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The Market | 12 October 2017 | Published by ICIS | www.icis.com/fertilizers | 29 pages

The Market

1The Market | 12 October 2017 | www.icis.com

ICIS accepts no liability for commercial decisions based on the content of this report. Unauthorised reproduction, onward transmission or copying of The Market in either its electronic or hard copy format is illegal. Should you require a licence or additional copies, please contact ICIS at [email protected].

Agricultural Insights 26K+S to merge potash, salt units 27Gensource presses on with MOP project 27Gulf Mining Group plans Oman SOP pilot project 28

Nitrogen 3Phosphates 12Ammonia 16Sulphur 20Potash 23

Recent sales 2Freight 2

Fertilizers at a glanceNitrogen■ Indian urea tender infuses life

in market India’s decision to announce a fresh import tender closing on 14 October has led to some activity in the urea market. Higher prices are heard across regions, including the Arab Gulf and China as suppliers increase prices ahead of the tender.

■ India to buy up to 500,000 tonnes RCF is expected to buy between 300,000-500,000 tonnes under its tender over the weekend. Prices are generally expected at $285-290/tonne CFR with offers likely from China and Iran and limited volumes from the Arab Gulf and Russia.

■ Egyptian sales above $300/tonne FOB MOPCO sold 45,000 tonnes of granular urea for November-December shipment at $302/tonne FOB. Egyptian business a few days earlier was $4/tonne lower than this level.

■ Nigerian material sold in Brazil A trader sold 20,000 tonnes of Nigerian granular urea to other major traders at $290-295/tonne CFR. Another sale for 15,000 tonnes was heard at $295/tonne CFR.

Phosphates■ NFL India scraps DAP purchase tender

NFL is understood to have scrapped its purchase tender for 45,000 tonnes (+/-10%) of DAP for the east coast for shipment by 25 October. Amber was the only offer with Chinese product at $375/tonne CFR, but this was deemed too high by the buyer.

■ Mosaic sells Saudi DAP cargo to India Mosaic said it sold 33,000 tonnes of DAP at $373/tonne CFR for mid-November loading from its joint venture Wa’ad Al Shamal project in Saudi Arabia.

■ Brazil MAP imports up in January-September year on year MAP imports into Brazil have reached 2.9m tonnes in January-September, up 57.31% from the 1.84m tonnes the year before.

Ammonia■ Trammo secures Egyptian spot cargoes

The trader agreed a price of $265/tonne FOB Ain Sokhna for 23,400 tonnes of EBIC-OCI material, and was awarded Abu Qir’s latest tender for 10,000 tonnes.

■ FACT India seeks pair of Q4 cargoes The group issued its first ammonia tender since June, as the firm looks to secure a combined 15,000 tonnes for November and December delivery.

■ Flurry of spot sales in Asia Pacific Several cargoes exchanged hands as deals were agreed by the likes of Mitsui, Yara, Koch, Fertcom, Mitsubishi and Trammo.

Sulphur■ China prices hit 26-month high

China players returned to the market in force following the Golden Week holiday, with demand remaining high. China import prices are now at their highest level since 13 August 2015, in part driven by domestic price hikes.

■ Middle East spot prices hike 13-18% Middle East spot prices rose by 13-18% this week amid ongoing supply shortages across the region and firm demand from China, where players returned strongly to the market following the holiday period last week.

Potash■ K+S to merge MOP, salts,

magnesium units Company-wide strategic overhaul aims to achieve annual operational savings of €150m by 2030.

FERTILIZER BENCHMARKS

2


The Market | 12 October 2017 | www.icis.com

The Market

Product Origin Seller Buyer Destination ‘000t $pt Ship

Urea - prilled Russia URALCHEM TBC Latam/Brazil 30 mid-250s FOB November

Russia PhosAgro Sylvite Canada 10 292 CFR November

Urea - granular Russia PhosAgro Sylvite Canada 20 304 CFR November

Oman SIUCI Keytrade? India? (Open) 40 275 FOB 1H November

Nigeria Indorama Nitron Brazil? 30 Low-270s FOB 2H October

Nigeria Indorama Transvostok TBC 30 Low-270s FOB 2H October

Egypt Helwan TBC Europe, Turkey? 15 298 FOB October

Egypt MOPCO TBC Europe 30 302 FOB H2 November

Egypt MOPCO TBC Europe? Turkey? 15 302 FOB December

China Fudao Trader SE Asia 6 280 FOB Oct/Nov

North China TBC Trader SE Asia 6 279 FOB Oct/Nov

AN Russia URALCHEM TBC Brazil/LatAm 20 High-220s FOB November

DAP Saudi Arabia Mosaic TBC India 33 373 CFR November

China Brio Kaltim Indonesia 7.5 380 CFR October

US Mosaic TBC Pakistan 25 380 CFR October

Tunisia GCT TBC Italy 30 TBC October

DAP/MAP US Mosaic TBC Mexico 7 346 FOB November

Saudi Arabia SABIC TBC Latin America 40 Formula December

Ammonia Egypt EBIC-OCI Trammo Asia Pacific 23.4 265 FOB Mid-October

Egypt Abu Qir Trammo Turkey? 10 Formula Mid-October

Oman Trammo Yara Italy 10 TBC Mid-October

Indonesia Mitsui PPL India 15 Mid-280s CFR Mid-October

Indonesia? Mitsui SABIC Taiwan 23.4 Formula 1H November

Malaysia PETRONAS Koch Taiwan 8 250 FOB Netback 1H October

Malaysia PETRONAS Fertcom Philippines 8 250 FOB Netback 1H October

Australia Yara Mitsubishi Taiwan 15 Formula Mid-October

Trinidad Trammo Muntajat South Africa 10 Formula? October

SUMMARy OF RECENT SPOT SALES

WEEKLy FREIgHT RATE INDICATIONS

Route Product ’000 tonnes $/tonne

yuzhny-WC India Urea 60-70 27-29

Riga-Brazil Urea 25-30 22-24

Ag- US gulf Urea 35-45 22-24

Egypt-French Bay Urea 6-8 23-26

USg-WC India DAP 55-65 37-39

Morocco-Brazil MAP 25-30 16-18

USg-Brazil DAP 25-30 16-18

Baltic-Brazil MOP 25-35 22-24

Baltic-China MOP 55-65 36-38

Vancouver-Brazil MOP/Sul 45-50 23-25

Vancouver-China Sul/MOP 50-65 17-19

Ag-WC India Sulphur 15-20 14-16

Ag-China Sulphur 25-30 18-20



Nitrogen

UREA MARKET HIgHLIgHTS■ Sentiment was soft for urea but then improved on Indian tender■ RCF India changes terms of tender; reduces offer validity■ Chinese prices increase as suppliers eye Indian tender■ Arab Gulf prices increase over $10/tonne in a week■ Nigerian, Arab Gulf material sold in Brazil at higher levels■ Egyptian prices touch $302/tonne FOB for Nov-Dec■ Indonesia’s Kaltim declares FM for November shipments ■ Baltic sells to Latin America as demand resurfaces ■ US Nola barge levels pick up tracking global trend

OVERVIEWThe announcement of a urea import tender from India over the weekend has led to another pickup in the market after a lull of around two weeks.

This will be the first major tender from RCF on behalf of the government. The buyer streamlined several processes during the week, including reducing its offer validity to a week’s time from 10 days announced earlier, as it looks to encourage participation from international suppliers. RCF is expected to buy anywhere between 300,000-500,000 tonnes.

Low stock levels, reduced production rates domestically and a push from the Indian government to be well supplied ahead of the rabi or winter season are the reasons for these frequent tender announcements from India. India is expected to purchase up to 1.3m tonnes of urea until March 2018.

Prices across key producer regions have shot up this week although only a handful were positions taken for the Indian tender. Most business concluded at higher levels was by traders anticipating a firm global trend in the fourth quarter as India continues to be a key buyer.

Granular urea business in the Arab Gulf was concluded at $275/tonne FOB Oman earlier this week and there is now talk of a deal at $285/tonne FOB and bids above this level for November cargoes.

In Egypt, prices went up by $4/tonne this week with Helwan’s sale at $298/tonne FOB for October followed by business from MOPCO for 45,000 tonnes for November-December shipment at $302/tonne FOB. Buyer details are not clear but the tonnes from MOPCO are heard to be for Europe.

Iran is expected to supply 200,000-250,000 tonnes to India under the tender while China is likely to be another key participant. As many as three to four panamax vessels may be supplied from China with some even expecting the lowest offer to be from China. Price expectations under the tender are in line or slightly higher than the last tender, at $285-290/tonne CFR.

Chinese prices have increased again this week, with prilled urea now in the mid/high-$270s/tonne FOB, backed by continued demand in the domestic market. Operating rates are still around 60% in China,

Interest for prilled urea outside of China has been limited. After lack of business over the last few weeks, Baltic producers sold three lots this week. However, prices were in a wide range from $250-259/tonne FOB for prills and around $270/tonne FOB for granular urea. This has led to expectations Russian tonnes may be sold to India depending on the price and freight rates.

The US Nola market jumped up over $20/short ton this week tracking international levels while Brazilian levels are also higher. However, in Brazil, most of the momentum was trader driven rather than from end-users.

Urea prilled bulk

Yuzhny FOB 255 - 260 248 -252

Romania FOB 265 - 270 250 -255

Baltic FOB 250 - 259 245 -250

Arab Gulf FOB 270 - 300 270 -300

SE Asia CFR 270 - 280 270 -280

NW Europe €pt FCA 265 - 275 265 -270

China FOB 273 - 277 270 -272

Urea granular bulk (spot)

Arabian Gulf FOB 275 - 287 265 -275

Arab Gulf US netback FOB 217 - 249 218 -229

Iran FOB 267 - 272 267 -272

Yuzhny FOB 255 - 260 255 -260

Baltic FOB 263 - 270 255 -270

SE Asia FOB 275 - 280 270 -280

China FOB 279 - 285 272 -280

SE Asia CFR 285 - 295 285 -295

Egypt FOB 298 - 302 296 -296

Algeria FOB 278 - 280 278 -280

North Africa FOB 278 - 302 278 -296

NW Europe €pt FCA 270 - 285 270 -280

Caribbean FOB 255 - 270 225 -255

US Gulf ps ton FOB 222 - 243 222 -232

US Gulf metric CFR equiv 240 - 272 240 -251

Brazil CFR 290 - 295 275 -280

NITROgEN 12 October 5 OctoberNITROgEN 12 October 5 October

Nitrates

AN Baltic FOB bulk 225 - 230 235 -245

AN B Sea FOB bulk 225 - 230 235 -240

AN France € deld bulk 250 - 270 250 -270

AN UK FCA £ bagged 220 - 230 220 -230

AN FOB Nola ps ton 180 - 185 180 -185

CAN Germany € cif blk 195 - 215 195 -215

UAN France € FCA 30% 155 - 157 155 -160

UAN FOB B Sea 32%** 145 - 150 145 -150

UAN FOB Baltic 32%** 145 - 160 145 -160

UAN FOB Egypt 32%** 141 - 150 141 -150

UAN FOB Nola ps ton 32% 140 - 140 135 -140

UAN CFR ec US 32% 160 - 165 160 -165

Am. Sulphate bulk

Black Sea FOB (white) 135 - 145 130 -140

Baltic FOB 135 - 145 130 -140

Brazil CFR 135 - 140 135 -140

SE Asia CFR 121 - 136 124 -134

China FOB 107 - 117 110 -115

**low end dutiable product

PRICES ARE IN US$ EXCEPT WHERE SPECIFIED

❯❯

4



The Market

slightly higher for smaller lots. Granular urea business from MOPCO this week was heard for Europe for November-December shipment but the destination is not confirmed.

In Italy, there is no interest for granular urea with buyers not in a hurry to make purchases. Buyers are still looking for lower prices or any correction in the market over the next few months.

Demand is expected to emerge only in December.

AFRICAIn Egypt, prices have increased again this week as traders bought cargoes for October-December shipment. A few shorts for Europe are believed to have been covered. Availability in the country is expected to be low due to 30-50% of monthly production committed locally in October-December.

MOPCO says it sold a total of 45,000 tonnes of granular urea at $302/tonne FOB to undisclosed traders. While 30,000 tonnes will load in second-half November, another 15,000 tonnes is for full December shipment.

Keytrade was linked to the purchase of the 15,000-tonne lot, but this could not be confirmed.

Earlier in the week, Helwan is understood to have sold 15,000 tonnes of granular urea at $298/tonne FOB for October shipment to an undisclosed buyer.

The range this week is based on business from Helwan and MOPCO with our price assessment based on deals eight weeks forward.

Meanwhile, Abu Qir has issued a sales tender for 25,000 tonnes ❯❯

BLACK SEAIn yuzhny, there is unconfirmed talk OPZ was offering $260/tonne FOB for October/November late last week and is now offering $270/tonne FOB. No fresh business is heard.

OPZ is expected to remain shut down for the rest of this month as well. The producer was last heard to be looking for a new gas supplier since it failed to come to a tolling agreement with ERU.

Prices are notionally increased in line with international markets.

BALTICIn the Baltic, business picked up this week with suppliers selling prilled and granular urea into Latin America this week. Buyer interest had been lacking over the last few weeks.

Bids are now expected to improve since producers allocated part of their tonnes, and as international markets have picked up. It is likely some cargoes may move to India from the Baltic despite the higher freight.

In St Petersburg, PhosAgro is understood to have sold 20,000 tonnes of granular urea at $304/tonne CFR to Canada and 10,000 tonnes of prills at $292/tonne CFR to the same destination. The cargo is for November shipment.

Freight is heard around $32-33/tonne.

In Riga, URALCHEM is understood to have sold 30,000 tonnes of prilled urea in the mid-$250s/tonne FOB Riga to Latin America/Brazil for November delivery. The business was concluded earlier this week.

In Kotka, bids are heard below $250/tonne FOB for a November cargo but the supplier is looking for higher levels.

In Tatarstan, MendeleevskAzot is expected to have 10,000 tonnes of granular available for November. The producer is yet to make any sales.

EUROPEIn Turkey, Igsas is understood to have purchased 5,500 tonnes of Egyptian granular urea in the low-$290s/tonne CFR. Dreymoor was linked to the deal with the trader believed to have sold an old position.

In northwest Europe, business continues to be slow and prices are

UREA PRICE COMPARISON

EgyPT UREA SALES - OCTOBER-NOVEMBER

Supplier Quantity ('000

tonnes)Buyer

Price ($/tonne FOB)

Shipment

MOPCO 30Koch,

Keytrade225-227 H1 Oct

MOPCO 5 Koch? 230 H1 Oct

MOPCO 40 Ameropa? 242.5 October

MOPCO 3 Trader 270 October

AlexFert 10 Trader 230 October

AlexFert 10 Ameropa? 250 October

AlexFert 6 TBC 302 October

AlexFert 3 TBC 302 October

Abu Qir 10 OCI/OFT? 266 October

Abu Qir 15 Traders 294 October

Abu Qir 20 (prills) Trader 273 October

OCI/EFC 15 TBC 270 October

Helwan 20 TBC 296 October

Helwan 15 TBC 298 October

October Total 182

MOPCO 25 TBC 272 November

MOPCO 20 Koch 294 November

MOPCO 30 TBC 302H2

NovemberNovember Total

75

MOPCO 15 Keytrade 302 December

December Total 15

❯❯

5



The Market

of granular urea and 20,000 tonnes of prilled urea, closing on 17 October. The cargo is to ship 20-30 October.

