All Posts from February 5, 2016

Central Garden tanks up on Earth Juice, exits fertilizer private-label contract

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Central Garden and Pet, Walnut Creek, Calif., reported a 17 percent increase in sales for its first quarter ending Dec. 26, 2015, to $359.8 million from the year-ago $307.3 million, and in doing so revealed that it has added the Earth Juice brand to its portfolio and has exited a fertilizer private-label contract.

Central Garden said the quarter includes three full months of Hydro-Organics, Chico, Calif., which it acquired last year. Hydro-Organics is known for its Earth Juice-branded products. Central Garden provided no further details about the transaction. It did, however, confirm more details about two Pet-related 2015 acquisitions, saying it paid $61 million for National Consumer Outdoors Corp., a pet bedding company and $23 million IMS Trading Corp., a rawhide and pet treat distributor.

The company told analysts Feb. 2 that the private-label fertilizer contract was no longer profitable and was not with a core retailer. It said the private label business remains important to the company and it remains bullish on that segment in general, saying “it gives us more critical mass, a bigger share of the shelf,” and drives manufacturing efficiencies, which benefits its branded business as well.

The company also walked away from its seasonal décor business, i.e., artificial Christmas trees, etc. It said it expects little or no impact on its bottom line from the décor or fertilizer changes.

As far as where it stands versus ScottsMiracle-Gro, the company told analysts that in the areas where the two compete, it is confident that has it held or taken market share in all of those areas. Central Garden recently revealed that for fiscal 2015 some 65 percent of its Garden sales came from three big box stores: Walmart at 31 percent, Lowe’s at 18 percent, and Home Depot at 16 percent. Company-wide, the three represented 31 percent: Walmart 16 percent, Lowe’s eight percent, and Home Depot seven percent.

As for the 17 percent first-quarter uptick in sales, most of that increase was from its Pet segment. Sales were up only three percent, to $111.1 million in Garden, due primarily to stronger grass seed sales as well as higher sales of other manufacturers’ products.

Garden reported a seasonal loss of $3.3 million, improved over the year-ago loss of $3.5 million. Garden’s operating margin improved 40 basis points, more than offsetting a decline in segment gross margin. Grass seed, fertilizers, and other manufacturers’ products were the biggest contributors to the operating margin increase, offset somewhat by lower margins on bird seed.

The company reported a loss of $8.6 million ($.0.18 per share) compared to the year-ago loss of $5.7 million ($0.12 per share).

Sulfuric Acid

Sulfuric Acid, U.S. Gulf

U.S. Gulf: Price ideas for sulfuric acid cargoes imported to the Gulf of Mexico were quoted in a range of $45-$50/mt CFR, unchanged from the previous report.

The Brazilian sulfuric acid market was called $45-$50/mt CFR, and vessels to Chile were expected to command $55-$65/mt CFR.

Texas-based sulfuric acid producer Eco Services recently announced a long-term agreement with Citgo Petroleum Corp. to supply sulfuric acid regeneration to Citgo’s Lake Charles Refining Complex. The agreement, described as a multi-year deal by Eco Services, will allow Citgo to decommission a sulfuric acid plant located at the Lake Charles site.

Sulfur

Sulfur, Tampa, U.S. Gulf, Vancouver, West Coast

Tampa: Questions regarding the effect of Mosaic’s first-quarter phosphate production curtailment on the market took center stage in an otherwise slow week.

Some believed the cutback was a bad omen for second-quarter molten sulfur pricing. “Sulfur took a downturn these last two quarters,” said one market player. “Usually you would expect to see an uptick in Q2, but now I’m not sure I can see that happening.”

Others took a brighter view, however. “Conversations surrounding Mosaic’s announced curtailment have been in the marketplace, but it’s nothing the spring fertilizer season won’t resolve in the next 30-45 days,” said one source.

The curtailment news was expected to delay Mosaic’s New Wales, Fla., solid sulfur melter from entering production. The unit was reportedly languishing in the commissioning phase as of the previous report, despite Mosaic’s original plan to bring it online in late October 2015.

Sources expected the facility to finally enter production in February. Suddenly flush with excess sulfur supply due to the newly reduced production schedule, however, the melter’s timeline is now up in the air. “(Mosaic) is not in a real hurry to get the melter up and running,” said one a source, “not when (they are) struggling to contain sulfur across a high point.”

The contract price of molten sulfur delivered to Tampa was $95/lt for the first quarter, down $15/lt from $110/lt in the fourth quarter.

