Plymouth, Minn.-The Mosaic Co. reports that it will contribute $200,000 to the American Red Cross and local disaster relief organizations designated by Florida Governor Charlie Crist and Louisiana Governor Bobby Jindal for hurricane relief efforts. Mosaic also said it will match employee contributions to the Red Cross. The donation follows a $50,000 contribution the company made in August to the Red Cross’s Tampa Bay region, which covers eight counties in central and southwest Florida. “Hurricane Gustav hit areas of Louisiana particularly hard, including communities where our employees and their families live and work,” said Jim Prokopanko, Mosaic’s president and CEO. “Our contribution is intended to help provide direct and rapid assistance to the victims who have been impacted most severely.” Mosaic employs approximately 3,000 in Florida and 280 in Louisiana.
U.S. Gulf/NOLA:Nothing new was reported in the market in the past week, leaving Tampa at $931/mt DEL and import business at other Gulf ports at $936/mt DEL. The last done at NOLA was reported at $880/st FOB.
Sources said last week that Tampa could go up again for October should numbers reported for Yuzhnyy hold at around $900/mt FOB or higher. If there is no retreat in the Black Sea, they say Tampa could conceivably hit the $1,000/mt DEL mark.
Correction:The NYMEX closing natural gas price for August 2008 should have read $9.217/mmBtu, not $9.163/mmBtu as reported in recent issues (GM Aug. 4-Aug. 25).
Eastern Cornbelt:The anhydrous ammonia market remained at a nominal $1,040-$1,080/st FOB regional terminals for spot market tons, with the low in Illinois to the dealer. Forward contract postings remained considerably higher at $1,240-$1,250/st FOB regional terminals for October through November.
Western Cornbelt:Sources described fertilizer activity as very quiet in early September, though some pressure was observed on spot pricing. Sources reported virtually no ammonia movement on preplant wheat in the region, which one source described as “very depressing.”
Perhaps that lack of movement was the driving force behind reports of spot ammonia tons priced as low as $940-$950/st FOB in Iowa last week for immediate take, although one source noted that “no one can hold anything” at the moment. Other areas in the region continued to report spot tons in a range of $1,000-$1,050/st FOB, with forward contract ammonia referenced as high as $1,230-$1,240/st FOB for October through November.
Southern Plains:Several sources reported steady movement of ammonia on preplant winter wheat ground, but some stopped short of calling it a heavy run. That was not true everywhere; one source said preplant ammonia movement in his trade area had already surpassed historical levels.
The anhydrous ammonia market was quoted at $910-$915/st FOB production points on the low end, with Terra reportedly on allocation out of its Woodward, Okla., plant. At the upper end of the range, the market was quoted at $950-$975/st FOB Kansas pipeline points. One source said reference pricing FOB Verdigris, Okla., had firmed to the $960/st level last week, some $20-$40/st higher than the previous level.
South Central:Anhydrous ammonia was quoted at $920-$960/st FOB regional terminals to the dealer for spot tons, with the low FOB Memphis, Tenn.
Black Sea: Reports in Asia and Europe began circulating that $900/mt FOB was achieved late last week. Some write this off to hype, while others are convinced the price was indeed hit. The price from Yuzhnyy has been steadily increasing as demand from the U.S., Europe, and especially Asia takes its toll on limited global production.
A number of Black Sea plants remain shut down for routine maintenance. Full production in the area is not expected until October at the earliest.
The biggest push on prices is the lack of production from the Burrup facility in Australia. The closure of that plant because of an explosion in the gas supply system has caused buyers to search for tons wherever they can.
Industry observers were taken aback at the reports of $900/mt FOB being done. One Asian source was not so much surprised at the price, but at how quickly that price was achieved. The buyer was not identified, but sources say it was most likely a major trader.
The public discussion of $900/mt FOB has prompted producers to begin pushing for $950/mt FOB and up. Should the price really hit that level, the price to Europe and the U.S. would be well above $1,000/mt CFR. Sources are not sure those markets will be able to absorb such an increase.
With the latest deal on the books, sources now peg the market at $880-$900/mt FOB.
Middle East: The contract price to India keeps moving up, largely due to occasional higher-priced spot deals. Sources report that even though Indian buyers are not taking as many tons as earlier anticipated, the demand is strong enough to move prices up. Because Indian purchases are less than anticipated, said one Asian source, occasional spot tons have become readily available. With demand strong in Asia, buyers are quick to take the material.
