Formerly Argus FMB Ammonia Market summary Prices continue to diverge across regions Supply tightness in southeast Asia and the Middle East have pushed delivered prices up this week in east Asia while limited demand and strong supply availability continue to weigh on prices in the Americas and Baltic. The east Asia cfr price rose to $230-270/t, driven up in the high end by a 30,000t contract shipment to Japan from Indonesia. Japanese trader Mitsui had bought two 15,000t cargoes from Kaltim at $220/t fob in July, priced on a formula basis and will deliver the cargo to Japanese buyers later this month at a freight rate of $50/t. Interest in September cargoes from east Asia is emerging and buyers appear to be targeting Middle East suppliers, with major turnarounds still ongoing in Malaysia and Indonesia. China's Convestro is in the second stage of a tender to secure 130,000t/yr starting 2018 on a term contract basis. The contract is for a year with the mutual option to extend for another two years. Contractual netback price indications from suppliers in the Middle East have been around $185-220/t this week. Despite signs of growing spot interest in Asia and Middle East suppliers pushing up their offer prices, there have been no fresh spot transactions this week to support a significant increase in the Middle East fob price. prices Ammonia prices $/t 3 Aug 27 Jul ± fob Ventspils 185-190 225-38 Yuzhny 190 190 nc North Africa 205*-210* 205-210 nc Middle East 185-215* 180-210 5 US Gulf domestic (barge) $/st 170-175 170-175 nc Caribbean 150 150 nc SE Asia and Australia spot 200*-220* 190-210 10 SE Asia and Australia contract 210-220 210-220 nc cfr NW Europe (duty unpaid) 240*-245 240-245 nc NW Europe (duty paid/d free) 253*-258* 253-258 nc North Africa 190*-210* 190-210 nc India 215-240 215-240 nc East Asia (excl Taiwan) 230*-270 209-230 30 Taiwan 225*-255* 219-240 10 Tampa 190 190 nc US Gulf 195 195 nc This price range includes a duty level set at 5.5pc *Indicative Price, ** all formula, *** old business, na - Not available Yuzhny vs Middle East fob price 500 Middle East fob Yuzhny fob $/t Highlights: Baltic contract prices fall in August p2 400 Indian buyers remain focused on Middle East p3 CF starts supplies to Mosaic p5 300 hh Mosaic phosphate production rises p8 200 100 30-Apr-15 19-Nov-15 16-Jun-16 12-Jan-17 03-Aug-17 View the methodology used to assess ammonia prices at www.argusmedia.com/methodology. Your feedback is always welcome at fertilizer@argusmedia.com
Issue 17-31 Thursday 3 August 2017 The August Baltic contract price has been settled at around $185-190/t fob Ventspils, pushed down by limited demand in Europe and low prices offered in the Americas. The Yuzhny fob price is flat with no new spot transactions this week. US phosphate producer Mosaic's ammonia supply agreement with nitrogen producer CF Industries has gone into effect. Outlook: Mixed EUROPE Ukraine Activity out of Yuzhny has remained largely focused on term contracted supplies. Supplies at Yuzhny are estimated to reach 100,000t in August and is likely to be maintained for the coming months, unless the Yuzhny fob price increases. The Yuzhny fob price is assessed unchanged this week at $190/t. Last week's scheduled maintenance at the Togliatti-Odessa pipeline has been completed and Togliatti Azot is back to operating four out of its seven ammonia units. Baltic The August Baltic contract price has been settled below $190/t fob Ventspils, reflecting limited demand and low prices in the Americas. Turkey Turkish petrochemicals group Petkim has issued a tender today seeking 6,000t for delivery 8-12 September. The tender closes on 8 August. The last tender by the buyer at the end of June was awarded to trader Ameropa at what was heard to be around $240-245/t cfr. Yuzhny, Ventspils and NWE prices 400 350 300 250 Yuzhny fob Ventspils fob NWE cfr $/t hhh A Turkish fertilizer trader is heard to be making enquiries for a 23,000t vessel term charter to deliver ammonia into India, Morocco and Europe. It is believed the trader intends to source the cargoes from producers in the Middle East, Black Sea and Baltic. UREA MARKET SUMMARY Firm market conditions are supporting urea and allowing producers to raise prices gradually. There is little unsold urea available from producers for August outside China and prices are set to firm further during the month. Two spot cargoes of Arabian Gulf granular urea have been sold over the past week at $202-203/t fob, $12-13/t up on the July sale to India. Egyptian prices have risen from $205/t to $214/t fob in heavy selling for