Cranbury, N.J.-Specialty phosphate maker Innophos Holdings Inc. reported net income for the second quarter ending June 30, 2010, of $17.6 million ($.79 per diluted share) on sales of $184 million, compared to the year-ago $17.6 million ($.81 per share) on sales of $166.8 million. The company said all parts of the business are performing well and that it is making headway in its plan to diversify sourcing of phosphate rock. The company said it signed its first new phos rock contract May 3, and has taken shipload quantities from three different potential sources and continues to advance negotiations for both short- and long-term supply. Six-month net income was $28 million ($1.26 per share) on sales of $353 million, versus the year-ago $47.8 million ($2.19 per share) on sales of $357.6 million.
Eastern Cornbelt: Ammonia pricing continued to firm in the region. Sources tagged the regional market at $525-$540/st FOB, depending on location and time of delivery, with the upper end quoted for fall prepay. One source pegged the Albany, Ill., market at the $530/st FOB level at midweek for either prompt or prepay tons. Late in the week, one regional supplier moved up its ammonia postings to $530-$545/st FOB Indiana and Illinois terminals.
Western Cornbelt: Sources continued to report rapidly firming markets for nitrogen and phosphates. “Demand is strong, and supply is not great,” said one source, describing the variables driving up pricing.
Sources quoted fall prepay ammonia firmly at the $525/st FOB level or higher in the region last week. The low end of the prompt market for ammonia was quoted in the $480-$500/st range FOB regional terminals, but higher postings were circulating.
Effective Aug. 2, Agrium’s anhydrous ammonia postings moved up dramatically, to $525/st FOB Hoag, Neb., $530/st FOB Greenwood, Neb., and $535/st FOB Iowa terminals at Early, Garner, and Whiting. In the Southern Plains market, Agrium’s ammonia terminals firmed on that date to $470/st FOB Borger, Texas, $510/st FOB Mocane, Okla., $515/st FOB Conway, Kan., and $520/st FOB Clay Center, Kan.
On Aug. 6, another regional supplier moved its ammonia postings up to $520-$545/st FOB in the region, with the low in Nebraska and the upper end out of Iowa terminals.
Northern Plains: Anhydrous ammonia was in tight supply in the region. North Dakota sources reported no delivered pricing available out of Beulah, Leal, or Brandon, Manitoba, in early August. “Our biggest problem is getting an ammonia price,” said one contact.
Where tons were available, sources put the market at $505-$515/st FOB regional terminals for prompt business. Higher postings were announced from some suppliers in early August, however. Effective Aug. 2, Agrium’s anhydrous ammonia postings firmed to $535/st FOB Mankato, Minn.
On Aug. 6, another supplier moved its postings up to $520/st FOB North Dakota terminals and $530-$545/st FOB in Minnesota.
Great Lakes: Regional sources quoted ammonia pricing to the dealer at $530-$545/st FOB last week. A Wisconsin source reported the low end of that range for either prompt or fall prepay tons.
Black Sea: With the Ukrainian producers shut down, material from the area is limited to the Russian plants. A result of the low supply is a rising price.
Sources now say $350/mt FOB was done out of Yuzhnyy.
If the price could stabilize in the upper $340s/mt FOB to low $350s/mt FOB, sources say the Ukrainians could justify restarting their plants.
The official line is that the plants currently shut down are undergoing routine maintenance, but at a slow pace. The producers have not seen any reason to rush the plants back into full operation while prices remained under $320/mt FOB, which is seen as the break-even point for production.
Now with prices moving up, some of the producers might start looking at beginning operations again. The problems they will face, however, are twofold.
The first problem is that natural gas prices are expected to go up in the fourth quarter and again early next year. These increases will raise the cost of producing ammonia, as well as the break-even point.
The second problem is that once more ammonia starts flowing from the plants, there is no guarantee that demand will be strong enough to absorb the tonnage without a drop in prices. Any drop in the price from the current levels could once again force producers to shut down – or lose money with each ton sold.
Middle East: Recent business in the region indicates that the price is moving up. And moving smartly.
FACT/India closed a deal with Qafco late last month to buy 7,500 mt at $360/mt CFR. The initial offer was $365/mt CFR, but subsequent talks knocked off five dollars. The estimated netback on the deal is $330-$335/mt FOB.
Almost immediately, producers grabbed this increase in price with enthusiasm. Sources report that bids at $335/mt FOB were being rejected by mid-week, with an eye on a target price of $360/mt FOB.
Traders said a price increase at this time is reasonable, but $360/mt FOB, they say, is too much too soon.
