All Posts from January 24, 2020

UAN

Argentina, Eastern Canada, Eastern Cornbelt, Northeast, Northern Plains, U.S. Gulf, UAN, Western Cornbelt

 U.S. Gulf:

NOLA UAN barge business continued to be quoted at $135/st($4.22/unit) FOB. While some argued that the market was stable for now, others thought the next trades could come off a bit at $125-$130/st FOB. In the meantime, players were awaiting the results of the CF tender.

 Eastern Cornbelt:

The UAN-32 market was unchanged at $160-$165/st/st ($5.00-$5.16/unit) FOB Mount Vernon, Ind., $167-$168/st ($5.22-$5.25/unit) FOB Illinois River terminals, and up to $175-$190/st ($5.47-$5.94/unit) FOB inland terminals on a spot basis. UAN-28 was reported at $147-$165/st ($5.25-$5.89/unit) FOB Cincinnati, depending on time of delivery.

A surprise UAN tender announced by CF on Jan. 20 was set to conclude on Jan. 22. The tender allowed buyers to submit bids for Q1 tons at any CF source, with official responses remaining private and expected no later than Jan. 24.

Several industry contacts said the move by CF indicates long inventory, coming as it does after several posted price drops in recent months. “I know there were a lot of customers trying to get low bids and then being upset when those bids were rejected,” commented one source at midweek. “It’s definitely not making folks happy.”

Sources were also somewhat skeptical of how many offers will be made into the tender, since much of the remaining needs are for Q2 tons. “Many customers are reluctant to show their hand (demands or price) to CF,” reasoned one industry contract. “There’s not a lot to gain other than showing what level you will buy.”

 Western Cornbelt:

The UAN-32 market was unchanged at $160-$200/st ($5.00-$6.25/unit) FOB in the Western Cornbelt, with the low reported at St. Louis and the upper end for spring prepay offers out of spot Iowa locations.

 Northern Plains:

North Dakota continued to quote the UAN-28 market at $200-$205/st ($7.14-$7.32/unit) DEL for prompt ship.

 Northeast:

The UAN-32 market was quoted at $165-$170/st ($5.16-$5.31/unit) FOB Baltimore, Md., with pricing out of terminals in upstate New York unchanged at the $219/st ($6.84/unit) FOB level.

 Eastern Canada:

The UAN-28 market was pegged at C$272-$287/mt ($9.82-$10.25/unit) FOB in the Ontario market, virtually unchanged from last report, while UAN-32 quoted at the C$310/mt ($9.69/unit) FOB mark on a spot basis, down just C$4/mt from December pricing levels.

 Argentina:

Acron Group, Moscow, said it supplied Argentina with more than 100,000 mt of liquid fertilizers last year, with those tons composed predominantly of UAN. Its first cargo of liquid fertilizers arrived in the country in May 2019.

Yara International ASA – Management Brief

Europe, Management Briefs

Yara International ASA, Oslo, said on Jan. 21 that Yves Bonte (CEO NewCo) will leave Yara to take up the combined role as CEO and Chair of the Board of Directors of Domo Chemicals, a global engineering materials company headquartered in Belgium. Bonte will begin his new role during February.

“I would like to thank Yves for his strong contribution to Yara over more than a decade,” said Yara President and CEO Tore Holsether. “Under his leadership, the industrial nitrogen businesses have delivered strong results for the company, and Yves has built a strong organization which I am confident will continue the great work in the next phase for this business.”

A process has been initiated to identify Bonte’s successor.

Bonte took on the CEO NewCo role last summer, when it was announced that Yara was looking into creating an independent public offering (IPO) for its industrial nitrogen business (GM June 28, 2019). A final conclusion for the IPO scope was expected in early 2020. As part of the evaluation process, the business units Mining Applications (TAN), Transport Reagents, and Industrial Nitrates on July 1, 2019, were organized as a separate entity. Bonte, previously Executive Vice President, New Business, took on the role as CEO of this entity, reporting to an internal Board of Directors chaired by Holsether.

Yara, IBM Seek Open Farm & Field Data Exchange

Europe, News, News Briefs, U.S.

At the World Economic Forum at Davos, Switzerland, on Jan. 23, Yara International ASA, Oslo, and IBM, Armonk, N.Y., announced plans for an Open Farm & Field Data Exchange, inviting farmer associations, industry players, academia, and NGOs from the food and agriculture industry to join a movement to develop an open data exchange that facilitates collaboration around farm and field data, with the aim of improving the efficiency, transparency, and sustainability of global food production. They noted that today, farm and field data are typically dispersed, non-compatible, and inaccessible.

The two said sharing data would allow farmers to receive higher-value services and be paid in return for sharing their data. They said use of the open data exchange platform can also make it trustful for farmers and value chain players to meet potential regulatory requirements.

However, they noted concerns that stand in the way of collaboration, such as securing the benefits of sharing data broadly while respecting data privacy for farmers and protecting proprietary information.

