Urea and nitrates

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)–Brownfield exploration company Silver Valley Metals announced it has signed an asset purchase agreement for the Ranger-Page project in Idaho which will allow it to refocus efforts at its lithium and potash project in central Mexico. The firm said the decision came after careful consideration of its options about how to move forward in the most effective and least capital dilutive way. With two significant projects and a share structure that remains intact, the company said entering a sale with Silver Dollar Resources Incorporated was considered to be the most strategic option. Part of the decision was based on them having continued participation in the Ranger-Page project through its 12% equity stake in Silver Dollar. Silver Valley Metals CEO Brandon Rook said selling the Ranger-Page project will help relieve the company from having to undergo substantial capital dilution in order to meet the financial obligations it has over the next 15 months. “We believe there is strong upside to Silver Dollar’s share value because of its tier one assets in their portfolio today. With this transaction, Silver Valley avoids diluting its shares on a 2X plus multiple and adds dollars to the treasury at the same time,” said Rook. Following the transaction, the company said it will be in a good position to refocus efforts at its lithium and sulphate of potash (SOP) project located in the states of Zacatecas and San Luis Potosi. Comprised of 4,056 hectares over three mineral concessions, the project’s inferred mineral resource has demonstrated that the area contains 12.3 million tonnes of SOP and 243,000 tonnes of lithium carbonate equivalent.

15-Jul-2024

HOUSTON (ICIS)–The ports of Houston and Freeport in Texas remain mostly closed on Tuesday while millions remain without power following Hurricane Beryl's landfall at the start of the week. Port Houston said all of its terminals will remain closed on Tuesday. Port Freeport said the Freeport Harbor Channel is closed. Gates 4 and 14 are closed, while Gate 8 is opened. Freeport LNG Development had shut down its LNG operations at Freeport on July 7. It can export 15 million tonnes/year. Loadings for LNG tankers slowed considerably on 8 July due to rough seas and suspension of pilot services at Calcasieu Pass and Sabine Pass. Both are in Louisiana. The port of Corpus Christi is scheduled to reopen on Tuesday. It is the third largest oil-exporting port in the world, and it is home to Corpus Christi Liquefaction, a terminal that can export 15 million tonnes/year of liquefied natural gas (LNG). MILLIONS REMAIN WITHOUT POWERBeryl made landfall on Sunday in Matagorda, Texas, as a Category 1 hurricane, with maximum sustained windspeeds of 80 miles/hour (130 km/hour). So far, much of its effect on chemical operations has been by interrupting power. On late Tuesday morning, Texas reported more than 2.82 million outages, according to the website poweroutage.us, which keeps track of power outages in the US. CenterPoint Energy, the main electrical transmission and distribution company in Houston, said more than 1.76 million customers remain affected by outages. Entergy, the main one for eastern Texas, said on Monday evening that 247,000 customers remained without power. Texas-New Mexico Power, which handles the areas around Freeport and Galveston said it 73,220 customers are affected by outages. BERYL CAUSED SOME CHEM SHUTDOWNSElectrical outages and precautions had caused some chemical companies and refiners to shut down units. Enterprise Products said bad weather caused a trip to a propane dehydrogenation (PDH) unit in Mont Belvieu, Texas. Marathon Petroleum reported power loss and multiple unit shutdowns at its Galveston Bay refinery. Dow shut down its operations in Seadrift, Texas, as a precaution. In Baytown, ExxonMobil said it is continuing to assess the site for possible damage as it resumes normal operations. The company anticipated minimal impact to production. Formosa Plastics shut down its Olefins 1 unit at Port Comfort, Texas. Interoceanic Corporation (IOC) said its affiliate, PCI Nitrogen, has halted ammonium sulphate (AS) and sulphuric acid production at its facility in Pasadena, Texas. Phillips 66 reported an upset at its refinery in Sweeney, Texas. The refiner did not say if it shut down any unit. Personnel had returned it to normal operations. CITGO reduced operating rates at its refinery in Corpus Christi, Texas. BASF Total Petrochemical's cracker in Port Arthur, Texas, produced off-spec material because of a suspected lightning strike. LIMITED RAIL DISRUPTIONSOn Monday, BNSF said its Pearland intermodal facility in Houston remained closed.  WEATHER FORECASTIn the late morning, Beryl had degraded into a post tropical cyclone with maximum sustained winds of 30 miles/hour, according to the National Hurricane Center. It was in the northeastern part of the US state of Arkansas, and meteorologists expected it would continue traveling in that direction towards Canada. Thumbnail shows flooding caused by Beryl. Image by Reginald Mathalone/NurPhoto/Shutterstock

