California:
Sulfate of potash (SOP) remained at $580-$590/st FOB in California, depending on grade.
Pacific Northwest:
The SOP market was steady at $565-$570/st FOB in the Pacific Northwest, with delivered tons tagged at the $580/st level in Washington.
Members of North Central Farmers Elevator (NCFE) in Ipswich, S.D., and Wheat Growers in Aberdeen, S.D., have voted in favor of a merger of the two companies, according to a Sept. 28 announcement from both co-ops. The unified company will take effect on Feb. 1, 2018, under a new name that has yet to be determined.
“We listened to our members, and it was based on their comments that we brought this to a vote of the membership,” said Rick Osterday, NCFE board president. “We’re pleased that they concluded that the unification of both cooperatives can bring additional value to members and ensure the long-term relevance and viability of a unified cooperative. We want to thank them for their support and participation in this important part of cooperative governance.”
NCFE members voted 911-657 in favor of the merger, while Wheat Growers members supported the unification with a 1,598-954 vote. The voting period extended from Aug. 29 to Sept. 28. The focus of the two co-ops now turns to planning integration efforts, including developing a name for the new business.
“This is a merger of two financially strong, legacy-rich cooperatives,” said Hal Clemensen, Wheat Growers board president. “Our mission now is to seize this opportunity to build a new, even stronger cooperative better able to serve our member-owners. As we go forward, we will create new efficiencies, take advantage of new technologies, and continue to build a strong employee team – all in order to create more value for our members.”
NCFE and Wheat Growers first attempted a merger in 2015 (GM March 9, 2015), but the proposal went down to defeat when NCFE members rejected the unification with a 51 percent majority (GM June 22, 2015). Had that merger proceeded, the new co-op would have started operations in August 2015 under the CentraGro Cooperative name, with projected annual sales of $2.23 billion and approximately 7,000 members.
NCFE and Wheat Growers alerted members on July 31 that they were considering a second merger (GM Aug. 11, p. 1), claiming the decision was driven by a number of “market changes and pressures.” In an FAQ supplied to members on Aug. 14 (GM Aug. 18, p. 1), the companies elaborated on these pressures, citing lower commodity prices, a downturn in the agriculture economy, and a drought that is impacting the trade areas of both co-ops.
In preparation for their second merger vote, NCFE and Wheat Growers held 21 informational meetings from Aug. 21 to Sept. 1 in multiple South Dakota locations. Votes were tallied on Sept. 28 at a special meeting in Aberdeen at the Dakota Event Center.
The unified cooperative will be headquartered in Aberdeen, with the NCFE Ipswich headquarters remaining open as a regional office. Current Wheat Growers CEO Chris Pearson will serve as CEO of the new company, with current NCFE General Manager Mike Nicholas becoming the new executive vice president and COO of the company’s grain division.
Wheat Growers currently has more than 5,100 active member-owners and approximately 40 grain and agronomy locations in eastern North and South Dakota. NCFE offers grain, agronomy, feed, and energy products and services from 22 locations in north-central South Dakota and south-central North Dakota, and has more than 2,400 producer-members.
Wheat Growers and NCFE estimate that the merger will create synergies that save $12.7 million per year, or $50.8 million over four years. These annual savings include $4.6 million in agronomy, $3.7 million in grain, $2.9 million in operations, $800,000 in energy, and $700,000 in administration.
NCFE and Wheat Growers stressed that no jobs will be eliminated as a result of the merger, but said it is “too early to predict” if expected synergies will result in facility closures. “Questions about facilities and operations will be worked out by the new combined boards during the year following the merger,” the FAQ said. “Where there is any overlap in services or facilities, the boards will take a careful look at what is best for our members.”
LSB Industries Inc. on Sept. 28 announced that the ammonia plant at its Pryor, Okla., chemical facility experienced a minor fire and was taken out of service Sept. 23, 2017, to repair damage to some of the plant’s electrical controls, wiring, and piping. The company said none of the company’s employees were injured, there was no damage to the reformer or to other major pieces of equipment, and there was no release of ammonia.
LSB expects the repairs to be completed and ammonia production to resume by the end of October 2017. The company plans to meet customer commitments for pre-sales of products by either shipping from other facilities or by purchasing them from third parties, so the ammonia plant downtime will not result in reductions of UAN or ammonia sales volumes.
