The Market · Recent tenders in India for FACT, RCF and SPIC have lifted prices to the mid-$160s/ tonne CFR India. Potash Canpotex APC sign contracts in India Canpotex has now signed

Fertilizer Prices | News | Analysis

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The Market | 14 May 2015 | Published by ICIS | www.icis.com/fertilizers | 24 pages

The Market

1The Market | 14 May 2015 | www.icis.com

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India approves new urea policy... 22...leaves subsidy rates unchanged 22K+S Q1 EBITDA rises 36.9% 22ICL’s Q1 net income rises 2% 22

Nitrogen 4Phosphates 11Ammonia 13Sulphur 18Potash 20

Prices 2Recent sales 3Freight 3

Fertilizers at a glanceNitrogen■ Market focus on 9 May IPL India urea

tender The lowest offer was submitted by Liven at $298.38/tonne CFR ECI. Awards heard for over 800,000 tonnes, but not yet confirmed.

■ Egyptian urea sale heard at $312/tonne FOB Helwan is heard to have sold 5,000 tonnes to Agrium, likely for shipment to Italy. Expectations of more sales in coming weeks given improved production.

■ Kaltim Indonesia sells urea cargoes In Indonesia, Kaltim is understood to have sold two 30,000-tonne granular cargoes to traders at $311-311.50/tonne FOB for shipment to Australia.

■ Chinese urea prices remain firm Chinese suppliers have kept urea prices firm, limiting quantities committed to India. Prilled offers are now at $295/tonne FOB and above.

■ AN price levels starting to move up AN prices are starting to move up in line with urea, but higher priced deals are yet to be concluded as buyers are still to digest levels.

Phosphates■ Mosaic sells DAP/MAP to Latin America

Mosaic has sold 46,000 tonnes of DAP/MAP for June shipment to Latin America at $468-472/tonne CFR.

■ Bangladesh import tenders to close on 31 May Private importers have issued purchase tenders for a total of 400,000 tonnes of DAP and 200,000 tonnes of TSP closing on 31 May, for shipment by September.

■ DAP production at GCT suspended GCT has halted production after sit-in protests by unemployed youths demanding work disrupted deliveries.

Ammonia■ Yuzhny ammonia price slides on

netback The Yuzhny ammonia price has dropped to $360/tonne FOB on the low end based on the netback from an Ameropa sale to IFFCO in India. Discussions for new sales are heard in $385-390/tonne FOB range.

■ FACT India closes import tender FACT received offers in the $500-525/tonne CFR range under its 11 May ammonia purchase tender for 2 x 7,500 tonnes. There are expectations the tender will be scrapped.

■ Ammonia cargo sold to Namhae Korea at $433/tonne CFR Yara has sold a 15,000-tonne Australian cargo to Namhae at $433/tonne CFR for June shipment to Korea.

Sulphur■ Prices stabilise - lack of demand and

lack of availability International sulphur prices appear to have stabilised amid a lack of demand as well as a lack of availability.

■ Indian tenders attract higher prices Recent tenders in India for FACT, RCF and SPIC have lifted prices to the mid-$160s/tonne CFR India.

Potash■ Canpotex APC sign contracts in India

Canpotex has now signed a contract for 1.3m tonnes of MOP with its Indian customers, while APC has signed contracts with IPL for 275,000 tonnes and Zuari for 230,000 tonnes of MOP for May 2015-March 2016. The tonnes are priced at $332/tonne CFR with 180 days’ credit.

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NITROGEN BLACK SEA FOB PRICE COMPARISON

AN Urea Ammonia100

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The Market | 14 May 2015 | www.icis.com

The Market

PRICES ARE IN US$ EXCEPT WHERE SPECIFIED

NITROGEN 14-May 7-May

Urea prilled bulk

Yuzhny FOB 280-285 265-280

Romania FOB 295-300 290-295

Baltic FOB 280-285 265-275

Arab Gulf FOB 290-300 280-290

SE Asia CFR 295-305 295-300

NW Europe €pt FCA 290-300 280-290

China FOB bagged 290-295 285-290

Urea granular bulk (spot)

Arabian Gulf FOB 290-310 280-305

Arab Gulf US netback FOB 329-359 316-354

Iran FOB 280-290 260-265

Yuzhny FOB 290-300 280-290

SE Asia FOB 311-312 280-285

China FOB 300-305 285-295

SE Asia CFR 300-320 290-300

Egypt FOB 290-312 275-290

NW Europe €pt FCA 295-315 295-315

Caribbean FOB 330-335 320-325

US Gulf ps ton FOB 322-350 311-345

US Gulf metric CFR equiv 351-381 338-376

Brazil CFR 305-320 290-310

Nitrates

AN Baltic FOB bulk 205-215 205-210

AN B Sea FOB bulk 205-215 205-210

AN France € deld bulk 355 355

AN UK FCA £ bagged 240-270 240-270

AN FOB Nola ps ton 270-275 270-275

CAN Germany € cif blk 260-265 270-275

UAN France € FCA 30% 185-190 185-225

UAN FOB B Sea 32%** 180-190 170-180

UAN FOB Nola ps ton 32% 220-240 220-240

UAN CFR ec US 32% 220-240 220-240

Am. Sulphate bulk

Black Sea FOB (white) 145-155 150-155

Brazil CFR 155-160 155-165

SE Asia CFR 160-165 160-165

Natural Gas

NYMEX $/mmBtu 2.98 2.72

NW Europe TTF $/mmBtu 6.79 6.69

AMMONIA DD MMM DD MMM

Yuzhny FOB 360-390 390-400

Arabian Gulf FOB 380-410 390-420

Iran FOB 360-370 380-400

Caribbean FOB 425-435 425-435

US Gulf CFR 468-470 468-470

Tampa CFR 465 465

NW Europe CFR duty unpaid

410-450 440-450

North Africa CFR 390-430 420-430

India CFR 413-450 427-449

Taiwan CFR 430-450 440-450

Korea CFR 433-460 450-460

PHOSPHATES 14-May 7-May

DAP bulk

US Gulf FOB 468-472 460-465

Nola ps ton FOB barge 415-425 408-415

North Africa FOB 500-510 500-510

Saudi Arabia FOB 470-490 470-490

Baltic FOB 480-490 460-480

China FOB 465-470 460-465

Pakistan CFR 480-490 480-490

Benelux FCA € 489-493 489-493

MAP bulk

Baltic Sea FOB 480-490 465-475

Brazil CFR sight 490-500 485-495

TSP bulk

North Africa FOB 375-385 375-385

NPK bulk

Russia 16.16.16 FOB 360-370 360-370

China 16.16.16 CFR 400-415 400-415

Phos Acid P2O5 fert grade

N Africa FOB 745-820 745-820

NW Europe CFR 900-940 900-940

India CFR cash 805 805

Phosphate Rock

Morocco 70-72 BPL FOB 120-145 120-145

India CFR 75-140 75-140

POTASH 14-May 7-May

MOP bulk

Vancouver standard FOB 300-310 300-310

Vancouver gran FOB 310-320 310-320

Israel/Jordan standard FOB 300-310 300-310

Baltic standard FOB 290-310 290-310

China CFR 315 315

SE Asia CFR 330-340 330-340

Brazil gran CFR 325-335 325-335

NW Europe € gran CIF 295-305 295-305

SOP bulk

NW Europe € FOB 500-550 500-550

SULPHUR 14-May 7-May

Vancouver FOB (spot/contract)

130-140 125-135

Middle East FOB 139-142 139-140

Mediterranean CFR spot 150-155 150-155

North Africa CFR contract 148-152 148-152

China CFR 140-156 140-156

India CFR 160-165 155-160

Black Sea FOB 108-122 108-122

Brazil CFR 150-155 150-155

Liquid

Tampa CFR lton 132 132

Benelux delivered 154-165 154-165** low end dutiable product

3



The Market

Product Origin Seller Buyer Destination ‘000t $pt Ship

Urea - prills Yuzhny Nitora Med/Israel 2-3 282 FOB May

Baltic Trader 10 285 FOB May

Iran/China Various IPL India 830? 298.38-300.50 CFR May/June

Urea - gran Baltic Salavat EuroChem? 13 290 FOB? May/June

Baltic Salavat Trader 20 297 FOB May

Egypt Helwan Agrium Italy? 5 312 FOB May

Oman SIUCI Trader 30 310 FOB June

Indonesia Kaltic Fertcomm Australia 30 311 FOB May

Indonesia Kaltim Ameropa Australia 30 311.50 FOB May/June

Algeria Sorfert OFT 35 Formula June

Algeria Sorfert Indagro 25 Formula June

UAN Nitron? Various Argentina 20-25 mid-220s CFR May-June

DAP Saudi Arabia Engro Pakistan 30? mid/high-480s CFR

China Engro Pakistan 30? low/mid-480s CFR

DAP/MAP US Mosaic LatAm 46 468-472 FOB June

MAP Morocco OCP Brazil 500 CFR May/June

Ammonia France Borealis Trammo 12 May

Algeria Sorfert Yara France 15 Formula May

Algeria Sorfert Trammo 15-23 Formula May

Saudi Arabia SABIC Deepak India 10 May

Iran Transagri IFFCO India 3.4 413 CFR May

Iran Transagri Deepika India 2 414 CFR May

Australia Yara Namhae Korea 15 433 CFR June

Sulphur SPIC India 20 mid-$160s CFR June

SUMMARY OF RECENT SPOT SALES

WEEKLY FREIGHT RATE INDICATIONS

Route Product ’000 tonnes $/tonne

Yuzhny-WC India Urea 35-45 22-24

Riga-Brazil Urea 25-30 20-22

AG- US Gulf Urea 35-45 21-23

Egypt-French Bay Urea 6-8 31-33

USG-WC India DAP 55-65 25-27

Morocco-Brazil MAP 25-30 11-13

USG-Brazil DAP 25-30 15-17

Baltic-Brazil MOP 25-35 20-22

Baltic-China MOP 55-65 27-29

Vancouver-Brazil MOP/Sulphur 45-50 20-22

Vancouver-China MOP/Sulphur 50-65 14-16

AG-WC India Sulphur 15-20 16-22

AG-China Sulphur 25-30 15-20

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The Market

OVERVIEWThe main focus of the urea market this week has been the outcome of the IPL India urea tender, which saw awards limited by the continued strong stance from Chinese producers on price levels.

IPL closed its tender on 9 May and saw the lowest offer from Liven at $298.38/tonne CFR east coast India, which would need a price in the mid-$280s/tonne FOB China to be workable. Offers from Chinese suppliers started the week around $288/tonne FOB, but have since moved higher and are now at $295/tonne FOB and above.

The exact quantity that IPL has been able to procure remains uncertain for now, but is understood to be around 830,000 tonnes. It seems some traders that were expected to confirm tonnes, changed their minds given the strong Chinese price levels. Those traders that did confirm are expected to make losses on at least part of the tonnage which had not been covered.

Availability is limited from China at present, and this alongside the firm domestic market, the strong stance of producers and traders needing to cover short positions has supported price levels. There are some expectations that once stocks build up at ports over the coming weeks prices could come under pressure. However, there is also the view that the success this time round in keeping prices firm will encourage producers to maintain their strong stance.

Elsewhere, the firm Chinese prices and traders stepping in to cover shorts looks to have supported price increases in other origins. Latest granular business from the Arabian Gulf was concluded at $310/tonne FOB, while Egyptian urea has sold at $312/tonne FOB and Indonesian at $311-312/tonne FOB. Yuzhny price levels are also heard higher into the low-$280s/tonne FOB with producers targeting higher levels in next business.

However, buyers have stepped back from the market for the time being, hesitant to make purchases given the higher prices. As a result, prices in end user markets are not reflecting the latest FOB levels.

There are now some expectations that the market will be fairly quiet ahead of the IFA annual conference at the end of the month.

Date Vessel Kt Destination

Comp Akorea 1.2 Ameropa/Turkey

Comp Akin 1.4 Ameropa/Turkey

Comp Sea Breeze 6.2 Mekatrade/Egypt

Comp Tamar Kiran 5.5 Trammo/Turkey

Comp Atlantic Breeze 18 Mekatrade/Ghana

Comp Filiboz 4.5 Trammo/Turkey

36.8

OPZ/TIS– MAY 2015, ’000 TONNES

Nitrogen

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BLACK SEAIn Yuzhny, Nitora is understood to have sold 2,000-3,000 tonnes of prilled urea at $282/tonne FOB for prompt shipment to the Mediterranean/Israel.

The trader is now understood to be asking for $290/tonne FOB and has received a bid for a small quantity at $288/tonne FOB for May. This is not confirmed.

Dnipro is understood to have sold tonnes to several traders this week in the $280-285/tonne FOB range for May shipment.

Producer targets are now indicated at $290/tonne FOB.

NF Trading is fully committed for May with cargoes moving to its own distribution in Turkey and Italy and the same situation is expected in June.

OPZ is understood to still have availability for May loading, but volume is not clear. Both ammonia and urea lines are running.

In the paper market, May bids and offers are at $275-280/tonne FOB, with June at $280-285/tonne FOB.

In Tuapse, EuroChem is sold out for May but still has some product left for June shipment. Price ideas for June for prilled urea are above $290/tonne FOB Black Sea/Baltic and at $310/tonne and above for granular urea.

Romanian prilled urea prices have been increased notionally this week given higher prices elsewhere.

BALTICBaltic prices have firmed again this week on the back of higher numbers elsewhere in the market, but activity is limited. Some producers are still waiting to make sales and there are expectations that discussions will take place at the IFA conference at the end of the month.

