Ottawa, Ontario-The Canadian Fertilizer Institute (CFI) has established an Urban Fertilizer Council to communicate the importance of responsible nutrient use to companies that supply lawn and garden fertilizers. CFI’s website emphasizes that effective use of fertilizers for lawn and garden care needs to be proactively communicated to the media and urban consumers, and that municipal officials need to know the facts about fertilizers and ways that homeowners can use fertilizer while at the same time protecting lakes and rivers. For starters, CFI suggests getting gardeners to carefully follow the directions on fertilizer bags to reduce the impact on the environment. Information is also provided in other areas, such as contributions of nitrogen and phosphorus to surface and groundwater from a Kentucky Bluegrass lawn; determining nutrient loading rates; fertilizer source effect on ground and surface water; healthy turf development through responsible application; limiting lawn fertilizers; mowing practices that reduce runoff from turf; phosphorus runoff losses from lawns; responsible fertilizer practices for lawns; and University of Nebraska-Lincoln environmental concerns.
U.S. Gulf/Tampa:Yara has concluded April business at Tampa at $610/mt DEL for all customers, a drop of $25/mt from March. Sources say the new price nets back to Yuznhyy at around $530/mt DEL – others say lower.
Eastern Cornbelt:While fieldwork remained stalled in Illinois, Indiana, and Ohio due to wet weather, sources said preplant movement had resumed in parts of Kentucky and Tennessee last week. Ammonia sales were confirmed in the $665-$695/st FOB range, with reference levels as high as $705/st FOB in the region. Fall prepay ammonia sales were still being concluded in the $710-$720/st FOB range last week, with at least one supplier reportedly referenced as high as $740/st FOB for fall. According to one source, most who wanted to lock in fall prepay tons have done so already.
Western Cornbelt:Anhydrous ammonia continued to be quoted at $650-$670/st FOB regional terminals for prompt tons. Sources reported a little preplant movement in Nebraska last week, but wet weather slowed the pace again on Thursday. A Missouri source pegged delivered ammonia in the $640-$650/st range from southern production points. A wider range was reported for fall prepay offerings, with some suppliers reportedly referenced as high as $740/st FOB for fall, up from previous levels in the $685/st FOB range.
California:The anhydrous ammonia market was pegged at $750-$765/st DEL in the state, with the low for trucked product and the upper end reflecting rail-DEL material. Effective March 24, Agrium’s anhydrous ammonia postings firmed to $750/st truck-DEL in Central California and $755/st truck-DEL in Northern California. Calamco’s reference prices in California moved on March 18 to $750/st truck-DEL and $765/st rail-DEL, with aqua ammonia moving to $200/st FOB from the previous $185/st FOB.
Pacific Northwest:Anhydrous ammonia remained at $715-$725/st DEL in the region, with the low in Montana.
Western Canada:Anhydrous ammonia pricing remained at $853-$889/mt DEL in the region.
Black Sea:Just where the market lies is up for debate. Asian sources look at the $610/mt CFR price in Tampa, pull out their calculators, and estimate the netback to Yuzhnyy at $510-$530/mt FOB.
At the same time, other observers look at the price going into April just below $500/mt FOB. One place is putting the price at $475/mt FOB for this week.
Asian observers note that April will most likely be soft. One trader commented that current discussions of prices in the mid-$400s/mt FOB as soft or weak should be seen in an historical perspective.
With recent prices in the upper $500s/mt FOB, the mid-$400s/mt FOB does look like a bargain. But, said this trader, previous years were never so high.
According to the Green Markets price scan, 10 years ago this week ammonia was at $117/mt FOB. Five years ago the price was $215/mt FOB, and last year it was $277/mt FOB.
For now, sources are putting the market in the low $500s/mt FOB – with plenty of room to fall. By the end of last week, one source said a safe bet would be to put the range at $510-$530/mt FOB until new business becomes public.
Middle East: Sabic settled a deal with OCP/Morocco for $590/mt CFR. Sources say the estimated netback on the deal is about $520/mt FOB. The deal moved up the low end of the market.
A previous deal with FACT led to a bottom price of $508/mt FOB. Other deals at the same time were pegged at $530/mt FOB. With the Sabic-OCP deal, sources say the bottom has tightened.
Producers are reportedly oversold and in no mood to bargain. Reports from India that FACT will shut down its operations because of the high cost of inputs – including ammonia – were greeted more with sighs of relief than concern of where the production will go.
The problem is that so far the FACT shutdown is more rumor than fact.
