All Posts from June 7, 2024

Egypt Shutters Fertilizer Plants as Heat Wave Strains Gas Supply; Expects Surge in LNG Imports

Asia, Brazil, Egypt, Europe, Featured, Natural Gas, Nitrogen, U.S.

Multiple industrial plants in Egypt have been temporarily idled as a heat wave grips the country, causing energy shortages and rolling blackouts that impacted petrochemical and fertilizer producers. Temperatures across the country rose to 104 F during the week and were expected to climb in the coming days.

At least six companies – Sidi Kerir Petrochemicals Co., Abu Qir Fertilizers and Chemical Industries, Egypt Kuwait Holding, Misr Fertilizers Co., Methanex Egypt, and Egyptian Chemical Industries Corp. – said on June 5 that they had idled plants as a result of fluctuating pressure in the gas network, Bloomberg reported.

The oil and electricity ministries said Wednesday that supplies to the fertilizer plants would gradually resume on June 6 after maintenance work has been completed, but the temporary closure jolted the global urea industry, pushing prices up in the Arab Gulf, Europe, Asia, Brazil, and New Orleans.

North American fertilizer equities retreated Wednesday following Egypt’s announcement that resume nitrogen output would resume at idled facilities. Bloomberg reported. CF Industries Holdings Inc. dropped 4.6% and was among the worst performers in the S&P 500 Index, while The Mosaic Co. shares fell 2.1%, Nutrien Ltd. dropped 1.6%, and Yara International’s US-listed shares fell 4.4%.

“Liquefied natural gas supply cuts are ending for Egyptian nitrogen producers, easing pressure in a market reeling from supply shocks,” Bloomberg Intelligence Analyst Alexis Maxwell said, adding that prices had been trending higher on expectations of further Egyptian shortages “which now look unlikely.”

Egypt said it expects to import more than 20 liquefied natural gas (LNG) cargoes this summer to ease energy shortages. State-run Egyptian Natural Gas Holding Co. will buy the shipments via tenders through October, a person familiar with the plan told Bloomberg, asking not to be identified because the information is private.

The LNG purchases would boost Egypt’s imports to the highest level since 2018, according to ship-tracking data. So far, the country has bought at least four shipments for delivery to Jordan, from where it is rerouted to Egypt. The demand is likely to tighten the global LNG market and drive prices higher, especially if Asia and Europe have hotter-than-usual summers.

Egypt is flush with cash from a $57 billion international bailout package that helped it avert a crisis and pushed foreign currency reserves to a record high. President Abdel-Fattah El-Sisi’s administration may have to dip into those funds to avoid a repeat of the power blackouts that gripped the nation last year and avert widespread public discontent, Bloomberg reported.

The energy shortage comes despite Egypt buying some LNG volumes earlier this year to supplement electricity generation. The country’s gas importer last month signed a deal with Norway’s Hoegh LNG to rent its Hoegh Galleon LNG floating terminal starting in June.

Authorities have already increased the price of some fuels but have yet to decide whether they’ll further lift subsidies on electricity prices.

GROWMARK to Acquire St. Louis Chemical Producer AgraForm

Featured, U.S.

GROWMARK, Bloomington, Ill., announced on June 4 that it has signed a letter of intent to acquire AgraForm LLC, an agrichemical manufacturing company located in St. Louis, Mo. The deal is expected to close at the end of June. Terms were not disclosed.

AgraForm provides bulk formulation, agrichemical processing, spray drying, milling, packaging, and storage services for chemical manufacturers. The company has two locations in S. Louis, one for manufacturing insecticides, fungicides, and biological products for agricultural use and another for dry storage.

“This purchase enables us to grow efficiently in these product lines while providing the opportunity to produce proprietary product offerings in the future,” said GROWMARK Chief Operating Officer Wade Mittelstadt.

“We can also strengthen our relationships with key suppliers who currently utilize AgraForm’s state-of-the-art manufacturing facilities, Mittelstadt added. “AgraForm employs a talented team and is a very well-run operation with strong commitments to safety, environmental responsibility, and customer service. GROWMARK is pleased to be part of continuing their legacy of success.”

“The AgraForm Team is extremely excited to partner with GROWMARK to couple formulation processing with distribution for additional long-term value and growth for our current clients, GROWMARK customers, and FS Cooperatives,” said Ron Cunningham, President of AgraForm.

