All Posts from February 24, 2023

Urea

Black Sea, Brazil, Eastern Cornbelt, India, Indonesia, Market Watch, Middle East, South Central, South Korea, Southeast, Southern Plains, U.S. Gulf, Urea, Western Cornbelt

US Gulf:

Most sources put NOLA urea trades in the $310-$335/st FOB range, up from the week-ago $302-$325/st FOB.

Eastern Cornbelt:

Urea prices in the Eastern Cornbelt rebounded slightly on firming NOLA barge business. Most terminals were reported at $390-$400/st FOB on the Illinois and Ohio Rivers during the week, but very little was trading. “Dealers are scared it’s not going to last,” commented one source about the bump in pricing. “Most have a layer of urea bought in the $500s.”

Western Cornbelt:

Urea prices firmed to $375-$400/st FOB in the Western Cornbelt, with the St. Louis, Mo., market quoted at the $375-$380/st FOB level at midweek.

Southern Plains:

New urea pricing at Catoosa/Inola, Okla., was quoted at $385-$410/st FOB during the week, up from $370-$390/st FOB last week. The Houston, Texas, urea market was reported at the $450/st FOB level for the latest offers.

South Central:

Urea was quoted at $385-$400/st FOB in the South Central region, with the low confirmed at Memphis, Tenn., and Convent, La., and the high at Little Rock, Ark. Kentucky sources quoted new offers out of Ohio River terminals at $390-$400/st FOB, with the low for prompt and the high for prepay.

Southeast:

Urea pricing out of port terminals in the Southeast was reportedly down to $410/st FOB, well below the previous week’s $425-$450/st FOB and the $460-$470/st FOB level confirmed earlier in February.

India:     

The long-awaited urea tender call finally came from IPL. The closing date is March 3, with the buyer calling for 1 million mt and a shipping deadline of June 1.

Industry watchers had been expecting a shipping period longer than the usual six weeks, but most were surprised by the 12-week time frame. Sources said the longer shipping window will help prevent the urea market from overheating as trading houses scramble to gather tons to offer to India, and will allow for purchase deals to be spread out over the three-month period instead of being concentrated.

Sources also noted the longer shipping time could allow for more Chinese product to play a role in the tender. Buying from China requires clearances from customs officials that have taken 2-3 month to be issued. Even with word from Beijing that the clearance process will be streamlined, the process could still require multiple weeks before the urea is cleared for export. The longer shipping period offered by IPL could make it possible for tons to be approved for shipment in May.

Besides the possibility of more Chinese product than expected, sources said the Arab Gulf producers will most likely lead the way. Producers from Indonesia, North Africa, and possibly Nigeria could also become part of the supply chain.

Sources were generally hesitant to offer predictions on where the price will end up, although one trader speculated that the recent Indonesian selling tender was a possible floor. The price in Indonesia was $349/mt FOB, leaving this trader to suggest Indian prices ranging $360-$400/mt CFR.

No matter the price, sources said the final amount will be dramatically lower than the last tender price of $573-$579/mt CFR, which closed on Nov. 14, 2022 (GM Nov. 18, 2022).

Middle East: 

Egyptian prices moved up smartly all week. Sales of small 5,000-6,000 mt lots to European buyers started the week at $387/mt FOB and ended at $395/mt. Most of the deals were done by MOPCO, but sources reported that Abu Qir also sold some small lots late in the week.

Traders said the sales all seemed to be covering shorts into Europe. Sources expect to see at least one cargo from Egypt offered in the Indian tender.

Algerian producer AOA followed Egypt’s lead with sales to European buyers at $380/mt FOB. Deals with more distant buyers, such as those in Latin America, were put in the $340s/mt FOB. AOA told those inquiring later in the week that they were sold out for March.

No new spot deals were reported in the Arab Gulf, leaving industry watchers to estimate where prices might be. Sources said that discussions widened target prices down to $330/mt FOB, and as high as $340/mt FOB. One source said the higher end was being offered by producers, with buyers pushing hard for the lower end.

Arab Gulf urea is expected to be the dominant product offered in the IPL urea tender, set to close on March 3. Sources said the tender’s long three-month shipping window could allow more participation from producers.

