U.S. Gulf: The UAN market continued to be quiet, with sources saying it may be some time before new business is concluded. There were unconfirmed reports that CF is sold out into December.
Last done business was reported within the $235-$245/st ($7.34-$7.66/unit) FOB range, with East Coast vessel business at $250/mt CFR. Eastern Cornbelt: The UAN-28 market was steady at $250-$259/st ($8.93-$9.25/unit) FOB most terminals in Indiana and Ohio. Illinois sources pegged the UAN-32 market at $285-$295/st ($8.91-$9.21/unit) FOB in late July.
Western Cornbelt: The UAN-32 market remained at $285-$310/st ($8.91-$9.69/unit) FOB regional terminals in the Western Cornbelt, with both the upper and lower ends of the range reported in the Missouri market, depending on location. One Iowa sources pegged the dealer market solidly at the $295/st ($9.22/unit) FOB level for any available spot tons.
California: Sources pegged the low end of the UAN-32 market at $310-$320/st ($9.69-$10.00/unit) FOB import terminals in California, down slightly from last report. Delivered tons were reported in a broad range at $315-$355/st ($9.84-$11.09/unit), with the low for railed material to the Central Valley and the upper end for truck-DEL tons.
Agrium’s July 1 UAN-32 postings in California included $320/st ($10.00/unit) FOB Woodland, $325/st ($10.16/unit) FOB Richvale, $335/st ($10.47/unit) FOB West Sacramento, and $365/st ($11.41/unit) truck-DEL
Pacific Northwest: The UAN-32 market was quoted at $340-$360/st ($10.63-$11.25/unit) DEL in the Pacific Northwest, down roughly $10-$15/st from last report, with the upper end reported in Montana. The July 1 reference price FOB Kennewick, Wash., was $345/st ($10.78/unit).
Western Canada: UAN-28 was steady at $335-$350/mt ($11.96-$12.50/unit) DEL in Western Canada.
East Melbourne — The Land and Environment Court of New South Wales (NSW) on July 28 imposed a penalty of A$768,250 on Orica Ltd., related to incidents at the company’s Kooragang Island (KI) facility in Newcastle and its Botany facility in southern Sydney, which took place between October 2010 and December 2011. The penalties will contribute to funding seven environmental enhancement projects in the Hunter Valley and Botany. Orica reiterated its regret for the events, and said that it has invested more than $200 million over the last three years delivering the largest improvement program in the KI facility’s 45-year history. Orica said key initiatives include: redesigning the ammonia plant to prevent a repeat of the August 2011 event; $20 million to commence an ammonia management improvement program, which will include a further $80 million investment to install flaring systems, pending regulatory approval, and other infrastructure to minimize ammonia emissions and odors; $17 million upgrading computerized instrumentation and alarm systems for the KI site’s Nitrates plants; $27 million installing new secondary containment structures and upgrading existing infrastructure, such as drainage networks, to reduce the risk of pollution incidents; $10 million upgrading site electrical infrastructure; and $51 million upgrading plant equipment and process vessels. In addition, Orica will also pay the NSW Environment Protection Authority’s legal and investigation costs.
Plymouth, Minn. — The Mosaic Co. said July 31 that it has received permission from Brazilian regulatory authorities to acquire Archer Daniels Midland’s fertilizer distribution business in Brazil and Paraguay. Mosaic said it hopes to close on the business and its 500 employees by the end of the year. Once completed, Mosaic expects to increase its distribution in what it termed the world’s most promising agricultural area from 4 million mt to 6 million mt annually, establishing a strong platform for future growth. In the meantime, Mosaic is working toward the sale of its Argentina distribution business and expects to soon cease operations in Chile.
Vienna — Borealis has announced the divestment of its Biosuper business in France. The Biosuper brand, a phosphate-based dryer used in animal stables, and the related production equipment will be transferred to the new owner, Eliard SPCP, in third-quarter 2014. Borealis said the sale will free up storage space for Borealis’ fertilizer products at its warehouse in La Rochelle, France. Currently, Borealis sells around 150,000 mt/y of fertilizers from La Rochelle, where around 40 people are employed. The divestment has no personnel impact, as all current warehouse employees will be needed to handle the additional 10,000 mt/y of fertilizer volumes.
U.S. Gulf: Sources reported a prolonged quiet spell in the Gulf sulfuric acid import market. The lull is typical for summer, with the current market largely based on sales to small consumers such as water treatment plants.
Volume buyers were thought to be fairly well covered heading into the season, and little or no new business was expected in the Gulf for the short term.
Prices were quoted in a range of $60-$65/st CFR, unchanged from the previous week.
Tampa: Second in hot topics among sulfur industry players behind the third-quarter price of molten sulfur at Tampa – previously announced at $136/lt DEL – was Mosaic Co.’s solid sulfur melting facility, set for construction at New Wales, Fla., in 2015.
