Global Availability of Phosphorus and Its Implications for Global Food Supply: An Economic Overview

6 Conclusion
As far as this can be said today, agriculture will always be dependent on phosphorus inputs. And at least in foreseeable future it is very likely that the prime source of phos-phorus for agriculture will be mineral phosphate fertilisers and therefore, ultimately, phosphate rock. Although phosphate rock is a finite natural resource and contrary to recently published articles predicting a "peak phosphorus" event within this century, the currently available information shows no clear indications that phosphate rock deposits are facing depletion any soon. At the same time, the inherent uncertainty of such pre-dictions needs to be emphasised.

Furthermore, a close inspection of price trends and their determinants reveals that none of the past price peaks were triggered by physical phosphate rock scarcity but in-stead by a combination of demand increasing factors, long capacity expansion lead times and, possibly, by an oligopolistic market structure.

But even though mineral phosphate deposits might not run out in the near future, there can be no doubt about the finiteness of this resource. Given that phosphorus as a nutrient is not substitutable in agriculture the only alternative to the use of phosphate rock-based mineral fertilisers is using phosphate recyclates. In other words, unless the phosphorus cycle is closed, essentially through complete recycling, the supply of min-eral phosphate fertilisers is going to be finite. This is unlikely to be a problem within this 19

century, yet it remains a permanent threat in the long run. A fundamental question therefore is whether the market price mechanism will provide appropriate economic in-centives for phosphorus recycling early enough to prevent a peak phosphorus event and eventually a limited availability of this non-substitutable nutrient. A precautionary approach would surely include a strategy towards a more efficient use of phosphorus fertilisers and investment in recycling options.

Meanwhile, physical abundance of phosphate rock alone may not be enough to en-sure a safe and stable economic supply. On the one hand, this relates to the highly skewed distribution of global phosphate rock production and reserves which may lead to a further increasing dependency of phosphate importing regions and nations on only a handful of producing countries, such as China, Morocco and Russia. On the other hand, increasingly volatile phosphate rock and fertiliser prices can pose a risk, espe-cially to farmers in developing and emerging nations. In contrast to developed coun-tries, the soils in developing regions are often phosphorus-deficient and therefore quite responsive to fertiliser application. Consequently, a price shock that renders phosphate fertiliser unaffordable can be assumed to have more severe effects on agricultural yields in tropical countries than in the industrialised countries of the North with phos-phorus saturated soils.

In that sense, and although the "peak phosphorus" debate cannot be expected to provide a reliable depletion or peak estimate, it surely helped raise public, political and scientific awareness of a formerly barely noticed topic. As a result, inter- and transdis-ciplinary research networks and initiatives such as Global TraPs, the European Phos-phate Platform and GPRI have been founded and the European Commission aims at publishing a Green Paper on the topic (ENEP 2013; EPP 2013; GPRI 2011; Scholz et al. 2013a).

　

by Markus Heckenmüller, Daiju Narita, Gernot Klepper

The World’s Biggest Phosphate Rock Producers, 2012 (Share in World Production)

OCP (Morocco)   13.3%

The Mosaic Company (USA)   6.5%

Yuntianhua Group (China)  3.9%

OJSC PhosAgro (Russia)   3.7%

PCS (PotashCorp) (Canada)   3.5%

Jordan Phosphate Mines (Jordan)  3.1%

CPG (Tunisia)   2.9%

Vale S.A. (Brazil)   2.2%

ICL (Israel)   1.7%
 
 
 Source: Based on Dennis (2013) and ICL (2013). 










 

Anglo Said to Weigh $1 Billion Niobium, Phosphate-Unit Sale

Anglo American Plc is considering selling its niobium and phosphate business in Brazil in a deal that may fetch about $1 billion for the London-listed miner, said people familiar with the matter.
Anglo is working with advisers on a possible sale of the business, said the people, who asked not to be identified because the information is private. A formal sale process hasn’t started and the company may still keep the operations, according to the people. Anglo has received expressions of interest but no formal offer, one person said.
The mining company is seeking to raise $3 billion by selling assets and is cutting jobs to trim costs and cut debt amid a collapse in commodity prices. It has already raised about $2 billion this year by offloading its tarmac business, two copper mines in Chile and platinum assets in South Africa. Anglo said in July that it had net debt of $11.9 billion, with a long-term borrowing target of $10 billion to $12 billion.

Anglo closed 2.2 percent higher at 609.9 pence in London. The stock is down 49 percent this year. A spokesman for the producer declined to comment.
China’s slowdown and cooling demand for metals and minerals has undermined Chief Executive Officer Mark Cutifani’s efforts to turn around the fortunes of a business that mines platinum and diamonds in Africa and iron ore in Brazil.
Anglo says it’s among the world’s three biggest producers of niobium. Its business for that material, used to make steel, produced 2,934 metric tons in the first half and contributed $35 million to earnings before interest, taxes, depreciation and amortization. Its phosphates unit had output of 513,000 tons with Ebitda of $52 million.
In late 2013, Anglo combined the management of its nickel, niobium and phosphates operations under a sole division, naming Ruben Fernandes as CEO of the business and relocating its offices to Belo Horizonte, in the Brazilian southeastern state of Minas Gerais, from Sao Paulo.

