profercy nitrogen reports. free trials...prilled urea: $320-322pt fob yuzhnyy $287-295pt fob china...

Published by Profercy LtdEditor Clive YearsleyE [email protected] +44 1372 386205www.profercy.com

PROFERCY NITROGENSERVICE: SAMPLE REPORTS

W: www.profercy.com / E: [email protected] / T: +44 1372 386 205

Thank you for downloading a sample pack ofProfercy Nitrogen Reports.All of the reports included in this pack werepublished between October and December2014 through the Profercy Nitrogen Service.Further reports were issued to subscribersduring this period.The pack includes: A Profercy Nitrogen Service Forecast

Published monthly, our Forecasts assess themedium-term supply, demand and priceprospects for key Nitrogen products.

A Profercy Weekly ReportNews and analysis on the short to medium termprospects for Nitrogen products, as well as priceranges for the week (on page 8). Publishedevery Thursday.Front page analysis focuses on the latestdevelopments, as well as short to medium termprospects for nitrogen markets. The followingsections address both supply and demand forboth grades of urea.The remaining sections provide expert analysisof the latest developments in global ammoniumnitrate, CAN, UAN, ammonium sulphate andammonia markets.

A selection of Profercy Daily UpdatesShort, to-the-point news and insights, coveringkey market and industry news. These reportsare published on average once a day, withfurther updates issued when markets are veryactive.The daily updates ensure that our subscribersreceive timely updates to support daily decisionmaking. All major market tenders are covered.

Our OfferA comprehensive package ofdaily news and analysis,detailed weekly analysis andforecasting reports – all for onesubscription fee.

Global fertilizer coverage andprice ranges – covering allmajor export and import originsfor Nitrogen, Phosphates &NPKs and Potash.

Multi-user subscriptions asstandard.

Access to industry experts.

Access to historical ProfercyPrice Data – used in contractprices worldwide.

Free TrialsFree trials are available of all our services. Ifyou are interested in further information, orwould like a free trial of our fertilizer marketreports, please email [email protected], you can register for a free trial atwww.profercy.com.

© Copyright 2014 Profercy Ltd All rights reserved. No part of this publication may be reproduced, stored in aretrieval system or transmitted in any form or by any means, without the prior written permission of the Copyright owner. 01

23 October 2014

Published byProfercy LtdEditor Clive Yearsley

DEVELOPMENTS

P1 Granular urea prices bottomout east and west

P2 Egyptian price dips and thenrebounds

P2 The worst appears to be overfor Arab Gulf suppliers

P4 Traders take a chance onEurope awakening

P5 Indian tender announcementbolsters Chinese price

P5 UAN: Market slow but stable

P6 AN: Black Sea product tradesat $280pt plus

P6 Ammonia: Tight short term

P8 Profercy Price Table

KEY PRICES

Prilled urea: $320-322ptfob Yuzhnyy

$287-295ptfob China

Granular urea: $301-320ptfob M East

Ammonia: $600-610ptfob Yuzhnyy

Global Urea PositionFrom last week’s report: Buyers are still waiting to see the real price floor.Fundamentals suggest this is not far away.

It appears to have been a pivotal week for urea. It began with rumours thatMiddle East granular urea had dipped as low as $310pt fob equivalent inLatin America and $10pt below a confirmed spot sale this week by aproducer. Illustrating the fact that market conditions were not so desperatefor suppliers, an Egyptian sales tender resulted in 25,000t being sold at$355-357pt fob. This was followed by a further volume at $367pt fob. Alsopositive is that more Middle East granular has been placed in Europe and,while returns are not high, they are also not as low as $310pt fob. The reallevel is closer to $320pt fob basis competitive freight. Another key factor forthe market this week is that, again, US prices have been stable. Thesideways move continues and although there is no rush for product, lowimports in November and December and even a slightly improving agcommodity outlook are positive signs. In Asia meanwhile, Thai interest ingranular is apparent with even Chinese material sold at $335pt cfr (below$310pt fob but not super low).

On the prilled front, Chinese prices have moved up from $287-288pt fob atthe start of the week for prompt (beating the tax deadline) to $290-295pt fobfor early November loading. Producers putting product in bonded store arequoting up to $305pt to cover minimum $8pt bonded store costs. In additionto the tax deadline, India’s announcement of a new tender closing 29October has bolstered market confidence as, apart from Iran, there are nocheap alternatives. In the West prilled urea prices are holding with supplylimited in the Black Sea and Baltic, the latter due to heavy switching toammonia at Russian plants.It certainly appears that after a poor run the market has bottomed out andtraditional price relationships have been restored. The question now iswhether pent up demand will afford room for a price increase into Q1 2015.

