Potash

HOUSTON (ICIS)–Mining major BHP said after a rough stretch for the global potash segment, it appears it is heading now towards finding renewed balance with improvements in both demand and supply. The company said it has also continued to advance its construction efforts at the Jansen potash project in Saskatchewan, Canada, with stage one currently ahead of schedule. In its economic and commodity outlook, BHP said potash prices have been on a downward trend over the last 18 months as the industry has been resetting after dealing with stark price movement and severe supply disruptions of recent years. The producer said one indicator that the market was returning to normal pace was that the magnitude of price movements in the first half of 2024 was less pronounced compared to a year ago. Looking at regional demand performance, it said a broad recovery has continued from the lows of 2022 with total muriate of potash (MOP) deliveries expected to reach, or exceed, the pre-Ukraine conflict levels during this year. Supply also increased further with export volumes from Russia and Belarus edging closer to their 2021 peak with Laos adding 2-3 million tonnes of capacity over the last few years. BHP said Canadian volumes this year point to an improved production level. “Balanced though does not mean that the market is at rest. The industry remains in the midst of a significant disequilibrium, slowly adjusting from the major shocks of recent years,” said BHP. “The compelling demand picture, rising geopolitical uncertainty and the maturity of the existing asset base collectively provide an attractive, accelerated entry opportunity in a lower–risk supply jurisdiction such as Saskatchewan, Canada.” It was also revealed that construction at the Saskatchewan potash project is ahead of the original schedule with Jansen stage 1 now 52% completed. The first production is targeted for late 2026 with this phasing having an annual output projected around 4.15 million tonnes. Jansen stage 2 is 2% complete with first production from this segment anticipated in 2029. Back in July the company had said Jansen had reached a pivotal milestone with construction having surpassed the 50% completion mark for stage 1 and stage 2 underway.

27-Aug-2024

HOUSTON (ICIS)–Although the Canadian railroad labor strife is poised to carry on further, US fertilizer participants are not growing overly concern as this action comes at a slower time of the year for domestic applications and fresh buying. With it being late August most of the attention of domestic growers are either on advancing harvesting campaigns or commencing those efforts soon, with some locations still tending to mature crops. There were also strong summer refilling efforts, which together is overall keeping the pull for nutrients light for most products although volume of nitrogen, phosphate and potash have continued to move over August on barges and terminals. As a source said they had zero concerns so far and not hearing that the situation is concerning customers either, “I assume if it persists there will be. It’s just happening at a time of year that it isn’t impactful enough to our industry.” The railroad strike appeared to have been resolved on 22 August when the government directed the matter to the Canada Industrial Relations Board (CIRB) for binding arbitration, with Canadian National (CN) and Canadian Pacific Kansas City (CPKC) having said they were preparing to begin running. Then on Friday labor union Teamsters Canada Rail Conference (TCRC) issued a strike notice for 26 August, against railroad Canadian National (CN) with approximately 6,500 unionized employees set to withdraw their service starting Monday. As there was prior to the start of this strike activity, there is also optimism from some that this will not be a protracted dispute. The US is about to enter a period of what has been anticipated to be good post-harvest demand, with a source saying a work stoppage “could be an issue then but generally these things resolve quickly.” Earlier this week industry group Fertilizer Canada said disruptions to rail services across the country will cost the fertilizer industry millions per day in lost sales revenue, with an average of 69,000 tonnes of fertilizer product transported per day. 75% of all fertilizer produced and used in Canada is moved by rail, with minimal transportation alternatives, with 90% of those volumes which are destined for the US market delivered by rail.

23-Aug-2024

TORONTO (ICIS)–Canada’s federal labor minister has decided to refer the labor dispute between the country’s two freight railroads and labor union Teamsters Canada Rail Conference (TCRC) to the Canada Industrial Relations Board (CIRB) for binding arbitration, he said in a webcast media briefing on Thursday. Steven MacKinnon expects the CIRB to act “with dispatch” and rail services at railroads Canadian National (CN) and Canadian Pacific Kansas City (CPKC), which shut down effective Thursday morning, 00:01 eastern time, should resume within a couple of days, he said. With the decision, the minister reversed his previous position. Just hours before the shutdown took effect, he had said the government would not intervene but leave it to the parties to settle the dispute through the collectives bargaining process, and last week he rejected CN’s call for binding arbitration. However, in Thursday's press briefing MacKinnon said that he came to the conclusion that the negotiations between the railroads and the union were at an impasse and that collective bargaining was not working to settle the dispute. He therefore decided to direct the CIRB to settle the dispute through final binding arbitration; to extend the terms of the existing collective agreements until new agreements are signed. The CIRB process was “generally a process that does not take longer than two days”, he said. However, he conceded that it was not yet quite clear when exactly rail service will resume, adding that the CIRB was an independent body that follows its own procedures. The CIRB is a quasi-judicial tribunal charged with keeping the industrial peace in Canada. The government has come under intense pressure from trade groups in Canada and the US and from Canadian provincial premiers (governors) to take quick action to end the shutdown, which threatened the economy and trade relations with the US. MacKinnon acknowledged the concerns raised by the chemical and fertilizer industries about supplies of chlorine to treat drinking water and the supply of potash fertilizer to farmers. It was up to the government to ensure that shipment of chlorine and fertilizer were not disrupted, the minister said. The railroads had stopped accepting shipments of chlorine and other hazardous materials well ahead of the 22 August shutdown. Meanwhile, LyondellBasell on Thursday declared force majeure on all rail shipments to Canada and industrial chemical producer Chemtrade Logistics warned about impacts from the rail disruption on its financial results. With additional reporting by Adam Yanelli Thumbnail photo source: CN 