Last prilled sale from Abu Qir was at $273/tonne FOB to an undisclosed trader, for mid-October shipment.

In Libya, the Lifeco ammonia and prilled urea plant has restarted after an unscheduled one-month shutdown and is running at a good rate. The Marsa El-Brega facility went offline on 11 September amid gas supply issues, but restarted a few days ago. The urea unit is operating at decent capacity, but no other details are available.

In Algeria, AOA Edeola/Bahwan has restarted urea production at one urea line following an over seven-month shutdown due to litigation issues. The plant shut down in mid-February.

The second urea line is expected to restart in end-October.

AOA has a capacity to produce 1.15m tonnes/year of granular urea from each line.

In Nigeria, Indorama is understood to have sold 30,000 tonnes (+/-10%) each of granular urea to Nitron and Transfotech, for shipment in October.

The price of the Nitron cargo, which will load 17-20 October, is undisclosed. The second cargo is priced in the low-$270s/tonne FOB and is to load 26-28 October.

The producer is now heard to be offering $295/tonne FOB for November cargoes.

In Ethiopia, the Ethiopian Agricultural Business Corporation (EABC) has reissued an import tender for 550,000 tonnes (+/-20%) of urea, closing on 26 October, for shipment to Djibouti and Sudan in November 2017-January 2018.

Offers are to be made on a delivered CFR and Liner Out basis in eleven lots of 50,000 tonnes each.

EABC scrapped its 13 September purchase tender for 550,000 tonnes of urea due to financial issues. Samsung had offered lowest in nine out of 11 lots under the urea tender, netting back to around $240/tonne FOB.

There is uncertainty surrounding the new tender given the short shipment window.

MIDDLE EASTThe focus shifted to the Arab gulf once again this week following the announcement of an Indian tender. Participation from the Arab Gulf is expected to be limited, with not much urea available in trader hands this time and as there are three producers undergoing shutdowns during the fourth quarter.

However, at least three cargoes are likely to be offered from the region under the Indian tender closing this weekend.

Business for granular urea was heard at $275/tonne FOB from Oman earlier this week following which there was talk of a sale at $285/tonne FOB but no details were available. A bid is now heard at $287/tonne FOB with the producer believed to be offering close to $300/tonne FOB.

❯❯

❯❯

The granular range this week is based on business concluded and the latest bid heard for November tonnes. Netbacks from Brazil for a part cargo are around $280/tonne FOB.

Prilled prices are left unchanged on lack of fresh business.

In Oman, SIUCI is understood to have sold a cargo of granular urea at $275/tonne FOB for 1H November shipment to an undisclosed trader.

Last business from the Arab Gulf was by traders that featured netbacks from India in the low/mid-$270s/tonne FOB.

There is talk of a trader-to-trader deal at $285/tonne FOB but this could not be confirmed.

Koch and Ameropa are shipping a cargo each to India under the previous IPL tender.

In Kuwait/Bahrain, PIC/GPIC is offering $300/tonne FOB for a November cargo. The producer is believed to have received a bid at $287/tonne FOB.

The producer has denied any new business so far.

Ameropa is understood to have sold a cargo from PIC/GPIC to Ferttrade under the previous Indian tender. CHS is also believed to be shipping a Kuwaiti cargo to IPL India.

In Saudi Arabia, SABIC is heard to be in discussions for a spot sale but no business has been concluded yet.

Ameropa is shipping a cargo from SABIC to India under the previous IPL tender.

DIRECT HEDgE FERTILIZER SWAPS PRICE INDICATIONS

12 October 2017

Urea FOB Egypt, $/tonne

Buyers Sellers

October 280 290

November 285 295

December 285 295


12 October 2017

Urea FOB Nola $/short ton FOB yuzhny

Buyers Sellers Buyers Sellers

October 234 238 260 275

November 245 255 260 275

December 251 253 260 275


12 October 2017

UAN FOB Nola $/short ton

Buyers Sellers

October 130 140

November 140 145

December 140 150

6



The Market

❯❯

❯❯

SAFCO 4 went down on scheduled maintenance on 23 September for an 84-day turnaround. The plant has a capacity to produce 120,000 tonnes/month of urea. SABIC has a total of seven urea production lines.

The producer is expected to have some buffer stocks as it is a planned shutdown.

In Qatar, Muntajat is not expected to have any availability due to an unscheduled maintenance. The QAFCO-4 granular urea plant will shut down for a 33-40-day unscheduled maintenance in end-October. The plant is expected to restart in the first half of December.

The maintenance, which will affect only urea production at the plant, is expected to remove 110,000 tonnes of granular urea from the market.

QAFCO has a total of six urea production lines, and has a capacity to produce around 5.5m tonnes/year of urea.

In UAE, FERTIL is shutting down line-2 on 15 October for 40 days of maintenance. This could remove around 100,000-110,000 tonnes of production. FERTIL has two urea production lines.

In Iran, around 200,000-250,000 tonnes of urea is expected to be supplied to RCF under a new tender from India.

In the previous India tender, two traders were able to supply only 50,000 tonnes in total due to ongoing production issues and material being committed elsewhere.

ASIAIn India, prices under RCF’s new import tender over the weekend are expected to be stable to slightly higher. Under the previous Indian tender on 25 September, IPL purchased 591,000 tonnes of urea at $284.66-285/tonne CFR, for shipment by 8 November.

The buyer is expected to purchase anywhere between 300,000-500,000 tonnes of urea. Stock levels in the country are low at present and domestic production is also lower, while sowing during the winter or rabi season is expected to be at good rates.

RCF surprised the market by issuing an import tender for an unspecified quantity of prilled or granular urea, closing on 14 October, and for shipment by 30 November. Offers are to remain valid until 21 October.

The buyer changed tender terms mid-week and brought forward the validity date to 21 October from 24 October previously. This is because of some concerns that a 10-day validity was too long. The shipment date was also changed to 30 November from 4 December announced previously.

It was NFL that was initially expected to issue a tender. The government is believed to have taken the decision to let RCF issue a tender before NFL because of RCF being ready to issue the tender sooner.

RCF and NFL have been allowed to import urea for agricultural use on behalf of the government, for a period of three months. The government amended its urea import policy in late September due to some financial issues with other importing agencies, MMTC Limited and State Trading Corporation (STC).

Under the previous Indian tender on 25 September, IPL purchased 591,000 tonnes of urea at $284.66-285/tonne CFR, for shipment by 8 November.

India imported 3.2m tonnes of urea fertilizer in April-September 2017, down 11% from the 3.6m tonnes imported in the same period last year, according to data published by the Department of Fertilizers.

Another 916,000 tonnes of urea will be shipped to IPL in October/early November under two recent tenders.

For the rest of the fiscal year, there are estimates India will import another 1.3m tonnes through tenders until March 2018 while the rest will come from OMIFCO.

In April 2017-March 2018, the Indian government plans to import 6m tonnes compared to 5.5m tonnes in the same period last year.

Meanwhile, MFL has extended the closing date of its purchase tender to 19 October, for 25,000 tonnes (+/-10%) of prilled urea for NPK production. The tender was to initially close on 3 October. Shipment is from 30 days of the issuance of the LOI, for delivery to Chennai.

In Pakistan, a total of 596,000 tonnes is understood to have been exported or in the process of being shipped since March. A majority of the shipments were for Sri Lanka (150,000 tonnes), Afghanistan (125,000 tonnes) and India (60,000-100,000 tonnes).

In Nepal, AICL closed a purchase tender for 30,000 tonnes of prilled and granular urea on 6 October.

Three traders offered under the tender, with Samsung’s offer being the lowest at $369.50/tonne CIP followed by IPL at $370.25/tonne CIP and Wilson $373.70/tonne CIP.

Offers are to remain valid for 21 days. The material is to be delivered in 90-110 days from the seventh day of the establishment of LCs on a CIP Nepal basis (Biratnagar, Birgunj and Bhairhawa AICL warehouses) with insurance up to Nepal.

Prices are $34/tonne higher than a previous tender on 4 September from AICL, which was scrapped. Only two traders had offered under the tender given the tight market, with Samsung’s offer being the lowest at $336.50/tonne CIP, followed by Wilson at $337.98/tonne CIP.

AICL has also issued purchase tenders for 25,000 tonnes each of urea (prilled or granular) and DAP, closing on 25 October.

There is also another tender from Salt Trading Corporation. Salt Trading Corporation has issued a purchase tender for 32,500 tonnes of urea, closing on 16 October. Delivery must be via a single cargo, and complete within 50 days from the opening date of LC. Offers are required to be valid for 21 days from opening.

In Indonesia, there is unconfirmed talk Pusri sold a lot of prilled urea

INDIA UREA IMPORTS (APRIL-SEPTEMBER)

Month 2017 2016

April 523,000 171,000

May 778,000 600,000

June 403,000 830,000

July 578,000 1,042,000

August 468,000 605,000

September 454,000 346,000

Total 3,204,000 3,594,000

https://www.icis.com/Dashboard/MarketUpdate/LoadGeneral/10150470

7



The Market

❯❯

❯❯

to Thailand around $270/tonne FOB. Kaltim has issued another force majeure (FM) notice for November shipments of granular urea. The producer had declared a similar FM for October shipments to traders.

Kaltim says this the FM is due to urgent demand for subsidised fertilizer domestically.

The manufacturer hopes to offer granular urea for export in December if local demand weakens and production returns to full rates.

The Kaltim V urea and ammonia plant has been shut down since August and is expected to restart only at the end of the month.

In Malaysia, there is no spot availability for now. Last heard contract netbacks were around $270-275/tonne FOB but now expected to be higher.

In Thailand, small lots from a Kuwaiti cargo are being sold at $295/tonne CFR. Buyers are hesitant to accept higher levels.

In China, prices of prilled and granular urea are higher following the announcement of a fresh Indian import tender and with the domestic market being unusually firm for this time of the year. Moreover, port stocks were estimated at 470,000 tonnes before the Golden Week holidays (1-8 October). and are now believed to be as low as 120,000 tonnes. Official estimates are awaited and may be higher.

A trader is understood to have purchased 6,000 tonnes of granular urea at $280/tonne FOB from Fudao, for end October/November shipment. Another parcel was also purchased from the north at $279/tonne FOB.

BlueChem/Fudao is now understood to be offering granular urea at $285/tonne FOB.

For prilled urea, prices are mentioned in the $273-277/tonne FOB range compared to $269-273/tonne FOB previously for October/November shipment. Offers this week are around $280/tonne FOB for prills ahead of the Indian tender.

AMERICASIn the US, barge levels are heard in a wide range this week with prices increasing by over $20/short ton during the week. The main driver was the international market but a trader also jumped in to pick up tons given the wide spread between the local and global markets.

Barge levels were as low as $222-225/short ton FOB Nola earlier in the week and then increased to $243/short ton mid-week for October shipment.

Warehouse levels continue to trade at a discount to Nola given lack of demand and competition among local producers.

Levels in St Paul were heard at $255-260/short ton FOB but the demand was largely trader driven.

Imports of urea in January-August have fallen 7% year on year to 4.8m tonnes, according to GTIS via the US Department of Commerce. Qatar and Canada were the biggest exporters.

In Brazil, a trader is heard to have sold 20,000 tonnes of Nigerian granular urea to other major traders at $290-295/tonne CFR.

Bids for the remaining 10,000 tonnes from the vessel are now heard at $295/tonne CFR, but the offer has now increased to $300/tonne CFR.

The trader had booked a granular urea cargo from Indorama last week at $272/tonne FOB for October shipment.

Another trader sold 15,000 tonnes of Arab Gulf granular urea at $295/tonne CFR. No other details are known.

Last week, prices in Brazil were pegged at $275-280/tonne CFR, although there was talk some material from a floating vessel was being offered around $270/tonne CFR.

Imports of urea to Brazil in January-September have risen nearly 41% year on year to 3.8m tonnes, according to data from GTIS/SECEX (the Foreign Trade Secretariat).

UREA PRICE COMPARISON

CHINESE DOMESTIC UREA PRICES yUAN (CNy)/TONNE

EXW EXWH

12-Oct 28-Sep 12-Oct 28-Sep

North 1,630-1,750 1,570-1,720 1,700-1,780 1,600-1,800

South 1,600-1,820 1,630-1,780 1,700-1,950 1,680-1,950

Luxi 1,680 1,680

US UREA TOP 10 IMPORTS (TONNES) JANUARy - AUgUST 2017

CountryMarket Share

(%)2016 2017

yOy change (%)

Qatar 18.11 931,859 864,401 - 7.24

Canada 17.13 793,134 817,493 3.07

United Arab Emirates

11.50 495,725 549,035 10.75

Saudi Arabia 9.33 603,812 445,402 - 26.23

China 6.41 365,166 305,845 - 16.24

Egypt 5.53 71,889 263,719 266.84

Russia 5.45 143,159 260,139 81.71

Kuwait 5.36 289,082 255,891 - 11.48

Algeria 4.67 355,570 222,739 - 37.36

Trinidad & Tobago

4.32 234,730 206,063 - 12.21

World 100.00 5,150,490 4,772,735 - 7.33



8



The Market

❯❯ In September 2017, Brazil imported 258,414 tonnes of urea, down 23% from the same month last year. Qatar was the biggest supplier at 59,037 tonnes followed by Saudi Arabia’s 44,000 tonnes and Russia at 32,054 tonnes.