Management expects that the EBITDA impact resulting from the repair expenses, the excess cost of purchasing UAN versus producing it, and the reduced absorption of fixed costs will be approximately $1.5-$2.0 million for the third quarter of 2017 and $2.5-$2.75 million for the fourth quarter of 2017.
LSB said it will provide an update on the progress of the repairs and the impacts of the downtime on financial results when the company reports third-quarter 2017 results in late October.
After years of preparation, the J.R. Simplot Co. is on the verge of activating an anhydrous ammonia production plant as part of an expansion at its Rock Springs, Wyo., phosphate fertilizer complex. Simplot decided in 2014 to proceed with the $350 million, 600 st/d ammonia plant adjacent to its existing Rock Springs phosphate fertilizer complex (GM Oct. 13, 2014).
“We continue to work through the process of bringing the plant up to operational capacity,” Simplot spokesman Josh Jordan told Green Markets. “We have reached a number of important milestones and are working through the final start-up aspects of the plant aimed at ensuring all equipment and employees are meeting the highest safety and performance standards. We look forward to operating at full capacity in the near future.”
The plant will use natural gas as a feedstock, and will enable Simplot to produce its own ammonia for nitrogen fertilizer production rather than importing it by rail. At a Pocatello/Chubbuck Chamber of Commerce breakfast last July, Simplot President and CEO Bill Whitacre said that once the plant is up and running, Simplot will be one of the most efficient fertilizer producers in the U.S., enabling it to better compete globally.
While Simplot’s Rock Springs plant and its Don phosphate plant west of Pocatello, Idaho, give the company a strategic advantage in the Intermountain West, Whitacre said the company must re-invest constantly in its facilities to sustain Simplot’s long-term viability. Simplot’s Don plant, which was built in 1944 and employs 350, was the company’s first fertilizer production site. It now produces more than one million tons annually of various phosphate fertilizers, feed phosphates, and industrial products.
When Simplot first proposed the Wyoming expansion to Rock Springs officials in 2014 (GM Jan. 13, 2014), it employed about 230 there. Another 25 full-time positions will be required to operate and support the new ammonia plant southeast of the city near Interstate 80 and a main Union Pacific line.
The Rock Springs complex features a storage building that can contain 80,000 tons of dry fertilizer. About 18,000 tons of ammonia would be stored onsite at atmospheric pressure. More than 100,000 pounds per hour of process steam will be produced at the plant. The phosphoric acid, MAP, and fluorosilicic acid produced at Rock Springs is primarily shipped to Midwest states such as Kansas, Nebraska, and Iowa.
A new natural gas pipeline and upgraded electrical service were needed for the new ammonia plant, requiring Simplot to work with Questar Pipeline Co. and Rocky Mountain Power for rights of way with the U.S. Bureau of Land Management and private land owners.
Simplot announced in 2012 (GM July 30, 2012) that it would expand the Rock Springs complex with its first phase, which increased dry phosphate production by more than 30 percent, boosting the plant’s phosphate production to 400,000 tons a year. Simplot’s Vernal, Utah, mine supplies phosphate ore to the Rock Springs plant via a 96-mile slurry pipeline, much like its Pocatello plant is supplied phosphate slurry from its Smoky Canyon Mine near Afton, Wyo., near the Idaho/Wyoming border. Also in 2012, the company initiated a $170 million phosphate expansion.
Rock Springs Mayor Carl Demshar told Green Markets that Simplot’s ammonia plant expansion has been a bright spot in recent years, as Wyoming has experienced an economic downturn. At one time, the Simplot plant’s peak construction work force exceeded 600, he said.
“I personally know several people on the senior management staff at the Simplot plant. I and the rest of the city council consider them very good corporate citizens,” Demshar said, noting that he participated in Simplot’s Wyoming industrial siting hearings and gave the company a high recommendation. “They have been a real asset to the community and will be for many years to come.”
Anuvia™ Plant Nutrients, Zellwood, Fla., has announced a number of new distribution agreements to expand the market presence of its enhanced efficiency, multi-nutrient, slow-release specialty fertilizer products.
The company recently reported that Southern States Cooperative will be marketing Anuvia’s SymTRX™, while Ferti Technologies and Vereens Turf will be marketing GreenTRX™ to their golf and turf customers. The announcements follow another recent agreement that Anuvia inked with Ewing Irrigation and Landscape Supply, Phoenix, Ariz., that allows Ewing to distribute GreenTRX to its landscape and lawn care customers (GM Sept. 22, p. 27).