Refinery utilization was down for the week, according to the U.S. Energy Information Administration (EIA). Capacity for the week ending Jan. 29 was 86.6 percent, a 0.8 percent decline from the previous week’s 87.4 percent a week, and represented a fifth consecutive week of falling domestic utilization. Capacity was also lower than the year-ago 89.9 percent, but beat the 85.9 percent five-year average.

Average daily crude inputs were marginally lower at 15.615 million barrels/d, 24,000 barrels below the 15.639 million barrels/d total reported during the previous week.

U.S. Gulf: The Gulf price of solid sulfur was called $90/mt FOB for the week, based on recent transactions into Brazil.

Vancouver: Reflecting a “broad spectrum of deals,” the Vancouver spot market was quoted in a range of $85-$105/mt FOB, down from $110-$115/mt the week before. Sales to China were responsible for the low end of the range, sources said.

The Chinese spot market was on hold heading into the Feb. 8 Lunar New Year celebration, with no new business expected to transpire before Feb. 15 at the earliest, and possibly not until March. Last-done Chinese spot was called $95-$100/mt CFR.

Sources speculated that lackluster Chinese demand brought on by bad weather could trigger a phosphate production curtailment by Chinese producers, threatening to further erode the country’s weak sulfur import market.

Alberta producer netbacks were reported in a range of (-)$12-$60/mt FOB.

West Coast: Trailing Vancouver lower, West Coast formed sulfur was called $80-$100/mt FOB, down from $105-$110/mt FOB at last report.

Molten contracts continued to land in a range of $65-$115/lt FOB for the first quarter, sources said.

ADNOC: The Abu Dhabi National Oil Co. released pricing for February loading last week. New offers were quoted at $105/mt FOB Ruwais, a decline of $17/mt FOB from January’s $122/mt FOB level.

Aramco: Formed Saudi Aramco sulfur was priced at $115/mt FOB Jubail for February, $13/mt FOB below the $128/mt FOB January price.

Tasweeq: Tasweeq also announced lower pricing f

Potash

Eastern Cornbelt, Israel, Nepal, Northwestern Europe, Potash Muriate, South Central, Southeast, Southern Plains, U.S. Gulf, Western Cornbelt

U.S. Gulf: Potash barge prices cratered again last week, with new sales as low as $198/st FOB. Others put the market in the $202-$205/st FOB range.

In the meantime, Gavilon is bringing in a 25,000 mt vessel next week loaded with BPC product.

Eastern Cornbelt: The potash market was pegged at $240-$260/st FOB in the Eastern Cornbelt, with the low end of the range confirmed for spot offers in the Illinois market in early February. The low end of the range reflected another $10/st drop from the previous week.

Western Cornbelt: Sources confirmed the low end of the potash market at $240/st FOB on a spot basis in the Western Cornbelt, and this was for “small quantities.” The upper end of the regional range remained at the $260/st FOB reference levels for producer tons ordered by Feb. 5.

Southern Plains: Sources reported significantly lower potash prices in the Southern Plains in early February. The market FOB Carlsbad, N.M., had reportedly dropped to $260-$267/st FOB from Intrepid, down $40/st from last report, with the low for red granular and the upper end for 62 percent white. The potash market FOB Catoosa was down to $255-$260/st FOB.

SOP Magnesia FOB Carlsbad was lower as well, with sources quoting the market at $350-$355/st, down $35-$45/st from the previous level.

South Central: The potash market was pegged at $260-$275/st FOB warehouses in the South Central region, down $5-$20/st from last report, depending on location. The low end of the range was once again reported in the Memphis market, with the upper end in Arkansas.

Southeast: Potash experienced big pricing declines in the Southeast in early February. Sources quoted the market at $250-$260/st FOB port terminals and $270-$275/st rail-DEL in the region, down $20-$30/st from last report. Sources were uncertain if the new levels would generate new sales, however.

Northwest Europe: Demand remains weak, with prices for granular material currently assessed at €280-€300/mt CIF.

Israel: Potassium nitrate was put in the $800-$1,000/mt range last week, with the wide range depending on grade or whether bulk or bagged.

Nepal: The Nepalese government has a tender for 5,000 mt of MOP closing Feb. 15. The tender includes calls for DAP and urea.

Product is to be bagged and delivered to a Nepal warehouse on the Indian border.

Phosphates

Brazil, Central Florida, China, Eastern Cornbelt, Middle East, Nepal, Pakistan, Phosphate Rock, South Central, Southeast, Southern Plains, U.S. Exports, U.S. Gulf, Western Cornbelt

Central Florida: Transactions on the Central Florida phosphate market were reported at $360-$370/st FOB for DAP, down from $370/st FOB at last report. MAP was $370-$380/st FOB, down from the prior week’s $380/st FOB.