BRAZIL UREA TOP 10 IMPORTS (TONNES) JANUARy-SEPTEMBER

CountryMarket Share

(%) 2016 2017yOy change

(%)

Qatar 31.46 932,415 1,185,663 27.16

Russia 13.63 224,453 513,705 128.87

Saudi Arabia 8.30 254,147 312,646 23.02

Nigeria 7.04 35,666 265,157 643.45United Arab Emirates

5.71 131,382 215,315 63.88

Algeria 5.66 78,350 213,464 172.45

Oman 4.83 212,703 182,136 - 14.37

Bahrain 4.34 215,205 163,614 - 23.97

Venezuela 4.30 215,063 162,229 - 24.57

Egypt 4.20 30,000 158,396 427.99

World 100.00 2,681,570 3,768,929 40.55

BRAZIL UREA ARRIVALS OCTOBER-NOVEMBER

Origin Seller Buyer Tonnes

Santos

Shuaiba Ameropa Yara 18,000

Shuaiba Ameropa Adufertil 10,000

Shuaiba Ameropa Mosaic 8,000

Shuaiba Ameropa Fertipar Sudeste 5,000

Shuaiba Ameropa Terrena 1,000

TBC TBC TBC 42,000

TBC TBC TBC 15000Riga Uralchem Yara 3,085

Mesayeed KochMosaic/Adufertil/

Utilfertil46,200

Sitra CHS Mosaic 27,000

Sitra CHS Fertipar Sudeste 5,844

Sitra CHSFertipar

Bandeirantes2,000

Sitra CHS Fertigran 3,000

Paranagua

Qatar CHS Mosaic 48,500

Qatar TBC TBC 49,500

TBC Koch TBC 38,500

Oman Koch Rocha 43,998

China Ameropa Agro São Luiz 5,400

China Ameropa Cibrafertil 6,300

TBC Ameropa TBC 30,000

Qatar Koch TBC 44,000

UAE Trammo Fertigran 4,750

UAE Trammo Fertipar 19,000

UAE Trammo Agro São Luiz 4,500

UAE Trammo Cibrafertil 4,500

UAE Trammo Heringer 7,052

UAE Trammo Utilfertil 2,200

UAE Trammo Cooperfertil 1,000

São Francisco Do Sul

Latvia Yara Yara 4,465

UAE Ameropa Cibrafertil 12,000

BRAZIL UREA ARRIVALS OCTOBER-NOVEMBER (CONTINUED)

UAE Ameropa Ferticel 1,000

UAE Ameropa Fecoagro 8,000

UAE Ameropa Fertipar 8,000

UAE Nitron Cibrafertil 11,700

UAE Nitron Fertipar 4,750

UAE Nitron Macrofertil 5,500

UAE Nitron Ourofertil 3,000

UAE Nitron Nitrobras 506

TBC Yara Intl Yara 10,000

Qatar Koch Yara 25,000

Qatar Fitco Ourofertil 12,000

Qatar Fitco Yara 4,000

Russia Uralkali TBC 35,000

Rio grande

Russia Koch Yara 27,000

Russia Koch Unifertil 7,700

Russia Koch Cibrafertil 6,300

Algeria Fitco Ourofertil 2,850

Algeria Fitco Mosaic 4,825

Algeria Fitco Unifertil 1,425

Algeria Fitco Multifertil 1,425

Algeria Fitco Josapar 3,800

Algeria Fitco Piratini 5,700

Algeria Fitco Coxilha 3,375

Algeria Fitco Unifertil 6,000

Algeria Fitco Piratini 2,000

Itaqui

Ust - Luga Trammo TBC 11,495

Aratu

Ust - Luga Trammo Fertipar 6,080

Vitória

Onne Ameropa TBC 30,000

Onne Martrade Fertipar / Heringer 19,000

Ruwais Trammo TBC 10,000

TOTAL 789,225

In Bolivia, government officials carried out final inspections of the storage facilities mid-week at the new granular urea and ammonia plant at Bulo Bulo. A team of experts from agricultural regulatory agency SENASAG toured the plant on 11 October, including the 30,000-tonne capacity urea warehouse.

Officials are expected to issue the relevant certificates shortly, paving the way for domestic and foreign sales of both nitrogen fertilizers.

Yacimientos Petroliferos Fiscales Bolivianos (YPFB) will export around 80% of the granular urea to Brazil, Argentina and Paraguay.

The $850m plant can produce up to 2,100 tonnes/day of granular urea and 1,200 tonnes/day of ammonia. It is unclear how the production is progressing as no truck transportation has been seen by locals, following the plant’s inauguration a month ago.

Follow Deepika Thapliyal on Twitter @IcisFertDeepika nd Julia Meehan @ICISJulia for daily tweets on the latest urea information.

9



The Market

Ammonium nitrateThere is growing sentiment in the market that buyers will purchase less urea, notably in Europe, for upcoming applications, instead opting for nitrates – likely an after-effect of urea’s recent spike in prices, and amid continued firmness for the competing fertilizer.

A key producer commented that buyers should look to purchase AN now, as firming prices may soon become widespread internationally.

A trader echoed these comments, and pointed to France and northwest Europe as likely to see higher prices first.

In the Baltic, URALCHEM says it sold 20,000 tonnes of AN to Brazil and Latin America, netting back to the high-$220s/tonne FOB Riga for November delivery.

The producer says the business was concluded a CFR basis, and it has calculated the FOB figure based on increased freight costs from the Baltic.

URALCHEM’s last business to the region was the sale of 30,000 tonnes of AN to Brazil at $237/tonne FOB Riga for H2 October delivery.

Aside from this late-week deal, the market is otherwise quiet, with little new business heard.

A trader feels producers, distributors, and buyers alike are all waiting until next week’s industry conference in Barcelona to conduct new business, and the market may enjoy fresh direction following the event.

There are rumours that traders may even short product to stimulate business – although the source which raised this option ruled it both unlikely, and risky.

A Baltic producer agreed that the market has turned inactive this week, and assessed prices as range-bound. Little interest is heard from buyers for larger volumes. A producer pegged Baltic prices this week at $230/tonne FOB.

The Baltic range has moved down to accommodate confirmed business and offers, and the Black Sea range has moved in concert.

In the UK, CF Industries was heard to have categorically denied rumours of a production outage at its UK AN operations, which surfaced last week.

Material is available for delivery as far out as December, according to a trader close to the company.

No new business has been heard, and in the absence of any new prices from CF – which is still yet to announce its new target – the range is steady.

In germany, the CAN market is slow, and little business is taking place.

A distributor says many of the nation’s largest consumers – agricultural co-operatives – have some 60-70% of their requirements already met, and are in no rush to buy.

OCI is confident of selling its remaining volumes this year, and has concluded business at €195/tonne CIF.

The producer feels prices are firming, however, and may return to a

level above €200/tonne CIF for spot volumes within the next few months. Many producers are believed to be sold-out for October and into November, with only larger companies such as Yara still trading. A source says the Dutch giant has also concluded deals at €195/tonne CIF.

Some smaller cargoes were heard offered at €190/tonne CIF for bulk material, but this was unconfirmed.

There is talk that the German market may continue to remain quiet for the duration – perhaps as far out as February or March 2018.

Prices are assessed steady this week.

In France, the market has slowed to a near-halt, with buyers in no rush to acquire fresh volumes.

The range is stable.

In Brazil, Imports of AN in January-September have risen year on year, according to data from GTIS/SECEX (the Foreign Trade Secretariat).

In the US, no new business has been heard, and the FOB Nola range is steady.

In Tunisia, GCT’s AN line is understood to have restarted, following an unscheduled shutdown in late September.

The producer is heard ramping up output at the facility, which was offline for around a fortnight.

BRAZIL AN TOP FIVE IMPORTS (TONNES) JANUARy-SEPTEMBER

CountryMarket Share

(%)2016 2017

yOy change (%)

Russia 99.57 809,717 1,015,679 25.44

Chile 0.43 500 4,362 772.40

United States 0.00 1,101 0 - 100.00

China 0.00 0 0 0.00

Germany 0.00 0 0 - 100.00

World 100.00 831,690 1,020,041 22.65

UAN SolutionsIn France, as with the majority of Europe this week, the market is quiet and inactive.

A trader supplying buyers in western France says his largest customers are already 50% covered for Spring applications, and as such, are in no hurry to buy.

Koch was heard to have purchased a small cargo at €155/tonne FCA equivalent for prompt delivery – a small deal in an otherwise quiet week.

A second trader active in the French market assessed prices at €155-157/tonne FCA, while another believes there is room for an increase within the next week, not just in France, but across Europe as well. A fourth trader has closed a deal at €160-165/tonne FCA for Q1 2018 delivery.

The range has been adjusted down on ranges heard for this week.

In the Baltic and Black Sea, the market is largely inactive, with players seemingly content to wait until an industry conference in Barcelona ❯❯

10



The Market

UAN FIXTURES AND ENQUIRIES IN OCTOBER 2017

Supplier DestinationQuantity

('000 tonnes)Charterer/

VesselShipment

PeriodFreight

($/tonne)

Sillamae Wilmington 40RNR

Agrinova25 Sep - 5

OctUnknown

D’ville Great Lakes 18Rosie RNR Keytrade

1-10 Oct Unknown

D’villeMontreal & Hamilton

18.5 Rosie RNR 7-17 Oct Unknown

before discussing prices for Q4 and into Q1 2018. However, much like the European market, there is sentiment that prices do have room to increase, with one trader referring to firmness in urea as setting an upward trajectory.

However, in the absence of new business, prices are stable.

In Egypt, no new business has been heard, and prices are steady.

In the US, rainfall has caused complications for this year’s harvest, and led to reduced UAN demand, at least in the short-term.

While Nola barge offers have increased – likely on the expectation of buying to come for autumn – there has been no higher trading concluded, in a market largely described as very thin.

There is sentiment abroad in the market that sellers are more optimistic than buyers, and may be overlooking the current upward momentum seen in urea, but sources said for the most part, buyers are on the sidelines anyway, and showing little motivation to act now.

Several traders suggested the $135/short ton FOB prices seen at Nola last week are no longer achievable, and the Nola barge level is being assessed notionally higher and at a flat level.

Producer CF was heard to be holding its price at $140/short ton FOB, and there is market talk that the company is eager to see imports diverted away from the US market, lest they take away its position of strength.

Midwest terminal values for prompt tons offered this week are at $170-185/short ton FOB, while on the East Coast the range has moved up to $180/short ton for Q4 shipments. There has also been chatter on the East Coast about potential vessel activity, perhaps as high as $180/tonne CFR. But this is not confirmed and was not included in the range.

The US east coast range is stable. Meanwhile, imports of UAN in January-August have fallen year on year, according to data from GTIS via the US Department of Commerce.

Ammonium sulphateIn the Baltic and Black Sea, prices have moved up amid a backdrop of tight availability along with ongoing healthy demand, particularly in the domestic market.

SBU/Kemerovo said its lowest offer was $150/tonne FOB Baltic, although other sellers were offering $145/tonne FOB. Buyers were willing to pay $140/tonne FOB. However, local traders said customers were bidding at $125/tonne in the domestic market.

In addition, SBU/Kemerovo confirmed its caprolactam (capro) outage will commence 16 October for one week. Because of this, the company has limited availability of by-product AS and is offering standard grade material at $150/tonne FOB Baltic. The scheduled maintenance was due in the second half of September but was delayed.

In Europe, capro grade material is also limited outside domestic commitments. Sellers say it is difficult to peg a range even on a notional basis since prompt material is so limited. The tightness currently felt in Europe is further compounded by a planned outage at Lanxess.

In the European capro market, October contract price discussions are still at an early stage as buyers and sellers appear to be far apart.Even if some producers have announced increases of around €30/tonne, sources on the buy side are confident that a rollover or even a small decrease is feasible based on indications after a first round of discussions.

Producers feel that the argument for a small price hike is realistic given that, apart from the small October benzene contract hike, there are also some moderate increases heard in the downstream nylon 6 market where demand remains healthy across most industries apart from carpet.

The healthy performance of the nylon 6 market has resulted in robust demand for capro, which is also enhanced by some on-going planned maintenance shutdowns that have made supply looking more balanced to tight.

In the China, buyers and sellers of standard grade AS are divided in terms of spot values. Buyers are pushing for business below $110/tonne FOB based on improved availability, while sellers appear to be seeking higher prices in expectation of improved demand and rising urea values.

This week’s range has been widen to incorporate prices discussed internationally.

In southeast Asia, pockets of fresh demand have started to emerge, with buyer interest seen in the Philippines and Sri Lanka. The price range has been adjusted to reflect the wider bid/offer range for Chinese exports.

In the Philippines, Atlas Fertilizers Corp is understood to be closing a purchase tender for 6,000-7,000 tonnes of capro grade AS for mid-November shipment.

In Sri Lanka, an enquiry was also discussed for 6,000 tonnes of material for prompt shipment.

US UAN TOP FIVE IMPORTS (TONNES) JANUARy-AUgUST

CountryMarket Share

(%)2016 2017

yOy change (%)

Russia 39.46 771,902 801,183 3.79

Trinidad & Tobago 29.30 488,787 595,014 21.73

Canada 16.49 309,032 334,833 8.35

Lithuania 6.78 74,217 137,719 85.56

China 2.55 224,013 51,864 - 76.85

World 100.00 2,106,952 2,030,553 - 3.63

❯❯

❯❯

https://www.icis.com/Dashboard/Dashboard?articleId=10149572

11



The Market

material at $195/tonne CFR, while a European producer quoted $200/tonne CFR. Meanwhile, capro grade product was pegged unchanged. A lack of availability moving into November, as a result of turnarounds in Europe, could lift prices moving into November, sources said.

In guatemala, Mayafert is understood to be in the market to purchase 10,000 tonnes of AS for Quetzal port for November shipment. Price discussions were heard in the mid-$130s/tonne CFR. The business is expected to be concluded shortly.

IIn Turkey, no new bids or offers were heard owing to limited product available from Russia being counterbalanced by very little buying interest, particularly at current levels being discussed for exports out of the Baltic.

In the US, exports in January-August have fallen year on year, according to data from GTIS via the US Department of Commerce.

In the Asian capro market, import prices rose for the fifth consecutive week, tracking higher offers and buying indications amid healthy seasonal demand for downstream nylon. The recent rise in capro prices is largely attributed to the relative shortage of material in northeast Asia and Europe.

Japan’s Sumitomo Chemical has planned a turnaround at its 85,000 tonne/year plant in Niihama from end-October to end-November. Ube Japan’s 100,000 tonne/year plant in Yamaguchi is also shut for turnaround for two months until mid-November,

Meanwhile, Taiwan-based China Petrochemical Development Corporation has shut its 200,000 tonne/year Kaohsiung plant for a 20-day turnaround from 6 October, and its Toufen plant is currently running at 85-86% capacity after recovering from a technical issue.

In Brazil, AS sellers were bullish in relation to the direction of prices for granular material. Advansix was heard offering granular

BRAZIL AS TOP FIVE IMPORTS (TONNES) JANUARy-SEPTEMBER

CountryMarket Share

(%) 2016 2017yOy change

(%)

China 37.10 367,264 556,414 51.50

Belgium 24.13 335,828 361,857 7.75

United States 21.79 358,209 326,805 - 8.77

Poland 6.73 108,234 100,980 - 6.70

Netherlands 6.62 126,004 99,303 - 21.19

Lithuania 1.33 48,512 20,000 - 58.77

Australia 1.10 14,653 16,500 12.60

Finland 0.44 21,000 6,600 - 68.57

Russia 0.44 1,187 6,554 452.20

Germany 0.25 17,984 3,702 - 79.41

World 100.00 1,401,342 1,499,607 7.01

US AS TOP FIVE EXPORTS (TONNES) JANUARy-AUgUST

CountryMarket Share

(%)2016 2017

yOy change (%)

Brazil 37.98 232,374 171,534 - 26.18

Peru 17.75 91,521 80,185 - 12.39

Canada 12.74 52,277 57,546 10.08Dominican Republic

9.06 45,149 40,942 - 9.32

Senegal 8.24 32,926 37,220 13.04

World 100.00 573,091 451,675 - 21.19

❯❯





Phosphates

PHOSPHATES MARKET HIgHLIgHTS■ Healthy phosphates demand in some region firms the market■ Mosaic sells DAP/MAP to Pakistan, Mexico ex-Tampa■ US MAP exports down 15% in January-August year on year

OVERVIEWThe phosphates market started the week stable and has seen a flurry of spot activity at the end of the week. The main characteristic of the market was the stalemate between Indian buyers and Chinese producers as CFR offers to India have increased. Chinese producers increased their asking prices following the Golden Week holiday (1-8 October), but Indian buyers are not willing to accept higher levels, and NFL has scrapped its DAP purchase tender on high offers from China.

