All Posts from May 5, 2014

Phosphates

Central Florida, China, Eastern Cornbelt, India, Market Watch, Phosphate Rock, Southeast, Southern Plains, Triple Superphosphate, U.S. Exports, U.S. Gulf, Western Cornbelt

Central Florida: A state of emergency was declared in Florida after parts of the state were doused with more than 20 inches of rain in a 24-hour period, according to weather reports.

The severe “S-shaped” weather pattern caused record precipitation in northern Florida and much of southern Georgia after spawning tornadoes and heavy rainfall in parts of Arkansas, Mississippi, Alabama, Tennessee, and North Carolina.

Sales of truck loads of DAP were quoted at $465/st FOB in the Central Florida market, and Mosaic’s posted price for the region was unchanged at $460/st FOB for DAP and $480/st FOB for MAP.

Rail-loaded DAP was offered as well, but sources said continued rail delays prompted buyers to stay out of the market until earlier orders were caught up.

Sources pinpointed May 15 as a likely date for delayed rail-based phosphate deliveries to have been successfully sorted and delivered. However, some speculated that the derailment and subsequent burning of a train carrying crude oil in Virginia on April 30 may have shocked rail operators into dialing back efforts to speed logistics fixes.

The Central Florida phosphate market was quoted at $460-$465/st FOB based on limited transactions and Mosaic’s posted price. MAP was quoted at a $20/st FOB premium to DAP, although no transactions were reported.

U.S. Gulf: With the spring planting season in full swing for most of the country, caution ruled the NOLA market as the window continued to shrink for barge-loaded material to make it onto fields during the spring push.

Inclement weather and an especially inopportune lock closure in the Twin Cities area further clouded the market. High river levels halted loading and unloading at some Twin Cities terminals, effectively cutting off area terminals from resupply for 7-10 days, a source said. The closure comes at time when the area was quickly ramping up phosphate consumption.

Barges already north of the closed lock were said to carry a huge premium. One barge offered at $485/st FOB prior to the lock closure suddenly jumped to a $500/st FOB offer level after the closure, a source said. It was unclear whether the barge attracted any interest.

Outside the upper river price bubble, prices trended lower for the week. Confirmed NOLA transactions ran from $480/st FOB on the high end to $470/st FOB on the low, and a loaded and moving barge was said to sell north of Rosedale, Miss., for a purported $465/st FOB.

Paper trading for May was quoted at $425-$435/st FOB, while July transactions were said to hit $428/st FOB.

Corn planting made up for lost time in the week ending April 27, according to USDA. Total U.S. acres planted rose to 19 percent, up 13 percent over the previous week but still trailing the five-year average of 28 percent.

A 4:00 p.m. look at the futures market on May 1 saw corn and soybeans down from the previous week, while wheat contracts were on the rise.

July 2014 corn was posted at $5.07/bushel, down slightly from the previous week’s $5.0725/bushel. Corn for September 2014 was $5.025/bushel, while contracts for December 2014 were at $4.995/bushel, down from $5.0275/bushel the week before.

Soybean prices for July 2014 were $14.61/bushel, down from the previous week’s $14.70/bushel. August 2014 soybeans were pegged at $13.9975/bushel, while November 2014 soybeans fell to $12.255/bushel from the prior week’s $12.31/bushel.

Wheat enjoyed moderate gains on the week. July 2014 wheat punched in at $7.0725/bushel, up from $6.965/bushel one week earlier, while September 2014 wheat contracts firmed to $7.16/bushel from the previous week’s $7.055/bushel. Wheat for July 2015 was $7.3525/bushel.

Repairs to the main chamber of the Melvin Price Lock near St. Louis, Mo., continued t

La Coop fédérée – Management Brief

Management Briefs

La Coop fédérée CEO Claude Lafleur has been named director general of IFFCO Canada, reporting to CEO Manish Gupta. Lafleur will also serve on the IFFCO Canada board, a post he will continue to occupy on behalf of La Coop, which is a major investor in IFFCO Canada.

IFFCO Canada says Lafleur’s appointment will enable the company to finalize key upcoming steps in the project planning process to build a $1.6 billion nitrogen plant in Quebec. He will play a front-line role with investors and financial institutions, as well as government authorities.

LaFleur has headed up La Coop, the largest agrifood organization in Quebec, for the past 8 years. Under his leadership, it has grown from $3.2 billion to $5.2 billion in revenues.

Yara 1Q income off 21 percent; sales volumes set record

Featured, News

Yara International ASA reported first-quarter net income after non-controlling interests of NOK 1,773 million (NOK 6.40 per share), compared with NOK 2,257 million (NOK 8.04 per share) a year earlier. Revenues were up, at NOK 21,709 million from the year-ago NOK 20,690 million.

