Lawrence, Kan.-City commissioners are ready to finalize the deal to take over ownership of the former Farmland Industries fertilizer plant and convert the property into a business park in order to create more jobs in the community, spokeswoman Megan Gilliland confirmed for Green Markets. Gilliland said commissioners last week unanimously directed staff members to prepare the final documents to transfer ownership of the 467-acre site on the eastern edge of Lawrence. They expect to have final documents for approval by the end of this spring. Under the proposed deal, the city will receive $8.5 million from the Farmland bankruptcy trust in exchange for assuming liability to clean up the property. According to a Lawrence city fact sheet, there are combined trust funds for the Lawrence property amounting to approximately $10.8 million. During the bankruptcy proceeding, the investment group Capitana LLC, which had expressed an interest in acquiring the property, purchased the rights to the residual interest from the trust for all four of the former Farmland Industries sites in Kansas. After the city receives its share, Capitana will receive the rest. The property has been damaged by years of nitrogen fertilizer spills, but commissioners expressed confidence that the trust fund will be enough to fund the 30-year environmental plan for the property. The problems are heavy nitrate contamination in filtration ponds at the northern end, the presence of hexavalent chromium near the center of the plant, and a potential for asbestos issues throughout the plant. Some believe the groundwater could take years to clean up, but it might be handled with long-term institutional controls.
U.S. Gulf/Tampa: Tampa anhydrous ammonia business has been reported at the $415/mt CFR mark for April, with Yara reportedly concluding this price with large buyers. The price is down $35/mt from the March $450/mt CFR.
Phosphate production is reportedly less than expected. In addition, sources said some sellers prefer to sell now rather than risk their product on the Midwest spring season. Sellers are also fearful of production returning in Ukraine.
Still, some sellers thought the drop was too much, and that others are too panicked about the spring season, saying it is way too early to throw in the towel on the spring season for ammonia. Another, however, said farmers in the Midwest are anxious and they want to plant corn the minute they can, and if that means foregoing ammonia in favor of another nitrogen, they will.
In the meantime, there was a lot of talk last week about a 20,000 mt export sale by CF of ammonia out of Donaldsonville. However, sources told Green Markets that while the deal did occur, it was really a swap with a trader in exchange for product at Tampa.
There was no word on new NOLA barge prices last week; however, sources said the new Tampa numbers would certainly put pressure on any new NOLA business.
Eastern Cornbelt: Field conditions in most of the region remained too wet for fieldwork in late March, but there were reports of a little preplant ammonia trickling to the field in southern Illinois earlier in the week. Spot ammonia pricing remained in the $415-$425/st FOB range out of regional terminals, with the higher numbers reported in the Indiana and Ohio markets. One Illinois source put the common dealer price at the $420/st FOB level for spot tons last week.
“We need to get 10 days of good running,” said one source, noting that early April is the favored time for preplant ammonia. “Everyone will try like hell to get rid of their prepay.”
Western Cornbelt: Anhydrous ammonia was quoted at $390-$410/st FOB regional terminals. One Iowa source put the dealer market at $390/st FOB Ft. Dodge and $400/st FOB Garner, with retail prices hovering in the $495-$510/st range to the grower.
California: Sources report some preplant fertilizer movement on rice, corn, cotton, summer vegetables, and dry bean fields. Preplant herbicide treatments were going down on vegetables crops in some locations. Sources reported only slight changes to the spot fertilizer markets.
Calamco adjusted its anhydrous ammonia price on March 25, dropping from $560/st to $520/st truck-DEL. The aqua ammonia postings moved on that date from $152/st down to $142/st FOB. Sources said ammonia movement on rice should kick off in early April, with big acreage planned north of Sacramento.
Agrium’s ammonia postings dropped as well, moving on March 25 to $520/st truck-DEL in central California and $525/st truck-DEL in northern California.
Pacific Northwest: Sources in Washington said growers continued to plant potatoes and early peas, and preplant applications were rolling briskly on a range of crops, including corn ground. The anhydrous ammonia market was quoted at $410-$420/st truck-DEL in the region, reflecting a drop from last report.
Western Canada: Much of the region enjoyed a taste of spring in late March, with warming temperatures and dry weather. Those conditions gave growers the spring bug, but there wasn’t a lot of field activity underway in the region. One Saskatchewan source said things could be rolling very soon, and he predicted that spring planting could be underway there before it begins in parts of the soggy Midwest this year.
Anhydrous ammonia pricing was steady at $700-$745/mt DEL in the region, with the lower numbers in Manitoba and Saskatchewan.
Black Sea: The full situation between Ukraine and Russia over natural gas supplies and prices is still up in the air. The prime ministers of the two countries met last week to hammer out a deal that would provide Ukraine with cheaper natural gas and end disputes over the transportation of natural gas into and through Ukraine.
