Argus FMB Ammonia Formerly FMB Weekly Ammonia Report

Issue 12-36 | Thursday 6 September 2012

market summary price guide Another price hike for October Ammonia – fob The market is still firming. In Yuzhny, prices this week have 6-Sep 30-Aug moved up $15/t on last week, with NF Trading selling the lion’s share of its October tonnage to Yara at $645/t fob. Ventspils $/t 638-645 638-645 While in the Middle East, the $705/t fob price achieved by Yuzhny $/t 625-645 625-630 PIC last week was further reinforced with a 23,000t sale from North Africa $/t 635-655 635-645 Sabic to Mitsui at the same price level. Current signals in the Middle East $/t 645-705 625-705 market suggest that no downturn in prices is yet in sight. US Gulf domestic (barge) $/st 670-680* 670-680

In the US, domestic prices are unchanged and movement Caribbean $/t 665 665 of ammonia up the Mississippi river has been slow in the aftermath of Hurricane Isaac and no new barge sales have Ammonia – cfr been reported this week. 6-Sep 30-Aug

In company news in the US, Orascom Construction Industries NW Eur (duty unpaid) $/t 675-725 675-725 (OCI) announced late yesterday that it will build a $1.4bn NW Eur (duty paid/d free) $/t 688-739 688-739 nitrogen fertilizer complex at Wever, Iowa, in the US. The North Africa $/t 665-680 665-675 plant will be built on a greenfield site in southeast Iowa to India $/t 680-690* 680-690 supply customers in the US corn belt. The project is likely to East Asia (excl Taiwan) $/t 725-780 705-780 be the first of a number of new nitrogen facilities expected Taiwan $/t 735-745 715-720 to be built in the US over the coming years, maximizing on Tampa $/t 705 705 the increasing availability of natural gas resources. OCI says US Gulf $/t 710 710 the new plant will be the first world scale natural gas-based *Indicative Price, ** all formula, *** old business, fertilizer plant built in the US in nearly 25 years. na - Not available

Market outlook: Ammonia prices remain firm, and buyers’ apparent willingness to secure volumes for October suggests that there remains considerable confidence in Highlights this week: the market. It appears that the NF Trading sale to Yara yuzhny vs middle east fob price NF Trading sells 75,000t to Yara for October Middle East fob Yuzhny fob ▪ Yuzhny line up expected to reach 300kt this month 700 ▪ Sabic sells spot cargo to Mitsui ▪ OCP plans turnaround 600 ▪ ▪ US market slow after hurricane ▪ OCI announces new nitrogen plant in Iowa 500

400 Argus FMB Ammonia 300 View the methodology used to An Argus Media company assess ammonia prices at 200 www.argusmedia.com/methodology. Your feedback is always welcome at [email protected].

for October at $645/t fob will set a new benchmark for east to India. This will be the second vessel out of Yuzhny prices out of Yuzhny in the coming weeks. The wide spread over the last two weeks to voyage east of Suez, reflecting between Yuzhny and Middle East fob prices continues, with tight supply in the east, and the wide spread between the latest Middle East spot price now established at $705/t Middle East and Yuzhny prices. fob. The $60/t price differential between Black Sea and Middle East latest spot prices is likely to result in further The firm line up is currently 205,000t although two other Yuzhny tonnage moving east in September. Nitrochem vessels will also definitely be nominated:

EUROPE Provisional Yuzhny line up for September Yuzhny Vessel ’000t Shipper/Destination Sept NF Trading today said it had sold around 75,000t to Yara Havfrost 38.0 Trammo/US 5 for October at $645/t fob Yuzhny. The price is a $15/t hike on last spot sales out of the port, and reflects continued Gas Grouper 23.3 Nitrochem/Morocco loading confidence in the market in the coming weeks. NF Trading Gas Columbia 23.3 Mitsui/India? *8 now expects to have only around 40,000t more available for October. Rossosh is due to shut for a turnaround next Gas Manta 23.3 Nitrochem onroads week for 3-4 weeks, sharply reducing volumes that will be Gas Cobia 23.3 Nitrochem *8-10 pumped down the pipeline to Yuzhny in 2H September. The Sylvie 24.0 Trammo *13-18 line up out of the port for September is currently confirmed at 205,000t but in total 300,000t is expected to load from Gas Providence 24.0 Trammo *16-20 the port this month. Nitrochem is currently accumulating Nordic River 26.0 Yara 2H product to load on the Gas Manta and Gas Cobia next week, and the trader also has some tonnage to return to NF Total 205.2 Trading this month. *estimated arrival

