All Posts from September 6, 2019

Ammonium Polyphosphate

Ammonium Polyphosphate, California, Eastern Cornbelt, Market Watch, Pacific N.W., Western Canada, Western Cornbelt

Eastern Cornbelt:
The 10-34-0 market was steady at $365-$380/st FOB in the Eastern Cornbelt, with the low reported at Cincinnati and on the Illinois River, and the high for fill tons offered out of inland tanks.

Western Cornbelt:
The 10-34-0 market remained at $355-$375/st FOB in the Western Cornbelt, with the low in Nebraska and the high in Iowa.

California:
The 10-34-0 market in California was quoted at $407-$412/st FOB for September, up $3/st from the prior month. 11-37-0 pricing was reported at $445-$450/st FOB in the state, reflecting a $4/st increase from August.

Pacific Northwest:
The 10-34-0 market was quoted at $409-$424/st FOB in the Pacific Northwest for September, up $4/st from last report. 11-37-0 pricing was pegged in the $446-$461/st FOB range, up $5/st from August, with Simplot’s posting for truck-DEL 11-37-0 in Idaho firming to the $434/st DEL level within a $35/st freight zone from Pocatello.

Western Canada:
The 10-34-0 market was pegged at C$630-$650/mt DEL in Western Canada, down C$20/mt from last report, with the low reported for “limited” fall offers in the Saskatchewan market.

OCP, Ghana to Build 1 M mt Fert Plant

News Briefs

OCP Group, Casablanca, and Ghana’s Ministry of Food and Agriculture (MOFA) on Sept. 5 announced plans to proceed with a new 1 million mt/y fertilizer plant in Ghana. The news came during the African Green Revolution Forum in Accra.

The plant would be to be located in the Jomoro District in western Ghana. The project is still in its conceptual phase and topographic studies are in progress. The project would use natural gas from Ghana and phosphate from Morocco.

The announcement follows a Memorandum of Understanding (MOU) signed in September 2018 (GM Sept. 14, 2018), in which the parties agreed to explore the feasibility of a fertilizer plant.

More Details Revealed About Alliance between Old World Industries and Unity Envirotech

Ammonium Sulfate, Featured, News

Officials with Old World Industries and Unity Envirotech of Illinois LLC (Unity) provided more details about the alliance that the two companies announced in August (GM Aug. 31, p. 1). Under the agreement, Old World will be the exclusive sales, marketing, and distribution agent for the ammonium sulfate (AMS) that Unity produces at its Henry, Ill., facility.

The agreement marks Old World’s first foray into fertilizer, said Scott Vanderventer, who will lead the alliance. Old World is currently the number one supplier for antifreeze, coolant, and DEF in North America, with well-known brands that include PEAK Performance® automotive products, BlueDEF® and Victory Blue™ diesel exhaust fluid, and Final Charge® and Fleet Charge® coolant products.

Old World Industries has a strategic growth initiative to grow into the ag space with new products, alliances, and partnerships,” Vanderventer told Green Markets. “The Unity partnership fits this strategy. AMS also fits this strategy of offering our customers functional fluids like anti-freeze, coolants, lubricants, and DEF and adding to the portfolio with crop input products.”

The Henry facility, which Unity purchased from United Suppliers Inc. in 2017 (GM Sept. 22, 2017), currently produces granular, turf grade, and spray grade ammonium sulfate products ranging from 90 to 300 SGN. Production at the facility began in January 2018, and some $20 million in recently announced upgrades (GM Feb. 15, p. 1) will help bring it to full operational capacity of 165,000 st/y, said Kobus van der Zel, Chief Operating Officer at Unity.

When the facility was purchased by Unity in 2017, United Suppliers had a 100 percent offtake agreement with Unity for the ammonium sulfate produced at the site. Van der Zel said that agreement still exists with Winfield United, which acquired United Suppliers’ crop nutrient business as part of a two-step merger announced in 2015 between United Suppliers and Land O’Lakes, the parent company of Winfield United (GM July 6, 2015).