Sources said that weak demand from the United States, Brazil, and Australia could allow Arab Gulf producers to shift potential tonnage from those buyers to India, giving traders even more product for offers than expected.

Indonesia:     

The mid-February selling tender surprised many in the industry. One trader noted that even one day before the tender call, Indonesian sources predicted that no sales would be made until March.

The change of heart, said one trader, might have occurred after reports of reduced domestic demand circulated in the country. Even if this was the main factor, sources said the government remains hesitant to push for more exports until the very end of the current season, as the government does not want the domestic market to appear short of product in an election year.

Even with concerns for the domestic market, sources said that 1-2 cargoes of Indonesian product will most likely be offered into the Indian tender.

Brazil:

Carnival celebrations cut into the work week, leaving just a few days for trading. Even with the short week, sources reported a large upward shift in the market. Deals rumored at $360/mt CFR came on the heels of sales at $350/mt CFR. By the end of the week, new offers were reported at $370/mt CFR, but without any confirmed business at that level

Rondonopolis was reported up a few dollars as well, with sources putting the price at $550-$565/mt FOB ex-warehouse. The inland market was not yet hit with the large increase seen at the ports. Many local buyers are only getting product as they need it rather than buying too far in advance.

South Korea:

Urea imports were counted at 102,000 mt for January, down 34% from 155,000 mt imported in January 2022, Trade Data Monitor reported. China supplied 47% of the imports with 48,000 mt, followed by 26,000 mt from Qatar.

Black Sea:

Prilled urea from the Black Sea is now reported at $285-$295/mt FOB, down from $320/mt FOB a week ago.

USDA Projects Higher 2023 Corn, Wheat Acreage; Crop Prices, Farm Income Expected to Decline

Featured, News, U.S.

American farmers will plant more corn, soybeans, and wheat this spring, with Russia’s war in Ukraine keeping crop prices high and supplies tight, USDA Chief Economist Seth Meyer said at the agency’s annual Outlook Forum on Feb. 23.

Corn plantings are projected at 91 million acres, up 2.4 million acres from last year and the highest planted acreage since 2021. USDA said reduced corn exports from Ukraine and strong demand from China should boost corn exports by 275 million bushels this year, with feed and residual use up 6%.

Soybean planted acreage is estimated at 87.5 million acres, unchanged from last year, but a projected yield increase to 52 bushels/acre from last year’s 49.5 bushels/acre should boost soybean annual production in 2023.

Planted wheat acreage is projected at 49.5 million acres, up 3.8 million acres from last year due to high global prices and tight supplies, partially due to the ongoing war in Ukraine. US cotton plantings, by contrast, are expected to decline by almost 21%, dropping to 10.9 million acres in 2023.

Total planted acreage in the US in 2023 is expected to be up nearly 3% from 2022. Corn futures fell as much as 1% after the estimates were released, dropping to $6.675/bushel in Chicago. Soybean futures also fell, while wheat and cotton rose, with cotton futures moving up as much as 1.6%.

Crop prices, while still high, are projected to decline in 2023, USDA said. Corn prices are estimated to drop more than 16%, with the season-average price projected at $5.60/bushel. Soybean prices are expected to fall nearly 10%, to a season-average price of $12.90/bushel, while the season-average price for wheat is projected at $8.50/bushel, down almost 6%.

The lower crop prices will also drive farm income lower, USDA said, with 2023 net cash farm income falling nearly 23% from 2022’s record levels, and net farm income dropping approximately 18%. While down from last year, Meyer stressed that US farm income will still be strong, driven by thin global supply.

“The supplies that are available for purchase on the global market remain tight,” he said.

The estimates are USDA’s first acreage outlook for the spring season, with more definitive estimates based on thousands of farmer surveys due in the Prospective Plantings report on March 31.

UAN

Eastern Cornbelt, Market Watch, South Central, Southeast, Southern Plains, U.S. Gulf, UAN, Western Cornbelt

US Gulf:

NOLA barges continued to be called $250-$275/st ($7.81-$8.59/unit) FOB, with players firmly entrenched at each end of the range.

Eastern Cornbelt:

UAN-32 pricing in the Eastern Cornbelt continued to drop, with new offers reported at $310-$315/st ($9.69-$9.85/unit) FOB Cincinnati, Ohio, $315-$335/st ($9.84-$10.47/unit) FOB Mount Vernon, Ind., and up to $360/st ($11.25/unit) FOB Seneca, Ill.

