt exported. The monthly total was an increase of 7.2 percent over the same period a year ago. Brazil was in second place at 36,007 mt, followed not so closely by Colombia at 17,642 mt. For the calendar-year-to-date, India, which got a late start on buying, has received 1,367,254 mt of DAP, Mexico 173,030 mt, and Argentina 162,265 mt.
TFI said MAP exports for July were 25.1 percent higher than in 2009 at 184,490 mt. Brazil was the big buyer at 86,742 mt, followed by Argentina at 47,726 mt and Japan at 14,301 mt. For the calendar-year-to-date, Brazil topped the list at 328,994 mt, with Australia next at 221,294 mt, and Canada the third-largest MAP importer at 173,059 mt. The total of MAP exports so far this year amounted to 1,052,751 mt, an increase of 16 percent.
The international market has been looking elsewhere for cheaper phosphate supplies, as domestic demand remained relatively strong and inventories low in this country.
India: Deepak is in the market for 30,000 mt of DAP – and they are looking for DAP at sub-US$500/mt CFR.
Nagarjuna Fertilizers has contracted for 30,000 mt of DAP ex China at US$492/mt CFR India, including credit.
Domestic sources say total Indian DAP imports to date total around 8 million mt.
IFFCO will take phosphate rock on a trial basis from the newly-opened Bayovar mine in Peru, to arrive in September.
POTASH
Eastern Cornbelt: Potash was quoted in a broad range at $390-$410/st FOB, with the upper end reflecting new producer postings and the low reported for spot warehouse tons from secondary suppliers.
For the Aug. 18 through Sept. 30 order and shipping period, Agrium firmed its 60 percent red premium potash postings to $420/st rail-DEL in Indiana, Ohio, Michigan, Wisconsin, and Illinois; and $410/st FOB Illinois warehouses at Rock Island, Granite City, Marseilles, and Calumet City; Indiana warehouses at Garrett, Seymour, and Mt. Vernon; Ohio warehouses at Washington Court House, E. Liverpool, and Toledo; and Saginaw, Mich.
Agrium also firmed its potash postings FOB Vade, Sask., to $370/st for standard and $375/st for premium potash for the same Aug. 18 through Sept. 30 period.
Western Cornbelt: Sources continued to quote the low end of the potash market at $390-$397/st FOB on a spot basis last week, but higher postings were taking effect. For the Aug. 18 through Sept. 30 order and shipping period, Agrium firmed its 60 percent red premium potash postings to $420/st rail-DEL in Iowa, Nebraska, Missouri, Minnesota, the Dakotas, Colorado, Kansas, and Oklahoma; and $410/st FOB Dubuque, Iowa, Shakopee, Minn., New Madrid, Mo., Homestead, Neb., and Colfax and Grand Forks, N.D.
California: Potash was quoted at $430-$440/st DEL in the state, up $15/st from last report. Potassium nitrate remained at $929-$996/st FOB, with the low for bulk tons and the upper end for bagged product. Sulfate of potash (SOP) was quoted at $600-$630/st FOB after discounts for orders of bulk fill tons placed by Nov. 16 and shipped by the end of November.
Pacific Northwest: Potash pricing had reportedly firmed to $425-$445/st DEL for new orders, depending on grade, supplier, and location. For the Aug. 18 to Sept. 30 order and shipping period, Agrium’s 60 percent red premium potash postings firmed to $420/st FOB and $430/st rail-DEL in southern Idaho, Utah, and Oregon’s Malheur County; $425/st FOB and $435/st rail-DEL in Washington, the Idaho panhandle, and Oregon excluding Malheur County and the Willamette Valley; and $430/st FOB and $440/st rail-DEL in Oregon’s Willamette Valley.
Western Canada: Potash was firming in the region. Early in the week, the market was quoted at $397-$406/mt FOB Saskatchewan mines to Canadian customers, depending on grade, producer, and location. Out of Western Canada warehouses, the market remained at $412-$437/mt FOB, with the lower numbers reported in Manitoba for 60 percent red potash and the upper end for 62 percent white granular tons FOB Calgary, Alberta.
As of Aug. 18, however, sources said the market had firmed to $420-$429/mt FOB Saskatchewan mines, with warehouses ranging from $435-$460/mt FOB, depending on grade and location.