September. Prices in Brazil have moved up to $214-215/t cfr, around $7/t up on last week Nola barge prices have spiked this week to $192/st fob, equivalent to $206/t cfr, albeit in thin trading which allows single barge sales to move the market. Yuzhny vessel line-up June-Aug 2017 Vessel Volume Shipper Destination Loading date Gas Cobia 23,400 Ameropa 1-Jun Gaschem Stade 23,000 TBD Jorf Lasfar 3-Jun Gas Snapper 23,400 TBD 7-Jun Navigator Eclipse 23,400 OCP Turkey 9-Jun BW Nice 40,000 Asia 13-Jun Gas Manta 23,400 Ameropa Jordan 13-Jun Navigator Eclipse 23,400 Morocco 23-Jun Gas Snapper 23,400 23-Jun Kent 23,400 27-Jun Gas Grouper 15,300 01-Jul Sylvie 23,400 06-Jul Gas Grouper 15,300 Solaro 25,000 Morocco 08-Jul Gas Manta 23,400 11-Jul Gas Cobia 23,400 19-Jul Gas Snapper 23,400 03 Aug* MaryCam Swan 15,000 03 Aug* MaryCam Swan 15,000 13-18 Aug* Clipper Mars 40,000 India 15 Aug* * estimated arrival 200 150 13-Apr-17 11-May-17 08-Jun-17 06-Jul-17 03-Aug-17 Follow us on Twitter @ArgusMediaFertz for market insights from our editors. Page 2 of 11 Issue Ref: 175746
Middle East and Africa Saudi Arabia Sabic's al Barrah will discharge 19,000t in India from 4-6 August to fulfil spot sales to IFFCO and Sanjana at $238/t cfr and $248/t cfr, respectively. The producer will load a vessel in mid-august to be delivered to Indian buyers, GSFC and Hindalco. Another 35,000t has been scheduled to be delivered to Lotte Fine Chemicals (LFC) in South Korea. A cargo will load aboard the al Jabirah in late-august or early September for Taiwan Fertilizer (TFC). Sabic's contractual netbacks are around $215-220/t fob this week. The producer is understood to be negotiating a spot sale into China via a trader. Ma'aden has committed most of its September volumes. The Polar and the BW Havis with 40,000t capacity each - are understood to be chartered by a major Japanese trader and have arrived in Saudi Arabia, presumably waiting to be loaded. Ma'aden's line-up in July allows for a 40,000t vessel to be loaded for southeast Asia or east Asia. A similar 40,000t has been scheduled to load in the first half of August also for the aforementioned markets. Ma'aden's contractual netbacks this week are around mid- $180s/t fob. Qatar Muntajat's charter Navigator Nova will discharge a total of 11,000t to India on 6-7 August, under term contracts with MCFL and Greenstar. The Almarona will discharge 7,000t at Haldia on 6 August. The producer has delivered 5,000t to Greenstar at Tuticorin on 1 August. Muntajat is heard to have chartered the Al Majedah to deliver a 15,000t cargo to an Indian buyer in the second-half of August, but this remains unconfirmed by the producer. Algeria Sorfert is loading the Wilhelm Schulte with 11,000t, likely for a delivery to Europe. The producer will load the Celtic Gas with 14,700t later this month. The destination for this cargo has not been disclosed. PHOSPHATE MARKET SUMMARY Indian buyers collectively bought 150,000t of DAP this week. NFL was heard to have awarded its 25 July tender to Ameropa. And Sabic sold two 30,000t DAP cargoes into India for September delivery. Chinese suppliers have increased fob levels to $345-350/t fob. Some Indian buyers have returned to the market in light of tight August supplies the increase in fob levels. But Pakistani importers have taken a step back from the market, citing lack of August availability and too high offers. The Latin American market has continued to soften. The Brazilian MAP price has eased to $40-345/t. the Ammonia world this week Saudi Arabia: Spot offers continue to rise US: CF starts term supplies to Mosaic Turkey: Petkim issues tender seeking 6,000t China: Covestro progresses 2018 term tender Venezuela: August cargo pushed to September India: Monsoon proceeding as normal this year Disclaimer: Argus depicts geo-political borders as defined by the United Nations Geospatial Information Section. For more information visit http://www.un.org/depts/cartographic/map/profile/world.pdf Page 3 of 11