Trammo has three vessels, the Havfrost which loaded yesterday, and the Gas Providence and the Sylvie, so far nominated for September, with the possibility of another The Yuzhny line up for August totalled around 333,000t: vessel at the end of September. Yara has nominated the Nordic River for 2H September, and will also load the Marigola from the port later in the month. Last month Yara Final Yuzhny line up for August purchased only 35,000t from NF Trading at around $630/t Vessel ’000t Shipper/Destination August fob - so the Nordic River and the Marigola may be all the vessels Yara needs for Yuzhny this month. Mitsui will load Gas Snapper 23.3 Nitrochem/Tunisia 5 the 23,000t purchased from NF Trading last month on the Gas Manta 23.3 Nitrochem/Belgium 8 Gas Columbia this weekend. The vessel is expected to head Gas Grouper 23.3 Nitrochem/Morocco 12 yuzhny, ventspils and NWE price Nordic River 26.0 Yara/France 13 Clipper Orion 39.9 Koch/US Gulf 15 Yuzhny fob Ventspils fob NWE cfr 750 Gas Snapper 23.3 Nitrochem/Belgium 18

Havis 37.9 Koch/US 21 700 Gas Cobia 23.3 Nitrochem/Tunis+Turk 22

650 Sylvie 23.4 Trammo/Turk+Moroc 23 Pacific 40.0 Yara/S Korea(Mitsubishi) 27

600 Marigola 9.5 Yara/ Israel 28

Clipper Mars 40.0 Nitrochem/US 31 550 Total 333.2

500

Baltic Saudi Arabia The Baltic price is assessed at $638-645/t fob, with further Sabic has sold a 23,000t cargo to Mitsui for 2H Septem- price increases likely following the increase in the Yuzhny ber loading at $705/t fob this week. The producer also price to $645/t fob for October, which is likely to mean a this week confirmed that it has confirmed its annual rise in the Ventspils price to $650-655/t fob imminently. supply agreement with SFC, Korea. The agreement is for 300,000tpa in 2013. Yara reported last week that aside from its usual contractual volumes for September, it had purchased a further 16,000t from various suppliers for September The latest loading schedule from KSA is as follows: loading at an average price of just below $640/t fob. Uralchem last week said it sold 7,000t to an unnamed Jubail and RAK loading schedule buyer at $645/t fob for September and expected to achieve Vessel Date Loadport Qty MT Destination $650/t fob on its next spot sales. Rose Gas 14-Sep Jubail 23,000 East Asia Belgium BASF imported an additional 30,000t it is estimated in Brussels 16-Sep Ras al-Khair 23,000 WC India recent weeks due to technical problems at its ammonia plant in Antwerp. The plant is expected to be restarted next week. Gas Oriental 25-Sep Jubail 23,000 Spot

MIDDLE EAST & AFRICA Camberly 27-Sep Ras al-Khair 23,000 WC India

Egypt OCI EBIC loaded the Tobolsk yesterday from Ain Sokhna for Al-Jabirah 6-Oct Jubail 23,000 East Asia Trammo for delivery to Indonesia and Australia. OCI-EBIC expects to load 1-2 more shipments in September, with the Al-Barrah 8-Oct Ras al-Khair 23,000 East Asia next vessel expected to be the Tomsk for a delivery to the east.

