All Posts from January 5, 2015

Urea

California, China, Eastern Cornbelt, India, Market Watch, Middle East, Pacific N.W., Pakistan, U.S. Gulf, Urea, Western Canada, Western Cornbelt

U.S. Gulf: Prompt granular barge trades continued to move up over the holidays, firming to $335-$341/st versus the Dec. 22 $322-$333/st FOB. Many players were taking time off for a long stretch, however, so actual trading may have been limited.

Prill barges were called $315-$327/st FOB.

Eastern Cornbelt: Granular urea remained at $360-$385/st FOB in the Eastern Cornbelt, with the low out of river locations and the upper end inland.

Western Cornbelt: Granular urea was steady at $360-$370/st FOB in the Western Cornbelt, with some talking of a likely increase in early 2015.

California: The granular urea market remained at $410-$415/st FOB in California, with no current delivered prices reported in late December.

Pacific Northwest: Granular urea was up slightly at $390-$400/st FOB coastal terminals in the Pacific Northwest, with delivered tons pegged nominally in the $410-$420/st range in the region.

Western Canada: The granular urea market was quoted at $565-$590/mt DEL in Western Canada, up $30/mt from early December pricing levels.

India: Sources report that just about everyone who had an award in the IPL tender has a vessel booked. The vessel lineup fits in nicely with the Jan. 12 ship-by deadline.

Reportedly many of the traders worked out their contracts so that the price of material loaded after Jan. 1 in China would reflect the new export duty regulation instead of the old one. One trader noted that this provision will help a few trading houses earn a little more on their sales.

Industry watchers say it is too soon to tell if there will be another tender before the end of the fiscal year in March. Localized complaints of urea shortages are offset by competing reports of sufficient supplies in key agricultural areas. One observer noted that some of the complaints were aimed more at the amount of urea in reserve rather than what the farmers actually need now.

Sources say any purchases after January will most likely be for reserves to jumpstart the next season. With that in mind, said one trader, it would make more sense for India to wait and see how the global market moves before committing to another major purchase.

New production around the world, say sources, along with easier access to Chinese product, could keep urea prices soft for a while.

The Indian government is stepping up its efforts to produce more urea at home. Under the New Investment Policy (NIP) announced in October, the Indian government asked for proposals from urea producers for ways to increase production. The government said it received more than a dozen plans from producers, but media reports say only four or five of those proposals will be accepted this year. Of the 12 or so proposals, only two were for new production facilities. The rest were requests for support to expand existing plants.

The NIP was designed to make India self-sufficient in urea without being an added burden on the national treasury. Companies wanting government support – including tax breaks and subsidies – had to first put up Rs3 billion (US$47 million) as a sign they were able to follow through with their plans.

The government plan to increase local production means it could reduce the amount it pays in urea subsidies, because locally produced urea is cheaper than the imported variety. A government panel comprised of the fertilizer, finance, petroleum, and agriculture ministries will start reviewing the proposals this month.

Government sources tell local media they want to have the first set of projects started before the fiscal year ends in March. At the same time the government is moving to increase local production, it is also reviewing th

Crops/Weather

California, Eastern Cornbelt, Market Watch, Pacific N.W., Western Canada, Western Cornbelt

Grain Futures: As of 4 p.m. on Dec. 29, corn and soybeans were higher compared to the previous report, but wheat was down.

Corn for March 2015 was $4.1275/bushel, up from $4.11/bushel in the previous report. The May 2015 price for corn was $4.2125/bushel, an increase from $4.195/bushel, while trading of December 2015 corn contracts checked in at $4.3675/bushel, a slight rise from the previous $4.3475/bushel.

The January 2015 soybean price was $10.4175/bushel, up from $10.35/bushel at last report. Soybeans for March 2015 were put at $10.4875/bushel, also higher than the $10.4325/bushel reported in the previous period, while soybeans for November 2015 firmed to $10.245/bushel from the previous $10.1975/bushel.