Sample Weekly ReportPrice ranges are providedeach week on page 8


Urea Supply - WestBlack SeaYuzhnyy: NF has sold two 5,000t lots of prilled urea toAlgeria at a stated netback of $322pt fob Nikolaev. Itreports it has been bid at $320pt fob for 25,000t forNovember. DniproAzot resumed production on 20October and is quoting urea at a high $325pt fob.

Urea line-up: Trammo has 7,000t to load for Romaniaand 5,000t lots for Bulgaria and Turkey. Ameropa hastwo small vessels to load for Turkey and Italy. There areno vessels at TIS.

Tuapse: 4,000t of prilled urea will be shipped toRomania.

Romania: Prilled urea is put around $340pt fob.Keytrade will load a cargo for Portugal.

BalticBusiness is slow with urea volumes cut by increasedexports of ammonia. Latin American prices reflect$310pt fob or lower but with small volumes to moveproducers are not considering these markets.

Salavat: The Salavat complex is still facing technicalproblems. The plant restarted but new problems with acompressor have forced another shut-down.Gazpromexport has 28,000t each of prilled and granularurea for shipment by mid-November. This is not beingoffered for sale until production resumes.

North Africa/MediterraneanEgypt: The Helwan sales tender for 25,000t of granularurea resulted in 20,000t being placed at $355-357ptfob. An earlier 6,000t sale to Agrium was followed by asale of 14,000t to Trammo for Italy (10,000t) and Spain(4,000t). OCI is then reported to have booked thebalance 5,000t at $357pt fob. MOPCO has since closeda sales tender with one 4,000t lot sold to Trammo at$367pt fob. Note that as this is below the 5,000tminimum volume included in our price range, thistransaction has not been considered.

Egyptian suppliers are hoping that gas supplies improvein November permitting a more steady flow of exports.However, problems persist for now. The AFC plant isreported to have restarted but has shut again due togas supplies being halted.

Algeria: Sorfert has advised that all factories are downdue to technical issues - 2 ammonia units and onegranular urea. The complex has been operating belowcapacity for some time with the ammonia unitsstruggling to perform consistently.

Despite the production issues, Sorfert is pushingcontract holders to load granular urea.

Helm is in the freight market for 4,000t granular ureaArzew-Spanish Med. Indagro has been the market for15,000t granular urea Arzew-Belfast loading lateOctober and also has 5,000t to load for anotherdestination. Yara will load 15,000t on the PolarisQueen. Total October exports look set to be around50,000t.

Croatia: Trammo is in the freight market for 9,000t ureaSibenik-Sines Portugal loading 22-25 October.

Turkey: Chinese granular urea is being offered for re-export at $330pt fob. One/two small lots have alreadybeen placed.

AmericasVenezuela: Nitron has a cargo of granular urea to load.

Urea Supply - EastMiddle East: Granular urea prices appear to havefound a floor. A 40-50,000t lot was sold by oneproducer earlier in the week at $320pt fob with asecond 25-30,000t cargo also placed.

As regards netbacks for Middle East product from themajor markets, the US reflects below $310pt fob whileThailand is around $317-318pt fob. European netbacksappear marginally better although the position is notentirely transparent with freight varying from a low of$28pt to as high as $33pt for two ports. Basis latestsales in the Mediterranean, European netbacks arearound $320pt.

High ammonia prices are influencing production in theMiddle East. Qatar has cut urea production on one plantin favour of producing more ammonia to take advantageof current high returns for the intermediate – latest sale$635pt fob, and to meet its contract commitments.

Qatar: 30,000t of urea will load second half October forBangladesh (contract).

Kuwait/Bahrain: Trammo will load 30,000t of granularurea for Italy and Spain next week. PIC’s Kuwaitcomplex will be on turnaround from 20-25 October for45-50 days.

UAE: Fertil is indicating that it will have limited spotavailability through year end due to contractcommitments to the USA and Bangladesh. Koch isloading a cargo for Europe or Australia fixed in the high$20s pt basis 1-1 for the former. Nitron has 30,000t toload in late October.

Oman: Keytrade is in the freight market for a vessel toload 25,000t of granular urea end October in Oman for


South Africa. However, it is understood the cargo mayhead to Europe. Koch has 40-50,000t to load whichcould head to Europe.

Middle East Export Sales OctoberPrills

Supplier Shipper Dest ‘000t

Qatar S Africa 10

60/m Bangladesh 30S Arabia Bdesh 20

50k/m

Total 60

Prod/m 110

Granular

Supplier Shipper Dest ‘000t

Bah/Kuw CHS USA 40

140k/m Helm Brazil 30

Thailand 20

Trammo Europe 30

Gavilon USA 40

Turnaround 40Oman Koch France/Brazil 30

100k/m Keytrade RSA/Europe? 30

Koch 40Qatar Yara Brazil 90

350k/m Yara USA 45

S Africa 25

CHS? USA 45S Arabia S Africa 25

230k/m Thailand 50

USA 60UAE Bdesh 25160/m Nitron Argentina 30

Bangladesh 25

Trammo USA 30

CHS? USA 30

Koch Europe/Aust 30

Nitron 30

Total 900Prod/m 1080

Prilled/granular 800Prilled and granular prod/m 1190

Iran: It is estimated that around 200,000t of granularurea will be available for offer in the STC India tender.