Still, by Thursday of last week, two deals at $340/mt FOB seemed to indicate that the producers’ target price might be achieved in the not-too-distant future.
Fertil sold 15,000 mt to Mitsui at $340/mt FOB. Sabic sold 5-7,000 mt at the same price.
By Friday, producers were rejecting bids of $340/mt FOB. The bottom line, said one producer, is that everyone in the area is sold out through August and into September. Only a price well above the current market norm might entice a supplier to break loose a cargo.
With demand remaining strong in India and East Asia, sources say there is no reason for producers not to be aggressive in their pricing ideas.
One source noted that even Iran is no longer looking at providing massive discounts to move its product.
Iranian tons will still be offered a few dollars off what the Arab producers are offering because of the extra expense in stepping around the ban of using U.S. dollars to purchase any Iranian product. But the discount will not be as deep as what the market saw just a couple of months ago.
Some sources report an explosion at the Iranian Pardis I facility, that killed five last week, will not affect output dramatically. Media reports say the explosion was caused by a ruptured gas pipeline. The explosion will cause some temporary reduction in ammonia production.
However, others were skeptical, citing the problem with getting accurate information out of Iran. These plants will be taking up much of the ammonia that had gone to the international market earlier.
Asia: Demand is stepping up again.
Sources report that Taiwanese buyers are once again beginning to ask for the “plus 10 percent” portion of their contracts.
At the same time, the South Korean buyers remain strong and steady. No new increase in demand is expected in Korea for a while. For now, the buying is just what has been contracted for. Purchases of tons beyond the contracts might start as early as October, said one source.
Gresik of Indonesia reportedly bought a cargo from Transammonia at $400/mt CFR.
The price is seen as an indicator of continued strong prices in the area. Sources say the tonnage most likely came from Malaysia. But even if it came from the Arab Gulf, sources say the delivered price offers a good margin for a decent profit.
UREA
U.S.Gulf: Urea barges remained firm last week, with players calling the market $290-$295/st FOB. Prills were reported to be available and being offered in the same range.
Eastern Cornbelt: Granular urea was pegged in a broad range at $310-$330/st FOB, with the low out of spot river locations in Illinois and the upper numbers out of inland points in Ohio.
Western Cornbelt: Granular urea pricing was tagged at $315-$325/st FOB regional terminals to the dealer. One Iowa source quoted dealer pricing at $320/st FOB in his location last week. Effective Aug. 4, Koch’s urea posting FOB Enid, Okla., firmed to $315/st. That level was slated to firm to $320/st FOB on Aug. 7.
Northern Plains: Granular urea was pegged at $315-$320/st FOB the Twin Cities, with delivered tons quoted at the $340/st level in South Dakota. Agrium’s July 23 urea postings included $345/st FOB North Dakota warehouses at Alton, Carrington, Colfax, Scranton, and Grand Forks, and $350/st rail-DEL in Minnesota, Wisconsin, and the Dakotas.
Great Lakes: Granular urea was pegged at $315-$330/st FOB, with the low in Wisconsin and the upper end out of Michigan terminals. Delivered urea was quoted at the $325/st level to points in central Wisconsin.
Northeast: Urea pricing in the Northeast region was up from last report. Sources tagged the dealer market at $330-$335/st FOB Philadelphia and out of warehouses in western Pennsylvania.
Indonesia: Gresik opened and closed a tender last week for 15,000 mt.
The tender was called after the company was forced to scrub another tender late last month over a misunderstanding with the government. The issue appears to have been tax related.
Sources say the most likely winner will be Summit.
Twelve companies in a series of bagged bulk bids participated in the tender.
The estimate on bag costs is $7-$8/mt.
Bagged material is seen as heading to either Vietnam or Bangladesh. If the latter, sources say the bags will have to be printed with BCIC markings, which could explain the higher bag rate.
No matter what the price of bags, the price of Indonesian tons clearly showed a drop from the previous tenders, when the bulk price range was $269-$273/mt FOB. This tender shows a price of $267-$268/mt FOB.
Profeta, a regular participant in these tenders, did not bid.
Gresik Selling Tender for 15,000 mt
Bidding Company
Quantity (mt)
US$/mt FOB Bulk
US$/mt FOB Bagged
BBSC
5,000
265.50
Trada
5,000
265.00
Youngwoo
15,000
264.00
Samsung
15,000
262.75
Swiss Singapore
15,000
258.50
Liven
15,000
257.00
Parnaraya
15,000
235.00
Limardi
15,000
275.75
Summit
15,000
275.65
Universal
15,000
272.40
Petrosida
15,000
272.00
Indevco
5,000
262.00
New selling tenders from Kaltim and PIM are expected soon.
