Posts By Date - Green Markets

STC tender indicates significant price change

May 8, 2012Breaking Industry Newswebster@kennedyinfo.com

Offers in the STC urea tender that closed today confirmed higher prices across the board, including steeply higher Iranian levels. The lowest offer came in at $535/mt CFR, about $150/mt higher than what IPL paid just two months ago. The average price of all the offers comes in $30/mt higher over the final IPL price.

Industry sources had expected to see the Arab producers come in around $555/mt FOB. And indeed, the three producers companies that did offer set their prices at $555-$556/mt FOB. Traders carrying Middle East tons had offers around $557/mt FOB.

When STC first issued its tender, it would not consider offers containing Iranian tons. At the last minute, however, the company changed the closing date from May 4 to May 8 and allowed Iranian material to be included. The change made a difference. The lowest offer came from Titanium based on Iranian product at $535/mt CFR. Other offers of openly declared Iranian tons range from $563/mt CFR to $579/mt CFR. Offers of Yuzhnyy and Middle East tons started in the upper $550s/mt CFR.

The prices offered in this tender seem to indicate that the days of ultra-cheap Iranian urea are over. The Titanium offer was far outside the norm for this tender, even from other offers based on Iranian material. One observer wondered if Titanium would be able to obtain the necessary product at that price.

Emmsons got stuck between IPL and the Iranian suppliers with its price award from the last tender. Sources report that Emmsons was unable to make good on its award of 500,000 mt.

Last week industry watchers said STC would not only have to make up for the half-a-million tons Emmsons did not deliver but also at least an equal amount to keep supplies at levels designed to prevent panic among local distributors and political figures.

A number of Chinese tons were offered in the tender. It is unclear to sources if the tons are left-over quantities from the last export window that remained in bonded warehouses or if the tons will be shipped after July 1 when the Chinese export duty drops to 7 percent from its current 110 percent. The prices — $527-$563/mt FOB — seem to indicate no one is working with older tons.

Based on the offers, the Yuzhnyy price moved into the $550s/mt FOB, the Middle East – Arab producers – moved into the mid-upper $550s/mt FOB and China into the $540s/mt FOB.

Once STC concludes its talks with the offering companies, new and higher prices around the producing world will be posted.

K+S announces sale of nitrogen business

May 8, 2012Breaking Industry Newswebster@kennedyinfo.com

Germany’s K+S Aktiengesellschaft has signed an agreement with EuroChem regarding the sale of K+S Nitrogen, one of the leading suppliers of nitrogenous fertilizers.

The transaction, with an enterprise value of EUR 140 million for K+S Nitrogen, is likely to be closed at the end of the second quarter of 2012. The effective economic date of the transfer is March 31, 2012. The sale is subject to a number of factors, including approval by the EU antitrust authority.

For K+S, the sale will generate a book profit of around EUR 70 to 80 million, depending on the net earnings of K+S Nitrogen generated by the time the transaction is closed together with other effects. From now on, K+S Nitrogen will be stated as a “discontinued operation”. In financial year 2011, K+S Nitrogen generated revenues of EUR 1,156.8 million and operating earnings EBIT I of EUR 69.4 million.

“We are pleased to have found a well-suited new owner for K+S Nitrogen in EuroChem. Against the backdrop of the recently concluded sale of the fertilizer activities of BASF in Antwerp, the sale to EuroChem is the best option from the perspective of K+S, but also of the employees of K+S Nitrogen,” says Norbert Steiner, Chairman of the Board of Executive Directors of K+S Aktiengesellschaft. “I would like to express my particular thanks to the employees of K+S Nitrogen for their extraordinary commitment in recent years,” Steiner continues.

EuroChem CEO Dmitry Strezhnev commented: “K+S Nitrogen is a natural extension to our recently acquired EuroChem Antwerpen operations. This acquisition provides us with a world-renowned platform while further securing our competitiveness in key markets worldwide. We welcome the highly skilled staff of K+S Nitrogen and our clients and partners may rest assured that the high level of service they have grown accustomed to with K+S Nitrogen will be maintained.”

The strategy of the K+S Group provides for growth in the Potash and Magnesium Products and the Salt business segments in particular and for focusing management resources and financial means on this accordingly. Against this background, K+S had sold the business activities of COMPO to the investment company Triton last year.

K+S Nitrogen markets nitrogenous fertilizers with a focus on major customers in agriculture and special crops such as fruits, vegetables and grapes. In addition to the fertilizers produced by EuroChem Antwerpen and delivered by BASF for it, K+S Nitrogen also markets the goods of other European fertilizer producers. The company is based in Mannheim, Germany, and employs about 180 people worldwide. More information is available at www.ks-nitrogen.com.

EuroChem is a leading global agrochemical company, producing primarily nitrogen and phosphate fertilizers, as well as certain organic synthesis products and iron ore. The Group is vertically integrated with activities spanning from mining and natural gas extraction to production, logistics, and distribution. EuroChem is currently developing two sizeable potash deposits in Russia with the Gremyachinskoe (4.6 mtpa) and Verkhnekamskoe (3.4 mtpa) greenfield projects. Please visit www.eurochem.ru for further information.

The K+S Group is one of the world’s leading suppliers of standard and speciality fertilizers. In the salt business, K+S is the world’s leading producer with sites in Europe as well as North and South America. K+S offers a comprehensive range of goods and services for agriculture, industry, and private consumers, which provides growth opportunities in virtually every sphere of daily life. The K+S Group employs more than 14,000 people. The K+S share – the commodities stock on the German DAX index – is listed on all German stock exchanges (ISIN: DE000KSAG888, symbol: SDF). More inform