China: Prilled urea for prompt shipment on vesselsnominated by 28 October is quoted around $292-295ptfob. Product that would be lifted from bonded store withall attendant costs is quoted at $298 up to $305pt fob.Bonded store costs are around $8pt in Yantai withmonthly financing and storage to add. The availability ofbonded storage is limited (around 800,000t according tosome estimates) which has led to a slight rush to bookspace for November this week.

Granular is offered by producers at $310-315pt fob withgood quality product having sold at the high end of therange.

As regards quality, there are major problems emergingagain for some shipments made in September. At leastone barge has been rejected in the US while someSouth American markets are also affected.

Shipping

Ameropa is in the freight market with an inquiry for20,000t granular urea Yantai-Montreal and Gavilonfor 35,000t Yantai-2 ports west coast Mexico.

Ameropa will also load 35,000t of granular forColombia, Ecuador and Peru part of which will covera sale to Agripac Ecuador.

Nitron will load 30,000t of granular urea for Mexicowith freight put around $26pt.

Urea Demand - WestEurope/MedEurope: With prices elsewhere traders are movingmore granular urea to Europe. Several companies haveMiddle East cargoes planned for the Med and NWEurope. In addition a Chinese cargo has been bookedfor Italy while Turkish buyers are offering and sellingChinese granular for re-export from Iskenderun (around$330pt fob|).


Latest cargoes booked for Europe are:

Origin Shipper Kt DestKuwait Trammo 30 Sp/Italy

China Dreymoor 40 Italy

UAE Koch* 30 Sp/Fr

Oman Keytrade 30 Bel/Ger

Recent Sep/Oct loads

Oman Koch 30 France

Indonesia Koch 30 France

Iran Belor 45 Germany

Iran Agropoly 40 Bulgaria

Iran 20 Italy

Total 295

* Could head East

Italy/Spain: NF has 40,000t of Chinese granular ureascheduled to arrive in Ravenna and understood to havebeen booked from Dreymoor. The product is beingindicated at around $365pt cfr. Yara is offering localproduct in the low to mid-$370s pt cfr equivalent.

Trammo has a Kuwaiti cargo of 30,000t granular ureabooked for Italy and Spain. Some of the product hasbeen sold in the $370s pt cfr Spain. Freight estimatesvary from $28 to $33pt. Basis $375pt cfr duty paidSpain this would reflect $319-324pt fob before costsand margin.

NW Europe: Keytrade is offering a cargo of Omanigranular urea which may be shipped to Ghent/Brake.

Mediterranean prilled demand: A few small inquiriesfor prilled urea are being negotiated with pricesreflecting around $320pt fob Black Sea. NF has closedtwo cargoes for Algeria while Lebanon and Turkey havesome small requirements.

North AmericaUS Gulf: Granular barge prices are put in the range$305-310ps ton fob with buyer interest evident at thelow end of the range. There is still no sign of a pricerebound although many believe the market has littlepotential downside from here basis anticipated imports.As indicated earlier, these are mainly expected to beconfined to contract volumes as the US offers poorreturns for suppliers.

US Gulf/ec Gran Urea Imports 2014/15Origin Shipper ‘000t ArrivalVarious Various 199 JulyVarious Various 666 AugVarious est Various 465 SepKuwait CHS 40 OctChina Koch 60 OctChina Dreymoor 50 OctS Arabia 60 OctUAE 60 OctQatar 90 OctChina Gavilon 15 OctTrinidad 25 OctChina Trammo/Gavilon 100 NovQatar Yara/CHS or Koch 90 NovUAE Trammo/CHS 60 NovKuwait Gavilon/CHS 80 NovS Arabia 60 Nov

Total 2120July-Nov 13 1517Difference 603

Corn: Corn for December and May was trading in the$3.60-3.82/bu range at presstime. December 2015 is at$4.05/bu.

Latin AmericaBrazil: The main talking point early in the week was areported sale of Middle East granular urea by Nitron toFertipar at $340pt cfr. No confirmation of the deal hasbeen possible. At the same time and since, other smallvolumes have sold in the high-$340s pt cfr.

Russian prilled urea was sold last week just below$340pt cfr.

Industry association figures show nitrogen deliverieswere up 6.2% January-September on a nutrient basiscompared with 2013. Production of urea was down144,000t to around 600,000t. For the same period,imports increased by 450,000t to over 2.6m. tonnes.Urea imports in September were just over 240,000t,with production a modest 64,000t and down 32,000t onthe same month last year.