The domestic market in China is slowing down, and producers will have more DAP export availability for November/December.

West of Suez, the Tampa DAP price edged upwards slightly following Mosaic sales to Pakistan and Mexico. The domestic DAP barge market has been subdued, with some business recorded amid tight availability. No import cargoes are heard arriving at Nola in October and the Mississippi river is expected to close soon, so any tonnes sold this week need to be loaded and ready for shipping.

The Brazil MAP market remains subdued for another week, with limited business heard around the $360/tonne CFR mark. Offers from

Russia and Morocco are heard at higher levels this week, but buyers are not willing to accept these levels. Brazil MAP imports were up 57.31% in January-September year on year.

On the supply side, most producers are comfortable for November. SABIC is already in discussions for December business, and PhosAgro is sold out of DAP for November. Chinese production rates at domestic plants are unchanged at around 55% for DAP and 65% for MAP this week.

ASIAIn India, Mosaic said it sold 33,000 tonnes of DAP at $373/tonne CFR for mid-November loading from its joint venture Wa’ad Al Shamal project in Saudi Arabia.

NFL is understood to have scrapped its 28 September purchase tender for 45,000 tonnes (+/-10%) of DAP for the east coast for shipment by 25 October to Kakinada/Vizag/Dhamra. Amber was the only offer with Chinese product at $375/tonne CFR, but this was deemed too high by the buyer.

NFL is expected to issue another DAP purchase tender in mid-November. Last business to India was heard in the low-$370s/tonne CFR two weeks ago for October shipment.

In April-October 2.82m tonnes of DAP arrived at Indian ports.

RCF will close a purchase tender on 13 October for 30,000 tonnes (+/-10%) of phosphate rock (29% P2O5 minimum) for shipment to Mumbai in 30 days from the purchase order date.

Offers are requested to remain valid for 30 days from the closing date.

FACT has issued a purchase tender, closing on 16 October, for 7,500 tonnes (+/-5%) of phosphoric acid (100% P2O5) for delivery by road to its plant at Cochin end-October to December 2017.

Delivery is requested to start immediately after the issue of Letters of Intent (LOI).

There is talk of more phosphoric demand in the market, as domestic production requirements have increased.

In Nepal, AICL has issued purchase tenders for 25,000 tonnes of DAP, closing on 25 October.

Offers are to remain valid for 21 days and the material is to be delivered

PHOSPHATES 12 October 5 October

TSP bulk


NPK bulk

Russia 16.16.16 FOB 260 - 270 260 -270

China 16.16.16 CFR 300 - 310 300 -310

Phos Acid P2O5 fert grade

N Africa FOB 515 - 620 515 -620

NW Europe CFR 630 - 700 630 -700

India CFR cash 567 567

Phosphate Rock

Morocco 70-72 BPL FOB 85 - 100 85 -100

India CFR 64 - 114 64 -114

PHOSPHATES 12 October 5 October

DAP bulk

US Gulf FOB 342 - 346 340 -345

Nola ps ton FOB barge 318 - 325 320 -326


Saudi Arabia FOB 360 - 365 360 -365

Baltic FOB 340 - 345 340 -345

China FOB 358 - 360 360 -362

India CFR 372 - 375 365 -372

Pakistan CFR 370 - 380 360 -368

Benelux FCA € 338 - 342 335 -340

MAP bulk

Baltic Sea FOB 335 - 340 335 -340

Brazil CFR sight 355 - 360 355 -360


PHOSPHATES PRICE COMPARISON

❯❯

13



The Market

and deliver cargoes after the Golden Week holiday (1-8 October). Prices for 64% DAP were at CNY2,600-2,700/tonne ex-station Liaoning and EXW offers for 57% DAP were CNY2,100-2,200/tonne. Deliveries in the north will come to an end soon. Producers said domestic prices were higher than overseas, so cargoes were mainly absorbed in local regions. Export prices rose in line with higher domestic production costs and tightening supply, with levels for 64% DAP at $370-380/tonne FOB, up by $150-20/tonne from pre-holiday levels. Producers in Hubei said they would not consider exporting in the near term, as they have completed export targets and domestic market is in a peak season in October-December.

Domestic MAP prices rose after the Golden Week holiday, on the back of soaring feedstock sulphur prices. Some producers have not announced their new offers, but market sources said that prices for fresh deals had risen. Traders said that downstream demand had picked up. According to producers, they received enough orders for cargo deliveries till late October/early November and have no turnaround plans in October, although supply tightness was eased with the agricultural demand season coming to end.

Production rates are stable at around 55% for DAP and 65% for MAP this week.

In Indonesia, Kaltim is heard to have awarded its 4 October purchase tender to Brio at $380/tonne CFR for 7,500 tonnes of DAP for October shipment, which would net back to $360/tonne FOB China.

In Sri Lanka, state-run Colombo Commercial Fertilizer (CCF) will distribute 3,000 tonnes of TSP under its 20 June purchase tender from Hiyork Holdings.

EUROPEIn Russia, PhosAgro is sold out of DAP/NPK in November and still has some MAP volumes available.

The producer is not offering DAP to India and has no scheduled shipments to the Americas.

The producer sold DAP from Ghent at $405/tonne FCA.

in 90-110 days from the seventh day of the establishment of LCs on a CIP Nepal basis (Biratnagar, Birgunj and Bhairhawa AICL warehouses) with insurance up to Nepal.

In Pakistan, US DAP has been sold at $380/tonne CFR for late October shipment.

The Pakistan DAP price range has been adjusted to reflect this business.

There is talk that Fauji bought an Australian DAP cargo, but this has not been confirmed.

In China, the market has been subdued following the Golden Week holiday last week. Netbacks from the Indonesian DAP tender last week are at $360/tonne FOB.

However, producers continue to be unwilling to reduce offer prices.

Domestic DAP producers in northeast China started to release offers

❯❯

❯❯


12 October 2017

DAP FOB Nola $/short ton MAP CFR Brazil

Buyers Sellers Buyers Sellers

October 317 323 355 370

November 308 314 355 370

December 305 310 355 370

INDIAN DAP ARRIVALS APRIL-OCTOBER

Supplier Buyer ‘000t Port Arrival

Ma’aden IPL 339 Mundra, KandlaApril-

September

SABIC Chambal 176 Mundra, Kandla May-August

SABIC Tata 31 Dhamra September

Ma’aden Kribhco 163Vizag, Mundra,

PipavavMay-

September

JPMC IPL 94 Mundra, KandlaApril-

October

Quantum IPL 45 Vizag September

Amber IPL 124 Vizag July-August

Ameropa IPL 51 Kakinada May

Kailin IPL 55 Mundra June

Ferttrade IPL 90 Mundra, VizagJuly-

September

Fertisul TCL 55 Kakinada July

Dreymoor TCL 102 Kakinada June-August

China GSFC 35 Vizag July

Mosaic Mosaic 363 MundraMay-

SeptemberMosaic Chambal 25 Mundra July

Kailin Chambal, Zuari 294Kandla, Kakinada,

KrishnapatnamMay-

September

Kailin NFL 47 Kakinada June

Ameropa NFL 95 Kakinada, PipavavAugust-

SeptemberFerttrade NFL 55 Mundra August

Midgulf NFL 92 MundraJune-

September

Midgulf GSFC 64Mundra, Kakinada

June

YUC Zuari 239Kandla, Mundra,

VizagJune-

September

Midgulf CIL 39 Kakinada August

Transagri Blue Deebaj 8 Kandla May

PhosAgro Green Star 35 Mundra June

Amber RCF 36 Mundra September

Quantum RCF 20 Mumbai May

YUC RCF 47 Mundra June

Total 2,819

CHINA DAP PORT STOCKS

Port Volume (‘000 tonnes)

Beihai 26

Zhangjiang 180

Fangcheng 50

Zhenjiang 60

CHINESE DOMESTIC MAP PRICES yUAN (CNy)/TONNE

EXW EXWH

Hubei (55% powder) 1,900-1,950 1,900-1930

Hubei (58% powder) 2,100-2,150

14



The Market

PhosAgro is undergoing maintenance until November so will have less production.

NPK 15.15.15 prices are heard at $240/tonne FOB in the Baltic.

In France, TSP is heard offered in Rouen at $315/tonne FCA Fca for Oct/Nov.

In Turkey, there is talk of DAP sales from GCT and OCP around $368-370/tonne FOB. Igsas has been linked to one of the deals.

In Italy, DAP demand is limited and price have increased, with offers heard at €360/tonne FOB FCA Ravenna big bags.

In Benelux, DAP prices are heard around $400/tonne (€338/tonne) FCA and Russian DAP has been sold from ghent at $405/tonne (€342/tonne) FCA.

AMERICASIn the US, Mosaic sold 25,000 tonnes of DAP to Pakistan at $380/tonne CFR for late October shipment from Tampa. Freight is estimated at $38/tonne.

The producer also sold 5,000 tonnes of DAP and 2,000 tonnes of MAP to Mexico at $346/tonne FOB Tampa for 1-10 November shipment.

Mosaic said its DAP offer price remains $350/tonne FOB Tampa.

Exports of DAP out of the US in January-August fell year on year, according to data from GTIS via the US Department of Commerce.

In August, US DAP exports rose by 25.30% to 225,519 tonnes from 179,988 tonnes year on year.

MAP exports out of the US in January-August have fallen year on year, according to data from GTIS via the US Department of Commerce.

In August, the US exported 150,990 tonnes of MAP, approximately half the 313,029 tonnes exported in the same period the year before.

In the domestic market, Mosaic sold five DAP barges at $325/short ton FOB and three MAP barges at $330/short ton FOB late last week for prompt shipment.

Barges were heard around $318-323/short ton FOB for DAP and at

❯❯ $324-325/short ton for MAP. No new cargoes are heard arriving at Nola in October and there is talk of OCP product offered at $320/short ton FOB.

Warehouse prices are heard at around $360/short ton FOB for DAP and MAP.

In central Florida, prices by truck have dropped by $20/short ton to $335/short ton FOT for DAP and by $10/short ton to $355/short ton FOT for MAP from last week.

In Brazil, MAP demand is weak and limited business has been heard around $360/tonne CFR, with Russian MAP offered at $370/tonne CFR.

OCP is heard trying to increase price offers to $380/tonne CFR for November, but there is no demand at the moment.

MAP imports into Brazil in January-September have risen year on year, according to data from GTIS/SECEX (the Foreign Trade Secretariat).

In September, Brazil imported 443,927 tonnes of MAP, almost double from the 228,131 tonnes year on year. The main exporting country was Morocco with 136,568 tonnes.

Imports of DAP into Brazil in January-September rose year on year, according to data from GTIS/SECEX (the Foreign Trade Secretariat).

Brazil imported 51,829 tonnes in September, up 62.35% from the 31,924 tonnes in the same period the year before. The main exporting country was Lithuania with 30,606 tonnes.

In guatemala, Mayafert is heard in the market to purchase 5,000 tonnes of DAP for Quetzal port for November shipment. Price discussions are heard in the mid-$380s/tonne CFR and the business is expected to be concluded shortly.

US DAP TOP 10 EXPORTS (TONNES) JANUARy-AUgUST

CountryMarket Share

(%)2016 2017

yOy change (%)

India 36.50 461,403 396,377 - 14.09

Mexico 15.07 162,258 163,658 0.86

Brazil 12.46 147,287 135,330 - 8.12

Japan 8.80 79,337 95,535 20.42

Colombia 7.22 89,916 78,393 - 12.82

Peru 5.89 76,008 63,955 - 15.86

Honduras 4.19 44,485 45,527 2.34

Dominican Republic

1.85 23,786 20,120 - 15.41

Argentina 1.30 10,996 14,117 28.38

Panama 0.97 2,459 10,510 327.41

World 100.00 1,167,490 1,085,830 - 6.99

US MAP TOP 10 EXPORTS (TONNES) JANUARy-AUgUST

CountryMarket Share

(%)2016 2017

yOy change (%)

Brazil 38.41 625,690 581,255 -7.1

Canada 31.04 691,500 469,689 -32.08

Australia 11.6 197,718 175,571 -11.2

Colombia 5.59 80,617 84,547 4.87

Mexico 4.07 55,652 61,591 10.67

Japan 3.48 59,151 52,610 -11.06

Venezuela 2.08 10,994 31,466 186.21

Argentina 1.65 45,957 25,015 -45.57

Paraguay 1.48 0 22,457 0

Chile 0.51 460 7,787 1592.83

World 100 1,789,194 1,513,330 -15.42

BRAZIL MAP TOP 5 IMPORTS (TONNES) JANUARy-SEPTEMBER

CountryMarket Share

(%) 2016 2017yOy change

(%)

Morocco 26.81 441,808 776,241 75.7

United States 24.48 579,616 708,887 22.3

Russia 24.42 464,989 707,256 52.1

Saudi Arabia 11.67 183,268 337,806 84.32

China 8.41 97,484 243,540 149.83

World 100 1,840,780 2,895,790 57.31

❯❯





15



The Market

AFRICA/MIDDLE EASTIn Tunisia, GCT is heard running its phosphates production at normal rates.

GCT has concluded a 30,000-tonne DAP cargo to Italy for October shipment, but no price was confirmed.

The Secretary of State for the Ministry of Energy, Mining and Renewable Energies Hechem Hmidi said that phosphates production in Gafsa has increased by 34% from 2016.

He hopes to finish 2017 with 10% more production on some phosphates products through more regularity in transportation of the product.

Also, he expects a production of 5m tonnes of phosphates by the end of 2017 and 7m tonnes next year.

In Morocco, OCP is understood operating at regular rates and is busy producing NPS for the Ethiopia tender.

The producer is heard shipping 130,000-160,000 tonnes of DAP/MAP to Europe at $368-375/tonne FOB in November and is offering above $375/tonne FOB for future shipments.

The North Africa DAP FOB range has been increased to reflect business to Turkey and offers.

In Jordan, JPMC is in discussions for a 35,000-tonne DAP cargo to India for October shipment.

In Saudi Arabia, SABIC is in discussions for a 40,000-tonne combo cargo of phosphates to Latin America under formula for December shipment.

The producer is sold out until December.

For India, SABIC has received firm bids in the low-$370s/tonne CFR and is targeting high-$370s-$380s/tonne CFR.

The Uganda Free Zones Authority (UFZA) has issued a Developers’ License to China-Africa International Industrial Co-operation Company Limited, a subsidiary of Guangzhou Dongsong Energy Group (U) Co. Limited, within Sukulu Industrial Park, Tororo District.

The license will establish three plants in the Free Zone, including a phosphate fertilizer plant, with an annual production of 100,000 tonnes, which are expected to be completed by 2024.

In South Africa, Durban port closed this week after vessel movements were suspended when a severe storm hit the coastal region resulting in at least eight deaths in the province. Port officials said it is too early to assess the extent or costs of damages and when the port will reopen.

Subscriber note: ICIS is considering adding a MAP Nola quotation. Please send any comments or queries to [email protected].

