Tampa: Negotiations continued last week for first-quarter contract prices for molten sulfur to Tampa. The parties were getting closer to an agreement, but no deal had been reached.
The molten market was tighter than that for prill, both in the U.S. and in Europe. While still in balance, it was likely to grow a little tighter during the first quarter because of turnarounds already started at refineries.
Weather problems in Canada, where the oil sands provide an abundance of sulfur, were also contributing to market tightness. Sources said freezing, melting, and refreezing on Canadian roadways was a major factor in accidents.
The U.S. Department of Energy said refinery operating capacity rates fell by 4.3 percent last week, from 87.9 percent to 83.6 percent. A source said the change was the result of a combination of factors, including turnarounds at refineries.
Another reason was the fact that storage capacity for finished products such as gasoline, diesel, and distillate was essentially full, leaving little room for additional product. The increase in finished product was the result of diminished demand.
U.S. Gulf: Gulf Coast prices were hovering at about $150/mt FOB.
Vancouver: Spot prices at Vancouver were in the range of $140-$150/mt FOB.
West Coast: Prices for the West Coast were in the same range as Vancouver.
Benelux: New first-quarter prices for molten sulfur were in the $168-$180/mt FOB range, higher than the current U.S. market for molten, which was at $160/lt to Tampa. As is the case in the U.S., Europe’s demand for molten was stronger than for prill sulfur.
ADNOC: The FOB Ruwais price was $150/mt FOB for January.
Tel Aviv — A Canadian firm, EnGlobe Corp., has been selected to clean up the Kishon River. The river is highly polluted, primarily from untreated waste from fertilizer and petrochemical plants in the Haifa bay region. Haifa Chemicals, Israel Chemicals Ltd., and Oil Refineries Ltd. will contribute more than half of the cost of the $60 million clean-up. EnGlobe was selected following an international tender issued by Israel’s Environmental Protection Ministry. The project involves dredging the river and then biologically treating the sludge and turning the area into a regional park.
Houston — KBR reports that it has been awarded a contract to provide a license and basic engineering design package as part of the ammonia plant revamp for capacity increase at reduced energy consumption by Nitrogenmuvek in the city of Petfurdo, Hungary. KBR will increase ammonia capacity for a 1970s vintage-designed plant from 1,000 mt/d to 1,650 mt/d.
Boston, Mass. — Cold storage and ice manufacturer JP Lillis Enterprises, which does business as Cape Cod Ice, has agreed to pay EPA penalties of $225,000 for failing to put in place a required risk management plan for ammonia used in the refrigeration system at its East Providence facility. EPA also asserts that the company violated the Clean Air Act’s general duty clause – which applies to facilities where extremely hazardous substances such as ammonia are present – at its Sandwich, Mass., location. Under this clause, owners and operators of these facilities are required to identify hazards; design and maintain the facility in a safe manner; and take steps to prevent accidental releases of the extremely hazardous substance and minimize the consequences of any accidental releases that occur. The charges state that the company had not taken required steps to design and maintain a safe facility, or taken precautions that would minimize the consequences of an accidental release of ammonia, if one were to occur, at its Sandwich facility. For example, they failed to provide mechanical ventilation, working ammonia detectors, and an emergency shutdown switch for the machinery room; failed to develop operating procedures and a comprehensive mechanical integrity program; and failed to train employees in the proper operation of the system at the Sandwich facility.
Forty years after the Clean Water Act became law, Iowa’s rivers and streams, as well as those in other states, are still murky, a new analysis by Environmental Working Group (EWG) charges. The reason for what EWG terms the “most serious flaw in this historic and otherwise effective federal law” is that little or nothing is included to address agricultural pollution.
According to the Iowa Department of Natural Resources, EWG states, fully 92 percent of the nitrogen and 80 percent of the phosphorus – the two pollutants most responsible for the poor condition of the waterways – come from non-point sources. Only 8 percent of the nitrogen and 20 percent of the phosphorus come from municipal and industrial discharges.
“Yet Iowa’s water quality regulation almost exclusively targets municipal and industrial discharges, while agricultural runoff remains largely unregulated,” the study points out. “Instead, Iowa relies on farm owners and operators to take voluntary measures to reduce pollution, and taxpayers pick up much of the cost. Iowa’s towns, cities, and industries don’t have that choice. Under the federal Clean Water Act, they have been required to take often-expensive action to reduce pollution since 1977.”
EWG insists that Iowa’s rivers and streams can be clean, but only if Iowans take concerted action to reduce the nitrogen and phosphorus overload from agricultural operations, adding that the good news is that experience and science make it clear that concerted action does result in major improvements. EWG concludes that Iowa’s voluntary programs could work much better if they were revamped to be more effective and were provided with a larger and more secure source of funding. The governor and the legislature are being urged to act to implement the Iowa Land and Water Legacy amendment endorsed by 63 percent of Iowans in 2010.