Western Cornbelt:

UAN-32 remained under pressure in the Western Cornbelt, with new offers reported at $295-$300/st ($9.22-$9.38/unit) FOB Port Neal, Iowa, and $320-$325/st ($10.00-$10.16/unit) FOB St. Louis. In the Northern Plains, the latest spring offers FOB Winona, Minn., were quoted at $365/st ($11.41/unit), down significantly from the previous $440/st FOB level.

Southern Plains:

UAN-32 at Oklahoma production points reportedly fell to $265-$300/st ($8.28-$9.38/unit) FOB, down from $310-$330/st ($9.69-$10.00/unit) FOB, with the low confirmed at Verdigris. New offers FOB Woodward were quoted at $270-$275/st ($8.44-$8.59/unit), while rail-DEL pricing in the Texas High Plains slipped to $300-$305/st ($9.38-$9.53/unit).

South Central:

February-March UAN-32 offers were confirmed at $310-$335/st ($9.69-$10.47/unit) FOB in the South Central region, down from the prior $325-$350/st ($10.16-$10.94/unit) FOB range, with the low for truck tons in Louisiana and the high reported by Kentucky sources out of Ohio River terminals.

Southeast:

The UAN-32 market in the Southeast was quoted at $370-$400/st ($11.56-$12.50/unit) FOB port terminals in late February, with the low confirmed at Savannah, Ga., and the high at Wilmington, N.C., and Norfolk, Va. Spot pricing out of inland terminals in Georgia remained significantly higher at the $450/st ($14.06/unit) FOB level.

Turkey’s Yilport Takes Over Operations at Croatian Port Amid Petrokemija Acquisition

Croatia, News, News Briefs, Turkey

Turkey’s Yıldırım Holding AS has taken over operations at the Croatian port of Šibenik, located on the country’s Adriatic coast, north of Split, according to a Bloomberg report, citing an emailed statement from the Turkish group.

The port used to operate as Croatia’s main fertilizer port prior to the production halt early last year at the country’s sole fertilizer producer, Petrokemija d.d.

The takeover of Šibenik port is part of Yildirim’s acquisition of control of Petrokemija. The Turkish group signed an agreement with the Croatian producer’s biggest shareholder, Croatian oil and gas group ING d.d., and Croatian gas company Prvo Plinarsko Društvo last November to acquire Terra Mineralna Gnojiva company, which holds a 54.517% stake in Petrokemija (GM Nov. 18, 2022).

Yildirim Holding has been targeting a first-quarter 2023 production restart of Kutina-based Petrokemija, and aims for the operation to achieve full capacity operations of 1 million mt/y of fertilizers (GM Dec. 9, 2022). Production was halted over 10 months ago amid rising natural gas costs,

The port of Šibenik is a general cargo port, handling ships of up to 50,000 dwt. Yildirim port operations subsidiary Yilport is targeting €50 million (approximately $53 million at current exchange rates) at the port, aimed at turning it into a multi-purpose terminal, according to the report.

TSP

Eastern Cornbelt, Market Watch, South Central, Triple Superphosphate, U.S. Gulf

US Gulf:

Players noted firming TSP barge values, calling prices $525-$540/st FOB for the week, an increase from $525-$530/st FOB reported previously.

Eastern Cornbelt:

TSP was steady at $595-$610/st FOB Cincinnati in late February.

South Central:

TSP warehouse pricing was pegged at $620-$635/st FOB in the South Central region, with the low at Memphis and the high at Little Rock.

Transportation

Illinois River, Market Watch, Mississippi RIver, Ohio River, Transportation, U.S. Gulf

US Gulf:

Maintenance at Calcasieu Lock, in progress since Jan. 30, was scheduled to run through March 3. Intermittent delays at the site were reported up to 23 hours during the week.

Sources continued to expect Algiers Lock repairs to kick off before the end of February and last for roughly seven weeks. Approximately 20 days of daylight-hour shutdowns are expected during the project. Delays were noted up to 22 hours through the week, down from 32 hours reported previously.