Van der Zel said that offtake agreement is now transitioning from Winfield to Old World, however. “The majority of our product is going to Old World already and has been for about a month, but there are some transition agreements,” he told Green Markets. “We still supply Winfield with some product as they need it, but this new offtake agreement will eventually replace the offtake agreement with Winfield United as the transition is completed.”

Old World Industries has more than 56 distribution locations across the U.S., and Vanderventer said the company plans to sell and distribute the ammonium sulfate from Unity via truck, railcar, and barge mainly across the Cornbelt, but also into market “that best fit logistically and economically.”

“Our agreement is a multi-year agreement with growth opportunities,” Vanderventer said.

OCI Reports Capacity Upgrades, Positive Outlook on Low N Inventories, Corn Prospects

ADNOC - Abu Dhabi, Ammonia, Europe, Featured, News

OCI NV, Amsterdam, reports that its Iowa Fertilizer Co. (IFCo) anhydrous ammonia plant has achieved a record 116 percent of nameplate capacity after its mid-summer turnaround at the Wever, Iowa, complex. The plant also significantly improved gas efficiency.

“We took advantage of the low season during the summer and have already completed planned turnarounds at OCI Nitrogen, Sorfert, and IFCo,” OCI Executive Director and CEO Nassef Sawiris told analysts on Aug. 30. In August, the company took down one urea train in Egypt for a turnaround.

“We have now also reached the end of our capex program and have no further commitments for growth capex for the remainder of 2019 or in 2020. Therefore, we are about to reach our run rate capacity from the fourth quarter this year,” he continued.

Sawiris noted that the Sorfert turnaround in Algeria has allowed ammonia capacity to go up to 100 percent, which has not been achieved on a regular basis in the past.

“Looking ahead, seasonal summer prices of nitrogen fertilizers have been higher than the year before for the second time in a row,” added Sawiris. “I believe this is due to a healthier operating environment and tightening supply. Inventories at this time of year remained lower than previous years, which bodes well for the outlook. It is widely expected that corn acreage in the U.S. will increase next spring, and we see distributors wanting to have adequate product available in store rather than delaying purchasing decisions until next season.”

The company sees very few urea capacity additions in the coming years in combination with low exports from China. While ammonia prices have been weak this year, Sawiris noted that new capacity is being absorbed and no new merchant supply is expected until 2022. He added that the outlook for DEF is robust.

In other news, OCI expects its planned joint venture with Abu Dhabi National Oil Co. (ADNOC) (GM June 21, p. 1) to combine their Middle East and North African (MENA) businesses to be concluded by the end of September. “The jv will create scale and become the largest dedicated seaborne exporter of ammonia and urea globally,” said Sawiris. “It will be another step forward in the consolidation of this still fragmented industry.”

Financially, Sawiris said the jv will have margins above industry average, very low leverage and finance charges, and that it is well-invested with a young asset base that ensures low maintenance costs and high gas efficiency. “We also expect substantial synergies, over $60-$75 million. These are mostly straightforward commercial or logistics synergies, which we expect to achieve within a short time frame.”

OCI expects jv annual revenues of $1.74 billion with an EBITDA of around $800 million, based on 2018 pro forma figures. OCI and ADNOC will own a 58 percent and 42 percent stake, respectively. Sawiris will head the jv.

OCI said it has mandated J.P. Morgan to assist with the evaluation of strategic options (GM March 8, p. 1) for its methanol group, including the sale, merger, or spin-off to shareholders. A final decision is expected in early 2020. The company confirmed incoming interest about its methanol business earlier this year after it was reported that SABIC had been making inquiries.

Nutrien Sells Romanian Business to Toros Tarim

Eastern Europe, Featured, News, Turkey

Turkey’s Toros Tarim, Istanbul, has purchased the Agroport fertilizer business in Romania from Nutrien Ltd., Saskatoon. Nutrien confirmed on Sept. 5 that the deal had closed and told Green Markets that it was not material to Nutrien.