The London-based mining company is set to become the world’s second-largest producer of niobium, used in high-temperature alloys for jet engines and in lightweight steel for cars, when it completes the ramp up of its $325 million Boa Vista Fresh Rock plant in Brazil’s Goias state by mid-2016.
Cia. Brasileira de Metalurgia & Mineracao, controlled by the billionaire Moreira Salles family, dominates the supply of niobium after starting operations in 1961. CBMM, as the Araxa, Brazil-based company is known, sold a 30 percent stake to a group of Asian steelmakers in two transactions worth $3.9 billion in 2011.

ICL Signs MOU to Establish Phosphate Operation in Namibia

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         ICL TEL AVIV, Israel, December 7, 2015 /PRNewswire/ --

Joint venture with Leviev Group would build a large-scale maritime mining and phosphate downstream manufacturing business  

ICL aims to secure competitively-priced phosphate deposits for future decades to strengthen its global specialty phosphates business 

JV is another step in ICL's strategy to diversify its sources of phosphate raw materials in order to build its specialty phosphate business in the Americas and Africa 

Follows ICL's recent strategic steps, including the formation of a phosphate JV with China's leading phosphate company Yunnan Yuntianhua (YTH) 

 

This could be the first commercial maritime exploration of phosphate in the world.

This phosphate should be high in chlorides and organics, eventually "similar" the peruvian Bayóvar phosphate nowadays being used to produce phosphoric acid in Brazil (Cubatão), México (Coatzacoalcos) and US (Uncle Sam).



Dam burst at Vale, BHP mine devastates Brazilian town

Nov 5 (Reuters) - A dam holding back waste water from an iron ore mine in Brazil that is owned by Vale and BHP Billiton burst on Thursday, devastating a nearby town with mudslides and leaving officials in the remote region scrambling to assess casualties.

The mining company Samarco, a joint venture between top iron ore miners Brazil's Vale and Australia's BHP, said in a statement it had not yet determined why the dam burst or the extent of the disaster at its Germano mine near the town of Mariana in Minas Gerais, south eastern Brazil.

Civil defense authorities in Mariana said they were evacuating about 600 people to higher ground from the village of Bento Rodrigues, where television footage showed dozens of homes destroyed by the mudslide. A car rested on top of a wall where the roof of a building had been ripped off.

They said the flood had also reached another village further down the hill, called Paracatú de Baixo, and that inhabitants there were being evacuated.

The dam was holding tailings, a mining waste product of metal filings, water and occasionally chemicals. It was located near the Gualaxo do Norte river, adding to fears of potential water contamination.

The G1 news service of the Globo Media group reported that between 15 and 16 people died and 45 others were missing, citing the local union.

Civil defense authorities could not confirm casualties and said numbers reported in Brazilian media were speculative. A city hall official confirmed one death and 16 injuries, adding that dozens more were missing.

At a news conference in Melbourne, Australia, BHP Billiton's chief executive, Andrew Mackenzie, said a full assessment of casualties and damage was being hampered by darkness.

"Most of what happened there has been under the cloak of darkness," he told reporters. "At daybreak, clearly we will do an awful lot more and give you further updates."

Rescue crews continued to search the muddy waters after nightfall.

Brazilian army units nearby stood ready to help the search and rescue effort and the minister of national integration, Gilberto Occhi, planned to visit the state on Friday to provide assistance, according to a note from the presidency.

Miners are struggling amid a collapse in prices of iron ore and other commodities due to concerns about demand from China, the world's top consumer of industrial raw materials.

Samarco produces about 30 million tonnes per year of iron ore, just under 10 percent of Brazil's output. Iron ore is transported down a slurry pipe from Germano to Espirito Santo, where it is turned into pellets.

Vale has directed media questions to Samarco.

(Reporting by Anthony Boadle; Additional reporting by Raquel Stenzel and Natália Scalzaretto in Sao Paulo, Sonali Paul in Melbourne and James Regan in Sydney; Editing by Chris Reese, Tom Brown, Ken Wills and Ed Davies)

Indian 1H 2015 phosphoric acid price increase will do nothing to improve the bearish sentiment in the global fertiliser market.

Slow fertiliser demand from cautious farmers who are not seeing improvements in agricultural commodity prices is met with more than enough supply.

The 40 USD/tonne increase in the phosphoric acid price in India—from 765 USD/tonne to 805 USD/tonne P2O5—was larger than most analysts expected. The other two benchmark price increases of the past two weeks, the 1H 2015 Chinese potash price and the US Tampa April ammonia price had brought no great surprises.

Indian phosphate producers, who use ammonia and phosphoric acid to produce DAP, are believed to have accepted the higher than expected price increase following a bearish outlook for ammonia in the Eastern Hemisphere. Ammonia prices decreased with 6 percent in India last week and severe oversupply of ammonia in the Eastern Hemisphere will keep a strong lid on prices.