Though Mosaic has so far declined to elaborate on its plan for the 1 million st/y plant, the facility was widely assumed to provide a hedge against future domestic supply volatility by allowing Mosaic the means to secure alternatively sourced product as needed, as well as provide the company with added leverage in future sulfur contract negotiations.
Mosaic representatives allowed that sourcing efforts had already begun for the plant, and solid material was expected to begin arriving for processing in June 2015.
Industry watchers believed, however, that Mosaic has already been importing solid sulfur into Galveston, Texas, from international sources, then melting and shipping the molten product via standard channels across the Gulf.
Sources said this internationally sourced product was acquired at a substantial premium to the domestic market, with the added costs justified by a perceived guarantee against possible supply shortages.
Refinery utilization rates for the two most recent reporting periods registered their highest levels since 2006, according to the U.S. Energy Information Administration (USEIA). A new USEIA report said refineries processed more barrels of crude oil for the weeks ending July 11 and July 18 than at any time since the government agency began keeping weekly records in 1990.
Increased domestic capacity, coupled with higher utilization rates, was responsible for the record outputs, even though the number of operating U.S. refineries fell from 254 in 1982 to 139 in 2013. Despite the decline in total facilities, combined production capacity actually rose to 17.7 million barrels per day from 16.1 million barrels per day in 1982.
Refinery operating rates fell slightly for the week ending July 25, the USEIA said. Production capacity was listed at 93.5 percent for the week, down 0.3 percent from 93.8 percent in the previous reporting period. The rate was higher than the 91.3 percent posted for the same week in 2013, and also beat the five-year average of 91.2 percent.
The price of molten sulfur delivered to Tampa was $136/lt for the third quarter.
U.S. Gulf: The price of sulfur exported from the Gulf of Mexico was static at $140-$145/mt FOB.
Vancouver: Sources estimated that the recent Chinese typhoons damaged or destroyed approximately 260,000 mt of sulfur, further restricting already tight supplies and lending additional price support to a market already said to be outpacing other international markets.
Spot prices at Vancouver were quoted in a range of $140-$170/mt, unchanged from the previous period. Third-quarter contract levels continued to trickle in, with preliminary figures pointing toward a range of $140-$160/mt FOB.
Following its most recent bout of suspended production stemming from hydrogen sulfide gas-related issues, the Alberta-based Syncrude 21 mega-refinery was working to resume loading by Aug. 3 at the latest.
The price of Alberta sulfur was unchanged at (-)$20-$80/mt.
West Coast: Sulfur sold from the West Coast was quoted in a range of $135-$145/mt FOB.
Benelux: Benelux sulfur traded in a range of $158-$172/mt for the third quarter.
ADNOC: The July price of ADNOC sulfur was $170/mt, though an updated price for August was expected soon.
U.S. Gulf: Potash barge indications were up last week, with new trades in the $362-$367/st FOB range.
Eastern Cornbelt: Potash pricing was firm at $390-$397/st FOB regional warehouses in the Eastern Cornbelt, with the low for red granular and the high for white granular tons.
Western Cornbelt: Potash pricing remained at a firm $390/st FOB for red granular and $397/st FOB for white granular tons in the Western Cornbelt.
California: Potash was unchanged at $498-$515/st FOB in California.
Crystalline potassium nitrate was steady as well at $950/st FOB for bulk and $1,020/st FOB for bags.
The sulfate of potash (SOP) market was pegged at $680-$700/st FOB in California.
Pacific Northwest: The potash market remained firm at $455-$465/st FOB warehouses or DEL in the Pacific Northwest, depending on grade and location. The potash market FOB Utah mines was steady at $400-$405/st, depending on grade.
Western Canada: Granular potash remained at $429/mt FOB Saskatchewan mines to Canadian customers for new sales, with regional warehouses reported in the mid $400s/mt FOB, depending on location.
Brazil: Suppliers are hoping to move granular prices to $380-$385/mt CFR in the second-half, up from the last done $350-$360/mt CFR.
China: While new second-half 2014 contracts do not appear to be in the cards for China, Uralkali has floated a first-half 2015 price increase of 10 percent for China. Should it stick, the price increase would boost standard prices to $335.50/mt from $305/mt CFR.
Central Florida: Phosphate producers were said to have zero tons of MAP on offer in the Central Florida market, regardless of price, and resellers claimed they weren’t sure if any DAP was available either.
Irrespective of availability, sources said phosphates were currently a hard sell out of Florida, as rail rates to the Northeast made it difficult or impossible to compete with the price of NOLA material shipped from river terminals.
Truck-loaded DAP continued to command a premium over rail-loaded product.
The Central Florida DAP market continued to be quoted at $435-$440/st FOB, unchanged from recent weeks, with product shipped by truck believed to represent the top of the range. MAP, though essentially unavailable, was quoted $20/st FOB higher than DAP.