Morocco Sabic’s latest shipment on the al-Barrah, which loaded this OCP has confirmed that it will take a planned rolling turn- week for UBE, Thailand has been priced at around $725/t around at the Jorf Lasfar complex reducing DAP/MAP pro- cfr. duction to 260-270,000t/month through to the end of the year. The producer is scheduled to receive two shipments of ammonia from Nitrochem in September/early October out Qatar of Yuzhny. Qafco still has limited surplus ammonia and continues to use all of its surplus availability to cover contractual obligations. india, far east and Middle east price Iran India cfr Far east cfr Middle East fob PCCI reports that it has stocks of ammonia at the Pardis 800 plants at BIK but there are no vessels currently available which are insured to load out of Iran, other than those 750 operated out of Assaluyeh by Raintrade.

700 Asia/Indian SUbCONTINENT 650

600 Vietnam Mitsui will deliver the 7,000t cargo it was awarded at $780/t 550 cfr last week to Vinachem on the Gas Millennium in late-Sep- tember. The cargo will load from Bontang next week. 500

Ammonia vessels August/September 2012 Supp/Buyer Vessel QTY Port Date arrival Dis Port Prices $ CFR Raintrade/Ppl Gas Cat 18,517 Assaluyeh 2-Aug-12 Paradip 592 Sabic/Iffco Tomsk 23,356 Ras Al Khair 3-Aug-12 Paradip 650 Mitsui/Cil Tilos 5,500 Al Jubail 7-Aug-12 Kakinada 675 Mitsui/Cil Tilos 9,500 Al Jubail 9-Aug-12 Vizag 675 Qafco/Spic Al Majedah 6,500 Mesaieed 6-Aug-12 Tuticorin LTC Qafco/Zuari Al Majedah 3,600 Mesaieed 10-Aug-12 Goa LTC Qafco/Cil Almajedha 5,500 Mesaieed 14-Aug-12 Vizag LTC Sabic/Kit/Iffco Gas Oriental 5,200 Ras Al Khair 15-Aug-12 Kandla 652 Sabic/Hindalco Gas Oriental 4,200 Ras Al Khair 17-Aug-12 Dahej 672.5 Sabic/Gsfc Gas Oriental 14,000 Ras Al Khair 20-Aug-12 Sikka 675 Cifc/Ppl Bunga Khemboja 9,005 Kerteh 14-Aug-12 Paradip 629.5 Cifc/Tcl Bunga Khemboja 2,000 Kerteh 16-Aug-12 Haldia 630.5 Qafco/Cil Al-Marona 5,000 Mesaieed 16-Aug-12 Kakinada LTC Qafco/Mcfl Al-Marona 4,000 Mesaieed 21-Aug-12 Manglore LTC Qafco/Zuari Al-Marona 5,000 Mesaieed 22-Aug-12 Goa LTC Sabic/Kit/Iffco Tobolsk 23,000 Ras Al Khair 25-Aug-12 Kandla LTC Qafco/Ppl Al Majedha 15,350 Mesaieed 25-Aug-12 Paradip 646 Cifc/Iffco Tomsk 17,868 Ain Sokhna 1-Sep-12 Paradip 666 Cifc/Tcl Tomsk 5,500 Ain Sokhna 3-Sep-12 Haldia LTC Raintrade/Iffco Gas Cat 18,506 Assaluyeh 5-Sep-12 Paradip LTC Qafco/Zuari Al-Marona 5,000 Mesaieed 3-Sep-12 Goa LTC Qafco/Mcfl Al-Marona 6,000 Mesaieed 6-Sep-12 Manglore LTC Qafco/Spic Al-Marona 4,000 Mesaieed 8-Sep-12 Tuticorin LTC Mitsui/Cil Gaschem Hamburg 6,500 Aljubail 6-Sep-12 Vizag LTC Mitsui/Cil Gaschem Hamburg 12,000 Aljubail 7-Sep-12 Kakinada LTC Mitsui/Cil Gaschem Hamburg 5,000 Aljubail 10-Sep-12 Ennore LTC Kit/Iffco Tilos 23,000 Sur 8-Sep-12 Kandla LTC Raintrade/IFFCO Gas Cat 18,000 Assaluyeh 2nd half Sept Paradip LTC Sabic/KIT/IFFCO Brussels 23,000 Ras Al Khair 22-Sept-12 Kandla LTC

2012 Argus FMB Europe Fertilizer Conference Indonesia and Exhibition 3-5 October, Madrid, Spain Trammo will deliver a cargo to Gresik around 23-25 Septem-

ber on the Tobolsk, ex-Egypt. Register online here www.eventsforce.net/FMBEurope Mitsui is loading the Nisyros with 23,000t this week from Bontang for delivery for Koch, discharging in California and Mexico.