With each Asian purchase, the spot price moves up – and with it the contract price.
Last week India reportedly paid $837/mt CFR for a cargo that two weeks ago would have cost $820/mt CFR. The price increase came as Sabic settled with a trader for an Asian buyer at $842/mt FOB.
The gap between the contract and spot prices remains wide.
If a pricescan included contract and spot prices, the spread would be almost $90. One Asian trader said such a spread is useless for fiscal planning. He noted that because the contract price moves with the spot price, it is better to keep an eye on the spot purchases – at least until the new contracts are up for negotiations.
With the latest spot deal reported, sources now say the spot market is $830-$840/mt FOB. If the contracted tons are included, sources say the Middle East market is $740-$840/mt FOB.
Asia: Demand remains strong. Sources say buyers still need material, but are less willing to pay whatever is offered.
Some of the industrial buyers in Asia are now reported to be having a more difficult time passing on the increased cost of imported ammonia to their buyers along the production chain. Sources say the global economic slowdown is beginning to affect the industrial sector. Some are now telling their buyers to hold off on additional purchases. Others are spending more time shopping around looking for potential savings on their ammonia and other inputs.
The tightness in the Asian market is a direct result of the damage done to the natural gas facility that feeds the Burrup ammonia plant in Australia. Sources say the plant will most likely not be up and running until early next year.
The joint venture ammonia plants in Indonesia, KPA and KPI, have given up on picking up spare tons from Kaltim.
Industry observers point out that Kaltim and other state-owned plants are now so focused on urea production that no spare ammonia is to be found. One source added that the reduction of available ammonia is also due to the problems plants have had getting enough natural gas to run at full capacity.
The bottom line is that ammonia from KPI and KPA is all that is being exported from Indonesia at this time.
UREA
U.S. Gulf: Granular barges were reported to be trading last week within the $752-$760/st FOB range. Sources called the market $752-$755/st early in the week and said it worked its way up as the week progressed. This does represent a boost over the prior week’s $750-$755/st FOB, but certainly not the kind of volatile swings the industry has been so used to seeing this year. Prills were called $745-$750/st FOB.
Eastern Cornbelt: Granular urea was reported at $810-$840/st FOB terminals to the dealer for prompt tons. One source reported an offer for barge-delivered urea tons at considerably lower numbers dockside, but was not sure what the terminal price would be after throughput costs.
Western Cornbelt: Granular urea remained at $800-$830/st FOB in the region, with several sources reporting $810/st FOB as the common dealer number last week.
Southern Plains: Granular urea was pegged at $780-$790/st FOB, with the low reported at Enid, Okla.
South Central: Granular urea pricing was down from last report at $785-$810/st FOB regional terminals to the dealer, with the low reported in Mississippi and the upper end in Arkansas.
Southeast: Granular urea was reported at $840-$860/st FOB port terminals, with the upper end reflecting the list price FOB Savannah, Ga. Sources reported minimal buying activity last week.
Argentina: The Profertil plant was reported back up last week after a brief outage. As recently reported during its earnings cycle, Profertil is going to need a major turnaround between now and early next year. The best estimate now for the turnaround is November, according to an Agrium source.
India: MMTC closed a tender late last week. Offers flooded in, but dramatic spikes in prices were only evident at the fringes. Reportedly, the Indian buyer did not want to pay more than $850-$855/mt CFR, the upper levels of the last IPL tender. By the time of the tender the ceiling was raised to $860/mt CFR.
Plenty of material was offered that met that criteria. The tonnage offered under $860/mt CFR, excluding seller option tons, came to more than 650,000 mt.
Sources say MMTC could easily cover the rest of its 2008-2009 seasonal needs with this tender. The question will be the potential for port congestion if the buyer grabs too much in too short a time.
One Asian trader was conviced that even if MMTC takes the tonnage slated for September and October shipment, it would quickly ask sellers to delay a few of the cargoes so the urea could be better spread out.
The Middle East offers will have to come down, said sources. At $852/mt FOB, the producers have priced themselves out of contention in this tender.
Area observers are convinced the producers will come down in price, if for no other reason than to attempt to hold onto a portion of the Indian market.
One producer representative said MMTC may be willing to pay a little more – but not too much more – to secure smaller cargoes that can be directed to ports that could make the urea more readily available to local farmers.
