All Posts from August 31, 2015

Urea

Asia, Black Sea, Eastern Cornbelt, Great Lakes, Market Watch, Middle East, Northern Plains, Tampa, U.S. Gulf, Urea, Western Cornbelt

U.S. Gulf: Prompt barge prices continued to wane last week, with players calling new business within the $275-$280/st FOB range. Prompt prills were called $295/st FOB, with mid-September about $10/st less.

Eastern Cornbelt: Granular urea pricing in the Eastern Cornbelt showed a slight decline from last report. The regional market was quoted at $325-$335/st FOB, down $10-$20/st, with the low FOB Cincinnati, Ohio. Urea pricing out of the Burns Harbor, Ind., market was quoted at the $330/st FOB level last week.

Western Cornbelt: The granular urea market was quoted at $325-$335/st FOB in the Western Cornbelt, down some $10/st from last report, with the low out of river terminals and the upper end inland.

Northern Plains: The granular urea market was pegged at $315-$320/st FOB the Twin Cities for late August tons. Delivered urea in North Dakota covered a broad range at $340-$380/st, “depending on where you’re going with it,” according to one source. “The farther west, the more money from Minneapolis.”

Great Lakes: The granular urea market was down some $25-$35/st from July pricing levels, although some regional terminals remained out of product in late August.

The dealer market was reported in a broad range at $330-$365/st FOB in the Great Lakes region, depending on location, with the upper end quoted by Michigan sources out of inland points. Wisconsin sources pegged the common dealer market for urea at $330-$340/st FOB for new sales.

Northeast: Granular urea was tagged at $340-$345/st FOB terminals in the Northeast for new sales, although some locations remained seasonally out of product in late August.

India: The industry took a series of deep breaths in the wake of the MMTC and TCP/Pakistan tenders. Sources now say another tender could be called as early as this week.

Sources say IPL is next in the rotation to call a tender, and prices are expected to be lower than the MMTC tender of July due to the devaluation of the Chinese currency.

Industry watchers are skeptical about how many tons India really needs. They cite the poor rains this season, combined with the extreme drought in some areas, as arguments against any large purchases.

One trader noted, however, that urea availability is a highly sensitive political issue, and that the government has allocated enough funds to import about 3 million mt this season. The psychological impact of buying less, argued another source, could lead to political problems for the government because farmers may perceive that there won’t be enough urea on hand for them.

To avoid the political angst, the government may go ahead and authorize up to 3 million mt of urea. Whatever is left over can be used as buffer stock for the next season.

Indian buyers are said to be looking at the impact of the Chinese renminbi devaluation and comparing the losses and gains based on the rupee’s strength against the U.S. dollar. Sources point out that while most Asian currencies were falling in relationship to the dollar, the rupee actually gained back some strength last week.

The big unknown is the proposed Chinese value-added tax (VAT) scheduled to take effect Sept. 1. How – or if – the tax will affect exports is still up in the air. For buyers, any gains won through devaluation for lower prices may be lost with the VAT.

Chinese urea has stabilized. Prills are now pegged at $270-$275/mt FOB, with granular running about $5/mt ahead.

Supplies are steadying out. Most of the prilled material heading for the ports is already booked for either India or Pakistan. Sources say Ameropa was able to secure Chinese tons within 24 hours of the aw

Potash Corp. of Saskatchewan Inc. – Management Brief

Management Briefs

Bernie Rock has rejoined Potash Corp. of Saskatchewan Inc. and will assume the position of vice president, project development and operations, effective Sept. 14. He will report to Raef Sully, president of PCS Nitrogen.

Rock was initially employed at Arcadian Corp., and joined PCS in 1997, holding various titles until retirement in 2012. Thereafter, he served a stint as senior vice president for Trammo’s ammonia division before becoming president of NTL LLC, a nitrogen consulting company.

Rock will be relocating from Tampa to the PCS offices in Northbrook, Ill.

Transportation

Market Watch, U.S. Gulf

Atlantic: Tropical Storm Erika, located 30 miles southeast of Antigua on Aug. 27, was forecast to follow a northwesterly track over the weekend. Weather models called for the system to reach Category 1 hurricane strength before striking Florida’s eastern coast on Aug. 30-31.

Tropical Storm Danny devolved into a low-pressure trough in the Caribbean last week. Forecasters did not believe the system was likely to intensify again.