U.S. Gulf: A Feb. 3 announcement that Mosaic would curtail phosphate production by up to 400,000 st in the first quarter was met with measured excitement in the NOLA barge market.

Poised to record a small price drop for the week prior to the news, the prompt DAP market edged higher in the hours following the announcement, to a range of $312-$325/st FOB. New offers were generally quoted around $327/st FOB on Feb. 4, although some were offering as high as $335/st FOB, sources said.

First-quarter paper firmed as well, coming in at $315-$326/st FOB, although March physical was reported as low as $305/st FOB for DAP and MAP.

Mosaic’s announcement comes amid tumbling global phosphate prices. NOLA DAP is down approximately 28 percent versus February 2014, and MAP’s decline has been even more pronounced. Extreme weakness in the Brazil MAP market – down more than 35 percent from the year-ago – played a part as well, limiting opportunities for offshore sales.

“Mosaic believes that current market prices do not reflect the value we see for our products,” a Mosaic spokesperson said. “We are not participating nor selling at the low price seen in Brazil today, and at NOLA in the last few weeks.”

While some market players were quick to point to the curtailment as sparking the market, others were unconvinced. “The curtailment announcement is mostly smoke and mirrors. It won’t have much effect,” said one  trader, while simultaneously acknowledging the firmer market. “Paper jumped a little overnight. I think possibly (it was) some short-covering just in case this Mosaic thing has an impact.”

While stagnating commodity levels and prodigious NOLA supply have commonly taken the blame for the recent soft market, observers have increasingly pointed to delayed spring purchasing for the continued weakness.

“It was a supply issue, but lately that’s shifted,” said one trader. “There’s just not enough demand out there to get rid of everything that’s available. What we need now is to get into the season, get things going.”

Additional supply is expected soon at NOLA. Sources anticipate a Moroccan cargo on or around Feb. 10, and a vessel loaded with 30,000 mt of DAP and MAP was reportedly due in March.

The NOLA DAP market was quoted in a range of $312-$325/st FOB, up from $310-$323/st FOB at last report. MAP was called flat at $315-$328/st FOB.

Eastern Cornbelt: The regional DAP market remained at $355-$365/st FOB in the Eastern Cornbelt, with MAP roughly $5/st higher than DAP.

The 10-34-0 market was quoted at $510-$515/st FOB in the region.

Western Cornbelt: Sources pegged the DAP market at $360-$370/st FOB most regional terminals in the Western Cornbelt, with MAP $5/st higher than DAP.

10-34-0 continued to be quoted at $475-$500/st FOB in the region, with the low in Nebraska and the upper end in Iowa.

Southern Plains: Sources quoted the DAP market at $350-$360/st FOB Catoosa, down $15-$20/st from mid-January pricing levels. Although there were still reports of suppliers “waiting for barges to arrive” after earlier high-water restrictions, other sources said more tons seemed to be available at the port in early February. MAP was quoted in the same range as DAP at the port.

The 10-34-0 market had reportedly slipped to $475-$495/st FOB in the Southern Plains, down some $10-$20/st from last report. &l

Ammonium Sulfate

Ammonium Sulfate, China, Eastern Cornbelt, South Central, Southeast, Southern Plains, Western Cornbelt

Eastern Cornbelt: Granular ammonium sulfate was unchanged at $265-$280/st FOB and $285-$295/st DEL in the Eastern Cornbelt.

Ammonium thiosulfate was steady at $325-$335/st FOB in the region.

Western Cornbelt: Granular ammonium sulfate was steady at $265-$270/st FOB regional terminals in the Western Cornbelt.

Ammonium thiosulfate was unchanged at $295-$315/st FOB in the region.

Southern Plains: Granular ammonium sulfate was steady at $240-$275/st FOB in the Texas market, with coarse and standard grade priced $10/st and $20/st lower than granular, respectively.

Ammonium thiosulfate remained at $295-$300/st FOB in the Southern Plains.

South Central: Granular ammonium sulfate was pegged at $245-$260/st FOB in the South Central region, with the low reported at Memphis and representing a $5/st drop from mid-January pricing levels.

Ammonium thiosulfate remained at a nominal $295-$305/st FOB in the region, where available.

Southeast: The granular ammonium sulfate market was steady at $270-$280/st FOB in the Southeast, with delivered tons steady at $290/st DEL in the Carolinas, $300/st DEL in Georgia and Alabama, and $305/st DEL in Florida. Reference pricing for standard grade ammonium sulfate was unchanged at $200/st DEL in Florida.