Reportedly, the MMTC negotiators were meeting with the lowest offering companies and the Middle East producers into the weekend.
The price in Yuzhnyy had moved up near $820/mt FOB on the heels of the announcement of the tender. But now, said one trader, this tender shows the market has reached its peak. The netbacks on the lowest offers indicate a sub-$800/mt FOB price from the Black Sea.
Sources say the Swiss Singapore tons are actually re-exported Chinese tons to be delivered in a container.
Few in the industry expect to see the price spike any time soon.
India is the largest single buyer at this time. If MMTC takes 500-600,000 mt from this tender, sources say there is little incentive for it or IPL to issue a new purchasing tender for the next couple of months.
The delay in calling this tender, say sources, helped push down the Yuzhnyy price and put pressure on the Middle East. A similar delay for the final round of buying could have the same impact.
China: Beijing announced a new tariff rate schedule effective Sept. 1. For the month of September, export urea is being taxed at 185 percent of plant value. Sources say that puts Chinese urea at $850-$900/mt FOB bagged. The duty will drop to 175 percent for the last quarter. The latest increase in the export tariff indicates how serious the planners in Beijing are when it comes to guaranteeing urea supplies for the domestic market.
The Chinese government has regularly stepped in with ever-increasing export tariffs for the past year and a half. Sources say the central planners grew concerned earlier this year when first quarter exports almost surpassed exports for all of 2007.
The dramatic increase in the price of international urea was drawing more Chinese product to offshore buyers, leaving the domestic market to pay more and more for fewer tons.
An oft-heard phrase in China is that the last thing Beijing wants is 900 million angry farmers. To placate the farmers, the government kept adding duties to discourage exports.
At first all that did was drive up the price of international urea. The tariffs were easily assimilated into the new global pricing.
Once Beijing got serious by more than doubling the cost of the exported urea, the exports slowed to a trickle.
One trader noted that the economic planners have to walk a fine line. They must ensure plenty of low-cost urea to the farmers while also making sure the urea producers do not go broke.
Black Sea: Prices had moved up near $820/mt FOB on reports of an upcoming Indian tender. Once the tender was called, however, the netback to Yuzhnyy appears to indicate pricing closer to $770-$780/mt FOB. Sources are calling the market even lower.
One trader noted that panamax freight from Yuzhnyy to India is about $60/mt. At that rate, the lowest offer of $854/mt CFR comes in at $790/mt FOB. However, the lowest offers are for smaller vessels. Freight for these smaller ships is higher, thus reducing the netback.
Based on the MMTC tender, sources now peg the Black Sea market at $760-$780/mt FOB.
Once MMTC makes its awards, sources are hard pressed to find any other major buyers ready to step up and take cargoes.
Chances are IPL and MMTC will sit back for a while. They will let the tons get loaded and not make any move toward buying once those contracts are filled and producer inventories begin to build.
Middle East: Producers surprised the industry in the MMTC tender by not trying to move their prices up $10-$15/mt. This time around, the offering prices were only a couple of dollars above what industry sources had been calling the spot market.
Even with that modest increase, sources – including one in regular contact with a producer – said the price will have to be cut by $25-$30/mt to make the offers competitive.
Reportedly, MMTC and producer representatives went into meetings right away to talk about changing the offering price.
Sources say the producers will most likely come down, but not as far as MMTC would like. Still, said one observer, the flexibility of taking delivery in smaller vessels allows MMTC to direct the ships to less obvious ports that could be beneficial to the end user. That flexibility has always been worth a couple of dollars, said one source.
Producers say they are under no pressure to lower prices. Contracts and demand remain strong.
Saudi Arabia concluded another deal with Pakistan to provide more urea under a government-to-government aid package. At the same time, Safco 1 is being shuttered for good.
Other producers with contracts around the globe also say there is no need to rush to book new shipments for a while.
Still, said one source, chances are the producers will agree to lower prices as a way to keep a presence in India. One trader recalled a short time back when the Middle East producers refused to lower their prices in post-tender talks and ended up with no new business on their books for about two months. In a subsequent tender the producers dramatically lowered their prices to ensure an award.
The fact that producers provided just one price for prills and granular told some traders that those two markets have once again reached parity.
Unless and until a deal is struck with MMTC, sources say the new price range for the Middle East is $820-$850/mt FOB for prills and granular.