Accusations by Russia that Ukraine was siphoning off gas meant for Western and Central Europe in recent years led the Russian gas monopoly to shut off the gas flow in the middle of winter. The disruption of gas flow affected the rest of Europe as well as Ukraine, prompting the European Union to step in and moderate the dispute.
In the end, Russia turned on the tap – but only after raising the price of natural gas to Ukraine.
The increase in price – about $300/1,000 cubic meters – made it impossible for the Ukrainian ammonia plants to keep operating.
Last year at this time ammonia out of Yuzhnyy was pegged at $215-$220/mt FOB. This year opened at $275-$280/mt FOB. These low prices meant the producers were not able to run without incurring massive losses.
The almost-one-year shutdown of the Ukrainian producers meant there were limited quantities of ammonia from the Black Sea area. Buyers took what Russian cargoes they could, as well as tons from Trinidad and the Middle East.
Last week the price was at $375-$380/mt FOB, a level that would allow the Ukrainian producers to open again. Sources report at least one major facility came back online, with others set to follow suit.
The recent drop in price at Tampa from $450/mt CFR to $415/mt CFR was a result of the increased tonnage expected from the Black Sea, said one source.
Working back from the Tampa price, one Asian trader said the price in the Black Sea could be pegged at $345-$360/mt FOB. He pointed out, however, that if the Ukrainian and Russian governments can come to an agreement on lower gas prices, the Yuzhnyy equivalent price in the low-$350s/mt FOB would be more than enough for the plants to keep running.
The deal under discussion between Russia and Ukraine is for Gazprom to buy into the Ukrainian pipeline system. Ukrainian law would have to be changed to allow for foreign ownership of any portion of the natural gas pipeline. The system accounts for about 80 percent of the flow of natural gas from Russia to the rest of Europe. It is also the second largest network on the continent.
There is precedent for Russia cutting a deal with a neighbor in exchange for a portion of the transportation network. Gazprom owns shares of the national pipeline systems in Belarus and Armenia. In exchange, Belarus, for example, pays $168/1,000 cubic meters instead of the more than $300 paid by Ukraine.
The Ukrainians are under pressure to do something. Russia is already backing an alternative route for natural gas that will bypass Ukraine. The new pipeline is expensive, but Russia and Gazprom seem committed to the idea to be clear of problems with Ukraine.
A deal that allows for Russian participation in the Ukrainian system would save Gazprom a great deal of money and increase its control over its product from wellhead to consumer.
The deal would also provide the cash necessary to upgrade the Ukrainian network. The country has been feeling heat from the East and West to modernize their facilities. Unfortunately, the cash-strapped country has had to put off not only upgrades, but regular maintenance.
Middle East: Producers have been arguing for weeks that the market should be at $400/mt FOB. But each time a producer thought a deal at that level was possible, Iran would settle a deal at significantly lower levels.
Sources now report that Iranian producers are asking $400/mt FOB. So far, no one has nibbled at the new price.
In the past several weeks a number of cargoes have been committed and loaded out of Iran. The most recent by Yara is slated for Northwest Europe, say sources.
Generally, material from Iran is sold at a slight discount to the Arab ammonia because of the extra steaming time to get to the Iranian port. A $400/mt FOB Iranian deal would translate to a $390/mt FOB deal elsewhere in the Arab Gulf.
If Iran gets $400/mt FOB, Asian sources say that would be a move in the right direction as far as the Arab producers are concerned, but still not enough.
The softened price in Tampa is no incentive for buyers to accept higher prices right now, said one observer.
Asia: Sources report Mitsui is having some problems getting its KPA facility in Indonesia back up and running.
The plant was on a routine turnaround and was expected to be back in production late last week. There now appear to be a few glitches in the start-up process that will keep the plant down until at least this week.
An extended shutdown could mean Mitsui might enter the market to buy tons for its clients. Sources report that Mitsui had a number of swap deals in place to handle the turnaround. Now, with the plant down longer than expected, new swaps might be difficult as other producers need to satisfy their own buyers. Some of them had counted on KPA tons as early as early April.
UREA
U.S. Gulf: Wet weather across much of the nation kept a damper on urea barges, leading to some slippage in price last week, according to sources. New trades, while few, were put within the $310-$314/st FOB range for granular. Sellers remain optimistic that prices will rebound once conditions start to dry out and field work begins in earnest.
Eastern Cornbelt: The granular urea market was steady at $350-$365/st FOB in the region.
Western Cornbelt: Granular urea was pegged at $345-$360/st FOB in the region, with the low again confirmed in southern Missouri to the dealer. An Iowa source quoted the market at $362/st DEL from Mississippi River shipping points, backing up to roughly $350/st FOB river terminals.