The arbitrage decisions of the Indian phosphate industry will help shape the short-term global market. Higher DAP prices resulting from greater DAP import volumes can strengthen the position of suppliers in the Americas. However, demand needs to increase significantly in these regions for any material impact on prices to become feasible.

The market is also hoping for India to take up substantial volumes of the urea that is entering the market. A purchase tender has not yet been announced. Delaying the tender for as long as possible will help India achieve a lower price as long as the floor in the urea market is not reached. A urea floor price is estimated to be another USD 10 to USD 20/tonne lower than current FOB export prices in China and Ukraine—the marginal cost producers. Evidence of Chinese aspirations for the urea export market surfaced last week when Chinese export statistics showed all-time high export volumes of almost 1.3 million tonnes in February.

Analysis by Viktor Ikeda, a new member of our Global Farm Inputs team, shows that Brazilian farmers joining their colleagues in Europe and the US in cautious fertiliser application looks likely. This caution is due to the margin pressure resulting from lower agricultural commodity prices and currency headwinds. And with the main driver of global fertiliser demand shifting into a lower gear, global fertiliser markets remain strong buyer markets.

Source: https://far.rabobank.com/en/sectors/farm-inputs/Weekly-Fertiliser-Update-Week-14.html

Purified Phosphoric Acid - Production Capacity - 2015

Approximate capacities (k tons.of P2O5 per year)

Group                     Locations                                                                 Capacity

PCS                        Aurora - NC - USA                                                     300
Innophos                Geismar - LA - USA and Coatzacoalcos - Mexico     260
Prayon                    Puurs and Engis - Belgium                                         230
ICL                         Arad - Israel and Cajati - Brazil                                  220
Emaphos                 El Jadida - Morocco                                                   150
Wengfu                   Dazhou - Sichuan - China                                          100
Petrocentral             Gresik - Indonesia                                                       50
Dongbu                   Dongbu - South Korea                                                 50
Haifa                       Haifa - Israel                                                                30
GACL                     Vadodara - Gujarat - India                                           30
Crystalis                  Siilinjarvi - Finland                                                      30
AB Foods                Bandirma - Turkey                                                       20

Sources: "Phosphoric Acid - Rodney Gilmour" (foto) and personal research

The Colossus of Piaçaguera

Once upon a time it was a big country.
Full of farms.
Not well developed.
Its name was Brazil.
It was in need of fertilizers.
It still needs.
In the sixties Peri Igel of Ultra Group bring capital and technology.
To build the place where now I am working.
It was called ULTRAFÉRTIL!
At Cubatão, Plínio de Queiroz, at Raiz da Serra, going to the rail to Paranapiacaba.
The old Santos Jundiahy of the Britons.
Now an old lady.
Going to do half a century.
First of its class in South America!
Integrated: NH3, HNO3, Na NH4, H2SO4, H3PO4 and MAP!
It its still there.
Working, making profit.
Being innovative.
Using Bayóvar Rock for Phosphoric and SSP (at former IAP).
Now "small" before a giant as Uberaba´s former Fosfértil´s.
A complex is like a living being.
In our case an old behemot, now "smaller", but as respectable as ever!
I would like to congratule each one that has did that job done!

Against crisis Vale focuses R&D in productivity

Contra a crise, Vale foca pesquisa em produtividade

• R7 Página Inicial
• Receba Notícias No Seu Celular

• Texto: -A +A

Em tempos de orçamento enxuto e preço dos metais em baixa, a Vale aciona os cérebros a serviço de sua área de pesquisas para trabalhar em busca de maior produtividade. Em linguagem popular, o foco é fazer do limão uma limonada, isto é, ajudar a mineradora a extrair o maior valor das operações já existentes com o menor investimento possível. Em 2015, a mineradora destinará US$ 900 milhões do orçamento anual (US$ 9 bilhões) para pesquisa e desenvolvimento (P&D). Alguns projetos já estão sendo encaminhados às áreas de negócios, que batem o martelo para sua execução.

Nessa lista estão pesquisas nas minas de Onça Puma e Sossego, no Estado do Pará. O diretor de Exploração e Projetos Minerais da Vale, Marcio Godoy, conta que as sondagens ao redor de Onça Puma detectaram depósitos satélites de níquel com teores superiores aos já processados. A expectativa é que a Vale consiga elevar de 1,8% para 2% o teor do metal extraído, elevando seu valor de mercado.

No caso da operação de cobre de Sossego, em Carajás, a meta é estender a vida útil da mina. As atividades foram iniciadas em 2004 e, pelo projeto original, terminariam em 2015. Os estudos já estenderam a vida útil da unidade até 2024. A ideia é esticá-la por pelo menos mais uma década, estima Godoy. As pesquisas geológicas e estudos de processos que permitirão o aproveitamento de novos corpos de minério estão em conclusão e serão submetidos ao conselho da Vale.

"O segredo da mineração é conhecer bem a sua jazida para extrair o máximo de produto aplicando o mínimo de capital", diz Godoy. Nesse novo ciclo de baixa do minério de ferro e dos preços dos metais, a mineradora deslocou os esforços da pesquisa de projetos greenfield (iniciados do zero) para exploração brownfield (já existentes).

