All Posts from March 7, 2011

Vale touts stellar performance

News Briefs

Rio de Janeiro-Vale S.A. reported a stellar performance for the fourth quarter and year ending Dec. 31, 2010. Vale said it was the best ever annual result, characterized by all-time high figures for operating revenues, operating income, operating margin, cash generation, and net earnings. Fourth-quarter net earnings were US$5.92 billion on sales of $15.2 billion, up from the year-ago $1.52 billion and sales of $6.54 billion. Full-year net income was $17.3 billion on sales of $46.5 billion, up from the prior year’s $5.3 billion on sales of $23.94 billion. Fertilizer results reflected the start-up of Vale’s new phosphate project in Peru. Fourth-quarter fertilizer revenues were $769 million, up from the year-ago $108 million, while full-year revenues were $1.85 billion, up from the prior year’s $413 million.

The Week in Fertilizer Stocks

Fertilizer Stocks
Week Year
Producer Symbol Price Ago Ago
Agrium AGU 96.74 91.60 67.74
CF Industries CF 140.14 134.02 106.78
Intrepid Potash IPI 38.52 37.06 28.74
Mosaic MOS 86.10 82.20 61.27
PotashCorp POT 61.97* 57.93 38.29
Terra Nitrogen TNH 117.95 115.41 89.65
Distribution/Retail
Andersons Inc. ANDE 48.36 46.71 32.36
Deere & Co. DE 92.63 88.91 58.66
Scotts SMG 55.46 53.33 40.14
* represents three-for-one stock split

Market Watch

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

AMMONIA

U.S. Gulf/Tampa: March Tampa business was a late bloomer last week but it finally came in early last week at $545/mt DEL, up $30/mt from February. Some sellers thought it could have gone higher, but they usually do.

The really late bloomer was NOLA ammonia barges which have not literally changed in ages. Just as Green Markets was ready to slap a price into the long-dormant $420/st category, came word that a new, spot barge transaction had actually occurred. The new number is $524/st FOB to an industrial end user.

Eastern Cornbelt: Anhydrous ammonia was steady at $670-$690/st FOB regional terminals, depending on location and time of delivery. Sources said the low end was doable for fall prepay tons on a spot basis in the Illinois market, while the upper end reflected the spot market out of some Indiana terminals.

Western Cornbelt: The anhydrous ammonia market was quoted at $635-$660/st FOB in the region, depending on location and time of delivery. The low end was quoted in the Nebraska market for prompt pull, with fall prepay tagged at $645/st FOB. In Iowa, sources tagged spring ammonia at $640-$650/st FOB, with fall prepay reportedly being offered in the $655-$660/st FOB range.

One Iowa contact reported that soil temperatures in his trade area had climbed to 31 degrees at the four-inch level by early March. “If we do not receive any more measurable moisture, we could see an earlier-than-normal start to the NH3 application season,” he said.

California: Anhydrous ammonia was steady at $660/st truck-DEL in California, although sources said a price increase in early March was possible. Aqua ammonia was unchanged as well at $177/st FOB from Calamco.

Pacific Northwest: Washington sources pegged the anhydrous ammonia market in the $675-$720/st DEL range, with the low for railed tons and the upper end for truck-delivered material.

Western Canada:Anhydrous ammonia remained at $817-$825/mt DEL in Manitoba, $825-$834/mt DEL in Saskatchewan, and $834-$861/mt DEL in Alberta. Dealer postings were in the $827-$871/mt DEL range in the region.

Middle East: The increase in Tampa is as much a reflection of the unrest in the area as it is demand in the U.S., one Asian trader noted.

The reduced supplies from North Africa because of the unrest in Libya and nervousness over demonstrations in Oman have led some Asian sources to speculate that prices will continue to rise.

Arab producers in the Gulf are now offering tons at $480/mt FOB but no one could point to business done at that level yet.

The last done business that could publically be named put the regional price just under $460/mt FOB. Sources say nothing has been done to confirm a price higher than $460/mt FOB as the week closed.

The bullish attitude, however, comes from the lack of Libyan material.

One trader said the equation was very easy to figure out. Europe needs ammonia and it can no longer get it from Libya, one of its main suppliers. The European buyers will then go to the Arab Gulf and the Black Sea to get what they need.

In the Gulf, the buyers are again limited because they cannot buy Iranian tons, so that limits them to the Arab producers.

The Arab producers all claim full order books for their contracts and other long-term buyers. One source noted that East Asia has remained a strong and steady customer.

