Washington-The U.S. House of Representatives on June 26 passed the American Clean Energy and Security Act of 2009 (HR 2454) by a vote of 219 to 212. The climate change bill, sponsored by Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.), was opposed by The Fertilizer Institute (GM June 29, p. 10). “As written, the legislation will render the U.S. nitrogen industry uncompetitive and threatens to force fertilizer production overseas to countries that do not regulate emissions, resulting in a loss both for the economy and for the cause of reducing CO2 emissions,” said TFI President Ford B. West. “We believe that H.R. 2454 will cause fuel switching and drive up the price of natural gas. Every $3 increase in the price of natural gas adds more than $1 billion to the cost of nitrogen production. Additional increases in the domestic price of natural gas caused by fuel switching will lead to an even more severe competitive disadvantage. U.S. producers will face a stark choice of losing market share to imports or moving production overseas ?Çô neither choice is good for the U.S. economy, the environment or U.S. food security.” West also faulted the bill for its “lack of understanding of the science behind the nitrogen cycle and the essential role of plant nutrients in food production,” taking aim at certain agricultural practices the bill cites to avoid or reduce greenhouse gas (GHG) emissions. “GHG emissions can come from all types of nitrogen sources applied to the soil, regardless of whether these are applied as commercial fertilizer or manure,” West said. “Whether a farmer chooses to use commercial or organic fertilizer sources, they need to adopt best management practices.”
U.S. Gulf/Tampa:July business at Tampa has been concluded at $180/mt DEL. In addition to these lower numbers, sources report that recent large quantity business out of NOLA fell within the $170-$180/st FOB range.
Eastern Cornbelt:Anhydrous ammonia continued to move for spot loads in the region as growers finished up sidedress applications. Illinois sources pegged the dealer market for ammonia at $300-$310/st FOB terminals for spot loads, with fall prepay tagged at the $340/st FOB mark.
Western Cornbelt:The ammonia market was pegged at $290-$310/st FOB regional terminals last week, with the low in Iowa and Nebraska for prompt, cash market tons. One Nebraska source also quoted delivered ammonia at the $286/st level last week. Forward contract ammonia for August was referenced by one supplier at $335/st FOB in Iowa and Nebraska, and $355/st FOB Palmyra, Mo.
Southern Plains:The anhydrous ammonia market in the Southern Plains region was quoted at $240-$250/st FOB regional production points for cash market tons, with fall prepay reportedly being offered at a $10-$20/st premium. Out of Kansas pipeline points, the ammonia market was tagged at $280/st FOB for prompt tons and $290/st FOB for fall prepay.
South Central:The anhydrous ammonia market was down from last report at $280-$290/st FOB Memphis, Tenn., for very limited cash market business. Out of Henderson, Ky., the ammonia market was reported at $300-$310/st FOB, with the low for prompt tons and the upper end for fall prepay.
California: Effective June 26, Calamco lowered its ammonia price in California from $390/st to $300/st truck-DEL. Rail-delivered ammonia moved on that date to $335/st, while Calamco’s aqua ammonia posting dropped from $108/st to $90/st FOB in California.
Black Sea: For all intents and purposes the ammonia market here is dead. Sources say Nitrochem continues to produce and move out tons, but other producers are shutting down.
One Asian observer noted that the only destinations for what few cargoes come out of Yuzhnyy are in Europe and Turkey. And the tons going into central Europe are getting fewer and fewer.
Most of the demand in Europe at this time is for industrial use. Buyers are able to secure tons from Baltic and Caribbean sources cheaper than what Yuzhnyy can deliver.
Ukrainian producers continue to face the pressure of high natural gas costs from Russia and a stagnant-to-soft ammonia market. With current prices hovering at $190/mt FOB and production costs closer to $320/mt FOB, area producers have no choice but to begin shutting down.
Plant managers had tried to tighten the market by taking extended turnarounds earlier this year, but when the market failed to bounce back on the heels of the global economic slowdown, full-scale shutdowns were openly discussed.
By last month more plants were shut down indefinitely than at any other time, said one source.
Middle East: Talks between Sasol and Sabic broke down as June ended. Sources say Transammonia moved in quickly to see what they could do. Reportedly Sasol wanted to pay much less than what Sabic was offering, and no amount of offers and counter bids could close the gap.
Sources say Transammonia is in a good position to offer not only the 80,000 mt Sasol wants under a 12-month contract, but at a more attractive price.
Trammo has an exclusive contract to move out some Egyptian tons. But the natural home for those tons – Europe – is either not interested in more ammonia or can grab some cheaper product from the Caribbean. India, the next likely location, is now said to be fully booked under contracts with Arab Gulf suppliers. That leaves Transammonia to look wherever it can for a buyer.