California: Granular urea pricing was unchanged at $375-$395/st FOB and $400-$420/st DEL in the state.
Pacific Northwest: Granular urea was steady at $395-$410/st DEL in the region.
Western Canada: Granular urea remained at $491-$516/mt DEL in the region, depending on location, with dealer reference levels quoted as high as $525/mt DEL in some locations.
Pakistan: The TCP tender for 125,000 mt closed March 25, with 830,000 mt offered.
The lowest offer from Mekatrade at $311.39/mt CFR with Iranian tons will most likely be accepted, and a new tender for the remaining 75,000 mt issued immediately.
Traditionally, TCP does not negotiate with runners-up in their tenders. But some in the industry thought that with only a 10 cent difference, TCP might approach Multicommerce to lower its price.
As the Thursday business day closed in Pakistan, the word from TCP was that it was ready to accept only the Mekatrade deal.
The tabulation of tender offers follows.
Offering Company
Tons offered (mt)
Origin
US$/mt CFR
Mekatrade
50,000
Iran
311.39
Multicommerce
50-75,000
Open
311.49
Blue Deebaj Chemical
50,000
Iran-CIS-Egypt-China
312.00
Swiss, Singapore
50,000
Open
312.50
Transfert
50,000 Firm
Open
318.50
50,000 Optional
Open
318.50
Transammonia AG
50,000
Open
318.77
Transammonia Trading
50,000
Open
318.77
Helm
50-70,000
Open
319.45
Gavilon Fertilizer
50,000
Open
319.74
Liven Agrichem
50,000
China-Middle East
319.80
Quantum
50,000
Open
326.65
Dreymoor
50-70,000
Open
338.75
Keytrade
50-70,000
Open
335.00 Gwadar
340.00 (Karachi-Gwadar)
The two offers from Transammonia, say Asian sources, appear to have come from different regional offices of the company.
Sources peg the freight from Iran to Pakistan at $35/mt. That would put the netback to Iran at $276/mt FOB.
The absence of Arab urea producers was not surprising to industry observers.
Pakistan needs to import about 400,000 mt for the upcoming application season. A government-to-government aid package between Saudi Arabia and Pakistan will provide the tons not covered by the tender. Obviously, Sabic will supply the urea under the aid package terms.
Sources said there was no reason for any of the other producers to compete in the tender.
Besides, said one trader, they are saving themselves for the upcoming Indian tender.
India: Industry observers had expected Indian buyers to
hold off at least one more week before calling a tender.
One source said the dramatic drop in price as demonstrated in the TCP/Pakistan tender should have led the Indian buyers to sit still at least another week while downward pressure on prices continues.
The Indians confounded that conventional wisdom. IPL called a tender almost as soon as the TCP results were released.
The tender will close April 1 and is for an indeterminate amount. However, sources in India said IPL may buy up to 500,000 mt, subject to price and shipping criteria.
Sources expect to see the Middle East suppliers be aggressive in their pricing. Some have said the producers will try to reverse the loss exhibited in the TCP tender and move prices back up. Others have said some of the producers are getting to the point where they have to sell.
As with previous Indian tenders, the type of urea to be shipped – prilled or granular – is left up to the offering firm. Offers are to be on a delivered basis, but the Middle East suppliers usually offer their tons with FOB pricing. The Indians then use their own vessels to ship.
Indian buyers spent much of March talking to traders and producers hoping to nail down some long-term contracts for urea – much as they did for phosphates. Sources report the buyers undertook this effort to avoid tenders and the spikes in prices that normally follow.
Because the TCP tender came in at $311/mt FOB, sources say the target price set by the Indians of $300-$310/mt FOB is possible. One trader said IPL might even see sub-$300/mt CFR offers.
Indonesia: Pusri announced a selling tender of 20,000 mt to close March 30. Sources report the tender is being run under the first of new export permits.
The drought in Indonesia has depressed local demand, making exports more attractive.
The tender is for sale in four 5,000 mt lots because the shallow draught at the plant’s dock limits the size of vessels allowed.
Middle East: Producers were not happy with the results of the Pakistan tender. Sources estimate the netback on the Iranian tons at $275-$285/mt FOB.
The Arab producers were hoping to hold the line on prices as the Indian tender approached. Steady – albeit limited – orders kept the order books full enough to avoid panic. Saudi Arabia is in good shape, say sources, because it has a contract to sell about 300,000 mt to Pakistan under a government aid package.
The Saudi business is in addition to the cargoes sent to Australia by other area producers at a healthy netback.
With the U.S. market slowing, however, and medium-tosmall buyers now on the sidelines, sources say the reserves are building.
In the absence of any other public business in the region besides the TCP tender, sources say the market for prills and granular is in the upper $280s/mt FOB to mid-$290s/mt FOB. One Asian trader said $295/mt FOB for a spot cargo is possible.