U.S. Gulf: Despite a general consensus among both traders and producers that the NOLA barge price was likely to experience a slow, steady climb in the weeks ahead, several sources noted a marked reluctance by a substantial segment of the market to go long.
“We’re still pushing it,” one seller said, “but people seem to be a little afraid of phosphates. Not sure why.” Added another source, “I wish I wasn’t so scared of phosphates, but I still haven’t bought in.”
Despite buyers’ hesitance to take the plunge, prices continued to creep northward in light trading. Overall volume remained down, and nowhere near levels many had hoped following the previous week’s Southwestern Fertilizer Conference. Most sources expected the market to pick up steam in the coming weeks, however.
Industry players almost universally pegged $445/st FOB as the current floor for domestic DAP, although a barge or two were believed to have traded as low as $442/st FOB. At least one barge sold for $448/st FOB by midweek, and many saw the market pushing close to $450/st FOB as of July 31.
Chinese-sourced DAP was believed to have sold at $435/st FOB for the week, but some sources said offers for Chinese product were generally closer to the low $440s/st FOB and that the cheaper transactions were the result of a last-minute order cancellation, with a seller needing to unload the spurned product posthaste.
Quality concerns regarding Chinese phosphates were a non-issue, some believed, claiming the imported material would be dark in color and have good physical characteristics. Chemical analysis could prove to be an issue however. “Nitrogen could be low,” one source said.
Sources continued to keep an eye toward the Latin American markets, where continued price strength was believed to directly support domestic levels.
The Brazilian market in particular is a good barometer for offshore trends in general, sources said, and a dip for the week in CFR prices at that country were briefly taken to portend a potential pullback in NOLA levels. Traders decided, however, that the price blip was more likely a one-off event, possibly representing a hedge trade or a cargo of lesser-quality material.
Terminal and warehouse prices held firm as well, with sales occurring in a range of $475-$490/st FOB in the lower and mid-river markets, while $495/st FOB was reported at St. Paul. MAP was said to command an extra $20-$25/st FOB over DAP.
Sources lamented an unexpected run-up in barge freight rates in recent weeks, claiming tow rates to have doubled or worse to some destinations. Price jumps of $15-$30/st were reported, and barge tightness related to a number of factors was blamed.
Huge quantities of imported salt clogged barge queues and were the primary culprit, several sources said. Businesses and municipalities needing to replenish salt stocks after last year’s harsh winter were responsible for a large chunk of the current tightness.
Eastern Cornbelt: The granular ammonium sulfate market was quoted at $280-$290/st FOB for available spot tons. Sources said fill programs that were available at mid-month at $270/st FOB and $280/st rail-DEL were no longer on the table last week.
Ammonium thiosulfate was steady at $350-$360/st FOB in the Eastern Cornbelt.
Western Cornbelt: The granular ammonium sulfate market was pegged at $275-$290/st FOB in the Western Cornbelt for prompt pull.
Ammonium thiosulfate remained at $315-$345/st FOB in the region.
California: Ammonium sulfate was steady at $245-$280/st FOB in California, depending on location, grade, and supplier.
Ammonium thiosulfate remained at $300/st FOB Stockton.
Pacific Northwest: Granular ammonium sulfate was unchanged at $245-$265/st FOB and $255-$275/st DEL in the Pacific Northwest, depending on location.
Ammonium thiosulfate was quoted at $315/st FOB and $330/st DEL in the Pacific Northwest.
Western Canada: Granular ammonium sulfate was unchanged at $400-$405/mt DEL in Western Canada.
U.S. Gulf: The last done barge business continued to be called $340/st FOB. Buyers are not anxious to buy at $340/st FOB, however, and sources say traders are out of product, leaving CF as the only game in town.
Sources say CF recently sold a cargo to Guatemala to help it take the steam off building inventories. Market watchers argue that based on soft international pricing, CF may have had a netback as low as $250/st FOB to Yazoo City off of the trade.
Western Cornbelt: Ammonium nitrate remained at $380-$400/st FOB in the Western Cornbelt, with the low reported in Missouri and the upper end in Iowa for the last done business.
California: No market was reported for agricultural ammonium nitrate in California.
CAN-17 was unchanged at $325-$345/st FOB in California.
AN-20 was reported at $280/st DEL in the state.
Pacific Northwest: No market was reported for agricultural grade ammonium nitrate in the Pacific Northwest.
CAN-17 remained at $338/st FOB Kennewick, Wash., and $348/st rail-DEL in the Pacific Northwest.
AN-20 was steady as well at $260/st FOB Kennewick and $270/st rail-DEL in the region.
Disclaimer of Warranty
All information has been obtained by Green Markets from sources believed to be reliable. However, because of the possibility of human or mechanical error by our sources, Green Markets or others, Green Markets does not guarantee the accuracy, adequacy, or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.