China: The crystalline grade ammonium sulfate market has reportedly slipped a bit in limited sales to regional buyers. Sources say netbacks show prices may have dropped below $100/mt FOB.

Industry watchers said supplies of steel grade ammonium sulfate are dropping as Chinese steel plants cut back on production. The reduction in output is not only tied to the Lunar New Year week-long celebrations, but also to reduced demand for Chinese steel as the Chinese economy slows down.

Ammonium Nitrate

Ammonium Nitrate, South Central, Southeast, Southern Plains, U.S. Gulf, Western Cornbelt

U.S. Gulf: Price ideas continued to be called $200-$215/st FOB, with little interest. Sources reported that forward business was being discussed in the middle of that range.

Western Cornbelt: Ammonium nitrate remained at $275-$280/st FOB in the Western Cornbelt, where available.

Southern Plains: The ammonium nitrate market was quoted at $255-$260/st FOB Catoosa for the last reported business.

South Central: Ammonium nitrate remained at $250-$255/st FOB in the South Central region in early February.

Southeast: Ammonium nitrate remained at $295-$300/st FOB Tampa for truck tons.

Nitrogen Solutions

Eastern Cornbelt, South Central, Southeast, Southern Plains, U.S. Gulf, UAN, Western Cornbelt

U.S. Gulf: Price ideas were $155-$160/st ($4.84-$5.00/unit) FOB based on the latest offers being made into the market. In the meantime, sources said East Coast vessels had fallen into the $165-$170/mt CFR range, if not lower.

There were reports that CF was involved in a trade with Nitron to send a 25,000 ton vessel to South America at a price of $176/mt CFR, which could reportedly netback to NOLA at $136/st FOB. Sources says this adds more weight to the argument that UAN barge prices should go lower.

Eastern Cornbelt: The low end of the UAN-28 market remained at $175/st ($6.25/unit) for UAN-28 FOB Cincinnati in early February, with Illinois sources quoting UAN-32 at $220.80-$222.40/st ($6.90-$6.95/unit) FOB river terminals for spot tons.

Western Cornbelt: UAN-32 was unchanged at $222.40-$230/st FOB ($6.95-$7.19/unit) FOB terminals in the Western Cornbelt.

Southern Plains: UAN-32 pricing was down in the Southern Plains. Sources quoted the low end of the market at $195-$200/st ($6.09-$6.25/unit) FOB regional production points for new business, with the upper end reported at the $210/st ($6.56/unit) FOB terminal level.

One contact referred to the gap between current market levels and earlier fill levels. “This has a lot of people stirred up, and my prediction is that the next fill season will result in a lot of ‘no thank yous’,” he said. “That would be the polite version.”

South Central: UAN-32 pricing had reportedly slipped $200-$210/st ($6.25-$6.56/unit) FOB in the South Central region, down some $5-$10/st from last report, with the low reported in the Memphis market.

Southeast: UAN pricing continued to fall in the Southeast. Although UAN-32 reference prices remained as high as $190/st ($5.94/unit) FOB at some port locations, sources pegged the market at $173-$178/st ($5.41-$5.56/unit) FOB regional terminals for actual offers, with the low reported in Georgia.

Although some sources said activity was “picking up” in early February, others continued to describe sales as “thin,” with “very little conversation because (the market) continues to drop.”

Urea

China, Eastern Cornbelt, India, Indonesia, Middle East, Nepal, Pakistan, South Central, Southeast, Southern Plains, U.S. Gulf, Urea, Western Cornbelt

U.S. Gulf: Prompt granular barges moved last week, starting the week as low as $187/st FOB and then climbing to $205/st FOB before firming near that number.

Sources said there was a lot of activity, with CF coming into the market to buy four or five barges, but not at the high end of the range. By Thursday, February product was being offered at $206-$208/st FOB and March at $210/st FOB.

Prills remained hard to gauge, with the last done piece of prompt business called $225/st FOB. Second-half February tons were called $220-$230/st FOB. Overall, product is reported to be scarce, although Yara is reported to be bringing in a Libyan vessel soon.

Eastern Cornbelt: Granular urea continued to be quoted at $235-$250/st FOB regional terminals in early February, with the low reported in Cincinnati, Ohio, for prompt tons.

Western Cornbelt: The granular urea market remained flat at $245-$255/st FOB in the Western Cornbelt.

Southern Plains: Granular urea was quoted at $245-$250/st FOB Catoosa, Okla., down some $5-$15/st from last report, with inventories continuing to be described as tight due to Arkansas River logistics. “Urea has begun to arrive by barge in the Tulsa market, but early barges are going to cover contracts, so spot product is still limited,” said one source.