Buyers in South Asia will be ready to pick up any tons that might become available if the FACT story pans out.
South Korean buyers, in particular, are anxious for material.
Ammonia sources closer to Korea are sold out, leaving SFC, Dong Bu, and Namhae to look where ever they can for material.
For now, the price is pegged at $520-$530/mt FOB.
India: Rumors are circulating that FACT will shut down because input costs are too high. Asian sources said they were chasing down the rumor the better part of last week with no luck in getting confirmation or denial.
If FACT closes down, the impact on the ammonia market will be more psychological than actual. The company buys about 80,000 mt of ammonia a year, mostly from the Middle East. In the current climate, the ammonia producers can find ready homes for the ammonia.
South Korea: Word is that SFC still needs to secure contracts for about 200,000 mt of ammonia for the rest of the year. The company is said to be in talks with Nitrochem and Transammonia for the contracts.
SFC, like other Korean buyers, eschewed holding tenders in favor of long-term contracts. The tenders, said one Asian observer, too often led to higher spot prices and occasional gaps in deliveries.
By moving to contracts or long-term buying arrangements, the Korean companies are able to lock in their needed cargoes at more stable and predictable prices.
UREA
U.S. Gulf: Prices last week continued to be called within the $360-$370/st FOB range. However, most players tended toward the low-to-middle portion of the range. Many sellers remain bullish, but others indicated that stragglers may be tempted to let a barge go below the $360/st FOB mark. There was one such report, but no firm confirmation.
Price ideas for prills varied quite a bit, with most putting the product within the $350-$359/st FOB range. Some felt lower quality product could be had below $350/st FOB.
Eastern Cornbelt: Granular urea was steady at $420-$445/st FOB in the region, with the low reported out of spot river terminals in Illinois and Ohio.
Western Cornbelt: Granular urea pricing remained in a fairly broad range at $410-$430/st FOB, with the low on a spot basis in Missouri and the higher numbers reflecting dealer reference pricing at some locations. One Iowa source pegged the common dealer price in the $415-$420/st FOB range out of river locations last week. The Catoosa/Inola, Okla., market remained at roughly $405-$410/st FOB to the dealer.
California: Granular urea pricing was steady at $490-$510/st FOB and $510-$515/st DEL in the state, with minimal movement reported last week.
Pacific Northwest: Granular urea was pegged at $485-$508/st DEL, with most dealer quotes reported at the lower end of that range last week. Sources said that market was actually up from a low of $450-$465/st DEL in mid-March. On an FOB basis, sources tagged the urea market last week at $485-$495/st in the region.
Western Canada: Granular urea was steady at $575-$600/mt DEL to the dealer, although there were reports of sales to larger volume buyers at $30-$40/mt discounts from those levels.
India: The State Trading Co. called a tender late last week to close April 7. The tender documents do not specify the quantity, but did call for a long-term supply of prilled or granular urea from April 2008 through March 2009. Sources estimate the total deal should be for about 300,000 mt.
The tender is the second wave of what is expected to be a steady round of tenders from India. The MMTC tender that closed last month was the opening shot in the 2008-2009 purchasing program for India. Unfortunately for the Indian buyers, prices moved up quickly on the MMTC announcement. In the last tender MMTC took about 600,000 mt. Sources say it will need to come back in for another tender near the end of the second quarter.
Sources expect to see IPL step up by the end of April, as soon as the STC awards are made.
Black Sea: Even with word that STC/India was back in the market, sources say the Yuzhnyy price has not moved. Sources report prices remain at $395-$405/mt FOB, with many saying $400/mt FOB is the most commonly discussed price.
Tons from Yuzhnyy are not expected to be offered in the upcoming STC tender. But the Black Sea suppliers are expected to look to fill gaps that might occur if other producers move to fill Indian orders and not ones elsewhere.
Middle East: Prices have not moved. Prills and granular seem to be stationary at $400-$410/mt FOB.
Area sources speculate some Middle East tons will be offered in the upcoming STC/India tender. The shipping options from the Middle East to India regularly make material from this part of the world preferable to the Indian buyers.
With India the only game in town for upcoming spot sales, sources expect to see some tons offered from the Middle East in the STC tender. Few expect to see any discounts given.
South Korea: The South Korean Red Cross announced last week that it was resuming shipments of urea to North Korea. A shipment of 5,000 mt will leave for the north this week as the South Korean government approves the renewal of fertilizer shipments to its neighbor. Local media report that shipments were halted late last year in protest over North Korea’s continued nuclear weapons testing program.
