Maple Park, Ill.-Hintzsche Fertilizer Inc. officials say that Lee County planners need to get the idea out of their heads about Hintzsche building an anhydrous ammonia plant on Interstate 39 interchange property near Paw Paw. “They keep talking about an ammonia facility, which it isn’t,” John Hintzsche told Green Markets. “Nobody wants ammonia production in their backyard. We know this.” Still, there are those with the county board who aren’t sure about the Hintzsche plans and have put the matter off for at least another month while they consider the future of the area, which now is mostly farmland but is expected soon to see rapid commercial development. Just what kind of development is the issue, according to those who consider that industry development doesn’t fit in with the county’s long-term vision. Hintzsche – whose family-owned company is involved in agronomy and fertilizer, seed, petroleum and other businesses, with locations in Cortland, Kirkland, Minooka, Troxol, and Waterman – sees it as an ideal spot in the center of its Illinois agriculture markets. He said plans call for a retail farm center with a storage and distribution hub that could handle 15,000 tons of dry MAP, potash, urea, and other fertilizer lines.
U.S. Gulf/Tampa: No new business was reported last week to test the market. Seller price ideas are now firmly above $600/mt DEL, with reports that a vessel was sold for delivery to Tampa or other U.S. Gulf ports at $625/mt DEL.
Price ideas for barges are also up, with sources talking $580-$600/st FOB. Actual new business is yet to be confirmed.
Eastern Cornbelt: The anhydrous ammonia market was quoted at $660-$685/st FOB regional terminals. Effective Feb. 13, Agrium’s Feb. 13 anhydrous ammonia postings included $690/st FOB E. Dubuque/West, Iowa; $695/st FOB Niota and E. Dubuque/East, Ill.; $700/st FOB Meredosia and Marseilles, Ill.; and $710/st FOB Cincinnati/Finney, Ohio.
Western Cornbelt: The anhydrous ammonia market remained at $645-$670/st FOB regional terminals, with the low in Nebraska and the higher numbers in Iowa. Missouri sources quoted delivered ammonia at $640-$650/st last week from southern production points, where the FOB was placed at roughly $560-$570/st after netbacks. There were also reports of some offers surfacing for fall prepay ammonia in the $665-$680/st FOB range. One source said these offers were being driven by farmers who are trying to lock up input costs so they can forward contract their crops.
Agrium’s Feb. 13 anhydrous ammonia postings included $670/st FOB Greenwood, Neb., and Iowa terminals at Early, Garner, and Whiting, and $665/st FOB Hoag, Neb.
Northern Plains: Minnesota sources pegged the anhydrous ammonia market at $670-$680/st FOB for fairly prompt tons and up to $695/st FOB for April or May shipments. Effective Feb. 13, Agrium’s anhydrous ammonia postings moved to $670/st FOB Mankato, Minn. Dakota Gasification reposted its cash market ammonia price at $730/st DEL in North Dakota to the dealer. There were reports too of at least one supplier offering spring prepay ammonia in North Dakota at the $765/st DEL level last week, but that was not confirmed. Several suppliers also reported fielding inquiries about fall prepay ammonia.
Great Lakes: The regional anhydrous ammonia market was pegged at $685-$705/st FOB to the dealer, with the upper end quoted by Michigan dealers. Wisconsin sources reported prepay ammonia in the $700-$705/st FOB range.
Black Sea: The market seems to be taking a breather. Sources in Asia say no new business was reported out of Yuzhnyy. One observer noted that the Yuzhnyy loaders are facing almost dry tanks as demand remains unusually strong.
Earlier this month a deal at $570/mt FOB was done as a spot deal. Since then, buyers have been hesitant to approach producers. The new asking price is said to be $600/mt FOB, but with no takers. Tampa players say this would necessitate a $700/mt DEL Tampa price.
The price range has tightened, but with no reports of anything closer to the producer’s wish.
Middle East: Sources report Sabic is offering a spot cargo at $560-$570/mt FOB. Asian sources say this price reflects the Saudi producer’s expectation that Yuzhnyy will move closer to $600/mt FOB.
So far, say sources, no one has nibbled at the Sabic offer – at least at the level offered by Sabic. Reportedly, buyers from India to Korea are interested in the tons, but for now the price is too high.
Producers in the area all report full order books. At the same time, inquiries keep coming in for more material.
One source reported that one buyer has been asking its supplier to add a few extra tons – as allowed under the long-term deal – to each shipment. The producer has been forced to decline the request – also allowed under the deal ?Çô because each ton is committed well into March.
The situation in Iran is adding to the ammonia shortage. The IPCC #3 plant still has a ways to go before it begins production, say Asian sources. At the same time, a minor glitch in the #2 facility reduced output. And the #1 plant is down for maintenance.