Sources report that the Arab Gulf producers are more than comfortable with their contracts to India, even though India is not clamoring for more material. The long-term contracts are ensuring steady shipments out of the area. At the same time, some plants have scaled back on production or have taken extended turnarounds to ensure a surplus does not build.
Prices remain in the low $200s/mt FOB based on the Indian contracts.
No spot buyers have popped up on the screen lately. Sources say the most likely spot buyers would have been in Asia, but supply and demand is nicely balanced at present.
Asia: Sources report the market east of Suez remains strong. The only soft spot is South Korea. Namhae reportedly is taking fewer tons than expected. Sources speculate the lower off-take is a result of reduced demand from the fertilizer sector. And one reason for reduced demand for South Korean fertilizer comes from the Seoul government’s discontinuance of fertilizer assistant to North Korea.
Area observers note that even with a softer South Korea, sellers are not having any problems placing tons. Likewise, buyers are anxious to get tons, but not anxious that the tons will not be available.
The joint venture Indonesian plants KPI and KPA are running at full capacity, and are fulfilling contracts without much difficulty.
Sources report the Mitco plant in Malaysia is coming back on line slowly. The plant experienced a feedstock supply problem that grew in complexity as the repairs teams worked on the facility.
On the transportation front, Asian sources report that a growing number of vessels are sitting idle looking for work. One observer noted that six or seven new mid-sized vessels came out this year and have yet to be fully employed. Even with older ships retiring from service, sources say the slack ammonia market, especially west of the Suez Canal, is playing havoc with the shipping industry.
India: Sources report buyers are taking just what their contracts require. A month ago or so, buyers were asking suppliers to add a few tons with each order. Now with phos acid and phos rock talks completed, the phosphate industry of India is not as desperate for ammonia.
UREA
U.S. Gulf: Prices were firming last week, according to most sources, as demand from rice country was coming back into the market. Most were now calling the urea barge market within the $244-$250/st FOB range, with quotes of $255/st FOB as the week ended. Sources said prices quickly worked their way up as the week progressed, with some saying that $244-$245/st FOB did not last long.
Eastern Cornbelt: The urea market was quoted at $275-$295/st FOB regional terminals for prompt tons.
Western Cornbelt: Granular urea was quoted at $275-$295/st FOB in the region, with the upper end reported in Iowa for limited spot loads to the dealer.
Southern Plains: Sources quoted the granular urea market at $270-$280/st FOB Oklahoma terminals, with one source describing inventories as short in spite of limited new buying activity.
South Central: The granular urea market was pegged at $265-$270/st FOB regional warehouses to the dealer, with some anticipating a slight increase in early July as rice demand continues. A wide range of rice development meant some growers were still wrapping up the first application while others were already finishing the second in late June. One Louisiana source said urea applications on rice will likely run into late July, and that wide window has resulted in good urea volumes in most areas. “We’re not disappointed,” said one source.
Southeast: Granular urea was in short supply in the region, with several locations reportedly out of product. Sources pegged the dealer market at $300/st FOB port terminals, if available.
Pakistan: The Trading Corporation of Pakistan bowed to pressure from the central government to ensure that 300,000 mt enters the country by mid-September.
A tender for 35,000 mt that was originally slated to close in mid-July was pushed up to June 27. Two more tenders for 50,000 mt each were called, and then their closing dates were moved up to June 30 and July 11. The amount requested in the June 30 tender was also increased to 100,000 mt.
Now the closing date of the July 11 tender has been moved up to July 4. And another tender to close July 14 has also been called.
All told, TCP asked for 350-400,000 mt in tenders called in the past two weeks.
Prices offered in the first tender seemed to suggest a strengthening market, with the exception of an offer by Hagrapota at $276/mt CFR. Prices offered by the other traders ranged from $284.90/mt CFR to $296/mt CFR.
At the time the tender results were released, sources pointed out that TCP paid $283.75/mt CFR in its previous tender.
To no one’s surprise, no tons were offered by Arab Gulf suppliers.
The AG producers secured large quantity deals with IPL and MMTC of India. Those orders will keep the Middle East suppliers comfortable into September, and some say into October.
Tender results follow on page 6.