Nos dois casos acima as pesquisas foram realizadas pelo Centro de Desenvolvimento Mineral (CDM), em Santa Luzia, na Grande Belo Horizonte, primeiro centro de pesquisas da Vale, que completa agora 50 anos. Foi lá que a empresa desenvolveu a tecnologia para explorar os minérios de itabiritos quando suas reservas de hematita no Quadrilátero Ferrífero - minério mais puro, de alto teor de ferro - entraram em declínio nos anos 60. A criação do CDM ajudou a Vale a dar o primeiro salto tecnológico na mineração de ferro.

Bactérias

Além de aprimorar processos de produção já existentes, os pesquisadores da companhia também desenvolvem novas tecnologias. Desde sua criação, em 1965, o CDM obteve o registro de 450 patentes. Uma das novas apostas em inovação tecnológica é o uso industrial da biolixiviação, técnica que utiliza bactérias para estimular a extração de cobre contido em minérios que hoje não são processados por falta de uma rota economicamente viável.

A pesquisa da biolixiviação está em curso desde 2011 e já consumiu US$ 1,5 milhão. Inicialmente ela será aplicada a minérios oxidados encontrados na superfície do depósito de cobre de Sossego, mas pode ser base para a extração de níquel e fosfato, diz o engenheiro Felipe Hilário, coordenador do projeto.

Um dos objetivos é reduzir custos, já que o uso industrial das bactérias dispensa a construção de uma planta de ácido sulfúrico, estimada em 30% do capital investido na produção do cobre. O ácido libera o cobre de minerais associados. A ideia é misturar o enxofre ao minério e deixar as bactérias agirem como um catalisador do processo químico de produção do ácido sulfúrico. Os testes que darão dimensão da viabilidade industrial estão começando no CDM e devem levar quase um ano. "O que estamos fazendo é repetir um fenômeno que acontece na natureza em escala industrial", explica Hilário.

Os pesquisadores do CDM também reproduziram uma pequena planta para processar o minério de transição da mina de cobre de Salobo (PA). Lá são feitos testes para capturar o cobre de menor teor, por meio da alteração de reagentes. Com a flotação (separação de impurezas) a expectativa é levar esse mineral, que hoje não pode ser processado, de um teor de 1% para 39% de cobre. O processo também reduz a necessidade de lavrar mais minério. "É um apoio bem prático para melhorar a produtividade de uma operação", cita Godoy.

O diretor de Exploração e Projetos Minerais destaca que pesquisas na mesma linha estão sendo realizadas na área de fertilizantes, para viabilizar o aproveitamento de fosfato sem grandes investimentos em reforma de unidades como Araxá (MG) e Catalão (GO). Na mina de Bayovar, no Peru, há análises para a eliminação de matéria orgânica para permitir o uso do fosfato em plantas de ácido fosfórico no Brasil.

O CDM também pesquisa formas de viabilizar o aproveitamento das terras raras, um conjunto de 17 elementos usados na indústria de alta tecnologia e encontradas dentro das operações de fertilizantes. Embora sejam abundantes, ao contrário do que diz o nome, as terras raras são de difícil extração.

Potash Offer For K+S A Sign Of Weakness

By Tim Maverick
On June 26, the Potash Corporation of Saskatchewan (NYSE:POT) revealed an $8-billion offer for Germany's K+S AG (OTCQX:KPLUY, OTCPK:KPLUF).
The deal, if it happens, would be the first major deal in the potash sector since 2011.
The market for potash, a key fertilizer ingredient, has been in the doldrums since 2013. That's when one of the two global potash cartels - the Belarusian Potash Company - broke up. Uralkali left, leaving only its partner Belaruskali.
That breakup led to falling potash prices, as competition between the global producers began to heat up. Although prices have since stabilized, they still hover near five-year lows.
The freer market and resulting prices didn't please the North American Canpotex potash cartel, forcing it to operate well below capacity. This cartel is headed by Potash Corp., and also includes Mosaic (NYSE:MOS) and Agrium, Inc. (NYSE:AGU).
This brings us to the proposed takeover of K+S by Potash Corp.

No Deal Logic

Many analysts have questioned the logic of Potash Corp.'s offer for K+S. After all, why would a low-cost producer want to buy one of the highest producers of potash?
On the surface, this deal makes no sense.
K+S's production costs are around $230 per metric ton, thanks to its aging mines. Meanwhile, Potash Corp.'s costs are at only $95 per metric ton this year.
But dig a little deeper, and the reason is obvious.
Potash Corp. is after the Legacy mine, owned by K+S, right next door to some of its mines in Saskatchewan.

Legacy Project

You see, K+S has sunk about $2.2 billion into Legacy, which is scheduled to come on-line in 2016. Legacy is similar in size to Potash Corp.'s current mines, with a capacity to eventually produce roughly three million metric tons of potash annually.
An important fact to note is that K+S has already said it would not join the Canpotex cartel. It would, like most producers globally, sell its output on the open market.
Analysts at the investment bank Liberum told the Financial Times that Legacy "poses a disruptive risk to industry pricing discipline." One can almost see the panic in the Potash Corp. executive suite's faces, as more potash production is set to hit an already weak market next year.
Despite denials from Potash Corp., if successful in its bid, the company would likely shutter Legacy to keep prices higher than they otherwise would be.