Reports of a deal between Indian and Iranian companies are seen as a one-off arrangement that should not have any impact on the market other than to underscore the tightness of the region.
Despite Sabic’s attempt to move the price up $40/mt, sources say the basic price remains constant this week.
Asia: Malaysian production is said to be down. Sources report no reason for the reduced output. The Indonesian facilities are all operating. Sources say demand remains so strong that the Malaysian and Indonesian facilities are oversold for the next month or so.
UREA
U.S. Gulf: Urea barges continued to be under pressure. While some supplies continue to look toward the $390s/st FOB for barge sales, most last week were conceding that prices continue to erode. They explain that some sellers have simply become nervous and shed barges as the industry waits for a first round of demand. As a result, most were reporting granular barges last week between $375-$385/st FOB, with some indicating that $370/st was in sight. In the meantime, prills were called $355-$365/st FOB.
Eastern Cornbelt: Granular urea was quoted in a broad range at $450-$470/st FOB in the region, with the low out of spot river locations in Illinois and the upper end reported in Ohio to the dealer.
Western Cornbelt: Granular urea pricing continued to slide slowly. The market was generally quoted in the $440-$450/st FOB range in the region last week, with reports of pricing in the St. Louis, Mo., area at $435-$440/st FOB on the low end. Dealer pricing out of the Inola and Enid, Okla., markets remained flat at $410-$415/st FOB.
Northern Plains: Sources quoted the granular urea market at $445-$450/st FOB the Twin Cities, with reports of pricing in the $430-$440/st FOB range for May-June shipments. In North Dakota, sources continued to quote the market at $515-$525/st DEL and in tight supply.
Great Lakes: Wisconsin sources quoted granular urea at $450-$460/st FOB or DEL, depending on location. Those numbers were down considerably from last report based on softer barge pricing at the Gulf, but some sources said they expect the market to firm again when topdress movement begins on wheat. In Michigan, sources continued to quote reference prices for urea as high as $505/st FOB, but most said spot tons could be had for probably $30-$40/st under that mark.
Northeast: Granular urea pricing was down slightly from last report at $472-$485/st FOB, with the lower numbers FOB Philadelphia, Pa., and E. Liverpool, Ohio. Several sources said reference levels were still as high as $492-$497/st FOB in the region, but no sales were taking place at those levels. Prilled urea was pegged at $462/st FOB E. Liverpool.
Delivered urea was quoted as high as $490/st in New England, but one source said rail-delivered urea into the region should be at roughly $460-$470/st based on new barge pricing at the Gulf. He noted, however, that few dealers had any room for new tons until spring movement kicks into gear. He also referred to the “disconnect” between warehouse pricing and delivered pricing based on current replacement costs, adding that this out-of-balance relationship may continue until demand picks up.
Black Sea: Pressure on the producers to lower their prices apparently eased last week as buyers stepped up to cover shorts at prices similar to the week before.
Sources report a short was covered at $330/mt FOB, most likely bound for Nigeria.
Another cargo was reported sold at $320/mt FOB for Turkey.
Despite the moves, the general perception is that the market is once again headed for a slide in prices. Inventories are reportedly building in Yuzhnyy and other Black Sea ports. At the same time, demand from regular buyers is just enough to ease only some of the inventory pressure.
Reportedly, Nigeria wants to take 100,000 mt this month and early March. This level of demand should be enough to ease concerns about over supply at the ports, said one source, but not enough to push the price up.
Helping the price hold even for a while, said another observer, are reports of additional shorts for Turkey, Nigeria, and possibly Latin America. Once covered, however, there appears to be little else on the horizon.
One interesting factor that may change some of the dynamics in the area is a report that the European Community is getting ready to lift anti-dumping duties imposed on Ukrainian material. The move could make it easier for material to get into Europe in competition with Russian and Mediterranean sources.
Despite the interest for Turkey and Nigeria, sources say the price remained stable from the previous week.
Middle East: Producers are trying to get higher prices, but no one is biting. Sources report prices have remained stable. Shipments of granular continue to flow out of the area under contracts and long-term arrangements.
Some small cargoes from the area are being shopped around to buyers in Asia, said one source. Reportedly, a buyer in the Philippines is interested in some material.
The attempt to move material from the Middle East to the Philippines could mean either the seller is desperate or the buyers are.
If the former, the price will have to come down significantly. If the latter, sources wonder where the money will come from.
Reportedly, representatives from STC/India were shopping around for some contracted tons. The buyers are said to be looking for favorable prices. Asian sources said the STC folks left empty handed.
India: Reportedly, STC has been to the Middle East and China looking for commitments for India’s NPK producers.
Sources say they got a cold shoulder in the Middle East. Talks in China reportedly went much better. There were no reports of concluded deals, but, say sources, China has emerged as the most likely source for this year’s orders.