Mitsui is scheduled to load the Gas Millennium in mid-Sep- tember to cover its 7,000t sale to Vietnam at $780/t cfr, and also to deliver a cargo to Taiwan. Mitsui will load the Gas Mahi from Bontang in mid-September as well, for delivery to South Korea.

FMB Spot Sales Selection – 6 September 2012

Origin Seller Buyer Destination ‘000t $pt bulk Shipment

Saudi Arabia Sabic Mitsui NA 23 705fob 2h sept

Russia/Ukraine NF trading Yara NA 75 645 fob October

Russia/E Europe NA Yara NA 16 638-640fob Sept

Russia Uralchem NA na 7 645fob Sept

Indonesia Mitsui Vinachem Vietnam 7 780cfr late-Sept

Kuwait PIC Mitsubishi NA 23.5 705fob 2H Sept

Ukraine/Russia NF Trading Yara NA 35 625-630fob Sept

Ukraine/Russia NF Trading Mitsui na 23 630fob mid-Sept

Indonesia Fertcomm Mitsui Taiwan 10 685fob mid-Aug

Russia (Ventspils) Uralchem Koch US 20 615fob Aug

Saudi Arabia Sabic Mitsui NA 23 663fob Early Aug

NA Trammo NA Australia 2 x 8 750cfr 2H Aug

Ukraine/Russia NF Trading Koch/Yara NA 60+60 600fob August

Sillamae Acron Yara NA 20 602fob August

Ventspils NA Yara NA 20 605fob August

Saudi Arabia Sabic Mitsui NA 15 659fob end-July

NA Trammo NA Thailand 8 730cfr mid-August

Saudi Arabia Sabic Mitsui NA 15 644fob end-June

Russia/Ukraine Trammo NA US Gulf 23 710cfr end-July

Russia Uralchem NA NA 10 615fob July

Russia/Ukraine NF Trading Yara/Koch NA 100 600fob July

Saudi Arabia Sabic Mitsui East Asia 15 617fob early-June

Russia/Ukr NF Trading Yara NA 60 550fob June

UAE Fertil Mitsui NA 6 510fob End-April/Beg-May

Russia/Ukr Trammo PCS US Gulf 25 460fob 20-Apr

NA Yara NA Australia NA 690fob June

Russia/Ukr NF Trading Yara NA 40 475fob May

Russia/Ukr NF Trading Koch US 40 460fob May

South Korea three port discharge may now discharge at four ports. The SFC is understood to be asking for further ammonia volumes vessel will need to wait to discharge product at certain next year. Sabic has agreed to supply SFC with 300,000tpa ports, and the cfr price for the shipment has yet to be final- during 2013. ized.

Namhae is scheduled to receive a cargo from Sabic between Raintrade will deliver an 18,000t cargo on the Gas Cat ex- 8-10 September, followed by a late-September cargo from Iran to IFFCO, Paradip in 2H September. Ammonia imports Mitsubishi. over August-September are detailed in the table above.