A trader said it had purchased 10,000 tonnes this week at $285/tonne FOB, but no other details are heard. Producer offers are now indicated at $290/tonne FOB for next sales.

Some small lots are also heard sold in the mid/high-$280s/tonne FOB, but this is for small lots. Offer levels for further small lots are indicated at $290/tonne FOB and above.

Offer levels into Brazil are reflecting a net back around $280/tonne FOB.

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May2013

PRILLED AND GRANULAR UREA PRICE COMPARISON - YUZHNY AND EGYPT FOB

FOB Egypt FOB Yuzhny

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The Market

Salavat has closed a tender for 13,000 tonnes of granular urea for loading at the plant in the second half of May. The tender is understood to have been won by EuroChem. The price has not been confirmed but there is talk of a number around $290/tonne FOB.

A trader said it purchased 20,000 tonnes of Salavat granular urea prior to the tender at $297/tonne FOB.

Rolling maintenance at PhosAgro’s Cherepovets facility will last through June and the producer will not have large volumes available until the second half of July. However, PhosAgro is understood to have some small lots, totalling 3,000 tonnes, available for May/June.

PhosAgro produced 267,500 tonnes of urea in the first quarter of 2015, up 6% from the 252,400 tonnes produced in the same period of 2014, according to the company’s production results for the first quarter. However, sales volumes were down 18.2% year on year at 232,900 tonnes.

EUROPEIn Turkey, no new business has been confirmed. There is still no news on whether Gubretas has made a purchase under its enquiry for 26,000 tonnes of urea for May/June shipment.

Buyers are not so keen on urea following the recent price hikes and are heard to be looking at AN purchases.

Buyer price ideas for urea are understood to reflect the $270s/tonne FOB Black Sea.

Limited activity continues in France as it is now the end of the campaign and buyers are reluctant to purchase more material. Some offers for early June in La Pallice are heard around €10/tonne higher than our granular price assessment of €295-315/tonne FCA northwest Europe.

Prilled FCA prices in northwest Europe are seen higher at €290-300/tonne based on higher Baltic price levels.

In Italy, the market is said to be short of product for corn demand and so prices have moved up. Granular urea was heard sold at €325/tonne FCA Ravenna in big bags, but is now being offered at €340/tonne FCA and expected to move higher.

Corn demand is expected to finish in early June and there is talk that it is now too late to import fresh tonnes in time to cover the demand. RC

AFRICAIn Egypt, all urea plants are now operational after gas supply returned to remaining plants (Alexfert and MOPCO) starting from 8 May.

A fresh granular urea FOB sale was concluded at a $22/tonne premium to previous business, with Helwan selling 5,000 tonnes at $312/tonne FOB to Agrium under its 14 May sales tender, for shipment 16-21 May. The destination is not known but there is some talk it could be for Italy.

Under previous business, Helwan sold 5,000 tonnes to Trammo at $290/tonne FOB for Greece (May shipment) about two weeks ago.

However, netbacks from northwest Europe are at lower levels, and heard at around $290/tonne FOB. So this week’s price range is assessed at $290-312/tonne FOB.

DIRECT HEDGE FERTILIZER SWAPS PRICE INDICATIONS, 14 MAY 2015

Urea FOB Egypt, $/tonne

Buyers Sellers

May 295 305

June 295 305

July - -

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Among other shipments, MOPCO is expected to supply 6,000 tonnes to Helm under an offtake agreement. There is talk in the market that the producer may shortly issue a sales tender as well.

MOPCO is expected to start production at one of its two new urea plants by end-May, while the second plant will be delayed further. This comes as the gas supply situation in Egypt is expected to improve following the start of LNG imports. At present, the existing MOPCO plant (MOPCO-3) is operating at 80% of capacity and has been operational since 10 May.

As for other plants, Helwan is understood to be operating at 90%, Alexfert at 80% since getting gas on 8 May, and OCI/EFC one line at full rates.

The gas situation in the country is expected to improve with the first LNG delivery from Sonatrach/Algeria understood to have been delivered this week. This is the second delivery since the Floating Storage and Regasification Unit (FSRU) arrived in Ain Sokhna in early April. Sonatrach is understood to have a 6 cargo deal this year with Egypt’s EGAS, alongside deals with others suppliers.

There is talk that the Ministry of Agriculture is in private discussions with four companies—from Bulgaria, UAE and two local firms—to import 150,000 tonnes of urea. A deal is expected to be finalised at the end of May.

The buyer’s price ideas are understood to be around Egyptian pound 2,300-2,400/tonne, which is equivalent to $300-315/tonne CIF.

The government is hoping to avoid high offers as was the case in the previous tender. The 18 April import tender from the General Cooperative Agrarian Credit Society for 150,000 tonnes of urea was scrapped as offers were at around $360/tonne CIF equivalent, significantly higher than the buyer’s price ideas.

The tender attracted limited participation as bid bonds were to be submitted in local currency, with 50% of the payment in cash after delivering the product and the rest with 30 days’ credit. Product was to be bagged in 50 KG bags.

Private buyers are understood to have purchased over 40,000 tonnes of prilled urea in small lots from the Black Sea since March. Nitora, Mekatrade and EuroChem have been among sellers.

In the paper market, bids and offers for May are unchanged at $295-305/tonne FOB while June is up by $5/tonne to $295-205/tonne FOB.

In Algeria, Sorfert sold 35,000 tonnes to OFT and 25,000 tonnes to Indagro under its sales tender for 50,000 tonnes (+/- 10%) of granular urea for 1-30 June loading in Arzew. A total of six companies bid under the tender. The price is based on a formula (average of FOB Egypt + premium).

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The Market

May following a month long scheduled maintenance. DT

ASIAIn India, IPL closed its 9 May purchase tender for an unspecified quantity of prilled or granular urea, for shipment by 29 June. Offers were asked to remain valid until 16 May. A total of 31 offers were received under the tender for 3.1m tonnes firm and 382,500 tonnes optional.

Liven submitted the lowest offer at $298.38/tonne CFR for Krishnapatnam, Gangavaram and Karaikal.

Initially the lowest offer was from Montana Shipping at $296/tonne CFR for 120,000 tonnes to east coast India. However, this was disqualified as the trader did not submit a bid bond.

For west coast India, Samsung was the lowest at $299.25/tonne CFR for optional quantity to Mundra.

On 11 May, IPL issued the following counters under the tender:East coast India:• $298.38/tonne CFR for Krishnapatnam,Gangavarm, Karaikal• $299.50/tonne CFR for Kakinada/Vizag• $300.40/tonne CFR for Chennai/ TuticorinWest coast India:• $299.25/tonne CFR for Mundra• $300.50/tonne CFR for Kandla• $300.50/tonne CFR for New Mangalore

IPL issued LOIs earlier in the week, but there is some variance in final awards being heard as it is understood that some LOI holders changed their minds given the increasing price ideas from Chinese suppliers. The following awards are now understood to have taken place, although there is still no confirmation:

• Global Transnational 60,000 tonnes Pipavav, 60,000 tonnnes Mundra, 30,000 tonnes Kandla• Samsung 60,000 tonnes Krishnapatnam and 60,000 tonnes Mundra• Liven 60,000 tonnes Krishnapatnam• Swiss Singapore 60,000 tonnes ECI• Transagri 90,000 tonnes Mundra• Mekatrade 60,000 tonnes Krishnapatnam• Rare Earth 60,000 tonnes Krishnapatnam• Transmart 50,000 tonnes Kandla• Gavilon 60,000 tonnes ECI• Agricommodities 60,000 tonnes for Krishnapatnam• ETA 63,000 tonnes• Aries 55,000 tonnesTotal = 828,000 tonnes

There is talk that the Department of Fertilizers had been looking to procure around 800,000 tonnes of urea under the tender given good stocks currently in the country after bad weather in March hampered demand.

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No update is available on whether an export licence will soon be available for the Bahwan/Edeola plant. There were expectations of a decision by end-May/June.

In Libya, Yara continues to operate one urea line and one ammonia line at its Lifeco facility.

MIDDLE EASTGranular urea business in the Middle East is heard at $310/tonne FOB for June shipment, an increase of $5/tonne from last week. Most producers are sold out for June and not in a rush to commit tonnes.

Thai offers reflect about $300/tonne FOB although buyers’ price ideas are much lower, while netbacks from latest business heard in Brazil are reflecting around $290/tonne FOB.

Granular prices are assessed in the $290-310/tonne FOB range this week, while prilled prices have been moved notionally higher to $290-300/tonne FOB.

FERTIL UAE is heard to be offering at $310/tonne FOB for June. The producer last week sold 35,000 tonnes of granular urea at $305/tonne FOB to Latin America for June shipment.

In Kuwait/Bahrain, PIC/GPIC is heard to be in discussions with a trader for an end-June cargo to Thailand and Philippines. The producer is targeting $310/tonne FOB but the cargo is likely to be formula priced.

In Oman, there is talk that SIUCI has sold a cargo for June to a trader at $310/tonne FOB. Last done business by the producer was at $300/tonne FOB about ten days ago.

In Iran, there are expectations that 240,000-250,000 tonnes of urea will be shipped to India by Global Transnational and Transagri by end-June under the IPL tender.

The Indian tender reflects netbacks in the mid-$280s/tonne FOB Iran. Price ideas are assessed in the $280-290/tonne FOB range this week.

In Saudi Arabia, SABIC is sold out for May and likely to not have spot tonnes for June either. Under previous business, the producer sold a total of 35,000 tonnes to Sudan in the high-$280s/tonne FOB for May/June shipment.

Discussions are still continuing between the Pakistani and Saudi governments for urea shipment under the loan agreement, with a decision likely only in June.

In other news, the SAFCO plant is now expected to come on stream only in end-June.

In Qatar, Muntajat is sold out for May-June. All Qafco plants are working fine after the Qafco IV urea plant resumed production on 6

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The Market

The following offers were received, prices on a $/tonne CFR:

IIndia’s Union Cabinet has approved the New Urea Policy-2015 which would aid domestic companies in maximising urea production over the next four years by 2m tonnes/year and reduce the country’s dependence on imports.

The policy aims at promoting energy efficiency in urea units to reduce the subsidy burden on the government without increasing the cost of urea for the farmer, and aims at providing the farmer with timely and uninterrupted supply of the crop nutrient, the statement said. (See also News)

In Nepal, AICL closed a tender on 7 May for 35,000 tonnes of urea and the lowest offer was submitted by Swiss Singapore at $383.99/tonne CIF Nepal. No award has been heard yet and will likely be delayed by the further earthquake in the country this week.

In Pakistan, there are expectations that the Economic Coordination Committee (ECC) will soon approve the import of another 150,000 tonnes of urea through TCP for the kharif season.

According to media reports, the Ministry of Water and Power has refused to approve the diversion of gas from the power sector to the fertilizer sector. When the ECC approved the import of 100,000 tonnes

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of urea at the end of April, it constituted a committee comprising the Ministry of Industries, Petroleum and Water and Power to explore the possibility of meeting the further demand for 150,000 tonnes to cover the kharif season urea through domestic production in order to save foreign exchange.

TCP will close two tenders for 50,000 tonnes each on 29 May and 1 June.

No progress is currently heard on discussions for new Saudi loan agreement.

In Indonesia, Kaltim is understood to have awarded its 8 May sales tender for 30,000 tonnes of granular urea at $311/tonne FOB for May shipment to Fertcomm. The cargo is understood to be for Incitec Pivot’s captive demand in Australia. The owner’s estimate was set at $310/tonne FOB.

There is also unconfirmed talk that Kaltim has sold a 30,000-tonne granular cargo to Ameropa at $311.50/tonne FOB, with the cargo expected to be delivered to Australia in early June.

The producer is understood to have another 30,000-tonne cargo currently on offer.

Despite the recent sales, the new Kaltim IV plant is understood to not yet be at full capacity. The Kaltim I plant will continue to run and will likely overlap full capacity at Kaltim IV for an initial period, before eventually being decommissioned.

In Thailand, contract cargoes are currently priced around $300/tonne CFR, but spot cargoes are at higher levels. Offers of AG granular urea are indicated in the $320s/tonne CFR, but not attracting buyer interest at present.

In China, producers have maintained their strong stance on prilled urea prices this week following the Indian tender. At the start of the week offers were heard in the high-$280s/tonne FOB, while traders needed the mid-$280s/tonne FOB to make shipments workable.

Offers subsequently moved above $290/tonne FOB and are now heard up to $300/tonne FOB and above. The Nitrogen Industry Association is understood to have told suppliers to not go below $290/tonne FOB.

There is talk that small lots are available in the low-$290s/tonne FOB, but for larger cargoes buyers would have to pay $295/tonne FOB and above. There is unconfirmed talk that business has taken place in the low/mid-290s/tonne FOB this week for smaller lots. Prices are assessed at $290-295/tonne FOB this week to reflect these price indications.

Availability is understood to be limited at Chinese ports and this is helping to support price levels, as well as firmer domestic prices. Inventories of prilled urea at domestic ports were heard less than 200,000 tonnes.

Granular urea prices have move higher this week on the back of stronger prilled prices in China as well as an increase in granular prices out of Indonesia. Offers are indicated at $305-310/tonne FOB, although there is talk that Fudao tonnes are on offer at $315/tonne FOB. Prices are assessed at $300-305/tonne FOB.