Piles of Po

Even if Potash manages to grab hold of the Legacy mine, it doesn't mean its troubles are over. You see, mining giant BHP Billiton (NYSE:BHP) has an even bigger potash project in the works.
The Jansen project, also in Saskatchewan, will be a mega mine if BHP decides to go ahead with it. It would be the world's largest potash mine, with a capacity of eight million metric tons annually.
And BHP has no interest whatsoever in joining the Canpotex cartel.
The only hope Potash Corp. has is that in this age of retrenchment by the big miners, BHP decides to put the project on hold.
The bottom line here is that Potash Corp., with whatever maneuvers it tries to make, is working from a position of weakness, not strength. The market looks to be oversupplied for years to come.

MbAC in legal hot water

TORONTO (miningweekly.com) – Brazil-focused project developer MBAC Fertilizer on Monday reported that subsidiary Itafós Mineracão was facing two lawsuits that could derail progress made with the company’s strategic review process. The TSX-listed company said that it was defending itself against claims laid by the Brazilian Labour Public Ministry and the Arraias City Hall against certain of the company’s assets in the country. MBAC was challenging certain rulings rendered thus far and said that protocols for the rehiring of employees would be followed once the strategic review process was complete. The company and its lenders were currently evaluating proposals and defining next steps after it placed its flagship Itafós Arraias operation on care and maintenance earlier this year and offered employees severance packages. The chosen proposal was expected to address MBAC's liquidity shortcomings and the lawsuits, and result in operations at its Itafós Arraias project restarting. MBAC was undertaking a strategic process in collaboration with its senior lenders. Options under consideration included securing a strategic partner, the sale of the company or its assets as well as other potential value-maximising transactions. The first lawsuit related to a combination of a class action and individual claims from former employees for severance payments stemming from the company's cost-cutting restructuring initiative. The total value claimed amounted to about $13.1-million, which included the original outstanding severance amount of about $1.6-million and damages of about $11.5-million. MBAC said that it had already settled 120 individual claims heard to date using a working capital facility of $400 000 obtained from one of its senior lenders for this purpose. Once all individual claims had been settled, MBAC expected to be able to significantly reduce the total amount of penalties and damages that were being claimed. A labour judge of the State of Tocantins had placed certain of the company's fixed and non-fixed assets valued at $2.7-million in escrow to cover payments related to the claims and had ruled that the assets be sold in an auction at the end of the month. These assets, however, were pledged to Itafós' lenders as part of the security package under the company's project loan financing. As a result, the lenders were working to stop the auction, MBAC said. The second lawsuit related to a notification received on June 10 of a tax claim from the Arraias City Hall relating to municipal services taxes (ISS). The claim stated that the ISS associated with all services rendered to Itafós should be remitted to the City of Arraias regardless of whether the services were rendered locally or remotely. The total ISS amount being claimed was about $1.9-million, as well as penalties and interest of $1.6-million for a total of $3.5-million. The company believed that it had remitted ISS correctly in

Brief description of ICL and Yuntianhua JV

Description of the Transaction

ICL will invest up to $500 million in its strategic alliance with Yunnan Yuntianhua which will include a) the creation of a new joint venture company in which ICL will have 50% ownership and which will operate an integrated, world-scale phosphate platform across the value chain and b) a strategic holding in Yunnan Yuntianhua, China's leading producer of phosphate rock and fertilizers, as detailed below: 

The joint venture will include the following assets:

• A world-scale phosphate rock mine, currently operated by Yunnan Yuntianhua, that produces approximately 2.5 million tonnes of phosphate annually, and which will become the JV's full backward integration as a competitive phosphate platform.
• An integrated, world-scale phosphate operation with annual capacity of approximately 1,850,000 tonnes of sulfuric acid, 700,000 tonnes of phosphoric acid, 850,000 tonnes of fertilizers, 60,000 tonnes of purified phosphoric acid, 120,000 tonnes of specialty fertilizers and 65,000 tonnes of specialty phosphates for the food and engineered materials markets.