Vietnam: Buyers in the Philippines, Thailand, and Sri Lanka have benefited from Chinese material being re-exported through Vietnam.
Sources report that about 50,000 mt a month passes over the land border or via small barges from China into Vietnam. They add that these tons appear to be heading south without the usual high export tariffs being applied.
The result is bagged urea with Chinese markings being sent throughout the region at significantly lower prices. CIC in Sri Lanka reportedly took delivery of a container of bagged urea at the equivalent price of $685/mt CFR bagged. Considering that tariff-paid Chinese urea is now at a minimum of $830/mt FOB bagged, sources say CIC got a good deal.
Reportedly, the Vietnamese government is willing to allow the re-export process to continue as long as nothing is done to the bagged urea. One source said the material must remain in its original Chinese bags.
Attempts to open the bags to provide a bulk order or to re-bag in Vietnamese bags are actively discouraged by Hanoi. One source said the government is concerned that if the Chinese bags are tampered with, some of the domestically-produced material could find its way into the export order.
Taking a page from the Chinese export playbook, Vietnam placed a high tariff on exports to ensure sufficient domestic supplies.
Bangladesh: BCIC called another tender to close Sept. 8. The buyer wants 50,000 mt each of prilled and granular urea. Sources say shipping inquiries were made for cargoes from Vietnam to Bangladesh. The country is facing a severe urea shortage. Reportedly, BCIC is now moving as quickly as it can to make awards in its tenders and to get winners to ship as quickly as possible.
Pakistan: The Ministry of Food, Agriculture and Livestock on Sept. 1 told the Economic Monitoring Committee (EMC) that an agreement has been signed with the Saudi government for the import of 135,000 mt of urea, with shipments to begin arriving in the first week of September. This would be followed by more shipments, as per the agreed-to schedule. The committee was also informed that the urea availability situation in Punjab and Sindh, particularly in the rice and cotton belts, had improved. However, the local media report that large numbers of farmers are holding protest rallies across the country about the shortage and high price of urea.
Due to urea shortages, the government is watching for movement of product being smuggled into Afghanistan.
Indonesia: Sources report no new steps have been taken to implement the government’s plan to place all state-owned urea manufacturers under one holding company. One trader said the move will have to happen soon, because indicators point to another export tender being called this week or next.
NITROGEN SOLUTIONS
U.S. Gulf: All was quiet on the UAN front, with most folks continuing to call the market $500-$505/st FOB ($15.62-$14.78.unit). Chatter continues that prices may soon fall below the $500/st FOB mark.
Eastern Cornbelt: The UAN market remained at $16.00-$16.79/unit FOB regional terminals for cash tons, with one source quoting a $455/st ($16.25/unit) FOB dealer price in Indiana last week. Reference prices for forward contract UAN-32 tons for October through February remained at significantly higher levels, ranging from $596.80.40-$606.40/st ($18.65-$18.95/unit) FOB regional terminals.
Western Cornbelt: UAN-32 was steady at $510-$525/st ($15.94-$16.41/unit) FOB regional terminals for cash tons to the dealer, with reference prices as high as $17.20/unit FOB. Sources reported few new sales to test the market, however.
Southern Plains: UAN-32 was quoted at $495-$500/st ($15.47-$15.63/unit) FOB regional production points on the low end, with the upper end of the range at $510-$520/st ($15.94-$16.25/unit) FOB terminals to the dealer.
South Central: UAN-32 was also down from last report, with sources quoting the terminal market in a broad range at $495-$520/st ($15.47-$16.25/unit) FOB to the dealer. The low was reported FOB Vicksburg, Miss.
Southeast: Sources quoted the UAN-30 market in a broad range at $465-$488/st ($15.50-$16.27/unit) FOB regional terminals. Some expressed doubt that sales had actually been achieved at the upper end of that range, though they acknowledged that the market should be there based on replacement costs. Supplies in Norfolk, Va., were said to be a little tight, with suppliers there reportedly sticking to the $480-$488/st ($16.00-$16.27/unit) FOB range to the dealer.
UAN vessels were reportedly being indicated in the $550-$580/mt CFR range, with the lower number described by one source as a “bargain.” Others indicated $560/mt as the bottom of the vessel market in early September.
AMMONIUM NITRATE
U.S. Gulf: Recent barge business continued to be called $520-$530/st FOB. Sellers, however, have much higher price ideas for fall cargoes.
Western Cornbelt: Ammonium nitrate was quoted at $550-$600/st FOB in the region.
