All Posts from August 5, 2013

Intrepid 2Q earnings off 40 percent; MOP volumes flat, prices dip

News, News Briefs

Denver — Intrepid Potash Inc. reported net income of $11.3 million ($0.15 per diluted share) on sales of $92.7 million for the second quarter ending June 30, 2013, versus the year-ago $19 million ($0.25 per share) on sales of $98.8 million. Actual potash sales volumes were flat at 184,000 st; however, average realized sales prices were down for the quarter, to $402/st from $465/st. Intrepid blamed the spring weather for reducing volumes. It expects fall demand to be stronger than the spring due to the need to replenish potash, and reiterated that farmer economics remain positive. However, it said the near-term outlook is for pricing to soften and to be impacted by farmer and dealer reactions to the summer fill and their demand needs, and by speculation regarding global potash prices based on recent developments. Second-quarter potash sales were $78.2 million, down from $88.7 million, while production was up, at 182,000 st from 170,000 st. Trio, the langbeinite product, continued to be a positive. Sales volumes and prices were up – 35,000 st ($359/st) versus 26,000 st ($322/st). Sales were $14.5 million versus $10 million, and production was 50,000 st versus 33,000 st. Intrepid six-month net income was $26.2 million ($0.35 per share) on sales of $191.9 million, up from the year-ago $39.6 million ($0.53 per share) on sales of $211 million. Six-month MOP volumes were 369,000 st ($409/st), down from the year-ago 387,000 st ($471/st). Sales were $161 million versus $190.5 million, while production was 404,000 st, up from 388,000 st. Six-month Trio sales volumes were 74,000 st ($354/st), up from 55,000 st ($312/st). Sales were $31 million, up from $20.5 million, while production was 96,000 st, up from 63,000 st. Annual maintenance turnarounds are slated for the East and West facilities in the third quarter, and Moab is expected to begin harvesting in September following the peak evaporation season. Intrepid third-quarter guidance for MOP production was 150-180,000 st and sales of 180-220,000 st, with full-year production of 780-820,000 st and sales of 765-825,000 st. Third-quarter Trio production is expected to be 50-60,000 st with sales of 30-40,000 st, while full-year production is seen as 190-210,000 st and sales at 160-190,000 st.

Belaruskali finds new marketer

Breaking Industry News

Belaruskali has signed a preliminary agreement with Qatari-trading company Muntajat to market up to 3 million mt/y of its potash, according to the Belarus press. On July 30, Russia’s Uralkali announced that it was pulling out of a long-standing joint marketing venture, Belarusian Potash Co., that it had with Belaruskali. Muntajat is a relatively new trading company formed in 2012 to market Qatari chemical and fertilizer products.

Investor group eyes CF

News, News Briefs

New York — CF Industries Holdings Inc. shares shot up about 12 percent Monday July 29, 2103, after a second-quarter investor letter by Third Point LLC, a hedge fund run by activist investor Daniel Loeb, highlighted the stock as an equity position. The letter said CF trades at an unwarranted discount to fertilizer and chemical peers. Third Point believes CF’s cash flow generation strength is misunderstood and that it should deliver a much larger dividend, which would highlight the sustainability of its cash flow generation and lead to a substantial re-rating. CF had no comment last week.

Martin 2Q sulfur and fertilizer volumes off

News, News Briefs

Kilgore, Texas — Martin Midstream Partners LP reported a 28 percent drop in operating income for its Sulfur segment, which consists of both sulfur and fertilizer, for the second quarter ending June 30, 2013. However, Martin said the results were better than its own forecast. Income was $8.9 million on revenues of $60.9 million, down from the year-ago $12.3 million and $67.1 million, respectively. Sulfur volumes were off 31 percent, to 209,100 lt from 301,400 lt, while fertilizer was off 15 percent, to 71,300 lt from 83,600 lt. Six-month segment income was $18.9 million on revenues of $131.3 million, versus the year-ago $24.8 million and $141.6 million, respectively. Sulfur volumes were 403,100 lt, down from 580,400 lt, while fertilizer was 175,000 lt, down slightly from the year-ago 177,500 lt. Third-quarter Martin-wide net income was $9.1 million ($0.33 per diluted common unit) on revenues of $358.2 million, compared to the year-ago $10 million ($0.25 per unit) and $333.8 million, respectively. Six-month net income was $25.7 million ($0.95 per unit) on revenues of $791.9 million, versus the year-ago $22.5 million ($0.64 per unit) and $682.2 million, respectively.