In the domestic market, production rates are heard around 73% of capacity. Domestic prices rose remained firm this week, with further increases seen. Latest prices are heard as follows:

IPL INDIA PURCHASE TENDER: 9/5/2015

Supplier/Origin ‘000t firm ‘000t opt Price/port

Liven 60 298.38 KP/GV//KKL

Samsung 60 298.70 KP/GV/KKL

Swiss Singapore 280 60 301.43 Pipavav/ Mundra

RareEarth 65 299.25 KP

Mekatradae 60 299.73 KP

Global Transnational 210 30 300.44 Pipavav/ Kandla

Fertisul 120 299.75 KP/KKL

Transagri 120 300.00 Mundra

Quantum 125 300.00 KP/GV/KKL

Amber 125 300.10 KP/GV/KKL

Ferttrade 63 300.25 KP

Seaborne International 55 300.55 KP

Agricommodity 62.5 62.5 301.50 KP

Transmart 100 301.50 KP

Dreymoor 120 120 301.69 KKL

Transglobe 140 301.95 KKL

Ameropa 60 60 302.43 KP

Aries 235 302.99 KP

Gavilon 63 303.35 Mundra

ETA 130 303.50 ECI

MTPL 60 303.50 KKL

Valency 65 304.80 KP

Trammo 65 306.47 KP/GV

Midgulf 60 306.80 KP/GV//KKL

Indagro 65 308.00 ECI

BerryChem 60 309.90 KP/GV/KKL

YUC 120 310.70 ECI

CHS 50 50 313.00 Mundra

Helm AG 60 315.00 KP

Keytrade 120 315.00 KP

8



The Market

• CNY1,560-1,740/tonne EXW and CNY1,550-1,750/tonne EXWH in northern provinces• CNY1,580-1,750/tonne EXW and CNY1,650-1,830/tonne EXWH in southern provinces• CNY1,648/tonne EXW from the Luxi factory, Shandong

In Australia, cargoes are currently being purchased for peak arrival time of June-July. Up to four cargoes have been purchased from Indonesia, with cargoes from the Middle East and China also due during that time frame.

Urea imports to Australia in March 2015 totalled 221,018 tonnes, up from 142,512 tonne in March 2014, according to data from GTIS/Australian Bureau of Statistics.

AMERICASIn the US, urea buying has continued at Nola this week, with talk that demand into the warehouse system is still good.

Nola barge prices remain firm this week. Prompt barge sales are heard concluded $345-350/short ton FOB, with all May barges in the $328-345/short ton FOB range. First half June barge sales are heard traded at $322-335/short ton FOB. The price is assessed at $322-350/short ton FOB Nola this week to reflect business heard.

There is some talk of prices in the mid-$350s/short ton FOB, but no business has been confirmed at these levels yet.

Upriver, deals were heard at $343-355/short ton FOB. Chinese urea is understood to have been sold upriver in the $333-337/short ton FOB range.

In the paper market, May bids and offers are at $325-330/short ton FOB, with June at $312-317/short ton FOB.

In Trinidad, it is now understood that the PCS’ urea plant has restarted. A restart date has not been heard it was thought to be around 7-10 days ago.

In Guatemala, Incofe is closing a purchase tender on 14 May for 28,000 tonnes of urea as well as AS.

In Brazil, granular urea prices have move higher this week, with business now heard to have been concluded at $305/tonne CFR.

Offers are at higher levels, but not attracting interest for the time being with importers understood to be selling tonnes they already have before returning to the market to buy more.

One trader was heard offering a small lot at $320/tonne CFR, while another said it was offering in the high-$320s/tonne CFR, but would be prepared to sell at $325/tonne CFR.

The price is assessed at $305-320/tonne CFR this week based on business heard concluded and offer levels.

DIRECT HEDGE FERTILIZER SWAPS PRICE INDICATIONS


14 May 2015

Urea FOB Nola $ps ton FOB Yuzhny

Buyers Sellers Buyers Sellers

May 325 330 275 280

June 312 317 280 285

July 295 305 270 280

14 May 2015

UAN FOB Nola $ps ton FOT Rouen €pt


May 218 222 200 215

June 210 215 200 215

July 200 205 200 215

❯❯

There was also unconfirmed talk that a 9,000-tonne sale had taken place at $330/tonne CFR, but this has not been included in the price range.

Prilled price indications are heard around $300/tonne CFR this week.

Brazil imported 141,585 tonnes of urea in April 2015, down from 251,249 tonnes in March, and nearly 54% lower than the 305,013 tonnes imported in April 2014, according to data released by the Foreign Trade Secretariat (SECEX).

The main supply source in April was Qatar with 87,551 tonnes, followed by Russia with 36,423 tonnes.

In the first four months of 2015, imports were 846,661 tonnes, down 28% from the 1.12m tonnes imported in the same period last year.

BRAZIL UREA IMPORTS: JANUARY-APRIL, ’000 TONNES

Supplier 2013 2014 2015

Qatar 227,965 206,704 268,658

Russia 405,533 272,977 224,144

Oman 0 123,446 88,436

UAE 0 87,999 63,230

Kuwait 14,199 108,820 56,459

Venezuela 53,621 116,408 44,480

Argentina 82,278 100,800 39,500

China 42,007 91,684 30,946

Ukraine 186,505 0 27,500

World Total 1,086,751 1,179,214 846,661

Source: Foreign Trade Secretariat/GTIS

9



The Market

Ammonium sulphate/nitrateAN price levels are starting to move up across markets in line with the bump up in urea but higher priced deals are yet to be concluded as buyers are still to digest the positive turn in price sentiment.

In the Black Sea and Baltic, AN prices are assessed in a range of $205-215/tonne FOB, with last done business into Brazil heard at the lower end of this range while producers are now asking for higher levels. There is also talk of business into Brazil below $205/tonne FOB but this is believed to be an older sale and hence not included in our price range.

In the Black Sea, NF Trading is offering tonnes for June but no business has been confirmed yet. The producer’s price ideas are heard in the mid-$210s/tonne FOB.

EuroChem is sold out for AN in May and has not concluded any June business. The producer is targeting $215-220/tonne FOB for fresh sales.

For AS, buyer and seller price ideas for caprolactam grade AS are heard in the $145-155/tonne FOB range this week.

In the Baltic, there is talk of three to four Russian AN cargoes sold in the mid-$200s/tonne FOB range since April, including one this week. Uralchem is looking to do further AN business in Latin America, and is targeting mid-$210s-220/tonne FOB.

For AS, there is talk of SBU/Kemerovo selling about 3,000 tonnes of capro material last week to Turkey. This is not yet confirmed.

In Belarus, Grodno is understood to have scrapped its sales tender on 7 May for 25,000 tonnes of capro AS. Bids were heard in the mid-$130s/tonne FOB, below the producer’s price target of around $150/tonne FOB.

In Germany, CAN prices for May are heard in the mid-€260s/tonne CIF. There is talk of lower prices as well, in the €220s/tonne CIF level, but this is understood to have been offered short for deliveries in the second half of the year and not included in our price range.

A new price for CAN (starting July-August) has yet to be announced but there are expectations it will be around €240-245/tonne CIF based on early indications from OCI.

In France, last done AN business remains at €355/tonne delivered.

In the UK, prices remain in the range of £240-270/tonne FCA for May. There is also talk of imported AN having been sold in the mid-£210s/tonne FCA, but this is not confirmed.For CAN, prices for May are heard at €240/tonne CIF equivalent and below €230/tonne CIF for June.

In Turkey, there is talk that buyers are in the market for AN but prices ideas are around $200/tonne FOB, which is not likely to be accepted by suppliers.

Under previous business, Vertiqal sold 6,000-8,000 tonnes of AN in the high-$230-240/tonne CFR for Bulgarian material. Another trader is heard to have sold 6,000-7,000 tonnes of AN to southern Turkey at similar prices.

For AS, Gubretas is understood to have purchased 8,000-10,000 tonnes of capro AS from OCI at $172-175/tonne CFR last week. Freight is estimated at $20-25/tonne.

In Tunisia, AN production is understood to be completely down due to major protests at the GCT plant.

In Indonesia, Petrokimia Gresik will close a purchase tender for 20,000 tonnes of AS on 15 May, for June shipment.

Gresik’s contract volume requirements are above 300,000 tonnes/year.

In China, recent capro grade prices are around $130-135/tonne FOB, while steel grade prices are in the $120s/tonne FOB.

In Brazil, there is talk of AN business being concluded at $223/tonne CFR for a part cargo. This is believed to an older sale and not included in our price assessment.

Over the last few weeks, business has been heard in the mid/high-$220s/tonne CFR with EuroChem linked to the deals, with one cargo sold to Heringer.

Uralchem says it sold AN to Brazil about three weeks ago at above $228/tonne CFR. The producer says it has not concluded any business this week or in the previous week.

BRAZIL AS IMPORTS (TOP 10 COUNTRIES IN TONNES)

Supplier Jan-Apr 2015 Jan-Apr 2014 Jan-Apr 2013

Belgium 175,252 195,821 117,847

US 166,867 183,295 131,829

China 108,502 31,178 84,189

Netherlands 83,431 50,994 141,086

Poland 50,017 63,166 52,857

Belarus 22,125 242 2,627

Germany 18,199 17,004 15,825

Finland 15,751 26,250 9,751

Hong Kong 456 0 0

Spain 192 96 72

World Total 640,794 615,989 638,913


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May2015

May2014

BLACK SEA AN FOB WEEKLY PRICES

AN FOB Black Sea

10



The MarketThe Market

For AS, capro grade offers from OCI and Poland are heard at $160/tonne CFR which makes Chinese product, which is being offered around the same price level, uncompetitive.

AS imports into Brazil rose by just 4% to 640,794 tonnes in January-April, compared to a total of 615,989 tonnes in the same period last year, according to the country’s Foreign Trade Secretariat (SECEX).

In April, the country imported 157,351 tonnes of AS – up by 11% from 141,606 tonnes in March, but 5% lower than the total of 165,315 tonnes the year before. The main supply source in April 2015 was the USA, which supplied 71,715 tonnes of AS.

In other news, Brazil imported 210,908 tonnes of AN in January-April 2015, up 28% from the 164,920 tonnes purchased during the same period last year, according to SECEX.In the month of April, the country imported 66,688 tonnes of AN, up 37% from 48,680 tonnes in March but down 35% from 102,866 tonnes in the same period last year. All of the imports during the month were from Russia.

In Australia, Incitec Pivot’s Donora AN plant has been idled from 1 May due to contracting appalachian coal production resulting in loss of business in the Illinois Basin. The book value of the Donora plant was fully written off in 2014. The plant will be maintained in readiness for a restart, if required.

In other news, Orica has confirmed construction of the 330,000-tonne/year AN plant in the Pilbara was overall 95% complete as of 31 March. Commissioning is scheduled to be completed in late 2015, with production ramping up in 2016.

AN manufactured at the plant will be sold to mining customers in the Pilbara region through a jointly-owned marketing and distribution agency managed by Orica.

Orica and Yara International each hold a 45% stake in the JV, with Apache owning a 10% stake.

BRAZIL AN IMPORTS (TOP COUNTRIES IN ’TONNES)

Supplier Jan-Apr 2015 Jan-Apr 2014 Jan-Apr 2013

Russia 210,908 164,884 214,697

Switzerland 0.61 0.3 0

Ukraine 0 0 19,243

World Total 210,908 164,920 233,979


❯❯

UAN SolutionsUAN prices are slightly higher this week, with one of two traders, who are believed to have short sold into Argentina, covering its position at a higher price while another is believed still to buy tonnes to complete its vessel.

In the Black Sea, UAN prices are starting to inch up slightly after producers placed significant tonnes into Argentina. Producers say

they are targeting $180-190/tonne FOB for June, and there are expectations these levels are likely to be achieved.

Prices have been notionally moved up this week after higher priced deals were heard out of the Baltic.

In the Baltic, Ameropa is heard to have purchased 25,000-30,000 tonnes from Acron for Argentina. The price could not be confirmed but is believed to be in the $180-190/tonne FOB range.

There is talk that Nitron is looking for tonnes to complete a vessel to Argentina but this is not confirmed.

Sales to Argentina reflect the mid-$170s/tonne FOB but these prices have not been included in our assessment as these sales were believed to be short.

In Romania, Azomures is understood to be working and has some quantity for Spain.

InterAgro is still understood to be down.

In Belarus, Grodno is understood to have sold 10,000 tonnes to France under business done last week.

In France, there is little prompt demand, with prices heard in the mid-€220s/tonne FCA.

This week’s prices are based on new season levels, which are heard in the €185-190/tonne FCA range. There is some talk that sellers are withdrawing offers, and now looking to offer at higher levels.

In Egypt, Abu Qir is sold out for UAN in May, with its next tender expected for June shipment.

Last done business was at $179/tonne FOB, with 6,600 tonnes sold to Helm for Spain and 30,000 tonnes to Koch for Rouen. Both the shipments have already loaded.

In the US, new season prices from CF are expected to be announced in end-May/early June, which is keeping trades limited with hardly any quotes heard this week. Prices have been kept unchanged in the $220-240/short ton FOB Nola range, with the low end based on import indications and the higher end reflecting price levels for partial prompt quantities.

In the east coast, no fresh offers or deals are heard this week and prices have been left unchanged in the $220-240/tonne CFR range. East coast terminals are trading in the $250-260/short ton FOB range this week.

At Midwest terminals, levels are stable with some areas marginally stronger in locations with supply constraints. Most terminals traded in the $285-$305/short ton FOB range this week.

In Argentina, further business is heard this week in the mid-$220s/tonne CFR with Nitron linked to a deal. Bunge and another local company are understood to be the buyers. There is market talk that the trader will cover these tonnes from the Baltic.

