Mosaic cuts phosphate fertilizers production

The Mosaic Co. is reducing production of phosphate fertilizer, citing high sulfur and ammonia prices.
The Plymouth-based crop nutrient producer said it doesn't expect to cut employees, though the move will lower operating rates at its mines and concentrates plants.

CF and Yara in merger talks

Norway's Yara International and CF Industries CF in Your Value Your Change Short position said they are discussing a merger that would create a ne w, nearly $19 billion-a-year powerhouse in the global fertilizer business and extend the industry's recent run of consolidation.

A deal would create the world's biggest producer of nitrogen fertilizers, combining Yara's global distribution system with CF's proximity to low-cost natural gas—a key component in nitrogen fertilizer—as sliding crop prices and rising competition from China increase pressure on fertilizer makers.

A tie-up also could face regulatory scrutiny, analysts said, as the two companies have sizable combined market share in some countries.

The companies, in statements confirming the talks, said they are at an early stage and may not result in a deal. Yara spokesman Esben Tuman said the discussions are driven by a belief that the companies have complementary geographic focuses.

A CF Industries spokesman didn't respond to requests for comment.

Share prices of both companies rose Tuesday after the firms disclosed the talks. Yara, which had revenue of $13.4 billion last year, and CF Industries, whose 2013 revenue totaled $5.47 billion, have a combined market valuation of about $26.4 billion. That would rank a merged company just below the $28.8 billion market cap of Canadian fertilizer giant Potash Corp. of Saskatchewan, the world's largest producer of potash, another type of fertilizer that is made from minerals.

Fertilizer companies have done a string of deals in recent years, to reduce costs and gain traction overseas. Yara recently acquired fertilizer producer OFD Holding Inc., strengthening its Latin American operations after last year spending $750 million to buy the Brazilian fertilizer operations of grain-trading firm Bunge Ltd.                     

 

Yara buys 60% of Galvani

Galvani was a Family owned Brazilian fertilizer company with two principal sites (in Paulínia - São Paulo and Luís Eduardo Magalhães - Bahia).
The purchase will cost around US 320 million (assets, plus debt) and additional provisional investments (oppening of one mine in Salitre and another in Santa Quitéria).
By this way Yara reinforce its commitment to be a raw material phosphate producer in Brazil, combing Galvani with the recently bought former Bunge retailing NPK operations (that gives Yara a 25% NPK Market share in Brazil).

Maaden Phosphate new JV gets its money to go ahead

Source: Seeking Alpha
Saudi phosphate project gets $5B financing deal

Jul 1 2014, 08:20 ET

• Saudi Arabia's Ma'aden says it signed a $5B financing deal with commercial banks and a state-owned investment fund to back its $7.5B phosphate production project in the country.
• The project is a joint venture between Ma'aden, Saudi Basic Industries Corp. and Mosaic (MOS), and is part of Saudi state efforts to create a stronger industrial base beyond oil refining and export.
• The project will have a production capacity of 16M metric tons/year of phosphate concentrate, sulphuric acid, phosphoric acid, as well as plants to produce calcium monophosphate and calcium diphosphate; phosphate production expected to start in late 2016.

Argus FMB Strategy Report: World Processed Phosphates Outlook to 2028

 

This strategy report examines the major changes currently underway in the industry, and their impact on the future shape of the sector.
In particular the report addresses:

• The significant role of China in the phosphates market, with forecasts of its continued capacity build-up, and the likely development of its exports
• The major influence of OCP on processed phosphates and in particular the future of its Jorf Lasfar Phosphate hub
• The decline of production in North America and Europe, and inevitable closures
• Changes in the patterns and mix of phosphate products, particularly amongst ammonium phosphates
• Demand growth for processed phosphates, international trade and pricing
• The increasing role of micronutrients in phosphate products as a path to balanced fertilization and product differentiation

The report provides annual price forecasts to 2028 for the key international processed phosphate benchmarks: DAP, MAP, TSP, SSP, and phosphoric acid.
The report presents essential insights, analysis and guidance for producers and consumers of processed fertilizer phosphates, as well as academics and investors in the fertilizer industry.
Purchase the study or request more information

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Argus FMB Strategy Report: World Phosphate Rock Outlook to 2028

The World Phosphate Rock Outlook to 2028 is a ground-breaking document. It tackles the important issues of the day:

• The peak phosphates debate - how credible is it?
• Declining grades - will new phosphate rock currently under assessment be suitable for merchant deliveries or acid plants
• What is the impact of impurities on the suitability of rock for the main end-uses
• Where will investment be seen and at what overall project cost
• What is the future of rock trade and how will the quality of rock traded alter
• What will be the impact of entry costs and the poorer grade/quality of ore being mined

The phosphate industry is undergoing major changes. The World Phosphate Rock Outlook to 2028 analyses the changes which are already occurring in the availability of various grades and qualities of rock. The companion study “Argus FMB Strategy Report: World Processed Phosphates Outlook to 2028” analyses the impact of changing rock supply on the type and production which can be produced using poorer grade/quality rock.