Colorado Lock maintenance and repairs, scheduled to last through March 10, were heard to restrict lock access daily between 7:00 a.m. and 7:00 p.m. Wait times were counted up to seven hours on Feb. 21.

Navigation through the Belle Chasse Bridge was reportedly unavailable from 6:30 a.m. to 7:00 p.m. on Feb. 20 and 22 due to ongoing bridge replacement work. More daytime closures are scheduled for Feb. 24, 28, and March 2, with additional shutdowns expected in late March and April. The bridge is located at Mile 3.8 of the Algiers Canal.

Delays at Port Allen Lock were reported up to nine hours during the week, while wait times of 42 hours were observed at Industrial Lock. Brazos Lock passages were seen as high as 13 hours.

Bayou Boeuf Lock maintenance was heard to conclude on Feb. 16, capping off a period weekday navigation shutdowns.

Mississippi River:

Rising water levels were reported on the lower Mississippi River.

A Flood Warning was in effect for the Mississippi River at Vicksburg on Feb. 21-22, one week after a similar warning was posted for the Feb. 15-20 period. Levels at the site were predicted to peak at 33.5 feet on March 3-5, below the area’s 35-foot Action Stage. The NWS expected Baton Rouge levels to climb above that gauge’s 30.0-foot Action Stage on March 6-8, to at least 30.2 feet.

The primary chambers at Mel Price Lock and Chain of Rocks Lock are closed to navigation through March 31 and March 17, respectively. Transit has remained available through the secondary chambers at both locations. Corps data put Mel Price delays up to nine hours, while vessels waited up to 16 hours to transit Chain of Rocks.

Upper river locks currently closed for winter maintenance are scheduled to begin reopening to navigation on Feb. 26. Lock 24, shut since Jan. 12 for miter gate repairs, as well as Lock. 25, closed for lower guidewall cribbing, are due to reopen first. Mel Price Lock is slated to be the last to return to service, on March 31. Barges loading from NOLA for destinations above Clinton, Iowa, were expected to be begin releasing in the last two weeks of February.

Illinois River:

Sources noted rising-water conditions on the Illinois Waterway during the week, although no navigation restrictions were reported on Feb. 22. Wickets were reported in the lowered position at both LaGrange Lock and Peoria Lock, allowing boats to pass both sites without locking. Corps data put wait times at nine hours through each location.

Delays were reported up to seven hours at Marseilles Lock during the week. Starting in June, large-scale lock repairs and maintenance will force the Illinois River to effectively close to commercial navigation for 120 days. Normal movements are expected to resume in October.

Ohio River:

High flows and dangerous drift conditions were reported on the Ohio River due to quickly rising water levels. Towing capacity for boats traveling in the southbound direction was reduced by 5-10% as a result, although the restrictions were expected to be short-lived.

The secondary chambers at Bellville Lock and Racine Lock are scheduled to return from repairs and maintenance on Feb. 26, after which Racine Lock will enter a main chamber shutdown scheduled to last through March 12. Racine Lock waits were noted up to nine hours through the week.

JT Meyers Lock floating mooring repairs are scheduled to continue through Aug. 20, with intermittent main chamber closures expected. Following the current repair shutdown, the site’s auxiliary chamber will shut Aug. 21 through Sept. 10 for miter gate repairs, after which the main chamber will shut once again from Sept. 11 to Nov. 17. Delays at the site topped out at 5.5 hours on Feb. 22.

The main chamber at Dashields Lock returned from a three-day shutdown on Feb. 18. The Hannibal Lock primary chamber closed to navigation on Feb. 20, resulting in delays up to 12 hours for the week. Work at Hannibal is scheduled to wrap up on April 7.

The main chamber at Greenup Lock is due to close March 12 through April 12 for maintenance and repairs. At Melville Lock, the auxiliary chamber is projected to shut April 17 through Aug. 4.

Corps data put Cannelton Lock waits up to 11 hours on Feb. 22. On the Tennessee River, wait times at Kentucky Lock were recorded in a wide 5-22 hour range. Boats transiting Wilson Lock were delayed up to 20 hours.

Sulfuric Acid

Brazil, Market Watch, Sulfuric Acid, U.S. Gulf

US Gulf:

While offer levels from Northwest Europe continued to translate to US Gulf import price ideas in a general $100-$110/mt CFR range, increasing inventories in Europe – combined with low demand levels from a well-supplied US market – could prompt sellers to entertain bids in the $90-$100/mt CFR range in the next round of business, players speculated.

