All Posts from July 6, 2015

Ammonium Nitrate

Ammonium Nitrate, Market Watch, Northwestern Europe, Southeast, Southern Plains, U.S. Gulf, Western Cornbelt

U.S. Gulf: Some softening was indicated in the ammonium nitrate market last week, with market bears seeing pricing as low as $255/st FOB, if not lower. Others, however, reported the market as high as $262/st FOB.

Western Cornbelt: Ammonium nitrate was unchanged at $335-$340/st FOB in the Western Cornbelt for the last sales.

Southern Plains: The Catoosa/Inola ammonium nitrate market had reportedly firmed to $340/st FOB for any available tons.

South Central: Ammonium nitrate was pegged at $335-$345/st FOB in the South Central region, but minimal business was reported and some locations were out of product after the spring season. One source described “a lot of demand destruction” this year as dealers reassess the ammonium nitrate regulatory environment.

Southeast: The Tampa ammonium nitrate market was quoted at $330-$340/st FOB for truck tons.

Northwest Europe: Demand is seasonally slow for ammonium nitrate and CAN. In France, Yara on June 30 raised its quote for AN 33.5 percent N for August deliveries to €298/mt CPT, up €6/mt from its June 10 quote of €292/mt CPT. Yara increased the quote for CAN-27 to €242/mt CPT, up from €237/mt CPT.

Western Potash reports major investment – Alert

Breaking Industry News

Western Potash Corp., Vancouver, today reported Beijing Tairui Innovation Capital Management Ltd. (Tairui) has agreed to make a strategic equity investment of C$80 million in Western at a price of C$0.3213 per common share of Western for a total of 248,989,860 common shares in the capital of Western, subject to adjustment, which will result in Tairui holding a 51 percent ownership stake in the company on a non-diluted basis on closing of the transaction. The per share issue price of C$0.3213 represents a 46 percent premium over the company’s volume weighted average price on the Toronto Stock Exchange for the 30 trading days ended July 3, 2015.

Under the terms of the investment, Tairui will have the right to appoint four nominees to the board of directors of the company. In addition, the investment agreement provides that the number of common shares issuable to Tairui and the per share issue price of C$0.3213 based on 248,989,860 common shares, are subject to adjustment in certain circumstances where additional common shares may be issued on or prior to closing, such that Tairui will, in all such circumstances, hold a 51 percent ownership stake in the company on a non-diluted basis on closing.

The adjustment provisions include adjustments in the event that CBC (Canada) Holding Corp. (CBCHC) elects to exercise, in whole or in part, and within the prescribed time limit, its pre-emptive right to maintain up to a 19.9 percent share position in Western pursuant to the subscription agreement between CBCHC and the company dated June 1, 2013.

It is anticipated that closing will take place on or about Aug. 31, 2015. Proceeds from the investment will be used for the development of the pilot plant scale selective solution mining operation in accordance with a previously announced positive scoping study on the company’s 100 percent owned Milestone property in southern Saskatchewan.

PotashCorp seeks further talks with K+S – Alert

Breaking Industry News

Potash Corp. of Saskatchewan Inc. has responded to K+S Group’s rejection of its takeover offer, reiterating its position as to how a merger is a good deal for both companies, and seeking to discuss the matter further with K+S management.

"We believe that the combination of our two companies would create a well-capitalized, more diversified company across products, geographies, production, distribution and customers," said PotashCorp CEO Jochen Tilk in a statement July 3. "We believe this creates greater opportunities and security for all employees. Management and employees of K+S are critical to the future performance of the combined company and we look forward to working collaboratively to address any issues, including safeguarding the interests of employees and communities. We are seeking to meet with K+S management at the earliest possible opportunity so that we can jointly discuss our commitments and further specify the details that would form the basis of a successful combination."

PotashCorp highlighted major points regarding a merger between the two companies:

  • Proposal brings together two best-in-class companies with complementary assets and minimal overlap
  • PotashCorp supportive of K+S operations, employees and communities, and believes K+S management and employees to be an important part of a successful combination
  • Proposal not predicated on closing mines, curtailing production, selling the salt business or cutting jobs
  • Well capitalized, diversified enterprise provides platform for future growth and greater opportunities for K+S employees’ career growth and employment stability
  • Proposal of €41 per share in cash provides 57 percent premium to the volume weighted average share price during the prior 12 months, and certain value to K+S shareholders

BHP Billiton – Management Brief

Management Briefs

BHP Billiton has announced changes to its top management team. Dean Dalla Valle, currently president, Health, Safety, Environment (HSE), Marketing and Technology will become chief commercial officer, assuming accountability for Potash. BHP said his current portfolio includes group project management making the Potash Project a strategic fit for his portfolio. He will retain existing areas of Health, Safety, Environment (HSE), Marketing, Supply and Information Technology.

Tim Cutt, who formerly handled both Potash and Petroleum, will now be president, BHP Petroleum, allowing him to concentrate exclusively on Petroleum’s growing value, according to BHP. These title changes are effective July 1, 2015, and Dalla Valle will assume responsibility for Potash Aug. 1, 2015.

International Plant Nutrition Institute – Management Brief

Management Briefs

The International Plant Nutrition Institute (IPNI) board of directors has elected two new officers. Oleg Petrov, Uralkali director of sales and marketing, was elected vice chairman, replacing Jim Prokopanko, CEO of The Mosaic Co., who is retiring later this year. Tony Will, CEO of CF Industries Holdings Inc., was elected chair of the Finance Committee. Dr. Mostafa Terrab, chairman and CEO, OCP Group, Morocco, continues as chairman of the IPNI board.