Then add to the already tight supplies in the region buyers’ reluctance to commit to buying a cargo too far in advance.

While demonstrations in Oman and other Arab Gulf countries have not yet affected ammonia or urea production or shipping, sources say some buyers are just nervous enough

Management Briefs – March 7, 2011

Management Briefs

Potash Corp. of Saskatchewan Inc. last week made several management announcements, effective March 1. Tom Regan, president of PCS Phosphate and Nitrogen, has announced his retirement. He has held various positions in operations and management, and leaves PotashCorp after a long and distinguished career. Brent Heimann, currently vice president, Phosphate and Nitrogen Operations, is promoted to president, PCS Phosphate and Nitrogen Divisions.

Mark Fracchia, currently general manager at PCS Potash, New Brunswick Division, is promoted to vice president, safety, health and environment. He succeeds John Hunt, who will be leaving PotashCorp effective April 1.

Darryl Stann, vice president, industrial sales, is promoted to vice president, procurement. He succeeds Karen Chasez, who has elected to retire.

Troy Erny, vice president fertilizer sales South, is promoted to vice president, industrial sales, succeeding Stann in this position.

Shane Williams, senior director, North American and International sales, feed, is promoted to vice president fertilizer sales South, succeeding Erny.

Stacy Schnetzka, director sales, purified phosphates, assumes the position of director, purified phosphates and industrial sales.

Mary Socha, technical district sales manager, is promoted to manager national accounts.

Tom Rix, manager national accounts – feed sales, is promoted to director, North American feed sales.

>John Cooper, director industrial sales, and Melvin Todd, technical district sales manager have elected to retire effective March 1.

K+S Aktiengesellschaft announced that Richard Wilson, formerly vice president, manufacturing, for Morton Salt, has been appointed as CEO of Potash One Inc. effective March 1. He is replacing Alexa Hergenröther, head of corporate development at K+S, who was the interim CEO. Wilson, a 40-year veteran of Morton Salt, will lead the management team based in Saskatoon that is focused on the implementation of the Legacy Project, a planned K+S potash solution mining facility in Saskatchewan.

The position of Potash One CFO will continue to be held by Luis Mendoza, who was previously the vice president of K+S North America.

Mike Ferguson, formerly vice president, projects, at Potash One, will continue to act as senior vice president and project manager of Potash One. Erika Ritchie will continue to retain her position as vice president environmental & regulatory affairs. Dr. Franz Xaver Spachtholz, formerly head of general mining division at K+S Aktiengesellschaft, has been appointed as vice president engineering of Potash One.

Pat Connors has accepted the position as a new account manager covering the Southeast U.S. for The Mosaic Co.’s North American sales unit. He comes from Mosaic’s feed business, where he has been working with the sales team for the past two years out of the FishHawk office in Florida.

Connors will be managing accounts in Florida and Georgia and will report to Dave Finken. Connors lives in Tampa and is a Florida native. He is a graduate of the University of Florida with a degree in Animal Science. He worked for Smithfield Foods prior to joining Mosaic.

CF Industries Holdings Inc. has announced that Brett Nightingale has joined their sales team as sales manager, national accounts. He will be responsible for managing sales relationships with key large customers. Nightingale previously worked for TradeMark Nitrogen in Tampa, where he managed s

ADI Agronomy okays $54,922 ammonia penalty

News Briefs

Kansas City, Kan.-ADI Agronomy Inc., which owns a group of farm supply facilities in southeast Missouri and northeast Arkansas, has agreed with the U.S. Environmental Protection Agency (EPA) to a $54,922 civil penalty to resolve chemical risk management program violations involving anhydrous ammonia operations at ADI’s Ag Distributors retail facility at Kennett, Mo. According to EPA Region 7, the Kennett facility was issued an administrative compliance order in July 2010 after an inspection noted eight violations, including failure to establish and implement maintenance procedures to ensure the ongoing integrity of ammonia process equipment, and failure to document that the equipment complied with recognized and generally accepted good engineering practices. ADI uses, stores, manufactures, or handles on-site movement of 10,000 pounds or more of anhydrous ammonia in its fertilizer production process. Like other such facilities that mix or blend fertilizers using anhydrous ammonia but do not sell directly to farmers, EPA pointed out, ADI must implement the most stringent preventative program, which requires detailed safety precautions, preventative maintenance, operating procedures, and employee training measures. As part of its settlement with EPA, ADI has certified that the Kennett facility is now in compliance with regulations. ADI is a unit of Tennessee Farmers Cooperative, LaVergne, Tenn.