So far, about 200,000 mt has been shipped. Humanitarian organizations have said an additional 100,000 mt is needed by June to prevent another massive famine in the country.
Kyodo News Service reports that the South Korean government is paying for an additional allotment of 50,000 mt to be sent, as well as the 100,000 mt being organized by the Red Cross.
The United Nations Food Program estimates that between October and March North Korea was short of food by 125,000 mt. The Seoul government and relief agencies hope the fertilizer shipments, along with deliveries of 400,000 mt of rice, will improve the situation in the north.
China: Sources report domestic demand is more than being met. Producers are free to make offers in the upcoming STC tender. Buyers will have to take into account the increase in export duties put on urea for the second and third quarters. Beijing will move up the export duty from 30 percent to 35 percent beginning April 1.
NITROGEN SOLUTIONS
U.S. Gulf: Players continue to call the market $300-$310/st FOB, with most tending toward the bottom of the range. The bearishness is due to full tanks, say sources.
Eastern Cornbelt: UAN remained at $11.25-$11.65/unit FOB most regional terminals to the dealer, with little new business to test the market.
Western Cornbelt: Most sources pegged the UAN-32 dealer market in the $360-$365/st ($11.25-$11.41/unit) range FOB regional terminals, with the occasional pricing quote slightly above or below that range on a spot basis.
California: UAN-32 pricing was down just slightly from last report. Sources tagged the dealer market at $390-$400/st ($12.19-$12.50/unit) FOB, with postings reported at the $410/st ($12.81/unit) FOB mark in the state. There were also reports of rail-delivered UAN from the Midwest moving into sections of the state for as low as $385/st ($12.03/unit).
Pacific Northwest: UAN-32 was quoted at $405-$410/st ($12.66-$12.81/unit) DEL. One source quoted an FOB price of $400/st ($12.50/unit) to the dealer.
Western Canada: UAN-28 was tagged at $362-$378/mt ($12.93-$13.50/unit) DEL in the region.
AMMONIUM NITRATE
Western Cornbelt: Ammonium nitrate remained at $385-$395/st FOB in the region.
California: No market was reported for ammonium nitrate in California. The CAN-17 market was steady at $310-$320/st FOB in the state. CAN-27 was unchanged as well at $385/st FOB from one regional supplier, with some movement reported to the field.
Pacific Northwest: Ammonium nitrate was reported at $447-$462/st rail-DEL, with the low end in Montana. CAN17 remained at $294-$304/st DEL in the region.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate pricing was firm at $300-$305/st FOB in the region, up slightly from last report.
Western Cornbelt: Granular ammonium sulfate pricing was up slightly from last report, at $300-$305/st FOB in the region. The low end was reported in Iowa, with the upper end reflecting new reference prices in Missouri to the dealer.
California: Ammonium sulfate remained firm at $310-$330/st FOB, with the low quoted for standard grade and the upper end in desert areas of the state.
Pacific Northwest: Sources tagged the ammonium sulfate market at $325-$332/st DEL, up slightly from last report. Tiger90 was reported as high as $643-$650/st DEL in the region.
Western Canada: Granular ammonium sulfate pricing in the region firmed at mid-month to $425-$430/mt DEL, up from the previous $410-$415/mt DEL range.
PHOSPHATES
Central Florida: The weather was beginning to improve in the Southeast last week and field activity was resuming, which meant more fertilizer was moving into the area. The heavy rains began to abate last week in the Northeast and Midwest, but some areas were preparing for or were dealing with flooding conditions.
New phosphate sales out of Central Florida last week were mostly done by the truckload, but the price those sales brought was substantially above the previous week’s high in the range. Producers said domestic phosphate prices will need to rise even more, because export sales were netting $1,150/mt FOB or higher last week.
Sources noted the spring season has yet to really begin, and when it does it will be brief but intense. Last week, traders and producers were dealing with future sales, from mid-April until July. Where at all possible traders’ terminals and dealers’ warehouses were full, and both would like to keep them that way, out of fear of even higher prices by summer.
The phosphate industry, which has faced higher raw materials costs, got a small break last week when the April price was reported at $610/mt, down from $635/mt, which was about what was expected. Most believe that price will fall by larger amounts during the next few months. That could help, because next week the phosphate industry will begin negotiating second quarter sulfur prices, which were expected to take a healthy jump, somewhere between $100/lt and $250/lt.