Black Sea: Terms such as “dead” and “silent” kept popping up as traders talked about what was happening in Yuzhnyy.
Sources report bids to South American buyers are showing effective netbacks of $255/mt FOB. Producers are rejecting this price level.
Sources say a $30 gap now exists between producers and end users. And many traders are caught in between.
Even as no business takes place, one Asian trader said that buyers smell blood in the water. They seem to be willing to hold off until prices are more to their liking.
Even the IPL Indian tender did little to raise expectations of higher prices in the area.
The absence of any new business in the area has left industry observers saying the Indian tender shows a new price that is lower than the current market.
China: The Chinese tons offered in the TCP tender are apparently sitting in bonded warehouses looking for a home. And there are even more tons still looking for a buyer.
The Chinese domestic market appears to be dropping, as does the international market – and this poses a problem for the holders of the bonded material.
The price of urea when it went into the warehouses is higher than what the market can now handle. Sources say any trader working with the tons will have to take the loss rather than have the price reduction pass back to the producers.
NITROGEN SOLUTIONS
U.S. Gulf: While some said there is pressure on UAN barges, nothing new was reported last week, leaving the last trades at $210-$215/st ($6.56-$6.72/unit). There was speculation that something below $210/st FOB could be done. As with urea, sellers remained optimistic once field conditions improved.
Eastern Cornbelt: UAN-32 continued to be quoted in the $255-$265/st ($7.97-$8.28/unit) range FOB regional terminals. One Illinois source put the dealer market for spot tons firmly at the $260/st ($8.13/unit) FOB level in his trade area last week.
Western Cornbelt: UAN-32 remained in a broad range at $245-$265/st ($7.66-$8.28/unit) FOB regional terminals to the dealer, with the low reported in southern Missouri. One source put the common dealer market in his trade area at the $255/st ($7.97/unit) FOB level in late March.
California: UAN-32 was pegged at $247-$258/st ($7.72-$8.06/unit) FOB in the region, up slightly from last report, with delivered UAN-32 at $275-$285/st ($8.59-$8.91/unit) in the state. The dealer market FOB Stockton was quoted in the $247-$252/st ($7.72-$7.88/unit) FOB range last week.
Pacific Northwest: Sources tagged the UAN-32 market at $270-$285/st ($8.44-$8.91/unit) DEL in the Pacific Northwest, depending on location.
WesternCanada: UAN-28 was unchanged at $294-$310/mt ($10.50-$11.07/unit) DEL, with the low in Manitoba and the upper end in Alberta. Dealer postings were referenced as high as $320/mt ($11.43/unit) DEL in the region
AMMONIUM NITRATE
U.S. Gulf: The market remained quiet. Sources said there was little demand on the barge market – nor product actually available. The last trades continue to be called $252-$253/st FOB, with sellers quoting $260-$265/st FOB for the next round of business.
Western Cornbelt: Ammonium nitrate was steady at $285-$290/st FOB, with the low in Missouri and the upper end in Iowa.
California: No market was reported for ammonium nitrate in California. CAN-17 was unchanged at $255-$275/st FOB in the state.
Pacific Northwest: Ammonium nitrate was quoted at a $348-$365/st rail-DEL in the region. CAN-17 pricing remained at $245-$250/st FOB and $260/st DEL.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was unchanged at $230-$235/st FOB or DEL.
Western Cornbelt: Granular ammonium sulfate remained at $225-$230/st FOB in the region.
California: Ammonium sulfate was steady at $220-$247/st FOB, depending on grade and location, with the upper end quoted for granular sulfate in desert locations. IRM’s postings for regular grade ammonium sulfate moved on March 8 to $235/st FOB Chico, with fluid grade moving on that date to $225/st FOB Chico and $220/st FOB Sacramento.
Pacific Northwest: Granular ammonium sulfate was pegged at $240-$245/st DEL, reflecting a slight increase from last report. IRM’s postings moved on March 8 to $240/st FOB and $245/st DEL for granular and regular grade ammonium sulfate in Washington, Oregon, Idaho, and Montana, with fluid grade sulfate postings moving on that date to $170/st FOB and $175/st DEL in those four states.
Western Canada: Granular ammonium sulfate remained at $325-$335/mt DEL to the dealer, with postings at the $340/mt DEL level on the upper end.
PHOSPHATES
Central Florida: Although Mosaic was limited on inventory, mainly due to export sales and a tight sulfur market, sales were up in the Central Florida DAP market last week. Florida and Georgia were in the market, and the Northeast was coming on strong.
The Northeast was a bit of a surprise, considering the heavy rain and snowfalls the area has had this winter. However, buyers were anticipating drier conditions during the next few weeks, and were ensuring they had enough to meet farmers’ demands.