TCP urea tender that closed June 27
Supplier
Origin
Quantity mt
US$/mt CFR
Hagrapota
Egypt, Black Sea
25,000
276.00
25,000 (S/O)
276.00
Transammonia
Open
25-50,000
284.90
Transfert
Open
35-40,000
286.00
35-40,000 (S/O)
286.00
35-40,000
286.00
35-40,000 (S/O)
286.00
Keytrade
Open
30-35,000
289.00
Dreymoor
Open
25-30,000
289.67
25-30,000 (S/O)
289.67
Toepfer
Open
25,000
293.75
25,000 (S/O)
293.75
Multicommerce
Open
25-30,000
295.00
Helm
Open
25-35,000
296.00
25-35,000 (S/O)
296.00
At the time the tender results were opened, Asian sources said Hagrapota presented a bank letter instead of a bid bond and might be excluded. By Tuesday of last week, however, that speculation proved false. Hagrapota was given an award for its firm offer of 25,000 mt at $276/mt CFR.
TCP reportedly went to Transammonia and Transfert to see if they would match the Hagrapota offer. They declined. Sources say the two trading houses had a very good reason to reject TCP’s request.
The next tender was due in a few days – June 30 – and everyone in the industry expected to see higher prices in the offers. Instead of pushing higher from the previous tender, however, Trammo and Transfert offered tons at the same level as the first tender.
TCP urea tender that closed June 30
Supplier
Origin
Quantity mt
US$/mt CFR
Transammonia
Open
25-50,000
281.27
Transfert
Open
35-40,000
284.75
35-40,000
287.75
Keytrade
Open
25-35,000
288.79
Dreymoor
Open
25-35,000
289.67
Gavilon
Saudi Arabia
25,000
292.00
Sources report that late Wednesday, TCP made awards to Transammonia and Transfert at $281.27/mt CFR. Others in the industry disputed that Transfert accepted the lower price, but one trader said it is likely they did.
Coming up next will be a tender for 50,000 mt that was slated to close July 11 and will now close July 4.
As soon as TCP saw that it would not be able to buy 100,000 mt in the first or second tender, it issued another tender to close July 14.
Local media report the country is short by 300,000 mt for the upcoming application season. Traders in the area say, however, that the purchases being pursued in this round of tenders will be used for buffer stock rather than going straight from port to field.
Besides the political pressure to ensure – or at least to ensure the perception – that enough urea is on hand, TCP faces financial problems. The finance ministry had to be called in to talk to commercial bankers to make sure letters of credit issued by TCP would be honored. The banks objected, saying that TCP was already overdrawn on its accounts from other non-urea tenders.
Bangladesh: Two tenders for 125,000 mt each of prilled and granular urea by BCIC closed last week, with Chinese material dominating the offers.
Sources say the country does need the material, but getting the BCIC and government bureaucracies to move quickly enough to act before the validity dates of the offers expire will be difficult. Observers say BCIC regularly faces delays in making awards that are partly of its own making, partly a result of government regulations, and partly a matter of money.
This time, say sources, the money is not an issue.
Offers for both types of urea had to be in bagged delivered format.
Sources provided the lowest five offers of 13 that were made in the tender.
BCIC Prilled Urea Tender
Offering Company
Source
Quantity (mt)
US$/mt CFR bagged
Globe Impex
Ukraine
62,500
273.80
Wilson
China
25,000
295.17
Liven
China – Indonesia
50,000
295.53
Bulktrade
Open
25,000
298.14
Desh
Open
100,000
304.14
Results for the granular tender follow with the lowest five of 10 offers.
BCIC Granular Urea Tender
Offering Company
Source
Quantity (mt)
US$/mt CFR bagged
Globe Impex
Ukraine
62,500
276.80
Wilson
China, Egypt, Malaysia
25,000
298.87
Desh
Open
25,000
299.40
Liven
China – Malaysia
25,000
302.52
Bulktrade
Open
100,000
303.14
Sources say many of the “OPEN” offers most likely involve Chinese material.
With freight rates between China and Bangladesh pegged at $20/mt, and $5 removed for bags, the Globe Impex offers are well below the current perceived Chinese prilled and urea markets.
India: Sources report that Indian buyers had approached companies that did not get awards in the recent MMTC tender to secure cargoes for August and September shipments.
Reportedly, all the bids were rejected.
The market remains in a state of turmoil as buyers, sellers, and traders all keep a close eye on the Chinese market.
If Chinese urea dips into the $250s/mt FOB, sources say it could become competitive in the current market.
No one is willing to take a long position on any material at this time, and so efforts to nail down long-term deals in anticipation of a tender have market players nervous.
Sources say rumors are strengthening that a major India buyer will call a tender later this month. Bets are being placed on STC calling a tender in the second half of July.
Indian buyers will want to nail down as many tons as possible while the export duty on Chinese urea remains at 10 percent. That window closes Sept. 30.
As long as Chinese urea sits as an outlier to the Black Sea and Middle East markets, say sources, the buyers will be able to play one against the other in pricing negotiations.