Richmond-based Southern States is one of the nation’s largest agricultural cooperatives, with more than 200,000 farmer-members and 1,200 retail outlets in 23 states. Ferti Technologies, founded in 1987, produces and sells premium quality fertilizers and amendments. The company’s products, which include granular, liquid, soluble, and combination fertilizers, are produced in facilities located in Quebec, Ontario, North Carolina, and Arizona. Vereens Turf is based in Longs, S.C., and is a regional fertilizer formulator and blender that has been serving golf, sod, lawn, and landscape customers in the Southeast U.S. for more than 20 years.
“Southern States, with its reputation for strong member relationships and for delivering new products and technology that bring value to their members, is a great fit for us with a product like SymTRX,” said Hugh MacGillivray, Anuvia executive vice president commercial. “The product represents cutting-edge nutrient delivery technology while optimizing crop performance.
“Ferti Technologies has developed premium quality fertilizers and amendments specific to the diverse needs of its customer base,” said MacGillivray. “GreenTRX, with its unique performance qualities and its environmentally friendly benefits, will be a great addition to their product line and a new sustainable solution to offer the turf industry.”
MacGillivray said Vereens’ “goals of balancing soil biology with increased nutrient efficiency fits with Anuvia’s environmentally friendly products, which improve soil health and plant performance.”
Anuvia said its SymTRX proprietary processing system uses multiple sources of organic waste materials to create a slow-release ammonium N and sulfur sulfate fertilizer. Both SymTRX and GreenTRX are designed to release 65 percent of their nutrients within the first 2-3 weeks, and the balance for up to eight weeks. Both products also provide 16 percent organic matter.
“We’re excited for the agronomic, economic, and environmental benefits that the SymTRX 20S product will provide to our customers,” said Steve Becraft, Southern States executive vice president of agronomy. “We believe the SymTRX 20S product is a profitable growing solution that will provide tremendous value to our customers.”
“GreenTRX is a great innovation that we are pleased to introduce in our fertilizer line,” said Martin Bisaillon, Ferti Technologies sales director. “In today’s market, healthy turf and lawns need more than basic nutrition. GreenTRX captures the synergy between organic matter and mineral nutrition, creating a novel slow-release plant nutrient product.”
K+S Group, Kassel, Germany, reported that the first large rail transport with a total of 122 railcars from the Bethune mine in Saskatchewan arrived at K+S’s potash handling and storage facility in Port Moody, one of Vancouver’s ports, on Sept. 27. The almost 2-kilometer-long unit train was loaded with about 13,000 mt of MOP standard and was pulled by four Canadian Pacific (CP) locomotives. The 1,800-kilometer-long route through the Rocky Mountains took three days. Since the end of July, several smaller rail transports have already transported the potash produced from Bethune to Vancouver.
“With this first major rail transport, we have reached another milestone,” said Dr. Burkhard Lohr, K+S chairman. “As planned, we will have capacity to produce up to two million mt at the Bethune mine annually by the end of the year.”
K+S said the arrival also marks a significant milestone for K+S’s partner, Canadian Pacific. CP had connected the Bethune plant to the existing rail network with a new, 30-kilometer-long link. For CP, this was the largest rail infrastructure project since the mid-1980s.
K+S said over the next few weeks, additional unit trains will transport potash from the Bethune mine to the handling and storage facility in Vancouver. In October, the first vessel loaded with potash will then leave the port, destined for customers in Asia.
One contract worker was killed and two others injured in an explosion at DSM North America’s resin plant in Augusta, Ga., Sept. 27. Initial reports were that it resulted from a welding accident. Local authorities said there was no chemical leak or evacuation. No significant damage was reported at the plant or to its neighbors, which includes a plant owned by Potash Corp. of Saskatchewan Inc.
The Fertiliser Association of India (FAI) has elected K.S. Raju as its new chairman and Manoj Mishra as co-chairman. The decision was reached at a Sept. 25 board meeting of the organization. Raju is chairman of the agri and energy group Nagarjuna, and this will be his second term as FAI chairman. He previously held the position during 2008-2010. Mishra is chairman and managing director of National Fertilizers Ltd.
U.S. Gulf:
The rally in NOLA granular urea prices proved to be short-lived, as some had predicted. Prompt trades last week were called $226-$245/st FOB, with the lower end late in the week, compared to the week-ago $230-$260/st FOB.
