US fertilizer industry watching but not immediately concerned over port strike

HOUSTON (ICIS)–As port operations along the East Coast and Gulf Coast came to a halt amid a union strike underway, the US fertilizer industry was carefully watching the labor developments but is not overly concerned about the situation having an immediate impact on activities or price direction.

Part of this outlook on the port problem comes from a perspective of fertilizer participants that the work stoppage will be short in duration as the economic consequences will be severe if protracted.

This latest labor disruption began when union International Longshoremen’s Association (ILA) rejected the latest wage offer by employers’ group United States Maritime Alliance (USMX).

This commenced a strike at 36 ports stretching from Maine to Texas, and although the labor talks were said to be continuing there was no further progress reported as of late on 1 October.

Also, the US fertilizer sector recently experienced the Canadian rail strike, which did provoke some steep concerns before it was quickly resolved so there is thought this situation could follow a similar course and end with a quick resolution.

There are some thoughts this strike could be settled within a few days, although the government has indicated that it will not intervene in the situation.

An industry participant echoed the overall outlook in saying “if the short term is like that, I do not expect any fertilizer related issues.”

Domestic fertilizer prices should not see any immediate escalation because of this strike activity because demand is still fairly limited following the recent hurricanes and with the ongoing harvest progress.

In addition, most of those volumes to be used in the coming weeks for end of the year applications, or stockpiled for next spring, saw the majority of movement over the last part of summer and now are mostly in place already.

US producers did not immediately respond to a request for comment but Canadian fertilizer major Nutrien said that while the strike might not have any consequences directly for their operations, there is concern over the larger repercussion if this stoppage turns lengthy.

“As the world’s largest supplier of crop inputs and services, Nutrien depends on reliable supply chains to serve North American and offshore customers,” said a Nutrien spokesperson.

“While the East Coast port strike is not expected to materially impact our shipments, any extended disruption will be felt more broadly in the supply chain, and we urge parties to dispute to achieve a timely resolution.”