Wheat for March 2015 was $6.155/bushel, down significantly from the prior period’s $6.5525/bushel. May 2015 wheat was down as well at $6.19/bushel from the previous $6.5675/bushel, and July 2015 wheat contracts fell to $6.2025/bushel from the last reported $6.54/bushel.

Eastern Cornbelt: Although some parts of the Eastern Cornbelt saw snow flurries on Christmas, most of the region enjoyed mild temperatures and calm weather conditions over the Christmas weekend. Much colder weather was reported in northern areas of the region during the final days of 2014, however.

Western Cornbelt: Snow and cold covered parts of Iowa and Nebraska during the final days of 2014.

A post-Christmas storm produced 1-5 inches of snowfall across central and northern Nebraska and parts of northeastern Iowa, and bitterly cold temperatures followed. Cold weather advisories were issued for northern Iowa on Dec. 29-30, with wind chills falling to -20 and -30 in some locations.

California: December brought welcome rainfall to drought-stressed California, but the month ended with a cold snap that threatened frost damage to flower, fruit, and vegetable crops in some areas of the state.

A powerful weather system was expected to bring snow, rain, and freezing temperatures to much of California during the final days of 2014 and the start of 2015. Lows down to the upper teens and mid 20s were predicted for the Sacramento and San Joaquin valleys, as well as for parts of the central and northern coasts of California.

Frost advisories were also in effect for parts of Southern California on Dec. 27-28, with more chilly weather expected for the southern counties during the first days of 2015.

The cold weather was accompanied by rain and wet snow in coastal areas and valleys, with heavier snow accumulation reported in the northern Sierra Nevada. Inland areas of the Southwest were also bracing for cold and snow as the week advanced, with several inches of snow likely in Las Vegas and heavier amounts in the mountains of northern Arizona.

The winter weather capped an active month of precipitation in California. San Diego recorded nearly 4.5 inches of rain for the month, which is about 3 inches above normal. Although authorities warned that much more will be needed this winter to alleviate long-term drought in the state, the November and December rainfall was viewed as a promising start.

Pacific Northwest: Winter weather hit the Pacific Northwest with a vengeance in late December, bringing snowfall, high winds, and very cold temperatures.

Snowfall from Winter Storm Frona had reached 18-19 inches at higher elevations in Montana, Idaho, and Washington by Dec. 29, with several inches reported as low as 1,000 feet in northwestern Oregon. The snow was accompanied by very cold temperatures and gusty winds clocked at 50-70 mph in some locations. Parts of Montana and Idaho were bracing for dangerous wind chills on Dec. 29-30, with highs only reaching into the single digits.

Western Canada:

Sulfuric Acid

Market Watch, U.S. Gulf

U.S. Gulf: Sources said a Miami, Ariz., smelter has resumed operation after being offline since early November due to fire. The shutdown of the smelter, owned by U.S. miner Freeport-McMoRan, was believed to be responsible for “substantial” tightness in the Gulf market as the company required significant replacement tons during the outage.

Prices in the Gulf market were called $70-$80/mt CFR.

Sulfur

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

Tampa: Sources reported all quiet in the domestic market last week, with the exception of continued speculation about the first-quarter price of molten sulfur delivered to Tampa.

Speculation continued to center on the likelihood of a price increase for the quarter, based on elevated January 2015 pricing in the Middle East and Chinese numbers said to be in the $170s/mt CFR.

Another source expected a rollover to be more likely, however, citing rumors of first-quarter Brazilian contracts settling at rollover levels. Additionally, molten supply remains strong, said the source, though others pointed to tightness in the Gulf market as a possible chink in supply heading into 2015. Negotiations were not expected to begin until the New Year.

The fourth-quarter price of molten sulfur delivered to Tampa was $129/lt CFR.