Still on the sidelines are the buyers from MMTC and IPL. Industry observers don’t expect to see them getting serious about buying for at least another four to six weeks.
Whatever the buyers do, local media reports say the national budget will take a hit.
Subsidies for urea are skyrocketing because of the increasing international price.
The subsidies, which are designed to protect the farmers from high input costs, have increased each year because of the ever-increasing cost of fertilizer. The rapid rise in prices during the past 18 months has led to ever-increasing budget deficits, say local news reports.
International traders say there is talk every year of redesigning the subsidy system, but local politics regularly intrudes. Sources report there is little chance of revising the system this year with national elections slated.
China: The country is slowly moving back into full operations as the festivities of the lunar New Year fade and as the rails and roads are cleared of the ice and snow that paralyzed the country last month.
Product is moving out of the ports at a steady pace now. Sources say all the tons committed in the Indian tenders of last year have finally been shipped. What is loading now are newer deals that are in competition with domestic demand.
Reportedly, Agrium bought a cargo of granular for the U.S. west coast.
Sources say the domestic market is just beginning to pick up. Another one or two weeks should give a better indication of what the full demand will be, said one source.
For now, prices remain stable at $350-$360/mt FOB bagged for prill and $400-405/mt FOB for granular.
Bangladesh: The country faces a shortage of urea following the suspension of urea production at the Zia factory for the last 25 days. The factory stopped production for 16 days in two phases and was expected to resume production soon. According to local media, it remained silent for eight days – from Jan. 22-30 – due to an explosion in the ammonia plant’s compressor vessel. Then, after ten days it again fell silent on Feb. 10 as its reformer tubes became overheated and went out of order. Engineers were working to get it repaired as soon as possible.
NITROGEN SOLUTIONS
U.S. Gulf: Barge prices continue to erode, with sources saying it is hard to find storage space for new shipments. Most were putting new trades within the $305-$310/st FOB ($9.53-$9.69/unit) range, with speculation the price may have dropped as low as $300/st FOB.
Eastern Cornbelt: UAN remained at $11.45-$12.00/unit FOB regional terminals for spot or prepay tons.
Western Cornbelt: UAN-32 was quoted at $11.34-$11.88/unit FOB regional terminals. Iowa sources tagged the common dealer market for UAN-32 in the $370-$380/st range ($11.56-$11.88/unit) for spot or prepay tons. Reference pricing out of Missouri River terminals remained at the $370/st mark ($11.56/unit) FOB last week.
Northern Plains: UAN remained at $11.80-$12.20/unit FOB regional terminals. The low end was quoted FOB Winona, Minn., for prompt tons, with prepay there reported at the $12.00/unit FOB level. In North Dakota, UAN-28 remained at $350/st ($12.50/unit) DEL for prompt tons within a limited shipping area.
Great Lakes: The UAN market was pegged at $12.03-$12.79/unit FOB regional terminals, with the low reported in Wisconsin for spot tons and the upper number to dealers FOB Muskegon, Mich. Other dealer postings included UAN-28 at $349/st ($12.46/unit) FOB Schoolcraft, Mich., and prepay UAN was said to be available in Wisconsin at the $12.40/unit mark FOB terminals.
Northeast: The UAN-30 market was quoted at $329-$335/st ($10.97-$11.17/unit) FOB Philadelphia and Baltimore, Md., with most sources reporting the common dealer price at the $330/st ($11.00/unit) FOB level last week. Out of terminals in upstate New York, UAN-32 remained at reference levels of $405/st ($12.66/unit) FOB before discounts. Pressure on UAN pricing internationally resulted in slightly lower vessel replacement values, with sources tagging the current vessel market in the mid-tohigh $350s/mt C&F.
AMMONIUM NITRATE
U.S. Gulf: Compared to urea and UAN barges, AN barges continue to be reported in short supply. As a result, prices remain stable within the $355-$365/st FOB range.
Western Cornbelt: Ammonium nitrate was pegged at $390-$395/st FOB in the region.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was steady at $285-$300/st FOB in the region.
Western Cornbelt: Granular ammonium sulfate remained at $285-$300/st FOB.
Northern Plains: Granular ammonium sulfate was pegged at $280/st FOB in Minnesota on the low end. Dakota Gasification raised its ammonium sulfate cash market postings to $325/st DEL in North Dakota, $330/st DEL in South Dakota and eastern Montana, $335/st DEL in northern Minnesota, and $344/st DEL in Manitoba and Saskatchewan.
Great Lakes: Granular ammonium sulfate was pegged at $292-$295/st FOB in the region, with mid-grade sulfate reported at $270-$275/st rail-DEL in central Wisconsin.
Northeast: Granular ammonium sulfate remained in tight supply in the region. Delivered pricing was pegged at the $290/st mark, but sources said the market would firm to $300-$320/st DEL on March 1, depending on supplier.