Indian ammonia imports June-Aug 2017 Supplier Buyer Vessel Volume (t) Loading port Arrival Discharging port Price ($/t cfr) Iran Deepak Senna Princess 10,500 BIK 4 Jul JNPT Trammo Greenstar Gas Utopia 7,994 Ras al Khair 5 Jul Tuticorin Trammo CIL Gas Utopia 4,482 Ras al Khair 8 Jul Vizag 267.50 Muntajat Zuari Almarona 4,000 Mesaieed 6 Jul Goa 241.00 Muntajat Hindalco Almarona 3,600 Mesaieed 13 Jul Dahej LTC Muntajat MCFL Almarona 4,500 Mesaieed 15 Jul Mangalore 241.00 CIFC Deepak Gas Cat 13,500 BIK 8 Jul Kakinada 231.00 Trammo CIL Gas Utopia 4,482 Ras al Khair 10 Jul Vizag CIFC CIL Gas Cat 7,500 BIK 12 Jul Vizag 231.00 CIFC IFFCO Leo Sunrise 10,000 Kerteh 12 Jul Paradip 215.00 CIFC PPL Leo Sunrise 4,999 Kerteh 12 Jul Paradip 215.00 Sabic GSFC al Barrah 15,000 Ras al Khair 16 Jul Sikka LTC CIFC Zuari Gas Line 2,200 BIK 18 Jul Goa LTC Trammo IFFCO Tobolsk 15,357 Ras al Khair 19 Jul Kandla 215.00 Trammo Greenstar Tobolsk 8,000 Ras al Khair 24 Jul Tuticorin Ameropa IFFCO Clipper Mars 39,998 Yuzhny 28 Jul Paradip 245.00 CIFC PPL Gas line 21,000 BIK 28 Jul Paradip 215.00 Muntajat MCFL/Greenstar/ TCL Almarona 15,000 Mesaieed 29 Jul India The latest spot sale by Saudi Arabian producer Sabic at $238cfr for 23,000t, has been purchased by IFFCO. Sabic's al Barrah is expected to discharge at the port of Dahej on 5 August. It is understood that IFFCO's next scheduled cargo arrival aboard the Standorf has been priced at $215/t cfr for 7,000t. The cargo will originate from Iran and is expected to arrive at Kandla around 17 August. Coromandel might be enquiring for spot tonnes to fulfil a late-august requirement. A freight enquiry had been circulating to load 15,000t of ammonia at Mesaieed port in Qatar, discharging at Kakinada/Vizag on 20-24 August and at Haldia on 24-27 August. The monsoon season in India has been proceeding as normal since June. The Indian meteorological department's (IMD) actual recorded rainfall for the whole country stands at 473mm from 1 June until 2 August, compared to the aver- Mangalore/Tuticorin/Haldia Mitsubhishi CIL Anafi 15,000 Ras al Khair 30 Jul Vizag/Kakinada 215.00 Muntajat Greenstar Almarona 5,000 Mesaieed 1 Aug Tuticorin LTC Maa'den CIL Eupen 7,000 Ras al Khair 1 Aug Vizag LTC Maa'den CIL Eupen 13,000 Ras al Khair 2 Aug Kakinada LTC Muntajat ZIL Navigator Nova 3,500 Mesaieed 2 Aug Goa LTC Muntajat TCL Almarona 7,000 Mesaieed 6 Aug Haldia LTC Muntajat MCFL Navigator Nova 3,000 Mesaieed 7 Aug Mangalore LTC Muntajat Greenstar Navigator Nova 8,000 Mesaieed 6 Aug Tuticorin LTC Sabic KIT/IFFCO al Barrah 15,745 Ras al Khair 6 Aug Kandla 240.00 Sabic Sanjana al Barrah 3,000 Al Jubail 4 Aug Dahej 250* Raintrade/CIFC CIL Gas Cat 18,000 BIK 15 Aug Vizag/Kakinada LTC CIFC IFFCO Standorf 7,000 BIK 17 Aug Kandla 215.00 CIFC PPL Gas Line 18,000 BIK 20 Aug Paradip LTC LTC Indian subcontinent age rainfall of 472mm. In northwest India, actual rainfall was recorded at 354mm, compared to an average of 304mm, while the southern peninsula saw actual rainfall measured at 323mm compared to the average of 392mm. India, Far East and Middle East price 450 400 350 300 250 200 150 India cfr Far east cfr Middle East fob 13-Apr-17 11-May-17 08-Jun-17 06-Jul-17 03-Aug-17 $/t hhh Page 4 of 11
Asia Pacific Malaysia Petronas' scheduled maintenance at its 450,000t/yr Kerteh unit is continuing as planned and is set to last for up to 50 days or till early September. There have been no spot sales from Petronas this week. Indonesia The 825,000t/yr Kaltim 5 ammonia unit remains shut and investigations are ongoing to determine the length of the shutdown. Kaltim had previously indicated that the 25-30 days planned maintenance will be completed by the end of August. The producer is not offering spot ammonia for export and is focused on regular contract loadings for Mitsui and domestic deliveries to Petrokimia Gresik. South Korea South Korean buyers may possibly be in the market for September spot cargoes but their bids at around $210-215/t fob Middle East have been deemed too low by suppliers. Japan Mitsui will deliver 30,000t to Japanese buyers from Indonesia on the Gaz Millennium. The trader had secured two 15,000t cargoes from Kaltim last month under their regular off take agreement at $220/t fob, based on a formula price. Freight is estimated to be around $50/t, bringing the delivered price to above $270/t cfr after taking into consideration the $10-20/t premium for sales to Japan. China Convestro is in the second stage of a tender to secure 130,000t/yr starting 2018 on a term contract basis. The contract is for a year with the mutual option to extend for another two years. In the latest round that closed on 1 August, three to four shortlisted suppliers submitted bids. Covestro's term contract cargoes in 2017 are supplied by trader Trammo. A US-based trader is linked to the the winning bid for Covestro's tender seeking 8,000t for delivery in early September. The cargo is heard to be offered at around $250/t cfr but this could not be confirmed. Demand in southern China is rising with buyers seeking deliveries to the port of Zhanjiang. There is an outstanding requirement for a late August to early September delivery. The