09-Jul-2024

HOUSTON (ICIS)–Australian BCI Minerals announced it has signed a 21-year transhipment services agreement with CSL Australia for its Mardie salt and potash project in Western Australia. The producer said undertaking transhipment operations at Mardie provides a cost-effective alternative to a deep-water port as it eliminates the need for towage and pilots and is expected to perform well in the local weather conditions. As planned, the transhipper will travel 12-15 nautical miles from a jetty loadout facility to fill ocean-going vessels with a deadweight of up to 207,000 tonnes, which BCI said gives a significant strategic advantage over regional competitors, which cannot load vessels of this size. This agreement, valued at Australian dollars (A$) 598 million ($398.7 million) will be delivered in two phases, with the first portion done under a 12-month time charter agreement using an existing transhipment vessel. At the same time, CSL will construct a new vessel to use at Mardie, which is targeting output of 5 million tonnes/year of salt and 140,000 tonnes/year of sulphate of potash (SOP). It is anticipated this new transhipment vessel will be constructed in approximately 36 months. BCI said phase two will begin upon commissioning of their vessel and completion of a 20-year services agreement which will contain two five-year extension options. “BCI Minerals is very pleased to sign this major contract with CSL for a vessel specifically designed for the Mardie salt and potash project, which will provide us with a secure and cost-effective shipping solution providing real benefits to our operations and our customers,” said David Boshoff, BCI Minerals managing director. “CSL’s market leading reputation for delivering transhipment solutions and their commitment to safety and reliability make them an ideal long-term partner for BCI Minerals.” $1 = A$1.50

01-Jul-2024

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 7 June. Global urea prices firm as unexpected gas outages hit Egypt The near-term outlook for urea has firmed after prices saw a surprise uptick in North Africa and the Arab Gulf on news of unscheduled plant shutdowns in Egypt due to a lack of gas supply. Europe PET market tension intensifies on freight surcharges, container shortage Rising freight costs and a dearth of containers is thwarting the global flow of polyethylene terephthalate (PET) into Europe. Eurozone private sector momentum hits one-year high in May Business momentum in the eurozone hit the highest level in 12 months in May, pushing further into growth territory as service sector orders surged and the manufacturing industry showed signs of recovery. Heavy rainfall, flooding in Germany hits supply routes Torrential rain and flooding in Germany has led to evacuations in parts of the south of the country, hitting already-strained supply lines through central Europe and halting transport along some sections of the River Rhine. IPEX: Index down for first time this year on weak demand in all regions The ICIS Petrochemical Index (IPEX) was down 1.2% in May month on month, as weak downstream demand paved the way for price declines in all regions. Europe PE/PP June outlook muddied by falling feedstock costs and rising freight rates Polypropylene (PP) and polyethylene (PE) prices in Europe were largely stable for the final week of May, as players were waiting for upstream contract prices to settle.

10-Jun-2024

HOUSTON (ICIS)–Brazil producer Petrobras announced that its executive board has approved the resumption of operating activities of the fertilizer plant Araucaria Nitrogenados in the state of Parana. The plant has been mothballed since 2020 and the producer said it is now expected to be restarted in the second half of 2025. Located next to the Presidente Getulio Vargas Refinery the operation has a fertilizer production capacity of 720,000 short tons/year for urea and 475,000 short tons/year for ammonia. It can also produce automotive liquid reducing agent.

