Plymouth, Minn.—The Mosaic Co. declared a quarterly dividend of $0.275 per share on the company’s common stock. The dividend will be paid March 16, 2017, to stockholders of record as of the close of business March 2, 2017. Mosaic said there can be no assurance that the board of directors will declare future dividends.
São Paulo, Brazil—Cetesb, the São Paulo environmental enforcement agency, announced Jan. 18 an R8 million (US$2.5 million) fine against Vale Fertilizantes, a unit of Vale SA, due to a Jan. 5 fire at the Cubatão Industrial Complex Unit 2 (GM Jan. 6, p. 12).
Cetesb said the fine was due to the emission of pollutants into the atmosphere (nitrous oxide, particulate matter, and others) and the discharge of effluents, including ammonium nitrate, into the water. Cesteb said an explosion, followed by a fire at the ammonium nitrate warehouse, resulted in the production of toxic smoke and the contamination of the adjacent Mogi River. Cetesb said the fire consumed 10,000 mt of product, and the toxic smoke occurred for more than five hours. More than 150 nearby residents were evacuated.
There were no casualties, although two firefighters received minor injuries. Cetesb said that after the accident, it suspended the operating license of the ammonium nitrate unit until the area is fully recovered and rebuilt and licensed again. Vale is evaluating whether to question the size of the fine, according to a report by BNA. Cubatão is a part of Vale Fertilizantes that The Mosaic Co. does not plan to buy in its recently announced acquisition of Vale assets (GM Dec. 23, 2016).
U.S. Gulf: While prompt granular barge prices continued to run up last week, they topped out at $252-$255/st FOB and then began to retreat. The low was called $244-$245/st by late Thursday. February trades last week were reported at $257/st FOB and March $260-$262/st FOB.
Prill price ideas continued to move up and were called $240-$248/st FOB. March was reportedly quoted as high as $270/st FOB.
Eastern Cornbelt: Cornbelt sources reported some concerns about spring availability of urea, citing a significant reduction in import volumes and delays in the startup of new domestic production. As a result, urea prices were on the rise. Sources pegged the market at $285-$290/st FOB Cincinnati, Ohio, and Ottawa, Ill., with the low for prompt tons and the upper end for prepay. Out of inland terminals, the market was quoted at $290-$295/st FOB for prompt and up to $300/st FOB for prepay.
In the Great Lakes region, urea prices were quoted at $300-$325/st FOB for the week, depending on location and time of delivery, with the upper end reflecting spot pricing out of Michigan terminals.
Western Cornbelt: Granular urea was quoted at $280-$295/st FOB in the Western Cornbelt, up another $5/st from last report.
Sources pegged the St. Louis, Mo., urea market at $280-$290/st FOB for prompt bids, depending on supplier, with reports of April tons being offered at the $285/st FOB level at that location. An Iowa contact pegged the terminal market at $290-$295/st FOB for new business in late January.
Urea pricing FOB Catoosa, Okla., was reported at $280-$285/st FOB.
Northern Plains: Granular urea pricing had reportedly firmed to $285-$290/st FOB the Twin Cities, and up to $330/st FOB Carrington, N.D. Dakota sources quoted delivered urea in a broad range at $320-$350/st in late January, “depending on where it’s going and who is selling it.”
Northeast: Granular urea pricing in the Northeast was pegged at $285-$300/st FOB, up $15-$20/st from last report, with the low reported at Fairless, Penn. The East Liverpool, Ohio, urea market was quoted at $290/st FOB for prompt and $300/st FOB for prepay.
Eastern Canada: The granular urea market was quoted at $435-$465/mt FOB in Eastern Canada, depending on location, with reports of limited availability in the region.
Middle East: Even though prices are moving up in the world, a recent sale by Abu Qir in Egypt of 20,000 mt of granular product at $260-$262/mt FOB has industry watchers puzzled. This represents more than a $20/mt drop.
A $282/mt FOB deal from Algeria for a European buyer and $280/mt FOB from the Arab Gulf to Australia added to the confusion about the Egyptian deal. Industry sources are calling the Abu Qir deal an outlier that has raised more questions about how the deal was structured than about the overall health of the urea market.
There are also reports that at least one cargo that was bound for the U.S. was diverted to Brazil at the last minute. Sources said the diversion was made to take advantage of a $20/mt bonus in the sales price between the two destinations.
Sources report stockpiles by the Arab producers in the Gulf are tight. Producers are not anxious to step up production. At present, said one trader, output is balanced nicely with demand, with a slight advantage to the producers. Kicking up production would most likely soften prices at a time when many still see the market as a bit wobbly.