"Yara reports a strong first-quarter result reflecting record deliveries," said Jørgen Ole Haslestad, Yara president and CEO. "While global commodity nitrogen markets have been impacted by increased export supply from China, healthy demand in both Europe and Latin America has supported value-added premiums and generated a strong Yara performance.”

Global Yara fertilizer deliveries were up 21 percent, to 6.4 million mt from the year-ago 5.3 million mt, reflecting both strong demand for most products in all markets as well as the acquisition of Bunge assets in Brazil. Excluding volumes to Brazil, global Yara fertilizer deliveries were up 11 percent compared with first quarter 2013.

Yara’s average realized urea prices were 13 percent lower than a year ago. Realized nitrate and NPK compound prices decreased by 12 percent and 10 percent, respectively, keeping premiums over urea and other commodity fertilizers stable overall, while NPK blend margins in Brazil were higher than last year.

Although an early spring in Europe pulled ahead some demand from second to first quarter, Yara said strong farm margins and tight supply for nitrates in particular indicate a positive European nitrogen market situation also for the second quarter. Yara said it has a strong European order book for the remainder of the season, and is also positively impacted by lower European gas prices, which are expected to continue based on forward markets.

The largest fertilizer volume uptick was for NPKs, which saw a 45 percent increase, to 2.33 million mt from 1.61 million mt. Other major nitrogens with increases were nitrate at 1.74 million mt, up from 1.65 million mt, UAN at 418,000 mt versus 316,000 mt, and CN at 353,000 mt versus 332,000 mt. Those dropping in volumes were ammonia at 650,000 mt from 869,000 mt and urea to 1.55 million mt from 1.61 million mt.

Yara said its ammonia production was off 6 percent during the quarter and cited a mid-January fire at Tertre, as well as the Libyan Lifeco plant going down around the same time due to a militia blocking access to the site. Lifeco just recently returned to production. Qafco production was also down due to a scheduled turnaround.

Tensions raise concerns for Louisiana N plant

News, News Briefs

Baton Rouge — There was speculation last week that U.S./Russian tensions and potential sanctions over the situation in Ukraine could impact EuroChem’s proposed nitrogen plant for Louisiana. Concerns were that Russian President Vladimir Putin could retaliate against U.S. companies in Russia and alternatively thwart Russian investment in the U.S. Likewise, U.S officials may not be keen on new Russian investment in the U.S. However, Louisiana still wants the project. “Louisiana Economic Development continues to be supportive of the project,” said an LED spokesperson last week. “The company has not yet selected a location in Louisiana as it still is considering technical site matters associated with its in-state location options.” Earlier this year (GM Jan. 27, p. 12), EuroChem purchased a 2,150 acre site in Carrsville, La., for a potential $1.5 billion nitrogen (ammonia and urea) plant (GM July 15, 2013, p. 1), paying the state some $12 million. EuroChem still has an option on a privately-owned site at Edgard in St. John the Baptist Parish. If EuroChem doesn’t ultimately locate the project in Carrsville, Louisiana has the option to designate an alternate buyer that would purchase the site from the company. Louisiana is providing EuroChem with a $6 million grant for infrastructure improvements.

Cuba eyed for major N complex

News, News Briefs

Havana — Cuba may be in line for a new $1.2 billion urea and ammonia plant, according to Bloomberg, citing a recent report from Venezuela’s Petroleos de Venezuela SA (PDVSA). The project would reportedly produce 400,000 mt/y of urea and 370,000 mt/y. What is not used in Cuba would be exported by PDVSA’s Pequiven to other countries in the region. PDVSA is also eyeing a $1.4 billion regasification facility in Cuba. No timeline for the projects was given.

Tessenderlo Agro business credited with uptick

News, News Briefs

Brussels — The Tessenderlo Group reported a 27.9 percent increase in REBITA, to €41.8 million on revenues of €396.4 million for the first quarter ending March 31, 2014, compared to the year-ago €32.7 million and €486.5 million, respectively. Tessenderlo said operating performance was better than expected, driven by its Agro unit, which includes its fertilizer business, as well as by cost reductions. Despite the uptick, the company expects 2014 REBITDA to be only slightly above 2013 levels, citing current assumptions, including low visibility in a fragile economic environment for the rest of the year.