domestic ammonia price fluctuated in various regions but the average price remains relatively stable at 2,700-2,750 yuan/t ($402-409/t) ex-factory in Shandong and Yn2,550/t in Hebei. Falling urea prices have reduced demand for ammonia but the higher coal prices have supported the ammonia price. Americas US Nitrogen producer CF Industries has sold two August loading cargoes - 23,500t and 25,000t - to Trammo to be loaded on the Sanko Independence and Trammo Dietlin. Mitsui has also secured a 23,500t cargo from CF loading in August at an undisclosed price and will possibly ship the cargo to Asia. The domestic market remained quiet following the drop in the Tampa price to $190/t cfr. US phosphate producer Mosaic's ammonia supply agreement with CF has gone into effect, Mosaic said this week. The supply agreement calls for Mosaic to purchase 545,000-725,000t/yr of ammonia from CF, potentially until 2032, with pricing based on Henry Hub gas prices. Mosaic's new ammonia barge, the Harvest, will begin regular trips across the Gulf of Mexico from CF's Donaldsonville, Louisiana, plant to Mosaic facilities in Tampa in "the very near future", said the buyer. CF expects to export less ammonia once volumes start shipping under the contract with Mosaic. Venezuela A trader was heard to have secured 10,000t from Venezuela for August delivery to an undisclosed location in Asia. The cargo appears to have been loaded on the Luigi Lagrange. The vessel left Jose on 31 July and will arrive at Point Lisas on 3 August, most likely to load another cargo before heading towards its final destination. The Gaschem Stade will arrive at Jose on 4 August to load 23,000t for delivery to Tampa under Mosaic's recent spot purchase at $190/t cfr. An earlier planned end-august loading for 23,000t at Venezuela has now been pushed back to September. Proposed introduction of spot Caribbean price assessment Because of an anticipated increase in spot market liquidity, Argus proposes to introduce a spot fob Caribbean price assessment and rename the existing fob Caribbean price assessment, based on a netback from the Tampa price, as fob Caribbean (Tampa netback). Argus will accept comments on this new assessment up to 31 August. To discuss comments on this proposal, please contact Siew Hua Seah at siewhua.seah@argusmedia.com or + 44 20 7199 6538. Formal comments should be marked as such and may be submitted via e-mail to fertilizer@argusmedia.com or by post to Siew Hua Seah, Argus Media Limited, Lacon House, 84 Theobalds Road, London WC1X 8NL and received by 31 August. Please note, formal comments will be published after the consultation period unless confidentiality is specifically requested. Page 5 of 11
Spot Sales Selection 03 August 2017 Origin Seller Buyer Destination 000t $pt bulk Shipment US CF Trammo Chile/ Europe 48.5 formula August US CF Mitsui Asia 23.5 TBD August Yuzhny Ameropa Trammo Turkey 15 formula end-july-early August Saudi Arabia Sabic TBD India 15 238cfr early August TBD Fertcomm CJ Indonesia 12 215cfr TBD Saudi Arabia Sabic TBD India 15-20 205-210fob late July Venezuela Trader Mosaic US 23 190cfr early August Malaysia Petronas/CIFC IFFCO India 10 215cfr mid-july TBD Mitsubishi BASF China 7 209cfr mid-august Yuzhny Kuibychev Azot Trammo TBD 10 230fob TBD Saudi Arabia Mitsubishi CPDC Taiwan 15 219cfr early August Saudi Arabia Mitsubishi Coromandel India 15 215cfr early August Indonesia Kaltim Mitsubishi TBD 15 240fob end June Indonesia Kaltim Trammo TBD 15 240fob end June TBD Mitsubishi Covestro China 8 formula 1H July TBD Trammo CIL India 15 267.50 cfr First week of July Yuzhny Ameropa Petkim Turkey 6 TBD 2H June TBD Fertzcomm CJ Indonesia 6 275 cfr 4-5 July Egypt Abu Qir Trammo TBD 10 256fob 1H June TBD Mitsui Lotte South Korea 7 TBD end-june TBD Mitsubishi CPDC Taiwan 7 280 cfr mid-july Yuzhny Togliatti Mitsubishi TBD (East Asia) 40 formula mid-june US CF TBD TBD TBD 280 fob June Caribbean TBC Mosaic US 23 260cfr 2H June TBD Mitsubishi Namhae South Korea 6 294 cfr 2H June Oman Trammo Sumitomo Chemical Japan 10 320 cfr late May-early June Indonesia Kaltim Trammo TBD 15 372.50 fob May Indonesia Mitsui IFFCO Paradip 23 361.75 cfr May Indonesia Trammo Philphos Philippines 7 425 cfr 1H May Baltic TBD OCI Netherlands 11 TBD early May TBD Trammo Petkim Turkey 7 TBD 1H May UK CF UK Yara Europe 14 TBD UK CF UK Yara Europe 8 TBD Algeria Sorfert OCP Morocco 23 TBD 2H April Egypt Abu Qir Trammo Turkey 10 315 fob 2H April US CF Yara TBD 8 TBD 2H April Algeria Sorfert Koch TBD 40 350 fob late-april Saudi Arabia Ma'aden Trammo TBD 15 400 fob mid-april