The Central Florida DAP price range moved up from a flat $900/st FOB the previous week to $900-$950/st FOB last week. Mosaic’s asking price was $950/st FOB for prompt shipments of DAP or MAP, without the $4/st FOB discount for MAP. PotashCorp’s Central Florida reference price remained at $950/st FOB, while CF’s most recent posted prices were $900/st FOB for DAP and $940/st FOB for MAP. Discounts for national accounts were no longer available. MAP supplies continued to be scarce. In Texas, Agrifos’s truck price was $950/st FOB for trucks and $940-$950/st FOB for rail shipments, but company officials were planning another price hike, which had still not been determined late last week.
U.S. Gulf: While much of the Midwest has been hit hard by heavy rain and flooding in some areas, a few have managed to escape the deluge, such as western Kansas and eastern parts of Arkansas and Missouri. In those areas, farmers have been working the fields and applying fertilizers. However, eastern Arkansas, where the governor has declared 35 counties disaster areas, as well as other places along the Mississippi and parts of the Illinois River, will need time to dry out before work can begin.
In Oklahoma, it’s a different story. The Corps of Engineers has been releasing water from reservoirs to avoid flooding, which has created an extremely fast current on the river. While high water there was not a problem, the current was keeping barges from moving upstream. However, wheat farmers have yet to start making buys, and they may not this season. Crops there during the past two years were a disaster, and farmers were starting the season with little in the bank to buy phosphates. “They just can’t afford it,” a source said. “Not after the last two years.”
Warehouse prices last week ran from as low as $920/st FOB to as much as $940/st FOB. The lowest prices were at Inola and the highest on the upper Mississippi and Illinois rivers.
The unpleasant weather had a depressing effect on NOLA phosphate barges, with few sales being made and prices stagnating. NOLA DAP barge sales last week were in the $900-$905/st FOB range, but asking prices were running as high as $920/st FOB, which was at the top of the previous week’s range.
Eastern Cornbelt: Warehouse phosphate prices continued to firm on the strength of higher replacement costs. DAP was pegged at $940-$960/st FOB regional warehouses last week, with MAP at similar levels or slightly higher, depending on location. One supplier was now referenced as high as $995/st FOB for MAP as of March 26. No current prices were reported for 10-34-0 in the region due to lack of supply.
Western Cornbelt: DAP pricing continued to strengthen. Most sources quoted the warehouse market at $925-$950/st FOB warehouses to the dealer, although one regional supplier was reportedly referenced as high as $975/st FOB for new sales last week. MAP was quoted at $940-$965/st FOB, with postings as high as $995/st FOB for new sales. Sources continued to talk of retail sales at much lower levels, with reports from some of numbers still in the $700s/st to the grower.
10-34-0 pricing was reported in a broad range at $750-$800/st FOB, with the upper end reported last week for confirmed sales in Iowa to the dealer. “There’s just nothing out there,” said one source in reference to the incredibly tight 10-34-0 supplies in the region.
California: Producers launched a succession of price increases for phosphates during the month of March. The new numbers had many dealers contemplating not so much whether application rates would be cut, but rather by how much. “Growers are just saying, ‘What? You’ve got to be kidding me,’” said one dealer.
Effective March 17, Agrium’s MAP postings firmed to $1,010/st FOB or rail-DEL in California and Arizona. That level was up $105/st from the company’s March 7 posting, and $185/st higher than Agrium’s Feb. 26 list price. Then on March 20, Agrium moved its MAP postings up another $30/st to $1,040/st FOB or rail-DEL in California and Arizona. That posting was followed by another increase on March 27, to $1,060/st FOB or rail-DEL in the two-state region.
Simplot moved its postings up $50/st on March 26, bringing its reference prices in California to $1,060/st for MAP and $1,075/st for DAP on a rail-DEL or FOB warehouse basis. Simplot also raised its 16-20-0 and TSP postings, the first by $20/st and the second by $45/st. As a result, the company’s 16-20-0 reference prices moved on March 26 to $582/st DEL or FOB, and 0-45-0 TSP postings moved to $840/st rail-DEL or FOB French Camp. Simplot said $5/st discounts were in effect for MAP, DAP, and 16-20-0, but not for TSP.
Simplot reported that it was also raising phosphoric acid prices on April 1, by $2.10/unit from March postings in its Western and Midwest locations. As a result, superphosphoric acid (SPA) and merchant grade acid (MGA) postings from the company will move on that date to $11.70/unit DEL in California. In addition, Simplot’s MGA postings FOB local warehouses in California will firm on April 1 to $11.90/unit.
Agrium also announced new postings for phosphoric acid. Effective April 1, both SPA and MGA will firm to $1,170/st rail-DEL in Arizona and California, up dramatically from the company’s March 1 reference price of $960/st rail-DEL in those locations.