The best guess is that the two companies will once again offer 100-120,000 mt for sale in the next 2-3 weeks.
Middle East: Producers continue to claim full order books into September. And the price keeps moving up.
Late last month, Helm reportedly covered its award to TCP/Pakistan with material from Qafco and Fertil at $275/mt FOB.
Until Friday, nothing else emerged in the spot or public market.
By Friday morning, sources reported Egypt sold a cargo at $292/mt FOB. Earlier in the week, Egypt reportedly did a deal at $280/mt FOB.
The Helm deal confirmed what people were saying about the way the regional market was moving.
Earlier last week, sources said the granular market was moving to $275/mt FOB, with a good chance of going to $280/mt FOB by week’s end.
At least, Arab Gulf producers would only entertain bids that now start at $280/mt FOB, say sources.
The Egyptian deal now seriously places the Arab Gulf price in the low $280s/mt FOB.
Industry observers say that the AG equivalent to the Egyptian price is calculated from a delivered price into Europe.
Egypt has been moving strongly into the European market because it has more convenient transportation. The difference in FOB-equivalent prices between the Egyptian and the Arab Gulf producers is the distance vessels have to travel.
Other granular deals reportedly made in the past 14 days include a cargo to Argentina with an estimated netback of $275/mt FOB, and another to the United States at $280/mt FOB.
Once discussion of these deals is done, sources say the market talk shifts to “what if” scenarios. Traders and producers talk about “what if” India calls a tender. Or “what if” demand from the United States or Australia picks up.
One spoiler in the group – Iran – will be out of the export market for the rest of this month.
Deals signed with India will keep the Iranian producers out of any spot sales or tenders that might call for August or early September shipments.
The Iranians have stopped offering deep discounts to secure business. Some discounts to the Arab producers may still have to take place to handle currency issues. But the discounts are now expected to be minimal.
The previous premium on prills over granular seems to have gone away, say sources.
Late last month, industry watchers said the dearth of prills from the area gave prills a premium. But by last week, the market reverted to its traditional role of granular running $5-$10/mt ahead of prills. Sources could not report, however, on any specific deals for prills.
Black Sea: Sources report $250/mt FOB has been done. Producers are now talking about $260/mt FOB.
A call for 300-400,000 mt from Nigeria could help offer support to the area market. Yuzhnyy traditionally supplies the tons to the African buyer.
Add this tender call to a full line-up in Yuzhnyy for August as tons flow to Europe, India, and Pakistan. Some cargoes are reported for Latin America as well, but only occasionally.
The Latin American buying requests are coming in bits and pieces. Sources report no large orders have yet been placed. It seemed to some Asian traders as if the Latin buyers were just buying what they need when they need it instead of taking any forward positions.
And many traders are agreeing with the Latin America assessment.
Once the shipments to India and Pakistan are done next month, sources say demand for Black Sea urea could slide.
Pakistan: The full impact of the devastating floods in Pakistan on the agricultural infrastructure will not be known for a while.
Sources speculate that even if the flooded fields do not recover in time, Pakistan will still need all the urea it has contracted for – if for no other reason than to get a solid jump on the next application season.
Sources say there is little chance the flooded fields will recover in time to force a full growing season.
Pakistan is done with public tenders for material now that TCP has concluded the last of its tenders. The tenders will bring in 400,000 mt to supplement domestic production and the tons Sabic will send under a Saudi-Pakistan aid package.
Industry watchers say Sabic may wait to see what Pakistan’s needs are now before sending its tons.
India: Sources keep talking about another Indian tender by the end of August.
The best guess is that a tender called in late August or early September could be used to get offers of Chinese tons just as the export duty once again drops to 7 percent. The tender might allow for shipments throughout the last quarter of the year.
Some observers note, however, that India has no real need to call a tender. Reserves are reportedly high enough to allow the country’s buyers to sit on their hands for some time.
Still, said one source, because India is so comfortable, a buyer could call a tender and scrap it with no serious repercussions.
If the prices offered are not to the buyer’s liking, said another source, the buying house could just scrap the tender and wait for lower prices as market psychology and supply and demand take effect.
China: Reports are circulating that Chinese producers are now saying $275/mt FOB has been done for early September.
If true, the price shows a dramatic increase in prices out of China.
This month opened with prices stable in the upper $260s/mt FOB and talk of $270/mt FOB by mid-month.
Sources report delays in the northern loading ports of 3-5 days.