U.S. Gulf: Increased navigation through Algiers Lock pushed delays at the site to 18-24 hours for the week, shippers noted, with an average of 18 vessels in the queue. The extra traffic was due to dewatering, maintenance, and repair efforts underway through Oct. 15 at Bayou Sorrel Lock, and heavy congestion was reported in the West Canal – particularly in the Houma area – resulting from the work at Bayou Sorrel. Delays at Industrial Lock were reported at 4-6 hours, and boats were transiting Port Allen Lock in under an hour.

Industrial Lock was closed to daytime navigation on Aug. 24-25 for gate inspection. Water levels at New Orleans continued to recede last week, with the city’s gauge reading 5.1 feet and falling on Aug. 27.

Singlewide towing restrictions remained in place on westbound traffic through Calcasieu Lock, shippers said, adding that restrictions would remain in place until further notice. Dolphin construction on the lock’s east side triggered daylight Monday-through-Friday transit closures. Construction was extended through Sept. 18.

Lower Mississippi River: Weir construction and mat-laying activities caused intermittent daytime closures at Mile 643 on the Lower Mississippi River. The closures are expected to linger through Oct. 8. Similar activities will affect Mile 893 on Sept. 5-12, Mile 714 on Sept. 17-22, and Mile 418 on Nov. 11-17.

Weir construction at Big Island Bendway (Mile 600) continued last week. Sources said the project was 62 percent complete as of Aug. 26. Navigation is unavailable between 7:00 a.m. and 7:00 p.m. through early September, though waiting traffic has been allowed to pass overnight before the start of the following day’s work.

Upper Mississippi River: Dredging at Mile 655 concluded last week, shippers said. The work resolved shoaling at the site blamed for grounding a number of boats in the previous reporting period.

Transit through Locks 20 and 27 were delayed by about an hour each last week.

Illinois River: Shipping operators reported minor delays at the Marseilles and Starved Rock Locks for the week.

Ohio River: Following reports of grounding at the mouth of the Wabash River, dredging operations were scheduled through Aug. 30, sources said.

Phase 2 Emsworth Lock repairs pushed wait times at the site to 24-48 hours last week. The repairs shuttered the lock’s main chamber and are scheduled to run through Sept. 18, forcing all traffic through the auxiliary chamber. Queued traffic is slated to be cleared via the main chamber on Aug. 29-30 and Sept. 5-7, though a tow-width restriction of 80 feet will be in effect.

The Montgomery Lock river chamber remained out of service last week, blocked by a buildup of debris forward of the lower lock gates. Dredging required to reopen the lock had not been scheduled as of Aug. 27. The site’s auxiliary chamber is scheduled go offline Nov. 16 through Dec. 11.

The Corps announced revised Greenup Lock main and auxiliary chamber inspection dates last week. Originally slated for Aug. 3-25, work is now set to run during daylight hours, Aug. 31 through Sept. 23, with no work performed on Sept. 4-14. Shippers expect I-65 Bridge construction in Louisville, Ky., to block daytime navigation once work begins. No o

Crops/Weather

Eastern Cornbelt, Great Lakes, Market Watch, Northeast, Northern Plains, Western Cornbelt

Grain Futures: As of 4 p.m. on Aug. 27, corn, soybean, and wheat futures were all lower compared to the week before.

Corn contracts for September 2015 clocked in at $3.6375/bushel, down from the previous week’s $3.71/bushel. December 2015 corn fell to $3.75/bushel from the prior week’s $3.825/bushel, and corn for March 2016 was quoted at $3.8625/bushel, down from $3.9375/bushel the week before.

The November 2015 soybean price fell to $8.79/bushel from the previous week’s $9.0725/bushel. Soybeans for January 2016 were $8.8375/bushel, down from the last-reported $9.1175/bushel, while November 2016 soybeans were posted at $8.73/bushel.

Wheat for September 2015 was $4.8425/bushel, down from $5.0625/bushel the week before, and December 2015 wheat fell to $4.8975/bushel from the previous week’s $5.1125/bushel. Contracts for July 2016 wheat were listed at $5.0675/bushel, down from $5.1975/bushel at last report.

Eastern Cornbelt: Sources reported minimal activity in the Eastern Cornbelt in late August, with one regional contact describing new fertilizer sales as “few and far between.” Temperatures were reported in the upper 60s in Ohio at midweek due to a lingering cold front, but a return to more seasonal highs in the 80s was expected again by the coming weekend.

Ohio sources talked of dry field conditions in some parts of the state, and the Aug. 25 U.S. Drought Monitor labeled a portion of eastern Ohio as abnormally dry. Although some areas could use a rain, crop conditions in the region showed little change from recent weeks. Good or excellent ratings were assigned on Aug. to 52-56 percent of the corn and soybeans in Illinois, compared with 47 percent in Indiana and 44-46 percent in Ohio.