Indonesia Kaltim Fertcomm TBD 15 362 fob TBD Indonesia Trammo Philphos Philippines 6 370 cfr end-march Bahrain PIC Trammo India 8 350 fob 6-Mar Yuzhny OPZ Trammo NA 6 330 fob early-april NA Mitsui Mitsubishi South Korea 6 410 cfr end-march Indonesia Pupuk Kaltim Mitsui NA 10 300 fob March Announcement The holiday calendar showing which Argus reports are not published on which days is now available online http://www.argusmedia.com/methodology-and- Reference/Publishing-Schedule Announcement All data change announcements can be viewed online at www.argusmedia.com/announcements. Alternatively, to be added to the email distribution list for all announcements, please email: datahelp@argusmedia.com. Page 6 of 11
NEWS AND ANALYSIS Mosaic, CF ammonia supply agreement in effect US phosphate producer Mosaic's ammonia supply agreement with nitrogen producer CF Industries has gone into effect, Mosaic said today. The supply agreement calls for Mosaic to purchase 545,000-725,000 t/yr of ammonia from CF, potentially until 2032, with pricing based on Henry Hub natural gas prices. Mosaic said in its second quarter earnings call that its new ammonia barge, the Harvest, will begin regular trips across the Gulf of Mexico from CF's Donaldsonville, Louisiana, plant to Mosaic facilities in Tampa in "the very near future." The Harvest, which can load up to 22,000st of ammonia, was completed in late June. CF warns of potential new urea price lows in 3Q Leading nitrogen producer CF Industries reached record production and sales volumes in the second quarter, but sees the potential for US urea prices to reach new lows in the third quarter. CF maintained its bearish outlook for prices, despite a recent uptick in the US, for the rest of 2017 and early 2018 as the global nitrogen markets adjust to new capacity and changing trade flows. It flagged the potential for US urea prices to test recent lows in the third quarter if substantial imports arrive during what is typically a period of seasonally-low demand. CF flexed its fully-expanded production capacity in the second quarter, setting new records for ammonia and urea output. But lower prices led the producer to post a 94pc year-over-year drop in profit to $3mn. Gross ammonia production totaled 2.7mn st, up by 33pc from the second quarter of 2016. CF's Port Neal, Iowa, ammonia plant operated at more than 115pc of its 1.23mn st/yr nameplate capacity. Argus FMB Europe Fertilizer 2017 18-20 October Barcelona, Spain 31st Annual Conference Granular urea production reached a record 1.2mn st, a 53pc year-over-year increase. UAN (32pc) production fell by 3pc year-over-year to 1.7mn st. CF also began production at its new 400,000 st/yr urea equivalent diesel exhaust fluid unit at Donaldsonville, Louisiana. Second quarter sales volumes also set a new CF record at more than 5mn st for all products. CF sold 1.15mn st of ammonia, up by 32pc year-overyear. But average sales prices fell by $73/st year-over-year to $338/st, partially driven by more export sales at lower prices. Granular urea sales volumes grew by 26pc year-over-year to 1.2mn st at an average sales price of $212/st, down by $35/st from a year earlier. UAN sales volumes totaled 1.6mn st, down by 11pc yearover-year. Average UAN prices were $175/st, down by $27/st year-over-year. CF saw thinner margins across nitrogen products because of higher natural gas costs and an $18mn unrealized net mark-to-market loss on natural gas derivatives. Ammonia gross margin shrank to $76/st, down from $237/st a year earlier. Granular gross margin fell by $106/st year-over-year to $20/st. UAN gross margin dropped to $23/st, down by $71/ st year-over-year. CF reported an average natural gas cost of $3.39/mmBtu, up from $2.85/mmBtu a year earlier. Argus Fertilizer Conferences The gateway to global fertilizer markets - Europe: 18-20 October, Barcelona - Latin America (FLA): 22-24 January 2018 - Africa: February 2018 - Asia: April 2018, Beijing - East Europe: June 2018 Join 700+ delegates at the biggest fertilizer trade conference in Europe. Register today! www.argusmedia.com/fertilizer-europe www.argusmedia.com/fertilizer-events Page 7 of 11