Eastern U.S.: For the Aug. 18 through Sept. 30 order and shipping period, Agrium firmed its 60 percent red premium potash postings to $425/st rail-DEL in Alabama, Georgia, Florida, the Carolinas, Kentucky, Tennessee, Virginia, Delaware, Maryland, Pennsylvania, West Virginia, New York, New Jersey, Massachusetts, Connecticut, Rhode Island, Vermont, New Hampshire, and Maine. Agrium’s warehouse postings for that period moved to $417/st FOB Lynchburg, Va., and Wilmington, N.D., and $420/st FOB Mulberry, Fla., and Georgia locations at Americus, Bainbridge, Savannah, and Tifton.
NPK
India: Deepak is in the market for 30,000 mt of NPK 10-26-26 and 12-32-16 for Aug/Sept shipment for the West Coast of India.
RCF has tendered for 475,000 mt for various grades of NPK/NP. The tender closes Aug. 25.
MMTC has issued a tender for 60,000 mt of NP 20.20.0+13S and 35,000 mt of NPK 12.32.16 for Sept/Oct arrival.
SULFUR
Tampa: Refinery rates increased by 1.9 percent, from 88.1 percent to 90 percent for the week ending Aug. 13, according to the U.S. Department of Energy. That should help bolster supplies, but at least one source said it was difficult to find additional supply outside of existing contracts.
With Agrifos shutting down operations in the Houston area around the end of the first quarter of next year and Mosaic planning to shutter its South Fort Meade facility due to problems from a federal court in obtaining a contested Army Corps of Engineer permit, less sulfur will be needed in coming months. Mosaic could lose about 1 million st/y of phosphate production from South Fort Meade, and Agrifos produces about 600,000 st/y. That should eliminate the need for around 650,000 lt/y of sulfur.
The international sulfur market was improving last week, and recent agreements in China resulted in a price of $165/mt DEL. However, a portion of that may be due to rising freight rates, which took a big jump last week.
Vancouver: The two sulfur wharves at Vancouver will both be shutting down for two-week periods within the next month. PCT will be able to receive but not ship for two weeks, and when it restarts, Vancouver Wharves will neither be able to receive nor ship for the following two weeks.
MARKET NOTES
Pakistan: Pakistan’s largest urea manufacturer, Fauji Fertilizer Co. Ltd. (FFCL), has announced that it will acquire a 79.85 percent share of Agritech Limited (AGL), which owns two fertilizer plants – Pak American Fertilizer (PAF) and Hazara Phosphate Fertilizer (HPF).
The PAF manufacturing facility is located in Mianwali (Punjab) and can produce 352,000 mt/y of urea, while HPF is located in Haripur (NWFP) and can produce 130,000 mt/y of SSP.
Agri Tech had already instituted modernization programs at both plants, which will result in capacity enhancements of 37 percent and 25 percent for urea and SSP, respectively, to 483,000 mt/y and 162,000 mt/y. Completion of the expansion is expected by the end of the calendar year.
Toronto-Allana Potash Corp. reports that it engaged Tesla-IMC International Ltd. to complete a down-hole and surface 2D seismic survey over the potash basin on its Ethiopian Potash Project. The seismic 2D survey covers approximately 45 km over four lines, focused on the center part of the basin. In addition, Vertical Seismic Profiling (VSP) will be completed on selected drill holes to identify the seismic signature of the potash horizons. Tesla-IMC is a multinational geophysical company based in the United Kingdom and Calgary, specializing in seismic acquisition and interpretation for oil and gas companies and potash companies. Significant potash clients include Cleveland Potash, Iberpotash, Rio Tinto, and Vale Exploration. Tesla-IMC currently has all necessary equipment in Ethiopia and has completed seismic surveys for a multinational oil and gas company in the southern part of the country.
Moscow-Speculation continues to grow that there will be a major merger within Russia’s fertilizer industry, particularly potash. Anatoly Skurov, owner of coal producer Sibuglement, has reportedly acquired 20 percent of potash producer Silvinit, according to The Moscow Times, and State Duma Deputy Zelimkhan Mustsoyev has acquired 22 percent. Also last week, Silvinit appointed former Uralkali head Vladislav Baumgertner as interim CEO. Analysts saw this move as further evidence that a Uralkali/Silvinit merger is afoot. A group led by billionaire Suleiman Kerimov bought 53 percent of potash producer Uralkali in June.