Indian phosphate demand expected high as phosphoric acid settles

27 March 2015 12:26 Source:ICIS News

Focus article by Sylvia Traganida
LONDON (ICIS)--The phosphates market has high expectations for India’s diammonium phosphate (DAP) import demand following the settlement of phosphoric acid contracts for the first half of the year at $805/tonne CFR (cost and freight) between Moroccan fertilizer producer Office Cherifien des Phosphates (OCP) and its Indian customers, sources said on Friday.
There was talk in the market that OCP had already been shipping phosphoric acid to India under provisional prices. Other suppliers are now expected to follow suit.
Market players said that importing DAP is cheaper than producing it in India which is expected to give a boost to the market.
There are expectations that India will import 4.5m tonnes of DAP this year, up 20% from last year, given that a normal monsoon season in June-September is expected.
Moreover, the award of the RCF tender in India is expected to give some price direction to the DAP market, as all offers are for Chinese product and the lowest is at $491.30/tonne CFR.
In China, producers’ selling ideas remain at $470-475/tonne FOB (free on board) in a stand-off with Indian buyers, whose ideas are around $480/tonne CFR.
There are expectations that Chinese producers will focus on exports now that the domestic season is winding down, but it remains to be seen at what price level they will agree with Indian buyers.
West of Suez, the Tampa DAP benchmark remains under pressure, following a Mosaic sale to Central America. There are expectations that US DAP will be offered to India now that the phosphoric acid price has been announced, which could give a boost to the Tampa price.
In the US domestic market, demand remains lacklustre for another week due to the wet weather and is expected to pick up in the coming weeks when sowing will be completed in the Corn Belt.
“DAP demand will stay low until planting activity gets started. Plantings are way behind in the area and normally a lot more corn has been sown by now. Last year they were at 48% finished with corn but as of this week it is only about 1%,” said a US-based trader.
On the supply side, producers are discussing April tonnes with expectations that demand will pick up in the main exporting regions. DAP production rates at Tunisian state-owned producer Groupe Chimique Tunisien (GCT) remain unclear and OCP is heard operating at normal rates.

Mosaic worker burned by phosphoric acid

Gibsonton, Florida -- April, 22, 2015
A worker at the Riverview Mosaic fertilizer plant suffered severe burns over most of his body after he fell into a tank of phosphoric acid early Wednesday morning.
General Manager Robert Fredere says the man was pulled from the tank and the acid was washed off.
Employees called 911 and the worker was taken to Tampa General Hospital. He suffered thermal burns, as the acid was about 175 degrees Fahrenheit. He is currently in critical condition.
Right now, it is unclear what led to the accident. The worker was reportedly helping prepare the tank for maintenance when he fell into the 12x2 tank of acid. There were about 40 other workers around at the time.

Potash Corp offers to buy Kalium und Salz (K+S)

By

Alistair MacDonald and Eyk Henning          

Updated June 25, 2015 7:28 p.m. ET         

Canadian mining giant Potash Corporation of Saskatchewan offered to take over German rival K+S AG in a deal that, if successful, would create a company capable of dominating a big chunk of the global market for potash.
Potash Corp. offered K+S roughly €7.8 billion ($8.74 billion), or just over €40 a share in cash, according to a person familiar with the matter, an amount that would rank the proposed acquisition as one of the largest mining deals in recent years.
In a statement, K+S said Potash Corp. had informed its board that the Canadian company “may decide, depending on certain conditions, including a due diligence exercise,” to buy the company.
K+S is likely to reject the offer as too low, according to the person familiar with the matter. K+S is developing a mine in the western Canadian province of Saskatchewan and believes Potash Corp.’s offer doesn’t take into account potential synergies and the dominance this would give it in North America, the person familiar with the matter said.
Potash Corp. confirmed that it had made a private proposal to K+S. “There is no certainty that any offer will ultimately be made or as to the terms on which such an offer might be made,” it said in a statement.

Vale is looking for partners in fertilizers

As Brazil’s Vale SA figures out what to do with its fertilizer business, the mining giant is thought to be testing the waters on a potential sale, according to people familiar with the matter.

In addition to potash mines in South America, the Brazilian mining company owns a big potash development project and slew of fertilizer concessions in Saskatchewan, the world’s biggest producer of potash – a crop nutrient.

“There has been a lot of chatter that Vale is possibly considering selling their fertilizer business. If you are preparing your assets for sale, you want to increase the value of your portfolio,” said Joel Jackson, an analyst with Bank of Montreal.

Vale, the world’s biggest iron ore supplier and a major producer of other metals, is under pressure to sell assets amid a nearly $20-billion (U.S.) expansion of its iron ore complex in Brazil. People familiar with the matter said it has been trying to gauge how much its fertilizer business could fetch.

The unit accounts for about 6 per cent of Vale’s revenue from operations. Asked whether Vale is considering selling its potash assets, a spokeswoman for the company said it previously announced it was looking for strategic partners for potash and phosphate projects.

The outlook for the crop nutrient is murky, with new potash production coming onto the market and the dominant North American and Russian fertilizer players no longer able to influence prices the way they used to. Vale and its rival BHP Billiton Ltd. appear unsure about how to proceed with their respective potash development projects in Saskatchewan; neither has given a clear signal if and when they will go ahead.

Vale is still studying whether it would be economical to build its mine, called Kronau, after the nearby town. BHP has been vague on when it might build its Jansen mine, even though it has committed $3.8-billion to sink shafts into the earth – in preparation for the mine.

If developed, both projects have the potential to upend the potash market, which has long been controlled by three North American producers and, until 2013, a Russian-Belarus potash cartel. BHP’s Jansen would be the biggest potash mine in the world and Vale’s Kronau would be a medium-sized producer. The mines would be an economic boon to Saskatchewan. Though their potash output could further depress prices, which took a hit in 2013 when Russia’s Uralkali killed the Russian-Belarus cartel.

Vale and BHP would be competing with Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer. The Saskatoon-based company operates five of the 10 mines in the province and is expanding one of its mines there.