But that’s not the whole story, according to the fertilizer industry, which insists that much of this is already being done. The Iowa Department of Agriculture and Land Stewardship and the Iowa Department of Natural Resources (DNR) worked with Iowa State University over a two-year period to develop the strategy, according to The Fertilizer Institute (TFI). The resulting strategy, TFI emphasized, is the first time such a comprehensive and integrated approach addressing both point and nonpoint sources of nutrients has been completed.
“The Iowa strategy has been developed in response to the 2008 Gulf Hypoxia Action Plan that calls for the 12 states along the Mississippi River to develop strategies to reduce nutrient loading to the Gulf of Mexico. The Iowa strategy follows the recommended framework provided by EPA in 2011 and is only the second state to complete a statewide nutrient reduction strategy,” TFI pointed out.
“We find the draft Iowa Nutrient Reduction Strategy to be perhaps the most comprehensive state effort ever to address the complicated interplay of the multiple challenges that must be addressed to achieve this goal, and as earlier stated, we believe that state-led efforts to protect water quality by working with agriculture, municipal, and industrial charges are the most effective means of achieving water quality improvements.”
U.S. Gulf/Tampa: February ammonia business at Tampa moved down $18/mt, to $655/mt from January’s $673/mt. At the same time, players reported new NOLA barge business at $640/st FOB, down from the long-standing $685/st FOB.
Eastern Cornbelt: The anhydrous ammonia market was steady at $760-$775/st FOB in the region for spring prepay, with the low in Illinois and the upper end out of Indiana terminals.
Parts of the Eastern Cornbelt were hit with sub-zero lows in late January as a cold front moved across the upper Midwest. Wind chill advisories were posted for northern Illinois, northwestern Indiana, and parts of northern Ohio early in the week, with lows dipping to minus 17 degrees in parts of northern Illinois on Jan. 22.
The brunt of the freezing weather settled over northern Illinois, Wisconsin, Minnesota, and the Dakotas, with lows in northern Minnesota dropping to minus 30 on Jan. 22.
Indiana and Ohio were also in the mix, however, with wind chills falling to minus 10 in parts of northeastern Ohio on Jan. 22. Some areas north of Cleveland were also blanketed with 1-3 feet of lake-effect snow last week.
Western Cornbelt: The ammonia market remained at $740-$760/st FOB regional terminals for spring prepay, with the low in Nebraska and the upper end in Iowa and Missouri.
The bitterly cold weather that blanketed the Northern Plains last week also reached down into Iowa, with sub-zero lows reported in Iowa City on Jan. 22. Warmer temperatures were reported across the state as the week advanced, along with an increasing chance of snowfall.
The region is in desperate need of winter precipitation to alleviate long-term drought. Nearly all of Nebraska was in exceptional drought, according to the Jan. 22 U.S. Drought Monitor, while severe to extreme drought persisted across western Iowa. The western edge of Missouri was also labeled as a severe drought area last week, with the rest of the state experiencing abnormally dry to moderate drought conditions.
California: Anhydrous ammonia was steady at $825-$830/st DEL in California, with aqua ammonia referenced at the $220/st FOB level in the state.
Cold temperatures in mid-January resulted in frost damage to some citrus crops in the San Joaquin Valley. News reports said mandarins suffered significant damage when temperatures dropped to the 20s on successive nights. In Southern California, strong winds helped protect crops from low temperatures at mid-month.
Sources said the state saw little in the way of winter precipitation during the first half of January, but the dry weather came after an unseasonably wet December. As a result, moisture levels were still above normal in many irrigation districts, but only slightly. Fortunately, more rain was expected during the final days of January.
Pacific Northwest: Delivered ammonia was steady at $870-$900/st in the Pacific Northwest for rail or truck tons, depending on location. Aqua ammonia pricing remained at $210-$215/st FOB in the region.
Moderate drought was reported in southwestern Oregon, southern Idaho, and southern Montana in late January, with a sizable area of extreme drought persisting in south-central Montana. Most of Wyoming, too, was experiencing severe to extreme drought.
Mountain snow levels in much of the Pacific Northwest remained below average, but were ahead of last year at this time. Valley growers are counting on heavy snowfall in February, March, and April to provide adequate irrigation water for the 2013 growing season.
Western Canada: The anhydrous ammonia market remained at $942-$956/mt DEL in Manitoba, $956-$965/mt DEL in Saskatchewan, and $965-$987/mt DEL in Alberta, depending on location.
U.S. Gulf: Granular urea prompt barge prices continued to move up last week, with new trades reported within the $412-$422/st FOB range.
By the end of the week, sources said trades had backed off the high to around $418-$420/st FOB. Late February/March business was called $418-$429/st FOB.
Prills were generally put between $405-$415/st FOB, with some now seeking to move the price up to $420/st FOB.
Eastern Cornbelt: Granular urea out of the Cincinnati, Ohio, market was quoted at $450/st FOB for prompt and $455/st FOB for spring prepay. Prompt sales out of the East Liverpool, Ohio, market were reported at the $455/st FOB level. In the Illinois market, sources pegged urea pricing in the $455-$465/st FOB range last week.