06-Jun-2024

HOUSTON (ICIS)–DuPont expects about $60 million in dis-synergies from its break-up into three independent publicly traded companies, CEO Ed Breen and CFO Lori Koch told analysts in a conference call on Thursday. The US specialty chemicals and materials company announced late on Wednesday that it plans to separate its electronics and water businesses into two publicly traded companies while the existing DuPont, dubbed “New DuPont”, will continue as a diversified industrial company. The dis-synergies were largely related to insurance, audit fees, leadership and boards, that is, “public company stand-up costs”, Koch said. The dis-synergies were “not a huge number” and would be across all three companies, she said. As for separation costs, those are estimated at $700 million, with the biggest cost items being IT separation and tax, legal and audit work, she said. DIVESTMENT NOT RULED OUT While DuPont is pursuing spin-offs and is not running a parallel M&A processes for electronics and water, it does not entirely rule out divesting them. “If somebody wants to call and propose something, we are going to listen to it,” Breen said in response to analysts' questions. He also said that the water business, which is relatively smaller, may be spun off before electronics. The timing for the separations is good as markets are coming out of destocking cycles, Breen noted. Especially in semiconductors, “we are going into a real upcycle”, he added. DuPont has been working on the separation for about six months and expects to complete it within the coming 18-24 months, he said. The relatively long completion timeline is mainly due to tax matters as DuPont intends to execute tax-free separations, he said. In some of the countries where DuPont operating, a separated business must be run for a full 12 months before it gets tax-free status, Breen said. New DuPont, with annual sales of $6.6 billion, and the electronic spin-off (sales: $4.0 billion), are expected to have investment-grade balance sheets whereas the smaller water business (sales: $1.5 billion), may not, Koch said. PFAS As for DuPont’s liabilities for poly- and perfluoroalkyl substances (PFAS), those will be allocated between the three companies pro rata, based on their earnings before interest, tax, depreciation and amortization (EBITDA) in the last year before the spin-off, Breen said. The amount of PFAS liabilities may not be that large as DuPont expects to “make great progress” on settling claims by the time the spin-offs will be completed in 18-24 months, he said. BREEN’S NEW ROLE Breen will step down as CEO on 1 June, to be succeeded by Koch. However, he will continue as full-time executive chairman of DuPont’s board of directors, focusing on the separations, including the appointment of the spin-off companies’ boards and the hiring of their management teams. Breen would not rule out that he may join the boards of the electronics and water spin-offs but added that a decision has yet to be made. PROFILES OF THE THREE COMPANIES' MARKETS New DuPont, focused on healthcare, advanced mobility, and safety & protection: Electronics, focused on semi-conductors and interconnect solutions: Raw materials used by the electronic business include, among others, monomers, pigments and dyes, styrenic block copolymers, copper foil, filler alumina, nickel, silver, palladium, photoactive compounds, polyester and other polymer films, polyethylene (PE) resins, polyurethane (PU) resins, polyvinyl chloride (PVC) compounds and silicones, according to DuPont's website. Water, focused on reverse osmosis, ion exchange, and ultra filtration: Raw materials used by the water business include, among others, methyl methacrylate (MMA), styrene, polysulfone, high density polyethylene (HDPE), polyethylene (PE), aniline, calcium chloride, caustic and sulfuric acid, according to DuPont's website. DuPont's shares traded at $78.44/share, down 0.13%, at 11:00 local time on the New York Stock Exchange. With additional reporting by Al Greenwood Thumbnail photo source: DuPont

23-May-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 17 May 2024. Asia melamine makers grapple with increased costs, slowing demand By Joy Foo 17-May-24 11:53 SINGAPORE (ICIS)–Asia’s melamine spot market for China-origin product was largely stable in the first half of May, even though feedstock urea prices continued to rise, but demand may weaken for the rest of the month. Singapore's April petrochemical exports rise 26.5%; NODX down 9.3% By Nurluqman Suratman 17-May-24 10:45 SINGAPORE (ICIS)–Singapore's petrochemical shipments rose by 26.5% year on year in April to Singapore dollar (S$) 1.34 billion, reversing the 3.6% decline in the previous month, official data showed on Friday. PODCAST: China PP exports to weigh on SE Asia on ample propylene supply By Damini Dabholkar 16-May-24 21:55 SINGAPORE (ICIS)–The ample supply of propylene in Asia and new polypropylene (PP) capacities in China are expected to weigh on discussions in southeast Asia over the coming months. Tanker incident triggers rate hike on South Korea-Japan trades By Hwee Hwee Tan 16-May-24 11:28 SINGAPORE (ICIS)–The intra northeast Asia tanker market is expected to remain stable despite recent volatility in South Korea-Japan chemical freight rates, following a fatal tanker incident off Japan’s west coast. US hikes tariffs on $18bn worth of China imports, including EVs By Nurluqman Suratma 15-May-24 12:20 SINGAPORE (ICIS)–US President Joe Biden is ramping up tariffs on $18 billion worth of imports from China, including electric vehicles (EVs), semiconductors, batteries and other goods, in a move that the White House said was a response to unfair trade practices and intended to protect US jobs. Asia polyester discussions stable amid reduced supply, lower feedstock prices By Judith Wang 14-May-24 14:55 SINGAPORE (ICIS)–Asia’s polyester export discussions were little changed as the pressure of reduced supply in China was balanced out by weaker feedstock prices.