South Central: The South Central terminal market continued to slip, but some sources speculated that price declines may be reaching their limit. “Buyers are still on the sidelines, but I’m getting the feeling that we may be at the bottom,” said one regional contact. “With good weather we will be busy during the second half of February, but distribution could be a big concern because of the lack of prepay this year.”

Granular urea pricing had reportedly fallen to $235-$255/st FOB terminals in the South Central region, down some $15-$20/st from mid-January levels, with the low at Convent, La., and the upper end out of spot Arkansas River locations. The urea market FOB Memphis was pegged at the $240/st FOB level in early February.

Southeast: Granular urea pricing had reportedly slipped to $275-$280/st FOB port terminals in the Southeast, down another $5-$10/st from last report. One source said rail-DEL tons could also be had at the $275/st level on a spot basis in early February.

Sources continued to report a “very slow” fertilizer pace in the region, due both to wet weather and to cutbacks in wheat acreage. One Carolina contact said growers in his area would do some wheat topdressing “as soon as the weather changes,” but volumes would likely be only half of normal due to acreage reductions.

Another regional contact reported a slight uptick in fertilizer orders in early February, saying he’d “taken more orders in the last five days than in the last two months.” Low inventories continued to be reported throughout the region, however. “We’re theoretically three weeks away from the field here,” noted one source.

India: The government reported that imports were right on the mark for 2015. Industry watchers estimated India would need to import 8-9 million tons in 2015, and government figures released this week showed 2015 imports at 8.85 million tons.

Besides the public tenders conducted by MMTC, STC, and IPL, India imports urea from a joint venture operation in Oman. The output of that plant regularly supplies material to India. Just this week, a shipment of 43,000 mt from the Oman facility was unloaded at Vizag.

Sources said India is in no rush to start its 2016 buying. With prices showing no sign of rebounding, sources said the Indian buying houses appear to be willing

Ammonia

Ammonia, Black Sea, Eastern Cornbelt, Middle East, South Central, Southern Plains, Tampa, U.S. Gulf, Western Cornbelt

U.S. Gulf/Tampa: Nothing new was reported in the Tampa market last week. Sources reported that a large quantity of NOLA tons were sold below Tampa prices, with the NOLA range quoted at $261-$271/st FOB.

Sources said the drop was justified by falling prices in the Cornbelt, as well as less ammonia earmarked for Mosaic, which announced it would be cutting DAP production. Ammonia producers also saw natural gas prices drop below $2.00/mmBtu again last week.

March NYNEX natural gas closed Feb. 4 at $1.972/mmBtu, compared to the Jan. 28 close of $2.182/mmBtu one week earlier.

Eastern Cornbelt: After the prior week’s sizable drop in ammonia prices in the region, which was spurred by new postings from larger players, sources said spot pricing levels were still holding at $420-$425/st FOB regional terminals in early February, with the low in Illinois and the upper end in Indiana.

Although sources reported no one needling for still-lower ammonia prices last week, they also confirmed that “no one is knocking the door down, either.” Both dealers and retail buyers “are still holding out to make sure they get the lowest price,” said one contact, even with unconfirmed reports of some regional suppliers offering limited price protection for new ammonia orders.

One source said the new lower postings “have really screwed up the market,” undermining efforts by some regional suppliers to hold prices to the prepay levels that had initially yielded some spring commitments. “Some doors have been closed, so to speak,” said one regional contact.

Western Cornbelt: The ammonia market was steady at $360-$415/st FOB in the Western Cornbelt, with the low quoted in Nebraska and the upper end FOB terminals in central Iowa and Missouri. Delivered tons were pegged at $360-$380/st in the region from southern production points.

Southern Plains: The anhydrous ammonia market had reportedly slipped to $280-$285/st FOB on the low end out of some regional production points, with the upper end of the regional range quoted at $340/st FOB pipeline terminals.

South Central: The anhydrous ammonia market was quoted at $380-$420/st FOB in the region, down $25/st or more from last report, with the low at Memphis, Tenn., and the upper end FOB Henderson, Ky.

Black Sea: Pressure is being applied to producers to accept prices as low as $240/mt FOB. The main force is coming from Morocco, where OCP is trying to use its large-scale purchases to get lower prices.

Sources said at least for now, $240/mt FOB is not achievable. Prices are in the $250s/mt FOB for the limited tonnage that is available.

Middle East: Arab producers are long on material. Sources said Sabic in particular is being hit hard by weak demand and buyers demanding lower prices for product.

Namhae reportedly concluded a purchase at $350/mt CFR into South Korea. Sources said the netback on the deal came to $270-$275/mt FOB.

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