Follow Sylvia Traganida on Twitter @ICIS_Sylvia for daily tweets on the latest phosphates information

BRAZIL DAP IMPORTS (TONNES) JANUARy-SEPTEMBER

CountryMarket Share

(%) 2016 2017yOy change

(%)

United States 48.53 186,658 189,746 1.65

Morocco 19.02 27,744 74,368 168.05

Saudi Arabia 16.02 77,889 62,641 -19.58

Lithuania 7.83 0 30,606 0

China 4.32 7,620 16,888 121.65

World 100 332,153 390,982 17.71

BRAZIL PHOSPHATES ARRIVALS OCTOBER-NOVEMBER

Origin Seller Buyer Tonnes Product

Santos

Tampa Mosaic Mosaic 5,749 MAP

Morocco OCP Vale 27,000phosphate

rockSão Francisco Do Sul

Qatar Koch Yara 22,500NPK

19.04.19

China Ameropa TBC 10,060 NPK 11.44

TBI Yara Yara 20,000 NPK

Rio grande

Morocco OCP Yara 16,500phosphate

rockMorocco OCP Yara 18,500 MAP

Morocco OCP Yara 14,750 TSP

Itaqui

China Ameropa Risa 19,000 MAP/NP

Vitória

Morocco OCP Heringer 10,000 MAP

❯❯



Ammonia

AMMONIA MARKET HIgHLIgHTS■ Market still bullish on supply squeeze, prices climb in most regions■ Trammo seals Egyptian spot deals with EBIC-OCI and Abu Qir■ Yara Italy to receive Omani spot cargo after Trammo deal■ FACT India seeks pair of 7,500-tonne cargoes for Q4 discharge■ PPL/Paradip and SABIC agree Mitsui spot CFR deals■ Mitsubishi to load Australian spot cargo for Taiwan

OVERVIEWAmmonia prices remained on an upward trajectory in most regions, although the latest increases were not as sharp as those seen in recent weeks. Manufacturers are bullish about their prospects for the fourth quarter, with strong demand from India likely to support higher price targets east of Suez.

With Black Sea spot availability thin due to production issues at Togliatti, and Saudi producers SABIC and Ma’aden sold out for 2017, traders instead turned to North Africa and Asia Pacific to satisfy their requirements.

Trammo secured a pair of Egyptian cargoes from EBIC-OCI and Abu Qir, while Mitsui agreed a deal in east coast India and, in a rare move, sold a CFR Taiwan cargo to SABIC.

FACT issued its first purchase tender for several months and suppliers noted enquiries from buyers on both coasts of India. Yara acquired a spot parcel from Trammo for discharge in Italy, but sold 15,000 tonnes of Australian product to Mitsubishi.

Elsewhere in Asia Pacific, PETRONAS agreed two spot sales – to Koch and Fertcom – on a CFR basis featuring netbacks of around $250/tonne FOB Kerteh.

BLACK SEAIn yuzhny, no new spot sales have been confirmed, against a backdrop of talk of a supplier price target of $280/tonne FOB. Ameropa’s loading schedule remains impacted by lower output rates at Togliatti, meaning it is sold out for the foreseeable future.

Ameropa had planned to load 40,000 tonnes on the Clipper Venus for OCP in late October, but the lifting will almost certainly slip to November. Prices are assessed higher on a notional basis.

BALTIC AND NORTHWEST EUROPEIn the Baltic, no new spot sales have been heard by URALCHEM or Acron, and spot availability for the rest of the quarter remains unclear.

TURKEy AND MEDITERRANEANIn Turkey, the only fresh spot business heard was Trammo’s sale of a parcel to Gemlik for discharge by the Marycam Swan on 11 October.

AMMONIA PRICE COMPARISON

AMMONIA 5 October 5 October

India CFR 285 - 310 270 -310

Taiwan CFR 280 - 285 275 -280

Korea CFR 280 - 290 275 -285

Natural gas

Nymex $/mmBtu 2.89 2.94

NW Europe TTF $/mmBtu 6.23 6.09

AMMONIA 12 October 5 October

Yuzhny FOB 220 - 225 215 -220

Arabian Gulf FOB 245 - 270 245 -270

Iran FOB 240 - 245 235 -245

Caribbean FOB 210 - 215 210 -215

US Gulf CFR 248 - 250 248 -250

Tampa CFR 245 245

NW Europe CFR duty unpaid 265 - 310 260 -310

North Africa CFR 255 - 265 250 -260


yUZHNy LINE UP FOR OCTOBER, ’000 TONNES

Suppler/Destination KT Vessel Load

Trammo/India 23.4 Sanko Independence 6

Ameropa/Belgium 23.4 Gas Manta 11

Ameropa/Turkey 23.4 Gas Grouper 15-31

Ameropa/Turkey 23.4 Gas Snapper 15-31

Ameropa/Tunisia 23.4 Gas Cobia 15-31

Rossosh/Morocco 25.3 Navigator Jorf 25-31

Trammo/TBC 23.4 TBN 25-31

165.7

NW EUROPE DELIVERy SCHEDULE FOR OCTOBER

Supplier/Origin KT Vessel Recipient/Dest Load

EBIC-OCI/Egypt 10 W.Schulte OCI/Netherlands 1

Uralchem/Latvia 4 Coral Ivory Yara/Sweden 6

Acron/Sillamae 13.7 Yara Kara Yara/Norway 6

Yara/Germany 8 Temse Yara/Germany 8

Fertial/Algeria 13.7 Yara Nauma Yara/France 10

Ameropa/Yuzhny 23.4 Gas Manta EuroChem/Belgium 11

Yara/UK 8 Temse Yara/Germany 11

Uralchem/Lativa 4 Coral Ivory Yara/Sweden? 12

Uralchem/Latvia 13.7 Yara Kara Yara/Norway? 13

Yara/Germany 13.7 Yara Sela Yara/TBC 14

102.2

❯❯

17



The Market

In Tunisia, GCT’s ammonium nitrate (AN) line is understood to have restarted around 10 October following an unscheduled shutdown.

The producer is ramping up output at the facility, which was off line for around a fortnight.

Ameropa will deliver up to 23,400 tonnes to Gabes under contract in late October/early November.

In South Africa, the Solaro will arrive at Richards Bay later this month after Trammo sold around 8,000 tonnes of Caribbean spot ammonia to Muntajat. The vessel was originally due to deliver 17,000-18,000 tonnes to west coast India, until the trader agreed a deal with the Qatari supplier.

No price has been heard for the PCS material, which was acquired by Trammo on a spot basis, but it is likely priced under formula.

MIDDLE EASTIn Saudi Arabia, SABIC and Ma’aden remain sold out for the remainder of 2017 and neither has disclosed any fresh netbacks from contract deliveries to India and/or Asia Pacific.

In a rare move, SABIC secured a 23,400-tonne formula-priced spot cargo from Mitsui on a CFR basis for mid-November discharge in Taiwan.

The Japanese trader has yet to decide where it will source the Taichung-bound material for SABIC’s long-term customer TFC.

The cargo was required because of the three-month turnaround of the SAFCO IV plant that will remove more than 100,000 tonnes of merchant ammonia from the market.

The turnaround started on 23 September and also involves the SAFCO IV urea plant.

The BW Havis remains in the region with 40,000 tonnes of material for Mitsubishi, with still no word on when repairs will be completed.

In Qatar, Muntajat should have better ammonia availability due to the 33-40 days of maintenance at the QAFCO IV urea plant from late October.

The supplier secured a spot CFR cargo from Trammo for delivery to Africa, and is heard seeking up to 15,000 tonnes for Jordan.

In Oman, Trammo will load the Trammo Paris at Sur with a 15,000-tonne cargo of Omifco ammonia on 16 October.

Arabian gulf prices are assessed as unchanged.

In Iran, no new spot business has been heard, but prices are assessed higher on a notional basis.

INDIAFollowing a series of spot sales on the west coast in recent weeks,

No price has been heard, but the delivery was separate to the 10,000 tonnes Trammo loaded earlier this month for a spot customer in Italy.

Ameropa’s spot and contract deliveries in second half October could arrive a few days late due to loading delays in the Black Sea.

In Spain, Trammo may shortly use the Queen Isabella to deliver 7,000 tonnes of Algerian contract material to Castellon for Ube, after the vessel originally nominated, the Marycam Swan, went to Turkey. The Andesgas will deliver 7,000 tonnes of Algerian material to Aviles on 21 October for Fertiberia.

In Italy, Yara is heard to have secured around 10,000 tonnes of spot ammonia from Trammo for late October/early November delivery to Ravenna. The deal – which follows a similar agreement between the pair for an early October discharge – will arrive on the Trammo Paris from Oman.

No price has been heard for the material, with the balance of 5,000 tonnes likely to head to Turkey.

AFRICAIn Algeria, no fresh spot business has been heard by Fertial or Sorfert, with the latter’s ammonia export unit still down and no indication of when it may restart.

In Egypt, EBIC-OCI sold 23,400 tonnes of spot ammonia to Trammo at $265/tonne FOB for loading on the Trammo Cornell 15-20 October.

The Ain Sokhna cargo is scheduled to head to ports in Asia Pacific.

Meanwhile, Abu Qir awarded its 10 October sales tender to Trammo, with the 10,000-tonne cargo due to load on the Marycam Swan shortly.

Heard priced on a Yuzhny + premium basis, the material will load in the next couple of days most probably for long-term Turkish clients of the trader.

In Morocco, no new spot business has been seen by OCP, amid talk the group will only consume around 90,000 tonnes/month of ammonia versus the usual 120,000-150,000 tonnes/month.

There are suggestions the fall is down to a change of product mix, rather than any maintenance at its many DAP and MAP units.

In Libya, the Lifeco ammonia and prilled urea plant has restarted after an unscheduled one-month shutdown and is running at a good rate.

The Marsa El-Brega facility went off line on 11 September amid gas supply issues, but restarted a few days ago.

With the urea unit operating at decent capacity, it is unclear when Yara will next export an ammonia cargo.

❯❯

❯❯

NORTH AFRICAN AMMONIA TABLE FOR OCTOBER

Supplier/Origin KT Vessel/Buyer Arrival

CF Industries/US 39.7 Clipper Venus/OCP 8 Oct

Rossosh/Yuzhny 25.3 Navigator Jorf/OCP 13 Oct

Trammo/Trinidad 23.4 Trammo Dietlin 25-31 Oct

Ameropa/Yuzhny 23.4 TBN/GCT 25-31 Oct

111.8

SAUDI ARABIA LINE UP FOR OCTOBER

Supplier/Destination KT Vessel Load

SABIC/Korea 39 BW Nantes 15-20

SABIC/India? 23.4 Al-Jabirah 20-25

Ma’aden/India 23.4 Leo Sunrise 23-35

85.8

18



The Market

market attention was focused on the eastern seaboard, where at least one spot cargo will be delivered this month.

PPL/Paradip secured 15,000 tonnes from Mitsui heard priced under formula in the mid-$280s/tonne CFR, with the Indonesian material due to arrive on the Gaz Millennium around 20 October.

CIL was also heard in the spot market for up to 23,400 tonnes for November discharge at Kakinada and Vizag, but no confirmed deal or price target has been confirmed.

On the west coast, FACT issued its first ammonia purchase tender since June, as the group looks to secure a combined 15,000 tonnes for November and December delivery.

Suppliers are sought for a 7,500-tonne (+/- 5%) 21-25 November delivery to Kochi (Cochin) and a similar quantity for 9-13 December discharge at the same port.

The tender closes at 14:30 local time on 17 October, with offers requested to remain valid until at least 18:00 local time on 24 October.

Trammo will deliver a 23,400-tonne contract cargo of Black Sea ammonia to IFFCO/Kandla next week, with the material heard priced at around $300/tonne CFR.

Prices are assessed in line with latest spot business.

ASIA PACIFICIn Korea, no confirmed spot business has been heard by LFC or Namhae. However, there is talk the former received a 5,000-tonne spot parcel from Trammo on the Gas Utopia recently that was priced at above $300/tonne CFR Ulsan.

Neither side has confirmed such a deal, meaning it is excluded from the price assessment.

Namhae declined to identify names on its shortlist for 430,000-

450,000 tonnes for arrival at Yeosu in 2018, while LFC remains in negotiations with suppliers over its requirements for next year.

Both buyers expect to announce their procurement decisions for next year by the end of October.

LFC’s latest contract is $275-280/tonne CFR Ulsan, above the $270/tonne CFR Yeosu disclosed by Namhae. Prices are assessed higher on a notional basis to reflect bullish conditions.

In Taiwan, Mitsui sold a 23,400-tonne spot cargo to SABIC that will enable the Saudi supplier to fulfil its November contractual obligation to TFC.

No spot business has been concluded by CPDC, TFC or Formosa, although the former will receive 8,000 tonnes under contract from Koch that the US firm secured on a spot basis from Malaysia.

Meanwhile, CPDC shut down its 200,000 tonne/year caprolactam (capro) plant at Kaohsiung on 6 October for a 20-day turnaround.

The group’s 240,000 tonne/year acrylonitrile (ACN) plant at Kaoshiung will fall quiet on 10 November for three weeks of annual maintenance.

Prices are assessed higher on a notional basis to reflect bullish conditions.

In China, BASF will receive 23,400 tonnes of US spot ammonia from CF Industries on the Gaschem Stade around 30 October, with the cargo heard priced at $303/tonne CFR Zhanjiang.

Around the same time, the Gas Quantum will deliver 8,400 tonnes of Saudi material to someone on behalf of Mitsui.

Secco will perform scheduled maintenance at its 130,000 tonne/year ACN plant in Shanghai from 6-12 November.

In Indonesia, no fresh spot business has been heard by major

❯❯

❯❯

CONFIRMED KOREAN AMMONIA DELIVERIES, ‘000 TONNES

LFC

Ma’aden/AG 23.4 Eupen 12 October

Trammo/Trinidad 25 Gas Venus 15 OctoberKoch/Trinidad 13 Clipper Orion 18 OctoberPETRONAS/Malaysia 15 Bunga Kemboja 1-10 November

SABIC/AG 32 BW Nantes 10-20 November

Namhae

Koch/Trinidad 18 Clipper Orion 17 October

Mitsubishi/AG 10+ BW Nice 23-25 October

Mitsubishi/TBC 25 TBN 10-20 November

CONFIRMED TAIWANESE AMMONIA DELIVERIES, ‘000 TONNES

CPDC

Mitsubishi/AG 10 BW Nice 18 October

Koch/Malaysia 6-8 Bunga Kemboja 20 October

Mitsubishi/Australia 15 Kallo 25-31 October

Raintrade/Iran 16-22 Standorf? 25-30 November

Formosa

Mitsubishi/Australia 25 Nordic River 15 October

Yara/Australia? 25 TBN Late Nov/early Dec

CONFIRMED INDIAN AMMONIA DELIVERIES, ‘000 TONNES

PPL/Paradip

CIFC/Iran 12 Gas Line 17 October

Mitsui/Indonesia 15 Gaz Millennium 20 October

IFFCO/Paradip

Ameropa/Yuzhny 40 Clipper Mars 17 October

IFFCO/Kandla

Trammo/Yuzhny 23.4 Sanko Indy 21 October

CIL/Kakinada/Vizag

Muntajat/AG 10-15 Navigator Nova 14-15 October

CIFC/Iran 10 Gas Line 18-19 October

gSFC/Sikka

Trammo/AG 10 Trammo Paris? 25-31 October

Deepak/JNPT

Trammo/Trinidad 9 Solaro 25-31 October

Zuari/goa

Muntajat/AG 5-10 Almarona 12 October

MCFL/New Mangalore

Muntajat/AG 4 Almarona 13 October

SPIC/Tuticorin

Muntajat/AG 6 Navigator Nova 12 October

19



The Market

❯❯ producers and no new sales tenders have been issued.