Export sales remain brisk. The current duty of 7 percent will remain in effect through September 15. The duty will jump to 110 percent for 30 days, and then drop back to 7 percent for the rest of the year.
Bangladesh: BCIC called a tender to close August 30 to cover a shortfall of 75,000 mt granular from its June 22 tender.
Industry watchers are not surprised that the full quantity was not covered from the previous tender. Traders have long complained about the length of time it takes BCIC to process the paperwork once an award is given
NITROGEN SOLUTIONS
U.S. Gulf: UAN was hard to find. Sources called barges $200-$205/st FOB ($6.25-$6.41/unit).
Eastern Cornbelt: UAN was in tight supply and pricing continued to ratchet up, prompting one source to say that “those who were invited to the dance four weeks ago to buy fill tons were the lucky ones.”
Out of Illinois terminals, the UAN-32 market was quoted in a broad range at $230-$245/st ($7.19-$7.66/unit) FOB last week, depending on location. In Indiana and Ohio, however, one supplier was said to be offering limited UAN-28 tons early in the week for as low as $6.95/unit FOB Mt. Vernon and $7.05/unit FOB Cincinnati. As the week advanced, however, those low numbers were off the table, and the Cincinnati market for UAN-28 was more commonly pegged in the $210-$214/st ($7.50-$7.64/unit) FOB range. Rail-delivered UAN-32 was quoted in the $255-$263/st ($7.97-$8.22/unit) range in Ohio and Indiana.
Sources said postings from one supplier for the July 30 through Aug. 6 order and shipping period included $7.25/unit FOB in Illinois and $7.65/unit FOB in Ohio, with forward pricing in the $7.40-$7.50/unit range FOB Illinois terminals for late fall. “There is a lot of speculation going on with pricing going to $250/st ($7.81/unit) per ton by October out of Illinois River terminals,” said one contact.
Western Cornbelt: UAN-32 pricing had reportedly firmed to $230-$250/st ($7.19-$7.81/unit) FOB for prompt cash tons, with the low in Iowa and the upper end in Missouri to the dealer. Effective Aug. 6, Koch’s postings FOB Dodge City, Kan., firmed to $210/st ($7.50/unit) for UAN-28 and $240/st ($7.50/unit) for UAN-32.
Northern Plains: UAN was also in tight supply, and spot quotes were difficult to come by. “There are not a lot of available tons around right now for sale, and producers are tight lipped about pricing anything for prompt shipment,” said one source. A North Dakota contact quoted delivered UAN-28 at the $255/st ($9.11/unit) level from Manitoba, representing a $10/st increase from last report. Another pegged UAN-28 FOB Minnesota terminals in the $218.40-$224/st ($7.80-$8.00/unit) FOB range, but was unsure if tons were still available at that level in early August.
Great Lakes: Wisconsin sources tagged the low end of the UAN-32 market at $255/st ($7.97/unit) FOB last week. In Michigan, UAN-28 was quoted in the $233-$236/st ($8.32-$8.43/unit) FOB range. One Wisconsin source quoted delivered UAN-32 at the $255/st ($7.97/unit) level as well, noting that the price had firmed from $237/st ($7.41/unit) one week earlier.
Northeast: Sources reported low UAN inventories at regional terminals, and minimal movement. The UAN-30 market remained in the $200-$205/st ($6.67-$6.83/unit) range for the last done business, but sources said few suppliers were offering tons in early August. Out of terminals in upstate New York, UAN-32 was posted at $248/st ($7.75/unit) FOB to the dealer.
Western U.S.: Agrium’s UAN-32 postings firmed on Aug. 2 to $275/st ($8.59/unit) DEL in Washington, Oregon excluding Malheur County, and northern Idaho; $280/st ($8.75/unit) rail-DEL and $285/st ($8.91/unit) truck-DEL in southern Idaho; and $285/st ($8.91/unit) DEL in Montana and northern Wyoming. Agrium’s UAN-28 posting also moved on Aug. 2 to $249/st ($8.89/unit) DEL in Montana and northern Wyoming.
In California, Agrium’s UAN-32 postings moved on Aug. 2 to $268/st ($8.38/unit) FOB Sacramento, $290/st ($9.06/unit) truck-DEL in Central California, and $295/st ($9.22/unit) truck-DEL in Northern California.
AMMONIUM NITRATE
Western Cornbelt: Ammonium nitrate remained at $290-$300/st FOB in the region.
Pacific Northwest: Agrium’s CAN-17 posting FOB Kennewick, Wash., firmed on Aug. 2 to $250/st. Agrium’s 20-0-0 ammonium nitrate solutions posting FOB Kennewick also firmed on that date to $168/st.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate was tagged at $180-$190/st FOB in the region. A fill program offered earlier in July at the $170/st FOB or rail-DEL level was reportedly no longer available.