Mexico: Nitron is seeking a vessel to ship 30,000t ofChinese granular urea to Topolobampo (freight around$26pt) while Gavilon has booked a vessel for 30,000tChina to 1-2 ports west coast.

Colombia/Peru/Ecuador: Russian prilled urea wasbeing offered by traders early in the week around$310pt fob Baltic equivalent for November. Chinesegranular was also offered at a similar level. Ameropa


will load 35,000t of Chinese granular urea for the threecountries with part covering the sale to Agripac.

Asia/Pacific RimIndia: STC will close a tender on 29 October for ureafor shipment by 10 December. STC will be looking tosecure around 1.5m. tonnes of urea in the tender.

The announcement of the tender just allowed time forproduct to be lined up for bonded store in China, aheadof the end of the low-tax window closing on 31 October.However, estimates of the volume that may be availablefrom bonded storage product vary (see above) and willprobably fall short of Indian requirements.

Latest statistics: Urea imports were 561,000t inSeptember, down from 979,000t in September 2013.Impacted by the less favourable monsoon, sales weredown over 300,000t at 2.46m. tonnes. The position forthe April-September (kharif) is given below showingsales and total supply down 1.1m. tonnes and 1.2m.tonnes respectively.

A-S 14 A-S 13 Change

Prod 11.4 11.2 0.2%Imps 2.7 4.1 -34.1%Total 14.1 15.3 -8.8%Sales 14.0 15.1 -7.3%Balance 0.1 0.2

Pakistan: Two tenders for 200,000t each of urea areexpected to close in November.

Bangladesh: BCIC closes a tender 28 October for100,000t each of prilled and granular urea. The 15October tender in which Liven and Desh were lowesthas still to be awarded.

Taiwan: TFC closed a tender 21 October valid 23October for 5-6,000t of prilled urea for delivery by 10November. First round offers were around $310pt cfr.Aries and Ameropa are reported to have sold twocargoes at $305pt cfr. A third cargo may also havebeen booked.

Thailand: Several buyers have been in the market forsmall volumes of granular urea. It is reported that ureafrom Saudi Arabia (to be shipped with DAP) has beensold in the high-$330s/low-$340s pt cfr. Industrysources also report that TCCC has bought 6,000t ofChinese granular for prompt shipment in the mid-$330spt cfr reflecting sub-$310pt fob.

Sri Lanka: The September tender for prilled andgranular urea in which Mekatrade was lowest has notbeen awarded.

Nepal: A new tender for 35,000t of prilled urea isexpected to be announced in the coming weeks.

Malaysia: Helm will load 20-26,000t of prilled urea andphosphates in Nanjing for Malaysia sold to 3 buyers.The urea was reportedly priced earlier around $310-315pt cfr.

Philippines: La Filipina and other buyers are in themarket for urea. Chinese granular is put at $340-345ptcfr.

Zimbabwe: Negotiations are under way for 50,000t ofprilled urea to be shipped from China.

UAN SolutionsUAN prices remain flat. In France prompt prices arearound €200pt FCA Rouen (30%) but interest inbooking forward for early 2015 has waned. US pricesare also level with last week.

France: Prices are put around €200pt FCA Rouen forprompt. Buyer interest in locking in product forJanuary/February at €205-207pt FCA has subsided withbuyers uncertain whether this is a good forward price.

Romania: Interest in UAN for November shipment hassurfaced. Romanian prices are put around $235pt fob.

Bulgaria: Trammo is in the freight market for 30,000tUAN Varna-US east coast/Gulf.

US Gulf: UAN prices are at $237-242ps ton fob withbusiness slow. On the east Eurochem is reported tohave sold a part cargo at $265pt cfr.

Trammo has 30,000t of Chinese UAN due to arrive inthe Gulf over the next few weeks on a vessel reportedlyfixed in the high-$50s pt.

As reported last week Gavilon has 30,000t booked forthe US west coast, reportedly fixed around $60pt.

Nitrates/SulphatesLatest sales of FSU AN have been made into Turkey inthe low-$280s pt fob Black Sea. Further demand isevident with high ammonia prices perhaps supportingfurther buying of the product versus using importedammonia.

Amsul prices remain under pressure in Asia withdemand limited and competition from containerisedproduct intense. Malaysian and Indonesian price ideasnow reflect $120pt fob China or below.

Black Sea: NF has sold 25,000t of AN to GemlikTurkey at $282pt fob.

Turkey: Keytrade will ship 30,000t of AN from Muuga toIskenderun.


EU: Dreymoor is in the freight market for two vessels toload Georgian AN in Poti for Liverpool and Nantes.Trammo is seeking a vessel to load 5,000t of CAN inCroatia for Seville/Sagunto.