Albany-New York is banning phosphorus in lawn fertilizer starting Jan. 1, 2012, and is phasing in a ban on phosphorus in dishwasher detergent after the legislative measure was signed last month by Gov. David Patterson. Phosphorus fertilizer will be allowed only to establish a new lawn or if tests show that the lawn does not contain enough of the nutrient. It will also be prohibited on impervious surfaces. Application will be banned within 20 feet of any surface water except where there is a vegetative buffer of at least 10 feet or where the fertilizer is applied by a device with a spreader guard, deflector shield, or drop spreader at least three feet from surface water. No application will be allowed between Dec. 1 and April 1. The provision does not apply to use by agriculture or for gardens. Retailers are being allowed to sell their inventory of phosphorus detergent in stock as of Aug. 14 until Oct. 13. Sixteen states have enacted a law that requires phosphorus-free household detergents starting July 1, 2010 – Illinois, Indiana, Maryland, Massachusetts, Michigan, Minnesota, Montana, New Hampshire, Ohio, Oregon, Pennsylvania, Utah, Vermont, Virginia, Washington, and Wisconsin.
Minneapolis-Cargill reported net earnings of $691 million in the fiscal 2010 fourth quarter ended May 31, compared with $327 million in the same period a year ago. Excluding earnings from its majority investment in The Mosaic Co., Cargill’s fourth-quarter earnings rose 87 percent, to $433 million. Fourth-quarter revenues were $28.1 billion, an 11 percent increase from $25.4 billion in the year-ago period. For the full fiscal year, Cargill earned $2.6 billion, a 22 percent decrease from $3.33 billion in the prior year. Excluding Mosaic, Cargill’s earnings rose 14 percent, to $2.07 billion. Full-year revenues were $107.9 billion, compared with $115.1 billion a year ago. Cash flow from operations was $4.6 billion, compared with last year’s $6.7 billion. All five of Cargill’s business segments recorded increased earnings in the fourth quarter. Three of the five segments posted improved results in the full year. Cargill said the agriculture services segment, which provides crop and livestock producers with farm services and products, was up significantly in the fourth-quarter and full-year periods. Results were lifted by the late, large North American harvest and by improved costs and volumes in global animal nutrition products and services. Industrial earnings rose considerably in the fourth quarter due to increased results from Cargill’s majority investment in Mosaic; full-year earnings from the Mosaic investment remained below the year-ago level. The rest of the segment posted improved results in fiscal 2010.
Indianapolis-Environmental and natural resources investigators who have been looking into a fish kill in Randolph County that has exceeded 100,000 for nearly two months still aren’t explaining what happened or who is responsible. “We really can’t say much about it until the investigation is complete,” Barry Sneed, Indiana Department of Environmental Management (IDEM) spokesman, told Green Markets. “Sometimes it’s from natural occurrences; other times it’s from some other source.” In a brief email followup, Sneed explained that the first report of dead fish in the Mississinewa River came into the IDEM spill line on Sunday, June 20. “The broad area that we are looking at is in Bear Creek in Randolph County to the Mississinewa to the complainant’s location roughly 11 miles downstream, almost to Delaware County. Because of heavy rains at the time of the call, it is difficult to condense the area of investigation,” the statement explained. “The source or sources and cause or causes of the fish kill are being investigated, and whether any laws were broken.” Phil Bloom, spokesman for the Indiana Department of Natural Resources, confirmed that the number of dead fish was 106,605, while declining to talk about a cause or reports that a 21-mile stretch of Mississinewa River had been affected. But members of Indiana Concentrated Animal Feeding Operations (CAFO) Watch didn’t hesitate to name as a prime suspect a large animal feeding operation in Randolph County, where the organization claims 4,000 swine generate over 200,000 cubic feet of manure annually. Others are saying that liquid nitrogen fertilizer applied by corn farmers could have been washed into the river by an unexpected heavy rainfall.
Mining giant BHP Billiton Ltd. has offered to buy PotashCorp for $130 per share, or $40 billion. The widely-anticipated move was initially made to PotashCorp President and CEO William Doyle Aug. 12, and followed up with by a letter to PotashCorp Chairman of the Board Dallas Howe Jr. on Aug. 13. On Aug. 17, PotashCorp’s board soundly rejected the offer and initiated a shareholder rights program to make sure any deal was not done in haste. On Aug. 18, BHP took the offer directly to PotashCorp shareholders.