Mosaic phosphate, MOP production rises in 2Q Mosaic produced and sold more phosphate and potash fertilizer in the second quarter for a $97mn profit in the second quarter, a reversal from a $10mn loss a year earlier. Mosaic's phosphate segment operated at a rate of 84pc to produce nearly 2.5mn t of phosphate during the quarter, a 2pc increase from a year ago. Average DAP sales prices were $336/t, a $9/t improvement from the first quarter but still down by 2pc from a year ago. Overall phosphate sales volumes totaled 2.6mn t, a 5pc increase from last year. North American DAP/MAP sales volumes totaled 791,000t, up by 7pc year-over-year. International DAP/MAP sales volumes fell 10pc to 915,000t. Mosaic sold a record 774,000t of MicroEssentials in the quarter, up by 37pc year-over-year. Of the total, 365,000t was purchased by Mosaic's international distribution segment, which primarily represents its Brazilian business. Mosaic's second quarter potash sales volumes totaled 2.2mn t, up by 7pc from the prior-year period. North American sales volumes fell by 17pc year-over-year to 815,000t, while international potash sales grew by 34pc to 1.2mn t. Mosaic operated at 93pc of potash capacity, producing 2.3mn t during the quarter, up by 30pc from the prior year. Mosaic's average MOP realized prices increased for the third straight quarter to $179/t fob plant, up by $1/t yearover-year. North American prices rose by year-over-year $27/t to $200/t fob, while international grew by $1/t yearover-year to $159/t fob. Mosaic lowered its third quarter DAP price expectations by $10/t from the second quarter to $310-330/t fob plant, with sales volumes projected at 2.2mn-2.5mn t. Mosaic plans to maintain its operating rate of around 85pc of capacity, which equates to about 2.5mn t of finished phosphates. Mosaic also dropped MOP price guidance for the third quarter by $5/t from the second quarter to $165-180/t fob plant, with sales volumes pegged at 1.9mn-2.2mn t. Mosaic plans to lower its operating rate to around 82pc of capacity, which equates to about 2.1mn t. Mosaic said it is sold out of MOP for the third quarter of 2017 after a high level of participation during this year s potash summer fill program in the US. In expansions, Mosaic plans to steadily ramp up production at the new K3 mine in Esterhazy, Saskatchewan, and slowly phase out K1 and K2. The K3 mine reached potash ore in February. The ore from K3 will be carried to K1 and K2 via two overland conveyance systems. Once K3 is capable of replacing all the production from K1 and K2, Mosaic will have the ability to eliminate brine management costs. K3 will be fully ramped up by 2024. The company also said that the planned third quarter turnaround at the Esterhazy has been deferred until October. Mosaic reported that its $2.5bn acquisition of Vale Fertilizantes was approved by Brazilian antitrust regulators on 1 August. The company expects the deal to finalize by the end of 2017. Ma aden phosphate sales up in 2Q Saudi Arabian Mining Company s (Ma aden) latest interim results for the second quarter show an increase in sales of phosphate fertilizer. Ma aden sold 733,000t of phosphate fertilizer (DAP and MAP) in the second quarter, up by 4pc on the same period last year. Sales increased by 15pc from the previous quarter's 637,000t there is typically a rise in second-quarter sales because of increased seasonal demand. Ma aden s sales over April-June were improved by strengthening Indian demand. India is the world s largest importer of phosphates, typically accounting for 30-50pc of global trade each year. Argus estimates that, of the total sales, Ma aden shipped more than 200,000t of phosphates to India during the second quarter. Indian DAP demand increased in the second quarter after the government provided clarity on the goods and sales tax (GST) and with positive forecasts for the monsoon season. Argus calculates Ma aden s sales to India during the first quarter to have been as low as 65,000t of DAP. Production over the quarter was on par with the same period last year at 668,000t, but down by 7.4pc from the 721,000t produced during the first three months of this year. Ma aden reported that the production cost of phosphates dropped by 7pc over April-June, citing cheaper inputs and increased efficiency. It also confirmed that its Wa ad al-shamal project (MWSPC) has successfully commissioned all its plants. The first batch of phosphate fertilizer was produced on 8 July. The 3mn t/yr DAP, MAP and NPK project, a joint venture between Ma aden, US producer Mosaic and Saudi Arabian marketer Sabic, will boost Saudi Arabia s production capacity to 6mn t/yr. But this initial production was for trial purposes and not for commercial use. Argus forecasts that it is unlikely that the project will reach full capacity by the end of the year. Ammonia production increased to 555,000t during the second quarter. This was an increase of 85pc on the 300,000t produced over the same period last year. Ma aden attributed the increase to the start of operations at the Ma aden Wa ad al-shamal ammonia plant at the start of the year. Production at this plant was 299,000t. But the Page 8 of 11