22-Aug-2024

HOUSTON (ICIS)–Fertilizer Canada said disruptions to rail services across the country will cost the fertilizer industry an estimated C$55-63 ($40.3-46.2) million per day in lost sales revenue. Facing a potential strike, the industry group is urgently calling on the federal government to take immediate action to prevent a work stoppage on both railways. It wants to see binding arbitration that prohibits Teamsters Canada Rail Conference (TCRC) from undertaking strike action and CN Railway and Canadian Pacific Kansas City (CPKC) from lockout action. Both railways have served lockout notices to TCRC beginning 22 August and TCRC has served a strike notice to CPKC also beginning 22 August. “The time for action is now. We can no longer patiently wait for a resolution. The federal government must protect Canada’s economy and food security by ordering binding arbitration,” said Karen Proud, Fertilizer Canada president and CEO. The group noted that the railways move an average of 69,000 tonnes of fertilizer product per day, which is equivalent to four to five trains. The fertilizer industry is among the first to experience slowdowns. As on 12 August, the movement of some ammonia products were halted when they were embargoed. Since that action the railways have issued further embargoes, including US railways halting shipments to Canada. Currently 75% of all fertilizer produced and used in Canada is moved by rail, with minimal transportation alternatives, with 90% of those volumes which are destined for the US market delivered by rail. “In the last seven years, Canadian supply chain labour disruptions have cost the fertilizer industry nearly a billion dollars,” Proud said. “These stoppages are doing immense damage to our reputation as a reliable trading partner.” “Our customers, who rely on Canadian fertilizer products, are being forced to turn to our competitors in Russia, Belarus and China. We can’t afford for our railways to shut down, and we can’t afford a passive approach to our supply chains any longer. We need long-term solutions.” Fertilizer Canada represents producers, manufacturers, wholesale and retail distributors of nitrogen, phosphate, potash and sulphur fertilizers. $1.00=C1.36

20-Aug-2024

HOUSTON (ICIS)–Industry group Fertilizer Canada has requested federal authorities take action as CN Railway and Canadian Pacific Kansas City have issued embargoes immediately halting certain fertilizer shipments ahead of an anticipated labor strike. Fertilizer Canada is calling on the federal government and Labour Minister Steven MacKinnon to assist all parties and the Teamsters Canada Rail Conference (TCRC), in reaching agreements. Further, it is asking that there be a directive for binding arbitration that prohibits TCRC from undertaking strike action and the railroads from lockout action. The railroads have said they could lock out workers on 22 August if union leadership and the companies are unable to achieve immediate progress or reach a negotiated settlement or agree upon binding arbitration. Fertilizer Canada said that embargoes issued 12 August impact essential ammonia fertilizer products. In addition, service for all products will also begin to slow three to five days ahead of a work stoppage and take between three to five days to reach regular service upon conclusion. The group said the threat has already begun to impact fertilizer movement and the industry anticipates further slowdowns. It noted that a work stoppage which halts nutrient transportation will potentially have disastrous effects on crop yields and food security. It further stated that according to recent polling that 55% of Canadians believe the government has a role to play in the collective bargaining process and should step in to prevent impacts. “The long-lasting and cascading impacts of labor disruptions are felt before and after the stoppage even takes place,” says Karen Proud, Fertilizer Canada president and CEO. “We have had the threat of a work stoppage hanging over our heads since the beginning of the year. Farmers around the world rely on Canada’s fertilizer industry to maximize crop yields, and the fertilizer industry relies on rail to get our products to market.” The group is urging the federal government to amend the labor code to strengthen the bargaining process and also recognize fertilizer as an essential good critical to food security that should continue to move during work stoppages. “Canada’s reputation has been damaged by the numerous supply chain disruptions in recent history,” Proud said. “This uncertainty gives our international competitors like Russia and China an advantage. We need swift action to protect Canada’s reputation as a reliable trading partner.” 75% of all fertilizer produced and used in Canada are moved by rail with limited alternatives to rail. Not only does this supply support to Canadian farmers, but US and international growers also rely on this flow of fertilizer. Fertilizer Canada represents producers, manufacturers, wholesale and retail distributors of nitrogen, phosphate, potash and sulphur fertilizers.