Brazil:

Nothing new was heard on the Brazil import sulacid market, leaving price ideas unchanged in a $115-$125/mt CFR range.

Sulfur

ADNOC - Abu Dhabi, Alberta, Brazil, China, Kuwait, Market Watch, Qatar, Sulfur, Tampa, U.S. Gulf, Vancouver

Tampa:

Tampa molten sulfur contracts were pegged at $130/lt CFR for the first quarter, up $40/lt from $90/lt CFR in the prior period.

US refinery capacity moved lower for the week ending Feb. 17, the Energy Information Administration (EIA) reported, falling to 85.9%, a 0.6 percentage point decrease from 86.5% at last check. The rate trailed the year-ago 87.4% while beating the industry’s five-year average of 83.4%

Daily crude inputs were marginally lower, slipping to an average 15.010 million barrels/d, off 17,000 barrels/d from 15.027 million barrels/d posted previously.

US Gulf:

Sources called US Gulf sulfur pricing in a $120-$125/mt FOB range for the week, increasing from $115-$120/mt FOB in the prior report.

Brazil:

Brazil sulfur imports were understood to fall in a wider $135-$150/mt CFR range. The low side stemmed from the recent CMOC tender, reportedly awarded in the upper-$130s/mt CFR, while smaller cargoes were heard transacting as high as $150/mt CFR in recent trading. The market was previously called $135-$140/mt CFR.

First-quarter imports were pegged in a $172-$186/mt CFR range, with players reporting very little volume contracted for the period.

Vancouver:

Last-done at Vancouver continued to be heard at $115-$120/mt FOB, unchanged from the prior week.

Alberta:

Alberta sulfur netbacks were clocked at $15-$60/mt FOB. Both the low and high of the range were indicated to net back from molten tons contracted into the US market. Netbacks from material sold through the Vancouver export market tracked near the range’s upper end.

West Coast:

West Coast prills were indicated in line with Vancouver at $115-$120/mt FOB, unmoved from one week earlier.

Molten sulfur contracts were reported in a $125-$135/lt FOB range for first-quarter loading, above $75-$79/lt FOB in the fourth quarter.

China:

With port sulfur inventories reportedly falling to an estimated 1.5 million mt, Chinese buyers have reentered the market, sources said, supporting price levels of at least $150-$154/mt CFR. China has reportedly sought to maintain sulfur inventories of 1.5-3.0 million mt at ports in recent years.

ADNOC:

February posted prices from the Abu Dhabi National Oil Co. were called $127/mt FOB Ruwais, down $33/mt from $160/mt FOB in January.

Qatar:

Muntajat posted prices were called $124/mt FOB Ras Laffan for February lifting, down $31/mt from $155/mt FOB in the prior month. A recent selling tender issued by Muntajat was said to have been awarded at $145/mt FOB. Sources expressed surprise at the $145/mt FOB bid, citing recent price levels at Brazil and China.

Kuwait:

Kuwait will become the second-largest refiner of oil products in the Middle East by 2024, according to Dubai-based news outlet Zawya, citing a report from Fitch Solutions. The production boost, expected to top 35% in 2023, is expected to come entirely from the Al-Zour refinery project, slated to begin coming online before the end of 2023.

Al-Zour, comprised of three mini-refineries with a total 615,000 barrel/d nameplate capacity, is currently expected to reach full production levels in 2024, lifting Kuwait’s total refining capacity to about 1.5 million barrels/d, according to Bloomberg. The country produced around 800,000 barrels/d in 2022.

SOP Magnesia

Market Watch, Southeast, Southern Plains, Specialty, Sulfate of Potash Magnesia

Southern Plains:

Intrepid’s fill prices for Trio FOB Carlsbad included $360/st for standard, $395/st for granular, $405/st for premium, $410/st for OMRI standard and fine standard, and $445/st for OMRI granular for 1Q tons booked in January. A $20/st increase was slated to take effect after the January order period.

Southeast:

Granular SOP Magnesia was steady at $450/st rail-DEL in the Carolinas for the last offers.

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