Earlier, Ameropa is understood to have sold a cargo to Bunge in the mid-$220s/tonne CFR, while EuroChem is heard to have sold to Profertil and Nidera in the $225-230/tonne CFR range. The cost package is estimated in the mid-$50s/tonne.

11



The Market

OVERVIEWThe phosphates market has started showing signs of recovery in some regions this week, with increased activity recorded. Following weeks of speculation, the subsidy rates in India have been announced and have remained unchanged for the current fiscal year. Market players believe that demand in India will pick up, as the subsidies are now clear and two DAP purchase tenders are closing next week.

Pakistan has seen a lot of activity this week signalling the start of demand for buyers. Prices have firmed in the $480s/tonne CFR and more business is expected following the budget announcement at the end of the month.

West of Suez, the Tampa DAP benchmark has edged upwards following a Mosaic sale to Latin America. In the domestic market, there is a lot of activity out of the warehouses compared to river business where there is a lack of barges. Domestic demand is expected to slow down, as buyers are reluctant to purchase big volumes because they do not want to be left with carry-over tonnes.

In Brazil, demand is continuing, with Moroccan MAP sold at $500/tonne CFR. Chinese MAP 11.44 is also on offer, which could put pressure on Moroccan and Russian producers.

On the supply side, most producers are comfortable for June and can afford to stay on the sidelines for the time being. Production at Tunisia’s GCT is still down following protests and raw material supply issues. Also, JPMC has decreased its production by 25-30% until the end of the year, which is expected to put some pressure on the market especially as demand in the Indian subcontinent, Africa and Latin America is firming.

ASIAIn India, the subsidy rates for DAP and SSP have remained unchanged for the current year (April 2015-March 2016) remaining at Rs12,350/tonne for DAP, the government said. (See also News)

Phosphates

❯❯

Offers are heard around $480-485/tonne CFR from China and Saudi Arabian producers are targeting the $490s/tonne CFR, with buyers still looking at the $470s/tonne CFR.

No new DAP business has been heard, as rupee devaluation has slowed Indian enquiries.

In April, seven DAP and one NPS cargoes have arrived: one from the US, six from China and one from Saudi Arabia.

A Jordanian DAP cargo is expected for IPL at the end of the month.

In Nepal, there has been no award under AICL’s 7 May purchase tender for 20,000 tonnes of DAP.

The lowest offer under the tender was at $579/tonne CIF Nepal from Swiss Singapore.

In Pakistan, Engro is understood to have bought one Saudi DAP cargo in the mid-high-$480s/tonne CFR and one Chinese DAP cargo in the low-mid-$480s/tonne CFR.

Quantum is heard to have sold a second Australian DAP cargo, but no price has been confirmed. Last week, United Agro bought a cargo of Australian DAP from Quantum for prompt delivery at $492/tonne CFR.

DAP sales in April increased 10% month-on-month and 40% year-on-year to 53,000 tonnes. For the first four months of 2015, DAP sales posted a 1% decline year-on-year to 237,000 tonnes.

FFBL sold 23,000 tonnes of DAP in April, down 20% month-on-month, while the figure was up 24% year-on-year. Furthermore, January-April sales remained unchanged at 108,000 tonnes.

Engro’s DAP sales recorded a growth of 187% month-on-month and 101% year-on-year to 23,000 tonnes in April. In January-April 2015, Engro’s DAP sales posted 7% year-on-year growth to 59,000 tonnes.

In Bangladesh, private importers issued purchase tenders for a total of 400,000 tonnes of DAP and 200,000 tonnes of TSP, closing on 31 May, for shipment by September.

LCs must be opened within five days of receiving the work order from the Ministry of Agriculture.

In China, DAP producers maintained their selling ideas above $465/tonne FOB. A large DAP producer in Hubei reportedly concluded fresh deals to south Asia at around $465/tonne FOB China. Other local producers were selling their June products, mainly via export traders, delivering cargoes to ports at around CNY2,750/tonne. Producers have sold out their May products, and some even have sold out June cargoes.

Granular MAP 11.44 prices are heard at CNY1,980-2,050/tonne EXW, with most producers sold out for June and some even for July.

The export price of granular MAP 11.44 was around $355/tonne FOB two weeks ago, but it is difficult to get MAP in the next two months at $360/tonne FOB.

The domestic DAP market was largely stable. Distributors saw higher

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May2015

May2013

DAP US GULF FOB AND NORTH AFRICA FOB PRICE COMPARISON

North Africa FOBUS Gulf FOB

12



The Market

inventories for unsold cargoes compared with previous years, with demand in northeast China coming to a close.

Average operating rates at DAP plants were 68-70%. Many small and a few medium-sized producers shut plants for maintenance, while large ones had no such plan.

Deals in the domestic MAP market were healthy, as downstream compound fertilizer producers made active purchases amid an overall rise of MAP prices. Several producers put off their maintenance in light of better sales, contributing to stable average operating rates this week. EXWH prices for 55% powdered MAP were at CNY2,020-2,050/tonne in Hubei, with discounts available for deals. Most producers were fulfilling previous large-volume export orders, with delivery arranged till early June. Smoothness in export also gave support to MAP producers.

Average operating rates are at 50-60%.

Stocks of DAP inventory in Beihai have reached an estimated 45,000 tonnes, while stocks in Zhanjiang total 137,000 tonnes and 60,000 tonnes of TSP.

A vessel has been fixed for 3,500 tonnes of phosphoric acid from Fangcheng to Savannah on 21 April-10 May at $158/tonne VNR.

EUROPEIn Russia, PhosAgro is almost fully committed for June and might have a DAP/MAP cargo available later in the month.

There is talk in the market of interest to buy DAP/MAP in the $480s/tonne FOB.

The producer has domestic commitments for MAP and NPK this month.

PhosAgro reported fertilizers production up 8.3% during the first quarter of 2015 year on year while sale volumes increased by 2.8% over the same period on the back of improving demand from Europe and India, the Russian fertilizer major said.

The company’s output of phosphate-based fertilizers and monocalcium phosphate (MCP) stood in the first quarter at 1.34m tonnes, up 9.2% from 1.23m tonnes produced in the same three-month period of 2014.

Sales volumes for those products also rose in the first quarter, by 5% year on year, to 1.29m tonnes.

EuroChem is asking $485-490/tonne FOB for MAP from the Baltic and the Black Sea, $480-485/tonne FOB for DAP to non-European destinations and $500/tonne FOB for DAP to Europe.

The producer had a firm bid for 30,000 tonnes of Lifosa DAP.

In Turkey, Bagfas is operating at full capacity and producing 1,000 tonnes/day.

Bagfas has received an enquiry for 50,000 tonnes of DAP for east Europe, but no deal has been concluded. The producer is asking high-$480s/tonne FOB.


14 May 2015

DAP FOB Tampa FOB Nola $ps ton


May 450 465 415 422

June 450 465 415 422

July 450 465 418 422

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❯❯

In Italy, the market has slowed down as it is off season and no offers have been heard.

In Benelux, no business has been heard as the season in Europe is over, but traders talked DAP prices around $530-540/tonne FCA.

AMERICASIn the US, Mosaic sold 46,000 tonnes of DAP/MAP to Latin America at $468-472/tonne FOB Tampa for June shipment.

In the domestic market, Mosaic sold a number of DAP barges for June/July shipment at $415/short ton FOB Nola earlier this week and at $425/short ton FOB Nola later in the week. Some traders have pegged the market at $412/short ton FOB Nola, but this has not been confirmed so it has not been included in this week’s price assessment.

The producer has sold MAP barges at a $10/short ton Nola premium over DAP.

Mosaic bought back its own DAP loaded barges in the Nola market for its customers following some tightness due to an earlier sale of 200,000 tonnes of DAP to India. The producer anticipates continued tightness into the summer.

Mosaic has continued sales upriver and out of the warehouses at a $10-15/short ton premium depending on locations.

DAP upriver barges are heard trading at $417-$422/short ton FOB and even as high as $425/short ton FOB.

The producer continues to sell DAP at $445/short ton FOT by truck in Central Florida.

In the domestic market, interest has picked up but this has not translated to more buying. Domestic demand has improved, with tonnage moving out of the warehouses. Activity on the river seems more subdued with hand-to-mouth purchasing, as buyers do not want to be left with a lot of carry-over volumes.

The US Department of Agriculture (USDA) is projecting that this year’s corn crop will see yields reduced by approximately 586m bushels with a total production of 13.6bn bushels, smaller than 2014’s record output, according to the May World Agricultural Supply and Demand Estimates (WASDE) report.

The federal agency said US corn yield is being calculated at 166.8 bushels per acre, a reduction from last year by 4.2 bushels, with the WASDE stating that this is a weather adjusted yield trend that assumes normal summer weather.

In Brazil, Moroccan MAP is heard to have been sold at $500/tonne CFR.

13



The Market

Russian MAP is heard on offer at $495/tonne CFR.

Koch said it sold 7,000 tonnes of Chinese MAP 11.44 above $395/tonne CFR.

Bids for SSP (20% P205) are heard at $193-194/tonne CFR, but no business has been concluded.

Brazil imported 92,954 tonnes of MAP in April, down 52.74% from the year before, according to the latest data from the country’s Foreign Trade Secretariat.

In the first four months of 2015, Brazil imported 446,224 tonnes of MAP, down 33.41% from the 670,061 tonnes the year before. The main suppliers were Russia with 151,932 tonnes, followed by the US with 112,315 tonnes.

Meanwhile, Brazil imported 55,308 tonnes of DAP in April, up 16.98% from 47,281 tonnes in the same period in 2014. In January-April 2015, Brazil imported 178,739 tonnes of DAP, up slightly from 171,022 tonnes in the same period in 2014.

In Mexico, AFT/Fertinal is facing production issues and is now producing 60,000 tonnes/month.

❯❯ The producer will be focusing on the domestic market and has put off export shipments to 2H June.

In Argentina, there is talk in the market that Nitron sold Russian MAP at $510/tonne CFR.

In Venezuela, a trader has been awarded two 20,000-tonne NPK 10.20.02 cargoes and one 15,000-tonne DAP cargo under the 6 April tender. No price bids have been heard.

AFRICA/MIDDLE EASTIn Tunisia, GCT has halted production after sit-in protests by unemployed youths demanding work disrupted deliveries, according to media reports.

Company officials said that dozens of unemployed people are disrupting production and transfer of phosphate by train from the mines.

In Morocco, OCP is heard to have sold MAP to Brazil at $500/tonne CFR.

In Jordan, JPMC is loading a 31,000-tonne combination DAP cargo to IPL this week at $482/tonne CFR.

JPMC is heard curtailing its DAP production due to modifications at its granulation plant to decrease pollution.

The curtailment started in May and it will last until December, with production decreasing by 25-30%.

In Saudi Arabia, SABIC is targeting $490s/tonne CFR for India.

In Guinea-Bissau, GB Minerals plans to invest $175m to begin producing phosphates in 2017.

The feasibility study is expected to be delivered to the government in July, with the financing completed by year end and production starting in 2017.

BRAZIL MAP IMPORTS: APRIL (TONNES)

Supplier 2015 2014 2013

Morocco 48,994 31,994 122,159

United States 35,113 8,535 8,799

Russia 6,867 94,989 40,854

China 1,960 1,617 13,340

Mexico 20 29,895 0

Total 92,954 196,704 191,376

Source: SECEX – Foreign Trade Secretariat

OVERVIEWBlack Sea ammonia producers’ hopes of keeping prices near the $400/tonne FOB Yuzhny mark for remaining May loadings were undermined this week by the netback on a large cargo sold to India. IFFCO/Paradip paid Ameropa $450/tonne CFR for a 39,000-tonne contract cargo that loaded in late April, meaning a netback of $360/tonne FOB based on freight costs to the east coast port of $90/tonne.

Suppliers insist the lower price is not truly reflective of market conditions and $385-390/tonne FOB is heard as the most likely range for next business. Adding support to manufacturers’ price ideas is Koch’s difficulty in obtaining 40,000 tonnes for loading on the Clipper Orion.

The vessel remains in the Yuzhny line-up for now, but could head to the Baltic, North Africa or the Arabian Gulf should the buyer conclude business elsewhere.

Ammonia Sorfert sold a couple more spot cargoes this week as Yara and Trammo agreed to acquire at least 25,000 tonnes between them. Following recent spot business between the pair, Sorfert may try to sell a fresh 40,000-tonne cargo to Koch for loading in late May/early June as the buyer aims to send another large vessel across the Atlantic shortly.

East of Suez, downward pressure on prices continues to be seen, as illustrated by new spot deals in India and Asia Pacific. Transagri sold two small cargoes to buyers in west coast India at $413-414/tonne CFR for May shipment. Deepak bought 10,000 tonnes from SABIC at an undisclosed price, with the cargo understood to have been sold at below $400/tonne CFR.

FACT India is expected to scrap its purchase tender for a combined 15,000 tonnes for late May/early June arrival on the west coast. Two firms offered at $500-525/tonne CFR, with the high prices attributed to the relatively tight delivery window rather than a supply squeeze.

In Asia Pacific, Yara sold 15,000 tonnes of spot ammonia priced at $433/ ❯❯

14



The Market

tonne CFR to Namhae for mid-June arrival in Yeosu. The cargo is priced almost $17/tonne less than last spot business into Korea.

In the US, talks over the Tampa contract price for June cargoes are understood to have started. Yara is heard targeting a $5/tonne hike from May’s $465/tonne CFR, while Mosaic is pushing for a $10-15/tonne reduction.