PHOSPHATES
Central Florida: It’s tough being a trader these days. Last week, a trader made a sale at the top of that week’s price range – $720/st FOB – only to see a two-day-long price sheet from CF’s $740 a day later. That price was good only on last Thursday and Friday. Meanwhile, Mosaic raised its asking price to $760/st FOB for sales and, surprisingly, got that price for a prompt shipment the same week.
Mosaic began an unofficial summer fill program, for June and July, at $760/st FOB, but was said to have limited the number of tons it will sell at that price. That makes sense. Earlier, phosphate producers made advance sales of several months at prices in the $400-plus/st FOB range, only to see prices rise a couple of hundred dollars by the time the orders were shipped. Producers were facing uncertain raw materials costs for sulfur and ammonia, and didn’t want to stick their necks out too far. Second-quarter sulfur negotiations were more than a month from starting last week, but indications were the price will probably rise between $100/st and $250/lt. That’s a wide range, and the companies need to be in a position to deal with whatever the final price will be.
According to information recently released by TFI, inventories crept up a bit last month, but overall production was down. Various sources said the reduction in phosphate production was the result of sulfur shortages. Mosaic was said to be taking extraordinary measures to obtain the yellow stuff in order to maximize production. While Florida phosphate producers have little control over sulfur and ammonia prices, they do own their own rock mines, which helps keep their profits up and makes them more competitive against offshore producers.
While export prices seesawed back up to the top, the domestic market has dominated sales for months, and with prices for all markets continuing to escalate, that situation was not likely to change.
The Central Florida DAP price range continued its upward surge last week, from $685-$720/st FOB the previous week to $720-$760/st FOB last week. Mosaic was posting an asking price for phosphates of $760/st FOB for DAP and $756/st FOB for MAP. PCS Sales’s Central Florida reference price increased to $740/st FOB from $700/st FOB, and CF’s asking price hopped up to $740/st FOB for DAP and MAP. Discounts for national accounts were no longer available. MAP supplies continued to be scarce. In Texas, Agrifos’s truck price rose to $780/st FOB and its rail price was set at $775/st FOB for DAP last week, but it was no hurry to make sales.
U.S. Gulf: Cold, icy weather was sweeping into the Midwest last week, and that didn’t exactly encourage farmers to hit the fields. In Oklahoma, a large cooperative began work preparing fields the previous week on Friday, only to have heavy rain arrive the following day and put an end to its ambition of an early start. “Some try to get an early start,” a source said. “But, as farmers say, ‘If you don’t get stuck, you’re not trying hard enough.”
Mosaic has begun an unofficial summer fill program, with a limited number of tons available at $780/st FOB. The limit was due to the uncertain prices of sulfur and ammonia, as well as the continuously rising market. Sources generally agreed that farmers in the Corn Belt will continue to make phosphate buys, while those with pasture land will likely not apply phosphates and potash due to the high costs, but will probably apply nitrogens, which were somewhat more reasonably priced. Beef prices have risen significantly and will continue to do so, but not enough to make up for the difference in fertilizers for pastures. Higher feed corn prices were pushing up the price of cattle.
While the price of NOLA DAP barges has continued rising rapidly, warehouse prices have not. Warehouses at Inola were selling DAP at about $735/st FOB, which was in the range of barges, but without adding the cost of transportation and handling costs. In the St. Louis area, warehouse prices were running around $750/st FOB and $775/st FOB for northern, upriver locations.
Mississippi Phosphates’ production problems continued last week with more troubles at one of its two sulfuric acid plants (see page 1). As a result, DAP production will continue to be limited to about 900 st/d for the time being.
Traders said last week that inquiries from customers in the upriver areas had increased, but buyers suffered sticker shock when they learned of current prices and were holding off. By the time those barges were to arrive at the northern terminals, the cost would amount to more than $800/st. However, orders for deliveries later in March were made at $755-$780/st FOB last week.
Early last week a NOLA DAP barge buy was made at $710/st FOB, which set the low for the week’s NOLA DAP barge price range; the top price found was $750/st FOB for a floater.
Eastern Cornbelt: The rapidly firming phosphate market dominated conversation last week, and more sources were talking of possible cutbacks in usage this spring. While some sources said warehouse pricing was still available on a spot basis for as low as $775-$785/st FOB, others said DAP and MAP had firmed to $800/st FOB or more, with reports of new reference prices as high as $813/st FOB Maumee, Ohio. One Illinois source said he also fielded some quotes for summer fill DAP at the $800/st DEL level last week.
10-34-0 remained in very tight supply, with most sources saying product was unavailable in the region either for spot or forward sales.