The calendar said spring arrived last week, but that doesn’t mean a lot if the ground is too wet to work. Ground conditions vary widely, and some places will be weeks later getting started than other locations.
Even in Texas, which should have already begun its spring season, truck sales were only slowly beginning to increase. Nearby areas in Oklahoma were still too wet for farmers to work.
Still to be determined was the impact of PhosChem’s sale of six million mt to India under a three-year contract that called for two million mt a year. If India heavily draws its product in the early stage, the shortage will be felt on the domestic market – and prices will bounce up.
Yara settled April ammonia prices for Tampa at $415/mt, down $35/mt from March’s $450/mt FOB. One of reasons given was lower production levels by Mosaic, which were believed to be below 80 percent of capacity. Mosaic’s reduced production was due in large part to a shortage of molten sulfur. Second-quarter sulfur contracts will begin sometime after April 1, and the price will likely rise – possibly to around $200/lt, according to some sources.
The Central Florida DAP price range last week changed from $410-$415/st FOB the previous week to $415-$420/st FOB, primarily due to higher producer prices. Mosaic’s posted price moved up from $410/st FOB to $415/st FOB, while CF’s price matched Mosaic’s. PCS Sales was charging market-based prices. The prices from Agrifos were $450/st FOB for DAP and $460/st FOB for MAP, but railcars were about $5/st FOB less, if available.
U.S. Gulf: Temperatures in the Midwest were on the rise last week, but the ground was too wet for farmers to work in their fields. A trader complained that rain or snow has hit every three or four days, and that has delayed spring planting.
NOLA DAP barge sales were down last week – and prices went the same direction. However, the number of barges available for sale remained quite low, and will probably not be sufficient to meet dealer demand once the season kicks into high gear. That will happen relatively quickly, and those with barges in place will benefit.
The USDA will unveil its corn crop estimate on March 31 at 7:30 a.m. CDT. Unofficial estimates were running around 88 million acres, and that will probably be pretty close to what the USDA will say. Assuming corn prices continue to be in relatively good shape, farmers will likely use ample amounts of phosphate to reap the benefits.
Only a few NOLA DAP barge deals could be found last week, and they were below the previous week’s range. However, the lower prices for barges would help terminals, which were posting prices between $445/st FOB and $455/st FOB last week.
The Army Corps of Engineers scheduled the Mississippi River north of St. Louis to reopen on April 4. Still, high water and possible flooding due to heavy rain and snow during the winter months could present some problems, because a large portion of the snow had still not melted.
Minnesota is not normally one of the first to get started on the spring season, but it may be one of earliest this year due to drier conditions and warming temperatures.
The NOLA DAP barge price dipped last week in response to a lack of activity. Deals were found in the $415-$420/st FOB range, which was down from the previous week’s range of $425-$430/st FOB, but offers appeared to be moving upward toward the end of the week, generally in the $417-$418/st FOB range after falling early in the period.
Eastern Cornbelt: DAP was pegged at $450-$465/st FOB regional warehouses, with the low out of river locations in Illinois and the upper numbers inland. MAP was $15/st higher than DAP. 10-34-0 was unchanged at $360-$370/st FOB in the region.
Western Cornbelt: DAP was reported at $445-$455/st FOB, with the low out of river warehouses in southeastern Missouri. Another Missouri source put the dealer market in his location solidly at the $450/st FOB level in late March. MAP was $15/st higher than DAP, and an Iowa source quoted truck-delivered MAP at the $475/st level to his location.
10-34-0 was quoted at $350-$370/st FOB in the region; an Iowa source put the dealer market at the $360/st FOB level in his trade area in late March.
Effective April 1, Agrium’s phos acid postings will increase to $785/st rail-DEL for both SPA and MGA in Iowa, Nebraska, Minnesota, the Dakotas, Wyoming, Colorado, Kansas, New Mexico, Oklahoma, and Texas.
California: Phosphoric acid pricing remained at March posted levels of $8.15/unit DEL in the state for both super phosphoric acid (SPA) and merchant grade acid (MGA), with Simplot referencing MGA at $8.35/unit FOB. Simplot reported that it will raise its postings by 30 cents/unit effective April 1, bringing postings to $8.45/unit DEL for SPA and MGA, and $8.65/unit FOB for MGA. Agrium is also hiking its SPA and MGA postings on April 1 to $845/st rail-DEL in California and Arizona.
DAP was steady at $485-$490/st FOB or DEL in the state, while MAP was pegged $5/st higher at $490-$495/st FOB or DEL. 16-20-0 remained at $324-$331/st FOB. 10-34-0 was pegged at $368-$380/st FOB, but sources said a $10/st increase would take effect April 1 after the phos acid pricing increase.