EUROPEIn Yuzhny, producers and traders agree the $360/tonne FOB netback on an Ameropa cargo to a long term customer in east coast India is not a fair reflection of prices for remaining May product. The cargo, which loaded at the very end of April, is priced at $450/tonne CFR Paradip.

Instead, producers say $385-390/tonne FOB is a more accurate illustration of current talks, with upward support provided by the delay in Koch acquiring 40,000 tonnes for loading on the Clipper Orion this month. The vessel arrived in the Mediterranean several days ago, but has yet to leave for the Black Sea amid talk she may head north to the Baltic, south to Algeria or east to the Arabia Gulf.

NF Trading is understood to have denied it sold 23,400 tonnes to Trammo, with the buyer needing a cargo for late May loading on the Touraine. NF Trading recently said it is almost sold out for May and its price target for June business has not been heard. Ameropa may have a cargo available on a CFR basis later this month as recent troubles in Tunisia force it to postpone a contract delivery to GCT.

Dnipro does not expect to have any spot availability in May as it focuses on supplying the domestic market for the next few weeks.

BALTIC AND NORTHWEST EUROPENo fresh spot business has been heard amid suggestions buyers are targeting $380/tonne FOB for next business out of Ventspils and Sillamae.

Koch is expected to send a 40,000-tonne capacity vessel to the region as Ameropa and Uralchem are each expected to have 23,000 tonnes available for loading from late May.

The Pertusola will lift up to 12,000 tonnes of ammonia for Yara in

YUZHNY LINE UP FOR MAY (’000 TONNES)

Supplier/Destination’000

tonnes Vessel Load

Ameropa/Belgium 23.4 Cambridge 2

Ameropa/Morocco 23.4 Gas Manta 6

Ameropa/Belgium 23.4 Gas Cobia 9

Ameropa/Belgium 23.4 Gas Snapper 12

Trammo/Turkey 23.4 Sylvie 15

Yara/France 15 Navigator Gusto 16

Trammo/TBC 15 Marycam Swan 18

Nitora/Morocco 23.4 Gaschem Stade 19

Ameropa/TBC 23.4 Gas Grouper 20

Koch/US 40 Clipper Orion 21

Trammo/TBC 23.4 Touraine 26

Ameropa/Morocco 23.4 Cambridge 29

Ameropa/Belgium 23.4 Gas Manta 31

304.0

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Ventspils on 18 May. The Antarcticgas departed the port on 9 May with 10,000 tonnes for the same buyer.

In Belgium, the Cambridge is scheduled to arrive at Antwerp on 15 May with 23,400 tonnes of Black Sea ammonia for long term Ameropa customers BASF and EuroChem. The Gas Cobia will deliver an identical cargo on 21 May, as will the Gas Snapper on 24 May. The Gas Grouper departed the port a few days ago following a similar discharge.

In France, the Sanko Independence is scheduled to arrive at Rouen on 18 May to lift around 12,000 tonnes of spot ammonia for Trammo. The Borealis cargo is understood to have been made available following an earlier-than-planned turnaround at a downstream unit.

The Temse will deliver 8,000 tonnes of British ammonia to Ambes on 16 May. The Navigator Gusto will discharge a Black Sea parcel at the port next week, as well as at Montoir.

The Pertusola left Ambes on 8 May after completing the discharge of 12,000 tonnes of Turkish ammonia for Yara.

In Germany, the Alamajedah left Brunsbuettel on 11 May following the discharge of 15,000 tonnes of Algerian ammonia for Yara.

In the UK, the Temse sailed from Immingham on 12 May with 8,000 tonnes for Yara for discharge in France.

In the Netherlands, the Navigator Galaxy arrived at Rotterdam on 14 May with up to 15,000 tonnes of Algerian ammonia for OCI Fertilizers.

In Norway, Yara has nominated the Pertusola for its next delivery to Glomfjord, with the vessel due to arrive towards the end of next week. The Antarcticgas will discharge 10,000 tonnes of Libyan ammonia at Porsgrunn before the end of the month for the same buyer.

In Sweden, the Coral Ivory may return to Koping later this month with a fresh cargo of ammonia for Yara from Poland. The vessel delivered a similar parcel of Grupa Azoty ammonia at the port earlier this month.

In Turkey, Trammo has nominated the Sylvie for its next contract deliveries to Toros and Bagfas. The pair will share a 23,400-tonne cargo

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200

300

400

500

600

700

800

May2015

Jan2010

YUZHNY FOB V ARABIAN GULF FOB

Yuzhny FOBAG FOB

15



The Market

due to arrive in the next few days.

The trader may look to load a cargo of Gemlik spot ammonia before the end of the month, possibly on the Marycam Swan, if the producer has sufficient availability.

Trammo also expects to send the Sanko Independence to the region in late May. The vessel will load at least some of the cargo in France.

In Spain, the Queen Isabella arrived at Sagunto on 10 May with up to 7,000 tonnes of Algerian ammonia for Fertiberia. In the north of the country, the same buyer used the Andesgas to discharge an ammonia parcel of identical origin at Aviles on 11 May.

In Israel, the Marycam Swan arrived at Haifa on 13 May with up to 12,000 tonnes of ammonia for a long term client of Trammo.

AFRICAIn Algeria, Sorfert sold two spot cargoes to different buyers this week. Yara will load around 15,300 tonnes on the Almajedah 16-18 May and Trammo up to 23,400 tonnes at the end of the month.

The producer loaded 15,000 tonnes on the Navigator Galaxy in Arzew on 9 May for OCI Fertilizers and the vessel will return once, rather than twice, this month.

Fertial’s Annaba plant resumed production ahead of schedule earlier this week. The turnaround was originally due to end in late May following a planned shutdown that started in mid-April.

The manufacturer loaded the Queen Isabella with up to 7,000 tonnes on 9 May for Fertiberia and up to 10,000 tonnes on the Andesgas on 14 May for the same buyer.

The Nashwan, which used to carry ammonia, left Arzew this week for Morocco, but the vessel is understood to be carrying other LPG products rather than ammonia.

In Morocco, no fresh spot business has been heard by OCP. The phosphates producer is consuming around 80,000 tonnes/month of ammonia and recently targeted as low as $350/tonne FOB Yuzhny for June cargoes.

The Gaschem Stade sailed from Jorf Lasfar on 11 May after completing the discharge of 23,400 tonnes of ex-Yuzhny ammonia from Nitora. The vessel will return in late May/early June with a similar cargo as part of the pair’s long term deal.

The Gas Manta is scheduled to arrive on 15 May with 23,400 tonnes of Black Sea ammonia form regular supplier Ameropa.

In Tunisia, protests by local youths continues to keep nitrate and phosphates production at GCT offline. Ameropa is scheduled to send a 23,400-tonne cargo to Gabes later this month, but if the situation does not improve, the delivery will be postponed.

In Libya, the Antarcticgas will load 10,000 tonnes of Lifeco ammonia in Marsa El-Brega on 22 May on behalf of Yara. The producer continues to run ammonia and one urea line.

In Egypt, Abu Qir has confirmed it has no spot availability in May. The producer was earlier heard to have around 10,000 tonnes available for lifting this month.

❯❯

❯❯

The EBIC-OCI plant remains offline for another week and there is still no indication as to when it may restart production.

MIDDLE EASTIn Saudi Arabia, SABIC has not confirmed any fresh spot business but is heard to have approached buyers in Korea and Taiwan over a potential July spot cargo. The producer is also thought to have at least one spot cargo available for loading in June following the recent delay in the start-up of the SAFCO V urea plant.

The producer has sold 10,000 tonnes of spot volume to India’s Deepak and the cargo will load on the Rose Gas shortly. The cargo is heard to netback to around $360/tonne FOB Jubail but this has not been confirmed by either party. SABIC has also agreed a swap cargo with Muntajat, with 23,400 tonnes due to load next week

Koch continues to be linked with a possible purchase of 40,000 tonnes of spot ammonia for early June loading on a vessel like the Clipper Orion, Clipper Neptun or Jenny N.

We have assessed prices at $380-410/tonne FOB to reflect latest spot and contract business elsewhere in the Middle East.

The following cargoes are scheduled to load at Saudi ports in May:

• 23,000 tonnes on the Rose Gas in Jubail for discharge in India and, possibly, the Far East, 15 May

• 23,000 tonnes on the Al-Barrah in Jubail for discharge in India and/or the Far East, 22 May

• 23,400 tonnes on the Berlian Ekuator in Ras Al-Khair (RK) for discharge in India for customers of Muntajat, 23 May

• 23,000 tonnes on the Al-Jabirah in Jubail for discharge in India and/or the Far East, 29 May

Since the last report, SABIC loaded 14,500 tonnes on the Gas Quantum in RK on 9 May for shipment to the Far East for Mitsui.

In Qatar, Muntajat reports latest contract netbacks of $407-410/tonne FOB. The supplier says all the Qafco ammonia and urea lines are running well, but it has arranged at least one swap cargo with SABIC this month.

In Mesaieed, the supplier expects to load the Almarona with a 15,000-tonne cargo around 22 May. The Gas Columbia will shortly enter dry dock for maintenance.

In Bahrain/Kuwait, PIC does not expect to have any spot availability until late July/early August. The producer recently loaded 9,000 tonnes on the Gas Quantum for Mitsui earlier this month, with the cargo heard priced at around $410/tonne FOB.

In Iran, the netback on two small spot cargoes sold to west coast India buyers at $413-414/tonne CFR is estimated at $360/tonne FOB. This is based on freight costs for the small vessel and two-port discharge of around $55/tonne. The cargoes were sold by Transagri and loaded in early May on the Everrich 6.

The Gas Master will load 16,000 tonnes in BIK on 17 May for discharge in India for CIFC. The Gas Cat loaded in BIK a few days ago, although it is unclear how much and who for. The vessel appears to be heading to Kakinada in India, as does the Gas Line which loaded a cargo in late April,

16



The Market

some of which was sold to a Taiwanese buyer by Raintrade.

In Jordan, the Berlian Ekuator arrive at Aqaba on 11 May with 23,400 tonnes of Omani contract ammonia for JPMC from Trammo. Muntajat has confirmed it will deliver its next contract to the phosphates producer in June.

INDIAFACT received offers from two suppliers under its 11 May tender for 15,000 tonnes (+/-5%) of spot ammonia for arrival in Cochin 22-26 May and 1-5 June.

Qatari supplier Muntajat offered the first cargo at $500/tonne CFR and the second cargo at $510/tonne CFR. CIFC offered to supply the first cargo only at $525/tonne CFR. Because of the relatively tight delivery window, all three offers are $90-100/tonne higher than latest spot business into India, meaning it is unclear if FACT will pay the higher prices.

Transagri concluded two sales of Iranian spot ammonia to different buyers at similar prices. The trader is heard to have sold around 3,420 tonnes to IFFCO/Kandla priced at $413/tonne CFR for 17-18 May arrival. The cargo will be discharged by the Everrich 6, with the small vessel then sailing south to discharge 2,000 tonnes priced at $414/tonne CFR for Deepak/JNPT.

Deepak has purchased 10,000 tonnes of Saudi spot ammonia from SABIC and the cargo will be delivered to JNPT by the Rose Gas in late May. While a price has not been disclosed by either party, market players say it is not higher than $400/tonne CFR. Deepak is in the market for a June spot cargo and is in talks with potential suppliers.

The 39,000 tonnes of Black Sea ammonia due to arrive at IFFCO/Paradip on the Clipper Mars on 19 May from Ameropa is heard priced at $450/tonne CFR.

The Gas Master is scheduled to discharge 16,000 tonnes of Iranian contract ammonia at PPL/Paradip 22-25 May on behalf of CIFC.

Both the Gas Line and Gas Cat are scheduled to call at CIL/Kakinada in the next 10 days, but no details about potential sales by Raintrade or CIFC – both of whom regularly use the vessel – have been heard.

The Almarona discharged a parcel of Qatari ammonia at MCFL Mangalore on 8 May before delivering 7,000 tonnes at CIL/Vizag on 14 May. Both cargoes were from Muntajat.

ASIA PACIFICIn Korea, Yara has sold 15,000 tonnes of spot ammonia priced at $433/tonne CFR to Namhae for mid-June arrival in Yeosu. The cargo, priced almost $17/tonne less than last spot business in Korea, will almost certainly be sourced in Australia. Contract prices remain at $460/tonne CFR.

Mitsui used the Gaz Serenity to deliver 4,000 tonnes of spot product to Hanwa/Incheon on 14 May. The cargo is heard priced at $490/tonne CFR, but this has not been confirmed by either party and is understood to be an older sale. As a result, it is not included in this week’s range.

In Taiwan, no new spot deals were heard this week and contract prices are heard at around $450/tonne CFR. We have assessed this week’s range at $430-450/tonne CFR to reflect latest spot business in Korea. Formula prices are expected to soften in the coming weeks following recent lower spot trades.

❯❯

❯❯

SABIC will again use the Al-Barrah for its next delivery to Taichung for TFC. The vessel will arrive in early June, with no other contract deliveries expected before then.

Mitsubishi is expected send around 15,000 tonnes of contract ammonia to Mailiao in the next 10 days, with the cargo for Formosa due to arrive on the Brussels.

In Indonesia, gas supplies are understood to be plentiful in Bontang at present allowing full ammonia production, with a number of vessels due to load in the coming week.