Brazil: Ammonium nitrate imports from January throughend-September fell slightly on last year to just under1m. tonnes. Conversely, domestic production increasedby 66,000t on last year to just over 200,000t.

January to September imports of ammonium sulphatewere over 1.25m. tonnes, up 90,000t on the sameperiod last year. September imports were under100,000t, half those of the same month in 2013.

Indonesia: Gresik bid at $142pt cfr for amsul and isreported to have booked 20,000t from a trader ex-Chinaaround this level.

Malaysia: Buyers are targeting the low-$140s pt cfr foramsul.

China: Amsul prices are weakening. Prices are put inthe mid to high-$120s pt fob.

AmmoniaWhile demand cutbacks are an issue facing theammonia market, production is anything but predictablein a number of areas. This week the Sorfert complex inAlgeria has encountered a complete shut-downresulting in some October export tonnage being pushedinto November. In the Middle East meanwhile, a spotsale at a high $635pt fob has been reported for ashipment to Korea. Supply is tight nearby as the shut-down of one urea plant by Qatar is offset by reducedsupply from the area’s largest exporter Sabic (one plantdown).

Returning to the West, and as reported last week, theTampa price for November is expected to see one moremodest increase for the year with many expecting$660pt cfr. Logically a lower price may be witnessed forDecember but the extent of any drop will no doubtdepend on whether any more supply surprises lay justaround the corner.

Ukraine: No new sales have been reported. A potentialcandidate for loading, the Marycam Swan, is nowheading to Egypt.

The Prins Maurits for OCI will is destined for Castellon.

The Gas Grouper will load for Ameropa earlyNovember.

The position regarding gas supplies from Russiaremains unresolved despite encouraging signs earlierthis week (see update below in News section)

Yuzhnyy line up October

1-5 Cambridge 23 Tunisia Ameropa

3 C Mars 40 India Ameropa

4 Grouper 23 Belgium Ameropa

12 Cobia 23 Jordan Ameropa

20-25 P Maurits 12 Spain Bferts/OCI

20-25 Cambridge 23 Belgium Ameropa

20-30 Manta 23 Tun/Turk Ameropa

20-30 Snapper 23 Morocco Ameropa

Total 188

Baltic: Due to the delay in Algeria Koch may load itsBaltic cargo in early November. OCI may load theNavigator Galaxy in the Baltic in November after itcompletes in the Netherlands.

As reported last week Yara has 35,000t of ammoniabooked to load in the Baltic in November. Overall Balticavailability of ammonia has been boosted by at least50,000t/m by switching out of urea (now $320pt fob).No early switch back to urea is expected implyingavailability from the Baltic will remain high in December.

Turkey: Turkish buyers are looking to secure ammoniafor November but are refusing to pay $600pt fobYuzhnyy equivalent. Petkim, Bagfas and Igsas allrequire product but have few supply options.

Egypt: OCI will load 11,000t of ammonia shortly on theNavigator Galaxy for Rotterdam. Trammo has theMarycam Swan due to arrive Ain Sukhna 23 October toload a cargo of Ebic product for Turkey. The Ebic plantis still down.

Algeria: Both ammonia units are down. As a resultsome shipments have been pushed into Novemberincluding the 40,000t sold to Koch.

Yara has the Solaro heading south from the Baltic,possibly for Algeria.

Libya: Yara has just loaded the Pertusola in Libya forNorway.

Middle East: Marubeni has also booked a cargo ofammonia from Qatar at $635pt fob. This is expected toload on the Gaschem Stade after the vessel completesin Richards Bay. Muntajat has since booked the GasOriental to ship a cargo to South Africa around $90pt.As reported earlier Qafco has shut one urea line tomake more ammonia available. Sabic has oneammonia line down resulting in the loss of an estimated50,000t of ammonia.


Basis the latest Trammo sale to wc India at $640pt cfr,the low end of the Middle East price range is around$600pt fob.

Malaysia: Marubeni is reported to have booked productfrom Petronas to cover contract commitments.

Taiwan: Yara is reported to have sold 10,000t ofammonia to Mitsubishi for Taiwan. The product is beingshipped on the Viking River from Australia.

NewsUkraine and Russia gas deal still not closedA further meeting in Brussels is due to be held nextweek between Russian and Ukrainian representativesregarding supplies to Ukraine. At talks last week inMilan Ukraine agreed to a price of $385/’000cbmthrough end-March 2015, a level that was consideredacceptable to the Russian side. However, after furthertalks this week, Russian Energy Minister AlexanderNovak noted that Russia had failed to receiveassurances over Ukraine’s ability to repay existing gasdebts and for future gas.

As part of the preliminary agreement reached last week,Ukraine had agreed that the first tranche of $1.45 billiondebt must be paid before the beginning of supplies.Ukraine also proposed that a lower gas price is paid forthe summer period (April-September).