TFI Urges Congress to Name Potash, Phosphate as Critical Minerals

Belarus, China, Featured, Phosphate, Potash, Russia, U.S.

The Fertilizer Institute (TFI) President and CEO Corey Rosenbusch on June 4 provided testimony to the House Subcommittee on Energy and Mineral Resources in support of adding phosphate and potash to the US Critical Minerals list.

The hearing focused on several bills related to critical minerals including the bipartisan H.R. 8450, the Phosphate and Potash Protection Act of 2024, introduced by Reps. Kat Cammack (R-Fla.) and Elissa Slotkin (D-Mich.).

If enacted, the legislation would direct the US Geological Survey (USGS) to conduct an immediate review to determine the need for adding phosphate and potash to the Critical Minerals list. The USGS defines a critical mineral as essential to the economic or national security of the US, susceptible to supply chain disruptions, and having significant consequences for the economy or national security if absent.

“We are here today to ensure this committee understands that phosphate and potash meet all three of those criteria and should, without a doubt, be included on the USGS list of critical minerals,” Rosenbusch said.

“Half of all global crop yields can be attributed to fertilizer, but as the world population continues to grow it is imperative that the sustainable production and use of fertilizers continues to provide the ability of growing more food without needing more land on which to grow it,” Rosenbusch testified.

“But the majority of phosphate and potash resources are concentrated in only a few countries, leaving them vulnerable to supply chain vulnerabilities and geopolitical instability,” he said. “The events of the past few years have shown us that food security is national security and now is the time to protect our nation by including phosphate and potash on the USGS Critical Minerals list.”

TFI said only 14 countries produce potash, with Belarus and Russia comprising nearly 40% of global production. While the US produces potash domestically, TFI said it imports roughly 95% of its needs. Regarding phosphate, 11 countries produce significant amounts with China accounting for more than 40% of global production.

“Without these two minerals, modern agricultural systems would crumble and the ability to feed our growing population would be nearly impossible,” Rosenbusch said. “It is vital that we take proactive steps to secure our own agricultural future by recognizing the role these minerals play in putting food on our tables.”

Rail Union Rejects CN Offer for Binding Arbitration; Border Agent Strike Looms

Canada, Featured

Canadian National Railway Co. (CN) on June 6 reported that earlier this week it formally offered the Teamsters Canada Rail Conference (TCRC) to enter into binding arbitration to reach a new collective labor agreement and avoid a strike that could happen in mid-July, but CN said the TCRC rejected the voluntary arbitration process and all offers put to them.

CN said its offer to TCRC contained two options: one proposing to pay hourly wages to workers on a schedule rather than the current and longstanding practice of pay per mile with no schedule, and the other aimed to extend parts of the current arrangement.

TCRC rejected both, claiming the first offer involves “forced relocation” of workers for months at a time, while the second compels shifts of up to 12 hours, potentially raising the risk of accidents.

“The call for binding arbitration at this late stage of the bargaining process underscores the disingenuousness and failure of CN’s negotiation strategy,” said TCRC Spokesman Christopher Monette. “We firmly believe that binding arbitration can be avoided if CN stopped demanding concessions that would negatively impact workers’ quality of life and undermine rail safety.”

CN countered on June 6 that both offers “align with the latest government regulations and Duty and Rest Period Rules” that were implemented in May 2023, and said the TCRC’s claim that the railroad’s work and rest period proposals are unsafe is false.

CN said it took part in a case management conference organized by the Canada Industrial Relations Board (CIRB) in late May to discuss the Minister of Labour’s request for clarity on the continuation of activities during a work stoppage. As part of this review, the parties had until May 31 to submit replies to the CIRB. The CIRB has now extended this deadline to June 14.

“As of right now, the CIRB has not indicated how long they will take to make a decision, and neither a strike nor a lockout can happen until then,” CN said in its June 6 statement. “A strike or lockout is unlikely to happen before mid to late July 2024. However, the CIRB’s request for clarity does not impact CN and the TCRC’s ability to continue bargaining.”

TCRC in April warned that a strike at CN andCanadian Pacific Kansas City (CPKC) railroads could happen as soon as May 22 (GM May 3, p. 1), raising alarms from Canadian industry groups. Fertilizer Canada said a strike would have a “devastating impact” on the fertilizer industry, Canada’s economy, and domestic and international food security (GM May 24, p. 1).