10-34-0 prices were slated to move up in tandem with the phos acid increases. Simplot’s March 28 10-34-0 postings included $521/st FOB Helm and $533/st FOB El Centro, up $81/st from previous levels.
Pacific Northwest: Prices continued to firm dramatically for phosphates. Sources said there are still lots of uncertainties about how the price hikes will affect spring usage, but one source projected cutbacks of 10-20 percent across his trade area. “Dealers might have to pack heat” when they confront farmers with new retail pricing based on current replacement costs, he said.
Most sources tagged the regional MAP market in the $1,035-$1,055/st DEL range in the region last week, but postings were ratcheting up again. “It’s been a wild and crazy ride,” said one source, noting as well that the huge upswings in replacement costs have resulted in a wide variance in retail prices.
Agrium circulated another round of MAP postings last week, the company’s fourth price hike in the region since the first of the month. Effective March 27, reference prices for MAP firmed to $1,045/st DEL in Montana and Wyoming; $1,050/st DEL in southern Idaho, Utah, Nevada, and Oregon’s Malheur County; and $1,050/st FOB and $1,055/st DEL in Washington, northern Idaho, and Oregon excluding Malheur County. Those levels were up $20/st from the company’s March 20 postings, $50/st higher than the March 17 postings, and $155/st higher than Agrium’s March 7 MAP postings in the region. Compared to Agrium’s Feb. 26 MAP postings, the March 27 levels reflect a $235/st increase.
Simplot also announced a new round of phosphate pricing increases on March 26, with MAP and DAP firming $50/st, 0-45-0 TSP moving up $45/st, and 16-20-0 firming $20/st from previous levels. As a result, MAP postings in the region firmed on that date to $1,045-$1,060/st DEL in Montana (the low in the western and central portions of the state, and the high in eastern Montana); $1,050/st DEL in Idaho and Utah; $1,055/st DEL in Nevada and the rest of the Pacific Northwest region; and $1,060/st FOB Hedges. Delivered DAP postings were $15/st higher than MAP in each location.
Simplot’s TSP postings firmed on March 26 to $795/st DEL or FOB Pocatello, and $810/st FOB Hedges. 16-20-0 postings from the company moved to $575/st DEL from Pocatello in the region, and $580/st FOB Hedges. The company said $5/st discounts were available for MAP, DAP, and 16-20-0 pricing in the region.
Simplot reported that it was raising phosphoric acid prices on April 1 by $2.10/unit from March postings in its Western and Midwest locations. As a result, SPA and MGA postings from the company will move on that date to $11.70/unit DEL in the Pacific Northwest. Agrium also announced new postings for phosphoric acid. Effective April 1, Agrium’s SPA and MGA postings will firm to $1,170/st rail-DEL in Idaho, Montana, Nevada, Oregon, Utah, Washington, and Wyoming. That level is up dramatically from the company’s March 1 reference price of $960/st rail-DEL in those locations.
10-34-0 was quoted in a broad range at $512-$555/st FOB in the region last week, up significantly from last report.
Western Canada: The MAP market in western Canada firmed on March 20 to $1,130-$1,165/mt DEL. The latest hike followed previous increases that brought the MAP market in the region to $1,085-$1,120/mt DEL on March 17, and $965-$1,000/mt DEL on March 11.
U.S. Export: Although large export sales were absent last week, those that were made continued to push up the price range. A trader made a sale of 5,000 mt into the Caribbean at $1,150/mt FOB, and PhosChem made a sale of 6,000 mt of DAP and 7,000 mt of MAP into Brazil at $1,156/mt FOB. Both of those sales were well above the previous week’s range.
India, Pakistan, Brazil, and Argentina were the most promising markets last week. In Argentina, farmers were continuing their strike to protest the high export tariffs their government put in place, but sources said buyers there began making inquiries by the middle of last week, which could be an indication a settlement may be underway.
The export DAP price range last week moved to $1,150-$1,156/mt FOB, up from the previous week’s $1,050-$1,100 mt FOB. Export phosphate prices will continue to rise.
China: Beijing will impose a 30 percent export duty on TSP beginning April 1 to last throughout the year. This move marks a completion of placing export duties on phosphate fertilizers. Other phosphate fertilizers have been subject to the 30 percent duty for some time.
