U.S. Gulf: As with UAN, ammonium nitrate price ideas were mixed. While some saw a slight weakening in nitrate prices, others said they were moving up. Overall, this left a broader range than normal at $333-$350/st FOB, with most players in the middle at $335-$345/st FOB. The consensus appeared firm-to-up.
Western Cornbelt: Ammonium nitrate pricing was steady at $400-$425/st FOB in the Western Cornbelt.
The Trading Corp. of Pakistan closed its latest tender with offers lower than the last tender in July. Keytrade came in the lowest at $399.38/mt CFR for 50,000 mt. The company also made an optional offer of the same quantity at the same price. Keytrade won the July 29 tender with an offer of $419.39/mt CFR
In the latest tender, after Keytrade came Dreymoor and Helm. The two companies each offered 50-150,000 mt and were only cents apart. The Dreymoor offer was at $407.15/mt CFR and Helm at $407.41/mt CFR.
In the past, TCP would have had to accept the Keytrade offer and then call another tender to close in three to four weeks. The ruling body of TCP – Economic Coordinating Committee – however, granted TCP permission to negotiate with companies to see if they will match the lowest price offered in that tender.
If Dreymoor and Helm accept the Keytrade price, TCP would conclude its mandated purchase of 300,000 mt, leaving the market empty of any major urea buyers.
| Ammonia | 655 |
| Urea (g) | 418-440 |
| Urea (p) | 435 |
| DAP | 502-510 |
| Producer | Symbol | Price | Week Ago | Year Ago |
| Agrium | AGU | 98.08 | 100.37 | 80.32 |
| CF Industries | CF | 206.73 | 216.09 | 178.95 |
| CVR Partners | UAN | 25.63 | 25.91 | 22.15 |
| Intrepid Potash | IPI | 22.45 | 21.99 | 30.46 |
| Mosaic | MOS | 57.60 | 59.64 | 65.45 |
| PotashCorp* | POT | 41.35 | 44.50 | 54.39 |
| Rentech Nitrogen | RNF | 33.25 | 33.74 | N/A |
| Terra Nitrogen | TNH | 214.50 | 231.00 | 153.00 |
| Distribution/Retail | ||||
| Andersons Inc. | ANDE | 39.38 | 36.80 | 38.78 |
| Deere & Co. | DE | 76.12 | 75.51 | 72.66 |
| Scotts | SMG | 42.13 | 43.14 | 46.40 |
| * represents three-for-one stock split | ||||
BHP Billiton Ltd. last week said that while work continues to progress on its Jansen potash project in Saskatchewan, final approval by the BHP board of directors is still to come and may be later than initially expected.
“We are not in a position today to approve the full project,” Marius Kloppers, BHP CEO, told analysts Aug. 22. He said the company does not have all of its permits in place, and he did not want to signal a target date for approval. “Clearly that project is seeing some drift-out of a couple of months and so on as we have looked at additional engineering, as perhaps the permitting process has been slightly slower than expected.” He also said the company has lost a couple of months in setting up the shaft excavation due to very wet weather. Kloppers did say there is enough money preapproved to take the project through this financial year.
To date, BHP says two underground shafts that will support an 8 million mt/y potash mine are well advanced, with their excavation scheduled to be completed before the end of the 2014 financial year. It said the shaft collars are both excavated and lined to nearly 50 meters. The shaft sinking head frames are being erected, and boring machines are to soon be installed. BHP says at its fully expanded state, Jansen should operate at the bottom of the cost curve and generate strong investment returns. Existing pre-commitment funding will enable the project to advance in the 2013 financial year as the company works through the final engineering design and mining lease conversions before the decision is taken to the board. BHP said in the wider Saskatchewan basin, it completed more than 25 kilometers of exploration drilling in the 2012 financial year.
In general, BHP noted that it will allot future money to those projects that maximize value while considering the balance between short and long-term returns.
One thing at the back of BHP’s mind might be its earnings, released on Aug. 22. Profit attributable to the members of the BHP Billiton Group were off 34.8 percent for the year-ending June 30, 2012, to US$15.4 billion from the year-ago $23.6 billion. Revenues, however, were up 0.7 percent, to $72.2 billion from $71.7 billion.