Industry groups are also concerned about a potential strike of border agents in Canada that could happen as soon as June 7, Bloomberg reported. More than 9,000 workers at the Canada Border Services Agency are seeking improved wages, better retirement benefits, and more flexibility on remote work.

About 90% are deemed essential workers, which means they can’t actually walk off the job, Bloomberg reported. But they can protest conditions by performing only essential job duties and refusing to work overtime, potentially causing long delays in cross-border commercial traffic.

The Treasury Board of Canada, which manages the federal public service, has said that the union’s wage demands are too high. The government said in a June 5 statement that it is “fully committed to reaching an agreement that is fair for them and reasonable for taxpayers.”

Border officers can’t intentionally slow down border processing, and employees who take “illegal job action” may face discipline, the Canadian government warned. 

Sweden’s Cinis Inaugurates First SOP Production Facility

Europe, Featured, Low-Carbon, Potash, Sulfate of Potash, Sweden

SOP producer Cinis Fertilizer on June 4 inaugurated its first sulfate of potash (SOP) plant in Örnsköldsvik, Sweden, which uses a fossil-free production method with a low carbon footprint by using industrial waste as inputs.

“Today we have reached an important milestone with the production of potassium sulfate and sodium chloride,” said Jakob Liedberg, Founder and CEO of Cinis Fertilizer. “We have achieved this in record time.”

Construction of the plant commenced in February 2023 and first production began on May 8 (GM May 10, p. 30). The company hopes to ramp the plant up to its 100,000 mt/y capacity by the end of 2024.

“The steps that are now being taken are an important contribution to our and Europe’s food supply,” said Dan Ericsson, Sweden’s Minister for Rural Affairs. “The fact that it is also produced fossil-free is an important climate perspective. This facility will not only strengthen our country’s own capabilities, it also opens up opportunities for exports to other countries.”

Cinis recycles waste products from battery manufacturing, as well as the pulp industry and other industries, to produce SOP. The company is planning a second 200,000 mt/y SOP plant in Bergsbyn, Sweden (GM June 23, 2023), and announced in September that it will build a 300,000 mt/y SOP plant in Hopkinsville, Ky., with production slated for 2026 (GM Sept. 22, 2023).

Judge Upholds CA Penalty for Mislabeled Fertilizer

California, News Briefs, U.S.

The California Department of Food and Agriculture (CDFA) announced that an administrative law judge has upheld a penalty of $1.89 million plus investigative costs against Florida-based Agro Research International LLC, for adulteration and mislabeling of registered organic fertilizing material AGRO GOLD WS.

CDFA said the product was found to contain the synthetic herbicides diquat and glyphosate, both of which are prohibited from use in certified organic agriculture production. The product was registered with CDFA as a “biological amendment” and the company was required to adhere to the USDA’s National Organic Program standards for organic food and crop production.

CDFA in August 2020 initiated an investigation into AGRO GOLD WS, co-packaged with the organic herbicide WEED SLAYER. CDFA said it analyzed 17 samples of AGRO GOLD WS, all of which indicated “unequivocal confirmation of adulteration with diquat and glyphosate at significant levels.” CDFA said samples analyzed by four other state departments of agriculture were consistent with CDFA’s results.

CDFA’s Fertilizing Materials Inspection Program in December 2020 issued an order of statewide quarantine and removal from sale of AGRO GOLD WS, and CDFA’s State Organic Program executed a stop-use order for AGRO GOLD WS. CDFA in May 2022 sent a Notice of Penalty and Adverse Determination to Agro Research International, LLC, which then requested the hearing before an administrative law judge.

“This investigation and penalty based on scientific results is a perfect example of how CDFA’s Inspection Services Division preserves the integrity of the California certified organic label, as well as truth in labeling and our high standards to protect the agriculture industry and public,” said CDFA Secretary Karen Ross. “It’s also a strong example of how our Fertilizing Materials Inspection Program, the State Organic Program, and the Center for Analytical Chemistry collaborate effectively.”

Phospholutions Partners with WeGrow

News Briefs, Phosphate, South America, U.S.