Western Cornbelt: The continually firming phosphate markets were the big topic in the region last week. A Missouri source pegged the current warehouse markets at $800/st FOB for DAP and $815/st FOB for MAP, with reports of some locations referenced as high as $830/st FOB for MAP. At the low end of the range, sources continued to talk of $750-$775/st FOB available on a spot basis out of river locations early in the week, but those numbers were more difficult to find as the week advanced.
One supplier reportedly pulled its prices last week and was planning to repost the following week at the $800/st FOB mark or higher from its previous level of $750/st FOB Midwest warehouses.
10-34-0 was basically unavailable and “completely oversold,” according to several sources last week. Those who did report hearing of spot sales or offers talked of pricing in the $580-$625/st FOB range in the region, though these numbers were greeted with skepticism from other contacts and actual business was not confirmed. “If they keep delaying acid cars, we’re all in deep do-do for spring,” said one source.
Northern Plains: The DAP and MAP market had firmed dramatically from last report. Minnesota sources tagged the warehouse market firm at the $780/st FOB mark last week for the near term, with reports of pricing working its way to the $800/st FOB mark for May shipments forward. Sources also relayed reports of pricing already being offered for summer or fall fill tons.
North Dakota dealers tagged delivered MAP at $800-$810/st from Central Florida for spring tons. There was some talk of delivered MAP from western U.S. shipping points available in the Dakotas for as low as $735/st DEL, but it was unclear if that number was still doable last week.
10-34-0 remained in extremely tight supply, with most sources saying product was simply not available. One Minnesota source, when pressed, said limited spot tons could possibly be found at the $625/st FOB level last week, but that was a guess.
Effective Feb. 1, Agrium’s phosphoric acid postings jumped to $940/st rail-DEL for both super phosphoric acid (SPA) and merchant grade acid (MGA) in Minnesota and the Dakotas. Additional per-month increases of $10/st are slated for both products in March, April, and May
Great Lakes: Phosphate pricing was up dramatically from last report. Sources quoted the DAP and MAP markets at $785-$818/st FOB regional warehouses, with the low reported in southern Wisconsin and the upper number reflecting new dealer reference pricing FOB Webberville, Mich. One Wisconsin source reported a $795-$800/st truck-DEL price last week, with reports of summer fill program tons being offered in the $800-$825/st DEL range. A Michigan dealer said these drastically higher numbers will “stifle demand” in his trade area, and he expects growers to look to manure as a possible substitute this spring.
No current market was reported for TSP or 10-34-0 in the region last week, with 10-34-0 supplies reportedly tapped out or spoken for both on a spot and forward basis.
Northeast: The DAP and MAP markets were up significantly from last report, at $738-$758/st FOB regional warehouses. Some were doubtful of the lower numbers as the week advanced, and said still higher prices were around the corner based on current Central Florida pricing. 10-34-0 remained in very tight supply, with numerous reports that tons were not being offered for spot or prepay sales in the region.
The rapid upswing in phosphate pricing, coupled with tight supplies and high prices for potash, had some sources talking of cutbacks in spring usage. One source said farmers in his location are turning heavily to manure applications this spring as an alternative.
Western U.S.: Simplot announced a $70/st increase for DAP and MAP pricing in the Western U.S. The company’s new postings for Idaho and Utah include MAP at $815/st DEL and DAP at $830/st DEL. In the Washington and Oregon market, MAP pricing is moving to $820/st DEL, with DAP at $835/st DEL. California pricing moved to $825/st DEL for MAP and $840/st DEL for DAP.
Simplot’s new 16-20-0 postings include $485/st DEL in Washington, Oregon, Idaho, and Utah, up $30/st from the previous level. The California 16-20-0 price is firming $32/st to $485/st FOB Lathrop. Simplot also announced increases for 0-45-0, with new postings at $610/st FOB Pocatello, Idaho, $625/st FOB Hedges, Wash., and $655/st FOB warehouses or rail-DEL in California.
U.S. Export: Last week, PhosChem made a sale of 36,000 mt of DAP/MAP into Brazil at a new record price, ho-hum, of $850/mt FOB, which continued to give the export market a higher value than the domestic.
Also last week, India issued a tender seeking 585,000 mt of DAP, but it appeared unlikely the entire need could be filled, considering the worldwide phosphate shortage.
After dragging out the process, China announced it was increasing its export tariff from 20 percent to 35 percent in order to maintain domestic supplies. That move will continue to push the export market upward.
Last week the export DAP price range moved from $785-$800/mt FOB to a flat $850/mt FOB. Expect prices to be higher this week, if new sales are made.
POTASH
Eastern Cornbelt: Potash remained firm at $525-$550/st FOB regional warehouses for limited brokered tons.
Western Cornbelt: Potash pricing continued to firm. Most sources tagged the warehouse market at $525-$530/st FOB for brokered tons last week, with several suppliers either already referenced at or planning to move soon to the $550/st FOB mark.