Western Cornbelt: Granular ammonium sulfate was quoted at $180-$185/st FOB in the Western Cornbelt.
Northern Plains: Ammonium sulfate pricing was up from last report. Sources pegged the market at $220/st FOB and $225/st DEL in the region. Dakota Gasification moved its postings up on Aug. 2 to $225/st DEL in Minnesota and the Dakotas. Agrium was also at the $225/st DEL level in North Dakota and Minnesota.
Great Lakes: Ammonium sulfate fill tons that were available in July at the $170/st FOB or rail-DEL level in the region were reportedly no longer available last week. Sources quoted the granular ammonium sulfate market at $180-$190/st FOB, but one said higher postings were likely in the near term. Agrium’s July postings included $225/st DEL in Wisconsin.
Northeast: Several contacts put the ammonium sulfate market at $160-$165/st FOB production points, but it was not clear if fill tons could still be ordered at that level. The same was true for delivered granular ammonium sulfate – sources reported a $190/st DEL level for summer fill, but were not certain orders could still be placed at that level.
PHOSPHATES
Central Florida: Anyone looking to buy phosphate in Central Florida will be out of luck for the next few months. Although those with contracts should be able to purchase what they need from a producer, other buyers will have few options.
One trader who was looking to buy from another third party said he was only able to get a commitment for 150 st in September, which was not even considered prompt, and had to pay $450/st FOB.
Both CF and Mosaic were sold out until sometime in October, primarily because of the large number of contracts for export delivery. Inventories remained extremely low last week.
To make matters even worse, Mosaic plans to shutter its South Fort Meade mining operation after a federal judge at Jacksonville approved an appeal of the permit issued by the U.S. Army Corps of Engineers for expansion of more than 10,000 acres. The company still has rock supply on hand and can obtain additional supplies from North Africa, but the move to close the mine would reduce supply in the near future. Mosaic asked the judge to stay the order and allow it to continue mining operations in the disputed area.
The Central Florida DAP price range increased from the previous week’s $410-$415/st FOB last week to $420-$430/st FOB. CF Industries had nothing available for prompt delivery. Mosaic had no posted price and was not making prompt sales last week. PCS was making sales at “competitive prices.” Agrifos increased its asking price to $470/st FOB for DAP, while railcars were about $5/st FOB less.
U.S. Gulf: With supplies tight, prices on the river continued to escalate last week; that situation brought out fears of a return to the skyrocketing prices of 2008, when DAP was selling for about $1,200/st FOB.
The fear was expressed by several sources, who pointed out the shortage of phosphate inventories and the high price for crops such as corn, wheat, and soybeans. The price of corn for December 2010 jumped up from around $3.90/bushel a week earlier to $4.15/bushel, and $4.37/bushel for December 2011. Meanwhile, Russia banned the export of grain, which pushed up the price in the U.S. Late last week, wheat was selling for $7.85/bushel for December 2010. Some of the demand for feed wheat could be transferred to feed corn, which was working to push up prices for both crops. Soybeans were fetching $10.44/bushel for prompt delivery. A couple of sources said wet weather in some areas had marginalized the corn crop, which could work to push the price even higher.
For farmers, it meant they would have more money this year to buy fertilizer for next season, but phosphate applications could be reduced if the price rose too high.
A source commented that most of the sales made during the past week were done by traders, and some of the barges were traded trader to trader, and not sold to dealers.
Gavilon was believed to have brought in a Moroccan phosphate vessel, with some of the product being resold on the market, while most would be going into Gavilon’s own warehouses.
With NOLA phosphate barges moving up rapidly, warehouse prices were being upgraded to reflect the higher cost. Late last week, most were charging $480-$485/st FOB.
Early last week, NOLA DAP barges were purchased as low as $450/st FOB, but toward the end of the week barges were bringing as much as $460/st FOB. Based on confirmed sales last week, the NOLA DAP range was $450-$460/st FOB, compared to the previous week’s range of $440-$442/st FOB. Expect higher prices this week.
Eastern Cornbelt: DAP pricing to the dealer had reportedly firmed to $475-$485/st FOB, with MAP $10/st higher. 10-34-0 was quoted at $355-$375/st FOB in the region.
Western Cornbelt: Sources quoted the DAP market at $475-$485/st FOB in the region to the dealer, up $10/st from last report, with the upper half of the range reported in western Iowa and the low end out of river terminals in eastern Iowa and Missouri. MAP was $10/st higher than DAP.