China: Initially, changes in the export duty left many in the industry scratching their heads. What became clear at the end of last week, however, was that the current rate of 10 percent on urea will remain in place through Sept. 30. The duty was slated to jump back to 110 percent Sept. 1.
Initial rumors said the duty would be eliminated during this same period. Others said the duty would hold at 10 percent for the rest of the year.
The bottom line for the Chinese urea industry is that domestic demand is hitting its seasonal lull and the international market is not as hot as it was in previous years.
Without international sales, producers are facing the threat of building reserves, which could hit them when seasonal buying starts again, or shutting down their plants and face the wrath of local and national political and economic leaders.
The price is currently pegged at $260-$265/mt FOB for prills, with granular getting an addition $5/mt. At these prices, sources say a good deal on freight could make Chinese urea competitive in India, Pakistan, and Bangladesh.
Some Chinese urea has already been sold for delivery to the U.S. west coast.
Black Sea: Selling material from the Black Sea to points east of the Suez Canal remains problematic.
Asian sources say the pirates along the Somali coast make runs through the Suez Canal dangerous enough that several ship owners are refusing to let their vessels take that route. The only other option to go from Yuzhnyy to Pakistan or India is to go around the Cape of Good Hope. That option adds time and cost to the trip.
Based on the offers in the Pakistan tender that might come from the Black Sea and an estimated freight of $45-$50/mt, sources say the market is holding around $235/mt FOB.
Rumors in the last half of June that the price had dipped to $230/mt FOB were dismissed when no one stepped forward to claim the business.
Middle East: To say producers are comfortable is an understatement, say sources.
Area producers received enough orders from India – about 250,000 mt in the last tender alone – to ensure they do not have to scramble for deals with Pakistan or Bangladesh.
Even with the market in the area sold out, sources say the price has not budged from the low $260s/mt FOB for prills and granular.
Vietnam: Local media reports quote government officials that Vietnam is importing 100 percent of its fertilizer needs, leaving Asian sources puzzled.
In the past six months Vietnamese urea producers and traders have been selling Chinese material sent over the border at a rate that some now say may have cut into the country’s reserves. Sources say even some material from the Phu My plant may have made it into some exports – something that is banned by law.
The need to import 100 percent of fertilizer needs may reflect the country’s need to import all of its NPKs.
Demand in Vietnam is said to be off.
NITROGEN SOLUTIONS
U.S. Gulf: Like urea, these barge numbers were firming. Most were putting the last done business within the $125-$130/st FOB range ($3.91-$4.06/unit), with new quotes at $135/st FOB. Sources said that barge prices appear to be even stronger now than some inland prices. Many of the big players were reported to have filled up at $120/st FOB, leaving fewer tons and higher prices for those that waited.
Eastern Cornbelt: Several sources said UAN fill tons that had earlier been offered at the sub-$5.00/unit FOB level were no longer available as suppliers reportedly sold their allocations for fill. As a result, most sources put the regional market last week at $5.35-$5.75/unit FOB regional terminals to the dealer. One supplier was referencing $5.60-$5.90/unit FOB for the June 27-July 3 order and shipping period, while another was referencing forward contract tons for August at $5.45-$5.95/unit FOB in the region.
Western Cornbelt: Nebraska sources quoted the low end of the UAN-32 market at $160/st ($5.00/unit) for prompt or fill tons last week, while Iowa sources reported a $176/st ($5.50/unit) FOB dealer market. Fill offers at sub-$5.00/unit FOB levels had reportedly dried up as some suppliers pulled programs. One supplier was referencing cash market UAN-32 FOB Pine Bend, Minn., at the $5.95/unit level for the June 27-July 3 order and shipping period, while another was offering forward contract UAN for August at $185.60/st ($5.80/unit) FOB Pine Bend.
Southern Plains: The UAN-32 market was quoted in a broad range at $130-$160/st ($4.06-$5.00/unit) FOB regional terminals, with the low out of production points for what one source described as a “sizable block” of fill tons. Kansas sources tagged the upper end of the range at $150-$160/st ($4.68-$5.00/unit) FOB for prompt ship, with fill tons being offered in the same range on a delivered basis. One source pegged UAN-32 fill tons at $152/st ($4.75/unit) FOB in his trade area last week.
South Central: Louisiana sources confirmed the low end of the UAN-32 range at $165-$170/st ($5.16-$5.31/unit) FOB to the dealer, while sources in Arkansas and Tennessee continued to quote the dealer market at the $190/st ($5.94/unit) FOB level.
Southeast: Georgia sources pegged the UAN-32 market at $165/st ($5.16/unit) FOB and as low as $158-$160/st ($4.94-$5.00/unit) on a rail-delivered basis. Out of Wilmington, N.C., and Norfolk, Va., the dealer market was pegged at the $5.33/unit FOB mark last week.