Sirius wins close NPA vote

News, News Briefs

London — Sirius Minerals Plc’s proposal to build the world’s largest potash mine – the York Potash Project, near Whitby in North Yorkshire, U.K. – won an 8-7 vote from the North York Moors National Park Authority June 30. Only 15 of the 19 NPA members voted. The mine would be partially under the park. It was the last major hurdle for the project prior to financing. A major opponent of the project, Campaign for National Parks (CNP), said it is weighing an appeal, which would need to be launched within six weeks. “This is really just the beginning for the company – we have made a major step forward and now have a pathway to reaching production and unlocking ever more value for our shareholders,’ said Chris Fraser, Sirius managing director and CEO. Fraser said the company will provide a separate update on the project the week of July 6 that will provide a full status report and detail the next steps and milestones on the way to reaching first production. Sirius says the project would be the world’s largest and highest grade deposit of polyhalite, a multi-nutrient form of potash containing potassium (14 percent), sulfur (19 percent), magnesium (6 percent), and calcium (17 percent). Sirius’s first phase would produce 6.5 million mt/y, with a second phase reaching as high as 13 million mt/y. Initially, Sirius plans to focus on the polyhalite for direct application use or in granular form for NPK blends. Sirius says potassium sulfate can also be made, and that the site has muriate of potash (MOP) capability. Sirius has touted that it has lined up multiple agreements with organizations that have promised to take the bulk of its first phase capacity. Incorporated in 2003, Sirius shares are traded on the London Stock Exchange’s AIM market. Shares are traded in the U.S. on the OTCQX through a sponsored ADR facility. The company’s stock, which was closed for trading on June 30, shot up 43.3 percent on its July 1 close.

Uralkali expects increased production

News, News Briefs

Berezniki, Russia — Uralkali CEO Dmitry Opisov told analysts last week that the company now expects 2015 annual production to be 10.4-10.8 million mt, up from earlier estimates of 10.2 million mt. He said the flooding at the Solikamsk-2 mine has stabilized, with the average inflow now at 300 cubic meters per hour, versus 820 cubic meters in February. Uralkali called the first quarter “challenging,” due to inventory destocking, low crop prices, and the strength of U.S. dollar. For the year, Uralkali continues to see global potash shipments down, at 58-59 million mt from 2014’s 63 million mt. While the company expects shipments to China and India to be up, to date, it sees significant decreases to the U.S., Brazil, Southeast Asia, and Europe. It also blames lower prices on Belarussian Potash Co., saying prices in the U.S. fell some $50/mt. BPC imports started arriving in January. Uralkali’s first-quarter sales volumes were 2.53 million mt, down from the year-ago 3.05 million mt, with production at 2.70 million, down from 2.93 million mt. Export volumes were 2.05 million mt, down from 2.56 million mt, with average export prices up 19 percent, to $256/mt FCA from the year-ago $215/mt. Domestic volumes were almost level at 480,000 mt versus 490,000 mt. First-quarter revenues were $720 million, down from $862 million.

High winds topple Koch fertilizer tanks

News, News Briefs

Garretson, S.D. — Winds in excess of 100 mph upended four of six fertilizer tanks at the Koch Nitrogen facility here June 22, according to Fire Chief J.R. Hofer. “We had calls stacking up on each other, but we went on scene to check for spills and found that Koch already had people in the area,” he said. Hofer figures there was less than 100 gallons spilled at the site. The kind of fertilizer spilled was not identified. While Koch declined to participate in the story, the facility, which Koch acquired in 2012 (GM Dec. 31, 2012), is heavily into UAN and starter solutions.

HECA decision expected soon

News, News Briefs

Sacramento, Calif. — The fate of the Hydrogen Energy California (HECA) coal/petroleum coke-based nitrogen and electricity project planned for Kern County, Calif., should be decided within the next few weeks, according to a spokesperson for the California Energy Commission (GM June 29, p. 14). Two matters are under consideration – a request by HECA for a six-month suspension and another by opponents to terminate HECA’s application for certification (AFC). HECA said that its good faith attempts to negotiate C02 offtake and storage for the project, most notably with Occidental and successor company California Resources Corp., have not panned out and that it needs more time. On the positive side, it said the Internal Revenue Service has recently allocated $294.8 million of Section 48A tax credits to the project as a qualifying advanced coal project. In the meantime, opponents argue that HECA, which has been in the works since 2008, has had plenty of time and has spent hundreds of millions of federal taxpayer funds and thousands of hours of CEC and state permitting staff time, as well as the years and expense to opponents. They also note that California water resources are now in short supply and that HECA would require a considerable amount. Opponents argue that no C02 deal is imminent, and should CEC approve the six month suspension, a C02 deal should be ready when that time has passed or else the AFC terminated.

Trammo and Kuibyshev announce AS jv

News, News Briefs

Togliatti, Russia — Trammo Group and KuibyshevAzot JSC have formed Granifert LLC, a 50-50 joint venture, to build a 140,000 mt/y granular ammonium sulfate plant at KuibyshevAzot’s site. The estimated investment amount is more than 700 million rubles (US$12.5 million), with a project implementation period of 2015-2017. KuibyshevAzot is one of the leading producers of AS in the Russian Federation and Eastern Europe. In 2014 the fertilizer output constituted 450,000 mt, including granular at 90,000 mt/y. The company puts ammonia capacity at 1.32 million mt/y, ammonium nitrate at 550,000 mt/y, and urea at 320,000 mt/y. The company is also a producer of caprolactam and derivative products.

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