10-34-0 was pegged in the $355-$365/st FOB range in the region, with the upper end in Iowa.
Northern Plains: DAP pricing had firmed to $475/st FOB in Minnesota, with MAP $10/st higher. One regional supplier was reportedly taking DAP orders through Aug. 6 at $475/st FOB Pine Bend, Minn., with MAP at the $485/st FOB level. Delivered MAP in North Dakota was quoted at the $505/st level from Canada, while South Dakota sources pegged delivered MAP as high as $510/st last week.
10-34-0 had firmed as well. Sources quoted the market at $360-$385/st FOB, with the low in Minnesota and the upper end reported by North Dakota sources FOB Grand Forks. Delivered 10-34-0 was tagged at $385-$390/st in North Dakota from Manitoba.
Agrium issued a new price list for phos acid, with super phosphoric acid and merchant grade acid moving on Aug. 1 to $795/st DEL in Minnesota and the Dakotas.
Great Lakes: DAP pricing had firmed to $475-$485/st FOB regional warehouses, with the low in Wisconsin and the upper end in Michigan. A Wisconsin source quoted delivered DAP at the $485/st level as well. MAP was $10/st higher than DAP. 10-34-0 was quoted at $380/st FOB and $390/st DEL in the Wisconsin market.
Northeast: Phosphate pricing was up some $20/st from last report, and warehouse inventories were tight. Citing those two factors, plus the region’s drought conditions, one source said growers in some areas may forego DAP and MAP applications this fall in favor of spreading manure from local dairies.
Sources quoted DAP at $475-$485/st FOB, with the low out of warehouse locations in western Pennsylvania and the upper end FOB E. Liverpool, Ohio. One source said the E. Liverpool number was doable early in the week, but tons were no longer available at midweek. The MAP market was $10/st higher than DAP, where available.
10-34-0 was pegged at $350-$355/st FOB, with the upper end out of tanks in upstate New York.
Western U.S.: Agrium’s MAP postings firmed on Aug. 4 to $505/st DEL in Montana and Wyoming; $510/st DEL in southern Idaho, Utah, Nevada, and Oregon’s Malheur County; and $510/st FOB and $515/st DEL in Washington, northern Idaho, and Oregon excluding Malheur County. Agrium’s MAP postings in California and Arizona firmed on Aug. 4 to $520/st FOB warehouse or rail-DEL. Those levels represent a $20/st increase from the company’s July 26 postings.
U.S. Export: Last week, PhosChem continued sitting on the sidelines of the export market due to low inventories, but Agrifos managed to make one export sale of 6,000 to 7,000 mt into Central America at $496/mt FOB. That price was significantly higher than the $475/mt FOB PhosChem made a few weeks earlier. The next export sale would probably hit or exceed $500/mt FOB.
Inventories at Central Florida were extremely low last week, and producers will probably have little or nothing available for prompt sales until October or November.
Latin America continued to look the most promising for new sales, but the price will have to increase to lure producers to jump back into the market.
The export DAP price range increased last week from a flat $475/mt FOB to another flat level of $496/mt FOB, based on the most recent transaction. Watch for higher prices on the next deal.
India: Sources report that India is pushing back hard on prices. Deals in the mid $470s/mt CFR are reportedly being done. Industry observers say the combination of a strong negotiating position by the Indians and fluctuations in currency exchanges is allowing Indian buyers to bring in cargoes at prices well below the $500/mt CFR maximum price allowed for subsidized material.
The new pricing idea is well below the $490/mt CFR Indian buyers had to pay just 45 days ago, say sources.
The downside to shipping to India at this time is the reported port delays of 4-5 days for unloading vessels.
POTASH
Eastern Cornbelt: Potash remained at $380-$390/st FOB most regional warehouses, but pricing may be “starting to make a move, slowly,” according to one source. There were unconfirmed reports that as of Aug. 1 at least one producer was no longer taking orders at the summer fill levels of $390/st FOB and $400/st DEL.
Western Cornbelt: Potash was pegged at $385-$397/st FOB regional warehouses to the dealer, with the low reported in Iowa for red granular tons and the upper end in the Missouri market for white granular potash. With pricing down $130/st from year-ago levels and most sources describing brisk summer fill business, fall demand for potash in the region could be big, sources said.
Northern Plains: Minnesota sources tagged potash at the $390/st level FOB warehouses, but one contact said at
least one producer was now up $20/st on all new orders. That pricing adjustment was not confirmed, however. North Dakota dealers quoted delivered potash in the $400-$410/st range from Saskatchewan mine locations.