Trammo will load up to 25,000 tonnes of KPI material on the Gas Utopia at Bontang shortly, with the Hong Jin due to lift 15,000 tonnes for the same trader on 16 October.

In Japan, Sumitomo Chemical is preparing to launch a one-month turnaround at its 85,000 tonne/year caprolactam plant in Niihama, with the work due to start before the end of October.

In Thailand, the Gas Quantum will deliver 15,000 tonnes of Arabian Gulf material to Rayong on 14 October for Mitsui contract customer Ube.

In Malaysia, PETRONAS sold a pair of 8,000-tonne spot cargoes to Fertcom and Koch for prompt discharge, with the producer saying the netbacks are around $250/tonne FOB Kerteh.

Due for delivery by the Bunga Kemboja, the vessel will return to Kerteh next week to load 15,000 tonnes of spot material for LFC Korea under a previously announced deal.

In the Philippines, the 8,000 tonnes of Malaysia spot ammonia that arrived at Isabel on the Bunga Kemboja on 12 October came from Fertcom, not Trammo.

Trammo has sold similar-sized cargoes to the phosphates producer throughout 2017, but the latest discharge was on behalf of Fertcom – which acquired the cargo from PETRONAS.

No CFR price was disclosed, but the material nets back to around $250/tonne FOB Kerteh, according to PETRONAS.

In Australia, Yara sold 15,000 tonnes of spot ammonia on a CFR basis to Mitsubishi for mid-October loading on the Kallo at Dampier.

The Viking River will load up to 25,500 tonnes for the Norwegian group at Dampier on 20 October, possibly for CSBP/Kwinana.

The Nordic River left the port a few days ago with 25,000 tonnes for a Mitsubishi client in Taiwan.

AMERICASIn the US, with the return of rainy conditions across sections of the key crop regions, harvest on corn has been slowed and along with temperatures not yet being cool enough for optimum soil conditions for post-harvest inputs, demand remains muted.

This static atmosphere is not expected to slow the momentum that ammonia has redeveloped, with the further uptick seen in September supporting the outlook that additional price gains are poised to emerge through year’s end.

Talks for November should commence shortly, with sellers anticipated to seek a slight hike from the current $245/tonne FOB. As this might be the last chance for any increase, given the uncertainty and the chance for sellers to ride the forward direction, there is thought that perhaps as much as plus $25-35/tonne could be sought.

With the situation of its recent force majeure actions in both ammonia

and phosphates yet unclear, and with market talk that production and deliveries are back on schedule, there is thought producer Mosaic could resist any further upswing and position for a rollover for next month’s volumes.

Neither party’s stance is clear at this time and as such the difference in viewpoints may result in another round of protracted negotiations.

While likely delayed until winter, sentiment remains upbeat, on the potential for the autumn fill period for both restocking and inputs into the field. Ammonia retail prices are encouraging a return to more traditional patterns of input following a surge in the trend for more in-season nitrogen and variable applications activity in recent years.

The recent escalation in urea prices compared to the cost-ratio value on furrow ammonia available during the planting window has also added a push for this return to ammonia that is being seen by farmers in certain parts of the US.

Corn harvest is now at 22% completion while efforts on soybeans are moving at a quicker pace, as farmers have currently finished 36% of their crop, according to the US Department of Agriculture’s (USDA) Weekly Crop Progress report.

Despite the return of rain disrupting the progress in various regions, the USDA said 22% of this year’s crop has been harvested, an uptick of five percentage points week on week, but this year is still trailing the 33% achieved last year as well as the five-year average of 37%.

The average retail price of ammonia this week is at $399/short ton ex-dealer, an increase of $3/short ton from the previous week, but marks the second week in a row that the average price for the nutrient has been below $400/short ton since August 2010.

In Trinidad, natural gas restrictions are understood to have remained stable, with cutbacks at ammonia manufacturers last confirmed at 15-20%.

No plant issues have been heard and there is optimism that the balance of the month will remain favourable.

TRINIDAD LINE UP FOR OCTOBER

Supplier/Destination KT Vessel Load

Trammo/Chile 23.4 Sanko Innovator 1

Koch/US 40 Hellas Apollo 4

PCS/US 23.4 Kaprijike 4

TBC/US 25 Marola 6

Yara/Brazil 25 Yara Freya 10

PCS/Belgium 25 Libramont 11

Trammo/US+Mexico? 23.4 Sylvie 12

Trammo/Morocco 23.4 Trammo Dietlin 13

Koch/US 20 Hellas Eagle 14

Koch/Asia Pacific? 40 Clipper Neptun 14

PCS/TBC 25 Sombeke 18

Yara/US? 25 Yara Aesa 20

Trammo/TBC 23.4 Brussels 22

342.0



Sulphur

SULPHUR MARKET HIgHLIgHTS■ China spot prices spike to new 26-month highs■ Russia suspends Q4 negotiations on availability concerns■ FACT to source 60% of its sulphur domestically■ Middle East spot price rise 13-18% week-on-week

OVERVIEWThe return to the market of China players following the Golden Week holiday saw prices spike in both China and the Middle East.

China consumption remains high through a combination of low crushed sulphur availability, sulphur burning to make sulphuric acid, and the approach of the implementation date for the new China environmental tax.

High demand from China has caused shortages in the Middle East, which continue to fuel price rises.

With Russian Q3 material delayed due to bad weather conditions, and the postponing of contract negotiations because of uncertainty over availability resulting from the fast approaching winter waterways closures – due at the end of October – the market is expected to remain tight during the fourth quarter.

Coupled with this, OCP is understood to have a strong demand appetite for sulphur at present, and limited Russian availability could force them more heavily into the spot market in the fourth quarter.

Several European fourth quarter contract settlements have been agreed at increases of €5-10/tonne, but negotiations are ongoing.

Outside of the Middle East and China, spot markets were quiet, with prices stable.

In India, FACT has signed a supply agreement to source 60% of its sulphur requirements from Bharat Petroleum Corporation’s Kochi refinery.

MIDDLE EASTMiddle East spot prices rose by 13-18% this week amid ongoing supply shortages across the region and strong demand from China, where players returned strongly to the market following the holiday period last week.

Bids and offers have risen above $130/tonne in line with spiking China prices (see Asia section), but tight supply has meant that there was no confirmed business this week.

Some players saw offers in the high-$130s/tonne, but this was not yet widely seen in the market.

ASIAIn China, players returned to the market in force following the Golden Week holiday, with demand remaining high. Domestic and import prices rose sharply as a result.

Domestic prices hit CNY1,300/tonne late Wednesday, buoyed by the robust performance of the Huaxicun Commodity Contracts Exchange, which repeatedly hit upper limits.

China import prices, meanwhile, are now at their highest level since 13 August 2015, in part driven by the domestic price hikes.

The high buying interest is the result of a combination of low crushed sulphur availability, tight supply in the Middle East, the approach of

SULPHUR PRICE COMPARISON

SULPHUR 12 October 5 October

India CFR 135 - 145 135 -145

Black Sea FOB 64 - 78 64 -78

Brazil CFR 115 - 120 115 -120

Liquid

Tampa CFR lton (contract) 74 74

Benelux delivered (contract) 86 - 96 86 -96

SULPHUR 12 October 5 October

Vancouver FOB (spot/contract) 110 130 105 -115

US Gulf FOB 90 - 100 90 -100

Middle East FOB (monthly posted prices)

120 - 127 120 -127

Middle East FOB (spot) 130 - 135 110 -120

Mediterranean CFR (spot) 100 - 120 100 -120

North Africa CFR (contract) 77 - 92 77 -92

China CFR 155 - 160 140 -145


CHINESE DOMESTIC SULPHUR PRICES yUAN (CNy)/TONNE EXWH *

11-Oct 28-Sep

Fangcheng 1320-1350 1110-1120

Zhanjiang 1320-1350 1110-1120

Beihai 1320-1350 1110-1120

Zhenjiang 1320-1350 1110-1120

Nantong 1320-1350 1110-1120

Qingdao 1200-1200 980-980

Rizhao 1200-1200 980-980

Longkou 1200-1200 980-980

Tianjin 1200-1200 980-980

* Please note that 4 October was a non-reporting week for China because of public holidays

❯❯

21



The Market

the enforcement of the new China environmental tax, and increased burning of sulphur due to sulphuric acid shortages.

Sulphuric acid is globally tight, and China is understood to be the only country with any significant spot volumes available during the fourth quarter and high prices of sulphuric acid are encouraging increased burning.

China’s new environment tax comes in to force on 1 January 2018. Under the tax, producers will be charged CNY5/tonne of coal waste, CNY1,000/tonne of hazardous waste, CNY1.2 per unit of atmospheric pollution, and CNY1.4 per unit water pollution unit. This is encouraging downstream players to stockpile material to avoid paying the new tax, with some sulphur end-users believed to already be producing material for the spring 2018 season. Coupled with this, players are concerned that a new wave of regulatory inspections could lead to a repeat of the benzene chain closures seen in 2016, limiting supply though the chain. There were also concerns that the upcoming 19th National Congress of the Communist Party of China – due to begin on 18 October – could usher in further environmental led restrictions.

China inventory levels have risen in the past two weeks, in part because of the limited activity during the Golden Week holiday.

In India, despite the sharp increases in China and Middle East prices, India import prices were range-bound following recent rises, with the majority of players moving to the sidelines of the market in a wait-and-see position.

❯❯

FACT confirmed it has reached an agreement for Bharat Petroleum Corporation’s Kochi refinery to supply it with 120,000 tonnes/year of sulphur. This is understood to represent around 60% of FACT’s annual sulphur consumption. This represents around 10% o India’s total sulphur demand, according to market estimates, but players were unclear of the impact this would have on the wider Indian sulphur market.

Coromandel has issued a purchase tender for 25,000-35,000 tonnes (+/-10%) of sulphur for delivery 25 November-5 December to Vizag and Chennai. The tender will close on 23 October, with validity until 25 October.

Coromandel has requested two separate quotes, one for discharge solely at Vizag and one for discharge at Vizag and Chennai.

AMERICASIn Canada, loadings were quiet as the Pacific Coast terminal is in the last week of its maintenance period.

Vancouver prices have risen on higher prices in China. Several cargoes were concluded in the past two weeks from North America’s west coast. Pricing details were not heard, but it was noted by involved parties that the pricing was significantly stronger than the last deals heard. At least one of the cargoes was understood to be done by Petrosul.

Sulphur exports out of Canada for January through August are higher by 2% from the same time period last year, according to data from Statistics Canada via Global Trade Information Services (GTIS).

For the first eight months of 2017, 1.73m tonnes of sulphur were shipped from Canada. The US, China and Australia saw the greatest number of volumes.

Notable changes this year include nearly double the amount of tonnes going to Mexico, and slightly more than double the amount of tonnes going to Chile compared with 2016.

In the US, no loadings were completed this week from Stockton or Anacortes. It was understood that a vessel was loading at Martin’s Beaumont, Texas, port, but this was not confirmed.

US sulphur exports for January-August were lower than the same time in 2016, data from the US Department of Commerce showed.

Exports totalled 1.31m tonnes for the first eight months of 2017, a decrease of 7% when compared with the prior year.

Brazil received the majority of the tonnes, followed by Mexico and Morocco.

CHINESE-FORMED SULPHUR INVENTORy LEVELS, ’000 TONNES

12 October 28 September

Fangcheng 300 150

Zhanjiang 220 160

Beihai 49 73

Zhenjiang 120 180

Nantong 590 600

Qingdao 12 12

Rizhao 0 0

Longkou 10 10

Tianjin 0 0

Total 1,301 1,185

CHINA MAJOR PORT SULPHUR INVENTORIES

US SULPHUR TOP 5 EXPORTS (TONNES) JANUARy - AUgUST

CountryMarket Share

(%)2016 2017

yOy change (%)

Brazil 30 531,469 392,946 -26

Mexico 25 302,779 333,359 10

Morocco 16 290,545 211,564 -27

China 16 126,133 207,494 65

New Caledonia 4 92,392 55,500 -70

World 100 1,403,120 1,311,357 -7

❯❯




22



The Market

In Brazil, despite the rises in export prices, this was yet to filter through to the Brazil spot market, and prices were balanced this week.

Imports of sulphur into Brazil in January-September rose year on year, according to data from GTIS/SECEX (the Foreign Trade Secretariat)

AFRICAIn Morocco, OCP is understood to be actively seeking spot material, although no October shipments have yet been confirmed to have arrived at Jor Lasfar.

With Russia delaying contract negotiations due to uncertainty over its fourth quarter availability, OCP is expected to be more active in the spot market in the fourth quarter to make up for any lost volumes. Q4 contract negotiations with trading partners outside of Russia remain at an early stage.

EUROPEIn Russia, Austrofin Gazprom Export has suspended its fourth quarter contract negotiations amid poor weather conditions. Bad weather caused delays to Q3 deliveries, resulting in a backlog and the company is now unsure of how much volume it will have available for Q4.

In Europe, several Q4 contracts have been agreed at rises of €5-10/tonne, depending on starting point, with producers aiming for rises to bring prices more in line with overseas regions. Nevertheless, buyers continue to hold out for rollovers in some cases, arguing that supply and demand are broadly balanced.

In the Mediterranean, spot prices remain capped by weak demand, with traders that typically supply the region continuing to prefer to divert material elsewhere because of higher profitability. Coupled with this, surpluses at Italian refineries has meant that availability remains high. Nevertheless, buyers serving the downstream sulphuric acid market are concerned by current Mediterranean spot values because of the difficulty in passing on cost increases.

Subscriber note: ICIS is considering discontinuing the Black Sea FOB quotation. Please send any comments or queries to [email protected].

BRAZIL SULPHUR ARRIVALS OCTOBER-NOVEMBER

Santos


Corpus Christi Koch Vale 27,000

Ruwais Adnatco Vale 38,000

Beaumont Total Vale 27,500

TBC OCP Vale 35,000

BRAZIL SULPHUR TOP 10 IMPORTS (TONNES) JANUARy-SEPTEMBER

CountryMarket Share

(%)2016 2017

yOy change (%)

US 35.27 588,147 578,330 - 1.67

Kazakhstan 19.61 206,047 321,503 56.03

Russia 17.05 334,895 279,532 - 16.53

United Arab Emirates

11.74 151,948 192,563 26.73

Poland 5.04 0 82,663 0.00

Kuwait 3.66 61,498 59,995 - 2.44

Canada 2.48 39,593 40,700 2.80

Germany 1.70 12,013 27,855 131.87

Korea South 1.15 14,504 18,896 30.28

Italy 1.07 288 17,490 5,973.06

World 100.00 1,448,558 1,639,812 13.20

❯❯



Potash

POTASH MARKET HIgHLIgHTS

■ European demand picks up, supply still tight ■ Indonesia’s Sinar Mas awards 100,000-tonne standard MOP tender ■ K+S to merge potash, salt, magnesium business units ■ Canada’s Gensource searching for new Vanguard JV partner

OVERVIEWTight availability continues to put upward pressure on MOP prices around the world, and with a number of key producers believed to be sold out for October, this tightness may continue until the end of the year.