Trammo will shortly send the SCF Tobolsk to Bontang to reload following deliveries to China and Korea. The Sanko Innovator finished loading 23,400 tonnes of KPI ammonia on 14 May for discharge in Korea, Japan and China.

Mitsui will reload the Gaz Millennium on 17 May, following deliveries to Japan, while Trammo expects to load at least two vessels with KPI product in late May/early June.

Mitsubishi used the Brussels to load up to 8,400 tonnes at Lhokseumawe on 11 May of PIM ammonia, following a recent deal between the pair. The vessel then loaded a further cargo in Bontang, suggesting the Japanese trader agreed a spot deal, although there are no further details.

In Thailand, buyers are heard in the spot market for July cargoes, but no confirmed business has been heard. SABIC and Trammo are understood to have availability.

In Malaysia, it now appears Mitsubishi will not load the 15,000 tonnes of Petronas spot ammonia from Kerteh until late May/early June. The cargo was originally due to load on the Brussels this week.

There is still no confirmation as to whether Petronas is performing an ammonia and urea plant turnaround. However, the Bunga Kemboja does not appear to have loaded a cargo for the producer so far this month.

In China, the Gas Quantum will arrive in Caojing 21-22 May with around 12,000 tonnes of spot ammonia for Secco from Mitsui. A suggested price of $435/tonne CFR has been dismissed as too low.

CONFIRMED KOREAN AMMONIA DELIVERIES

SFC

Trammo/Indonesia 10 SCF Tobolsk 16-May

Mitsubishi/SEA 8 Brussels 2H May

Trammo/Indonesia 10 Sanko Innovator 2H May

SABIC/AG 23 Al-Jabirah 1H June

Namhae

Yara/Australia 25 Nordic River 14-May

Mitsubishi/TBC 25 TBN June

CONFIRMED TAIWANESE AMMONIA DELIVERIES

TFC

SABIC/AG 23 Al-Barrah 1H June

CPDC

Mitsui/AG 12 Gas Quantum 24 May

Formosa

Mitsubishi/SEA 15 Brussels 2H May

17



The Market

The SCF Tobolsk departed Caojing on 14 May after delivering a parcel of Indonesian ammonia to at least one long term customer of Trammo. The supplier will use the Sanko Innovator to deliver a similar cargo in the next few days.

In Japan, Trammo has nominated the Sanko Innovator for its next delivery of Indonesian contract ammonia to a long term client later this month.

Mitsui is expected to send the Gaz Millennium to at least one port later this month. The vessel left Nagoya on 5 May after the discharge of a parcel of Indonesian ammonia.

In Australia, the Viking River will discharge 25,500 tonnes of ex-Dampier ammonia at CSBP/Kwinana on 15 May on behalf of long term supplier Yara. The vessel will reload in Dampier early next week for the same supplier. Orica used the Wincanton to deliver 5,500 tonnes of its own ammonia from Newcastle on 8 May. The vessel will make a similar delivery before the end of the month.

Meanwhile, construction of the new 330,000-tonne/year AN plant in the Pilbara in Western Australia was overall 95% complete as of 31 March, Orica disclosed. Commissioning of the joint venture is scheduled for late 2015, with production due to be ramped up in 2016.

AMERICASIn the US, the closing of the application season in the south and the Midwest regions has begun, although there is still some activity in the northern states and into Canada as the end of spring nears.

Sentiment suggests application levels have been fairly strong since early April and inventory levels have been drawn down significantly. This should support retail prices, particularly if supplies are tight in the fall refill period and if corn growers enjoy substantial crop yields.

Speculation since the start of spring was farmers would be cut back on fertilizer inputs – particular nitrogen products – this season. However, this does not appear to be the case for ammonia, although some regions saw heavy rains derail those intentions. Where ammonia applications were less than normal or prevented by weather, a fair amount of urea top dressing is expected to compensate. There is some thought that UAN side-dressing will also be utilised this season to cover any nutrient deficiencies.

With demand fading as the planting season draws to a close, attention is turning to the upcoming Tampa settlement for June loadings. Sentiment from producers during earnings calls is ammonia pricing should stay stable through the forthcoming lull. Sellers maintain the May contract price of $465/tonne CFR is a low point for 2015, but a fresh fall in the Black Sea price should give buyers a boost in negotiations.

Buyers are expected to start the discussions by arguing for a drop of up to $15/tonne, with Yara understood to be targeting a hike of at least $5/tonne. Due to the IFA annual conference in Istanbul in 10 days, the June settlement is expected to be finalised earlier than in previous months.

In the fields, farmers continue to make excellent progress, with 75% of the corn crop now completed – up 20 percentage points in a week – according to the USDA. The completion rate is well ahead of the 55% achieved in 2014 and the five-year average of 57%.

❯❯ Rain is forecast to return to the Midwest and the Southern Plains over the next week, meaning planting rates may slow, but the weather will give a lift to initial crop growth.

Crop development has risen strongly on the back of better weather, with 29% of the corn planted already emerged. This compares to the 16% seen in the same week of 2014 and the five-year average of 24%.

Turning to soyabeans, the USDA said farmers continued to keep a brisk pace and have now completed 31% of this season’s plantings, up 18 percentage points from last week. This level is well above the 18% achieved in 2014 and the five-year average of 20%.

The USDA also released the May World Agricultural Supply and Demand Estimates (WASDE) report. The agency projects this year’s corn crop will see yields reduced by approximately 586m bushels to 13.6bn bushels.

US corn yield is calculated at 166.8 bushels/acre, a reduction of 4.2 bushels/acre from last year. Corn ending stocks declined to 1.746bn bushels down 105m bushels from the earlier projection.

For soyabeans, production is forecast to reach 3.85bn bushels, down by 119m bushels compared to last year. However, the lower yields will be offset by an increased amount of acreage. The yield rate is estimated at 46 bushels/acre which is slightly less than 2014. Soyabean ending stocks for 2015-2016 are projected at 500m bushels, up 150m bushels from the year prior.

In terms of crop futures, on 13 May the corn contract for May closed at $3.56/bu, down 10 cents from the week prior. May soyabeans ended the day at $9.75/bu, down 15 cents week on week. The average retail price of ammonia this week is reported at $711/short ton ex-dealer, unchanged from the previous report.

In Arkansas, LSB Industries said the $250m expansion project at its El Dorado facility is on schedule, with the nitric acid plant and concentrator expected to commence operation in Q3 2015 and the ammonia plant in Q1 2016.

In Trinidad, natural gas restrictions continued at a rate of about 15% over the past week. Yara’s smallest plant remains offline for maintenance, as does one of PCS’ four ammonia plants. PCS restarted its urea plant earlier this month following a shutdown triggered by weak urea prices.

Among the ammonia vessels due to load cargoes for various suppliers in Point Lisas before the end of the month are the Solaro, Marola, Marigola and Nijinsky.

In Brazil, the Marigola is due to arrive at Santos on 23 May with a cargo of Caribbean ammonia from Yara. The supplier used the Marola to discharge a 25,000-tonne cargo at the port on 13 May.

In Chile, the Brugge Venture sailed from Mejillones on 13 May following the discharge of 23,400 tonnes of Caribbean ammonia for a long term customer of Trammo. The supplier voyage-chartered the vessel from PCS and may use her again in a few weeks’ time.

In Colombia, the Libramont arrived at Barranquilla on 14 May with a parcel of Caribbean ammonia for a long term customer of PCS.

18



The Market

ANALYSISApart from India’s FACT, RCF and SPIC, the international sulphur market looked to be void of any new large purchase tenders this week. However, this was met with a notable lack of sales tenders, other than Tasweeq’s regular monthly sale of 35,000 tonnes of sulphur.

Demand is clearly on the low side internationally, but this appears to be countered by sulphur not being offered in abundance. Outside fixed-terms contract business many sellers claim to be sold out in the near term.

In China, prices have held stable because buyers and sellers are at a stalemate. Demand is not strong enough to lift the value of sulphur cargoes, while at the same time not so much material is available at the ports. Indeed, stock are at record lows of 902,000 tonnes. Sources are not so fazed by Chinese port inventory remaining below 1m tonnes as this is deemed by many as the new norm following the scrapping of the export tax window. Spot prices too are expected to remain stable because demand is steady.

In India, prices are quoted a touch higher. FACT’s tender attracted offers in the low-$160s/tonne CFR Cochin, but an award was not expected until 15/16 May. SPIC’s tender was said to have been agreed in the mid-$160s/tonne CFR Tuticorin.

In the Americas, prices looked to have stabilised largely on the back of a stem in the fall of spot prices in Asia. No new tenders were heard from the US following recent purchases made by Vale, Anglo American and AFT/Fertinal.

Europe experienced another shorter working week because of the Ascension Public holiday on 14 May. Little demand was seen out of the Mediterranean, but owing to various refinery turnarounds and maintenance, there either not so much availability was seen in the market. Price ideas of buyers and sellers were rather polarised, which compounded the lack of spot trading.

MIDDLE EASTIn Saudi Arabia, Aramco Trading moved its sulphur price up by $2/tonne to $142/tonne FOB Jubail.

CHINESE-FORMED SULPHUR INVENTORY LEVELS, ’000 TONNES

14 May 7 May

Fangcheng 123 170

Zhanjiang 110 94

Beihai 35 40

Zhenjiang 260 300

Nantong 290 290

Qingdao 72 73

Rizhao 0 0

Longkou 12 12

Tianjin 0 0Total 902 979

Sulphur

❯❯

Aramco Trading said it was fully committed to its contract partners and following its recent sale of 35,000 tonnes for first-half June loading, it was now sold-out for May and June.

In Qatar, Tasweeq will close its regular monthly sales tender on 19 May for 35,000 tonnes of sulphur for June shipment.

ASIAIn China, the market was quiet, but prices remained stable. Downstream phosphate producers have sufficient stocks and are therefore in no hurry to make purchases. It is understood DAP producers are holding high inventories because of a slowing in demand in northeast China. The average operating rate at DAP plants was 68-70% in China.

Sulphur inventories at Chinese ports were lower again this week. Import offers for granular sulphur were in a $155-160/tonne CFR China range, amid limited availability but buyers were unwilling to pay such a level.

At Nantong, prices at the ports along the Yangtze River were a touch firmer and imports were offered at $157-160/tonne CFR amid limited availability. At Qingdao, the local market was absent of any buying interest and import prices eased as a result, with offers in a $145-150/tonne CFR range. At Fangcheng, inventory levels at the port dipped. Because availability was limited, offers held at $155-160/tonne CFR.

The following cargoes were heard arriving at the ports:

• 21,000 tonnes of UAE granular sulphur at Nantong for a trader

• 35,000 tonnes of granular sulphur at Zhanjiang for a downstream producer

Inventories at the major ports drop by 77,000 tonnes this week.

In the domestic market, prices were stable but demand was subdued. Deals for granular sulphur were concluded at CNY1,160-1,170/tonne at the ports along the Yangtze River, with cargo-holders attempting to push up prices. The market at Qingdao was largely stable. Inventories at Fangcheng were at a low level, which may attract traders to divert their ships to the port. Saudi Aramco and Sinopec Puguang Gasfield raised their offers. In addition, there were some fresh export orders for phosphate fertilizer producers. These gave support to traders of spot cargoes, who were unwilling to cut prices.

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120

140

160

180

200

Jun2015

May2015

Apr2015

Mar2015

Feb2015

Jan2015

Dec2014

Nov2014

Oct2014

Sep2014

Aug2014

Jul2014

Jun2014

May2014

Source: ICIS

Saudi Aramco Trading Tasweeq

MIDDLE EAST SULPHUR MONTHLY CONTRACT PRICE

ADNOC

19



The Market

At Nantong, discussions were not smooth. Offers for granular sulphur were CNY1,170-1,200/tonne. Offers for crushed lump cargoes were at CNY1,120-1,130/tonne. Selling ideas for granular sulphur were above CNY1,150-1,160/tonne. Because downstream producers have built stocks, discussions were kept to a minimum. Deals for crushed lump futures were completed at CNY1,100/tonne. Downstream chemical producers concluded several small-volume deals at CNY1,165-1,170/tonne.

At Qingdao, selling ideas for imported crushed lump cargoes were CNY1,140-1,150/tonne, but cargo-holders were a bit sideline. Offers for domestic granular sulphur were mostly at CNY1,200/tonne. Traders adopted a wait-and-see stance, while downstream producers only bought in small volumes as their inventories were high. As a result, discussions were very limited.

At Fangcheng, offers for imported cargoes were at CNY1,200-1,250/tonne, but supply was limited. Downstream producers were prepared to pay close to CNY1,100/tonne, but it was difficult to secure cargoes at this level. Market sources said some imported cargoes will be diverted to ports in the southern part of China. Refiners spoke of healthy sales, with a slight price advantage. Some large downstream producers had purchased a batch of low-priced domestic sulphur, no higher than CNY1,100/tonne EXW. Traders of domestic sulphur offered at CNY1,300-1,350/tonne DEL early this week, but found it difficult to move out cargoes at the high end of the range.

Puguang Gasfield raised sulphur prices by CNY20/tonne to CNY1,150/tonne EXWH for cargoes at Wanzhou port this week, and by a total of CNY60/tonne to CNY1,130/tonne EXW for truck cargoes at Dazhou in Sichuan. The producer raised prices for cargoes at Dazhou twice, each by CNY30/tonne, on the back of reduced inventory pressure amid smooth sales, according to market sources. It was said that the producer faced little inventory pressure now.

In India, FACT’s reissued tender for 15,000-25,000 tonnes (+/- 10%) of sulphur attracted two offers in the low-$160s/tonne CFR Cochin from Transfert and Swiss Singapore.