The next round of talks is due to take place on 29October in Brussels. Commenting on the summit thisweek, European Commission Vice-President GüntherOettinger noted that "We made another step towards apossible solution and are close to an agreement onimportant elements. Others still need to be addressed,such as the financial gap."

Should the talks result in the price of $385/’000 cbmbeing accepted by all parties, this would imply aproduction cost for OPZ of around $500pt fob Yuzhnyyfor ammonia and around $330pt fob for urea.

In other news, RGK Trading has filed a suit in theEconomic Court of Odessa to collect UAH 1.39 billion italleges OPZ owes for gas supplied April-June 2014plus penalties. The debt is said to cover the supply of217m cbm of gas supplied to the OPZ complex byRGK, a D. Firtash company, during Q2 valued at UAH1.237 billion. This equated to around $490/’000 cbm inQ2 but the subsequent depreciation of the UAH againstthe US dollar has reduced this to $440/’000 cbm. Inother news, RGK Trading has filed a suit in theEconomic Court of Odessa to collect UAH 1.39 billion italleges OPZ owes for gas supplied April-June 2014plus penalties. The debt is said to cover the supply of217m cbm of gas supplied to the OPZ complex byRGK, a D. Firtash company, during Q2 valued at UAH

1.237 billion. This equated to around $490/’000 cbm inQ2 but the subsequent depreciation of the UAH againstthe US dollar has reduced this to $440/’000 cbm.

Yara/CF merger talks terminatedOn 17 October Yara issued the following statement:

“Yara International ASA and CF Industries haveterminated their discussions regarding a potentialmerger of equals transaction.”

"This has been a constructive process, with solid workby both parties. We were able to identify significantstructural and operational synergies, but in the end itbecame clear that we would not be able to agree onterms that would be acceptable to all stakeholders,"said Torgeir Kvidal, President and Chief ExecutiveOfficer of Yara International ASA.

"I would like to thank the management team and Boardof Directors of CF Industries for their hard work andcooperation throughout the discussions," said Kvidal.

Turkmenistan nitrogen complex commissionedState Concern "Turkmenhimiya" has just commissioneda new ammonia/urea line at Mary in the eastern regionof Turkmenistan. Contractors were Ronesans Turkmen(Turkey), Kawasaki Heavy Industries Ltd and SojitzCorporation (Japan).The total cost was over one billiondollars. The new complex will produce 640,000t/y ofgranular urea and 400,000t/y ammonia. The complexwill use 500 million cbm of gas per year. KBR, Uhdeand Stamicarbon provided technology.

Part of the company's output of urea will be supplied tothe domestic market with the balance exporting toneighbouring countries.

Indian gas price raisedThe Indian Ministry of Petroleum and Natural Gasannounced on 18 October that the Cabinet Committeeof Economic Affairs, chaired by the Prime Minister, hadapproved a new domestic gas pricing policy. Under thenew formula, domestic gas prices are expected toincrease to $5.61 per mmBtu from 1 November, up from$4.2 per mmBtu.

While the increase will raise the cost of urea production,the current fertilizer subsidy to producers is expected tomeet this increase. Supporting this, the governmentexpects to see increased revenues as a directconsequence of the gas price increase. The newdomestic gas formula is expected to be reviewed everysix months.

An increase in the gas price was initially proposed bythe previous administration. At the time the governmentsought to implement the Rangarajan formula whichwould have seen prices increased to over $8.2mmBtu.The plans were put under review shortly after the BJPgained a majority after the last election earlier this year.


Profercy International Prices $ptUrea prilled bulk 23 Oct 16 OctYuzhnyy fob 320-322 315-325Baltic – ice affected fob 315-320 315-320Baltic – ice free fob 315-320 315-320Romania fob 335-340 335-340Arab Gulf fob 300-305 300-305China fob 287-295 288-290Mediterranean cfr duty paid 345-350 345-350Brazil cfr 335-338 330-335EC Central America cfr 335-340 335-340WC Central America cfr 340-345 340-345India cfr 310-315 303-310SE Asia cfr 315-320 315-320

Urea granular bulk (spot) 23 Oct 16 OctArab Gulf fob US cargoes 301-306 301-308Arab Gulf fob spot price 318-320 320-328Arab Gulf full range 301-320 301-328Malaysia/Indonesia fob 320-325 320-325China fob 305-315 305-310SE Asia cfr 335-343 335-340Egypt fob 355-365 355-365Algeria fob 360-370 360-370Caribbean fob 307-311 306-313US Gulf pst fob prompt/7 days 306-310 310-312US Gulf pst fob to 30 days 306-310 305-312US Gulf metric cfr to 30 days 332-336 331-338Brazil cfr 345-349 345-350