Western Cornbelt: Strong storms brought rain, hail, and hard winds to central Iowa again on Aug. 22, but the Western Cornbelt enjoyed mostly calm, dry weather in the days that followed.

Crop ratings were generally unchanged from last report. USDA on Aug. 23 assigned good or excellent ratings to 77-82 percent of Iowa’s corn and soybeans, compared with 74-77 percent in Nebraska, and 33-51 percent in Missouri.

Missouri’s cotton was 40 percent good or excellent last week, with 46 percent of the state’s sorghum and 63 percent of the rice rated in those two categories as well. As for sorghum, USDA rated 46 percent of Missouri’s acreage as good or excellent last week, compared with 73 percent in Nebraska.

Northern Plains: Sources said the Northern Plains was slowly returning to more seasonal temperatures last week after a powerful cold front gripped the region on Aug. 22-23. The system also brought wind advisories and a tornado watch for eastern areas of the Dakotas, and produced a strong line of thunderstorms in Minnesota on Aug. 22.

Corn and soybeans were in great shape in the region in late August, with one Minnesota source describing field conditions as “the best ever in this area.” That assessment was also supported by USDA, which assigned good or excellent ratings to fully 80-88 percent of the corn and soybeans in Minnesota on Aug. 23, compared with 73-77 percent in the Dakotas.

Growers were also focused on the small grains harvest, with progress tracking well ahead of the five-year average in all three states. USDA reported that 92 percent of Minnesota’s spring wheat, oats, and barley were in the bin by Aug. 23, while harvest progress in North Dakota ranged from 70-89 percent, depending on the crop. South Dakota growers had 86 percent of the spring wheat and 95 percent of the oats harvested by that date.

Great Lakes: The week began with below-normal temperatures in the 60s for much of the Great Lakes region, but highs were

Sulfur

Bangladesh, Market Watch, Sulfur, Tampa, U.S. Gulf, Vancouver, West Coast

Tampa: Sources reported that BP plc partially restarted its 413,000 barrel/d Whiting, Ind., refinery last week, returning one of the facility’s idled crude distillation units (CDU) to service. The restarted CDU has a 250,000 barrel/d capacity, and BP hopes to slowly ramp up to full production.

The refinery experienced an unscheduled shutdown on Aug. 8 after a number of small piping leaks were discovered. No timeline for a return to full capacity has been announced.

The Phillips 66 refinery at Wood River, Ill., was operating at limited capacity last week after a cooling tower collapsed, local reports indicated. One of the 306,000 barrel/d plant’s refining units was offline and another was running at a reduced rate on Aug. 26. Plant management hoped to begin ratcheting up production on or around Aug. 28.

One source questioned whether soaring cracking margins could be linked to the recent rise in unplanned refinery maintenance. “With refinery margins so strong, there is an interest among majors to put off maintenance,” the contact said. “(We) will have to see if that results in more incidents.”

Molten sulfur delivered to Tampa was $137/lt for the third-quarter.

Domestic refinery capacity fell last week, according to the U.S. Energy Information Administration (EIA). EIA put utilization at 94.5 percent for the week ending Aug. 21, a 0.6 percent decline from the previous week’s 95.1 percent. The rate was higher than both the year-ago 93.4 percent and the five-year average of 92.1 percent, however.

Average daily crude inputs were also lower. EIA called inputs 16.658 million barrels/d, a 117,000 barrel/d decrease from the previous week’s 16.775 million barrels/d.

U.S. Gulf: Gulf prills were called $130-$135/mt FOB, unchanged from last report. The price was based on last-done into the Brazil market in the neighborhood of $150/mt CFR.

Vancouver: Market players were largely bearish on the Vancouver spot market last week, which appeared primed to sink lower based on continued weakness in the China spot market.

Last done remained unchanged in a range of $130-$135/mt FOB, sources said, though shrinking Chinese price ideas looked to pressure Vancouver in the next round of business.

Recent Chinese spot levels were quoted around $155/mt CFR, but some put the market closer to $150/mt CFR. Chinese buyers were reported to be holding fast to bids in the $140s/mt FOB for new business, however, leading some to predict a landing spot below $150/mt CFR.

Sources roundly blamed the Chinese market’s weakness on a new 13 percent VAT on fertilizer products imported to and exported from China, though sources were unable to verify whether the tax would apply directly to sulfur or only to finished products such as phosphate. The recent devaluation of the Chinese yuan also factored into sinking price ideas.

Alberta sulfur was steady at (-)$5-$85/mt.