Thinly-traded prills retained a firmer footing at $260-$265/st FOB, compared to the prior week’s $260-$270/st FOB.
Eastern Cornbelt:
Sources quoted the granular urea market at $275-$285/st FOB in the Eastern Cornbelt, with most river terminals reported in the $275-$280/st FOB range in late September.
Western Cornbelt:
After the prior week’s rapid run-up in price, the granular urea market had reportedly plateaued. Sources quoted the St. Louis, Mo., market at $275-$280/st FOB, with pricing out of Port Neal and Caruthersville, Mo., pegged at the $280/st FOB mark.
Urea pricing at Catoosa, Okla., and Minneapolis, Minn., had actually retreated from the prior week’s highs. Sources quoted the Catoosa market at $270-$275/st FOB for the week, down from a high of $290/st FOB reported on Sept. 21. The Twin Cities urea market was quoted in a broad range at $260-$275/st FOB for the week, down from $285/st FOB or higher the week before.
California:
The granular urea market had reportedly firmed to $310-$325/st FOB in the California market, up $15/st from last report, with rail-DEL tons quoted firmly at the $330/st mark for new business.
Pacific Northwest:
Granular urea pricing was quoted at $295-$315/st FOB in the Pacific Northwest, up a full $20/st from last report, with the upper end reported out of inland terminals. The Rivergate, Ore., price had reportedly firmed from $295/st up to $305/st FOB in late September, while delivered tons in eastern Montana were quoted at the $310-$320/st level.
Western Canada:
Urea prices had moved up considerably in Western Canada, fueled by the rapidly firming NOLA market. Most of the new offers for October tons reportedly fell in the C$430-$440/mt DEL range in the region, up a full C$45/st from last report, but many were skeptical that business had actually been done at that level.
“There is still hesitation at C$425-$430/mt DEL in Saskatchewan,” said one contact. “There is lots of nervousness, and distributors will not take any position right now. They can afford to wait.”
India:
The IPL tender closed on Sept. 25 with another push on prices. The lowest offers were at $284.66/mt CFR for the West Coast and $285/mt CFR for the East Coast, just a bit more than a $40/mt bump from the IPL tender earlier in the month.
IPL was ready to issue awards for 522,000 mt, but there are reports from India that IPL was only authorized by the fertilizer ministry to purchase 300,000 mt. Sources said IPL’s leadership was appealing the decision so that they can buy the full amount. As the week ended, however, sources were reporting that at least one possible award was being pulled back.
More companies participated in this tender, and they offered more tonnage than the previous tender. Sixteen companies offered about 1.1 million tons. The defining difference was the price, said one trader, with the boost in price appearing to have shaken more tons loose.
The bulk of the offers were in the $290s/mt CFR, with a few at $300-$330/mt CFR. Sources noted that there were limited offers from Iran, and more from China than expected. Once the price neared the $300/mt CFR zone, however, sources said more producers were willing to part with their product.
| Offering Company | Offers (‘000 mt) | Price US$/mt CFR | Discharge Port | |
| Firm | Optional | |||
| Aries | 126 | 284.66 | Gangavaram | |
| 289.66 | Krishnapatnam | |||
| Transagri | 10 | 285.00 | Kandla | |
| 60 | 295.00 | Krishnapatnam | ||
| 291.00 | Mundra | |||
| Koch | 41.9 | 286.00 | West Coast | |
| 60 | 291.80 | East Coast | ||
| Ameropa | 42 | 286.77 | Mundra | |
| 42 | 297.77 | Kandla | ||
| Comzest | 40 | 287.40 | West Coast | |
| 290.00 | Gangavaram-Karaikal-Tuticorin | |||
| 60 | 293.70 | Kandla | ||
| Amber | 60 | 288.00 | Mumbai-Kandla-Pipavav | |
| 295.00 | Gangavaram | |||
| 296.00 | Kakinada-Vizag-Karaikal | |||
| CHS Europa | 45 | 290.13 | Kandla-Mundra | |
| Dreymoor | 172 | 291.25 | Pipavav | |
| 291.45 | Hazira Anchorage-Mundra | |||
| 291.60 | New Mangalore | |||
| 291.95 | Tuna | |||
| 296.69 | Gangavaram | |||
| 297.79 | Vizag-Krishnapatnam | |||
| 298.39 | Karaikal | |||
| 301.69 | Tuticorin | |||
| Fert Trade | 60 | 292.00 | Mundra | |
| 294.00 | Krishnapatnam | |||
| Transglobe | 60 | 292.00 | Mundra | |
| 295.50 | Krishnapatnam | |||
| Swiss Singapore | 60 | 295.50 | Gangavaram-Karaikal | |
| 296.40 | Mundra-Pipavav | |||
| Fertisul | 50 | 299.00 | Gangavaram | |
| 299.95 | Krishnapatnam-Karaikal-Kakinada | |||
| Sinochem | 50 | 30 | 299.96 | Krishnapatnam |
| Continental Traders | 60 | 301.00 | Gangavaram | |
| 301.95 | Krishnapatnam-Karaikal-Kakinada | |||
| Midgulf | 60 | 330.00 | Krishnapatnam-Karaikal-Kakinada | |
| 328.00 | Tuna | |||
Muntajat of Qatar offered 30,000 mt at $300/mt FOB. Sources said this was put in so the Arab Gulf producers could signal where they think prices should be.