Southern Plains: Ammonium nitrate was tagged at $560-$575/st FOB the Tulsa, Okla., market, up considerably from last report.
South Central: The ammonium nitrate market was quoted at $535-$575/st FOB in the region, also up significantly from last report.
Southeast: Ammonium nitrate pricing was up from last report at $550/st FOB the Tampa market.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was steady at $485-$495/st FOB in the region, with the upper end reflecting dealer reference prices. Effective Sept. 8, Honeywell’s list prices will move to $505/st FOB warehouses or rail-DEL for granular ammonium sulfate, and $485/st FOB or rail-DEL for mid-grade sulfate.
Western Cornbelt: Granular ammonium sulfate remained firm at $475-$495/st FOB last week.
Southern Plains: Granular ammonium sulfate remained at $410-$450/st FOB Texas shipping points.
South Central: Granular ammonium sulfate was tagged at $460-$480/st FOB regional warehouses, up from last report.
Southeast: The granular ammonium sulfate market was quoted at $465-$470/st FOB and $490-$495/st DEL in the region, also up from last report.
PHOSPHATES
Central Florida: All of the major wholesale phosphate markets – including Central Florida – were slow. The situation was not expected to change for another couple of weeks. Phosphate producers and traders were waiting for dealers around the country to begin ordering, but dealers were waiting for farmers, who have yet to begin buying for the fall season.
New prompt sales were absent out of Central Florida last week, but railcars were being filled by earlier orders. In general, phosphate sales were slow – and that will not likely improve until the fall season gets underway. Most dealers’ warehouses were believed to be full.
The Central Florida DAP price range last week was unchanged at $1,070-$1,080/st FOB. PCS Sales’s Central Florida reference price was unchanged at $1,070/st FOB for DAP and had a $25/st FOB premium for MAP. Mosaic’s asking price was $1,090/st FOB for DAP and $1,115/st FOB for MAP, but the company was making sales at $10/st FOB less for both products. CF moved its price down to $1,040/st FOB from $1,050/st FOB for DAP, and from $1,115/st FOB for MAP $1,100/st FOB, but had limited availability. In Texas, Agrifos’ DAP price continued at $1,100/st FOB for trucks and $1,095/st FOB for rail shipments.
U.S. Gulf: A sure sign of fall is when wheat farmers in Oklahoma begin flocking to their local fertilizer dealers for phosphates, but apparently fall will be late this year. Wheat farmers, who did well last year and have the money to spend, were staying home. A source said it was unclear why, but it could be because they sense a weakness in the market and were waiting for prices to go down. Late last week, that was probably a smart move.
Phosphate sales, along with almost all fertilizers, were way down, and there were no indications that will change during the next couple of weeks. “There’s no place to put it,” a trader said. “We have to wait until there’s some space.” Some advance orders were reported from warehouses in the Corn Belt, but even those weren’t scheduled for delivery until later in September. There was balance in the market, because few barges were available. That may last for a short period longer.
Hurricane Gustav did little in the way of serious damage, but phosphate-processing plants at Donaldsonville and Pascagoula went down prior to the storm and then power outages delayed restart. Mosaic’s plant was still out late last week and it was uncertain when they would resume production, but Mississippi Phosphate’s were beginning to come online late in the week.
Meanwhile, NOLA DAP barge prices were on the decline in the stagnant market, and activity will not likely pick up until around the middle of September, which will allow about a month before the upriver closes.
TFI’s conference at Seattle was scheduled to start Sept. 6, but it appeared few new, prompt phosphate sales would occur.
NOLA DAP barge price range declined to $1,000-$1,030/st FOB. MAP barges were $25-$60/st FOB more than DAP. Mosaic’s asking price for NOLA DAP barges was $1,100/st FOB and $1,125/st FOB for MAP, and its prices for October and November were scheduled to increase $10/st FOB. CF was seeking $1,050/st FOB for DAP and to $1,110/st FOB for MAP for prompt deliveries.
Eastern Cornbelt: Sources continued to report some pressure on phosphate pricing, with the warehouse market quoted at $1,065-$1,100/st FOB for DAP and $1,100-$1,150/ st FOB for MAP. 10-34-0 was quoted at $1,175-$1,200/st FOB, where available.