Sources reported the paper market out of the Arab Gulf already shows a bearish attitude on prices. The differences are so significant that one trader called the current state of the market “way out of whack” with the predictions. February granular reportedly is being discussed at $260-$265/mt FOB, March at $250-$260/mt FOB, and April in the upper $240s/mt FOB.
Even though demand has been strong from the U.S. and Australia, sources said that demand will soon ease off. Likewise, more indications are coming out of India that a tender call could be pushed back to late February. Southeast Asian buyers are holding off making large commitments until they see changes in prices.
Confirmed sales in the low-$280s/mt FOB have indicated to some buyers that a softening may be coming. Going into this week, Arab producers in the Gulf were still talking about hitting $290/mt FOB. Now, however, the emphasis seems to be on holding what gains have been made in the past 60 days.
An Iranian producer reportedly sold 60,000 mt of prills to China at $240/mt FOB. The deal reportedly involved little financing, allowing for the producer to offer a price well off the usual Persian-Arab price differential of $10-$15/mt.
China: The country is in shutdown mode as the Lunar New Year approaches this weekend. Just as the offices started to close, however, a deal for $280/mt FOB for granular product was made. Sources suggested the tonnage was heading to Australia.
The Chinese government is giving the country a week off to celebrate the Lunar New Year of the rooster. This so-called Golden Week was officially to begin today, Jan. 27. However, sources reported many people began taking time off work as early as Tuesday. International traders reported being told to call back after Feb. 6, when most people will be back at work.
It is traditional for Chinese to visit their hometown and family members during the Lunar New Year. For many in the developed coastal regions, these trips mean hours of travel on overtaxed rail and bus lines. Even the domestic airlines are already reporting overbookings and crowded airports.
Offices that process deals, shipping documents, or financial instruments are either closed or so understaffed that nothing is expected to be accomplished next week. Likewise, port-side staff, from customs agents to stevedores, will be greatly reduced. Ships with imports or exports during the next week are expected to be processed and loaded at a much slower rate than any other week of the year.
India: Sources report urea stockpiles are sitting at just under 2 million tons. This amount, said one trader, means India will not need to call a tender until late February at the earliest.
The reserves in the country were recalculated after demand dropped in December because of the demonetization policy that tossed the distribution of urea in chaos. Now that new lines of credit for farmers have been established and sales have resumed, the domestic industry has taken a hard look at actual urea needs. As a result of that hard look, sources said the national demand level is lower than earlier predicted.
A tender call in late February would also allow the industry to know more about the government spending intentions for urea for the next fiscal year, beginning April 1. Usually by late February or early March most of the numbers in the budget are firmed up, with only a few tweaks taking place before the new fiscal year starts.
Pakistan: The government is going ahead with its plan to export up to 300,000 mt of urea by the end of April.
The move has been under discussion for almost six months. Once the final decision was made earlier this month, a government panel got busy setting up the details of how the exports will take place.
Two private-sector urea producers – Fauji and Engro – will handle the exports. The official trading house – TCP – had been lobbying that it should handle the exports because it handles all imports. In the end, the government went with the producers.
The move to export came because offtake was not as great as anticipated. The country imported material as well as increased domestic production. Currently, the country has a surplus of more than 1 million tons. Many of those tons are imported product, which do not receive subsidy support from the government, making them more difficult to sell against the domestic urea.
The government subsidizes domestic urea to the tune of Rs4,000/mt (US$38/mt) against a fixed price of US$228-$229/mt.
The State Bank of Pakistan will monitor the exports under a plan similar to the way it monitors sugar exports. At the same time, the Fertilizer Review Committee will keep tabs on the domestic urea price in case a spike in pricing occurs. If prices move up too rapidly, the committee has the authority to stop the exports.
The most likely market for the urea is India. Sources said the logistics of shipping material from Pakistan to India are simple, even though bulk loading time is a bit slower than that of other routine urea providers and spillage rates are a bit higher. However, politics may also play a part in any Pakistan-India deal. The animosity between the two governments dates to their founding almost 70 years ago. However, one trader noted that if the price is right, Indian buyers will most likely be willing to forego any political squabbles.
Pakistan’s prime minister’s office also reversed an earlier announcement that subsidies for urea would not be paid for the rest of the fiscal year. The initial pronouncement said the end in subsidy payments occurred because the budgeted funds for subsidies ran dry before the fiscal year ended. The latest announcement assured farmers they would still be able to receive subsidized urea throughout the year.