The results of the tender are expected to be published on 15 May.RCF has issued a purchase tender for 10,000 tonnes (+/-10%) of sulphur for shipment at Mumbai. The tender opens on 15 May at 14.30 IST and closes the same day at 15.00 IST.

SPIC’s purchase tender for 20,000 tonnes (+/-10%) of sulphur for end June delivery to Tuticorin is understood to have been agreed in the mid-$160s/tonne CFR.

In light of the bids and offers heard in the market this week as well as confirmation from buyers and sellers, the range has moved up.

AMERICASIn Canada, prices have recovered as the global market moves to a more stable position. No business is expected under $130/tonne FOB Vancouver and supply is tight out of the port.

The range has moved to $130-140/tonne FOB.

Inventories are low and little supply is currently available as scheduled shipments moved the high inventories out of the port over the last month.

❯❯ Syncrude is heard to be running smoothly.

One of the two terminals at the port is going through maintenance.

Demand for Canadian product from the US is heard to be normal.

Vancouver March exports were down 48% year on year.

West Canada sulphur production was down 2% year on year in January.

In the US, sulphur production was down 2% in the first quarter from 2014 due to more extensive maintenances at refineries.

US Gulf exports dropped 42% in April from last year. Sources said the lower number of exports was due to availability, as production has been down due to an extended maintenance season and domestic demand has been healthy.

In Mexico, AFT/Fertinal recently covered it position with two cargoes for May and second-half June delivery. Both cargoes are 55,000 tonnes and prices were hinted below $130/tonne FOB for both cargoes.

AFT/Fertinal is considering entering into planned maintenance at its two sulphuric acid plants at the end of the year. This will invariably result in substantial demand for sulphuric acid and less demand for sulphur. A firm decision has yet to be made.

Brazil imported a total of 679,337 tonnes of sulphur in the first four months of 2015, up 11% compared with the same period in 2014, according to the latest data from the Brazilian Foreign Trade Secretariat.

Brazil continued to import its largest share of sulphur from the US, followed by Kazakhstan then Russia.

The most notable change in January-April year on year was from Russia. Brazil imported 202,361 tonnes in the four month period 2015 from Russia, while in 2014 it imported 21,254 tonnes from the county.

BRAZIL IMPORT STATISTICS JANUARY - APRIL (TONNES)

Partner Country 2013 2014 2015

United States 354,347 316,602 228,315

Kazakhstan 99,531 201,169 223,595

Russia 141,540 21,254 202,361

Netherlands Antilles 0 10,611 14,182

United Arab Emirates 33,475 500 7,883

Oman 350 5,650 1,800

Italy 730 438 493

India 139 118 214

Germany 158 135 180

China 2 92 155

Korea South 0 0 104

Estonia 0 0 56

World 642,402 613,591 679,337

Source of Data: SECEX – Foreign Trade Secretariat

❯❯

20



The Market

❯❯ AFRICAIn Tunisia, it is understood production has been halted at GCT’s phosphate facility because of protests. During the first five months of 2015, GCT produced 650,00 tonnes of DAP compared with 1.3m tonnes in the same period last year.

EUROPEIn Russia, a major supplier said that now second-quarter contract negotiations have finished, the market was quiet this week. While confirming stable prices for China, the seller said it had received a number of enquiries.

In northwest Europe, the market was particularly quite because of the Ascension Day holiday.

In refinery news, Shell’s refinery in Pernis in the Netherlands is heard to have completed two months of planned maintenance.

In France, Total’s Donges refinery has planned maintenance scheduled from 4 May to 25 June.

In the Mediterranean, the outlook for June was not so strong. However, sellers price ideas were holding firm, with offers in the mid-$150s/tonne CFR for granular sulphur.

In Greece, Hellenic Petroleum’s refinery in Aspropyrgos is currently in a planned turnaround, which is due to be finished at the end of May. According to sources, sulphur from Hellenic has been sold directly to a buyer.

In Turkey, Bagfas confirmed it recently imported 8,000 tonnes of sulphur from NOC in Libya. It also bought 3,000 tonnes of sulphur from Greece and an unspecified quantity from Bulgaria and Portugal in the high-$150s/tonne CFR.

Subscriber note: ICIS is currently consulting readers about the methodology used for this report. To respond please go to: https://www.icis.com/compliance/documents/sulphur-methodology-consultation/

OVERVIEWThis week saw the announcement of two more MOP contracts in India from Canpotex for 1.3m tonnes and APC for 500,000 tonnes for May 2015-March 2016 deliveries, at $332/tonne CFR with 180 days’ credit, an increase of $10/tonne from the previous contract.

While buyers in most spot markets are not accepting higher prices yet, producers are comfortable with significant tonnes committed to China and India and activity expected to pick up in Brazil during June-September.

Supply issues given the strike at ICL and the mine shutdown at Uralkali will also limit liquidity, but the outlook on prices is not optimistic with many expecting the pressure on pricing to last through the summer.

Granular MOP in Brazil is priced at $325-335/tonne CFR while southeast Asian prices are about $330-340/tonne CFR for standard material. Business in the US is extremely slow with bad weather affecting demand.

ASIAIn India, Canpotex has finalised its annual potash supply contracts in India for a total of 1.3m tonnes of MOP with its long-term customers for May 2015-March 2016 deliveries, while APC agreed volumes of over 500,000 tonnes.

The contract is priced at a $10/tonne increase to $332/tonne CFR, in line with the price announced by Uralkali earlier. In the previous fiscal year, the Indian contract price was set at $322/tonne CFR with 180 days’ credit, although deals were also heard to have been concluded at lower levels with different payment terms.

The breakeven of contracts signed so far is understood to be as follows:

• Uralkali – IPL: 600,000 tonnes firm, and 200,000 tonnes optional

Potash • Uralkali – Zuari: 225,000 tonnes firm and 60,000 tonnes optional

• Uralkali – Shriram: 60,000 tonnes firm

• Uralkali Total: 885,000 tonnes firm and 260,000 tonnes optional, expected to conclude another 50,000-55,000 tonnes

• Canpotex – Tata Chemicals: 370,000 tonnes

• Canpotex – Coromandel: 365,000 tonnes firm

• Canpotex – Zuari: 300,000 tonnes firm

• Canpotex – IPL 200,000 tonnes

• Canpotex – Mosaic: 70,000 tonnes firm

• Canpotex Total: 1.3m tonnes, including optional tonnes

• BPC – IPL: 600,000 tonnes although not confirmed; expected to conclude contracts with other clients

• ICL, K+S are expected to sign deals in the near future

Indian importers purchased about 4.8m tonnes of MOP in the previous fiscal year and are expected to buy 5m tonnes this year.

RCF has closed its purchase tender for a total of 145,000 tonnes (+/-5%) of MOP firm and another 120,000 tonnes (+/-5%) of MOP at RCF’s option. Price offers are yet to be opened with a total of four offers heard from MMTC, IPL, BPC and a Dubai-based trader.

In other news, the government said this week that it will continue with existing subsidy rates for MOP under the Nutrient Based Subsidy (NBS) policy for the current year (April 2015-March 2016), at Rs 9,300/tonne ❯❯

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The Market

The government has issued strict regulations for subsidy payment. A subsidy would be paid to suppliers only after fertilizers are received by retailers, it added. Moreover, quality certificates will be issued by each state government within six months of delivery of the fertilizer. If quality is sub-standard, the supplier subsidy will not be given.

The government added that it has also freed up the transport of fertilizers to reduce the monopoly of a few companies. Rail freight subsidy will now be given on a lump sum basis to encourage companies to economise on transport.

In Bangladesh, as expected a purchase tender has been announced for 240,000 tonnes of MOP, closing on 31 May, for shipment by September.

LCs must be opened within five days of receiving the work order from the Ministry of Agriculture.

Standard MOP prices in southeast Asia are under pressure amid general lack of buying interest, and remain at $330-340/tonne CFR. The main buying season in major markets will only start around September until November. At present, most purchasing is only for small tonnes.

Uralkali is shipping standard MOP to Malaysia and Indonesia in May.

In Vietnam, Uralkali is shipping 25,000 tonnes of MOP in May. The cargo is made of 50% each of standard and granular MOP.

In China, domestic prices are largely unchanged except for SOP prices which are now at lower levels.

This week’s prices are as follows: ($1=CNY 6.21):

• Russian red MOP at CNY 2,050-2,060/tonne, northeast border price at CNY 1,750/tonne, both unchanged from last week

• Russian white MOP at CNY 2,100-2,130/tonne, northeast border price at CNY 1,900-1,920/tonne, both unchanged from last week

• Canadian white MOP at CNY 2,150/tonne, unchanged from last week

• Canadian red MOP at CNY2,500-2,600/tonne, unchanged from last week

• Dead Sea MOP at CNY 2,100/tonne, unchanged from last week

• Domestic prices (Qinghai Salt Lake prices) – no availability; 60% potash at CNY 1,960/tonne, 62% potash at CNY 2,030/tonne, both unchanged from last week

• Standard SOP at CNY 2,800-2,900/tonne, down CNY 50/tonne from last week

• Granular SOP at CNY 3,100-3,200/tonne, down CNY 100-150/tonne from last week

BPC has signed a five-year Memorandum of Co-operation with China’s Sinochem group to supply 4m tonnes of potash in 2015-2019. The agreed volume includes both firm and optional tonnes, with the total value of the deal estimated at $1.3bn based on the current market. However, exact price level is subject to further discussion.

In Australia, Potash West has entered into an agreement with Petratherm to divest its 55% stake in East Exploration, who has executed

❯❯ a binding term sheet to sell the south Harz project in central Germany. In return for its holdings, Potash West will receive 30.25m shares and own approximately 26% of Australia–based Petratherm.

Previous drilling results at south Harz indicate the presence of shallow potash mineralisation and the joint venture had applied for two exploration permits.

EUROPE AND MIDDLE EASTIsrael Chemicals Limited (ICL) posted first-quarter adjusted net income of $193m, up 2% year on year, although sales fell 13% to $1.40bn. The decrease in sales was attributed by ICL to employee strikes during the first quarter on the back of opposition to the company’s redundancy packages. The strikes, which took place at ICL’s Dead Sea and Neot Hovav facilities, had a negative impact of $164m on sales.

The company expects to recover most of its delayed production and sales in future periods once the strike ends. However, it is not known when the strike will come to an end.

In Germany, K+S posted a first-quarter net income at €164m, up 32% year on year, largely on the back of price increases in the de-icing salt segment in North America rather than in the potash segment. (See also News)

Granular MOP prices in northwest Europe are unchanged, in the €295-305/tonne FOB range.

AMERICASIn Brazil, granular MOP prices remain in the $325-335/tonne CFR range. Uralkali is understood to have cargoes totalling 150,000-160,000 tonnes of MOP available in May. BPC and Canpotex are also understood to have similar quantities.

In the US, some demand is trickling forth as field work is resuming in the south. But it has not been significant enough to boost the overall market, which remains stagnant.

While producers have remained confident that demand has been fairly typical, market activity seems to counter that notion. With the spring season quickly fading it is likely that there will be no domestic market rebound until summer fill is announced and refill activities get underway.

Barge pricing has declined again this week, with Nola now at $327-340/short ton FOB, while warehouse levels have fallen to $375-380/short ton ex-warehouse.

The average retail price of potash is reported at $491/short ton ex-dealer, a decrease of $1/short ton from the previous week.

In other news, EPM Mining Ventures has received a financing commitment which will provide the company with approximately $70.7m to accelerate the development of its potash project in Utah.

EPM is currently focused on the development of its Sevier Lake Playa Project in Millard County, Utah which has deposit reserves estimated at 31.5m tonnes of the nutrient. The company has estimated having a production capacity of 300,000 tonnes/year of SOP. MM

AFRICAIn Morocco, Uralkali is shipping 10,000 tonnes of MOP for May. The price is not known.

22



The Market

INDIA APPROVES NEW UREA POLICY, AIMS TO BOOST LOCAL PRODUCTIONIndia’s Union Cabinet has approved the New Urea Policy-2015 which would aid domestic companies in maximising urea production over the next four years by 2m tonnes/year and reduce the country’s dependence on imports, according to a statement from the Prime Minister’s office on Wednesday. The policy aims at promoting energy efficiency in urea units to reduce the subsidy burden on the government without increasing the cost of urea for the farmer, and aims at providing the farmer with timely and uninterrupted supply of the crop nutrient, the statement said.

The government aims to save Rs26.2bn due to the revised energy consumption norms and another Rs 22.1bn by reducing its annual urea reports, which will bring total savings to Rs48.3 over the next four years.

At present, India imports about 8m tonnes/year of urea of its total annual demand of 31m tonnes. The government has previously undertaken several measures to encourage domestic production including the revival of four closed urea units at Gorakhpur (Uttar Pradesh), Barauni (Bihar), the Talcher unit in Odisha and Ramagundam in Telangana. These units are expected to increase domestic production of urea by 5.2m tonnes/year.

The government also approved a uniform gas pooling policy under which all urea units would get gas at a uniform price. It has also encouraged the production and use of neem coated urea, which gives higher yields and is required less in quantity.

However, gas supply has been a significant issue for urea manufacturers in the country, and it remains to be seen if the government will be able to achieve its target of increasing production by 2m tonnes in the next four years. The maximum retail price of urea for farmers has been kept unchanged at Rs 268/50KG bag, excluding local taxes, the release said. Farmers have to pay an additional price of Rs14/bag of neem coated urea.