Midwest/Fatima suit dismissed

News, News Briefs

Washington — Levick Strategic Communications LLC, which filed suit against Midwest Fertilizer Corp. and its primary backer, Fatima Group, on July 18, 2013 (GM July 29, p. 13), voluntarily withdrew the suit Aug. 1 without prejudice. Levick had sought $416,738 for public relations work it said it performed for the defendants in their preparation for a nitrogen complex in Indiana.

The Week in Fertilizer Stocks

Fertilizer Stocks

The Week in Fertilizer Stocks

Producer Symbol Price Week Ago Year Ago
Agrium AGU 83.48 88.26 94.15
CF Industries CF 195.98 180.12 194.62
CVR Partners UAN 22.46 22.64 26.10
Intrepid Potash IPI 13.07 19.13 23.22
Mosaic MOS 41.88 52.51 57.97
PotashCorp POT 29.48 37.44 43.68
Rentech Nitrogen RNF 32.64 30.96 30.56
Terra Nitrogen TNH 218.13 218.00 229.17
Distribution/Retail
Andersons Inc. ANDE 59.80 59.05 37.18
Deere & Co. DE 83.05 82.90 77.53
Scotts SMG 51.86 49.96 39.52

Ammonia

Ammonia, Aqua Ammonia, Black Sea, California, Eastern Cornbelt, Market Watch, Middle East, Pacific N.W., Tampa, U.S. Gulf, Western Canada, Western Cornbelt

U.S. Gulf/Tampa: After concluding August business at $470/mt CFR, the Tampa market was quiet last week. Citing the current downward global price climate, however, sources speculated that September pricing would likely be under pressure as well.

While nitrogen prices may be under pressure, domestic producers are at least enjoying another round of lower gas prices, with the August NYMEX prices closing out at $3.459/mmBtu. Sources said the relatively cool, wet summer has kept gas demand low in the utility market.

Eastern Cornbelt: Favorable weather continued to produce favorable crop conditions in the region, and plentiful summer moisture resulted in only a small patch of western Illinois being classified as abnormally dry in late July.

With corn development tracking nearly level or slightly ahead of the five-year average, USDA assigned good or excellent ratings to fully 76-79 percent of the acreage in Indiana and Ohio last week, compared with 62 percent in Illinois. The region’s soybean crop was also developing ahead of normal, with 71-74 percent of the acreage classified as good or excellent.

Sources reported no changes to the spot fertilizer markets, and minimal new business to test the markets.

Ammonia prices in Illinois were steady at $540-$570/st FOB for prompt or fill tons, depending on location, with the Indiana ammonia market roughly $10/st higher.

Western Cornbelt: Parts of the region saw a dramatic swing in temperatures in late July, with several Iowa and Nebraska cities posting record lows on July 28 after experiencing sweltering heat at mid-month.

The cool weather persisted for the remainder of July, giving corn growers a needed reprieve as the crop enters pollination amid expanding drought conditions in both states.

The regional fertilizer markets were generally unchanged from the previous week, with little in the way of new sales reported to test pricing.

Sources continued to report the anhydrous ammonia fill market at $510-$525/st FOB in Nebraska, $525-$540/st FOB in Iowa, and up to $550/st FOB in the Missouri market.

California: California sources continued to report favorable crop conditions, although there were concerns about water availability for the third quarter. Rains in mid-July helped efforts to control several wildfires in Southern California.

Almonds were starting to hit the ground in the Central Valley, and sources said fertilizer applications will begin in the coming weeks in post-harvest applications on nut trees.

Anhydrous ammonia pricing in California was down from last report in the wake of lower Tampa ammonia pricing. Effective July 21, Calamco reposted anhydrous ammonia at $695/st DEL in California, down $70/st from the previous list price.

Calamco’s aqua ammonia posting fell on July 21 to $186/st FOB, down $19/st from the previous price.

Pacific Northwest: With the arrival of August, the wildfire season was in full swing in the Pacific Northwest. Several were raging in southwestern Oregon last week, and multiple wildfires were also being battled in eastern Washington, Idaho, and western Montana.

The dry weather accelerated the region’s winter wheat harvest, which was tracking ahead of schedule. Spring wheat and barley crops were nearly fully headed in the region by late July.

On the fertilizer pricing front, the anhydrous ammonia market was pegged in the $630-$680/st DEL range in the region, depending on location, with the low end for railed tons and the upper numbers for truck-delivered material. Dealer postings remained at $640-$665/st rail-DEL and $660-$690/st truck-DEL in the region.