President Trump wasted little time in taking on the Environmental Protection Agency (EPA) during his first week in office, including targeting the contentious Waters of the United States (WOTUS) rule that has drawn the ire of the fertilizer and agriculture industries.
WOTUS was promulgated by EPA and the U.S. Army Corps of Engineers in 2015 to more broadly define the scope of surface waters covered by the Clean Water Act. In one of his first acts as president within minutes of taking the oath of office, Trump’s team updated the White House website to provide policy specifics for his “America First Energy Plan,” including eliminating WOTUS and the Obama administration’s Climate Action Plan.
“For too long, we’ve been held back by burdensome regulations on our energy industry,” the administration said. “President Trump is committed to eliminating harmful and unnecessary policies such as the Climate Action Plan and the Waters of the U.S. rule. Lifting these restrictions will greatly help American workers, increasing wages by more than $30 billion over the next 7 years.”
Trump also said he would “revive America’s coal industry,” and focus the nation’s energy policy on the “vast untapped domestic energy reserves right here in America,” including “embrac(ing) the shale oil and gas revolution.” The policy directive said the Trump administration “will refocus the EPA on its essential mission of protecting our air and water.”
It was unclear what specific action the administration would take to address WOTUS, as the rule is currently locked in a legal battle involving 13 states who have sued over the rule in the U.S. District Court for the District of North Dakota. The Sixth Circuit Court of Appeals issued a national stay on the rule in October 2015, and the U.S. Supreme Court on Jan. 13, 2017, agreed to resolve the issue of which federal court should hear challenges to WOTUS.
“Continuing with costly and burdensome briefing and appendix preparation while the Supreme Court considers whether this court has jurisdiction over the petitions is especially unnecessary in light of the new administration’s repeated promises to reconsider the WOTUS rule,” the plaintiffs in the case, the Sixth Circuit Court, said in a court motion filed on Jan. 23. “The new administration’s statements raise the possibility that, even assuming the Supreme Court holds that this court has jurisdiction, this court will never need to address the current rule in the current procedural posture.”
Trump also signed executive orders on Jan. 24 to revive the Dakota Access and Keystone XL oil pipelines, and to expedite environmental reviews of other infrastructure projects. Policy experts were uncertain what impact these orders would have, however, as many of the environmental reviews are statutory and cannot be overturned by executive order. And, as with the WOTUS rule, the pipeline projects are currently embroiled in legal fights.
Trump said his order for the Keystone XL pipeline project essentially invites the company to re-submit its application, and that both pipeline projects would be subject to renegotiation.
In another action targeting EPA, the Trump administration placed a gag order on the agency, barring its staff from awarding contracts or grants and also preventing EPA staffers from issuing news releases, blog updates, or posts to EPA’s social media accounts. In addition, the administration has ordered a “temporary suspension” of all new business activities at EPA, including issuing task orders or work assignments to EPA contractors.
And on Jan. 26, Myron Ebell, the former head of Trump’s transition team at EPA, told the Associated Press that Trump may cut $1 billion from EPA’s $8 billion annual budget, and seek to make significant cuts to EPA’s 15,000-member nationwide workforce.
EPA was not the only federal agency in the new administration’s crosshairs. Trump on Jan. 24 issued an executive order imposing a hiring freeze on the federal workforce, excluding military personnel. Trump also ordered the USDA to refrain from making policy-related statements to the press or members of Congress unless approved by the agriculture secretary, the Office of the General Counsel sub-cabinet office, and the Office of Budget and Program Analysis.
The order also requires USDA staff to get explicit permission for a range of other activities, including audit responses, ongoing litigation, advisory committees, contract awards, correspondence, and agreements with other federal agencies.
The Turkish government has lifted the ban on domestic sales of 26 percent calcium nitrate fertilizers (CAN) and potassium nitrate. However, the sale and transfer of CAN fertilizers will be subject to controls.
The ban on the use of agricultural 33 percent ammonium nitrate (AN) in the country is to be permanent, a move that has surprised few due to Turkey’s security concerns. Ministry of Agriculture approval will be required for the sale and transfer of non-agricultural use of 33 percent AN, according to a Bloomberg report, citing a ministry decree.
It was known last week that the government had lifted the ban on domestic sales and transfer of CAN, but an official decree was issued only this week. One Turkish producer told Green Markets the company had recommenced deliveries of CAN by truck late on Jan 25.