second-quarter production volume was down by 7.3pc on output over the first three months of the year. In the first quarter, Ma aden produced 599,000t of ammonia. Actual ammonia sales were at 393,000t, up by 155pc on the same period last year but down by 16pc on the previous quarter s sales of 466,000t. Ma aden s outlook for the ammonia and phosphates markets is bearish, noting signs of weakness. Ma aden cites the potential for oversupply in the international market as a source for this uncertainty. In December 2016, Ma aden unveiled its plans for a third phosphates project, which will increase Saudi Arabia s DAP, MAP and NPK production capacity to 9mn t/yr. It is scheduled for completion in 2024. Ma aden reported a profit for the second quarter of 434mn riyals ($116mn), up by 147pc on SR176mn last year. Uralchem boosts urea, NPK production in 1H Russian fertilizer producer Uralchem increased its total fertilizer production to 3.2mn t in the first half of the year, a rise of 4pc on the previous year. Decreases in production of ammonia and DAP/MAP were offset by increases in urea and complex fertilizer production. First-half urea production rose by 9pc on the year to 611,000t following refurbishments at Azot Berezniki and Perm Minudobrenia. Delays to a maintenance project at Azot Berezniki and the modernization of the ammonia unit at Perm Minudobrenia hampered production of nitrogen-based fertilizers in 2016. Complex fertilizers registered the steepest increase over the six months, rising to 471,000t, up by 34pc on the previous year. The increase is largely because of the diversion of phosphate production towards complex fertilizers rather than DAP/MAP. Production of DAP/MAP decreased by 46pc year on year to 50,000t in the first half of 2017. First-half ammonia production fell by 3pc year on year to 410,000t. Output of AN and CAN decreased by 25,000t to 1.45mn t over the six month period following the reallocation of some capacity to nitrophosphate and sulphonitrate production. Agriculture (USDA). Soybeans blooming reached 82pc, two percentage points above the five-year average. Soybeans setting pods are at 48pc, three percentage points above the five-year average. US corn condition stands at 61pc rated good-to-excellent, a one percentage point decline week-over-week and a 15-point decrease from the previous year. Dryness in Iowa led to diminished corn doughing of 23pc, one percentage point below the average, and five points below last year. Overall corn silking is 85pc, four percentage points below last year. The USDA shows 15pc of corn production is within an area of drought in the week ending 25 July. Driven by declines in quality from last week for droughtstricken states, overall spring wheat condition fell to 31pc good-to-excellent, down by three points from the prior week. The US spring wheat harvest is 9pc complete, in line with the five-year-average. South Dakota has harvested 46pc of its spring wheat, 15 points above the five-year average. Montana is dealing with a 30-year low for topsoil moisture conditions and was measured at 4pc adequate and no surplus. Montana spring wheat quality was rated at just 9pc good-to-excellent. The US winter wheat harvest reached 88pc, up by four points from the prior week and two points above the fiveyear average. Argus World Urea Outlook to 2030 Gain insight into the short, medium and long-term changes facing future urea markets, including: An analysis of cost competitiveness for current/future exporters A 15-year projection of country-by-country urea (and nitrogen fertilizer) demand, capacity, production, imports and exports An assessment of global balances and the impact on pricing Find out more today by contacting us on info@argusmedia.com Cooler weather, low rainfall improve soybean Drought conditions in the US Northern Plains persisted, but a round of cooler weather and sporadic rainfall led to an increase in US soybean conditions. National soybean condition ratings, led by Illinois and Iowa, increased to 59pc good-to-excellent, two percentage points better than last week but still 13 percentage points below last year. Approximately 14pc of soybean production is within a drought area, according to the US Department of Market Reporting Consulting Events Page 9 of 11