Aqua ammonia was steady at $165/st FOB Kennewick and Central Ferry, Wash.

Western Canada:

Urea

Black Sea, California, China, Eastern Cornbelt, India, Market Watch, Middle East, Pakistan, U.S. Gulf, Urea, Western Canada, Western Cornbelt

U.S. Gulf: Granular urea prices traded in a narrower range last week at $313-$319/st FOB. Overall, sources said the market was fairly quiet right now. One source said it was almost like Europe, with everyone on vacation.

Others said the market is in a brief lull until more imports hit the shore. Sources are already anticipating additional Chinese tons, and have been debating their pricing. Depending on the particular import and its source in China, sources say the quality can either be akin to other imports or significantly off kilter.

Prills continued to be called $335-$337/st FOB.

Eastern Cornbelt: Granular urea pricing remained at $355-$365/st FOB most river terminals in the Eastern Cornbelt, with the top end of the regional range quoted at the $375/st FOB mark out of inland warehouses on a spot basis.

Western Cornbelt: The granular urea market remained in the $350-$360/st FOB range out of most regional terminals in the Western Cornbelt. One Iowa contact pegged the common dealer market at the $355/st FOB level in late July.

California: Granular urea remained at $450-$460/st FOB and roughly $480-$500/st DEL in California. Agrium’s July 1 postings for urea ranged from $460-$470/st FOB and $490-$525/st truck-DEL in the state.

Pacific Northwest: Sources quoted the granular urea market last week at $410-$430/st FOB in the Pacific Northwest, unchanged from last report. Delivered pricing was also unchanged at $425-$440/st in the region, with postings in the $430-$445/st DEL range.

Western Canada: Granular urea was steady at $480-$490/mt DEL in Manitoba, $490-$495/mt DEL in Saskatchewan, and $495-$510/mt DEL in Alberta and British Columbia.

India: The IPL tender presented opportunities for a number of traders to put in aggressively low prices while keeping producers happy.

The long shipping date – mid-September – allows tender winners to let the market play out and positions to evolve. One trader noted that the problem with the low price in the recent STC tender was that the shipping deadline was too close to the award date.

Sources report that out of the 4 million mt offered, IPL is taking about 1 million mt. Prices vary according to the port of discharge. The low price offered by Overseas of $303.50/mt CFR is for the larger west coast ports. East coast ports are taking shipments at $305/mt CFR. Sources add that slightly higher prices are being awarded for smaller ports.

In the June STC tender, only three companies offered tons below $310/mt CFR. This time around, of the 27 companies offering material, only four had offers exceeding $310/mt CFR.

Tender results follow.

Offering
Company		 Orgin Quantity
(‘000mt)		 US $/mt CFR Discharge Port Comments
    Firm Optional      
Overseas Open 180 60 303.50

Nitrogen Solutions

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

U.S. Gulf: Not a lot appeared to be going on in the market last week, except chatter. While some argued that prices should be $5/st FOB lower than $245-$250/st ($7.66-$7.81/unit), just as many said they were $5/st higher.
Regardless, it didn’t appear that much was going at any price.

Eastern Cornbelt: Sources pegged the UAN-32 market at $288-$300/st ($9.00-$9.38/unit) FOB in the Eastern Cornbelt for fill or prompt tons, with UAN-28 quoted at $252-$265/st ($9.00-$9.46/unit) FOB in Ohio and Indiana, depending on location.

Western Cornbelt: UAN-32 remained at the $285-$295/st ($8.91-$9.22/unit) FOB level for fill or prompt tons, with the low reported in Nebraska and the upper end in the Iowa market. The upper end of the cash market was quoted at the $300/st ($9.38/unit) FOB level on a spot basis.

California: Sources said UAN-32 pricing in California was slated to drop at midweek from at least one regional supplier, moving to $345-$350/st ($10.78-$10.94/unit) FOB. Other suppliers reportedly remained in the $365-$370/st ($11.41-$11.56/unit) FOB range at the upper end, but there was little new business to test the prompt market.

Pacific Northwest: The UAN-32 market in the Pacific Northwest was reported at $345-$355/st ($10.78-$11.09/unit) rail-DEL on the low end, with truck-delivered tons quoted at $355-$365/st ($11.09-$11.41/unit) in the region.

Western Canada: UAN-28 pricing remained at $324-$330/mt ($11.57-$11.79/unit) DEL in Manitoba, $330-$333/mt ($11.79-$11.89/unit) DEL in Saskatchewan, and $333-$342/mt ($11.89-$12.21/unit) DEL in Alberta and British Columbia.

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