Turkey’s government imposed a temporary ban on the sale of AN and CAN and other fertilizer nitrates on June 8, following a series of terrorist attacks in the country (GM June 10, 2016). Turkey’s annual market for CAN and AN is not insignificant. The country’s apparent consumption of CAN and AN in 2015 was around 630,000 mt and 1 million mt, respectively, according to IFA data. In addition to sizeable domestic output, Turkey in 2015 imported 171,000 mt of CAN and 363,000 mt of AN, according to IFA figures. Exports of CAN have continued to be allowed since last June’s ban on domestic sales. Turkey exported about 66,000 mt of CAN in 2015, according to IFA data.
According to the producer source, the sale and movement of CAN (like domestic sales of AN previously) now will be subject to a tracking system, and distributors and dealers will not be able to buy or sell CAN unless they are registered. Farmers also will need to be registered to buy CAN fertilizers. In addition, it is understood that farmers will need to secure receipts from the regional Ministry of Agriculture offices, who will verify that their proposed CAN purchases match their requirements. Sources fear that the receipting system may prove to be unworkable. Sources said the receipting process is seen as less of a problem for the country’s agricultural cooperatives, as they can draw on in-house staff.
Turkey’s potassium nitrate requirements are relatively small, and are largely met by imports.
U.S. Gulf: Shippers reported improved visibility in the U.S. Gulf shipping region after recurring fog delays were suffered in recent weeks. Some forecasts suggested continued patchy fog, but nothing on the order of the “white out” described over the previous month.
Industrial Lock delays were quoted in a 7-21 hour range, with lockings from the river-side outnumbering those from the canal by a 2:1 ratio. Algiers Lock waits were called 7-8 hours, and Port Allen Lock saw transit times as high as seven hours for the week.
High-water restrictions announced at Brazos Lock were expected to swell delays. Shippers estimated waits in the 24-36 hour range, and 15 vessels were counted in the queue on Jan. 25. Guide wall repair at Brazos River Floodgates were expected to limit transit from 7:00 a.m. to 5:00 p.m., Monday through Friday, through Jan. 31.
Lower Mississippi River: Reduced fog conditions allowed for more predictable movements on the Lower Mississippi, but high water moving down the river forced tow-size reductions south of Cairo, resulting in 1-2 day delays.
Lake Providence-area dike work is scheduled through Feb. 10.
Upper Mississippi River: Elevated river levels triggered tow-size reductions below Cairo, with large tows reporting five-barge cuts.
Ongoing repairs at Lock 21 limited widths to 70 feet. Double lockages were required to use an assist vessel in lieu of tow haulage equipment, which is unavailable during the project.
Tow haulage repair at Lock 22 was scheduled to conclude on Jan. 24, and main chamber shutdowns at Mel Price Lock and Lock 27 were due to wrap up on Jan. 25.
Thebes-area rock removal remained on hold thanks to high-water conditions. The Corps requires Cape Girardeau levels to be steady below 15 feet for work to begin. The gauge read 24.73 feet on Jan. 25, shy of the 29-foot action stage. Shippers predict transit restrictions and barge delays when work begins.
Illinois River: High water and fast flows were described on the Illinois Waterway. Bridge clearance issues and dangerous currents were expected to trigger 1-2 days of delay. Forecasts suggested improved conditions beginning on Jan. 26-27.
Fast flows limited Marseilles Lock navigation. Boats able to transit the lock reported waits up to 5-7 hours.
Chicago-area dive work concluded on Jan. 20, returning transit to normal. Dives underway at Mile 296 were expected to slow traffic through Jan. 30.
Ohio River: Sources continued to note high-water restrictions on the Upper Ohio River, with advisories slowing transits between Meldahl Lock and Pittsburgh. The Corps limited tow sizes on a boat-by-boat basis, with some smaller tows capped at eight barges. Transit, pickup, and drop-off delays were widely reported, with some describing deliveries postponed by a minimum 3-4 days.
The elevated levels kept dams lowered at Lock 52 and Lock 53, allowing vessels to pass without locking. Markland Lock reported delays in the 4-5 hour range. Bridge demolition at Mile 325 blocked daylight-hour transit on Jan. 20-23.
The R.C. Byrd auxiliary chamber is closed through Jan. 30. The auxiliary chamber at Markland Lock is scheduled to shut down March 6 through April 26.
High water affected Monongahela River transit as well, with barge restrictions and delivery delays reported. The Braddock Lock and Dam river chamber remains offline due to equipment failure, necessitating that tows pass via the land chamber in its place. Braddock Lock will close for repairs March 27 through April 28.
Dredging at Miles 102-104 on the Cumberland River will likely trigger mild-to-moderate barge delays, shippers warned. The work is scheduled to run through March 31. The Allegheny River was closed at Lock 6 due to a hydraulic leak and resulting mechanical failure.