The most up-to-date Argus Ammonia methodology is available on www.argusmedia.com Argus Ammonia Argus Ammonia Methodology Argus uses a precise and transparent methodology to assess prices in all the markets it covers. The latest version of the Argus Ammonia Methodology can be found at: www.argusmedia.com/methodology. For a hard copy, please email info@argusmedia.com, but please note that methodogies are updated frequently and for the latest version, you should visit the internet site. METHODOLOGY AND SPECIFICATIONS GUIDE ARGUS AMMONIA Contents: Methodology overview 2 Introduction 5 Publication frequency and assessment timing 5 General methodology 5 Assessing price ranges 5 Distressed trades and disruptions to trade 6 Spot and formula pricing 6 Units 6 Lot and cargo sizes 6 Products and specifications 6 Price guide how prices are defined 6 LAST UPDATED: JANUARY 2017 www.argusmedia.com Fertilizer Latino Americano 2018 22-24 January São Paulo, Brazil Join us at Latin America s leading fertilizer event. Register today and network with 700 delegates! www.argusmedia.com/fla Argus Ammonia is published by Argus Media group Registered office Argus House, 175 St John St, London, EC1V 4LW Tel: +44 20 7780 4200 Fax: +44 870 868 4338 email: sales@argusmedia.com ISSN: 2399-8741 Copyright notice All rights reserved All intellectual property rights in this publication and the information published herein are the exclusive property of Argus and/or its licensors (including exchanges) and may only be used under licence from Argus. Without limiting the foregoing, by accessing this publication you agree that you will not copy or reproduce or use any part of its contents (including, but not limited to, single prices or any other individual items of data) in any form or for any purpose whatsoever except under valid licence from Argus. Further, your access to and use of data from exchanges may be subject to additional fees and/or execution of a separate agreement, whether directly with the exchanges or through Argus. Trademark notice ARGUS, the ARGUS logo, ARGUS MEDIA, Argus Ammonia, other ARGUS publication titles and ARGUS index names are trademarks of Argus Media Limited. Visit www.argusmedia.com/ft/trademarks for more information. Disclaimer The data and other information published herein (the Data ) are provided on an as is basis. Argus and its licensors (including exchanges) make no warranties, express or implied, as to the accuracy, adequacy, timeliness, or completeness of the Data or fitness for any particular purpose. Argus and its licensors (including exchanges) shall not be liable for any loss, claims or damage arising from any party s reliance on the Data and disclaim any and all liability related to or arising out of use of the Data to the full extent permissible by law. Publisher Adrian Binks Global compliance officer Jeffrey Amos Commercial manager Jo Loudiadis Managing editor Peter Ramsay Editor Siew Hua Seah Tel: +44 20 7199 6538 fertilizer@argusmedia.com Customer support and sales: Technical queries technicalsupport@argusmedia.com All other queries support@argusmedia.com London, UK Tel: +44 20 7780 4200 Astana, Kazakhstan Tel: +7 7172 72 92 94 Beijing, China Tel: +86 10 8535 7688 Dubai Tel: +971 4434 5112 Moscow, Russia Tel: +7 495 933 7571 Rio de Janeiro, Brazil Tel: +55 21 2548 0817 Singapore Tel: +65 6496 9966 Tokyo, Japan Tel: +81 3 3561 1805 Argus Media Inc, Houston, US Tel: +1 713 968 0000 Argus Media Inc, New York, US Tel: +1 646 376 6130 Fertilizer illuminating the markets
30th Anniversary Conference Argus FMB Europe Fertilizer 2017 18-20 October W Hotel, Barcelona, Spain 700+ decision makers from across the fertilizer supply chain 20+ hours of networking including roundtables, cocktail receptions and interactive sessions 30+ speakers offering the latest commercial and technical insight in parallel tracks on Markets and Trade and Innovation and R&D 3 Specialist Sessions: Choose from one of the sessions below: Conference speakers include: Terje Bakken, Managing Director, Head of Marketing and Sales Division, Eurochem Rolf Haerdter, Head of Global Agronomic Services, K+S Nicolas Broutin, Commercial Director Mediterranean, Yara Crop Nutrition Matthijs Mondria, Managing Director, Global Sector Head Farm Inputs, Rabobank 18 October Micronutrients Forum Get the technical and commercial insights you need to take a share of this growing market Fertilizer Fast Track Seminar A guide to global fertilizer production, trade and demand dynamics Oil and Gas Market Trends Analyse changes in crude oil and gas trading patterns and the possible impacts on fertilizer producers Platinum Sponsor Gold Sponsor Silver Sponsors Bronze Sponsors Register now at www.argusmedia.com/fertilizer-europe