The major driver on lower earnings was weaker commodity prices. BHP also reported exceptional items, including a $1.8 billion impairment on its investment in the Fayetteville Shale dry gas assets.
Going forward, BHP expects the macroeconomic environment to stabilize before improving in the first half of the 2013 financial year. It said this recovery will provide support for commodity demand and pricing in the short-to-medium term. For specific commodities, it said the industry will find it difficult to develop new supply quickly enough to satisfy the expected increase in demand. He said this would particularly be the case for industries where barriers of entry are high, such as potash.
Washington — The U.S. Forest Service isn’t expected to make any fewer aerial applications or use less fire retardant under a firefighting plan being adopted to avoid land and water areas where endangered, threatened, and sensitive species are found, according to Edward Goldberg of ICL, which supplies Phos-Chek long-term fire retardant. “There isn’t any cutback. Actually these guidelines have been in place since 2002. They are based on the environmental impact statement the Forest Service mapped out last year that amounts to avoiding areas where drops shouldn’t be made. There’s really no operational change in what they’ve been doing for the last 10 years.” The agency recently put things in writing, saying that it has “identified a preferred approach for continuing the aerial application of fire retardant on National Forest System lands.” As described in the final environmental impact statement, the preferred approach would map land and water areas to avoid endangered, threatened, and sensitive species. This agency-preferred alternative would permit aerial delivery of fire retardant into waterways only when human life or public safety is threatened. The preferred alternative’s protocols would also better protect cultural resources that include historic properties, traditional cultural resources, and tribal sacred sites. Agency action was prodded by a July 2010 decision by the U.S. District Court in Montana which directed the Forest Service to complete further analysis and to consult further with the United States Fish and Wildlife Service and NOAA Fisheries Service. An organization had sued the agency and claimed the Forest Service had not adequately analyzed the effects of dropping fire retardant and had not adequately protected endangered species from its effects. Still, officials point out, the preferred alternative does not represent a final decision, but is one of three alternatives that the agency considered for tools that would allow the Forest Service to fight fires in rugged topography, in remote locations, and in areas that present risks to firefighters and the public. The Forest Service expects to issue its Record of Decision – which will establish agency direction regarding use of fire retardant applied from aircraft – before Dec. 31. According to ICL’s Goldberg, the Forest Service and Interior Department have a number of suppliers of fire chemicals suppliers, but ICL’s Phos-Chek brand is the leading fire suppressant formulation.
Suffolk County, N.Y. — This area’s sweet corn growers are testing a new type of controlled release fertilizer with the aim of protecting groundwater and the Long Island Sound. “The controlled release nitrogen fertilizer (CRNF) we are evaluating with Long Island sweet growers has only recently become available on the retail market for specialty crop producers and is designed to release the fertilizer according to the crop needs,” said Becky Wiseman, coordinator of the agricultural stewardship program for the Cornell Cooperative Extension of Suffolk County, sponsor of the trials along with American Farmland Trust and Agflex Inc. She identified the CRNF as Agrium’s ESN (environmentally smart nitrogen), which is designed to break down over time according to the plant’s needs for nutrients. Participating farmers will apply CRNF and conventional fertilizer in large field demonstration projects so that a direct side-by-side comparison can be made. Each project will be at least 8 planted rows wide and run the full length of the field to allow for adequate harvest for yield/quality assessment. The project will be part of the BMP Challenge system, which reimburses farmers who experience any reduction in their harvest after utilizing approved conservation practices. “According to our researchers, Agrium’s ESN is 10 to 15 cents more costly per unit N, which means for every pound of N, CRNF costs 10 to 15 more cents,” Wiseman explained. She noted that the planners also worked with Scotts on its Agricote brand. Nitrogen runoff is a major concern in Suffolk County, which accounts for approximately 1.3 percent of Long Island Sound’s total watershed area. It has been estimated that nonpoint sources account for 72-82 percent of the total nitrogen from Suffolk County into the Sound.
Production at Compass Minerals’ salt mine in Goderich, Ont., will be temporarily reduced due to a strike called Aug. 20 by the Communications, Energy and Paperworkers Union Local 16-O. Compass said it has strong deicing salt inventories following the historically mild winter season and believes mine management will be able to produce sufficient rock salt to meet its non-seasonal-customers’ needs while negotiations continue. The union represents approximately 380 employees at the mine.