Yara and IBM joined forces in April 2019, announcing plans to build the world’s leading digital farming platform (GM April 26, 2019).

“It is our collective responsibility to overcome siloes and work together to bring innovation to the way we produce food,” said Terje Knutsen, Yara Executive Vice President, Sales and Marketing. “The transition towards a more sustainable food system requires data-driven customized solutions for every field and farm. Trusted data sharing is one key element where we can jointly make a difference which will benefit all, from farmers all the way to end consumers.”

“When IBM and Yara developed the first digital farming collaboration, we centered around a joint vision to make a real difference in increasing global farming yields in a sustainable way,” said Mark Foster, Senior Vice President, IBM Services and Global Business Services.

“We believe the agriculture industry needs to invest in exponential technologies such as AI, IoT, and big data to help address climate change and population growth as it threatens the world’s ability to produce enough food. Together with Yara, we are taking a major step towards transforming the global food system by inviting all food value chain players to join this collaborative movement to help feed the world more efficiently and sustainably,” Foster added.

Itafos – Management Brief

Canada, Management Briefs

Itafos, Toronto, announced on Jan. 20 that its Board of Directors has appointed Dr. Mhamed Ibnabdeljalil as CEO, effective immediately. He has been serving as interim CEO since May 16, 2019, and has also been serving as a member of the company’s Board of Directors since Dec. 31, 2016, a role he will continue.

“The Board of Directors is pleased to confirm Mhamed as permanent CEO” said Anthony Cina, interim Chairman of the Itafos Board of Directors. “Since becoming interim CEO, Mhamed has been integral in reshaping our strategy and business plan during a challenging economic cycle as the industry faces significant and continued downward pressure on global fertilizer prices. We are extremely confident that Mhamed’s extensive knowledge of and experience in the global fertilizer market makes him uniquely qualified to lead the Company and our global executive team over this next phase in the Company’s growth and success.”

Previously, Ibnabdeljalil served as the Executive Vice President and Chief Commercial Officer of OCP Group SA. He has served as a director on more than a dozen boards of fertilizer companies in Europe, India, Middle East, and the Americas.

A Unit or Two of OCP for Privatization?

Morocco, News, News Briefs

Morocco plans to divest some state assets as part of a broader push to develop a growth model for the country’s ailing economy, and according to a Bloomberg report, citing Casablanca Stock Exchange CEO Karim Hajji, speaking at a conference in Marrakesh this week, “probably a unit or two of OCP SA can be privatized.”

While two IPOs are expected on the country’s bourse this year, Hajji said it is doubtful that the state IPOs will include the Moroccan phosphates group. He did not provide any further further details in relation to OCP, and the Moroccan group had not responded to Green Markets inquiries by press time.

Hajji did not identify the potential assets for this year’s IPOs, but the target assets are speculated to be those of the Moroccan state airline Royal Air Maroc and the country’s luxury hotel La Mamounia in Marrakesh, according to the report.

The combined efforts are hoped to help raise Morocco to emerging market status within two to three years, after the country was relegated to “MSCI frontier status” in 2013 amid a liquidity squeeze and an absence of new listings, Bloomberg reported.

Anglo American Confirms Bid for Sirius

England, Featured, News, Polyhalite, Specialty

Anglo American plc, London, said on Jan. 20 it had agreed to buy Sirius Minerals plc, Scarborough, developer of the North Yorkshire polyhalite mine and processing project in northeast England, for 5.5 UK pence in cash per share. The acquisition values the entire share capital of Sirius at about £404.9 million (approximately $530 million at current exchange rates).

The per share price represents a premium of 34.1 percent to the close of 4.10 pence on Jan. 7, Anglo said in a statement. Sirius directors have recommended unanimously that Sirius shareholders vote in favor of the acquisition offer.

“We acknowledge that to many shareholders our decision as a Board to recommend this offer will have come as a shock, and we recognize the returns that this offer would represent are not what either our shareholders or the Sirius Board had previously hoped for,” said Sirius Minerals Chairman Russell Scrimshaw.

However, he said, the Sirius Board – advised by JP Morgan – considers the takeover offer from Anglo American to be “fair and reasonable,” and said the directors believe the acquisition terms are “in the best interests of Sirius shareholders as a whole.” 

Anglo American CEO Mark Cutifani said Anglo’s recommended offer “provides greater certainty for Sirius’ shareholders, employees, and wider stakeholders, while bringing the prospects for the development of this potential Tier 1 project closer to reality.”

In order to become effective, the acquisition scheme must be approved by at least 75 percent of Sirius’ shareholders.

Sirius was worth more than $2.3 billion 18 months ago, according to a Bloomberg report, before its stage 2 funding plans dried up after a $500 million bond offering failed in September (GM Sept. 20, 2019). A successful bond offering would have unlocked $2.9 billion worth of financing needed to complete the polyhalite project.

Scrimshaw said shareholders now face “a stark choice,” and if the acquisition is not approved by shareholders and does not complete, “there is a high probability that the business could be placed into administration or liquidation within weeks thereafter.”