U.S. refinery capacity remained strong for the week ending Dec. 19, according to data obtained from the U.S. Energy Information Administration. Refinery utilization was put at 93.5 percent of capacity, unchanged from the most recent report. The rate was higher than both the year-ago rate of 92.7 percent and the 89.8 percent five-year average.

Daily refinery inputs rose slightly for the week, averaging 16.341 million barrels/d, an increase of 40,000 barrels/d over the previous week’s 16.301 million barrels/d.

U.S. Gulf: Spot tons in the Gulf market were hard to come by. Traders quoted prices in a range of $135-$140/mt FOB, unmoved from the previous report.

Vancouver: With prices in the Chinese spot market reportedly lingering in the $170s/mt CFR, sources said the Vancouver spot market held its own over the holidays. Values were quoted in a range of $140-$150/st FOB, while fourth-quarter contracts were reported in the $140s/mt FOB.

Cautious optimism that Alberta-based refiner Syncrude 21 would return to production was dashed as the massive 2,000 mt/d facility halted loading once again. The plant was said to have resumed production briefly in early December.

Alberta sulfur was called (-)$10-$75/mt, unmoved from the previous report.

West Coast: West Coast sulfur was quoted at $135-$140/mt FOB.

Sources expected first-quarter 2015 molten contracts to begin settling after the first of the year. Sources expect suppliers to seek an increase from fourth-quarter levels of $90-$130/lt FOB based on strength in the international markets.

Caribbean: The shuttered Hovensa refinery on St. Croix will stay closed following a vote from the U.S. Virgin Islands rejecting the proposed sale and reopening of the facility.

Once the largest refinery in the western hemisphere, a deal was in place between Atlantic Basin Refining and current owners Hess Corp. and Venezuela’s state-run PDVSA. Lawmakers voiced uncertainty regarding language in the agreement releasing the sellers from all liability in the sale, however, as well as concerns about the buyers’ ability to raise the estimated $1 billion required to jumpstart the facility. The facility was closed in January 2012.

Benelux: The third-quarter price of sulfur to the Benelux consortium was $158-$172/mt FOB.

ADNOC: The ADNOC price of sulfur for December was $150/mt FOB. January 2015 sulfur was quoted at $158/mt FOB.

Aramco: Sulfur sold by Saudi Aramco was called $125/mt FOB for December. Prices were set to rise to $158/mt FOB for January 2015, an increase of $33/mt.

Aramco announced a new partnership with Indonesian state-owned Pertamina to upgrade that country’s oil refineries. Aramco, along with China’s Petroleum and Chemical Corp. (Sinopec) and Japan’s JX Nippon Oil and Energy, plans to in

Potash

California, Eastern Cornbelt, Market Watch, Pacific N.W., Potash Muriate, Sulfate of Potash Magnesia, U.S. Gulf, Western Canada, Western Cornbelt

U.S. Gulf: While recent potash business continued to be called $368-$375/st FOB, there was much speculation in the market that Belarusian Potash Co. (BPC) might be successful in sending product to the U.S. If so, sources say NOLA prices could be under pressure and could fall into the $360-$370/st FOB range for January/February.

Earlier, sources had been upbeat about the prospect for potash remaining firm, citing both good domestic movement and the Uralkali mine outage.

As previously reported, Uralkali has recently complained that BPC has negatively impacted pricing in Brazil and may have the same effect on Chinese contracts (GM Dec. 22, p. 14).

Eastern Cornbelt: Potash was unchanged at $405-$415/st FOB in the Eastern Cornbelt, depending on grade and location.

Western Cornbelt: The potash market was firm at $405-$412/st FOB most regional warehouses in the Western Cornbelt, depending on grade and location.

California: Potash remained at $518-$535/st FOB warehouses in California, depending on grade and location, with the low for 60 percent and the upper end for 62 percent granular or soluble. Delivered potash was unchanged at $525-$535/st in the state.