Sentiment indicates there could be an increase in prices beyond the current ranges, but this is yet to materialise.

ASIA AND MIDDLE EASTIn the Chinese domestic market, MOP prices are firming, following the disruption of the Golden Week celebrations.

CNAMPGC and Sinochem Group are expected to raise their prices at ports in northern China, while downstream, second-tier traders claim prices increased after the holiday, with 62% Russian white MOP at Qingdao ports up by CNY20/tonne to CNY1,920/tonne.

However, domestic prices remain stable on the whole, because of steady rates in southern China.

There will be no arrivals at ports in northern China until 20 November, according to sources. This, combined with stable demand from downstream potassium sulphate and compound fertilizer producers – and large sales volumes from CNAMPGC and Sinochem Group in September – tightened supply for the spot market.

Traders and downstream producers have adopted a “wait-and-see” attitude, but tight availability and expectations of higher prices from CNAMPGC and Sinochem Group are expected to push up domestic prices slightly.

In India, a lack of spot availability has led to buyers putting pressure on distributors and producers, as they grow increasingly irritated with the continuing lack of product.

Equally, distributors active in the market are also pressuring producers, demanding more MOP be made available to meet prompt needs. However, these deliveries remain few and far between.

In southeast Asia, spot business is picking up and demand is good. A producer described increased activity in the market as buyers compete to secure what volumes are available, putting upward pressure on prices.

A second producer is eagerly awaiting the first news of several key tenders from large Southeast Asian buyers, which are expected in November and December. The results of these purchases will offer pricing direction for the months ahead.

In Indonesia, Sinar Mas is understood to have awarded its 100,000-tonne standard MOP purchase tender to several suppliers, with BPC securing 60,000 tonnes.

Awards were made around $260/tonne CFR, with delivery to end-2017.

It is unclear which suppliers secured shares of the remaining 40,000 tonnes, although APC did not enter a price for the tender.

Market sentiment indicates Canpotex was likely a key party to the remaining 40,000 tonnes, although this is unconfirmed.

Last business into Indonesia was at $250-260/tonne CFR under a tender in late June.

The now-closed tender will likely have a positive impact on spot availability in the next week or two, as several producers were understood to have cargoes in reserve to meet this requirement.

Finally, BPC estimates the range for granular material in Southeast Asia this week at $270-285/tonne CFR.

The Southeast Asia standard material price range is steady.

In Oman, Gulf Mining Group is investing up to $40m in a pilot SOP project, in hopes of proving its planned 500,000-tonne/year mine in the country’s Umm As Samim region a profitable investment.

Speaking to The Times of Oman, Tomas Sinclair, Managing Director of Gulf Mining Group, said a fully-fledged SOP project could be realised by 2022, should a feasibility study and subsequent pilot project be a success.

POTASH 12 October 5 October

SE Asia CFR 260 - 270 260 -270

Brazil gran CFR 275 - 285 275 -285

NW Europe € gran CIF 270 - 280 270 -280

SOP bulk

NW Europe € FOB 440 - 450 440 -450

POTASH 12 October 5 October

MOP bulk

Vancouver standard FOB 211 - 245 211 -245

Vancouver gran FOB 253 - 263 253 -263

Israel/Jordan standard FOB 210 - 245 210 -245

Baltic standard FOB 210 - 245 210 -245

China CFR 230 230


CHINESE DOMESTIC MARKET PRICES (CNy/TONNE)

Product 12-Oct 28-Sep * Change

Russian MOP: red potash 1800-1850 1840-1850 Down 40 low end

Russian MOP: red potash - border trade northeast

No prices heard

No prices heard

No prices heard

62% white standard MOP 1900-1930 1950-1960 Down 30-50

62% white standard MOP - border trade northeast

No prices heard

No prices heard

No prices heard

Canadian red potash 2300 2300 Unchanged

Canadian white potash 1900-1930 1950-1960 Down 30-50

Dead Sea potash 1880-1900 1900-1920Down 20 both

endsQinghai Salt Lake: 57% 1660 1660 Unchanged

Qinghai Salt Lake: 60% 1870 1870 Unchanged

Qinghai Salt Lake: 62% 1940 1940 Unchanged

SOP: standard 50% 2400-2550 2400-2550 Unchanged

SOP: granular 2650 2650 Unchanged

*Note: No prices for week ending 5 October due to Golden Week celebrations

❯❯



24



The Market

EUROPEIn Europe, demand is healthy, and the Euro-US Dollar exchange rate has stabilized slightly, after weeks of upheaval.

This rare period of constancy allowed some business to be concluded – although an ongoing lack of availability continues to leave buyers stumped, and has led to the emergence of a seller’s market.

BPC says prices are range-bound this week, but with a definite shift towards the higher end amid ongoing strong demand, and critically low supply.

The northwest European price range is steady.

In the BENELUX countries, demand is good, and market sentiment indicates firming prices.

Volumes from Agrimin are rumoured to be due into European ports shortly, and will likely be priced below the market level.

In the UK, Cleveland Potash is to face no further legal action following an investigation into an underground fire at its Yorkshire MOP mine, in which seven workers were injured.

Cleveland – a subsidiary of ICL – was placed under investigation by the UK’s Health and Safety Executive (HSE) following the blaze in April 2016, which was caused by polystyrene blocks catching fire in the mine’s tunnels some 1,100m under the sea bed, and 5 miles from the UK coastline.

HSE said: “The investigation has now concluded, and whilst our thoughts remain with those who were injured and otherwise affected by the incident, and we recognise the level of interest that it generated, there was insufficient evidence to pursue the matter further.”

In Germany, K+S is to merge its MOP, salts, and magnesium units in a company-wide strategic overhaul, as it sets out to achieve annual operational savings of €150m ($176m) by 2030.

K+S’ new “Shaping 2030” strategy will “reposition a manufacturing-driven company as a market-focused, customer-focused enterprise”, which places an emphasis on “realising synergies”.

The company was quick to renew its commitment to raw materials, however, referring to recent news of first deliveries from its new Bethune MOP mine in Saskatchewan, Canada, as “an important milestone”. (see News)

In Italy, Jordanian-origin granular MOP was heard available at €278-280/tonne FCA Ravenna big bags.

In Belarus, state media has announced that the planned 2m tonne/year Nezhinsky MOP mine will be operational by 2021.

The mine and accompanying processing plant is being built by Russian billionaire Mikhail Gutseriyev’s company Slavkaliy, with assistance from 10 Belarusian firms.

Slavkaliy will export its product to the global market through BPC.

AMERICASIn Canada, Gensource Potash has reaffirmed its commitment to the Vanguard One MOP project in Saskatchewan, Canada, following the collapse of the project’s original joint venture agreement

❯❯ last week, and is seeking a new joint venture partner, according to the Canada-headquartered company.

In a press release, Gensource stressed it is “poised and ready to advance the Vanguard One project”.

“The business structure planned for Vanguard One has not changed: It will be executed under a joint venture in partnership with an off-taker, or buyer, of the product and a financial partner,” the company states. (see News)

Meanwhile, Encanto Potash has closed a C$100m ($80m) funding agreement from GEM Investments America and GEM Global Yield, for the first part of funding to be utilised for Muskowekwan Potash project engineering studies.

Vancouver-based Encanto said the first drawdown under the agreement is expected by 15 October, but did not specify the amount it will receive initially for Saskatchewan project. The prefeasibility study supports primary and secondary mining for over 50 years at an assumed extraction rate of 2.8m tonnes/year. (see News)

In the US, the market remains inactive, as poor weather interrupts both the harvest and the return of field work – including both refill purchasing and fall inputs. However, sentiment is firm that as the rains come to a close and harvest continues in the Midwest, demand will begin to re-emerge.

The need for additional buying is being slightly suppressed by purchasers, who are seen as angling for lower prices into later this month, likely based on expectations of cheaper imports, with vessels heard in the process of unloading.

As a result, barge levels have moved a little lower, but there is sentiment that with a lack of new buying activity, the current prices might not fall much farther

Barges are being assessed this week at $220-227/short ton FOB Nola, a decrease of $5/short ton on the low side and $1/short ton on the high side of the range.

Warehouse movement is still lacking, and market players believe this will be the pattern until more harvesting concludes. However, despite the reduced demand, pricing levels are stable, and assessed unchanged at $250-$265/short ton EX-WH.

The average retail price of potash this week wwas $348/short ton ex-dealer, unchanged from the previous week.

Meanwhile, imports of potash in January-August have risen year on year, according to data from GTIS via the US Department of Commerce.

US POTASH TOP 5 IMPORTS (TONNES) JANUARy - AUgUST

CountryMarket Share

(%)2016 2017

yOy change (%)

Canada 82.52 4,708,453 6,951,173 47.63

Russia 6.13 292,410 516,498 76.63

Belarus 4.35 107,824 366,828 240.21

Germany 2.83 17,508 238,253 1260.82

Israel 2.39 133,251 201,201 50.99

World 100.00 5,350,913 8,423,439 57.42

❯❯








25



The Market

In Brazil, prices remain firm, although one distributor says the slowly increasing prices seen in recent weeks are abnormal for the time of year, as many crops’ application seasons have either passed, or are imminent.

A producer confirmed this week’s granular prices are steady at this higher level, and the range is stable.

Meanwhile, MOP imports to Brazil in January-September have risen year on year, according to data from GTIS/SECEX (the Foreign Trade Secretariat).

Elsewhere in Latin America, BPC continues to focus on shipments to Central American nations including Ecuador, Guatemala and Colombia, where demand is strong.

The producer is bullish on its prospects in the region, claiming that had it the product to ship, buyers would be waiting – but as with world’s other larger players, supply is thin.

The producer says high demand is supporting prices in the region, and a small increase may come to pass in the next few months.

AFRICAIn Eritrea, Essel Group Middle East (EGME) has appointed Colonnade Mining Group as drilling contractor for its Bada potash project.

The Dubai-based conglomerate’s subsidiary Interu Mining has contracted Colonnade to carry out a core sample drilling programme at its Bada prospect, which is situated in the East African nation’s northern Danakil region.

Colonnade’s programme will consist of drilling five bore holes, from which core samples will be extracted, and sent to a laboratory for analysis. The samples will provide EGME with data on the Bada prospect’s geology and potential as a potash-rich mine. (see News)

Subscriber note: ICIS is considering adding a CFR SE Asia granular quotation. Please send any comments or queries to [email protected]

BRAZIL POTASH ARRIVALS OCTOBER-NOVEMBER


Santos

Klaipeda BPC TBC 40,700

TBC Canpotex TBC 20,000

TBC Canpotex Mosaic 34,500

Saint John Canpotex Mosaic / Adufertil 29,000

Saint John Canpotex Mosaic / TBC 27,000

Portland CanpotexMosaic / Fertipar /

Adufertil24,185

Paranagua

Spain ICL Fertilizers TBC 30,000

USA Canpotex TBC 56,654

Hamburg K + S TBC 30,000

Lithuania BPC TBC 37,521

Canada Canpotex Agro São Luiz 8,800

Canada Canpotex Coopavel 2,900

China Nitron TBC 32,100

Antonina

Russia Uralkali TBC 24,898

São Francisco Do Sul

Tocopilla SQM Vitas Cibrafertil 21,000

Tocopilla SQM Vitas Nitrobras 800

Tocopilla SQM Vitas Paranaiba 500

Canada Canpotex Cibrafertil 12,500

Rio grandeLithuania BPC Yara 39,800Canada Canpotex Mosaic 27,500

Canada Canpotex Cibrafertil 9,522

Germany K + S Coxilha 4,000

Germany K + S Josapar 3,000

Germany K + S Multifertil 3,000

Germany K + S Piratini 4,000

Germany K + S Unifertil 1,000

Germany K + S Josapar 2,000

Germany K + S Coxilha 1,500

Germany K + S Unifertil 12,300

Germany K + S Heringer 1,000

Germany K + S Multifertil 1,500

Israel DSW Piratini 14,725

Israel DSW Ourofertil 4,000

Israel DSW CHS 6,000

Israel DSW Piratini 1,000

Lithuania BPC Yara 45,000

Itaqui

Russia Uralkali Yara 15,000

Russia Uralkali Tocantins 29,145

Aratu

Montevideu, Argentina TBC Cibrafertil 12,002

Montevideu, Argentina TBC SQM Vitas 8,200

Tampa Mosaic USA Mosaic 13,000

Saint John TBC Cibrafertil 10,000

Saint John TBC Mosaic 7,000

Vitória

Ashdod DSW Heringer 20,000

TOTAL 789,225

BRAZIL POTASH TOP FIVE IMPORTS (TONNES) JANUARy - SEPTEMBER

CountryMarket Share

(%) 2016 2017yOy change

(%)

Canada 29.38 2,030,793 2,229,242 9.77

Russia 21.45 1,058,806 1,627,673 53.73

Belarus 21.38 1,499,592 1,622,077 8.17

Israel 9.52 466,722 722,514 54.81

Germany 9.28 1,021,101 703,711 - 31.08

World 100.00 6,783,502 7,586,657 11.84

❯❯



26



The Market

In the US, wet weather across the key regions, especially seen in the Midwest, has been a key feature of the past week as it has slowed some of the harvesting progress and has also kept a lid on additional amounts of fall applications of fertilizer and other field activities.

More favourable and drier conditions are expected to return over the next seven to 10 days, which is seen as allowing for farmers to close in on the crops still left in the field over the rest of the month and possibly get a few weeks of extra work completed before the onset of winter conditions.

Nutrient demand remains muted given the harvest period but is still expected to be strong for ammonia and phosphates once buying kicks back into gear with anticipation that if its values remain stable that there will likely develop a good pull for more supply of potash as well.

Corn harvest is now at 22% completion while efforts on soybeans are moving at a quicker pace as farmers have currently finished 36% of their crop according to the US Department of Agriculture’s (USDA) Weekly Crop Progress report.

Despite the return of rain disrupting the progress in various regions, the USDA said 22% of this year’s crop has been harvested, an uptick of five percentage points week-on-week, but this year is still trailing the 33% achieved last year as well as the five-year average of 37%.

North Carolina at 89% of its acreage completed remains the top state but is closely followed by Tennessee at 85%.

The agency modified crop conditions with the amount of the crop rated as being very poor and poor now down to 11%, with fair staying at 25% as was the amount listed as good at 49%. The crop rated as excellent was increased to 15%.

There is now 82% of the corn crop being listed as mature.

Keeping a solid pace over the past week soybean farmers increased their amount of harvest to 36% of the crop, an increase of 14 percentage points week on week, but despite the progress this crop is still running behind the 41% from 2016 as well as the five-year average of 43%.

