Phosphates

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

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)–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)–Mineral development company First Phosphate announced it has discovered a significant high-quality igneous phosphate deposit at their Begin-Lamarche project, located in the Saguenay-Lac-St-Jean Region, Quebec. Having received all the results from its recent drilling program at the project the outcome has demonstrated continuous phosphate mineralization spread over three mineralized zones. First Phosphate said a compliant resource estimate is now underway with completion expected in the coming months, which will be immediately followed by work on a preliminary economic assessment for the project. “This drilling campaign has confirmed the presence of a high-quality igneous phosphate deposit in-line with expectation and in a logistically favourable mining area at just 70km from the deep-water port of Saguenay, Quebec,” said John Passalacqua, First Phosphate CEO.

25-Jul-2024

NASHVILLE (ICIS)–Unfavorable farming fundamentals, including weaker grain prices, high cost of credit, and weather issues will continue to hit demand for fertilizers, said market participants on the sidelines of the Southwestern fertilizer conference (14-18 July). Grain prices have slumped to the lowest level since December 2020 as Tropical Storm Beryl was expected to bring rains to the Midwest. This could boost yields at a time when prices are already under downward pressure due to ample availability. "The US farmer is in the worst shape that I have seen in my career, and this is concerning," said a trader with over 15 years of experience. Urea prices in the US are the cheapest in the world right now, as expected for this time of the year due to it being the offseason. Some market players believe prices are low domestically to discourage more imports. Importers may even look at re-exports to Brazil and Latin America if urea prices in New Orleans decline below $290-295/short ton FOB Nola. The level of $290/short ton FOB Nola is equivalent to $360/tonne CFR (cost & freight). For now, the urea level in Nola is in the mid $300s/short ton FOB Nola for July shipment. The phosphates market is getting more attention than urea in the US given the lack of availability for monoammonium phosphate (MAP) due to countervailing duties (CVD) on product arriving from Russia and Morocco. The lack of MAP availability is seeing prices trade at around $120/tonne premium to diammonium phosphate (DAP), when usually the premium is $20/tonne. There is more demand for triple phosphate (TSP) as some players are forced to switch due to the lack of MAP supply. The CVD rate for Russian producer PhosAgro is currently at 28.50%, while for Morocco the process is under review and could result in an increase in CVDs from 2.12% to 14.21% in October/November. Thumbnail shows crops being grown at a farm. Image by Shutterstock.

16-Jul-2024

HOUSTON (ICIS)–Global sustainable technology firm Metso announced it has been awarded  an order by Brazilian producer Galvani Fertilizante to deliver a lime calcination kiln and cooler package for their fertilizer plant in Irece, Brazil. The company said Galvani is taking a significant step at their Irece project by introducing sustainable technological innovation with this new unit expected to produce 350,000 short tons of phosphate concentrate and 600,000 short tons of agricultural limestone annually. Metso will supply a rotary kiln, a rotary cooler and ancillary equipment with the kiln and cooler system a critical part in the process to remove limestone from the phosphate concentrate. The kiln will be the largest lime calciner Metso has ever delivered, measuring almost six meters in diameter and over 140 meters in length. For its part Galvani said the partnership will bring strategic benefits and allow gains in mineral processing at their new unit. “The laying of the foundation stone for this unit, which took place in May of this year, reinforces the importance of this project for the development of the economy of the state of Bahia, in Brazil, and for the generation of jobs and income,” said Marcelo Silvestre, Galvani CEO. “This milestone represents our commitment to innovation and development, boosting our ability to meet the demands of the fertilizer market.”

28-Jun-2024

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 21 June. Indian phosphates buyers awaiting subsidies clarity from new government The bullish sentiment in the phosphates world continues, as supply in the Americas remains particularly tight, and demand firming. Europe naphtha, gasoline prices push higher despite weak fundamentals Europe naphtha market spot quotations appear to be torn between firming upstream Brent crude values and waning demand-side fundamentals, with weakness in gasoline particularly denting sentiment. New industrial deal needed to enable energy transition – Europe trade groups The EU needs a powerful industrial strategy to deliver the massive expansion in renewable energy required to power energy-intensive sectors which will provide locally made raw materials, according to a coalition of regional trade groups. Europe BDO heading into Q3 with hopes of stability rather than improvement Although the better-than-expected demand during the first half of 2024 would typically give rise to positivity for the European butanediol (BDO) market, players are tempering their predictions to hopes of stability. Downstream restructuring darkens Europe PX outlook despite shipping disruption uplift Paraxylene (PX) demand in Europe is likely to be relatively firm over the summer as seasonal buying appetite couples with stronger offtakes from downstream markets impacted by delayed imports and higher freight costs.

22-Jun-2024

HOUSTON (ICIS)–Canadian firm Arianne Phosphate announced that the government of Canada has added phosphate to the country’s critical mineral list, which it said acknowledges the fundamental importance and necessity of this mineral. The criteria for the Canadian critical mineral list are that the mineral is deemed essential to the nation’s economy and security, necessary for a transition to a sustainable low-carbon economy, can be a source for international allies and is a mineral whose supply is threatened. Minister of Energy and Natural Resources Jonathan Wilkinson said by updating the list Canada is taking a proactive step for its economy. “Investments in critical mineral projects create good jobs for workers, more avenues for Canadian innovation and lower emissions across the country – all part of our plan to build a cleaner Canada and a prosperous, sustainable economy,” said Wilkinson. Arianne Phosphate has been advancing on its Lac a Paul project in in Quebec’s Saguenay-Lac-Saint-Jean region and said it is now fully permitted and shovel ready. It noted that it hosts the largest independent greenfield phosphate deposit where it can produce a very high-purity and low-contaminant phosphate concentrate, ideal for use in both fertilizer and technical-grade applications. This includes the production of purified phosphoric acid which is required for lithium-iron-phosphate batteries. “The addition of phosphate to the critical mineral list not only recognizes the importance of the mineral but, the challenges the west has in securing the necessary supplies,” said Brian Ostroff, Arianne Phosphate president. “We welcome the Canadian government’s decision to add phosphate to its list and, along with the Quebec government’s recent decision to do the same, believe this will be a significant driver for Arianne as we look to conclude our ongoing discussions with potential partners and financiers.” Ostroff said an operating Canadian-based phosphate mine, along with the construction of a downstream purified phosphoric acid facility, would help ease the increasing concern over supply and start to address future needs. Arianne is currently undergoing a prefeasibility study designed to review the potential for constructing a large-scale phosphoric acid plant in the Saguenay region. The facility would be able to convert high-purity igneous phosphate concentrate into a purified phosphoric acid for use in downstream applications. As currently envisioned, the facility would be capable of producing 350,000 tonnes of battery-grade purified phosphoric acid and over 200,000 tonnes of a secondary phosphoric acid for use in specialty fertilizers and animal feeds.

10-Jun-2024

LONDON (ICIS)–Phosphates prices have been under pressure in India recently, while demand is expected to revive soon. Meanwhile, a lack of ammonia spot demand globally is weighing on the market. Phosphates editor Chris Vlachopoulos talks to senior editor Sylvia Traganida about the state of the phosphates market ahead of the International Fertilizer Association (IFA) annual conference (20-22 May).

15-May-2024