Pakistan: DAP importers are at loggerheads with government officials on price issues. The government has reportedly asked the importers to sell fertilizer at reasonable prices, considering the subsidy factor. The media reported that the Ministry of Food, Agriculture and Livestock (MINFAL) clashed with DAP importers, asking them to cut the commodity’s prices. The importers say it is not possible for the importers to sell the commodity at reduced rates, hence demanded increased subsidies. Currently, importers are getting Rs470 per 50kg bag (US$ 7.58) as a subsidy, and the government had allocated over Rs15 billion for providing subsidized DAP to the farmers during 2007-08. MINFAL is urging the DAP importers not to sell the commodity at the market price of Rs2,800 per 50kg, which is the current price of fertilizer at the international level, but at the price at which the importers imported the fertilizer. The government was of the view that most of the inventories the importers had in stocks were not imported at the price of over $900, but at a rate of $500 to $600 mt. But now the importers wanted to sell their stocks at around $900 mt (Rs2800 per 50kg bag). As such, the importers were asked to come up with fresh proposals to further reduce the prices of the imported fertilizer.
The country’s total DAP and other fertilizers imports during the first seven months of the current financial year July 2007-January 2008 period stood at 1.344 million mt fertilizer at $588.775 million, compared to 895,669 mt at $248.3504 million.
Pakistan’s only DAP producer, Fauji Fertilizer Bin Qasim Ltd. (FFBL), said the commissioning and startup of the revamping of the DAP plant is expected by the end of March 2008 within the approved budget of US$30 million.
DAP production during year 2007 was 357,000 mt, i.e., 21 percent lower than 450,000 mt during year 2006, while total urea production during the year was 475,000 mt, i.e., 1 percent lower than 480,000 mt produced in year 2006.
POTASH
Eastern Cornbelt: Potash out of regional warehouses was firm at $525-$562/st FOB for brokered tons, depending on grade and location. There were reports of reference levels now at even higher levels, with talk of new numbers north of the $600/st FOB mark at some locations.
Western Cornbelt: Potash was pegged at $525-$562/st FOB in the region for limited tons from resellers or brokers. Several sources quoted the common dealer market in the $545-$555/st FOB range for spot tons, depending on grade.
California: Although muriate of potash was technically still referenced at the $445/st level for March-May shipments, sources said all the tonnage was strictly allocated at that number and much higher postings would be in effect for the June forward shipping period. Several sources talked of potash rate reductions in the region this spring as a result of the tight supply and high prices.
Sulfate of potash was quoted at $618-$635/st FOB for granular and $637-$655/st FOB for water soluble product, depending on supplier, but huge increases were looming. One supplier was slated to move its granular SOP posting to $715/st FOB on April 1, and others were looking at increases up to $80/st.
Potassium nitrate pricing was holding at March levels of $860/st FOB for bulk and $920/st FOB for bags, but sources said increases were imminent in April.
Pacific Northwest: Potash was quoted at $485/st FOB on the low end last week. Agrium’s red premium potash postings firmed on March 10 to $539/st rail-DEL and $544/st FOB in southern Idaho, Utah, and Oregon’s Malheur County; $544/st rail-DEL and $549/st FOB in Washington, the Idaho panhandle, and Oregon excluding Malheur County and the Willamette Valley; and $549/st rail-DEL and $554/st FOB in Oregon’s Willamette Valley.
Sulfate of Potash: Due to continued potash market supply and demand pressures and production/transportation cost escalation, K+S North America reports that it will raise sulfate of potash prices by $80 per US ton on all grades. The increase will be effective with shipments on April 1, 2008.
Western Canada: No current prices were reported for potash in the region due to very tight supplies and a lack of new sales.
India: Both Canpotex and BPC have now announced new contracts to India for a price of $625/mt CFR, which includes a $355/mt increase (see related story). Now all eyes are turned to China. How much longer can that buying giant stave off a new deal, and will it get much of a discount off the Indian numbers?
SULFUR
Tampa: Negotiations for second quarter sulfur contract prices with phosphate producers had not started as of late last week, and sources said that will probably not happen until the first of April, when the quarter actually begins. Regardless of when they start, the price will go up. Most were still predicting an increase of between $100/lt and $250/lt. Some time this week, the game will begin.
Last week, it was mentioned that Mosaic could reopen its frasch mine to obtain additional supplies of sulfur and possibly hold down prices. However, that will not and cannot happen, mainly because Mosaic does not own the mine, which was sold some time before the IMC/Cargill merger a few years ago.
Otherwise the situation has not changed – too little sulfur and too much demand. Supplies remain extremely low, although no new major problems were reported at refineries.