Western Cornbelt: Most sources pegged the DAP market at $1,080-$1,100/st FOB regional warehouses to the dealer, although there were reports of spot sales being offered as low as $1,055-$1,060/st FOB some Mississippi River locations last week. MAP was pegged at $1,105-$1,150/st FOB for prompt sales, with no new business to test the market.
10-34-0 was firm at $1,175-$1,200/st FOB in the region for very limited spot tons.
Southern Plains: Preplant movement of DAP on winter wheat ground was described as very slow. Most blamed cost reductions and high fertilizer prices as the reason for the cutbacks, and several described the slow pace as surprising. One source, noting that field and weather conditions were generally favorable, and that the previous wheat crop was good and growers are looking at dryland corn yields approaching 100 bushels/acre in some areas, said preplant rates and activity should be heavier than normal.
Phosphate pricing was down slightly from last report, with one source speculating that a few sellers were “trying to force some movement” during the lackluster preplant run. DAP was reported at $1,070-$1,080/st FOB Tulsa, with MAP quoted at $1,110-$1,120/st FOB the port.
10-34-0 remained in very tight supply, but sources said limited spot tons could be had in the region for $1,175-$1,250/st FOB last week.
South Central: Phosphate pricing, on the other hand, appeared to be down somewhat from last report. Sources pegged the DAP market at $1,080-$1,110/st FOB regional warehouses to the dealer, with MAP at $1,125-$1,150/st FOB. TSP was reported at $1,050-$1,075/st FOB warehouses.
U.S. Export: No new export sales were made by PhosChem or other North American traders last week, and India claimed it was finding cheaper prices, which was not exactly a boost to the market. However, China has extended its export tariff on phosphates, but even that has failed to promote higher prices.
The value of the U.S. dollar was improving and was up about 10 percent in comparison to the Euro, which may be helping to suppress new export sales.
With no new sales, the export DAP price range remained unchanged at $1,160-$1,215/mt FOB.
POTASH
Eastern Cornbelt: The potash market was reported firmly in the $890-$930/st FOB range, depending on location, grade, and time of delivery, with the low quoted in Indiana for limited tons and strictly for immediate take.
Western Cornbelt: Sources put the potash market in a broad range at $895-$930/st FOB regional warehouses to the dealer, with most quoting the upper half of that range last week.
Southern Plains: Sources quoted the potash market at $900-$925/st FOB regional warehouses to the dealer, with little new business to test the market. Intrepid Potash’s postings firmed on Sept. 2, with 60 percent granular muriate moving to $800/st FOB Carlsbad, N.M., and Moab, Utah, and $818/st FOB Wendover, Utah; 60 percent standard moving to $794/st FOB Carlsbad and Moab, and $812/st FOB Wendover; 62 percent standard moving to $820/st FOB Carlsbad; 62 percent fine standard moving to $823/st FOB Carlsbad; and 62 percent granular moving to $826/st FOB Carlsbad.
South Central: Potash pricing continued to be firm. Sources put the warehouse market in a broad range of $890-$950/st FOB, with the low FOB Vicksburg and the upper end reported in Arkansas to the dealer.
Southeast: Potash pricing continued to firm. Sources pegged the market in a broad range at $850-$925/st FOB, depending on grade and location, with reports of delivered allocated tons at the $855/st mark on the low end. Effective Aug. 13, Agrium’s 60 percent coarse potash postings firmed to $850/st FOB Wilmington, N.C., and Georgia shipping points at Bainbridge and Tifton.
SULFUR
Tampa: With a month to go before third-quarter sulfur contracts expire, something totally unexpected occurred last week – negotiations for the fourth quarter actually began and phosphate producers were seeking a sharp reduction in prices.
During the past few weeks, prices on the world market have taken a steep fall – down about $190/mt FOB – and phosphate producers were ready to take advantage of the situation. Tampa sulfur prices never did reach as high as those in the Middle East or Vancouver, but a big drop was still anticipated by users. Months ago, a source said that when sulfur prices began to fall they would fall far and fast, faster than they rose. That could be the case.
Supplies had improved greatly since the last quarter, but an oversupply still does not exist. With the price of a barrel of oil below $110 refineries have returned to normal production, which has helped supplies. However, one source pointed out that the reason phosphate companies have improved inventories was not because of a large increase from their normal suppliers, but because they have purchased blocks of sulfur at higher prices from other sources.