Fertilizer demand in India is likely to fall nearly a fifth to India 45 million tonne in 2012-13 from a record high 54.6 million The Gaschem Hamburg, which was originally scheduled for tonne a year ago, on record high domestic prices of potash

and phosphate fertilizers and drought in key cash crop- COMPANY NEWS growing areas. The first year-on-year drop in consumption in five years is likely to hurt crop yields, although it will OCI gives go-ahead to nitrogen project in Iowa help the government cap the fertilizer subsidy. So far there Orascom Construction Industries (OCI) announced late yes- has been around a 40% drop in potash sales and 30% fall in terday that it will build a $1.4bn nitrogen fertilizer complex phosphate sales. at Wever, Iowa, in the US. AMericas It has set up a wholly owned subsidiary, Iowa Fertilizer Company (IFCo), to build and operate the plants on a green- US field site in southeast Iowa to supply customers in the U.S. The corn harvest continues to progress and 10% of the major corn belt. corn producing states’ crops have been harvested, up 4% OCI has selected Kellogg Brown & Root LLC (KBR), Maire from last week. Tecnimont Stamicarbon (Tecnimont), and ThyssenKrupp There has been no change in US domestic prices. Business is Uhde (Uhde) to supply the process technologies for the very slow as the clean-up after Hurricane Isaac continues. plants, which will produce 1.5-2m tonnes/year of ammonia, urea and UAN, as well as diesel exhaust fluid (DEF)

The NOLA barge market is inactive, with some suppliers Construction work on the complex is scheduled to begin saying they are struggling to place October barges. Trans- later this year, for completion in mid-2015. port times on the river have increased, and in some cases IFCo’s new plant will be the first world scale natural gas- doubled, as a route that would normally take 2-3 weeks could based fertilizer plant built in the United States in nearly 25 take 4-6 weeks. years. Iowa is the top corn producing state in the United States and has the highest use of nitrogen-based fertilizer in the Argus FMB FSU Regional Fertilizer nation. Conference and Exhibition 2012 The total investment cost is estimated to be $1.4bn and will be funded with a combination of equity and a tax-exempt 28–30 November, 2012, Bristol Hotel, Odessa, Ukraine bond issue. The Iowa Finance Authority has authorized IFCo to access bonding capacity under its private activity tax- exempt Midwestern Disaster Area bond programme. In addi- Book before 8 September and save €400 tion, the Iowa Economic Development Authority board unan- imously approved a comprehensive state financial incentive Registration Program request package expected to provide state tax relief in the order of $100m. The Iowa Department of Transportation board will also consider financial assistance for project-related public For more information please contact our conference department at +7 495 933 75 71 infrastructure improvements. or by email: [email protected]

Iowa State Governor Terry Branstad commented: “I am pleased to welcome OCI to Iowa. Their project is the largest investment ever made in our state. The Iowa Fertilizer Com- pany will bring high-paying permanent jobs to Lee County and will create approximately 2,500 construction jobs over the next three years. We believe this major capital investment will help invigorate economic development in an area of the state which has previously experienced significant challenges. We look forward to working closely with OCI and its management to ensure the successful completion of their project.”

OCI Chief Executive Officer, Nassef Sawiris, said: “OCI is pleased to have selected the state of Iowa for its North argusmedia.com American expansion and is looking forward to helping bring permanent jobs and significant economic activity to Lee

County and the state. Iowa Fertilizer Company is well- positioned to supply nitrogen-based fertilizer products to MEA looking for Trader for African region farmers in the Cornbelt and help reduce their substantial reliance on annual imports of fertilizer into the country. MEA Kenya, who have extensive fertiliser and related We intend to expand our presence in the United States and investments in the region, is seeking to hire a trader to most recently agreed to acquire the Weitz Company, an cover Africa and be based initially in Nairobi – the ideal Iowa-based construction company, which will play a major candidate would have some knowledge of French and role in the construction of our new fertilizer plant.”” have been involved in trading for some years.

Interested applicants should contact [email protected] 2013 Argus FMB Asia Fertilizer Conference and Exhibition

24-26 April, Beijing, China Save the date! Freight investor Services

More details on the conference will be released shortly. FIS Cash Settled swaps – 5 September 2012

Month Bid Offer Mid Basis Ammonia cfr Tampa (metric tonne) Sep 12 680 705 693 5 Oct 12 620 700 660 5 Nov 12 575 650 613 5

argusmedia.com/asia-fertilizer For further swaps information contact: Ron Foxon & Alexey Paliy, FIS Ltd - Office : +44 207 090 1122 or Cell: +44 7738726557 [email protected]

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