Toros Tarım, Turkey’s largest fertilizer manufacturer, said the purchase is in line with its goal to become a regional player. “Our goal is to make Romania, an important agricultural country, our second largest market, to make our brand known there,” said Hakan Göral, Toros Tarim Board Chairman and Vice President, Agricultural Industry, of Toros’ parent, conglomerate Tekfen Holding.

Agroport will officially be registered this month as Toros Agroport Romania SA.

Agrium Inc., a Nutrien legacy company, purchased Agroport in 2011 (GM May 9, 2011). At the time, it included key sales and distribution assets along the Danube in Romania. Agrium received the Romanian assets as part of the package when it purchased Agroport’s parent, Italy’s CerealToscana SA. The 2011 combined purchase price was $27 million plus working capital.

Gross sales were put at $200 million and an average EBITDA of $8 million over the past three years, before anticipated synergies. CerealToscana and Agroport had 90,000 mt of storage, with key Italian distribution assets in Livorno and Ravenna. The combined assets sold an estimated 400,000 mt of fertilizer per year, including commodity and specialty products. At the time, Agrium said the acquisition was complementary to its existing European fertilizer distribution business and would allow it to further leverage its Egyptian urea offtake agreement (GM Jan. 8, 2016).

Koch Eyes Enid Urea Expansion

Featured, News, Southern Plains, Urea

Koch Fertilizer said on Sept. 5 it is evaluating a construction project to increase urea production at its plant in Enid, Okla., to 1.8 million st/y. Currently, Koch Fertilizer is in the project engineering phase. Construction on the proposed project is anticipated to begin at the end of 2020, with startup occurring in 2022.

Koch said it submitted a construction air permit application on Sept. 5 to increase ammonia upgrade capabilities due to changes in the distribution system and to better serve the growing demand for upgraded nitrogen products.

“Our customers continue to increase consumption of upgraded products, like urea and enhanced efficiency fertilizers,” said Scott McGinn, Koch Fertilizer Executive Vice President. “We are committed to serving our customers, and this investment will enhance our ability to provide them with the nitrogen products they need by adding additional production flexibility at the Enid plant. Koch Fertilizer made a significant investment in the plant a few years ago, and we’re excited about the possibility to further expand our Enid operations through this new project.”

While Koch did not confirm current urea capacity at Enid, it did say the facility currently supplies in excess of 1.5 million st/y of ammonia upgraded products (urea, DEF urea solution, SUPERU® fertilizer, and UAN.) Current Enid urea capacity is estimated at approximately 1.283 million mt/y, according to Green Markets data.

Koch began an earlier $1 billion upgrade at Enid in 2013 (GM May 20, 2013), with plans to increased upgraded nitrogen capacity by approximately 1 million st/y. In 2013, the Green Markets estimate on urea capacity was 573,000 st/y. Koch said on Sept. 5 that since the new proposed project is currently in the engineering stage, there is not enough detail to estimate the construction spend.

The Enid facility was constructed in 1974 and was purchased by Koch in 2003 as part of the Farmland Industries Inc. bankruptcy. Koch has made major investments thereafter.

Mosaic Fertilizantes Mines Resume Production

Brazil, News, News Briefs

Mosaic Fertilizantes, Sao Paulo, the Brazil-based business unit of The Mosaic Co., Plymouth, Minn., said on Sept. 5 it has resumed mining at full capacity at its Araxá and Tapira mines in the state of Minas Gerais, marking the end of the regulatory required idling of the company’s tailings dams.

“I am proud of how our teams responded to meet the new regulatory requirements in Brazil,” said Mosaic Fertilizantes Senior Vice President Rick McLellan. “Solid execution across our business has allowed us to return these operations to full capacity ahead of plan and ensures that we are positioned to meet farmer demand heading into Brazil’s key planting season. We believe the revised regulatory requirements will make mining safer for our employees, our communities and the environment.”