Nitrates 23 Oct 16 OctAN Baltic fob bulk 280-285 280-285AN B Sea fob bulk 280-282 280-285AN France € deld bulk 312-315 312-315AN UK fot £ bagged 240-245 240-245CAN Germany € cif bulk 246-249 246-249UAN 23 Oct 16 OctUAN France € fot 198-200 198-202US ec cfr 260-265 257-262US ps ton fob Nola 237-242 237-242UAN FSU fob B Sea 230-235 230-235UAN Romania/Egypt fob 234-236 234-236

Am. Sulphate bulk 23 Oct 16 OctBlack Sea fob (white) 140-145 140-145Black Sea fob (standard) 110-115 110-115Baltic/NW Europe (white) 140-145 140-145Brazil cfr sight 160-170 165-170SE Asia cfr 142-145 145-150

AMMONIA 23 Oct 16 OctYuzhnyy fob 600-610 600-610Arabian Gulf fob (spot) 600-635 580-600NW Europe cfr duty free/pd 660-670 660-670North Africa cfr 625-635 625-635Tampa cfr 640 640India cfr (spot) 620-650 595-640


FORECAST14 October 2014


Sample MonthlyTrade Forecast

Granular prices have corrected, weighed down in the West by concerns over low cereals prices. On the supply sideconditions have eased to a degree. Qatar has increased production while Chinese product has been under severepressure with product on offer at $310pt fob at presstime from traders looking to move small volumes prior to the31 October closing of the low tax window.

In the last report pricing imbalance was analysed. The table below depicts how prices have moved since thatreport.

Q4 2013average

3 Sep Latest price and remarks

Granular

M East fob spot 322 368 $330pt, even lower for USA

Egypt fob 353 378 $370pt, still supported by production shortfalls

China fob 322 345 $310-315pt, low but demand weak

SE Asia cfr 336 372 $340-350pt, Thai market slow

US Gulf ps ton fob 310 350 $310ps ton, reacting to high Q3 imports

Prills

Yuzhnyy 314 335 $320pt, still supported by export cutbacks

China fob 312 295 $290pt and still low compared with 2013

India cfr 333 305-310 est Below 2013, next tender should be higher

As can be seen prices have moved more into line with Q4 2013 relationships with granular urea hit hardest. Egyptis the exception, but this is purely down to the lack of product available for export. In Q4 2013 Egypt exported 0.4m.tonnes of urea whereas this year the total will likely be less than half this.

From the 3 September report: From a pricing standpoint, the outlook for Chinese prilled urea appearsmost positive. As regards granular, and as stated last month, a cooling US market for new spot cargoesis expected October/November that could force a price correction for granular urea.


The drop in granular prices over the past month has, of course, not provided any incentive for buyers in NorthAmerica or Europe to stock up, adding to the negative influence of weak cereals prices. The chart below illustratesthe latter point. Indeed, it could be argued that urea is still over-priced vis-à-vis corn compared to 2009-2013.

Fundamentals - Forecast Trade Balance to March 2015

The projected market balances through February point to a relatively unexciting market. The October surplus islargely built into prices (particularly granular).

0

100

200

300

400

500

600

700

800

900

0

100

200

300

400

500

600

700

800

900

Ure

a $

Cor

n ce

nts/

bu

Low corn prices remain a concern for 2015

Urea US Gulf stonright axis

Corn end monthleft axis

-1000

-750

-500

-250

0

250

500

750

1000

Oct Nov Dec Jan Feb Mar

'000

tonn

es

World Urea: Forecast Trade Balance

Deficit

Surplus

A fairly balanced outlook


Forecast AssumptionsSupplyReduced supply from Egypt and Ukraine are assumed for Q4 while some product will be lost in the MiddleEast due to turnarounds.

China: The industry is operating at 67% of capacity. Exports in August were down 150,000t on August 2013 at1.3m. tonnes. September exports are estimated at 1.45m tonnes while 2.1m. tonnes have been committed forOctober/first half November. With the export tax coming back into effect from 1 November new exports areestimated at 1m. tonnes for November/December which would bring the year total to around 11m. tonnes andsecond half 2014 to just over 6m. tonnes, down around 0.9m. tonnes on second half 2013.

Arabian Gulf: PIC will undertake turnarounds at its Shuaiba and Sitra plants in October/November that will haltshipments second half October/November. In volume terms the estimated loss is a minimum of 120,000t.

Egypt: Exports are running at a maximum of 50-60,000t per month. Should domestic demand ease, an increase to80,000t/m may be possible. Even if this proves to be the case, exports of 240,000t would be down 186,000t on Q42013.

Algeria: Exports of 100,000t/m through December have been factored into the forecasts. This assumes that thereare no further production problems with ammonia production. At the time of writing both ammonia units were downat the complex.