AMMONIUM NITRATE
Western Cornbelt: Ammonium nitrate remained at a nominal $265-$270/st FOB in the region.
Southern Plains: Ammonium nitrate remained at $250-$255/st FOB Catoosa, Okla., with reports of limited tons and little demand for product.
South Central: The ammonium nitrate market was pegged at $260-$270/st FOB regional terminals to the dealer.
Southeast: The Tampa market for ammonium nitrate was steady at $305-$315/st FOB. Sources said spot tons out of the Wilmington market remained at the $290/st FOB level for the last done business.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate remained at $225/st FOB or rail-DEL in the region, but sources said Honeywell had announced a fill program at $100/st less, or $125/st FOB or DEL in the Midwest. Some said the new pricing took effect July 1, while others said no orders would be taken at the new levels until after the July 4 weekend.
Western Cornbelt: Although Honeywell was reportedly out on July 1 with a summer fill program for granular ammonium sulfate at $125/st FOB or DEL in the Midwest, several sources said the previous level of $225/st FOB or DEL was still the dealer market last week, with the new price taking effect after the July 4 weekend.
Southern Plains: Granular ammonium sulfate pricing remained at $190-$230/st FOB Texas shipping points, with the low FOB Freeport.
South Central: Granular ammonium sulfate pricing remained at $220-$225/st FOB in the region.
Southeast: While sources were able to confirm Honeywell’s drastic price reduction on granular ammonium sulfate in the Midwest, it appeared the company did not do the same in the Southeast market. Regional sources continued to quote granular ammonium sulfate at $190-$195/st FOB last week, with delivered product at $205-$229/st in the region, depending on location and supplier. Standard grade was pegged at $165-$178/st DEL in the region.
PHOSPHATES
Central Florida: After sinking for a couple of weeks, CF hiked its prices for DAP and MAP for Central Florida twice in less than a week. On June 26, the company hiked both prices by $5/st FOB, then another $5/st FOB on June 30. A source pointed out that phosphate producers were comfortable with their current supply-to-demand ratio and would rather increase the price than up production. That makes sense, because domestic consumption was not likely to increase until the fall season begins, and increasing production could lead to higher inventories. Export demand has been on the upswing and was sufficient to keep inventories at reasonable levels.
Higher prices were also considered a solid indication that curtailments, which had been expected, will not occur in the near future. A sulfur supplier said demand had fallen 25 percent compared to the previous month, but other suppliers disagreed.
Before the CF price hike, a trader made a sale of a railcar of MAP at $270/st FOB and noted he would have had to receive $275-$280/st FOB on the deal if it was done after CF posted the change. During the same week, Mosaic was making DAP sales around $250/st FOB, but that was likely to change this week.
The Central Florida DAP price range was changed from $250-$255/st FOB the previous week to $250-$260/st FOB. PCS Sales had no published price. Mosaic had no list prices for Central Florida, but was making sales within the current price range. CF’s price of $250/st FOB for DAP was bumped up to $260/st FOB and $10/st FOB more for MAP. Agrifos was no longer posting prices, but was charging based on market conditions.
U.S. Gulf: USDA first estimated 86 million acres of corn would be planted, then dropped the estimate to 85 million – and some predicted it could fall as low as 81 million acres after extremely wet conditions continued into late May. However, the newest estimate last week pushed the estimate up to 87 million acres. The impact on future corn prices was predictable – a fall to around $3.50/bushel last week, which was not good news for farmers or for fertilizer sales. The problem with the lower price was less fertilizer has been sold this season, which should mean lower crop yields. Prices were also down for other crops such as soybeans and wheat. Lower yields would mean less corn and higher prices, but that would have little impact until around harvest time.
Overall, the number of NOLA DAP barge transactions was down last week, but some said they were getting more calls and one said he expected the market to “take off” sometime soon.
Sales made during the past week were lower at the beginning and moved upward as the week progressed. By the end of the week, offers were generally all around $265/st FOB, although no sales were made at that price.
CF increased its asking price of DAP for August to $275/st FOB, but had no listing for July. However, its warehouse price increased $10/st FOB for both DAP and MAP for June. Terminal prices for the Gulf were running about $295/st FOB and business was said to be steady and good, although not likely to set any records.
The NOLA DAP barge price range moved up last week, to $260-$264/st FOB from the previous week’s $259-$260/st FOB range. Both Mosaic and CF had a $10/st FOB additional charge for MAP.