With 91% of its crop in the bin, Louisiana continues to be the leading state in harvesting, followed by Mississippi with 73% of the state’s soybean acreage completed.

The USDA said the amount of the soybean crop dropping leaves has now reached 89%.

Soybean conditions were slightly adjusted again with the amount listed as very poor still at 3% as was the amount deemed poor at 9%, with those ranked as fair decreasing to 27%.

The amount listed as good was lifted to 49% while the crop determined as excellent remained at 12%.

Cotton harvest has increased to 25% of the crop completed, with sorghum having reached 35% and the rice harvest currently at 85% finished.

Agricultural Insights

In trading on 11 October, the December corn contract closed down 3.2 cents to end the session at $3.46/bushel, while November soybeans fell by 0.6 cents to finish at $9.65/bushel.

The USDA’s Farm Service Agency announced this week it will suspend accepting most new offers to enroll land in the Conservation Reserve Program until later in the 2018 fiscal year but will approve those pending and eligible offers it has received through 30 September.

Officials said the temporary act is being undertaken to provide for a review of allocation levels, and to avoid exceeding the cap of 24m acres as the current enrollment is about 23.5m acres.

The USDA will continue to accept eligible offers for state-specific Conservation Reserve Enhancement Program (CREP) and CRP Grasslands enrollment.

Dow AgroSciences and ADM announced that they are collaborating to give US farmers access to Enlist E3 soybeans for 2018 planting through an agreement between the two companies with the thought that the new technology will boost productivity.

The highlight of the offering is that it is designed to give exceptional weed control and helps maximize yield as Enlist E3 soybeans are tolerant to applications of 2,4-D choline, glyphosate and glufosinate, giving farmers multiple herbicide modes which helps not only control economically damaging weeds but also curtails resistance.

The Dow AgroSciences program requires participating farmers to adhere to a comprehensive, robust set of protocols designed to ensure the soybeans reach specific ADM facilities, which will process them for use in North American markets only. Farmers will deliver these soybeans to one of the four ADM plants designated for this program.

Media reports said that US agriculture titan Monsanto has settled an intellectual property dispute with three leading Indian cotton seed makers over genetically modified seed technology.

Monsanto had not issued a statement on the report but several Indian companies were said to have been delaying payments to the firm, demanding a cut in royalties they paid to license its technology which forced legal wrangling before the parties entered into arbitration proceedings with Monsanto officials apparently indicating to the Indian government that they have reached a mutually discussed and accepted settlement.

Follow Mark Milam on Twitter @ICISMark for tweets on the latest agriculture information

Mar

k M

ilam


The Market


gERMANy’S K+S TO MERgE POTASH, SALT UNITSK+S is to merge its MOP, salts, and magnesium units in a company-wide strategic overhaul, as the German fertilizer producer sets out to achieve annual operational savings of €150m ($176m) by 2030.

K+S’ new “Shaping 2030” strategy will “reposition a manufacturing-driven company as a market-focused, customer-focused enterprise”, which places an emphasis on “realising synergies”.

The company was quick to renew its commitment to raw materials, however, referring to recent news of first deliveries from its new Bethune MOP mine in Saskatchewan, Canada, as “an important milestone”.

Burkhard Lohr, Chairman of the K+S Board of Executive Directors, says: “It was the right time to develop a clear picture of how K+S is to be structured in 2030.

The strategy will be executed in two phases, according to K+S. Firstly, through 2020, the company will align its four market segments: agriculture, industry, consumers, and communities, which will “help K+S better address and connect with customers”.

The company says its portfolio will then be broadened – with a focus on high-margin products.

It described the integration of its MOP, magnesium products, and salt units as a “key prerequisite for reinforcing customer orientation”.

K+S expects a positive effect on its earnings to the tune of at least €150m annually by the end of 2020, which will return the company to being free cash flow positive by 2019.

The move will also cut K+S’ net debt in half by 2020, according to the press release.

The second phase of “Shaping 2030” will see K+S “increase operating earnings and reduce the business’ dependence on external factors, such as weather and the global market price for MOP”. MOP prices have been slow to recover globally, amid persistent oversupply.

The producer will also expand its specialty businesses, such as fertigation – the combined application of water and nutrients to a crop; a process similar to a mix of fertilizer application, and accurate irrigation.

K+S also intends to step-up its business in high-growth regions such as Asia and Africa.

Almost as an afterthought to its announcement, K+S also set itself the goal of achieving €3bn in earnings before interest, tax, depreciation and amortisation (EBITDA) by 2030 – with at least 15% return on capital employed.

ICL CLEARED By UK AUTHORITy IN BOULBy MINE FIRECleveland Potash is to face no further legal action following an investigation into an underground fire at its Yorkshire muriate of potash (MOP) mine, in which seven workers were injured, according to media reports late on Wednesday.

Cleveland – a subsidiary of Israel Chemicals (ICL) – was placed under investigation by the UK’s Health and Safety Executive (HSE) following the blaze in April 2016, which was caused by polystyrene blocks

News

❯❯

catching fire in the mine’s tunnels some 1,100m under the sea bed, and 5 miles from the UK coastline.

Seven workers were treated for smoke inhalation.

The HSE issued Cleveland with two improvement notices after the blaze, but has concluded there is “insufficient evidence” for further action, according to reports in local and national media.

A HSE spokesperson says: “Having carried out our inquiries, two improvement notices were served and further interventions were instigated.

“The investigation has now concluded, and whilst our thoughts remain with those who were injured and otherwise affected by the incident, and we recognise the level of interest that it generated, there was insufficient evidence to pursue the matter further.”

ICL was not immediately available for comment.

UK-based fertilizer start-up Sirius Minerals is believed to be in preliminary talks with ICL to acquire the Boulby mine.

gENSOURCE TO PRESS ON WITH MOP PROJECTGensource Potash has reaffirmed its commitment to the Vanguard One MOP project in Saskatchewan, Canada, following the collapse of the project’s original joint venture agreement last week, and is seeking a new joint venture partner, according to the Canada-headquartered company.

In a press release late on Friday, Gensource stressed it is “poised and ready to advance the Vanguard One project”.

“The business structure planned for Vanguard One has not changed: It will be executed under a joint venture in partnership with an off-taker, or buyer, of the product and a financial partner,” the company states.

“As previously disclosed, Gensource is in discussions with several parties – all of whom are credible and active participants in the potash industry – to create these partnerships, and the company is excited at the prospect of moving the project ahead.”

The Vanguard One joint venture collapsed last week, with former partners Gensource, and Dubai-based conglomerate Essel Group Middle East (EGME) both pointing to a failure to meet contractual obligations on the part of the other as being responsible.

“Despite an extension of the deadline for the initial contribution and recent planning meetings for the JV, as of October 2, 2017, Vanguard has not received the initial contribution and, in fact, has received no funding whatsoever,” Gensource said in a statement on 2 October.

EGME’s responded: “EGME confirms that due to the incurrence of expenses before the agreement in question was finalised, contractual obligations relating to Vanguard have not been met by Gensource within the agreed timeframes. The arrangement has been terminated by mutual consent and with immediate effect.”

Gensource is employing specific improvements developed by Innovare Technologies, which filed a patent in June last year for its Selective Mining Enhanced Recovery (SMER) process, for potash and other water soluble mineral mining and recovery. The process is expected to improve energy efficiency and lower operating costs.

The producer adds: “Our shareholders will recall that Vanguard One’s


The Market

stated operating cost per tonne is projected to be among the lowest in the industry, even though the operation will produce only 250,000 tonnes per year, which represents a very small potash project. Up to now, potash producers have relied on scale (i.e. large tonnages) to obtain low per-tonne operating costs.”

A feasibility study has estimated it will take 22 months to construct Vanguard One, and it will be approximately two years from construction to first production. This timeline is now likely unclear, following the JV’s dissolution.

gULF MININg gROUP PLANS OMAN SOP PILOT PROJECTGulf Mining Group is investing up to $40m in a pilot sulphate of potash (SOP) project in Oman, in hopes of proving its planned 500,000-tonne/year mine in the country’s Umm As Samim region a profitable investment, according to media reports on Tuesday.

Speaking to The Times of Oman, Tomas Sinclair, Managing Director of Gulf Mining Group, said a fully-fledged SOP project could be realised by 2022, should a feasibility study and subsequent pilot project be a success.

Gulf Mining Group has applied for a mining licence, and is awaiting approval from the country’s Public Authority for Mining.

The licence calls for access to an area of 3,200 sq km in central Oman, where muriate of potash (MOP) will be extracted, before being put through brine extraction and initial processing at Umm As Samim, on the edge of the Rub al-khali desert. The area’s estimated reserve is in excess of 40m tonnes of MOP.

The product will then be shipped to the Duqm Special Economic Zone and combined with sulphur to produce SOP. Development of the port-side plant is envisaged to cost $300m-500m.

The plant will require 205,000 tonnes/year of sulphur.

Gulf Mining hopes to produce 500,000 tonnes/year of SOP, which can be scaled up to 1m tonnes/year once the operation is fully established.

Gulf Mining Group is the largest chromium producer in Oman, with a total production of 400,000 tonnes/year. The company also produces maganese, marble, gypsum, and limestone.

ENCANTO POTASH CLOSES PROJECT FINANCINg DEALEncanto Potash has closed the Canadian dollar (C$) 100m ($80m) funding agreement from GEM Investments America and GEM Global Yield, with the first part of the funding to be utilised for Muskowekwan Potash project engineering studies.

Vancouver-based Encanto said the first drawdown under the agreement is expected by 15 October but did not specify the amount it will receive initially for Saskatchewan project. The prefeasibility study supports primary and secondary mining for over 50 years at an assumed extraction rate of 2.8m tonnes/year.

The company previously said there was a shovel-ready construction date at the Muskowekwan project of September 2019.

It had also stated that these proceeds will also be used for the procurement and supply of third-party potash under the terms of a 20-year, 5m tonnes/year off-take agreement executed on December 2016 with the National Federation of Farmers’ Procurement, Processing and Retailing Cooperatives of India (NACOF).

❯❯ “Meeting this financing milestone means that we will be able to continue to advance the Muskowekwan mine. This is a significant opportunity for the company and our First Nations partners and we thank everyone for helping us get here,” said Stavros Daskos, Encanto Potash CEO.

INDIA ROLLS OUT DIRECT BENEFIT SUBSIDy TRANSFERThe Indian government has introduced the direct benefit transfer (DBT) for fertilizer subsidies from this month in seven small states including Delhi, according to local media reports.

Another 12 bigger states including Punjab, Madhya Pradesh and Andhra Pradesh are ready for the phase II launch next month, the reports said.

The government is targeting to cover the entire country by January 2018, a fertilizer ministry official was quoted as saying in the reports.

The government pays around Rs700bn annually as fertilizer subsidy to provide cheaper crop nutrients to farmers.

The DBT that is being implemented for fertiliser subsidy payment is different from the DBT implemented in cooking gas subsidy in the country.

Farmers may not be able to make upfront payments because some fertilizers are very expensive so they will continue to buy fertilizer from the retailer at subsidised rate. These transaction details will be recorded on the Point of Sale (PoS) machines.

The government will release the subsidy to companies only after checking the sale data uploaded on the website by the retailers, the reports said.

More than 60% of the PoS machines required have been installed across the country so far.

SLIgHTLy BELOW-AVERAgE MONSOON FOR INDIAIn India, the rainfall during the southwest monsoon season (June-September) was 95% of its long period average (LPA) or 50-year average, according to a press release issued by the India Meteorological Department today.

Rains in the 90-96% range are categorised as ‘below normal’, below 90% as ‘deficient’ and at 96-104% of LPA are categorised as ‘normal’.

Monthly rainfall was 104% of the LPA in June, 102% in July, 87% in August, and 88% of LPA in September. Rains has been below IMD’s forecasts. The weather office had expected the country to receive rains at 98% of the 50-year average.

However, another Indian weather forecaster, Skymet Weather had said monsoon rains will be 95% of LPA, with an error margin of (+/-) 5%.

IMF REVISES gLOBAL gROWTH PROJECTIONS UPWARDSThe International Monetary Fund has upgraded its global growth projections to 3.6% this year and 3.7% in 2018, up 0.1% from its previous forecast, it said in its latest World Economic Outlook published on Tuesday.

The increased growth projections are well above the 2016 level, which the IMF had forecasted at 3.2%.

“Broad-based upward revisions in the euro area, Japan, emerging ❯❯


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Asia, emerging Europe, and Russia more than offset downward revisions for the United States and the United Kingdom,” the IMF said in the report.

Despite the positive revisions to global growth forecasts, the IMF stressed that the recovery from the global recession is not yet complete.

“While the baseline outlook is strengthening, growth remains weak in many countries, and inflation is below target in most advanced economies.

“Commodity exporters, especially of fuel, are particularly hard hit as their adjustment to a sharp stepdown in foreign earnings continues.”

In his foreword, economic counsellor Maurice Obstfeld said that the global cyclical upswing that began halfway through 2015 is continuing to gather strength.

Despite this, Obstfeld stressed that neither policymakers nor markers should be lulled into complacency.

“A closer look suggests that the global recovery may not be sustainable - not all countries are participating, inflation often remains below target with weak wage growth, and the medium term outlook still disappoints in many parts of the world.”

Obstfeld also called on policymakers to act now, “while times are good”.

“For some countries where output gaps have closed, the time has come to think about gradual fiscal consolidation, to reduce swollen public debt levels and create buffers to be used in the next recession.”

CATALONIA’S INDEPENDENCE ‘SUSPENDED’The president of Catalonia suspended the region’s independence soon after declaring it as he asked the central government for “dialogue” for an ordered withdrawal.

When the Catalan president addressed the regional assembly and declared independence on Wednesday, the markets were closed but the IBEX 35’s futures fell sharply soon after his words.

However, futures moved sharply higher when two minutes later he said

the declaration would be suspended, the futures went sharply higher, a positive mood that persisted among Spanish investors on Wednesday.

According to figures from the Catalan government, 43% of voters (2.26m) in the region cast their vote on 1 October, with 90% of them (2.02m) voting for independence, less than 40% of the 5.5m-strong electorate.

However, the lack of a minimum quorum has overshadowed the vote, which was also met with a violent response from the police, causing further backlash from supporters of independence.

In a dramatic evening when those expending a full independence declaration were left disappointed, the Spanish government already said that there would be nothing to negotiate as the vote had been declared illegal, as well as the law it was organised under.

The Spanish government is holding meetings, but analysts in Madrid have said one of the options now would be to suspend Catalan autonomy – effectively, imposing direct rule to call a regional election soon after.

London-based analysts at Germany’s investment bank Deutsche Bank said on Wednesday the Catalan president had “increasingly been boxed in” by differences of opinion within his own government coalition as well as the fact that heavy weights of the Catalan business sphere had announced they would move their legal bases out of the region.

Among others, energy major Gas Natural and the main two Catalan banks, CaixaBank and Banc Sabadell, had announced last week they were moving their headquarters elsewhere in Spain. In total, six out of seven IBEX 35 Catalan companies announced that intention. The main index gathers the 35 largest Spanish companies.

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