Crystalline potassium nitrate was steady at $950/st FOB for bulk and $1,020/st FOB for bags in the state.

Sulfate of potash (SOP) remained in tight supply at $720-$735/st FOB in California.

Pacific Northwest: The potash market was steady at $465-$480/st FOB or DEL in the Pacific Northwest, depending on grade and location. The potash market FOB Utah mines remained at $420/st FOB for 60 percent standard and $425/st FOB for 60 percent granular.

The SOP Magnesia market was unchanged at $461-$481/st FOB in the region.

Western Canada: The regional potash market was pegged at $470-$480/mt FOB inland warehouses in Western Canada, with the Saskatchewan mine price reported at $445-$450/mt FOB to Canadian customers.

Phosphates

Bangladesh, Brazil, California, Central Florida, Eastern Cornbelt, Market Watch, Middle East, NPK 11-37-0, Pacific N.W., Phosphate Rock, Triple Superphosphate, U.S. Exports, U.S. Gulf, Western Canada, Western Cornbelt

Central Florida: Prices in the Central Florida market held steady through the holidays, sources said, amid year-end pressure to burn capital for tax purposes and preempt a looming increase in the price of rail freight out of Florida. The market maintained its $425/st FOB price floor, with truck sales pushing $5-$10/st FOB higher.

Activity was predictably slow given the relatively few business days available through the holidays, but some traders reported buyers taking advantage of purchase windows leading up to the New Year.

Motivators included the Dec. 31 close of the 2014 tax window, and rail rates expected to increase $5-$10/st in January. Sources also spoke of a price increase of approximately $5/st FOB expected in early 2015 as the Florida market responds to upward pressure from rising NOLA rates.

DAP prices on the Central Florida market were steady in a range of $425-$435/st FOB, unchanged from the previous report. Rail-loaded product was put in the $425-$430/st FOB range, while DAP trucks were called $430-$435/st FOB.

MAP was quoted at a $20/st FOB premium to DAP. As in recent weeks, however, MAP was said to be essentially unavailable.

U.S. Gulf: Despite minimal activity reported during the New Year’s week, the NOLA DAP market continued to strengthen over the holidays, industry sources said, extending a steady price climb that began around Thanksgiving.

Recent transactions fell in a range of $430-$440/st FOB, though a few barges traded at $425/st FOB prior to Dec. 25. New offers were quoted in a range of $435-$442/st FOB as of Dec. 30, and paper trading for March 2015 touched the $445/st FOB mark.

The market was DAP-centric, and demand for MAP was sluggish. MAP was thinly traded over the holidays, with some traders claiming the product struggled to maintain its premium to DAP.

Some voiced concerns that the recent price increases were driven in part by end-user motivation to purchase before the end of the year, suggesting short-term demand could taper after Jan. 1. The concerns were not universal, however. Barge supply continued to be tight at NOLA, others countered, which by itself would go a long way to supporting the market.

Sources expected a healthy lineup of import vessels to begin arriving in January, including cargoes from Morocco, Russia, and other locations. Speculation was in high gear whether vessels from China would be among the arrivals. “The Chinese are the wildcard,” one trader said.

With NOLA prices nearing the $445-$450/st FOB level, sources said it might make fiscal sense for Chinese sellers to target the U.S. “To attract (Chinese) imports you have to go to $450/st,” said one industry veteran. At prices below this level, he said Chinese producers can get better netbacks on sales to Australia, as well as internally.

Another contact agreed, noting that with paper trading up to $445/st FOB for the week, “Chinese DAP starts to get some attention here in the states.”

The NOLA barge market firmed to a range of $430-$440/st FOB for the week, up from $425-$435/st FOB at last report. MAP struggled to keep pace, and was generally quoted in a range of $435-$450/st FOB.

Eastern Cornbelt: DAP remained at $460-$475/st FOB regional warehouses in the Eastern Cornbelt, with the low reported at Cincinnati. MAP was reported in the $480-$500/st FOB range in the region, depending on location.