Northern Plains: Minnesota sources pegged the potash warehouse market firmly at the $525/st FOB level for limited brokered tons last week. A North Dakota source talked of delivered pricing in the $440-$450/st level based on current mine prices, but strict allocations applied.
Potash pricing FOB Saskatchewan for March shipments forward include standard grade at $382/st, granular at $387/st, and soluble and white granular at $392/st. Agrium’s potash postings for March 1 shipments forward include red premium potash at $385/st and standard at $380/st FOB Vade, Sask.
Great Lakes: Potash was commonly quoted at $525/st FOB regional warehouses for brokered tons, with some sources reporting spot tons as high as $540/st FOB last week. Producer postings were largely irrelevant due to no availability, according to sources. As one Wisconsin source said, the real issue at present is availability.
Agrium’s red premium potash postings for March 1 forward include $413/st rail-DEL in Wisconsin and $417/st rail-DEL in Michigan. Warehouse postings for that shipping period include $422/st FOB Saginaw, Mich.
Northeast: Potash remained in very tight supply, and previously ordered fill tons are taking their time to ship. One source said his supplier told him not to expect any March railcars, and that it didn’t look much better for April or May. Other sources said “current” prices are largely meaningless from producers, as they are not a true indication of what the market will be at time of delivery – whenever that is. One said postings are currently at $427/st DEL, but added that securing any tonnage at that level is “impossible.” He said the operative phrase for the potash market now is “call for availability.”
As a result, the best guesses from sources on “true” replacement costs for potash generally fell in the $500-$600/st DEL range. “We’re talking about a big, big number for potash, over and above the prices (producers) are talking about,” said one source.
Agrium’s red premium potash postings for March 1 forward include $442/st FOB Lewistown, Pa., and $437/st rail-DEL in the Northeast.
Potassium Sulfate: K+S North America reports that it will raise SOP prices by $80/st U.S. ton on all grades, effective March 3. K+S cited continued potash market pressures and production/transportation cost escalation.
SULFUR
Tampa: Sulfur supplies remained short, as expected, again last week, and there was no relief in sight. Sources said blocked sulfur was being moved from areas of Canada as far north as northern Alberta and the Northwest Territories to Galveston for remelting and shipment to Tampa, which was an indication of how serious the situation was. Although negotiations for second-quarter sulfur contract prices were more than a month away from starting last week, speculation held the increase would be between $100/lt and $250/lt, and would probably settle around $400/lt for the next quarter.
At Sweeny, Texas, a ConocoPhillips sulfur recovery unit suffered a leak, although two other sulfur trains were still operating at the approximately 250,000 barrel/d refinery.
At Tyler, Texas, Delek Refining had a release of 2,800 pounds of sulfur dioxide during a switchover between strippers. The incident was said not to be serious. The plant’s safety system switched the gas to a flare. No complaints from the public were reported.
Valero’s Delaware City refinery suffered a power outage, which resulted in acidic gases being transferred to safety incinerators five times during the previous weekend. The facility had not returned to full production as of late last week.
MARKET NOTES
Russia: Russian fertilizer producers, fearing proposed export tariffs, are taking action to freeze or lower domestic fertilizer prices, according to The Moscow Times. Reportedly, producers have agreed to freeze or lower prices by up to 5.6 percent through June 1. The government is expected to make a decision soon on tariffs, which producers fear will hamper competition.
Warsaw: The new Polish government of Donald Tusk decided to privatize two leading fertilizer plants: pre-war Tarnow and Kozle-Ketrzyn. In the past, German firms wanted to buy both plants and offered several millions dollars for modernization and new products, but the former government of Jaroslaw Kaczynski blocked the sale as a “sellout of national property.”
The Polish Gas and Naphtha Co., which delivers gas to plants, will remain in government hands.
Bergen, Norway: Odfjell, the transportation company, said it has cancelled contracts in Russia for new vessels. It explains that in 2004 it placed contracts with the large Russian Sevmash shipyard, located near Archangelsk, for up to twelve 45,000 tdw IMO type II coated product/chemical carriers. The initial fixed total contract price for all twelve vessels was approximately US $500 million, later increased to $544 million. Following serious delays in the construction process, combined with demands for further price increases from the yard, continuous cooperation problems, as well as protracted negotiations, Odfjell said it has decided to serve formal notice of cancellation to Sevmash. It said the installments already paid are covered by standard refund guarantees from international banks. Odfjell will further claim full compensation for its costs and losses caused, on account of misconduct and massive contract breaches. Unless the matter is solved amicably between the parties, the issue will be solved by arbitration in Sweden, as provided for in the contract.