13-Aug-2024

HOUSTON (ICIS)–Nutrien said global potash demand during H1 2024 has been supported by favorable consumption and low channel inventories in North America and southeast Asia, with global nitrogen being boosted by steady demand and continued supply challenges in key producing regions. In its Q2 earnings release the Canadian fertilizer major said it is also seeing that there are expectations which have been created for record US corn and soybean yields, that have pressured crop prices. For the potash segment Nutrien said the settlement of contracts with China and India in July is expected to support demand in standard grade markets in the second half of this year. The producer said that the uptake on the summer fill program it offered in North America has been strong, and as such it has raised full-year global potash shipment forecast from 69 million tonnes to 72 million tonnes. It further said it expects a relatively balanced market in H2 2024. The company showed that potash sales volume guidance has been increased from 13.2 million tonnes to 13.8 million tonnes due to expectations for higher global demand in 2024. It noted that the range does reflects the potential for Canadian rail strike in the second half which would have a relatively short duration. Looking at the situation with global nitrogen, Nutrien said Chinese urea export restrictions have been extended into the second half and natural gas-related supply reductions could continue to impact nitrogen operating rates in Egypt and Trinidad. The company said US nitrogen inventories were estimated to be below average levels entering H2 2024, contributing to strong engagement the summer fill programs. Nitrogen sales volume guidance has been narrowed from 10.7 million tonnes to 11.1 million tonnes as Nutrien continues to expect higher operating rates at their North American and Trinidad plants, It is also counting on a growth in sales of upgraded products such as urea and nitrogen solutions. While end user demand has taken its typical summer slump, Nutrien said they expect buying for crop inputs in North America to remain strong in Q3 as growers aim to maintain optimal plant health and yield potential. With that view it noted that good affordability for potash and nitrogen will be supportive of the upcoming fall application rates “Crop input demand remains strong, and we raised our full-year outlook for global potash demand due to healthy engagement in all key markets,” said Ken Seitz, Nutrien president and CEO. “Our upstream production assets and downstream retail businesses in North America and Australia have performed well in 2024.”

08-Aug-2024

HOUSTON (ICIS)–US fertilizer producer Mosaic said there are factors which suggest the global potash market is balanced while the phosphate market will remain tight not only for 2024 but beyond. In its Q2 earnings statement, which had a second quarter net loss of $162 million, the producer said its market outlook is that North American demand remains robust as it sees there are still buyers who continue to seek out and secure summer fill volumes. It is their view that part of this is a result of farmers and retailers having emptied their bins this spring with substantial crop fertilizing. Yet challenging weather has been present all summer and there is growing concern from end-users that yields could be impacted with a dip in income likely to result in less post-harvest demand. Looking at Brazil briefly the producer feels that the level of in-season demand present could be described as solid and comes primarily from concerns of low stocks. For the global potash segment Mosaic said supply constraints are likely to continue to abate this year amid expectations of seeing higher exports from Belarus and Russia. It also noted though that the recent contract settlements in China and India should help further stimulate buying activities further in both southeast Asia and into India. In terms of Chinese phosphate exports the producer said that rate has declined 27% year on year, during the first six months of 2024, which equates to over 1 million tonnes. Mosaic said in its view the long-term outlook remains favorable as domestic and industrial needs will continue to be prioritized over fertilizer exports in the long term. Looking at grains and oilseeds it is their expectations that stock-to-use ratios will remain low and constructive agriculture fundamentals and economics are expected to continue to incentivize growers to maximize yields. Mosaic said while corn and soybean fundamentals as well as prices have softened recently when viewing nutrients, they overall remain affordable and that bodes well for future demand. It noted that during this year the El Nino weather pattern is expected to shift to a La Nina classification which holds the potential for creating a favorable backdrop in southeast Asia, India and Brazil.