Western Cornbelt: Granular urea pricing continued to be quoted in the $460-$480/st FOB range in the region, with the upper end in Iowa and the low in Missouri on a spot basis.
Industry sources said urea production at Koch’s Enid, Okla., plant was down last week, with no word on the cause or the expected duration of the outage. The Tulsa, Okla., urea market was tagged firmly in the $445-$455/st FOB range last week.
California: Granular urea was quoted at $500-520/st DEL in California, although sources said the market was firming to the upper end of that range in late January. One source said a fair amount of business was booked in the $500-$510/st DEL range at mid-month.
The FOB market for urea was quoted in the $475-$485/st range for spot business in California, with dealer reference levels remaining as high as $535/st FOB.
Pacific Northwest: The granular urea market was pegged at $485-$500/st FOB and $490-$515/st DEL in the Pacific Northwest.
Western Canada: The granular urea market continued to be quoted in the $560-$590/mt DEL range in Western Canada, depending on location. Dealer reference prices remained at considerably higher levels, with urea posted at $630-$640/mt DEL in Manitoba, $640-$645/mt DEL in Saskatchewan, and $645-$655/mt DEL in Alberta.
Middle East: Sources report that Egyptian production is coming back online. In the meantime, prices have jumped to $480/mt FOB for granular urea. The most likely buyers for this material are in Europe, say Asian sources.
A cutback in natural gas supplies shut down Egyptian urea production last month. The gas was diverted from industrial use to household needs. Sources report that consumer demand is easing and allowing gas to be sent once again to the urea and ammonia producers.
A similar issue of natural gas diversion occurred in Iran and is still in place.
Sources say below-normal temperatures in Iran have increased demand for natural gas to heat homes and offices. This heating demand forced the government to divert the gas away from industrial facilities. The cutback in gas to the urea producers has shut down production.
Sources report the first hit by the closure of urea facilities was India. About 150,000 mt will not be delivered to India after Iranian producers declared a force majeure.
Arab producers are asking $430/mt FOB for their granular material and a few bucks less for the prilled. Sources say, however, that no one has stepped up to that pricing level yet.
Shipments from the region are dominated by long-term contracts or development aid packages, such as the shipment last week of the first cargo from Sabic to Pakistan under a US$100 million aid deal.
India: Sources say the loss of 150,000 mt from the Iranian force majeure will most likely not create major shortages in the country.
The last Indian tender in December 2012 left the country about 100,000 mt short of its stated targ
U.S. Gulf: Prices continued to move up last week, and spanned a broad range at $305-$315/st ($9.53-$9.84/unit FOB) FOB.
While some still argued that product could be had in the low $300s/st FOB for prompt, others said those barges are now gone, and that buyers are looking at $315-$320/st ($9.84-$10.00/unit) FOB for any new business.
Eastern Cornbelt: UAN pricing in the Eastern Cornbelt was quoted in a broad range in late January.
The UAN-28 market FOB Cincinnati was tagged at $320/st ($11.43/unit) for prompt pull and $325-$330/st ($11.61-$11.79/unit) for spring prepay, while prepay tons out of East Liverpool were quoted as high as $344.40/st ($12.30/unit) FOB last week. Illinois sources pegged the UAN-32 market at $370-$380/st ($11.56-$11.88/unit) FOB and $375-$385/st ($11.72-$12.03/unit) rail-DEL.
Western Cornbelt: Sources continued to report stronger UAN prices in the Western Cornbelt region. The dealer market out of most regional terminals had reportedly firmed to $368-$380.80/st ($11.50-$11.90/unit) FOB, up roughly $10/st from the previous week.
California: UAN-32 was pegged at $370-$380/st ($11.56-$11.88/unit) FOB for new business, with rail-delivered tons quoted in the $385-$405/st ($12.03-$12.66/unit) range in California.
Sources said quite a few tons were booked at the $385/st ($12.03/unit) rail-DEL level or lower in recent weeks, but newer business was reportedly being quoted at the upper end of the delivered range.
Pacific Northwest: UAN-32 pricing in the Pacific Northwest was down from last report. Sources pegged the low end of the market in the $372-$385/st ($11.63-$12.03/unit) DEL range, with the low for immediate take and the upper end for tons pulled by the end of March.
Dealer postings were at higher levels. Effective Jan. 16, IRM’s reference price for UAN-32 moved down some $20/st, to $395/st ($12.34/unit) DEL in Washington and eastern Oregon.
Western Canada: UAN-28 remained at $439-$445/mt ($15.68-$15.89/unit) DEL in Manitoba, $445-$448/mt ($15.89-$16.00/unit) DEL in Saskatchewan, and $448-$454/mt ($16.00-$16.21/unit) DEL in Alberta. Sources talked of tight UAN supplies in the region.
Disclaimer of Warranty
All information has been obtained by Green Markets from sources believed to be reliable. However, because of the possibility of human or mechanical error by our sources, Green Markets or others, Green Markets does not guarantee the accuracy, adequacy, or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.