Great Lakes: Agrium’s warehouse postings for red premium potash for the July 1 through Sept. 30 fill period included $390/st FOB Saginaw, Mich., and $400/st rail-DEL in Michigan and Wisconsin. Summer fill postings from PCS Sales for the same July 1 through Sept. 30 period included $400/st rail-DEL in Wisconsin and Michigan, with a $20/st increase slated for Oct. 1.
Northeast: Sources quoted potash at $390-$407/st FOB in the region, with the low for red granular tons in western Pennsylvania and the upper end out of spot Maryland locations for white granular potash. One source also quoted a $410/st railDEL range for summer fill tons of red potash, but wasn’t sure if orders could still be placed at that level in early August.
NPK
India: Under NFL’s recent tender, the following offers were made for NPK 20-20-20: STC, $302/mt CFR WC/EC; Quantum, $323/mt CFR WC/ECI; Swiss Singapore, $336.45/mt CFR WC/ECI; Agora, $319.95/mt CFR ECI; and Balderton, $319.20/mt CFR WCI and $314.20/mt CFR ECI.
For NPK 12-32-16, Hyundai and Balderton offered a common price of $498/mt CFR ECI and $502/mt CFR WCI.
RCF has announced tender for three lots of 13-15,000 mt phosphate rock. The tender closes Aug. 16.
SULFUR
Tampa: Now that sulfur suppliers and phosphate producers have signed off on the new, third-quarter contract pricing for molten delivered to Tampa – which was down $50/lt, to $95/lt – quiet was the prevailing mood in the industry.
Meanwhile, refineries were continuing to produce at better than 90 percent of capacity, and supply and demand were in balance. Sources said industrials, as well as phosphate producers, were getting as much sulfur as they needed.
Prices on the world market were beginning to head north again, based primarily on sales to China, which was paying more than it had just a month ago.
El Monte, Calif.-Navistar International Corp. is reporting that the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) are taking a look at ways to close compliance loopholes in 2010 urea-based Selective Catalytic Reduction (SCR) systems, including that vehicles are able to operate for long periods with empty urea tanks. Navistar, which has its own Exhaust Gas Recirculation Nitrogen Oxide (EGR NOx) control system, said the findings are backed up by independent testing that shows that new commercial vehicles that must use liquid urea to meet federal NOx emissions standards can operate effectively when urea is not present, and at the same time vehicles throw off levels of NOx as much as 10 times higher or more than when urea is present. Navistar said the research was conducted by EnSIGHT, an independent environmental consulting firm, using two long-haul vehicles and one heavy-duty pickup, all of which use SCR technology. “Navistar first identified these loopholes to the agencies and also presented our concerns at a July 20 workshop here,” reported Jack Allen, president of Navistar’s North American truck group. “We will be working with the EPA and CARB to ensure full environmental compliance. It’s obvious, however, that these trucks can operate effectively without liquid urea, and that under these and other conditions, SCR NOx emission control is turned off. We’re calling on the EPA and CARB to assure that all vehicles, not just ours, work when they are supposed to be working.”
Carteret, N.J.-Prime Lube Inc. is expanding distribution of its BlueSky diesel exhaust fluid (DEF) by signing on Atlantic Bulk Carriers of Wilmington, Del., as distributor on the Del-Mar-Va peninsula, which includes the eastern shore areas of Delaware, Maryland, and Virginia from the Chesapeake Bay to the Atlantic Ocean. Prime Lube said Atlantic Bulk holds a letter of adequacy from the U.S. Coast Guard to deliver fuel “over the water.” It has the unique authority to pump fuels and lubricants from the truck to the boat, supplying diesel, heavy marine fuel oils, lubricants, jet fuel, and gasoline to marine vessels and their onboard helicopters and airplanes. The company serves private and commercial vessels, including cruise ships and bulk container vessels, as well as the federal government.
San Francisco-The San Francisco Public Utilities Commission (SFPUC) says a $25,000 study shows that biosolids provided free to gardeners, school groups, and homeowners are not full of toxins, as activist groups are claiming, but compare favorably with commercial products on the market. According to an SFPUC statement, the comprehensive study was in addition to required federal and state tests prior to each giveaway. The biosolid compost was compared with different brands of soil amendment purchased off the shelf from gardening/hardware stores. All samples were analyzed by laboratories certified by the California Department of Public Health (CDPH) Environmental Laboratory Accreditation Program (ELAP). The test results show that the biosolids compost compares favorably to commercially available products. None of the priority pollutants found in any of the samples approached or exceeded regulatory limits or risk assessment criteria. Spokesperson Tyrone Jue said the tension over the safety of the biosolids escalated in March, when the Organic Consumer Association organized a demonstration at city hall in which protestors showed up at the mayor’s office in hazmat suits and gloves to give the city government back the free product by dumping it on the steps of city hall. The result was that the program was suspended while the compost underwent further analysis. Jue thinks that this info should comfort people. He told the local press, “It goes to show that just because you pay a lot of money for a product at a store does not mean that it is any better.”