10-34-0 remained firm at $520-$540/st FOB for limited tons in the region.

Agrium’s phos acid postings moved up on Jan. 1 to $1,065/ton of P2O5 for rail-DEL SPA and MGA in Wisconsin, and $1,100/ton of P2O5 for rail-DEL SPA and MGA in Michigan. Those levels were up $10/ton of P2O5 from Agrium’s December postings.

Western Cornbelt

Ammonium Sulfate

Ammonium Sulfate, California, Eastern Cornbelt, Market Watch, Pacific N.W., Western Canada, Western Cornbelt

Eastern Cornbelt: Granular ammonium sulfate was unchanged at $300-$310/st FOB in the Eastern Cornbelt, with delivered tons in the $310-$320/st range.

Ammonium thiosulfate remained at $345-$355/st FOB in the region.

Western Cornbelt: Granular ammonium sulfate was steady at $290-$310/st FOB in the Western Cornbelt, with the low reported in Missouri and the upper end in Iowa. Delivered ammonium sulfate was pegged in the $310-$320/st range in the region.

Ammonium thiosulfate market was quoted at $300-$320/st FOB in the Western Cornbelt.

California: The ammonium sulfate market was pegged at $265-$305/st FOB in California, depending on grade, location, and supplier.
Ammonium thiosulfate was steady at $300/st FOB Stockton.

Pacific Northwest: Washington sources pegged the ammonium sulfate market at $300/st DEL on the low end, up some $15/st from last report, and product was reportedly in tight supply.

Agrium announced significantly higher prices, with granular ammonium sulfate postings moving on Dec. 3 to $358/st FOB warehouses and $363/st DEL in Washington, Oregon, Idaho, Utah, and Nevada. New delivered postings in Montana and Wyoming moved to the $363/st level on that date. “They want to keep tons in Canada,” speculated one regional contact about the higher postings.

Ammonium thiosulfate was unchanged at $310-$320/st FOB in the Pacific Northwest, with the low FOB Kennewick and the upper end FOB Ritzville, Wash.

Western Canada: Granular ammonium sulfate had reportedly firmed $30/mt in Western Canada, with the market moving to $460-$465/mt DEL in the region.

Ammonium Nitrate

Ammonium Nitrate, California, Market Watch, Pacific N.W., U.S. Gulf, Western Cornbelt

U.S. Gulf: The last done NOLA business continues to be called $305/st FOB, with some eyeing $300/st for the next trade. Tampa was called $360-$365/st FOB.

Western Cornbelt: Ammonium nitrate was unchanged at $350-$360/st FOB in the Western Cornbelt.

California: No current market was reported for ammonium nitrate fertilizer in California.

CAN-17 was up slightly in the state, with the market pegged at $332-$352/st FOB, depending on location and supplier.

AN-20 remained at a firm $315/st DEL in California.

Pacific Northwest: No current market was reported for ammonium nitrate fertilizer in the Pacific Northwest.

CAN-17 was unchanged at $338/st FOB and $343-$348/st rail-DEL for the last done business in the region.

AN-20 was steady at $260/st FOB Kennewick, Wash., and $270/st rail-DEL in the Pacific Northwest.

Nitrogen Solutions

California, Eastern Cornbelt, Market Watch, Pacific N.W., U.S. Gulf, UAN, Western Canada, Western Cornbelt

U.S. Gulf: Sources were in agreement on an upward trend in pricing, though the extent of the uptick was still in debate. Generally, the market was put at $255-$265/st ($7.97-$8.28/unit) FOB.

East Coast vessel trades were also up at $287-$295/mt CFR.

Eastern Cornbelt: UAN-28 was pegged at $258-$265/st ($9.21-$9.46/unit) FOB Cincinnati, Ohio, with the low for prompt tons and the upper end for spring prepay. Out of Indiana terminals, the UAN-28 market was quoted at $270-$285/st ($9.64-$10.18/unit) FOB, with the low for prompt and the upper end for prepay on a spot basis.