“The PotashCorp board of directors unanimously believes that the BHP Billiton proposal substantially undervalues PotashCorp and fails to reflect both the value of our premier position in a strategically vital industry and our unparalleled future growth prospects,” said Howe. “After careful consideration, and in the interest of transparency, our board determined to proactively disclose BHP Billiton’s unsolicited, non-binding proposal to our shareholders. We believe it is critical for our shareholders to be aware of this aggressive attempt to acquire their company for significantly less than its intrinsic value. The fertilizer industry is emerging from the recent global economic downturn, and we feel strongly that PotashCorp shareholders should benefit from the current and potential value of the company. We believe the BHP Billiton proposal is an opportunistic effort to transfer that value to its own shareholders.”
On Aug. 18, Melbourne-based BHP said it would take its offer directly to PotashCorp shareholders. “We firmly believe that PotashCorp shareholders will find the certainty of a cash offer, at a premium of 32 percent to the 30-trading-day period average, very attractive and we have therefore decided to make this offer directly to those shareholders,” said BHP Chairman Jacques Nasser. BHP plans to formally commence its offer by way of newspaper advertisement on Aug. 20. The offer will be open for acceptance until 11:59 p.m. (EDT) Oct. 19, 2010. BHP is seeking to buy at least 50 percent of PotashCorp shares, and ultimately 100 percent.
BHP says the offer represents an attractive premium of 20 percent to the closing price of PotashCorp’s shares on the NYSE on Aug. 11, the day prior to BHP Billiton’s first approach to PotashCorp. It is also a premium of 32 percent and 33 percent to the volume weighted average trading prices of PotashCorp’s shares on the NYSE for the 30-trading-day and the 60-trading-day periods, respectively, ended on the same date. BHP says the offer is fully funded and provides PotashCorp shareholders with immediate liquidity and certainty of value regarding the company’s growth potential in the face of volatile equity markets.
PotashCorp argued that BHP is proposing a premium of only 16 percent over PotashCorp’s Aug. 16, 2010, closing stock price and that this does not reflect the strategic importance, scarcity value, and quality of PotashCorp’s assets, or the unique opportunity PotashCorp affords to BHP Billiton or any other acquirer to move to the head of the class in the potash industry.
PotashCorp shares immediately shot past the $130 mark once the news was released Aug. 17, to close that day at $143.17 versus Aug. 16’s $112.15. Analysts jumped on the merger bandwagon and put target prices on PotashCorp of between $170-$180 per share. P.J. Juvekar of Citigroup labeled the 16 percent premium as “paltry” and called $170 a conservative target representing a 10 percent premium to PotashCorp’s replacement value. Hari Sambasivam of National Bank Financial, who targets the company at $180 per share, expects the offer to trigger a long takeover battle, with potential bids by other international mining giants such as Rio Tinto and Vale S.A. Others suggested that China might enter the fray. Jacob Bout of CIBC tabbed PotashCorp as the potash industries’ “crown jewel.” Analysts from Morgan Stanley also said $180 could make sense. Analysts also noted the potential for even more potash consolidation in light of the possible Uralkali and Silvinit combination.
Doyle told analysts Aug. 17 that the company would not speculate on a price that it might accept. On Aug. 18, BHP said it was offering the full value of PotashCorp. However, it sidestepped a question as to whether this was its best and final offer.
Doyle said BHP’s Jansen mine project, under development in Saskatchewan, has been “a smokescreen, a charade so to speak.” “We clearly saw through it, and we think now that our shareholders will see through it as well.” Doyle said Aug. 12 was the first time the company had been approached by BHP. Doyle said once the deal was offered there was no need for further negotiation, as the offer was so far beyond opportunistic that it really was not a constructive basis for negotiation. “I am saying that we are not opposed to a sale, but what I am saying is we are opposed to a steal of the company.”
BHP said the acquisition is consistent with BHP’s strategy of developing, owning, and operating a diversified portfolio of large, low-cost, long-life, expandable, export-oriented, Tier 1 assets. It said PotashCorp would provide it with an immediate leadership platform in the global fertilizer industry and further diversify BHP’s portfolio of Tier 1 assets. In addition, it said the acquisition leverages BHP’s global capability and experience in building, operating, and expanding mining operations.