Phospholutions Inc., a sustainable fertilizer technology company based in State College, Pa., announced on June 4 that it has partnered with WeGrow AG, a global provider of specialty ag nutrition and nutrient use efficiency products, to commercially launch Phospholutions’ RhizoSorb® phosphate fertilizer technology in North, Central, and South America.

“We are thrilled to announce our partnership with WeGrow AG, an esteemed specialtycrop nutrition solutions leader,” said James Ortiz, Chief Commercial Officer at Phospholutions. “As Phospholutions advances its global mission to extend the benefits of our patented phosphate technology across the industry supply chain, this collaboration with WeGrow AG, focusing on specialty markets, aligns seamlessly with our broader ambition to commercialize our technology.”

Phospholutions said it selected WeGrow AG as the launch partner for RhizoSorb® due to its track record in product validation, an extensive distribution network, and its partnerships with leading universities. Earlier this year, WeGrow AG initiated the field-testing phase of RhizoSorb®’ across 13 countries.

“This partnership represents a significant step towards our continuous efforts in enhancing sustainable agricultural practices on a global scale,” said Paul Jaramillo PhD, Product Development Director at WeGrow AG. “Our collaboration aims to address the pressing need for more efficient and environmentally friendly nutrient solutions, ultimately supporting the region’s agricultural profitability and competitiveness.”

Cooperative Ventures Invests in Traction Ag

News Briefs

Cooperative Ventures, a joint venture between GROWMARK and CHS Inc., has announced an investment in Traction Ag Inc., a leader in farm accounting technology and a developer of the first cloud-based accounting software for US farmers. Traction Ag’s $10 million Series A round was led by Cooperative Ventures and joined by Plymouth Growth and existing investors.

Galvani to Expand Phosphate Capacity in Bahia

Brazil, Market Watch, News Briefs, Phosphate

Galvani, the largest producer of phosphate fertilizers in Brazil’s Matopiba region, plans to invest R$3 billion by 2027 to double the capacity of its industrial operation in Bahia, start mining in the state, and build a new factory in Ceará, Valor International reported. Galvani said the move will reduce the region’s reliance on imported fertilizers by 25%.

Valor International reported that the company has already started executing the first stage of the expansion plan, which will require R$700 million in investments. Of this amount, the company will allocate R$400 million to new phosphate mining in Irecê, Bahia, and R$200 million to the Luís Eduardo Magalhães factory, in the same state, Galvani CEO Marcelo Silvestre said.

As a result, production capacity will increase from the current 600,000 mt/y to 1.2 million mt/y by 2026. In 2023, Brazil imported 39 million mt of the 45 million mt of fertilizers it consumed, Valor International reported.

The second stage of the plan involves the project in partnership with state-owned energy company Indústrias Nucleares do Brasil (INB). Through the partnership, the companies plan to explore phosphate and uranium reserves in a deposit in Santa Quitéria, in the state of Ceará. Galvani is still awaiting permits to begin implementing the project, Valor International reported, which could take two to three years.

According to Silvestre, Galvani filed the environmental impact study with Brazil’s environmental protection agency IBAMA in December. The company expects the preliminary and construction permits to be issued by the end of this year. As a result, the complex could begin operating in the third quarter of 2027.

Sage Potash Closes Funding Round for Utah Project

News Briefs, Potash, U.S.

Junior miner Sage Potash Corp., Vancouver, B.C., announced on May 27 that it has closed its non-brokered private placement of 13,500,000 common shares for total proceeds of $1,822,500. The company said the proceeds will be used for the advancement of its mineral properties and for general administration expenses.

“We are extremely pleased to have attracted strategic investors who understand and appreciate the value of our project, namely a comprehensive and strategic land and mineral portfolio hosting a 280 million mt inferred resource of high-grade, clean chemistry potash, with a pilot production strategy in place and permitting to water access, cavern development, and waste disposal wells,” said Sage CEO Peter Hogendoorn. “We look forward to providing further updates of fundamental developments as we advance our project.”

Earlier this year Sage announced the receipt of all required governmental approvals for two Class V exploration wells at its Sage Plain Potash Project in Utah’s Paradox Basin (GM Jan. 12, p. 27). In partnership with global engineering firm RESPEC, Sage is advancing engineering and designs for a 50,000 mt/y pilot-scale potash solution mining operation as part of its ongoing engineering studies and production permit application (GM Dec. 8, 2023).

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