A Vale spokeswoman said the board of directors has not made a decision on whether to proceed with the mine. But the flurry of activity around Kronau has led some to believe that Vale is getting ready to advance the project, even if it may eventually attract a buyer.

Poland's ZChP to build phosphoric acid plant near its Senegal mines

12 December 2014 16:53 Source:ICIS News

LONDON (ICIS)--Poland's Zaklady Chemiczne Police (ZChP) is to construct a phosphoric acid plant near the phospate rock mines in Senegal which it acquired a controlling stake in last year, the company said on Friday.
The investment is the next step in multi-component fertilizer producer ZChP's plan to move to full fertilizer production in the country and set up a fertilizer distribution centre for West Africa.
Establishing the phosphoric acid installation would also help ZChP hedge against the risk of the European Union introducing tough limits on cadmium in fertilizers, the company said.
The phosphate rock mined in Senegal's Lam Lam and Kebemer regions contained relatively low concentrations of cadmium and the costs of cadmium removal at the African subsidiary would be comparatively low, it added.
ZChP, part of largest Polish chemical group Grupa Azoty, paid $28.85m for a 55% stake in the former sole owner of the mines, African Investment Group, in August 2013.
Shipments of phosphorites from the mines to ZChP's production complex in Police, near Poland's northwestern Baltic Sea coast, would amount to 200,000 tonnes in 2014, the company said.
The target is to gradually move up to shipping a million tonnes to Police within a few years, it added.

Algérie - 6,5 millions de tonnes de phosphates en 2016

La production annuelle de phosphate brut atteindra, dans la wilaya de Tébessa (est algérien), 6,5 millions de tonnes en 2016, soit "plus du triple de la production actuelle", a affirmé le directeur général de la Société des mines et phosphate (Somiphos). Une importante partie de cette production, soit 4,5 millions de tonnes, sera transformée en acide phosphorique (un acide minéral obtenu par traitement du minerai de phosphate) dans une usine en cours de lancement dans la région d’Oued El-Kebrit (Souk-Ahras). Le reste est destiné à l'exportation et à la satisfaction des besoins locaux, a ajouté le directeur général, Noureddine Zaïdi, dont l’entreprise relève du groupe public Ferphos.

Crude prices to have marginal US sulphur impact

Houston, 17 February (Argus) — The North American sulphur market is likely to be affected more by the direction of the phosphate market than by falling crude prices, though crude supply will impact fundamentals.

While crude prices have fallen by about 50pc since June, US benchmark sulphur prices have increased. The first quarter Tampa molten sulphur benchmark increased by $18/lt over the prior quarter to $147/lt del in late January/early February because of firming in the global market and temporary tightening of local supply related to seasonal refinery turnarounds. Sulphur is a byproduct of oil refining and a key phosphate fertilizer feedstock. Historically, sulphur has shown a much stronger positive correlation with phosphate prices than oil.

Sulphur pricing will remain under the primary influence of end-user market dynamics. But supply-side factors could limit the scale of future price increases. Planned and expected shutdowns could reduce US average sulphur demand by around 500,000 lt/yr from its current level of just over 9mn lt/yr. The closures include PotashCorp's Suwannee River chemical plant in Florida, the second quarter shutdown of its Geismar, Louisiana, sulphur-based acid plant, and Mississippi Phosphates' bankruptcy and shutdown late last year.

These demand reductions could be offset some by US phosphate giant Mosaic operating at higher production rates early this year to meet market demand and take advantage of lower ammonia prices, despite the increased cost in the first quarter sulphur price. Some sulphur-burned acid producers are also aiming to ramp up utilization rates to meet customer requirements.

But by year's end, Mosaic should be operating its 1mn t/yr sulphur melter in Florida for which it will import offshore formed sulphur and remelt it for its own consumption, representing a shift away from regionally-recovered molten sulphur. Depending on the facility's utilization, this could further disrupt US demand prospects, regardless of the price of crude oil.

Amid drastically lower oil prices, large oil and service companies have announced layoffs and capex cuts. Interest in investing in new infrastructure and projects focused on byproduct sulphur could be limited while the market negotiates these changes. Syncrude has paused its planning of a potential sulphur remelt facility to turn formed sulphur blocks in Canada back into molten form for regional shipments. Still, several Canadian entities are also weighing new sulphur forming projects to increase exports of byproduct sulphur because its primary trade partner, the US, has been increasing its own production and importing less.

Since sulphur is the unintentional byproduct of oil refining and natural gas processing and North America is a net-exporter of sulphur, refining and upgrading activities have dictated North American sulphur supply fundamentals.

US refiners have more than tripled their exports since 2005 amid healthy margins, which has kept US refinery utilization rates high. At the same time, the sulphur content of the overall US crude slate has risen to 1.46pc from 1.42pc, according to the Energy Information Administration (EIA). The increased pipeline availability of higher sulphur Canadian crudes has driven the trend.

EIA data show refinery sulphur production capacity increased by 33pc from 2005-2014 to over 41,300 st/d. US refiners have boosted desulphurization capacity to comply with the Environmental Protection Agency's (EPA) Tier 2 Gasoline Sulfur program which in 2005 reduced average sulphur levels to 30ppm from 120ppm.