Rail-delivered UAN-32 remained in the $325-$330/st ($10.16-$10.31/unit) range in the Eastern Cornbelt.

Western Cornbelt: The UAN-32 market was tagged at $290-$310/st ($9.06-$9.69/unit) FOB in the Western Cornbelt for prompt pull, with the low in southern Missouri and the upper end in Iowa. Sources said spring prepay offers were at the $320/st ($10.00/unit) FOB level in Iowa at year’s end.

California: The UAN-32 market was reported at $300-$320/st ($9.38-$10.00/unit) FOB import terminals in California, up slightly from last report, with delivered tons reported in the $320-$340/st ($10.00-$10.63/unit) range in the state, depending on location.

Pacific Northwest: The UAN-32 market had reportedly firmed to $355-$375/st ($11.09-$11.72/unit) DEL in the Pacific Northwest, depending on location.

Effective Dec. 15, Agrium’s UAN-32 postings moved to $360/st ($11.25/unit) truck-DEL and $365/st ($11.31/unit) rail-DEL in Washington, northern Idaho, and central and northern Oregon; $370/st ($11.56/unit) truck-DEL in southeastern Oregon and southern Idaho; $390/st ($12.19/unit) rail-DEL in southeastern Oregon and southern Idaho; and $390/st ($12.19/unit) rail or truck-DEL in the Klamath Basin sales area.

Western Canada: Sources quoted the UAN-28 market at $378-$394/mt ($13.50-$14.07/unit) DEL in Western Canada, up $34-$35/mt from last report.

Transportation

Market Watch, U.S. Gulf

U.S. Gulf/River: Shippers reported no ice on the Illinois River as of Dec. 30, but a watch was underway, with Chicago-area temperatures hovering just above freezing. T.J. O’Brien Lock and Dam reopened Dec. 23 following a period of extended main chamber maintenance, and sources reported operating delays of about an hour for the week. The lock will close again Jan. 21, 2015. The cutoff date for Chicago-bound releases out of New Orleans was Dec. 14.

Upper Mississippi River Lock 27 saw wait times of 2-4 hours, and transit through Lock 20 was delayed by about an hour. The U.S. Army Corps of Engineers’ 2014/15 rock removal project at Thebes, Ill., will commence when river levels at Cape Girardeau, Mo., drop to the 10-foot mark. The Corps’ plan is to run the operation through January, with an eye toward minimal navigational impacts. Locks 17 and 20 are slated to close for the navigation season on Jan. 5.

Healthy water levels on the Ohio River saw officials drop wickets at Lock 52, where wait times were about an hour. R.C. Byrd Lock saw similar waits. Main chamber maintenance at Belleview Lock is scheduled from Jan. 5-9. The lock’s auxiliary chamber will be offline Feb. 9-27.

A full river closure is expected at the Hulton Bridge replacement site on the Allegheny River, shippers warned. The 48-hour stoppage is set to begin at 7:00 a.m. on Jan. 7.

Ongoing equipment failure at Braddock Lock and Dam on the Monongahela River will keep that lock’s river chamber offline indefinitely. Minor delays are expected, though shippers said the land chamber will remain open to navigation.

“Major delays” are anticipated in February on the Kanawha River at Winfield Lock, where main chamber repairs are expected to last about a month. The Tennessee River’s Pickwick Lock auxiliary chamber, offline since Nov. 10, is projected to reopen Jan. 9.

In the Gulf area, shippers reported transit delays of 2-4 hours at Industrial Lock, and wait times of about an hour were experienced at Bayou Sorrel, Port Allen, and Algiers Locks. The Corps announced a postponement to the Bayou Sorrel Lock repair operation, pushing back the closure to July 2015. The project will last six weeks, and major delays are expected.

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