Pacific Northwest: SPA and MGA remained at $8.15/unit DEL in the region. Simplot reported that it would raise its phos acid postings by 30 cents/unit on April 1, bringing the number to $8.45/st DEL for both SPA and MGA. Agrium will raise its SPA and MGA postings as well on April 1, to $845/st rail-DEL in Idaho, Montana, Nevada, Oregon, Utah and Washington.
DAP and MAP remained at $485-$490/st FOB or DEL, with 16-20-0 quoted at $319-$325/st DEL in the region. 10-34-0 was tagged at $375-$385/st FOB in the region, but sources said a $10/st increase would take effect in April following the phos acid pricing hike.
Western Canada: Several sources noted a slight softening in spot MAP prices in parts of the region, but one attributed the momentary weakness to “some nervous dealers who can’t wait until spring breaks.” He said the price drift would stop as soon as parts of the U.S. begin rolling.
MAP was pegged at $582-$617/mt DEL to the dealer, depending on location, with the low reported in Manitoba and Saskatchewan and the upper end in Alberta and British Columbia. Dealer reference levels were quoted as high as $625/mt DEL in the region.
10-34-0 was unchanged at $470-$483/mt DEL in Western Canada.
U.S. Export: With the two million mt deal India inked with PhosChem last week, that country has already signed contracts for about five million mt for this year. However, it will probably still need an additional million mt to meet its needs.
India has also agreed to buy 500,000 mt from KeyTrade, 500,000 mt from China, and at least 1 million mt from other sources. It was estimated to need around six million mt this year.
PhosChem released few details on the three-year, six-million mt contract it signed, but other sources said it was for a fixed price of $500/mt CFR. After deducting for freight, that would put the Tampa price at about $440/mt. However, no other customers will be able to get phosphate close to that price. Shortly after that transaction was announced, a sale was made into Latin America at $460/mt FOB.
Also, very late the previous week Agrifos made a small sale into Latin America at $470/mt FOB.
Nevertheless, all of those sales were well below the previous week’s range of $505-$510/mt FOB. Based on the recent sales, the export DAP price range last week was $440-$470/mt FOB. The range was most likely to increase next week and thereafter in the short term.
Correction: The U.S. Export price for the issue dated March 22 was changed from $505-$510/mt FOB to $470/mt FOB.
India: The contracts with PhosChem and PhosAgro, along with smaller deals, should keep Indian users in good stead for this season. Sources say the large amount of buying that took place this season was because the country finally emptied out the warehouses from port to field. The whole distribution system needs to be replenished.
The PhosAgro and PhosChem deals are set for a total of 4 million mt, and could reach 6 million mt. But these are not the only suppliers.
Gavilon, JMPC, and OCP have all reportedly either concluded deals with Indian buyers or are about to. The total in all these deals, however, is just shy of the 1 million mt mark.
One Asian trader noted that the netbacks for the smaller deals will not be as good as what PhosAgro and PhosChem were able to achieve.
Late in the week, word from India was fresh business included the following, all at US$500/mt CFR India, with additional quantities being negotiated: IPL, 500,000 mt from JPMC ex Jordan; IPL, 350,000 mt from Keytrade ex open origin; Coromandel International Ltd., 90-100,000 mt from Agora ex China; Zuari, 75,000-90,000 mt from Helm ex China; Nagarjuna, 225,000 mt from Helm ex China; MCFL, 75,000-90,000 mt from Dreymoor ex China.
On the phosphoric acid front, Foskor has agreed with CFL to a price of US$775/mt CFR East Coast with 30 days credit for shipment March-June, an increase of US$147.50/mt on the first quarter price of $627.50/mt CFR. OCP has reportedly followed with an agreement for March-June shipment at $775/mt CFR with 30 days, an $85/mt increase on the February price of $690/mt CFR.
POTASH
U.S. Gulf: Barge prices were called $365-$375/st FOB.
Eastern Cornbelt: Potash was quoted at $405-$417/st FOB regional terminals, with producer postings at the $420/st FOB level.
Western Cornbelt: Potash pricing remained at $395-$412/st FOB regional warehouses, depending on location, with the low reported in Missouri and the upper end in Iowa on a spot basis. One source put the common dealer price for granular potash at the $405/st FOB level out of river warehouses in late March.
California: Potash was unchanged at $440-$460/st DEL in California, depending on grade. Potassium nitrate pricing remained at $929-$996/st FOB, with the low for bulk tons and the upper end for bagged product.
The sulfate of potash (SOP) market was steady at $590-$610/st FOB for bulk tons, depending on grade and supplier. Great Salt Lake Minerals Corp., a subsidiary of Compass Minerals, will raise its SOP specialty fertilizer product prices by $30/st on April 1, for both standard and granular products.