Braintree, Mass.-The Occupational Safety and Health Administration (OSHA) reached a settlement agreement last week with American Seafoods International over what the agency claimed were willful and serious violations of safety and health standards at the company’s New Bedford, Mass., processing facility, stemming from process safety management deficiencies. According to OSHA Boston area spokesman Edmond Fitzgerald, the seafood company, which faced a total of $279,000 in fines – chiefly for the handling of anhydrous ammonia in the plant’s refrigeration system – agreed to correct all hazards and pay an amended fine of $175,000. OSHA’s inspection found that the plant’s Process Safety Management (PSM) program, prescribing what employers must do to address hazards associated with large amounts of hazardous chemicals, was incomplete, lacked operating procedures, and did not provide for adequate inspections of process equipment. OSHA’s inspection identified failure to update process safety information, failure to conduct an incident investigation of a January 2001 ammonia leak, failure to certify or evaluate the PSM program every three years as required, failure to establish and implement procedures to maintain changes in the process, and failure to provide and document employee training. American Seafoods also agreed to more training and review. “The requirements of OSHA’s PSM standard are stringent and comprehensive because an ammonia leak could have a severe or catastrophic effect on the plant’s workers,” said Brenda Gordon, OSHA’s area director for Boston and southeastern Massachusetts. “In this case, American Seafoods International knew that aspects of its PSM program were incomplete or inadequate and did not take steps to address those deficiencies. It is imperative that this employer scrutinize, update, and properly maintain each element of the process to minimize hazards and protect its workers’ safety and health.”
Washington-Alcoa Inc. is one of six companies selected by the U.S. Department of Energy (DOE) to participate in finding ways to turn captured industrial carbon dioxide (CO2) emissions into useful products. Alcoa has been awarded a $12 million grant to study methods to convert CO2 into a carbonate product that can be used as fertilizer, soil additives, or construction fill material. According to DOE, Alcoa’s pilot-scale process will demonstrate the high efficiency conversion of flue gas CO2 into soluble bicarbonate and carbonate using an in-duct scrubber system featuring an enzyme catalyst. The bicarbonate/carbonate scrubber blow-down can be sequestered as solid mineral carbonates after reacting with alkaline clay, a by-product of aluminum refining. The pilot-scale project will take place at Alcoa’s Point Comfort, Tex., refinery, which produces alumina, the primary product in aluminum. Alcoa will contribute $3 million to the project, and scientists from the Alcoa Technical Center in Upper Burrell will lead the project, said spokeswoman Judy Smydo. DOE Secretary Steven Chu described the objective of the Alcoa and other projects, which are funded with $106 million from the American Recovery and Reinvestment Act and matched with $156 million in private cost-sharing funds, as designed to demonstrate the potential opportunity to use CO2 as an inexpensive raw material instead of causing pollution problems.
Deerfield, Ill.-CF Industries Holdings Inc. said Aug. 6 that it has agreed to the terms of a consent decree with the U.S. Environmental Protection Agency (EPA) and the Florida Department of Environmental Protection involving compliance with the Resource Conservation and Recovery Act (RCRA). The agreement resolves a Notice of Violation (NOV) issued in 2005 that alleged that certain practices at the company’s Plant City, Fla., phosphate complex violated RCRA. The consent decree will not be final until it has been approved by a federal court. Under the terms of the agreement, the evolution of which has been described in previous disclosures, the company will pay a civil penalty of approximately $700,000; modify certain operating practices; undertake capital projects; and accelerate approximately $55 million of funding for future closure, maintenance, and monitoring activities. Additional funding may be required in future years. “We are pleased to have resolved this issue through a negotiated settlement that reaffirms our commitment to environmental stewardship,” said Stephen Wilson, CF chairman, president, and CEO. “We have always sought to lead the industry in implementing practices that protect our natural resources, such as construction of our industry-first fully lined phosphogypsum stack system at Plant City.” The 2005 NOV arose from EPA’s broad phosphate industry enforcement initiative. The company said that it believes it was in the best interest of shareholders to negotiate this pioneering agreement in response to the initiative. In doing so, the company has not admitted any violation of law or regulation.
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