Eastern Cornbelt: The DAP market was quoted at $295-$310/st FOB regional warehouses, with MAP $10/st higher. One supplier was referencing cash market DAP at $295/st FOB Peoria, Ill., and $300/st FOB Cincinnati for the July 1-3 order/shipping period, while another posted forward contract DAP for August at $305/st FOB Peoria and $310/st FOB Cincinnati.
10-34-0 was pegged at $400-$425/st FOB most regional shipping points, with very little new business to test the market.
Western Cornbelt: DAP was tagged at $290-$310/st FOB warehouses to the dealer, with MAP at a $10/st premium. A Nebraska source quoted delivered MAP at the $312/st level last week. One supplier was referencing DAP for the July 1-3 order and shipping period at $295/st FOB St. Louis, while another was offering forward contract DAP for August at $305/st FOB St. Louis.
Some aggressive pricing on 10-34-0 was reported in the region last week, from as low as $305-$315/st FOB in western Iowa to as high as $370/st FOB on the upper end.
Southern Plains: The DAP market was pegged at $285-$290/st FOB Catoosa and Inola, Okla., with reference prices from one supplier for the July 1-3 order/shipping period at the $300/st FOB level. MAP was $10/st higher than DAP. 10-34-0 pricing had reportedly slipped to as low as $340-$350/st FOB in the region.
Effective July 1, Agrium’s postings for super phosphoric acid (SPA) and merchant grade acid (MGA) moved to $705/st railDEL in Kansas, Colorado, Oklahoma, New Mexico, and Texas. Agrium’s postings will firm to $730/st rail-DEL in August.
South Central: With spring demand all but over in the region, one source said his phosphate volumes were down at roughly 75-80 percent of normal, along with lower liquid nitrogen and potash volumes. DAP pricing to the dealer covered a broad range at $295-$320/st FOB regional warehouses, with MAP $10/st higher. TSP was also reported in a wide range at $290-$315/st FOB regional warehouses to the dealer, with some reporting very low inventories.
Western U.S.: Effective June 26, Agrium’s MAP postings dropped to $345/st DEL in Montana and Wyoming; $350/st DEL in southern Idaho, Utah, Nevada, and Oregon’s Malheur County; $350/st FOB warehouse and $355/st DEL in Washington, northern Idaho, and Oregon excluding Malheur County; and $360/st FOB warehouse or rail-DEL in California and Arizona.
U.S. Export: Last week, India made awards based on a tender it issued seeking 215,000 mt and could take as much as 360,000 mt from various vendors – none from the U.S. Prices will range from $323/mt DEL to $335/mt DEL.
Meanwhile, PhosChem made two small sales last week. The first was a sale of 7,000 mt into Central America at $288/mt FOB, and the second a 6,000 mt deal into Africa at $290/mt FOB. Another international trader said he was willing to make sales closer to $285/mt FOB, but had not as of late last week.
Export sales have helped producers keep inventories in check and have been the most bullish of the wholesale markets. PhosChem was working to kick prices up a few dollars after each trade.
The export DAP price range last week moved up from $281-$285/mt FOB the previous week to $288-$290/mt FOB. Prices appear poised to rise slowly during the short term.
China: Changes in the export duty will allow phosphate producers to ship material through Sept. 15 at the lower rate of 10 percent.
The initial standard was for phosphates to have a 10 percent duty only June 1 through Aug. 30. The change allows for an additional 15 days of exports.
DAP producers in China have been facing growing stockpiles at a time when domestic demand is down and when the export duty was set at 110 percent.
Producers had been hoping for an elimination of the export duty at least into the fourth quarter, if not the rest of the year.
POTASH
Eastern Cornbelt: Potash was quoted at $580-$630/st FOB warehouses from brokers or resellers, depending on grade and location, with no new sales reported to test the market.
Western Cornbelt: The dealer market for potash was reported at $580-$630/st FOB regional warehouses for brokered tons, depending on grade and location. One source said most resellers are now in the $580-$600/st FOB range to the dealer.
Southern Plains: Potash pricing FOB Carlsbad, N.M., remained in the $720s/st FOB, depending on grade. Out of regional warehouses, however, sources put the spot market from brokers or resellers in the $590-$600/st FOB range to the dealer, with some suppliers still reportedly holding to the $630/st FOB level.
South Central: Potash pricing for brokered tons out of regional warehouses was pegged at $590-$595/st FOB last week, but “no one is asking,” according to one source.
Southeast: Potash from brokers or resellers was reported at $635/st FOB Wilmington, with delivered tons in the $630-$650/st range from the Mississippi River.
Japan: Canpotex announced June 30 that it has concluded new pricing agreements with Japanese contract customers covering potash shipments for the second half of 2009. The new contract agreements reflect an average delivered price of over $700/mt CFR.