By the middle of the week, IPL released a list of awards totaling 522,000 mt. Chinese producers will be sending 248,000 mt, Iran only 65,000 mt, Ukraine 52,000 mt, Arab Gulf producers 122,000 mt, and Pakistan 35,000 mt.
|
East Coast |
||
| Offering Company | Source | Tons Awarded (mt) |
| Aries | China | 126,000 |
| Fert Trade | China | 62,000 |
| MidGulf | China | 60,000 |
| Comzest | Iran | 40,000 |
|
West Coast |
||
| Offering Company | Source | Tons Awarded (mt) |
| Ameropa | Arab Gulf | 84,000 |
| Koch | Oman | 41,600 |
| Dreymoor | Ukraine | 52,000 |
| Amber | Pakistan | 35,000 |
| TransAgri | Iran | 10,000 – 25,000 |
As the week closed, reports surfaced that one award was being withdrawn by IPL. Late Friday, as Green Markets was going to press, IPL increased the total tonnage awarded to about 600,000 mt. Sources confirmed Amber was one of the companies that received an additional award. Sources said the Amber award was for Chinese product.
Sources also raised eyebrows at the Amber offer of Pakistani urea. Traders expressed concern that political differences between India and Pakistan would be played out in the final approval stage of the delivery of the product. One trader said he could imagine all sorts of bureaucratic issues that could be raised at the receiving port to slow the entry of Pakistani urea into the country. Others said the need for urea in India could push down the traditional rivalry between the two countries.
The lack of Iranian tons in this tender was attributed to plants being shut down for maintenance and Iran’s growing presence in the global urea market. One trader noted that just a few years ago only two companies knew the ins and outs of exporting Iranian urea. Now, he said, there are at least nine trading houses that handle Iranian tons. He further noted that only three of those companies have been offering tons into India.
Even as Iran expands its presence in the world, sources said it should be able to provide the bulk – if not all – of the remaining demand for urea in India for this year.
If IPL can buy all the tons it wants, the country will still need about 1 million tons to close out the current season. Sources said the country could easily run two more tenders to secure the tons before Jan. 1.
The tenders could be called by two new players in the urea import business. The government has issued limited-time permission for NFL and RCF to import urea during the last quarter of the year.
Sources said the Department of Fertilizers is unhappy with the way IPL and MMTC have handled urea purchases this year. In addition, the DOF and STC continue to have disputes that have kept the trading house from running a tender. The permission given to NFL and RCF to import urea for farmers is officially being promoted as an effort to streamline the process and bring more competition to the importing business.
One international trader said the government could make the process more competitive if it removed the heavy subsidies from urea and went to a modified market-based pricing system. He and others noted, however, that the subsidies on urea are a highly dangerous topic to discuss in politics, and few in government or the legislative branch are willing to do so.
China:
The almost 250,000 mt offered into India from China represents most of the tonnage sitting in dock-side warehouses, according to sources.
Chinese producers had been unwilling to back offers into India in previous tenders because prices were too low. Now, with estimated netbacks to China of $265-$270/mt FOB, companies were more than happy to step up.
In the run-up to the tender, sources reported that producers were holding out for closer to $280/mt FOB. One trader said these pricing ideas are most likely what prompted tender offers in the mid-$290s/mt CFR. As soon as the tender closed, however, many of these same producers followed up with traders offering tons at $270/mt FOB so that they could get a piece of the action in India.