Pacific Northwest: Potash was steady at $435-$445/st FOB regional warehouses and $440-$450/st DEL, depending on grade and location. A Washington source put the market in his trade area at $440/st FOB and $448/st DEL in late March.
Western Canada: Potash to Canadian customers FOB Saskatchewan mines remained at $431-$437/mt FOB, depending on grade.
India: ICL Fertilizers on March 22 announced it has signed additional agreements to supply 430,000 mt of potash to its customers in India. This is in addition to the company’s agreement, announced last week, to supply 1 million mt of potash to another customer in India. The aggregate sale of 1,430,000 mt of potash to the Indian market over the next 12 months represents an all-time record for the company. Under the terms of the new agreements, ICL Fertilizers will supply 430,000 mt of potash, including an option for 90,000 mt, for a 12-month period beginning in April 2010, at a price of $370 mt CFR.
SULFUR
Tampa: With second-quarter sulfur price negotiations on the horizon, supplies remained tight and there was nothing to indicate that would change during the next couple of months. Speculation was that sulfur suppliers will seek a hefty increase to around $200/lt for molten to Tampa.
Sources said spot deals, which could not be confirmed, were running around $200/lt to Tampa, and world prices were even higher.
Refinery production was hovering around 80 percent and sweet crude was still the rule, which meant less sulfur production. Meanwhile, the price of gasoline at the pump was on the rise last week, as refineries were attempting to recover lost income from higher oil prices and reduced consumption. High levels of unemployment continued to take their toll on driving.
Pakistan: Pak-Arab Refinery Ltd. has issued a tender to sell 4,500 mt from April-June. The minimum reserve base price is US$241/mt excluding general sales tax and special excise duty. Delivery will be from Punjab. Bidders have to bid for at least 300 mt. Bids are due March 31.
MARKET NOTES
India: IFFCO is eyeing some US$4 billion in capital expenditures for capacity expansion in India, Argentina, and Jordan. “Of the total $4 billion proposed investment, $3 billion would be funded through borrowings and the rest through internal accruals of Iffco and our joint venture partners,” said IFFCO Managing Director U.S. Awasthi. IFFCO, the country’s largest fertilizer maker, would set up a new ammonia plant in Argentina for $800 million. IFFCO already owns 10 percent in Americas Petrogas, a Canadian oil company that is involved in gas exploration in Argentina’s Neuquen Basin in central Argentina. The gas produced by Americas Petrogas could fuel the ammonia plant. Avasthi said IFFCO would invest $100 million on this plant, matched by an equal investment by the joint venture partner. The remaining $600 million would be funded through debt, he said.
IFFCO would also invest $1 billion each in expanding its Nellore plant in Andhra Pradesh and its Kalol facility in Gujarat. At the Kalol plant, IFFCO will set up a phosphoric acid plant that will produce the equivalent of 1 million mt/y. This would go into the fertilizers produced at its Kandla plant. Another $1 billion investment will go into a new phos acid plant being set up by IFFCO and Jordan Phosphate Mines Co. at Eshidiya.
India: The Union Environment and Forests Ministry has granted first-stage environmental approval to Aditya Birla Nuvo Ltd. (ABNL) for its urea expansion project. The project envisages setting up one 2,200 mt/d ammonia unit and one 3,850 mt/d urea unit within the existing fertilizer complex at Jagdishpur in Uttar Pradesh. The facility is also known as the Indo-Gulf fertilizer division of ABNL. The complex currently comprises one 1,910 mt/d ammonia unit and two urea units, each of 1,625 mt/d capacity.
Bangladesh: The country will get a soft loan of $230 million from the Chinese government for setting up the proposed Shah Jalal Fertilizer Factory, in the Natural Fertilizer Factory area of Fenchuganj in Sylhet, northeast of Bangladesh. A formal Memorandum of Understanding was signed by both governments when Bangladesh Prime Minister Sheikh Hasina recently visited Beijing. The factory to be set up by Bangladesh Chemical Industries Corp. would have a daily production capacity of nearly 1,750 mt/d of urea, which is 0.5 million mt of urea a year.
Saudi Arabia: Ma’aden, which is currently building a giant phosphate fertilizer complex in Saudi Arabia in a joint venture with Sabic, reports that it is conducting a feasibility study for a second phosphate project. The new study is on property northeast of the city of Tarif. The new mine could add about 1.5 million mt of ore. Recent estimates indicate estimated resources in the mining license at 234 million mt, with a concentration ranging from 17-19 percent phosphorus pentoxide “P2O5.”
Ma’aden said the existing project is slated to begin production by the end of the year and will produce 2.92 million mt of DAP.