The company’s Catalão mine, also idled due to the regulatory changes, resumed operations in June.

Aguia Resources Ltd. – Management Brief

Australia, Brazil, Management Briefs, Phosphate

Junior miner Aguia Resources Ltd., Sydney, has announced several management changes as it advances its phosphate and copper exploration plans in Brazil. The company said the changes reduce the number of direct reports to Fernando Tallarico, Technical Director Brazil, while new additions are expected to strengthen his support.

Jose Fanton, who has been a senior part of the team and Tallarico’s right hand man, will semi-retire. He will stay on as a part-time member of the team on special projects and assignments, as an Ambassador for Aguia (Aguia Ambassador).

Lucas Galinari has been promoted to General Manager, Exploration, responsible for exploration of the company’s copper assets, as well as advanced phosphate exploration on existing phosphate satellite discoveries that might extend the life of the Tres Estradas Phosphate Project (TEPP) in Brazil. Lucas has team members based in Lavras do Sul and Cacapava (51 kilometers), where the company has offices, core sheds, sample prep, and accommodation assets.

Luis Clerot has been appointed General Manager, Phosphate Development. He is a geologist, a Brazilian national, and formerly Harvest Minerals Ltd.’s Country Manager during the exploration, permitting, and product approval for a direct application potash operation in Brazil.

Thiago Bonas has been appointed General Manager, Resource Modelling and Strategy. He is a Brazilian national, has worked with Aguia for many years, and is a highly experienced resource geologist. He is a sitting member of the CBRR – Brazilian Resource and Reserve Committee – which helps oversee the best global engineering and geology practices, exploration, mineral resources, and reserves report guidelines according to CRIRSCO recommendations.

Marina Carvalho has been named General Manager, Administration and Finance. She is a Brazilian national, has worked with Aguia for many years, is highly experienced, and has been promoted to this new, full-time position.

Board Chair Christine McGrath has resigned as Company Secretary. Michael Duligal LLB has been appointed as Company Secretary in her place, which adds to his current role as Business Analyst.

David Shearwood has been appointed Executive Director.

In addition, Justin Reid, Toronto, has resigned from the Board and his role of Managing Director, while Catherine Stretch, Toronto, has resigned as Chief Commercial Officer.

“We remain committed to the long-term success of Aguia and will be working with the Board of Directors over the next few months to transfer knowledge and information,” said Reid, on behalf of himself and Stretch. “We believe Aguia’s phosphate and copper assets in Southern Brazil have the potential to deliver value to shareholders as they continue to be developed over the next couple of years.

“We also leave knowing that there is a highly experienced and capable technical team in Brazil to develop these assets. We want to thank the members of our team for the hard work and dedication over the last few years. It has been a pleasure working with them and we wish the company and its shareholders well in the future,” Reid added.

In other news, the company has received the resignation of David Gower, a Non-Executive Director based in Toronto. The company said he joined the company as Chairman in 2013 and has provided his geological, business building, and Brazil experience. Aguia said he was heavily responsible for recapitalizing the company in 2014-15, which ultimately allowed it to be reinvigorated into its current form.

Stephen Ross was named Non-Executive Director, effective Aug. 15. He is an experienced geologist and company director with a long-term background in developing projects from discovery and acquisition through community engagement and permitting, as well as fund raising and operating in non-English speaking jurisdictions.

Aguia to Delist from TSX

Australia, News, News Briefs, Phosphate

Junior miner Aguia Resources Ltd., Sydney, Australia, said on Sept. 2 it has decided to delist from the Toronto Stock Exchange (TSX). The company said the delist will reduce costs and duplication associated with a dual listing. An Australian company, Aguia is also listed on the Australian Stock Exchange (ASX). The final date of TSX trading will be the close of business Sept. 16, 2019.