06-Aug-2024

HOUSTON (ICIS)–Intrepid Potash saw indications of improving production during Q2 which has helped support continued expectations that their 2024 potash output will be approximately 15% higher year on year. In a project and operational update, the US fertilizer producer said at the HB Solar Solution mine in Carlsbad, New Mexico, it completed work on the replacement extraction well in June. It is now serving as the primary source of brine for the current evaporation season and Intrepid expects it will be the primary for future seasons. Also underway is phase two of installing a system to clean the injection pipeline and remove scaling to help ensure more consistent flow rates. All pipeline is installed with tanks set and the producer expecting to commission the project during Q3. At the Brine Recovery mine in Wendover, Utah, the construction of primary pond 7 is finished and is being filled with brine. It is expected to increase the brine evaporative area and maximize availability, increasing grade, and improving production by the fall of 2025. At the East Underground Trio mine the producer said because of the efficiencies from the two continuous miners placed into service in 2023, and the operation of a fine langbeinite recovery system, it had significant improvement in production rates and cost structure year on year. Intrepid said for the first six months of 2024 the cost of goods sold totaled approximately $284 per short ton, which compares to the same prior-year figure of $320 per short ton. The Q2 average net realized sales prices for potash and Trio averaged $405 and $314 per short ton, respectively, which compares to $479 and $333 per short ton during Q2 2023. “Our strategic focus continues to be improving our potash production, and I'm happy to share that we saw the first indications of this in our second quarter results,” said Matt Preston, Intrepid Potash CFO and acting principal executive officer. “Improved brine grades at HB from the Eddy Cavern and good early-season evaporation rates, allowed us to extend our spring production season and we still expect our 2024 potash production to be approximately 15% higher than 2023.” Preston added that when looking at the quarterly results their operational and financial performance continues to be solid with significant improvement in both total and per ton production costs. “As the broader potash market looks to be finding its midcycle pricing floor, we remain focused on improving our unit economics by means of higher potash production,” Preston said.

06-Aug-2024

HOUSTON (ICIS)– Producer Agrimin Limited said their Mackay Potash project in Western Australia is now advancing towards a final investment decision. In an update on quarterly activities the company said it continues to focus on their project which is planned to be able to manufacture standard and granular sulphate of potash (SOP) products. Current activities include efforts towards project funding and strategic partnerships, design works, environmental approvals as well as product marketing. The Mackay project is set to undertake sustainable extraction of brine from Lake Mackay using a network of shallow trenches, which will be transferred along trenches into a series of solar evaporation ponds. Raw potash salts will crystallize on the floor of the ponds and be collected by wet harvesters and pumped as a slurry to the processing plant that will refine harvested salts into high quality finished SOP ready for direct use by customers. SOP volumes will be hauled by a dedicated fleet of road trains to a purpose-built storage facility at Wyndham Port. At the port it will be loaded via an integrated barge loading facility for shipment to customers. The project’s definitive feasibility study (DFS) was completed in July 2020 and demonstrated that once in operation it could be the world’s lowest cost source of seaborne SOP. The independent technical review of the DFS was completed in April 2021. The company has signed three binding offtake agreements with Sinochem Fertilizer Macao Limited for the supply of 150,000 tonnes/year, Nitron Group for 115,000 tonnes/year and with MacroSource for 50,000 tonnes/year. Agrimin has already completed site-based testing for the salt harvesters, geotechnical sampling and for the sealed haul road. Additionally, the company has worked with its proposed power contractor to refine the project’s site power station design which has resulted in a hybrid diesel, solar, wind and battery solution. Regarding environmental clearance the company said the project is being assessed by the Western Australian Environmental Protection Authority (EPA) and during the quarter it resubmitted the environmental impact assessment response, which included revised management and monitoring plans. It is still expected that the EPA approval will come during the second half of 2024. Agrimin said it is also progressing other secondary approvals, licenses and agreements which included coverage for mining operations project safety and water regulations.

26-Jul-2024

HOUSTON (ICIS)–Mining major BHP announced the Jansen potash project in Saskatchewan has reached a pivotal milestone with construction having surpassed the 50% completion mark for stage 1, with stage 2 now underway. The company said the project should have first production in 2026 with it holding the potential to become a major source by the end of this decade as it could eventually increase Jansen’s total output to 16-17 million tonnes/year of muriate of potash (MOP). BHP total investment in Jansen is approximately Canadian dollars (C$) 14 billion ($10.2 billion) with the firm saying this marks the largest investment in its history, as well as the largest private investment in Saskatchewan. Having crossed the halfway mark, the focus now shifts towards the completion of the mill building and processing plant, port construction, finalizing infrastructure and gearing up to handover the project to operations. The company said efforts are also being intensified to prepare the workforce with an operations-ready mindset as the project gets closer to having its first ore. “Reaching the half-way milestone for JS1 is a testament to the dedication of our Team Jansen workforce, our contractors and procurement partners, and the local and Indigenous communities surrounding the Jansen area,” said Karina Gistelinck, BHP asset president potash. “Building one of the largest potash mines in the world requires an all-hands-on-deck approach, and the province has really come together to make a project of this magnitude possible. Delivering Jansen safely remains our top priority as we get ready for Jansen operations in 2026.” C$1.00 = $0.73

23-Jul-2024