The Chairman explained that while over the past four months following the setbacks in the bond market Sirius was successful in reducing the initial funding needs of the polyhalite project, that despite an extensive global search for a strategic investor, the company to date had not received a firm proposal for a partial project stake.

“The only viable proposal was received from Anglo American in early January, who were only interested in pursuing a 100 percent control transaction,” he said.

Anglo said the project at this stage requires “a significant amount” of further financing to develop and commission the operation.

Anglo expects in the first two years after successful completion of the acquisition, development work on the project to be broadly in line with Sirius’ revised development plan, although it said it intends to update the development timeline, “optimize mine design, and ensure appropriate integration with its own operating standards and practices.” It said development work of approximately US$300 million per annum is expected during this period and subject to the update.

Sirius and Anglo, which announced on Jan. 8 that they were in advanced talks (GM Jan. 10, p. 1), expect the acquisition scheme to be effective by March 31, 2020.

Acron Targets 20 Percent Share of Argentina’s Liquid Fertilizer Market

Argentina, News, News Briefs, Russia, UAN

Acron Group, Moscow, said it had supplied Argentina with over 100,000 mt of liquid fertilizers, predominantly UAN, last year. The group established a local distribution company, Acron Argentina SR., in 2018 for direct fertilizer sales to this South American country, and its first cargo of liquid fertilizers arrived in the country in May 2019 (GM May 24, 2019).

This first cargo comprised 20,000 mt of UAN for sale to end consumers through the group’s Argentina distribution network.

In order to expand its liquid fertilizer portfolio and complement UAN with sulfur, a key macronutrient for Argentine growers, the Russian group subsequently started supplying ammonium thiosulfate solution (ATS).

To support direct sales, it has leased storage facilities with a total capacity of about 50,000 mt in the strategically located ports of San Martín and Zárate, and hired a fertilizer sales team in the country.

Acron Vice President Overseas Dmitry Khabrat said UAN is already in great demand in Argentina’s agricultural sector, and is widely used by local growers to produce corn and wheat. But buyers had limited access to the global UAN market due to poor infrastructure, an issue, he said, the group has managed to solve.

“We use the storage facilities to maintain UAN inventories and ship supplies to growers as needed, even as little as a single truckload,” said Khabrat.

Acron is targeting a 20 percent share of the country’s liquid fertilizer market, and expects to reach that “in the near future.” The group additionally, next year, plans to start selling dry fertilizers to Argentina.

The expansion in Argentina is an important part of the Acron group’s stated strategy to expand its presence in key markets.

OCP Expands Activities in Eastern, Central Europe

Eastern Europe, Morocco, News, News Briefs

OCP SA is to launch a joint venture company in Romania in partnership with the UAE’s Al Dahra Holding LLC that aims to tap demand for fertilizer in Central and Eastern Europe, according to a Bloomberg report, citing Morocco’s Official Gazette.

Morocco’s government signed off on the investment on Jan 16.

OCP and Al Dahra, an Abu Dhabi-based multinational agribusiness company, each will contribute an equal share in the new firm’s $5 million capital and each will hold a 50 percent stake, according to Morocco World News.

The new company, set to be named South East European Fertilizer Co. (SEEFCO), aims to extend the Moroccan group’s activities to Romania, but also will use the country as a hub to expand into Central Europe and Eastern Europe.

By collaborating with Al Dahra, the investment costs for OCP will be significantly lower, and the Moroccan group will also benefit from the UAE’s company’s business book, according to the Moroccan news report.

BHP Jansen 85 Percent Complete

Australia, News, News Briefs, Potash, Saskatchewan

BHP Ltd., Melbourne, said on Jan. 21 its current investment program at the Jansen potash project in Saskatchewan was 85 percent complete, up from 84 percent in October (GM Oct. 18, 2019), and remained within the approved US$2.7 billion budget.

Ahead of an expected final investment decision on stage 1 of the project by February 2021, the mining group’s board in October approved an additional US$144 million for engineering work to support project planning and on finalizing the port solution, plus a further US$201 million in funding to further de-risk the project.

BHP, in its half-year operational review this week, reported final shaft lining work at Jansen is continuing.

Emmerson Starts EISA for Khemisset

Morocco, News, News Briefs, Potash

Junior potash developer Emmerson plc, Isle of Man, said on Jan. 20 it had started the full Environmental and Social Impact Assessment (ESIA) study for its Khemisset Potash Project under development in northern Morocco.

The ESIA will be completed in partnership with Moroccan-based firm Phénixa SARL, which Emmerson said has been integral in all environmental and social studies carried out at Khemisset to date.

Emmerson last week reported that it has finalized the feasibility study components for the connection of its Khemisset project to road networks, including design and cost components (GM Jan. 17, p.27).

The company is targeting to produce around 800,000 mt/y of potash over a minimum mine life of 20 years, with a planned mid-2022 start-up.

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.