Aguia said the Board of Directors wishes to reduce unnecessary cost to concentrate expense where it adds value to shareholders, namely in the development of its phosphate assets and via drilling as they explore the company’s copper assets. Aguia’s key projects are located in Rio Grande do Sul in Brazil, where it said phosphate deposits exhibit high-quality and low-cost production characteristics, and are ideally located with proximity to road, rail, and port infrastructure.

 

East Coast Fertilizer Operations Brace for Dorian

Featured, News, Southeast

Hurricane Dorian brought coastal flooding to the Carolinas on Sept. 5 as the Category 2 storm continued to crawl its way up the East Coast. In addition to a high storm surge and heavy rainfall, Dorian generated destructive winds and tornado activity in the Carolinas, with storm impacts expected in Virginia and coastal areas of the Mid-Atlantic and Northeast regions into the weekend.

Several fertilizer producers and wholesale suppliers in the Southeast said they were taking steps to avoid damage from the storm. Carolina-Eastern Inc. told Green Markets it had “lifted” chemicals in its coastal sites to higher locations in advance of the storm.

Nutrien Inc. reported on Sept. 4 that its Aurora, N.C., phosphate mine and plant was in the process of shutting down in preparation for the storm. “Aurora is now under a hurricane warning and expecting conditions to deteriorate starting tomorrow afternoon,” Nutrien Spokesman Will Tigley said. “The plant is in the process of shutting down and securing for the storm. We expect to resume normal operations on Saturday.”

Southern States Cooperative, which operates fertilizer plants at Lumberton, N.C., Statesville, N.C., and Darlington, S.C., told Green Markets on Sept. 5 that it had worked “in advance to secure our facilities in order for our employees to be able to focus on their
safety and their families” during the storm.

“We have taken our standard precautions in preparation for the hurricane, which include asking local managers to monitor conditions to ensure employee safety, preparing facilities in advance to secure product, computer equipment, and other assets,” said Jennifer Gwyn, Director of Marketing and Communications for Southern States. “We will continue to monitor conditions closely through the storm and any potential flood threats that may follow. I am unaware of any closings at this time, but that can change quickly during such a weather event.”

Koch Fertilizer LLC and Yara North America Inc. reported no significant effects from the storm as of Sept. 5, but Koch said it was continuing to “monitor the situation.” Yara’s locations that faced potential impacts from Dorian include a terminal in Savannah, Ga., and leased storage space at Wilmington, N.C.

Wilmington was bracing for winds of up to 105 mph and 10-15 inches of rain, with Dorian’s full impact expected late on Thursday and continuing into Friday morning. The U.S. Coast set Port Condition Zulu at both Wilmington and Morehead City, N.C., on Wednesday afternoon, closing both ports and suspending all port operations.

One fertilizer supplier in central North Carolina told Green Markets that his location was expecting only moderate rains and 30 mph winds from Dorian, but flooding and power outages were being reported in eastern North Carolina.

“Our first real rain just started half an hour ago, and I do not expect any problems for us,” he said shortly after noon on Sept. 5. “We do have an issue now with the port closed at Wilmington, as we were trucking urea and potash from there. So we could run out of those depending on how long the interruption lasts.”

Meherrin Fertilizer Inc. had not responded to requests for facility and weather updates as of early Sept. 6. Meherrin operates multiple storage facilities in the Carolinas, both at coastal and inland locations.

ADM Co. on Sept. 4 activated its “hurricane readiness plan” and scheduled a shutdown of its Southport, N.C., specialty ingredients processing plant as Dorian approached, company spokeswoman Jackie Anderson told Bloomberg. “We are making alternative shipping arrangements when necessary to ensure we continue meeting customer needs during this time,” she said.

Bunge Ltd. said on Sept. 4 that it was temporarily shutting its vegetable oil plant in Warsaw, N.C., with plans to reopen the facility on Monday, Sept. 9. Spokesman Frank Mantero told Bloomberg that Bunge had no plants to halt operations at its Sandston, Va., operation, although the situation was being closely monitored.

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