West Coast: Sources called the West Coast formed sulfur market unchanged at $125-$130/mt FOB last week. Third-quarter molten contracts were $75-$125/lt FOB.

ADNOC: Abu Dhabi National Oil Co. (ADNOC) sulfur was priced at $155/mt FOB for the month of August, with an updated September number expected soon. Some observers predicted a downward move following recent softening in Chinese spot.

ADNOC’s 800,000 barrel/d Ruwais refinery was operating at approximately 70 percent of capacity last week following an early August breakdown of the plant’s residual fluid catalytic cracking unit (RFCC). ADNOC was working to raise output to 75 percent by the end of August, according to reports. No official timeline for a return to full production was available, though sources speculated th

Potash

Brazil, Eastern Cornbelt, Great Lakes, Market Watch, Northeast, Northern Plains, Northwestern Europe, Potash Muriate, Southeast Asia, U.S. Gulf, Western Cornbelt

U.S. Gulf: Lower price ideas were being reflected last week, according to sources, who said $294/st FOB was being offered with no takers.

Some argued that still lower numbers would have to be offered to pull in a new trade. Others, however, maintained that business had occurred as high as $300/st FOB, and said that prices will likely firm once farmers actually start pulling material.

Eastern Cornbelt: Potash prices were reportedly under pressure in the Eastern Cornbelt, with several sources noting that the market “keeps falling” since the announcement of summer fill pricing levels in early July.

Red tons were reported at $336-$340/st FOB in the Cincinnati market last week, with other regional locations generally reported in the $340-$350/st FOB range, depending on grade.

Western Cornbelt: The potash market was flat at $340-$355/st FOB warehouses in the Western Cornbelt, depending on grade and location.

Northern Plains: Sources talked of a softer potash market out of regional warehouses in the Northern Plains, with the range reported at $345-$352/st FOB, depending on grade and location.

North Dakota sources quoted delivered potash in the $340-$350/st range last week, with the market FOB Saskatchewan mines pegged at roughly $305-$315/st for standard, $310-$320/st for granular, and $317-$327/st for soluble to U.S. customers.

Great Lakes: Although reference prices for potash remained at $355/st FOB for red and $362/st FOB for white granular tons out of warehouses in the Great Lakes region, sources pegged the market more commonly in the $345-$355/st FOB range, depending on grade and location.

The sulfate of potash (SOP) market was unchanged at $740/st FOB Toledo, Ohio.

SOP Magnesia remained at $540/st FOB in Michigan.

Northeast: Potash remained at $352/st FOB Baltimore for red, with the upper end of the regional range reported at $360/st FOB for white granular and/or soluble potash. Rail-delivered potash was pegged at $360-$367/st in the Northeast.

Southeast Asia: Most import markets in the region remain largely out of the buying season, although demand is expected to revive by late September or October. Currency concerns and weak palm oil prices continue to weigh heavily on potash demand sentiment, however.

The Malaysian ringgit, Asia’s worst performer this year, is now at its lowest against the U.S. dollar since before the government put a “floor” under the currency in 1998. Malaysian palm oil futures hit their lowest in nearly 6-1/2 years on Aug. 25.

In Indonesia, in addition to a deteriorating rupiah, benchmark palm oil prices are reported to be heading for an eighth weekly drop, and there are concerns that a new levy will impact export shipments.

Indonesia’s new export levy, which came into force on July 16, requires exporters to pay $50/mt for crude palm oil export shipments and $30/mt for shipments of processed palm oil products. The crude palm oil levy makes Indonesian product less competitive in global markets. Crude palm exports were estimated to have slumped 20 percent to a four-month low in July due to Ramadan holidays and the new levy, according to local media reports.

No significant new potash import business is reported in either country. Current prices are reported at $305-$310/mt CFR for standard material in Malaysia, and around $310-$315/mt CFR for standard product in Indonesia. Sources reported minimal new business to test the market, however.

Regarding the region’s smaller markets, Uralkali is reported to have sold a cargo for September delivery to Vietnam in the $320s/mt CFR. It is unclear if this is a mix of standard and granular

Phosphates

Brazil, Central Florida, China, Eastern Cornbelt, Great Lakes, India, Market Watch, Middle East, North Africa, Northeast, Northern Plains, Pacific N.W., Pakistan, Phosphate Rock, U.S. Exports, U.S. Gulf, Western Cornbelt

Central Florida: The Central Florida DAP market continued to be quoted at $430/st FOB for truck-loaded material. MAP was listed $20/st higher at $450/st FOB, with no sales reported.