Ag center hopes ruling resolves tank issue

News Briefs

Montevideo, Minn.-The Farmers Union Oil Co-op ag center here is hoping a district court judge’s ruling has put to rest objections over moving three anhydrous ammonia tanks that a neighboring property owner has been raising since summer of 2009 (GM July 12, 2010). General Manager Glen Moe told Green Markets that the judge with some reservations ruled Feb. 16 that the city’s issuance of a conditional use permit for the tank facility was not “unreasonably arbitrary or capricious,” as claimed by the resident. Moe said the resident had asserted that the city didn’t follow “certain protocol” getting the safety part of it clarified. “He can appeal if he wants to, but I understand that it would cost him $20,000 or more, and from what I’ve been told he probably would not proceed,” Moe added. In a memorandum attached to the ruling, the judge stated: “This matter raises competing interests and legitimate concerns on both sides of this argument. While this court still has reservations relating to health and safety in view of documented anhydrous ammonia releases in the state, the court cannot substitute its judgment for that of the governing body.” Actually, Moe pointed out, moving the tanks makes them safer than they were in the original location. They were about 150 feet from a mobile home manufacturing facility with 200-250 employees. Moving them south 1,700 ft. puts them where there are only four or five people living nearby.

CHS expands fertilizer marketing globally

News Briefs

St. Paul-CHS Inc. said March 4 that it has begun trading fertilizer at its European operations office in Geneva, Switzerland. CHS currently sources crop nutrients from 19 countries, but until now has only marketed fertilizer products domestically. “In many geographies, we’re already shipping grain to the same regions where we buy fertilizer. Fully integrating these businesses will help us maximize our sourcing and logistical strengths and better serve customers,” says Mark Palmquist, CHS executive vice president and chief operating officer, Ag Business. “We’ll be in a stronger position to add shareholder value by creating unique offers and distribution efficiencies.” Joining CHS in Geneva are Walter Singer, manager of CHS Europe fertilizer department, and Hans von der Brelie, effective April 1, manager of CHS Europe fertilizer marketing. They will be responsible for sourcing and marketing fertilizer throughout the company’s European operations, which includes the Black Sea region, former Soviet Union countries, the Middle East, Africa and for fertilizers, the Indian subcontinent. They will report to Claudio Scarrozza, senior vice president, CHS Europe. Prior to joining CHS, both had extensive experience in the sector with multinational companies. Earlier this year, CHS added Hussam Deranieh, area manager, Middle East, CHS Europe, to its Amman, Jordan, office, also reporting to Scarrozza. North American fertilizer customers already doing business with CHS will gain better global connections and insight, says Palmquist. “Increasingly, world events trigger fertilizer market events, in terms of production outages and export disruption,” he says. “Experienced international traders in Europe and the Middle East focusing solely on fertilizer markets will give our domestic supply and marketing team additional market intelligence to help customers better manage volatility and risk.”

Couple guilty of illegal fertilizer hauling

News Briefs

Macon, Ga.-A Moultrie, Ga., couple has pleaded guilty to violating the federal hazardous materials transportation law by transporting 19 shipments of ammonium nitrate fertilizer and Telone II pesticide between January and July 2009 using a trucking company under a federal out-of-service order, according to the Office of U.S. attorney for the Middle District of Georgia. U.S. Attorney Michael Moore said Thomas and Cathy Watson admitted to transporting the hazardous materials using their TomCat Trucking Inc. of Doerun, Ga., which was under order from the Federal Motor Carrier Safety Administration and was administratively dissolved by the Georgia secretary of state after having received an unsatisfactory safety rating. Moore said the Watsons agreed to a sentencing condition banning them from applying for or holding any commercial motor carrier permit for the duration of their sentences. They each face a maximum penalty of up to five years in federal prison, followed by three years of supervised release and a $250,000 fine. Sentencing will be scheduled by U.S. District Judge Hugh Lawson at a later date.

Court halts Uralkali, Silvinit merger

News Briefs

Berezniki-A Perm Territory Arbitazh Commercial Court has issued a temporary injunction prohibiting the implementation of the merger agreement of Uralkali and Silvinit. The companies said the injunction does not affect completion of acquisition by Uralkali of 20 percent of Silvinit’s ordinary shares. The court preliminary hearing on the merits of the claim is scheduled for April 12, 2011. Uralkali and Silvinit believe that the injunction and the claim brought by minority Silvinit shareholders, including Acron, are entirely without merit and intend to contest them vigorously. The merger had been expected to close by the end of the first quarter.

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