Bunge reports fertilizer results

News, News Briefs

White Plains, N.Y. — Bunge Ltd. reported first-quarter fertilizer earnings before interest and tax of $6 million on sales of $61 million, compared to the year-ago $35 million and $66 million, respectively. Results were primarily driven by the improved performance at its Brazilian port operation, while the year-ago results include a gain of $32 million related to the sale of certain legal claims. Fertilizer volumes were up slightly, to 137,000 mt from 135,000 mt. Company-wide, Bunge reported a net loss attributable to Bunge of $13 million ($0.18 per diluted share) on sales of $13.5 billion, compared to year-ago income of $180 million ($1.15 per share) on sales of $14.8 billion.

Sulfur

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

Tampa: Sources noted a new trend from domestic sulfur suppliers who appear to have begun holding excess tons of sulfur in reserve, presumably to offer internationally at a price premium to Tampa.

Sources said sulfur volume had historically been concluded at the settlement of the quarterly contract, and phosphate producers didn’t have a way to secure extra tons if needed. The new practice would signal a change to that limitation, potentially allowing buyers the flexibility to make emergency acquisitions as needed, but for a price.

Despite the ongoing outage by the Syncrude refinery, which reportedly produces in the neighborhood of 1,000 mt/d of sulfur when operational, phosphate producers reported no difficulty in securing volumes needed to keep plant operations running at full steam.

U.S. refinery operating rates checked in at 91 percent for the week ending April 25, according to the U.S. Energy Information Administration. The rate was unchanged from the previous week, but considerably higher than last year’s 84.4 percent and the five-year average of 86.6 percent.

The second-quarter price for molten sulfur at Tampa was $133/lt DEL, an increase of $23/lt from the first-quarter price of $110/lt DEL.

U.S. Gulf: Sulfur sold from the Gulf of Mexico was tabbed at $150-$160/mt FOB.

Vancouver: The price of sulfur in the Vancouver spot market was unchanged at $140-$160/mt FOB.

Sulfur shipped from Alberta was quoted at (-)$30-(+)$85/mt FOB, also unchanged from the previous week.

West Coast: The West Coast price of sulfur was reported at $140-$155/mt FOB, unchanged from the previous week.

Benelux: The price of Benelux sulfur for the second-quarter was $158-$172/mt, a $28/mt hike from the first-quarter price of $130-$144/mt.

ADNOC: The April price of ADNOC sulfur was $170/mt. An updated price for May is expected soon.

Potash

Bangladesh, Eastern Cornbelt, Market Watch, Potash Muriate, Southeast, Southern Plains, U.S. Gulf, Western Cornbelt

U.S. Gulf: Barges spanned a broad range at $335-$350/st FOB, with most pointing to the higher end of the range as the week progressed.

Eastern Cornbelt: The potash market continued to be quoted in the $380-$385/st FOB range for any available tons in the Eastern Cornbelt, but warehouse inventories were described as very tight.

Western Cornbelt: Potash was pegged in a broad range at $370-$385/st FOB regional warehouses in the Western Cornbelt, depending on grade and location. Missouri sources quoted the spot market firmly in the $380-$385/st FOB range last week.

Southern Plains: Potash was tagged at $370-$380/st FOB regional warehouses in the Southern Plains, up $5/st from last report. The Carlsbad, N.M., market was quoted at $370/st FOB on the upper end for granular potash.

South Central: Potash inventories remained tight at terminals in the South Central region due to railcar shortages. The potash market was quoted at $370-$375/st FOB warehouses in the South Central region. Warehouse inventories were expected to be recharged with incoming import tons in the near term.

Southeast: Potash pricing out of regional warehouses was quoted at $375-$380/st FOB, with the same range quoted for rail-delivered tons.

Bangladesh: As reported last week, Canpotex Ltd. is selling US$40 million worth of potash to Bangladesh over the coming year (GM April 28, p. 10). A top official at the Bangladesh Agricultural Development Corp. (BADC) has confirmed for Green Markets that the amount totals 120,000 mt, with final costs determined by freight and international markets trends at the time vessels arrive at Chittagong in Bangladesh.

The contract was negotiated between the Canadian Com-mercial Corp. and the Bangladesh Agricultural Development Corp. The contract includes an option for Canpotex to supply an additional $20 million worth of potash. Md. Zahir Uddin Ahmed, chairman of BADC, said that if all the cargoes are delivered in time, the Bangladesh government would consider importing more from Canada.

Bangladesh imported more than 0.6 million mt of potash last year. It has imported 100,000 mt of potash from Russia in the past, and also some quantities from Belarus.

The deal will increase bilateral trade between Canada and Bangladesh, which should hit the $2 billion mark by next year, said Heather Cruden, Canada’s high commissioner to Bangladesh. Given the high quality of Canadian potash, Cruden expressed confidence that Canada’s share will grow to at least a third of the potash import demand of Bangladesh.

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.

For additional details visit our Terms of Use.