Ma´aden awards $2.25 bln of work on phosphate project

Dec 23 (Reuters) - Saudi Arabian Mining Company (Ma'aden) has awarded three contracts worth a combined 8.46 billion riyals ($2.26 billion) to Canadian and Asian companies concerning its new phosphate mining and production project, it said on Monday. The project in Waad al-Shimal City in the north of the country is a joint venture between Ma'aden, Saudi Basic Industries Corp and Mosaic. Canada's SNC Lavalin and China's Sinopec Engineering Group have won a 2.86 billion-riyal deal to build a power plant and a sulphuric acid plant which has a production capacity of 4.9 million tonnes, Ma'aden said in a bourse filing. South Korea's Hanwha Engineering & Construction Co won a contract to build a phosphoric acid plant worth 3.5 billion riyals. The plant will have a production capacity of 1.5 million tonnes. China Huanqiu Contracting & Engineering Corp Co won a contract to build an ore beneficiation plant worth 2.08 billion riyals with a production capacity of 5.3 million tonnes. The projects are due to be completed in 2016, Ma'aden said. Ma'aden aims to close fundraising for its $7 billion phosphate project before the end of the year, a timetable reiterated in Monday's statement.

Doyle leaves legacy of discipline at PCS (from Argus Media)

Houston, 14 April (Argus) — The world’s largest potash producer by capacity has tapped a new chief executive with no fertilizer experience to replace a man whose name is synonymous with the word ‘potash’ and conservative supply-side strategy. Bill Doyle is stepping down as the head of PotashCorp (PCS), with Jochen Tilk named as his replacement effective 1 July. Doyle announced his resignation last week, having led the company for 15 years through prosperous and tumultuous times. Doyle leaves a legacy of strategic producer tactics, matching supply to demand to support potash prices. Doyle’s adherence to a price-over-volume marketing strategy brought needed orderliness to the market, according to industry sources. “Bill really ushered in a form of supply and demand discipline to the industry, something it had very little of,” American Plant Food vice president of sales Toby Hlavinka said. “He [dragged] the industry with him, some kicking and screaming. I think everybody in this industry is better off because Bill Doyle was in it.” Doyle, who has been at PCS for 27 years, oversaw significant price volatility for a crop nutrient that had historically seen relatively stable and low prices. “He was such a huge figure in this world,” Ameropa managing director Nick Adamchak said. “Bill was the consummate marketing guy.” From 1999 when Doyle was named chief executive through 2006, the average midpoint standard muriate of potash (MOP) price was $135/tonne (t) fob Vancouver, topping out at $183/t in February 2006. A major price run-up began in 2007, spurred by record demand from China (9.4mn tonnes) and the asset bubble ahead of the 2008 financial crisis. Standard MOP prices reached as high as $875/t fob Vancouver by the end of 2008. By September 2009, prices tumbled by nearly half to $473/t as a result of the financial crisis. PCS reacted by significantly cutting back potash production, producing 3.1mn tonnes of MOP in 2009, down from 7.5mn tonnes the previous year. Potash prices fell further to the $340s/t fob Vancouver by 2010, the same year that Australian mining giant BHP Billiton made a $40bn hostile takeover bid for PCS. Doyle, with support of the Canadian government, successfully fought off the bid, which BHP Billiton withdrew in November 2010. MOP prices recovered in 2011, with the average price holding at $483/t fob Vancouver from July 2011-April 2012. Since then, prices have steadily declined because of global oversupply and anemic demand. The unexpected breakup of the exporting arrangement between Russia’s Uralkali and Belarus’ Belaruskali in July 2013 added considerable market uncertainty. Uralkali, one of PCS’ chief competitors, switched to a volume-over-price marketing strategy, increasing supply and further depressing prices, which reached a low of $293/t fob Vancouver in February 2014. The move challenged Doyle’s long-held marketing philosophy. He publicly called the event “the single dumbest thing that I’ve ever seen.” With supply high and prices low, PCS again adjusted its operations in response. It cut its production rates to 58pc of capacity and laid off 18pc of its workforce—1,045 employees—in December 2013, citing price declines and weaker-than-expected demand. PCS produced 7.8mn tonnes of MOP in 2013, up 1mn tonnes from 2012 but down by 500,000 tonnes from 2011.