Pacific Northwest: Repair and maintenance operations in progress throughout the Columbia-Snake River System are expected to severely limit transit through March 20.
Damascus and Tehran—Syria and Iran have signed a deal that gives Iran the right to operate two phosphate mines in al-Sharqiya, some 50 km south of the ISIS-held city of Palmyra, and to invest in an unnamed Syrian port, according to Iran’s IRNA news agency. The deal was one of five signed on Jan. 17 during a visit to Tehran by Syrian Prime Minister Imad Khamis. The deals are said to be part of the Syrian government’s repayment of Iranian debt and for Iran’s help in the recapture of Aleppo.
Syria also has phosphate mines at Khnaifees, about 70 km south of Palmyra. But more than five years of civil war have taken their toll on the country’s mines and output. ISIS seized the mines in 2015 (GM June 1, 2015); their current status is unclear.
Roswell, Ga.—SiteOne™ Landscape Supply LLC, which identifies as the largest and only national wholesale distributor of landscape supplies in the U.S., has acquired East Haven Landscape Products (EHLP), East Haven, Conn. Started in 1978, EHLP distributes nursery, hardscapes, and landscape supplies in the coastal Connecticut market.
SiteOne said the acquisition adds a full-service landscape supply location along the southeastern Connecticut coast, extending SiteOne’s network of existing full-service locations in Greenwich and Windsor, Conn., and Bedford Hills, N.Y.
U.S. Gulf: Sulfuric acid vessels imported to the Gulf of Mexico were expected to see pricing in the $40-$45/mt CFR range, flat from the previous report. Recent Brazil tons in the $45-$50/mt CFR range – along with Northwest European smelter sales called steady in the $5-$10/mt FOB range – supported those numbers.
Cargoes sold into Chile were called $10/mt above Brazil at $55-$60/mt CFR.
In the domestic market, West Coast tons were called $100-$110/mt DEL, with U.S. Gulf-delivered material quoted in the $85-$95/mt DEL range. Material destined for the Midwest carried $80-$90/mt DEL pricing, sources said.
Tampa: The first-quarter contract price of molten sulfur delivered to Tampa is $75/lt. The contract was valued at $69.55/lt in fourth-quarter 2016.
Refinery utilization continued to tumble last week after posting near-record highs to start the year. The U.S. Energy Information Administration (EIA) put run rates at 88.3 percent for the week ending Jan. 20, a 2.4 percent drop from the week-ago 90.7 percent, and a full 5.3 percent down from 93.6 percent logged in first-week January. The rate trailed the year-ago 90.6 percent, but kept ahead of the 86.9 percent five-year average.
Average daily crude inputs were also down. Refiners processed an average 16.047 million barrels/d, the EIA said, a drop of 421,000 barrels/d from 16.468 million barrels/d in the previous report.
U.S. Gulf: Marathon Petroleum Corp. was expected to restart a sulfur recovery unit (SRU) last week at its Galveston Bay refinery, located in Texas City, Texas, Reuters reported.
The unit has been offline since Jan. 9 as part of a planned turnaround at the 459,000 barrel/d facility. A number of units included in the turnaround are scheduled to remain offline until March, including a 218,500 barrel/d crude distillation unit, a 64,000 barrel/d residual hydrotreater, and a pair of reformers processing a combined 130,000 barrels/d.
Sources called last-done on the Gulf solid sulfur export market in the $75-$77/mt FOB range, with new offers described at $80/mt FOB.
Vancouver: Sources reported a slow Vancouver export market, with spot pricing generally described as steady in the high $80s/mt FOB. Additional scattered sales were reported in the low $90s/mt FOB. Short-term contract tons were said to run equal with spot.
Market watchers traced the slow week at Vancouver to a slumbering Chinese import market, essentially shut down due to the Lunar New Year celebration beginning Jan. 28. Last-done on that market was quoted in the $101-$107/mt CFR range. Sources were divided on which direction the price might turn post-holiday.
Netbacks to Alberta producers continued at (-)$55-$20/mt FOB.
ADNOC: The Abu Dhabi National Oil Co. announced the Jan. 20 restart of units at its Ruwais refinery complex, with production expected to resume in the following week.
Capacity was cut to 50 percent of the facility’s stated 800,000 barrel/d capacity following a fire in an olefin conversion unit on Jan. 11. Both the fire and lost production were confined to the complex’s newer west-side unit, a $9 billion expansion completed in 2015. The cause of the fire was unknown.
ADNOC offered January prills at $92/mt FOB Ruwais, $4/mt higher than $88/mt FOB in December.