Hurricane Gustav caused a temporary interruption of sulfur vessels to Tampa, but that situation was returning to normal. Gustav caused little or no damage to offshore oil platforms and little to gulf coast refineries. Two other hurricanes, Hanna and Ike, and Tropical Storm Josephine were in the Atlantic late last week, but were expected to turn north before reaching the Gulf. Any large storm entering the Gulf would be a problem for sulfur transportation and possibly refineries.
Vancouver: Sources said there has been no real change in the market due to China, at least not yet, even though the Olympics have come to an end. Without its phosphate processing plants and other factories running during and in the lead-up to the Summer Olympics, that county’s needs were not that great. Negotiations were continuing last week without progress.
Semester negotiations with Brazil were about to get underway, and the South American country was expected to seek a sharp decrease in pricing.
Pakistan: The state-owned Oil & Gas Development Co. is seeking to sell 5,500 mt of sulfur at a minimum price of $888.29 in some 14 lots. Bidding is through Sept. 16.
The Fertilizer Institute has appointed Rebecca Seigworth as director of economic services, a new position at TFI. Seigworth joins TFI’s economics team, which is responsible for supporting its efforts by formulating statistical information for the industry and providing economic analysis in the legislative, regulatory, and public affairs arenas. Seigworth recently earned a bachelor of science in agribusiness management from Pennsylvania State University, where she also served as a teaching and research assistant. Her academic research was primarily focused on emerging issues in economics, rural development, and policy. She also studied abroad at the University College Dublin, Belfield, in Dublin, Ireland, and was an agri strategy and alliance intern with the Allied Irish Bank.
Jeff Scoggins has joined the sales staff of Midwest Fertilizer Inc., headquartered in Paola, Kan. Scoggins was previously with Ben Trei, but has been involved in the fertilizer business since the late 1960s. In his new role at Midwest, Scoggins will cover the southeast Kansas and eastern Oklahoma markets, and will be based in Parsons, Kan.
Reno-Itronics Metallurgical Inc. has shipped its first packages of GOLD’n GRO Guardian Deer Repellent, according to Itronics Inc., its parent company. The company has completed registration of GOLD’n GRO Guardian Deer Repellent in Nevada, Utah, Colorado, Maryland, Massachusetts, New Jersey, and Rhode Island. Registration is pending in Delaware, Pennsylvania, New York, and Alabama. The shipments are being made to qualified landscape maintenance businesses in several of the states that are licensed for spraying pesticides. These new customers will now evaluate the GOLD’n GRO Guardian Deer Repellent for use in their landscape spray programs. “Getting the GOLD’n GRO Guardian Deer Repellent sales started is a major milestone achievement,” said Dr. John Whitney, Itronics president. “GOLD’n GRO Guardian Deer Repellent is a direct extension of the GOLD’n GRO liquid fertilizer technology and opens up a large new, rapidly growing, market segment for the company’s products.”
Toronto-Chemtrade Logistics Income Fund has given an update on the situation at its Beaumont, Texas, sulfuric acid plant following an explosion in the plant’s furnace on Aug. 21 (GM Aug 25, p. 12) that injured two employees. Chemtrade said an investigation is underway, and that while it is too early to say how long the plant will remain shut down, it will probably be down for at least a month. Chemtrade said it carries property and business interruption insurance, and that the amounts of any claims cannot be determined until the investigation is complete and repairs are made so the plant can be safely restarted. Chemtrade said it is working with customers to assist them in obtaining alternative sources of product and logistics until it can resume production. In the meantime, the United Steelworkers Union, which represents workers at the plant, identified the two injured union members as Gene Gremillion and Robert Patilla. Gremillion. who sustained second-degree burns on his face, arms, and legs, has been released from the hospital. Patilla has two broken legs and third-degree burns, and remains hospitalized in critical but stable condition.
Tel Aviv-Israel Chemicals Ltd. reports that its board of directors has approved its intention to commence a stock repurchase program of up to five percent of its outstanding ordinary shares over a ten-month period through June 30, 2009. The share purchase program, which could amount to NIS 3.5 billion ($971 million) according to the Sept. 3 closing closing share price, is the largest ever initiated by an Israeli company. The buyback will involve the purchase of ICL’s ordinary shares in open-market and off-market transactions by ICL or its subsidiaries. ICL said the move is due to its positive financial condition and its significant cash flow. The company recently announced record financial results for the first half of 2008, including net profit of $1.05 billion on $3.6 billion in revenues and 37 percent operating margins. Cash flow generated from operating activities for the second quarter reached a record $473.5 million. The repurchase will be made with funds eligible for distribution as dividends in accordance with the Israel Companies Law, 1999. Together with the company’s recently announced $300 million dividend, to be paid Sept. 23, and other dividends totaling $288 million distributed earlier in 2008, the share repurchase program underscores the board’s faith in the company.