William F. (Billy) Willard, co-owner of Willard Agri-Service in Frederick, Md., has been named to EPA’s first-ever Farm, Ranch and Rural Communities Advisory Committee. As a member of the committee, Willard will advise EPA Administrator Stephen L. Johnson on environmental policy issues impacting farms, ranches and rural communities. Willard is a member of The Fertilizer Institute’s Board of Directors, and was nominated by TFI for service on the committee. He was selected from a group of more than 200 applicants for the 30-member committee.
TFI said Willard Agri-Service has developed innovative systems for monitoring nutrient use efficiency while minimizing runoff, including its HighQ propriety software program, which the company is currently expanding into the Midwest. In 2003, Willard Agri-Service was awarded the Environmental Respect National Award for its environmental stewardship.
“Billy Willard is uniquely qualified to bring an agricultural retailers’ perspective to EPA’s advisory committee,” said TFI President Ford B. West. “With more than 30 years of professional experience, Billy knows about the vital link retailers play in bringing cutting-edge tools of environmental stewardship to the nation’s farmers.”
TFI said the EPA committee will initially focus on how EPA’s policies and regulations on climate change and renewable energy will affect the agriculture community, and on the development of a constructive approach to advancing sustainable agriculture, protecting the environment, and addressing communication between environmental and agricultural interests. “We are pleased that EPA has recognized the fertilizer industry’s active role in environmental stewardship,” said West. “As a supporter of farmers’ use of the right fertilizer product in the right place at the right time and in the right rate, Billy Willard will make an excellent addition to the EPA committee.”
Indianapolis-Tests have found no fertilizer or other contamination in 33 private wells following a 35-car railroad derailment here on Jan. 6, according to health department and CSX announcements. Officials with both the county and the railroad said the well tests were conducted as a precautionary measure because of concerns expressed by nearby residents and the chance that some of thousands of gallons of lubricating oil, soybean oil, diesel fuel, and liquid fertilizer caused a problem flowing into a nearby stream or pond. “We were confident that we had secured all of the product (that had spilled), but felt it was prudent to do the check because of the number of active wells in the nearby community,” CSX spokesman Garrick Frances told Green Markets. He said CSX worked with the Marion County Health Dept., where spokesman John Althardt added, “Although we did not anticipate finding any water well contamination, we conducted the tests to reassure local residents as to the condition of their water and to establish a baseline for follow-testing that will take place later in the year.” He said samples were taken by the department and CSX and independently analyzed. The derailment occurred when 112 cars in the CSX yard were accidentally released and collided with a moving train. Frances said it took nearly a month to complete the cleanup, with the railcars being removed and 22,000 gallons of lubricating oil, 30,000 gallons of soybean oil, 19,000 gallons of corn syrup, 650 gallons of diesel fuel, and between 7,000 and 10,000 gallons of liquid fertilizer cleaned up or neutralized.
Toronto-Chemtrade Logistics Income Fund and Marsulex Inc. said Feb. 13 that they have reached an out-of-court settlement of their respective claims relating to disputes that arose following Chemtrade’s acquisition of Peak Sulfur Inc. and Peak Chemical LLC in August 2005. The two companies said that the issues have been resolved amicably and on a basis acceptable to both. They did not disclose settlement details, but said it was mutually beneficial and included minor revisions to their existing commercial arrangements.
Annapolis-The landscape industry was out in force at a hearing Feb. 19 to voice strong opposition to a bill that would impose a 10 percent tax on the total cost of fertilizer applications. “The added paperwork and expense that businessmen would have to go to is totally unreasonable,” declared Vanessa Finney of the Maryland Nursery and Landscape. “They would, for every single job they do, have to calculate the cost and itemize it individually on the bill.” Called the “fertilization application environmental impact fee,” the money would be collected for the state’s water pollution control fund, to be used for storm water management in developed areas of counties and municipalities. The penalty for failing to comply could be as much as $10,000 or five years in prison, or both. The bill, HB466, received its first reading on Jan. 30 and was aired last week by the environmental matters committee. If adopted by the legislature it would become law Oct. 1 of this year. The landscape association, along with Maryland Assn. of Green Industries and the Maryland Arborists Assn., pointed out that their intention is not to oppose putting money into funding an environmental cause, but they don’t want to be singled out for this purpose. In addition, Finney noted that the Maryland Agriculture Dept. has said it would have to hire three more full-time employees just to enforce the law and collect the fees. Mark Schlossberg, president of Pro-Lawn Plus Inc., told the local press, “For landscapers, this bill as written would require them to separate out their fertilizer (bed, tree, lawn) applications and charge the customers a 10 percent tax on that portion. Can you imagine the paperwork nightmare that would be?” He urged lawn applicator companies and landscape companies that offer turf and landscape fertilization services that haven’t already to contact the House Environmental Matters Committee to oppose House Bill 466 on the grounds that well-maintained turfgrass actually protects the Chesapeake Bay from harmful runoff, and that customers “won’t put up” with another tax.