Jordan: Jordan Phosphate Mines Co. (JPMC) has bought the stake of its Indian joint venture partner, Southern Petrochemical Industries Corp. (SPIC), in Indo-Jordan Chemicals Co. (IJCC) for US$50.6 million, according to the Jordanian and Indian presses. SPIC had owned 52.2 percent of IJCC. The Arab Investment Co. of Saudi Arabia reportedly owns 13 percent of the jv. The jv includes a phosphoric acid plant with a capacity of 700 mt/d and a sulfuric acid plant that can produce 2,000 mt/d.
Todd Smith will be joining Wilbur-Ellis Co. in May to take the position of Southwest region fertilizer director, reporting to Gene Gauss, Wilbur-Ellis vice president, fertilizer and nutrition. Smith will manage fertilizer purchasing and procurement for the Southwest business units of Wilbur-Ellis and will remain in the Austin area. He is leaving The Mosaic Co., where he has overseen marketing and sales for Texas.
Toronto-Amazon Mining Holding Plc (AMH) says it has entered into an agreement with Sekita Agronegocios, a leading Brazilian agribusiness company, to fund agronomic tests using Amazon Mining’s proposed ThermoPotash product derived from the Cerrado Verde project. AMH says Cerrado Verde is a source of potash-rich rock, from which it plans to produce a slow-release, non-chloride, multi-nutrient, fertilizer product. Cerrado Verde, which is amenable to open pit mining, is located in central Minas Gerais in the heart of Brazil’s vast Cerrado agricultural area. Sekita plans to test ThermoPotash in real-world conditions for use with garlic, carrots, corn, soybeans, wheat, and grazing grass for dairy cattle. Sekita is a leading Brazilian carrot, garlic, and milk producer. Its farms are located less than 10km from the Cerrado Verde Project.
Toronto-MBAC Fertilizer Corp. reports that its recent studies suggest that a near-shore potash solution mining operation off the Brazilian coast could be profitable. It said consultant AMEC Americas Ltd. concluded that the concept is technically valid based on current information and foresaw no “fatal flaws” preventing the Coastal Potash Project from advancing to the next stage – a pre-feasibility study in conjunction with a NI 43-101 report – once an appropriate ore deposit is identified. “We are excited about the results of this preliminary study,” said Antenor Silva, MBAC president and CEO. “The results warrant further geological studies using the public domain data available and geological modeling in the vicinity of sylvinite intersections identified within our claim areas. The long-term potential value of the Coastal Potash Project will complement our near-term focus on the Itafos phosphate project, which we expect to generate significant cash flow growth starting in 2012.” In the meantime, MBAC says it continues to advance its Itafos phosphate project. MBAC expects to have a feasibility study completed for Itafos in April 2010. MBAC is focused on becoming a significant integrated producer of phosphate and potash fertilizer in the Brazilian market. In October 2008, MBAC indirectly acquired all of Itafos Mineracao Ltda, which holds a 100 percent interest in the Itafos phosphate mine and related infrastructure (the Arraias-Campos Belos Project). MBAC says it has also recently expanded its property portfolio in Brazil with the acquisition of two potash exploration projects and one additional phosphate exploration project.
Toronto-Allana Potash Corp. reports that it has completed a private placement of 14,442,500 units of the company at a price of C$0.40 per unit for gross proceeds of approximately $5.8 million. Allana intends to use the proceeds to fund exploration and development efforts on the company’s potash property in Ethiopia and for general working capital purposes. The Allana project already has some involvement from Chinese investors (GM Nov. 16, 2009), and last week there was more speculation that China might jump into the project.
Guelph, Ontario-Syngenta Crop Protection Canada Inc. on March 17 announced its intent to work with Innovotech, a Canadian biotechnology product development company, clearing the way for continued research trials in North America on a new bacterial blight research product, oxysilver nitrate. Earlier this year Innovotech and Syngenta entered into an agreement allowing Syngenta to conduct research trials of oxysilver nitrate in a seed treatment application for control of bacterial blight. “We are very pleased to play a part in the development of this new technology,” said Coby Long, North American Seed Care marketing head at Syngenta. “We believe it is important to continually seek out new innovative pest management solutions for producers, both in North America and worldwide.” Innovotech is based in Edmonton, Alberta, and it has products in medical diagnostics and agriculture.
Los Angeles-The U.S. Supreme Court may be the next venue for the legal battle over Los Angeles and Orange County trucking biosolids for land application into Kern County. Kern County banned trucking of biosolids in 2006 after an overwhelming vote by residents of the unincorporated area, and the matter has been in court ever since. Los Angeles and Orange County argue Kern is illegally interfering with interstate commerce and is violating the state requirement to recycle this material. In the meantime, Los Angeles and Orange County have been spreading more than 420,000 tons a year in two locations in Kern County, one of them a Los Angeles-owned farm that is slightly less than 5,000 acres, and the other on privately-owned land. Some 26 “very large trucks” make the trip daily.
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.