Bentonville, Ark.-Walmart customers will have to look someplace else in the stores for their fertilizer and other such needs because more than 1,700 of the retailer giant’s garden centers across the country are being transformed into Game Time Headquarters, stocked with items to appeal to tailgaters. Walmart officials indicated the marketing change was being made to make better use of the space during a time when gardening sales slack off and interest in the local football teams reaches a peak. They point to tailgating.com, which reports 42 percent of tailgaters spend more than $500 each season on food and supplies. So, beginning immediately, these areas will become Game Time Headquarters, where shelves will be stocked with team merchandise and décor, as well as game-time snacks and beverages. Some observers, however, caution that Walmart risks confusing shoppers and alienating garden center shoppers, even though these items will still be available during the promotion, which runs through Sept. 30.
Hurricane Gustav idled fertilizer plants in the NOLA area this past week, but only minor damage was reported. The most damage appeared to be the lost production itself, and the only question was whether it would be for one week or maybe two, as the return of electricity and/or natural gas service appeared to be taking some time.
Initially, Gustav’s net impact appeared to be about a week’s worth of production taken out of the market at area plants due to the pre-Gustav shutdowns. At midweek, sources said that plants that went down Aug. 30-31 were generally on their way back up Sept. 5-7. However, by Thursday night there were some concerns expressed that gas and/or electricity may not be up in time to meet the early next week scenario.
PotashCorp said the Geismar, La., facility continued to be without electrical power as of Sept. 4. The power company indicated that some power would be restored over the weekend, which would help with maintenance activities. The company was hopeful that the plant could resume partial operations early next week and possibly be back to normal operations by week’s end.
Terra Industries Inc.’s best guess on its Donaldsonville, La., ammonia plant’s restart was still early next week. As of Sept. 4, the company was still waiting for electricity to be restored by Entergy. In the meantime, the company was making minor repairs to the plant.
CF Industries Holdings Inc. said Sept. 4 that its giant Donaldsonville complex was still down. Like Terra, the company was still awaiting electricity.
“The local utility is working diligently to repair lines and restore power, but at this point we can’t speculate about the timing of our return to production, the financial impact of the production outage, or the impact on shipments,” Stephen Wilson, CF chairman and CEO, said Sept. 3.
The Mosaic Co.’s Faustina and Uncle Sam plants were also down. Mississippi Phosphates, at Pascagoula, Miss., which incurred the most damage during Hurricane Katrina, also reportedly went down and was in the process of coming back up last week.
Given the extreme volatility of the fertilizer market this year, you could have argued that such a rash of outages would give a boost to prices. While urea barges appeared to be up slightly, DAP continued to soften.
By Sept. 4, river conditions had improved and vessels were able to enter the Port of New Orleans regardless of draft from mile marker 303 to mile marker 20. According to the U.S. Coast Guard, there were still some restrictions at Pascagoula. Conditions at Houston, Galveston, and Texas City were normal.
Weather analysts said Gustav would have a positive impact on the corn crop as it headed toward the heartland. “August was very dry, so the area could use some rain,” explained AccuWeather.com Agriculture Expert Senior Meteorologist Dale Mohler. “A couple of inches from Gustav will help to round out the crops before harvest.”
Hurricane season became more of a parade during the past couple of weeks, and it shows no signs of easing in the peak of the season. On the eastern side of Florida, Hurricane Hanna grew to Category 1 status after sustained winds reached 75 mph, and was expected to turn to a more northerly direction before striking Florida’s East Coast, Georgia, or South Carolina. Right behind Hanna was Ike, which was by far the most dangerous of the season thus far.
Late last week, Hurricane Ike had already reached Category 4 status with sustained winds of 135 mph, and was still in the Atlantic Ocean. Conditions were ripe for continued strengthening. Early forecasts plotted landfall near the Miami area, but if it moves into the Gulf of Mexico, Ike would likely continue to grow. Josephine, which was following on the heels of Ike, was still categorized as a tropical storm late last week, but that was expected to change.
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