India: Tender results were due in to IPL on June 30 for an unspecified amount of potash. While no prices were revealed, sources reported that most of the majors offered, including Canpotex, IPC, BPC, ICL, K+S, and APL. Sources say IPL is seeking $400-$450/mt DEL, while seller ideas are closer to year-ago numbers of $625/mt DEL.
SULFUR
Tampa: Although the new quarter began last week, negotiations for new prices had not even started, which was normal. A source predicted if an agreement had not been reached by the beginning of the Southwest Fertilizer conference in late July, it would by the end of that week. The discussions will probably be less contentious than usual because there will be less disagreement on the current situation. Due to relative balance in the market, it appeared the price of sulfur delivered to Tampa would not move much, probably not more than $5/lt, under the new contracts.
However, another source said it was probable other sulfur prices for delivery by rail would move more – and probably upward – in comparison to the Tampa price.
The supply of sulfur was said to be down somewhat as a result of refinery problems in some areas, and because more sweet crude was being used. OPEC has curtailed its sale of sour crude because of the lower price compared to sweet.
Prill operations were running near capacity last week and inventories were being held in check as a result of more than 100,000 mt being shipped from Beaumont in June. Most of those vessels were destined for Africa and Brazil.
Research Triangle Park, N.C.-BASF Plant Science earlier this year announced the addition of two new American Seeds LLC brands to the current list of NutriDense trait licensees. The two seed brands, Stewart Seeds of Greensburg, Ind., and Kruger Seeds of Dike, Iowa, are offering NutriDense grain hybrids this year due to strong demand in their market areas, as well as significant improvements in the performance of NutriDense genetics. BASF said that these brands build upon the ongoing relationship between NutriDense and American Seeds LLC, which includes NutriDense for silage with Grow Direct – Fielder’s Choice Direct and Heartland Hybrids. “We are very excited to add Stewart Seeds and Kruger Seeds to our growing list of NutriDense licensees,” said Barney Bernstein, Director of Trait Marketing and Sales for BASF Plant Science. “They have strong brands in their respective market areas and the additional acres of NutriDense hybrids will open many new grain contracting opportunities for all of our farmer customers.” NutriDense is a nutritionally-enhanced corn that contains a stacked set of output traits designed to enhance animal feed performance. Seed companies market the product through licensing agreements.
Boise-The Idaho Public Utilities Commission (IPUC) on May 29 approved a 10.2 percent rate hike for this year, as well as three other rate adjustments, increasing overall rates by an average of 13.5 percent. The other three adjustments include an increase in an Energy Efficiency Rider (2.25 percent), money for the installation of automated meters (1.8 percent), and an annual Fixed Cost Adjustment (1.3 percent). The Industrial Users of Idaho Power, including the J.R. Simplot Co., earlier asked IPUC to defer or spread out a 10.2 percent increase in a Power Cost Adjustment over three years in equal annual installments. The commission said collecting the full amount in one year assures the financial community that Idaho Power is able to recover reasonably incurred power supply costs. The PCA increase is from 0.7864 cents per kWh to 1.4 cents per kWh. IPUC commissioners said that while they are reluctant to approve rate increases beyond what is needed, especially during tough economic times, they are convinced reduced energy use will result from the Energy Efficiency Rider, Fixed Cost Adjustment, and installation of automated meters, keeping customer rates lower than they otherwise would be in future years. In its order, the IPUC stated: “The commission must also keep an eye toward the future and maintain a proactive approach that will best serve long-term ratepayer interests.” Meanwhile, the IPUC also recently approved a five-year agreement between Idaho Power and Boston-based EnerNOC to reduce demand from commercial and industrial customers by at least two megawatts this year and by at least 50 megawatts in both 2012 and 2013. Commercial and industrial customers who volunteer to participate would be asked to reduce their energy loads for two to four hours during summer days when demand on Idaho Power’s generation system is at its peak. Participants would be compensated in exchange for reduced loads.