Vancouver: Negotiations between sulfur producers and the Brazilians were still underway last week, with prices between $500/mt FOB and $600/mt FOB being discussed.
Pakistan: Pak-Arab Refinery Ltd. (PARCO) issued a tender for the sale of 3,000 mt of sulfur between April-June 2008. The minimum reserve base price is US$656/mt, excluding general sales tax. Bids were due March 27.
MARKET NOTES
India: Indian Finance Minister Shri P. Chidambaram took aim at higher urea and other commodity prices when he spoke at a conference in Singapore March 26. “The price of urea was US$175/mt in 2004,” said Chidambaram. “By April 2007, it had increased to $288/mt and in January 2008 it was quoted at $378/mt.”
He also noted higher costs for several other products, including oil and various metals and minerals. “The rise in the price of crude oil is another example of greed overtaking the common good of the world,” he said. “Surely, it is nobody’s case that the cost of producing a barrel of crude oil is close to US$110. Equally, it can be nobody’s case that the risks of exploring and producing oil have risen so high that the price of crude oil should spiral from US$34 to US$110 in a matter of four years.”
He also reportedly chided the U.S. for turning corn into fuel instead of food.
Chidambaram also pointed toward the U.S. for the subprime mortgage market crisis, which he said has caused such global uncertainty. He said it was due to poor regulations and lax supervision. “A senior policy maker told me that it was because ‘innovation was ahead of regulation!’ That is an ingenious spin on regulatory failure. Once the crisis exploded in the face of regulators and governments, there was little choice but to rush to the aid of failing banks and financial institutions. If this had happened in developing countries, we would have been lectured on the virtues of bankruptcy. Since this is happening in developed countries, no one pauses to ask whether all the old arguments are not being made to stand on their head.”
Potash Corp. of Saskatchewan Inc. announced in its recent proxy circular that Steve Hoffman, 59, is expected to join the company’s board of directors at its May 8 board meeting following his election at its annual general meeting. Hoffman is a retired senior sales and marketing executive of IMC Global Inc., where he served for more than 22 years. He is a former chairman and president of the Phosphate Chemical Export Association (Phoschem) and a former chairman of Canpotex. Hoffman would replace Fred Blesi, who has served on PotashCorp’s board since 2001.
Victory Nickel Inc., Toronto, has named Steve Harapiak as president and CEO. Harapiak is an engineer with several years of experience, including service as president and CEO of Potash Corp. of Saskatchewan Inc. between 1983-1987, when the company was a Crown corporation of Saskatchewan.
The Andersons Inc. has nominated Ross Manire to the company’s board of directors. The nomination will be voted upon during the company’s annual meeting in May. Manire currently serves as the chairman and CEO of ExteNet Systems Inc., Chicago, a wireless telecommunications company he founded in 2003. If elected, Manire will fill the seat of John Barrett, chairman, president, and CEO of Western & Southern Financial Group, who has served on the board since 1992 and has chosen not to stand for re-election.
Vancouver-Potash One Inc. said March 27 that it has significantly expanded its potash permit holdings around its Legacy Project and acquired permit applications under review in southeastern Saskatchewan. The company signed an agreement with an arms-length vendor to acquire 100 percent of three potash exploration permits in Saskatchewan (KP-355, KP-356, and KP-357) and two permit applications (KP-416 and KP-417) currently under review. All of the permits and applications border or are in the vicinity of existing or planned potash operations. The land size covered by these permits and permit applications is as follows: Permits: KP-355 – 72,181 acres; KP-356 – 87,002 acres; KP-357 – 79,920 acres (total equals 239,100 acres). Permit applications: KP-416 – 91,120 acres; KP-417 – 96,240 acres (estimated equals 187,360 acres). Historical exploratory drilling and seismic programs were conducted on the newly acquired properties in the 1950s and 1960s. This historic information will be reported once the company has completed its review of all relevant historical data. The purchase price payable to arms-length vendor consists of 1,408,000 common shares of the company (with a 4-month hold) and $2,897,880 in cash upon closing. “We are very pleased to expand our potash asset base in Saskatchewan,” said Paul Matysek, Potash One president and CEO. “The acquisition of new permits in the vicinity of KP-289 creates a critical mass in an area that is potentially amenable to potash solution mining. Potash One controls permits and permit applications that cover over 500,000 acres in this important potash producing region of the world. This allows us to position Potash One as one of the key potash development companies in Saskatchewan.”