INDIA LEAVES SUBSIDY RATES UNCHANGED FOR PHOS-PHATES, POTASH India will continue with existing subsidy rates for 22 grades of phosphate and potash fertilizers under the Nutrient Based Subsidy (NBS) policy for the current year (April 2015-March 2016), the Indian government said on Wednesday.

The grades of fertilizers under the scheme include diammonium phosphate (DAP), single super phosphate (SSP) and muriate of potash (MOP). The subsidy for DAP remains at Rs12,350/tonne and for MOP at Rs9,300/tonne, the government said.

A subsidy would be paid to suppliers only after fertilizers are received by retailers, it added. Moreover, quality certificates will be issued by each state government within six months of delivery of the fertilizer. If quality is sub-standard, the supplier subsidy will not be given, the government said.

The government added that it has also freed up the transport of fertilizers to reduce the monopoly of a few companies. Rail freight subsidy will now be given on a lump sum basis to encourage companies to economise on transport.

K+S Q1 EBITDA RISES 36.9% ON PRICE RECOVERY K+S Group’s first-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 36.9% year on year to €383.1m amid a price recovery in its potash and magnesium products, the German fertilizer producer said on Tuesday.

News

❯❯

The company’s revenues rose by 15.8% year on year to €1.38bn in the first quarter of this year, while its operating earnings were up by 44.2% at €316.7m, it said in a statement.

“Higher prices for de-icing salt in North America, the continuing recovery of average prices in the potash business and positive currency effects led to significantly higher revenues and profit for the K+S Group in the first quarter of 2015,” K+S chairman Norbert Steiner said in the statement.

For the whole of 2015, K+S Group expects its revenues to be “significantly higher” than the €3.82bn posted last year, the company said. “As a result of the positive development in the first quarter, the K+S Group has confirmed its expectations of a significant increase in EBIT I [operating earnings] compared to the previous year (2014: €641m),” it said.

ICL’S Q1 NET INCOME RISES; STRIKE ACTION HITS SALES Israel Chemicals Limited (ICL) posted first-quarter adjusted net income of $193m, up 2% year on year, although sales fell 13% to $1.40bn, the Israel-headquartered fertilizer major said on Wednesday.

The decrease in sales was attributed by ICL to employee strikes during the first quarter on the back of oppositon to the company’s redundancy packages. The strikes, which took place at ICL’s Dead Sea and Neot Hovav facilities, had a negative impact of $164m on sales.

Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at $353m during the January-March 2015 period, up 4% compared to the same quarter of 2014. In line with adjusted net income, ICL’s adjusted earnings per share (EPS) rose 2% in the first quarter, year on year, to $0.152.

“We expect to recover most of our delayed potash production and sales in future periods following the conclusion of the strike. Despite the longer-than-expected duration of the strike, we expect a significant net benefit from efficiency measures implemented at these operations,” said ICL’s CEO Stefan Borgas.

It is for the second consecutive quarter ICL has been hit by the labour disputes. Its net income for the fourth quarter of 2014 had fallen 29% due to strikes during the period.

Net sales during the quarter were also impacted by the sale of non-core businesses (negative impact of $64m), lower volume sales at ICL’s Industrial Products and Performance Products divisions (impact of $22m), as well as negative exchange rates, primarily due to a lower euro against the US dollar.

“These [negatives] were partially offset by improved sales volumes at ICL Rotem and ICL UK, by the first time consolidation of companies acquired which contributed an increase in sales of $70m and an increase in ICL Fertilizers’ selling prices,” said the company.

Looking ahead, ICL is determined to continue with its saving programme which was the initial cause of the strikes at its Israel operations. Chairman Nir Gilad, said: “The business environment in global markets in which the company operates, together with the business environment in Israel as dictated by the Israeli government, are leading to an essential need, and, in certain cases, even an existential need, to implement efficiency plans at the company’s plants in Israel.”

He added the costs saving programme had delivered $100m in savings in 2014 and had already done so by $30m in the first quarter of 2015.

23



The Market

INCITEC PIVOT H1 NET PROFIT GROWS 27% YEAR ON YEAR Fertilizer and explosives maker Incitec Pivot Ltd (IPL) has posted a net profit after tax (NPAT) of Australian dollar (A$) 146.4m ($116m) in the six months ended 31 March 2015, the company announced on Monday.

The A$30.7m increase from the same period last year was attributed to the company’s business excellence (BEx) program, a weaker Australian dollar, and higher diammonium phosphate (DAP) prices.

IPL managing director and CEO James Fazzino said the BEx program was the driving force behind improving plant reliability, with the Phosphate Hill ammonium phosphate plant producing more than 500,000 tonnes during the six months to March.

“For the full year, Moranbah is anticipated to produce 330,000 tonnes [of explosive grade ammonium nitrate] and about $A$140m in earnings before interest and tax (EBIT),” Mr Fazzino said.

“Additionally, construction of the Louisiana ammonia project is on track with the project 75% complete. Production is set to commence in the third quarter of the 2016 calendar year.”

IPL said that its Gibson Island urea plant near Brisbane, Queensland will undergo a maintenance turnaround in March 2016, and the plant is expected to run at 85% of its 405,000 tonne capacity until that time.

Phosphate Hill is expected to produce above 900,000 tonnes for the full year, with the company aiming to achieve nameplate capacity of 950,000 tonnes during the financial year. However, higher gas costs to the plant since February 2015 is expected to add $50m to costs across the year.

The fertilizer segment of the business contributed A$59m to the company earnings, an increase of 18% on the previous corresponding period.

ORICA H1 PROFIT DOWN 3% TO A$211M Australian explosives and ammonia producer Orica posted a net profit after tax (NPAT) of A$211m ($166m) for the half-year to 31 March, down by 3% from the previous corresponding period, the company reported on Tuesday.

The company’s earnings before interest and taxes (EBIT) fell by 9% year on year to A$330m in the half-year period on the back of lower prices and demand, it said in a statement. Interim chief executive officer Alberto Calderon said that market conditions are difficult but Orica is continuing to take action to mitigate the impact of market headwinds.

“While the mining price boom has ended, Orica’s operations are more closely correlated to production volumes, which have remained steady,” he said. The report said lower manufacturing volumes at the Yarwun, Queensland ammonium nitrate plant were offset by improved manufacturing volumes at the Kooragang Island, New South Wales, ammonia plant.

Key features of the operating result included global AN volumes up 3%, however, Australian explosives volumes were down 5% due to customer site closures and mine planning changes in eastern Australia.

LSB ADVANCING ON EXPANSIONS AT EL DORADO LSB Industries said the expansion project underway at its El Dorado facility in Arkansas is progressing on schedule, with the nitric acid plant and concentrator expected to be operating by Q3 while an ammonia plant will start output during Q1 2016.

❯❯

❯❯

Oklahoma City-based LSB is building the ammonia plant at El Dorado at a cost of approximately $250m, with production capacity estimated at 1,224 tons (1,110 tonnes)/day. The ammonia will provide feedstock for other units at the facility. LSB is also installing a 30,000 tonne, full-containment, low-temperature ammonia storage tank at the plant site.

Speaking during the company’s earnings conference call, CEO Barry Golsen said the completed plant will provide the firm ammonia for onsite upgrading of products at a significant cost savings and will give it the ability to produce additional ammonia to sell into the market.

Golsen said 97% of the engineering effort for the ammonia plant is now completed with piping installation underway. After that portion is finalised the site will see electrical equipment and control features installed. All the work for the ammonia segment is scheduled to be finished by the end of 2015 with the ramp-up of operations coming in the first quarter time period.

“The foundations, concrete pads and many large vessels have been installed, structural steel and cooling tower are also effectively complete as is the de-mineralized water tank. Work is progressing well on the primary reformer and we have installed all three of the major compressors,” said Golsen. Officials did say that while the ammonia plant will get underway in Q1, acceptable levels of output will not be achieved until the following quarter.

The producer stated that it has spent $69.1m related to the expansion project at El Dorado in Q1 2015. The producer also is building a nitric acid plant with an anticipated capacity of 360,000 tonnes/year and a nitric acid concentrator with a capcity of 40,000 tonnes/year.

Golsen said the nitric acid plant and concentrator should be completed by mid-year and will begin full production during the Q3 period. The concentrator is mechanically complete and the control systems have been put into place, which will allow pre-commissioning work to start over the next few weeks.

DRILLING CAMPAIGN EXTENDING FOCUS PROJECT Focus Ventures has extended its phosphate mineralisation estimates at its Bayovar 12 phosphate project in Peru based on the early results from its phase two drilling work, the Canadian fertilizer developer announced on Monday.

The Vancouver-based firm said the drilling campaign at the project site near Piura is nearly complete and assay results for the first nine holes have been received. In addition, eight large-diameter core holes also were drilled to collect 400kg of material to investigate the production of direct application or reactive phosphate rock (RPR) using dry processing.

Some phosphate rock is reactive enough, because the phosphorus mineral apatite contains carbonate in its structure, that under certain soil and climate conditions it can simply be crushed up and applied directly to fields. RPR can be used as a reliable, low cost slow-release source of phosphorus and is thought to work best on acidic soils.

Mining and processing of RPR is simpler and cheaper than the manufacture of more complex fertilizers. The rock is mined, usually crushed and sieved into different size fractions, and sometimes washed or made into granules for ease of handling and use. The main advantage of RPR over processed phosphates is that there is lower capital investment and processing costs as well as a reduction in use of raw materials, and energy expended during processing.

24The Market | 14 May 2015 | www.icis.com

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The Market

All assessments in this report are made according to the published methodology, found at icis.com/compliance. The term “range” refers to the high and low prices gathered and verified in the week.

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Focus has commissioned an engineering study to investigate suitable dry mineral processing techniques and equipment for the establishment of RPR production at Bayovar 12.

At this time the exploration has outlined phosphate mineralization over approximately 8 km from west to east and 5 km north to south with Focus stating that all holes intersected the same sequence of phosphate beds and consistent geology and grades of the phosphate mineralization over long distances with no apparent faults or structures affecting the beds. Weighted average grade and widths of the upper 6 phosphate beds is measured at 14.4% with bed 3 averaging the highest grade at 21.72 %. The average grade of the lower 7 phosphate beds is calculated at 13.5%

Bayovar 12 is located near Piura, northern Peru and is within the Sechura Desert, a region where phosphate was discovered in the 1950s during drilling for petroleum. In late 2014 Focus filed the mineral resource technical report for Bayovar 12 which showed indicated deposits of 114.99m tonnes and 73.36m tonnes in inferred resources.

Officials said all the drill assay results will be incorporated into an updated compliant mineral resource estimate as part of the preliminary economic assessment study currently underway by a consortium of engineering companies.

Focus expects it will finalise and release that document during Q3 as it has a deadline of 31 December or else it will owe, as part of its recent purchase agreement with Juan Paulo Quay for the outright interest in the site, a $500,000 penalty to the JPQ shareholders.

There is an added provision that allows for an additional levy of the same fine for each additional year that the study is not complete. The penalty is capped at a maximum $2m in fines for delaying the study’s completion.

OCI ANNOUNCES BEAUMONT AMMONIA TRUCK LOAD-ING FACILITY OCI Partners announced on Monday it has implemented a state-of-the-art ammonia truck loading facility on-site at its subsidiary OCI Beaumont.

While financial details were not revealed the company said the new loading facility will help it diversify its customer base and generate higher netback prices for a portion of its ammonia sales volumes.

OCI operates an integrated methanol and ammonia production facility near Beaumont which has a design capacity of 912,500 tonnes per year of methanol and an ammonia design capacity of 331,000 tonnes annually. In April the company completed a debottlenecking project at the site which increased ammonia production capacity by 15% and

❯❯ methanol production by 25%. During the work the facility was shut down for two months.

During a quarterly earnings release officials said that based on operations to date they expect to exceed daily design capacities on both production lines. The producer estimates it spent $97m on the debottlenecking during the past quarter.

It has calculated that its methanol and ammonia production lines during Q1 2015 ran at a capacity utilization rate of 32% for each as compared to rates of 82% for methanol and 845 for ammonia during the same period the year prior.

MOSAIC NAMES O’ROURKE NEXT PRESIDENT AND CEO US fertilizer producer Mosaic announced on Wednesday that its board of directors has elected James “Joc” O’Rourke to succeed current president and CEO James Prokopanko effective 5 August.

Prokopanko will continue to serve as a senior advisor to the producer until his planned retirement on 4 January 2016. He joined Mosaic in July 2006 as executive vice president and chief operating officer and assumed the CEO title in January 2007. A 35-year veteran of the agriculture industry, Prokopanko previously served as corporate vice president at industry titan Cargill.

“Jim’s leadership over the past eight and a half years helped build a strong, innovative company with a culture of integrity and an emphasis on execution. My fellow directors and I wish him only the best, and we respect his decision to retire,” said Robert Lumpkins, Mosaic chairman of the board.

“The board has full confidence in Joc and the rest of Mosaic’s talented management team. Together they will help Mosaic build on Jim’s legacy of success for our employees, customers, investors, communities and other stakeholders.”

O’Rourke joined Mosaic in 2009 as executive vice president of operations and has served additionally as chief operating officer since 2012. Previously he was with Barrick Gold Corp as president of Australia Pacific and also has held various management roles in the mining industry in Canada and Australia.

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Documents

The Market · Recent tenders in India for FACT, RCF and SPIC have lifted prices to the mid-$160s/ tonne CFR India. Potash Canpotex APC sign contracts in India Canpotex has now signed