Davis, Calif.-University of California Davis researchers will receive $2.8 million in new grants to study the use and impacts of nitrogen. “This is one of the most important and least publicized environmental issues we face,” declared Tom Tomich, director of UC Davis’ Agricultural Sustainability Institute. “Escaped nitrogen from agricultural production affects not only the quality of our air, water and soil, but has huge potential to contribute to climate change. Many members of the public and politicians are unaware of the scope of this challenge. And many farmers are unaware that nitrogen management can save them money.” Among the grants are $1.5 million from the David and Lucile Packard Foundation for a statewide assessment of existing scientific evidence on nitrogen use in conventional and alternative farming systems, including a program to improve communication about nitrogen concerns among agriculture interests; $500,000 from the California Energy Commission and $350,000 from the Packard Foundation for new research on nitrous oxide emissions in various farming systems; $300,000 from the California Air Resources Board for research on practical ways to reduce nitrous oxide emissions in California agriculture; and $150,000 from the California Department of Food and Agriculture’s Fertilizer Research and Education Program to measure nitrous oxide emissions from cotton, corn, and vegetable cropping systems. The new studies should improve data-collection methods, said Agricultural Sustainability Institute researcher Johan Six, a professor in the Department of Plant Sciences and one of the grant recipients. “It’s urgent that we know how much nitrous oxide and other greenhouse gases are released during irrigation and fertilization of farm lands in California,” Six said. “The good news is we know that it is economically feasible to reduce these emissions. The first step is quantifying the necessary reductions.”
Boulder, Colo.-The Colorado-based Organic Center has developed a special calculator that allows users to measure the benefits of organic management of dairy cows. For example, calculations show some 40 million pounds of fertilizer, along with 758,000 pounds of pesticides, being saved by shifting dairy cows from conventional to organic management. According to Dr. Charles Benbrook, the center’s chief scientist and the study author, the calculator was developed to help consumers, dairy farmers, and food companies estimate the avoided environmental, public health, and animal welfare impacts associated with changing dairy cows over to organic management. “It gives us the means to uniformly measure the extent to which organic dairy operations prevent toxic materials from entering our air, water, soil, and in some cases, our food and drinking water.” He points out that some of the animal drugs and pesticides used to support milk production have been linked to health problems in cows, as well as human disorders such as developmental problems, miscarriages, the onset of Parkinson’s disease, diabetes, allergic asthma, and more. According to USDA organic standards, no artificial hormones or antibiotics are allowed for use on organic dairy farms. Organic regulations also prohibit the use of toxic and persistent chemicals for growing and maintaining pasture and in the production of grain and forage-based feeds. Chemical nitrogen fertilizer is also prohibited. The tool is available free of charge in the form of a Microsoft Excel-based calculator at www.organic-center.org.
Columbus, Ohio-American Municipal Power (AMP-Ohio) is getting a $30 million bridge loan from the state’s economic stimulus fund to begin construction on a 1,000-megawatt generating station that will produce a fertilizer byproduct using advanced emissions control technology. “The bridge loan that Ohio’s Advanced Energy Job Stimulus Program is providing AMP-Ohio assures that we can launch the construction phase of this important project on schedule later this year. We believe the project underscores our commitment to the environmentally sound use of clean coal and advanced energy technologies,” reported Jolene Thompson, the utility’s Senior Vice President of External Affairs. The new plant will use a variety of pollution-control technologies, including the Powerspan ammonia-based scrubber system, which successfully removes the great majority of sulfur dioxide, fine particulate matter, and mercury produced during combustion. Additionally, Powerspan technology shows the promise of affordable carbon dioxide (CO2) capture in the future and also yields what is described as a highly-marketable ammonium sulfate fertilizer byproduct. AMP-Ohio is working with Ohio-based The Andersons on the fertilizer portion of the planned power plant facilities. The Powerspan technology previously received $4.5 million in funding from the Ohio Coal Development Office, a program of the Ohio Air Quality Development Authority. When built, the new plant will provide power for 300,000 electricity customers of AMP-Ohio in 69 Ohio communities.
San Jose, Calif.-San Jose has taken the first step toward becoming the location of the first organics-to-energy biogas facility in the U.S. that would produce electricity to operate the city’s water treatment facility or for other uses, along with a high-quality fertilizer. The city council already has authorized a memorandum of understanding with a number of participants, including Zanker Road Biogas, which would develop and operate the facility, capable of processing up to 150,000 tons of organic waste per year that normally goes to a landfill. “This project not only demonstrates San Jose’s leadership in the production of renewable energy, but will help us meet the economic development, zero waste and energy goals of our city’s Green Vision,” said San Jose Mayor Chuck Reed. The technology, which is common in Europe, uses a process known as dry anaerobic fermentation to generate renewable biogas and high-quality fertilizer. The proposed project would be developed in three phases, with each designed to increase capacity by 50,000 tons per year of organic materials – a combination of primarily food waste and the organic portion of the municipal solid waste stream – and produce two products: a renewable biogas containing methane, and high-quality fertilizer. In contrast to the wet process in use in all of the existing anaerobic digestion systems in the U.S., this biogas system would use the dry fermentation technology specifically designed to process the relatively dry organic portion of the municipal solid waste stream, which is difficult to recycle without extensive pre-processing, and currently ends up in a landfill.
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