Brampton, Ont.-A youth charged with belonging to a homegrown terror cell in Canada known as the Toronto-18 pleaded not guilty in a Brampton courtroom on March 25. The youth is one of 18 individuals, 14 of them adults, who allegedly belonged to an Al Qaeda-inspired terrorist group that tried to purchase three tons of ammonium nitrate in 2006 for use in bombs intended for the Toronto Stock Exchange and offices of the Canadian Security Intelligence Service (GM June 12, 2006). The highly-publicized arrests were made after a sting operation conducted by Canadian authorities who arranged the AN sale. The youth is the first to be tried under Canada’s 2001 Anti-terrorism Act. All of the accused are Canadian citizens, and three of the teens have had charges against them stayed while the adults are awaiting trial. The identity of the youth is protected under the Youth Criminal Justice Act. The evidence includes videotapes allegedly depicting terrorist indoctrination, firearms training, and the testing of a remote switch that could be used to detonate a bomb; wiretaps of the adults allegedly plotting to kidnap and behead members of Parliament; and photographs of materials, including fertilizer, required to build a bomb. Little about the case has been made public since the arrests due to broad publication bans enforced during the bail hearings and preliminary inquiries. In September, a decision was made to halt the preliminary hearing for the adults and proceed directly to trial. Local reports said last week that it could be months and even years before those trials begin.
Dallas-The Environmental Protection Agency on March 27 has issued an administrative order on consent to Agrifos Fertilizer Inc. and ExxonMobil Oil Corp. to address long-term wastewater management and prevent future imminent and substantial endangerment to human health and the environment. EPA said in August 2007, the Agrifos Pasadena facility accumulated excessive amounts of acidic wastewater that threatened catastrophic failure of the impoundments. An abnormal amount of rainfall caused an excess of wastewater at the South Stack, resulting in the failure of a portion of the retaining wall that released wastewater into a county drainage ditch, Cotton Patch Bayou, and then into the Houston Ship Channel. The overflow released approximately 54 million gallons of wastewater between August 16 and September 7, 2007, and at least one fish kill was reported in the bayou. “This order is a reminder to those who own and operate these facilities of their responsibility to protect human health and the environment,” said EPA Regional Administrator Richard Greene. “EPA will continue to vigorously enforce our nation’s environmental laws through a strong enforcement program.” The EPA order requires Agrifos and ExxonMobil to promptly take steps to complete side slope closure of the gypsum stacks over the next two years and develop a corrective action plan to address soil and groundwater contamination. Agrifos and ExxonMobil will also build a new wastewater treatment plant to treat wastewater and dispose of acidic wastewater using the deep injection well at the facility. The order also requires Agrifos and ExxonMobil to demonstrate, through modeling, a five-year plan for managing water balance during closure activities at the site. The Agrifos facility has been in operation since the mid-1960s and was originally constructed and operated by the Mobil Corp. Agrifos operates a mineral processing facility that extracts phosphorus from mineral ores for use in commercial fertilizer. The byproduct wastes include phosphogypsum, which is accumulated in large piles of gypsum stacks, and process wastewater. Surrounding each gypsum stack is a moat storing process wastewater that has leached through the gypsum, which is normally treated within the plant.
Calgary-Encanta Resources is reported to have signed a memorandum of understanding with the Federation of Saskatchewan Indian Nations (FSIN) that could lead to potash exploration on Indian lands. According to the Star Phoenix, Encanta, a private oil and gas company with no potash experience, expects to spend up to $25 million to explore 400,000 acres of First Nations land in Western Canada.
Los Angeles-Rentech Inc. said March 11 that it is expanding its initiative to produce synthetic biofuels from garbage, often referred to as municipal solid waste (MSW). Rentech, having developed, patented, and licensed clean-energy technology for over a quarter-century, will pursue projects in large municipalities to convert garbage that otherwise would be buried at landfills into ultra-clean, biodegradable jet fuel, potentially meeting the needs of local airports and communities. “The Rentech Process can help solve waste management issues by utilizing waste streams such as MSW for the production of synthetic biofuels,” stated Richard Penning, Rentech executive vice president of commercial affairs. “For example, the County of Los Angeles alone creates close to 42,000 tons of garbage each day, and the City is quickly running out of landfill space to dispose of its waste.” The production of biofuels from MSW using the Rentech Process could have a potentially carbon neutral or even carbon negative footprint, while extending the life of existing landfills. These fuels are also cleaner burning and more efficient than petroleum-derived fuels. Rentech recently hired D. Edwards Inc., a waste management consulting firm, to assess market opportunities for converting MSW to synthetic biofuels, with a focus on California. The company also recently hired a former World Waste Technology executive to lead the initiative.
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