Traders were having a hard time organizing loadings for large vessels. Sources said it is now necessary to visit two ports to put together a panamax shipment. This two-port option adds to the cost of the package, but also adds to the frustration level of buyers and traders looking to close deals.
Chinese material bound for India was reportedly settled at $268/mt and $269/mt FOB. Other traders said that in some cases, the second-port price could raise the level to $271/mt FOB.
Loading of product will have to wait until Oct. 9. Offices and factories will be closing this weekend as China begins a week-long celebration starting on its National Day, Oct. 1. The government has been promoting the long holiday breaks to encourage more travel and recreational spending within the country to boost the national economy.
Middle East:
The netback to Arab producers from the Indian tender is pegged in the low-$270s/mt FOB. Sources put the freight to India’s West Coast at $10-$11/mt.
While Qatar offered tons into the Indian tender at $300/mt FOB, sources said other Arab producers have been talking of prices closer to $280/mt FOB. The product that will be sent to India is pegged at $270-$275/mt FOB, with some traders arguing that sub-$270/mt FOB is also possible.
Iranian plants that had been shut down for routine maintenance will be coming back on line in October. Sources said once the producers hit their stride, Iran will have about 400,000 mt available for export each month.
Traders said that means Iran could easily handle the rest of India’s demand – about 1 million tons – for the remainder of the year. In addition, said one trader, there will be enough tons for Iran to continue to service its new customers from Latin America to Southeast Asia.
Egypt is now coming down from its high of over $300/mt FOB. Sources said the latest granular price is pegged at $290-$295/mt FOB, and prills at $268-$273/mt FOB. Abu Qir reportedly sold 15,000 mt of granular for $294/mt FOB for October loading. Another full shipment of prills supposedly went for $273/mt FOB.
Traders were shaking their heads at the prices achieved last week. Even in the upper-$290s/mt FOB, sources said it will be difficult to find a home for the product. One trader noted that the tons above $300/mt FOB were all for November loadings.
Black Sea:
The Dreymoor award from IPL/India marked a return of CIS product being sold to India. Sources said it has been a long time since anything out of Yuzhnyy was considered by Indian buyers, because the prices were too high.
The $284/mt CFR West Coast price into India translates to an approximate $260/mt FOB netback to Yuzhnyy after freight and costs. One trader said a more realistic price would be $255-$260/mt FOB.
Pakistan:
Sources said the Amber offer of Pakistan material in the IPL/India tender could be the last of the 100,000 mt or so of Pakistan urea the trading house secured some time back at $215/mt FOB.
Many in the industry were stunned by the Amber move. The political and social conflicts between Pakistan and India have often turned simple transactions into major productions. One trader said he expects to see the Indian port authorities and inspection teams going over every document at product unloading to ensure that the absolute letter of the law is followed.
Pakistan allowed about 300,000 mt of urea to be exported this year because local reserves were too high. Sources said the combination of increased domestic production and imports taken under long-term contracts built up the stockpiles. The government allowed exports only if the action did not drive up the domestic price and if the sales did not cause domestic shortages.
Indonesia:
Rumors are circulating that a selling tender for small tonnage of 20,000 mt will be called soon. The floor price under discussion is about $260/mt FOB. However, sources said there have been problems getting $220/mt FOB in the past.
The recent run-up in prices may make the Indonesian pricing idea of $260/mt FOB more palatable to buyers, said one trader. The issue will still be finding a home for the product. The main buyers of Indonesian urea – Australia and Vietnam – are not in the market. Vietnam is imposing a large duty on imported urea, and the season is wrong for Australia.
Nepal:
A couple of tenders will be closing in the next few weeks. A tender by STCL closes Oct. 16 for 32,000 mt, and a second by AICL for 25,000 mt closes Oct. 25. Each tender also includes a call for DAP.
The tenders call for bagged material delivered to an Indian port near Nepal and then shipped to Nepalese warehouses. Sources said the usual package cost on the product is about $100/mt.
U.S. Gulf/Tampa:
Tampa ammonia prices for October jumped $30/mt, moving to $245/mt CFR from September’s $215/mt CFR, continuing an upward trend from August’s $190/mt. While some sources expressed surprise by the extent of the increase, others said it could have been more in light of higher international price ideas.
In the meantime, sources reported that recent NOLA barge trades have occurred within the $180-$190/st FOB range.