U.S. Gulf: Buying interest kicked up slightly on the NOLA barge market last week as a spate of imports inched closer to arrival.

Along with Chinese DAP left over from a recently discharged vessel, imports from Morocco, Russia, China, and possibly Mexico were expected to be available in September. At least one vessel was expected early in the month, believed to be of either Moroccan or Russian origin.

The owner of a Mexican MAP cargo remained undecided on a final destination, one source said, preferring to keep their options open. Potential landing spots included NOLA, Brazil, or other Latin American markets. The cargo is scheduled to load in first-half September, said the contact.

With so many imports on the menu, trading of domestic product was limited or nonexistent. Transactions instead focused on “open origin” offers, with nearby DAP sales reported in a range of $430-$434/st FOB.

Nearby open origin MAP was called $437-$440/st FOB, though market watchers said actual sales were few and far between.

Full-September DAP paper trading clocked in at $428-$429/st FOB, and October DAP paper was reported in the $415-$419/st FOB range.

The widely variable spot freight rates reported out of NOLA in recent weeks were said to be less of a factor in the current market, though some speculated that their return could spur upward pressure in terminal and warehouse pricing. Not everyone agreed, however.

“Most people have contract freight,” one trader said. “Very few people are actually having to pay spot rates.”

The NOLA DAP market was quoted in a range of $430-$434/st FOB for the week, down from $434-$435/st FOB at last report. MAP was called $437-$440/st FOB, down from $440-$445/st FOB the week before.

Eastern Cornbelt: DAP was quoted at $465-$475/st FOB in the Eastern Cornbelt, with the low reported out of multiple river locations and the upper end at inland warehouses. MAP remained at a $5-$10/st premium to DAP, depending on location, with the Cincinnati MAP market pegged at $470-$475/st FOB last week.

10-34-0 was reported at $510-$520/st FOB in the region, with the low for fill tons offered earlier in the month. “Some commitments were made due to fears about availability,” said one regional contact. “The program order period is over, but the market is still the same.”

Western Cornbelt: DAP was quoted at $465-$470/st FOB in the region, with MAP roughly $10/st higher. Although the warehouse market was described as steady, some contacts said rising freight rates could result in an uptick in near-term prices.

The 10-34-0 market was quoted at $520-$525/st FOB in the region.

Effective Sept. 1, Agrium’s phosphoric acid postings will firm $10/ton of P2O5 from August pricing levels, moving to $1,030/ton for rail-DEL SPA and MGA in Iowa, Missouri, Nebraska, Kansas, Colorado, Arizona, and California, and $1,045/ton in Oklahoma and Texas.

Northern Plains: DAP was steady at $465/st FOB the Twin Cities, with MAP at the $475/st FOB level at that location. North Dakota sources quoted rail-delivered MAP in the $505-$512/st range, down some $8-$10/st from last report.

The 10-34-0 market was quoted at $480/st DEL in North Dakota for fall tons. No current FOB prices were reported for 10-34-0 in the region last week.

Effective Sept. 1, Agrium’s phosphoric acid postings will firm $10/ton of P2O5 from August pricing levels, moving to $1,030/ton in Minnesota and $1,045/ton in the Dakotas for rail-DEL SPA and M

Ammonium Sulfate

Ammonium Sulfate, Eastern Cornbelt, Great Lakes, Market Watch, Northeast, Northern Plains, Western Cornbelt

Eastern Cornbelt: Sources pegged the granular ammonium sulfate market in the $280-$285/st FOB range in the Eastern Cornbelt, with rail-DEL tons reported at $285-$290/st.

Ammonium thiosulfate remained at $330-$340/st FOB in the region.

Western Cornbelt: Granular ammonium sulfate was steady at $280-$300/st FOB in the Western Cornbelt, with the low in Iowa and the upper end in Missouri on a spot basis.

The ammonium thiosulfate market was unchanged at $325-$330/st FOB in the region.

Northern Plains: Minnesota sources quoted the ammonium sulfate market at $280/st FOB, while delivered fill tons were reported at $280-$295/st in the Northern Plains, depending on location.

The ammonium thiosulfate market was tagged at $315-$320/st FOB in the region.

Great Lakes: Granular ammonium sulfate was reported at $280-$285/st FOB in the Great Lakes region, up $5/st from last report.

The ammonium thiosulfate market was quoted at $330-$340/st FOB in the region.

Northeast: Granular ammonium sulfate remained at $290-$295/st DEL and $250-$275/st FOB in the Northeast, with the low end of the FOB range reported at Hopewell, Va., after netbacks.

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