20-May-2024

SAO PAULO (ICIS)–Brazil’s state of Rio Grande do Sul remains at a standstill from the floods, with Thai petrochemicals major Indorama’s subsidiary in the country also suspending operations at its Triunfo facilities, a spokesperson confirmed to ICIS. Two main ports in Brazil’s southernmost state remain closed, while fertilizers players have said demand is likely to be hit on the back of a reduced planting season. A spokesperson for Indorama said the company had suspended operations at Triunfo on 3 May until further notice. Indorama's operations in Brazil are the result from its acquisition of Oxiteno and operates at Triunfo a methyl ethyl ketone (MEK) plant with a production capacity of 42,000 tonnes/year and a butene-2 plant with capacity at 42,000 tonnes/year, according to ICIS Supply & Demand. “Initially, we ensured that the emergency shutdown was carried out safely. Currently, we are carefully assessing the weather and logistical conditions, as well as the guidance from the relevant authorities, to determine the short, medium and long-term impacts [of the suspension],” said the Indorama spokesperson. Earlier in the week, Brazil’s polymers producer Braskem and styrenics producer Innova declared force majeure from its operations in Triunfo, as did styrene butadiene rubber (SBR) producer Arlanxeo. Official figures on Friday put the dead toll at 116, with more than 130 people still unaccounted for, while more than 100,000 remain displaced from their homes and nearly two million people in the 12-million-strong state are being affected by Brazil’s worst floods in nearly a century. To make matters worse, rains returned to Rio Grande do Sul by the latter part of the week, forcing authorities to suspend some rescue operations. Brazilians this week have kicked off a remarkable national mobilization to help alleviate the disruption gauchos – as citizens from Rio do Grande do Sul are known in Portuguese – are going through. From workplaces to residential buildings, from civil associations to companies, there is practically no place in the country where an effort to collect goods, food and money is not being deployed. PORTS CLOSED, AGRICULTURE HITThe Port Authority for Rio Grande do Sul, called Portos RS and which oversees operations at the Port of Rio Grande, Port of Pelotas and Port of Porto Alegre, said operations at the two latter facilities remain shut to traffic. The Port of Rio Grande is operating normally, it added. “[Portos RS] maintains operations at the Port of Porto Alegre suspended, due to the maintenance of the level of Lake Guaiba above the so-called flood level. At the Port of Pelotas, in the south of the state, the shipment of wood logs remains suspended and activities are paralyzed at the terminal,” the Authority said. “Regarding the crossing to Sao Jose do Norte [a city north of Porto Alegre], the vehicle and passenger transport service is suspended due to the high level of Laguna dos Patos.” This week, several fertilizers players said to ICIS demand is likely to be hit as planting for some crops which had just started is likely to be delayed, postpone, or cancelled. Moreover, seeds recently planted could also get damaged by high levels of moisture, potentially ruining their harvest. “There has been great damage to infrastructure in the state, with fertilizers mixers underwater and authorities still calculating the impacts,” said an urea trader. “The rice harvest is almost done, but wheat planting is in its early days and producers of urea believe demand destruction can happen due to the circumstances.” Another fertilizers source added that around 70% of soybeans in Rio Grande do Sul had already been harvested, but there is still 30% to be harvested which would now be at risk. It added that 30% would represent approximately 6.5 million tonnes of soybeans, or 5% of Brazil’s total production. Rio Grande do Sul is the main rice producer in Brazil, and the source said the harvest for that crop was already behind schedule when the rains started, with 78% harvested. “We estimate that the unharvested volume should significantly affect the supply of rice in Brazil, increasing the upward pressure on prices, “the source said. “Corn was also in the process of being harvested, with an estimated 83% harvested by the time the rains started. It is not possible yet to estimate precisely how much of this amount at risk has been lost.” Front page picture: Voluntaries working in Rio Grande do Sul organizing donations Source: Government of Rio Grande do Sul Additional reporting by Bruno Menini, Deepika Thapliyal and Chris Vlachopoulos

10-May-2024

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 3 May. Besieged by imports, Brazil’s chemicals put hopes on hefty import tariffs hike Brazilian chemicals producers are lobbying hard for an increase in import tariffs for key polymers and petrochemicals from 12.6% to 20%, and higher in cases, hoping the hike could slow down the influx of cheap imports, which have put them against the wall. US manufacturing falls back into contraction in April, prices rise Economic activity in US manufacturing contracted in April after expanding in March, according to the Institute of Supply Management’s (ISM) latest purchasing managers’ index (PMI) survey released on Wednesday. SABIC Q1 net income falls 62%, warns of industry overcapacity SABIC's net income fell by 62% year on year to Saudi Riyal (SR) 250 million in the first quarter amid a drop in prices and sales volumes, the chemicals major said late on Wednesday. US TiO2 producer Kronos to shut down production via sulfate process in Varennes, Canada Kronos Worldwide, a titanium dioxide (TiO2) producer headquartered in Dallas, Texas, US is planning to permanently shut down sulfate-based production at its location in Varennes, Quebec, Canada. US Huntsman assets in Europe spare from energy hit, but EU policies erratic – CEO Huntsman’s assets in Europe are not energy intensive and have been spared from the energy crisis, but more broadly, the 27-country EU is still lacking a comprehensive policy to address the issue, the CEO at US chemicals major Huntsman said on Friday.

06-May-2024