“The company’s proposed three-year agreement includes higher wages and attractive benefits, and addresses additional jobs associated with the company’s investment in new mining technology. When negotiations were suspended by the union, we were in agreement on all issues but one management-rights topic. We’re confident that we can work with union leadership to reach a mutually satisfactory agreement,” said Angelo Brisimitzakis, Compass Minerals’ president and CEO. “We look forward to resuming normal operations soon, and with our current strong inventory position we expect to have no difficulty serving our highway deicing customers this season.”
In other salt news, Compass on Aug. 13 announced that through its Sifto Canada Corp. subsidiary, it has entered into an agreement with the Town of Goderich and the Goderich Port Management Corp. (GPMC) to expand and enhance the Port of Goderich. “We believe this joint project will bring new cargoes, jobs, and opportunities to the community while providing Sifto with additional site flexibility, particularly during the winter months,” said Rowland Howe, Canada country executive for Compass Minerals. The plan calls for the creation of new land at the port, which would provide space for additional port traffic and would give Sifto additional storage options during the winter when the lake is closed. “The port expansion would allow us to continue to produce rock salt when lake traffic can be limited because of ice, giving us more consistent production and employment levels throughout the year and enhancing our recent C$70 million expansion,” Howe said.
The project is expected to cost approximately C$47.2 million, and will be financed in part through a C$15.7 million infrastructure improvement grant from the province of Ontario, along with funds from the GPMC. Sifto’s additional fees, currently expected to total approximately C$18.9 million over a five-year period, would provide Sifto with a renewable 25-year lease on the new land.
The plan requires completion of an environmental assessment, which is currently underway. Additionally, successful conclusions in feasibility evaluations and additional engineering studies must be finalized. The company and the town of Goderich expect project completion in 2016.
Bismarck — Advocates of the N-Flex system to process waste natural gas into ammonium fertilizer at the well site in North Dakota aren’t discouraged that the North Dakota Industrial Commission has put off a decision on awarding a $1 million grant (GM Aug. 20, p. 1) to get the effort off the ground. “The commissioners asked the developer to provide more information, including that on economic stability of the undertaking,” Alison Ritter, spokeswoman for the state department of natural resources, advised Green Markets. ”The commission was enthusiastic about the proposal, but a million dollars is a lot of money for a grant, and they decided that more information is needed.” Ritter added that she expects the issue would be on the commission’s agenda again next month. “It’s a million dollars. That is real cash,” explained Attorney General Wayne Stenehjem, who is a commission member, along with Gov. Jack Dalrymple and Agriculture Commissioner Doug Goehring. N-Flex proponents, including developer Neil Cohn, along with partner Glen Buckley, said they understood the commission’s position and are actually encouraged by the initial response. Buckley, who is also a principal and chief economist for NPKFAS, remarked, “We’re in the process of putting all the information together, and we fully anticipate the commission will approve it. We’re hoping it will be at the next meeting, but if not, then certainly by the end of the year. I don’t really foresee any problems. I believe the commission will approve it because there are real advantages, particularly transportation advantages.” Spencer Wagner, fertilizer specialist for the North Dakota Department of Agriculture, believes N-Flex will be a real benefit for the farmers, who used about 350,000 tons of anhydrous last year. “It would be a very good supplement to the existing supply we have here in the state, some of which comes by truck and rail from Canada, Minnesota, and pretty much anywhere in the Midwest.”
Scott County, Iowa — The Scott County Board of Supervisors has received a request from Iowa Fertilizer Co., a unit of Egypt’s Orascom Construction Industries (OCI) to postpone the date of its public hearing originally scheduled for Aug. 28. The hearing concerns the application to rezone 318 acres in the county on property between Walcott and Davenport for a $1.3 billion nitrogen plant. The board said no reason was given for the postponement. The hearing was to be held earlier in August, but a postponement was sought at that time so that the company could prepare its presentation. A new hearing date has not been established. Many locals had been gearing up for a big turnout at an Aug. 28 hearing. A local zoning board rejected the rezoning back in July by a 6-1 vote. The Walcott City Council recently voted 4-0 against the plant and has asked its mayor to represent their concerns at the Aug. 28 meeting.