Boise-The Idaho Mining Association has agreed to withdraw a groundwater pollution bill it introduced (GM Feb. 18, p. 13) and resume negotiations in April with state officials and environmentalists to clarify the application of state regulations to mining operations. The bill, backed by phosphate mining companies such as the J.R. Simplot Co. and Monsanto, would have prevented state regulators from requiring them to restore mineral-tainted water beneath their operations to its natural condition after their open pit mines are shut down. Companies fear such rules would curb future investment. In early 2007, the Idaho Department of Environmental Quality, the mining industry, and environmentalists agreed the Idaho Groundwater Quality Plan, enacted in 1992 by the Legislature to protect aquifer quality while allowing mining activities, was vague and needed changes, but negotiations broke down. In November, IDEQ postponed talks until April 2008. The main issue centers on determining how large an area can be contaminated with pollutants such as selenium, an element naturally occurring with phosphate ore deposits in Eastern Idaho ?Çô and for how long. The Legislature had approved an exemption that allowed limited contamination below mining sites that did not affect other water users. The issue is especially important for the phosphate mining industry in Eastern Idaho, which plans to open or expand several mines soon. Without better-defined rules, that would be much more difficult. Idaho Conservation League Program Director Justin Hayes welcomed the bill’s withdrawal. A return to negotiations will enable rules to be crafted that protect groundwater and allow the mining industry to continue operating in Idaho, Hayes said.
Moline, Ill.-Deere reported a 54 percent increase in net income, to $369 million ($.83 per diluted share ) on sales of $5.2 billion for the first quarter ending Jan. 31, 2008, versus the year-ago $239 million ($.52 per share) and $4.4 billion. Deere’s commercial and consumer division, which includes input company Lesco Inc., reported a 16 percent increase in sales during the quarter, to $743 million from the year-ago $641 million, though operating profits were down to $8 million from the year-ago $38 million. Deere attributed this to higher selling, administrative, and general expenses from Lesco, partially offset by higher sales volumes. Deere sales for the division are expected to be up 8 percent for the year, including 7 percent from a full year of Lesco sales. Deere hopes that gains from new products will help it offset market weakness related to the U.S. housing slowdown and rising costs for fertilizer and other lawn maintenance supplies. Overall, Deere is upbeat, expecting a 17 percent increase in equipment for full year 2008 and a 23 percent increase in the second quarter. Deere’s net income increase for the year is $2.2 billion, and $700-$725 million for the quarter.
Belleville, Ont.-Agrico Canada Ltd. reports that construction began on a 10 mt automated fertilizer blender at the Agrico Farm Centre at Belleville, Ont., in January. Agrico said the entire facility will be reorganized to accommodate modern bagging and tote-filling equipment. “These improvements will allow us to serve our customers quickly and more efficiently,” said Barry Cooper, manager. “The renovations will be completed without any interruption to service and the plant will be fully operational to fulfill the spring fertilizer requirements of our many customers.” Agrico said the new blending system will be high speed and efficient, allowing the blending of multiple products, including additives such as Avail, Agrotain, micronutrients, and growth stimulants. It is expected the new facility will increase the speed and ease with which growers can load their products and head to the field. “We will be able to meet all demand for fertilizer products and blends this spring,” said Cooper. “As the newest, most modern facility in the area, we are confident we will be supporting our customers better than we have in the past.”
Arden Hills, Minn.-Land O’Lakes Inc. reported an 83 percent increase in net earnings for the year ending Dec. 31, 2007, to $162.1 million on sales of $8.9 billion versus 2006’s $88.7 million and $7.1 billion. LOL reported improved performances nearly across the board in all businesses. LOL’s agronomy business reported $13.6 million in pretax earnings for the year, up from $11.8 million in 2006. Those earnings were generated by LOL’s stake in Agriliance LLC. For the fourth quarter, the restructured agronomy business (in its off season) reported a pretax loss of $35.6 million versus a year-ago $16.3 million loss. Those losses include one-time losses related to Agriliance’s repositioning. LOL reported $287 million in crop protection sales through Winfield Solutions LLC for the fourth quarter since the Sept. 1 repositioning. LOL’s seed sales were up significantly for the year, to $917 million from 2006’s $756 million, while pretax earnings were up slightly, to $43.9 million versus $40.1 million. Seed corn volumes were up 35 percent, just over twice the acreage increase. Soybean seed sales were down 6 percent, while overall acreage declined 14 percent. LOL-wide, fourth-quarter net income was off, at $5.5 million on sales of $2.6 billion from the year-ago $44.5 million and $1.9 billion. The company cited reduced earnings in its dairy food section due to the impact of strong product prices on volumes and product mix.
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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.