US refiners' sulphur recovery has increased even as domestic grades have trended lighter and sweeter. For example, BP upgraded its 410,000 b/d refinery in Whiting, Indiana, specifically to run heavy Canadian crude. Rising supply of Canadian and US domestic grades have displaced heavy, sour waterborne imports. Canadian heavy crude accounts for 40pc of foreign imports to the US and has room to grow.

Complex US refineries could see ample incentives to process discounted heavy, sour crudes despite a flood of domestic sweet supply. Those incentives could only grow if the discount of US benchmark West Texas Intermediate (WTI) widens against the global Brent marker. Valero recently said it expects this price trend to occur and will revert to a more medium, heavy crude slate at its US Gulf coast refineries, probably starting from March. In January Alon USA said it increased West Texas Sour crude runs in Big Spring, Texas, despite making investments to run more light, sweet on attractive asphalt margins.

Some refiners closer to tight oil supply continue to favor light, sweet including Marathon's refinery in Robinson, Illinois, which has easier access by rail to Bakken supply from North Dakota. Even so, some refiners' demand for Canadian crude will hold steady because they have the coking capacity to run it.

Legislative developments have also encouraged increased sulphur recovery because of demand for lower-sulphur products. From 1 January, vessels traveling within the US Emissions Control Area (ECA) are now required to switch from 1pc to 0.1pc sulphur bunker fuel. By 2017, the EPA Tier 3 Gasoline Sulfur program aims to reduce sulphur content of traditional gasoline to 10ppm sulphur from the prevailing 30ppm level. Industry estimates suggest this would be a net increase of 20 st/d sulphur production for refiners. It is unclear how many refiners have already begun producing product to this specification, well in advance of the new mandates, making the increased sulphur recovery volumes in the coming years difficult to quantify. (From: http://www.argusmedia.com/pages/NewsBody.aspx?id=994231&menu=no)

Yara and BASF to build ammonia plant in Freeport, Texas

The ammonia plant will be owned 68 percent by Yara and 32 percent by BASF and located on BASF's site in Freeport. The plant will have a capacity of about 750,000 metric tons per year. Each party will off-take ammonia from the plant in accordance with its equity share. Total capital investment for the plant is estimated at USD 600 million. Yara will in addition build an ammonia tank at the BASF terminal bringing Yara's total investment to USD 490 million. BASF will in addition upgrade its current terminal and pipeline assets.

The hydrogen technology reduces capex and maintenance significantly compared to a traditional natural gas based ammonia plant. The technology also allows for lower carbon dioxide emissions. A long-term supply agreement for nitrogen and hydrogen has been signed with Praxair Inc, the largest industrial gases company in North America, linking the feedstock variable cost to the advantageous natural gas prices available at the U.S. Gulf coast.

KBR, Inc, Houston, Texas, has been awarded a fixed price turnkey contract for the engineering, procurement and construction. The plant is expected to be completed by the end of 2017. Yara will manage construction of the plant while BASF will operate the plant and the export terminal.

Mosaic raised at Morgan Stanley, which cites undervalued phosphate assets

   from:  http://seekingalpha.com/news/2283636-mosaic-raised-at-morgan-stanley-which-cites-undervalued-phosphate-assets         

Feb 9 2015, 12:59 ET | About: The Mosaic Company (MOS) | By: Carl Surran, SA News Editor

• Mosaic (MOS +0.9%) is upgraded to Overweight from Equal Weight with a $56 price target at Morgan Stanley, which believes the company's phosphate assets are undervalued on an absolute basis.
• The firm also cites MOS' relative valuation relative to key peer Potash Corp. (NYSE:POT) as "too severe," and a balance sheet with spare capacity on both an absolute and relative basis.
• A key risk to the bullish thesis would be another large U.S. corn crop, Stanley says.

Mosaic (and big players in Phosphates) to suffer more in 2015?

Mosaic is currently facing a challenging business environment in agriculture and there is a continuous negative sentiment among agriculture investors that can create uncertainty  in 2015. Also, agricultural commodity prices are weak.
Mosaic is also facing pricing pressure in the phosphate segment. Phosphate prices remain depressed even as costs rose for raw materials. The company has thus decided to reduce phosphate production in response to these conditions.
Moreover, the company also lowered its forecast for global phosphate shipments for both 2014 and 2015 by roughly a million tons partly due to India importing more phosphoric acid for NPK fertilizer production.
Mosaic also foresees a bumper harvest in the next season which will possibly bring prospects of lower income for growers in 2015, making them skeptic in their business.
Mosaic is also exposed to macroeconomic uncertainties and other issues such as volatility in prices for key raw materials including ammonia and sulfur, and currency exchange fluctuations (mainly Canadian dollar and Brazilian real). Unfavorable swings in costs of key inputs – ammonia and sulfur – may hurt the company’s cost structure and profitability.
http://www.zacks.com/stock/news/155521/mosaic-mos-down-to-strong-sell-time-to-dump-it