Eastern Cornbelt:
The ammonia market remained at $305-$340/st FOB in the Eastern Cornbelt, depending on location, with the lower numbers reported in the Illinois market. One source quoted the bulk of recent prompt sales in the $320-$330/st FOB range in the region, but said prices “will need higher values in the future.”
Western Cornbelt:
The ammonia market ranged from $290-$325/st FOB for fall tons in the Western Cornbelt, depending on location and supplier. Sources quoted pricing out of Port Neal, Iowa, at the $310/st FOB level at midweek.
California:
The California ammonia market remained at $410/st DEL for anhydrous and $118/st FOB for aqua in early September.
Pacific Northwest:
The anhydrous ammonia market remained at $350/st FOB and $350-$380/st DEL in the Pacific Northwest, with the low for railed tons and the upper end for truck-DEL product. The aqua ammonia market was steady as well at $98-$102/st FOB in the region.
Western Canada:
The anhydrous ammonia market was pegged at C$505-$510/mt DEL in Western Canada for fall tons, although some sources confirmed the last actual business at the C$495/mt DEL level.
Baltic:
Last week’s sale of 15,000 mt to OCI at $270/mt FOB caught the attention of the industry because the price was way out of line with the general market trends. Sources noted that while prices have been moving up around the world, the big leap taken in this sale is not reflective of other markets.
Reportedly, the OCI purchase was made more in desperation rather than for any long-term planning, and Uralchem was more than willing to take advantage of the buyer’s predicament.
Ammonia-producing regions around the world reported shortages of spot material. Sources said that once OCI exhausted all other options, it had no choice but to accept the dramatically higher price from Uralchem. Sources said only one more small cargo is available in the area for October, and OCI may once again have to pay a higher-than-expected price.
The upward price on Baltic ammonia is two pronged, said one trader. The global demand and lack of product from other sources provided a firm floor on pricing ideas. In addition, the bulk of ammonia produced in the region is being used for domestic consumption. The strength of the domestic market ensured that any export price would be dramatically higher. Reportedly OCI was told it could have the cargo, but only if it matched the domestic price.
The OCI purchase was for material to be sent to Northwest Europe. Sources said freight to Antwerp is about $35/mt, leaving a landed price of $305/mt CFR. Even the most bullish industry watchers said that price was high for the current market.
Black Sea:
Sources reported that the only tons available in October are already under contract. One trader estimated that about 160,000 mt will flow out of Yuzhnyy in October.
Producers are reportedly looking for netbacks at $220/mt FOB, but without any spot sales to back up their desires, sources said the public price is put at just above $200/mt FOB. Eventually, said one trader, the public price will move up if even a small cargo is sold on the open market. For now, however, promoters of higher prices point to the tight global market and a calculated price back from the high price in Northwest Europe.
The sale of material to OCI from the Baltic has a calculated price of $305/mt CFR into Antwerp. By taking $60/mt off that level, sources said the calculated price is about $240/mt FOB. While that level might be reached eventually if the current market trend continues, no one predicted this price level through October.
Middle East:
Many Arab and Persian producers are still in turnaround situations, leaving no ammonia available for the spot market. One trader described the situation as “super short.”
Arab producers are quoting $250/mt FOB to inquiring buyers. They note that even at that price, however, finding enough material to fill a large order would be difficult.
Adding to the frustration of buyers looking for tons in the area, sources said North African suppliers – often the second choice for buyers in the region – are all reporting no available ammonia. Libya and Egypt report no spare tons, and Algerian production is still down. Prices in the North Africa region are now pegged just under $220/mt FOB.
The lack of extra material in the Middle East region is hitting India and its suppliers. Sources said PCS had to provide an Indian buyer with material from Trinidad. One trader noted that seeing tons come from the Western Hemisphere to India is not unique, but it is also not common.
India:
The last bit of public business into India was pegged at $250-$255/mt CFR. One trader said that given the movement in prices around the world, buyers will not be able to match these prices. Sources said buyers are getting into the mindset that they may soon have to pay $270-$280/mt CFR for West Coast ammonia deliveries and $280-$300/mt CFR for the East Coast. Industry watchers are careful to point out that prices are currently not at these levels.
Sources speculated that Mitsubishi might move a couple of ships to India. Reportedly, the vessels are holding cargo picked up some time ago at $200/mt FOB. If the right buyers can be found, the Japanese trading house will be able to unload the product for a healthy profit.