BHP has different production, marketing strategy
Unlike PotashCorp, BHP indicated that it might run its potash mines full out, rather than balancing their operation due to supply and demand. “Our basic philosophy is to run our assets at full capacity and take the market prices, which effectively means that we maintain full employment throughout the cycle, also continuing our investment programs throughout the cycle,” said Marius Kloppers, BHP CEO, executive director, and chairman of the group management committee. “And we do this by always ensuring that we’ve got low cost assets on the illustrative cost curves, which means that logically they are the assets that should be run in good times and in bad times.”
Kloppers said BHP is in business for long-term returns. He said the company is willing to cope with the vagaries of market prices, and that it really does not take a near-term price view.
Would BHP exit Canpotex?
Kloppers said that it is the BHP baseline demeanor to market its own product. However, he said it would honor all commitments, and he did note that the company does have other products in its portfolio where it has arrangements with partners.
PotashCorp is responsible for over half the potash sold by the three Canpotex partners, the other two being The Mosaic Co. and Agrium Inc. Analysts and Saskatchewan officials last week expressed concern that an exit from Canpotex by PotashCorp would have a significant impact on the market. Canpotex, the export marketing arm for the three Saskatchewan producers, is the world’s largest potash exporter, normally selling 8-9 million mt/y.
Does BHP really want PotashCorp’s N & P assets?
Kloppers emphasized the funding for the deal is not contingent on selling any of the PotashCorp assets. “You can see from the price line of PotashCorp’s capital redeployment program that the growth program is primarily geared towards becoming a bigger potash producer relative to those other businesses.” However, he said BHP has very similar situations in other parts of its portfolio.
Despite Kloppers’ assurances, industry speculation last week was that BHP might at some point spin off non-potash assets, particularly nitrogen.
BHP promises strong presence in Canada
BHP said it would base its new potash business in Canada with a president and management, and would put a Canadian on the BHP board. BHP intends to continue PotashCorp’s planned and previously announced capital programs. In addition, BHP will continue to progress its plans to develop its Jansen greenfield potash project. BHP said it has invested almost $1 billion in potash exploration and acquisitions in Saskatchewan, developing its own project as well as acquiring Anglo Potash Inc. and Athabasca Potash Inc.
BHP would also commit to retaining employment levels, as well as capital and exploration programs.
BHP also said it is committed to strong community relations, and intends to bring PotashCorp’s spending commitments on community programs in line with BHP’s global commitment levels.
BHP’s policy is to spend 1 percent of Profit Before Tax, on a 3-year rolling average basis, on community programs.
In addition, BHP noted that it has had business interests in Canada for almost 40 years, the most significant of which has been EKATI in the Northwest Territories – one of the world’s premier diamond mines. BHP says it has invested approximately US$5 billion in Canada since EKATI began production in 1998.
Analysts also questioned whether the Canadian government would allow the deal, i.e., allowing an offshore company to acquire a majority stakehold in a major Canadian-based resource company.
Shareholder rights plan
PotashCorp said the plan is intended to ensure that in the context of a formal takeover bid, the board has sufficient time to explore and develop alternatives to enhance shareholder value, including competing transactions that might emerge. The board authorized the issuance of one share purchase right in respect to each common share of PotashCorp outstanding as of the close of business on Aug. 16, 2010 (and each share issued thereafter, subject to the limitations set out in the rights plan). The rights will become exercisable if a person, together with its affiliates, associates, and joint actors, acquires or announces an intention to acquire beneficial ownership of shares which, when aggregated with its current holdings, total 20 percent or more of PotashCorp’s outstanding common shares, subject to the ability of the board to defer the time at which the rights become exercisable and to waive the application of the plan.
Following the acquisition of more than 20 percent of the outstanding common shares by any person (and its affiliates, associates, and joint actors), each right held by a person other than the acquiring person (and its affiliates, associates, and joint actors) would, upon exercise, entitle the holder to purchase PotashCorp’s common shares at a substantial discount to their then-prevailing market price.
The plan permits the acquisition of control of PotashCorp through a “permitted bid,” a “competing permitted bid,” or a negotiated transaction. A permitted bid is one that, among other things, is made to all holders of shares, is open for a minimum of 90 days, and is supported by a majority of PotashCorp’s shareholders.
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.