Ukraine: Exports are limited to output from one plant at OPZ, DniproAzot and the Cherkassy complex (130,000t/mmaximum). DniproAzot is currently on turnaround and its gas supply position beyond October is uncertain as thegovernment has halted the use of gas from local supply and underground storage. OPZ has sufficient gas forOctober but the position for the winter months is not clear. Gas supplies could be halted at any time. Given theuncertain position, exports of 100,000t/m have been assumed for November and December.

DemandPrilled demand from the Indian subcontinent should be significant in Q4. For granular, Brazil is expected tobook less than last year while the US is mainly expected to rely on contract shipments in the near term.

India: India has booked 4.1m. tonnes of urea by tender to date, in line with last year. Tenders for at least a furtherone million tonnes of urea are factored in to the forecasts for November/December shipment.

Pakistan: 185,000t of urea have been secured from Saudi Arabia under loan. A further 400,000t are estimated tobe required, mainly for November/December shipment.

Thailand: There are hopes government price controls on urea will be lifted at the end of October and at the latestby end 2014. Inventories are not excessive as contract suppliers have cut shipments. Demand for 500,000t of ureahas been forecast for November-January arrival against 400,000t last year.

USA: July/August imports were 0.6m. tonnes ahead of 2013 at 1m. tonnes. Through November it is estimated thatoffshore deliveries of granular to the Gulf/east coast will be around 2.1m. tonnes, 0.5m. tonnes ahead of 2013.

The influx of this product has cooled the market considerably with barge prices back down to $310ps ton. Giventhe low level of US prices, it is assumed that November/December shipments to the Gulf/east coast will beconfined largely to contract shipments from the Middle East. If this proves to be the case, July-February imports willbe in line with the 2013/2014 total at 3.1m. tonnes.

Brazil: Imports were 359,000t in September, 113% ahead of September 2013. The nine-month total was 3m.tonnes, 34% ahead 0f 2013. Demand for December-February arrival has been estimated at 0.9m. tonnes down onthe one million tonnes imported last tear. The main shipping period for this tonnage will be November/December.Europe: Recent increases in nitrate prices have largely just kept pace with the decline in the value of the Euroagainst the US dollar. As the chart below illustrates, urea is still not cheap as a source of nitrogen which impliesthat North African prices will need to fall further to prise the market open.However, on the positive side, a more active period is ahead with November through January imports normallypicking up. In 2013/2014, the major five European markets took 1.36m. tonnes of urea.


Forecast Urea Trade Balances

Note that the figures assume that all supply is open for sale and that no further plant shutdowns take place.Further, no account has been taken for winter problems affecting production or logistics (Russia/Baltic forexample).

Points from the above table are:

The market appears relatively balanced November through February. No major price run-up appears likely.

Forecast Urea Trade Balances to end March 2014Oct Nov Dec Jan Feb Mar

Supply 625 2895 2990 2665 2575 2875Demand 215 2910 3177 2411 2592 2420Balance 410 -15 -187 254 -17 455Supply/Demand % 99% 94% 111% 99% 119%

Regional PositionBalance East 275 417 217 795 795 1040Balance West 135 -432 -404 -541 -812 -585

Product positionBalance granular 295 203 308 259 -2 63Balance prills 115 -218 -495 -5 -15 392

Regional product positionBalance granular East 240 720 825 905 810 825Balance granular West 55 -517 -517 -646 -812 -762

Balance prills East 35 -303 -608 -110 -15 215Balance prills West 80 85 113 105 0 177

Europe: Urea Imports – KeyMarkets, Nov-Jan (‘000t)

Country N-J 2013/14 (‘000t)

France 385

Germany 250

Italy 224

Spain 247

UK 254

Total 1,360


If producers manage the position, it may prove possible to move prices steadily higher as buyers move to secureproduct for the spring in Europe and North America.

Granular urea is long. However, some of the granular surplus is due to Iran which could supply 3-400,000t toIndia for November/December shipment.

Potential Price DevelopmentsThe nitrogen market has been in a bear phase since 2012 with each successive peak lower than the previous one.This is clear from the below. The PWNI is heavily influenced by urea, which has a weighting of over 60%.

Given the trade balance forecasts for urea, which are based on conservative demand estimates for the majormarkets, and the poor grain outlook, it is unlikely that a real bull market in urea/nitrogen will be possible over thecoming months. The best suppliers can hope for appears to be a modest price uptrend once the current correctionis complete.

With regard to this point, some markets, particularly the USA, have already adjusted and are close to the floor. Thismarket already reflects a very low return for Middle East granular urea, sub-$310pt fob and below the level neededto compete in Brazil or Europe.


At the other extreme, North African granular prices are too high. The latest small sale of Egyptian product was ata heady $370pt fob, $20pt above the level possible in France. Also in the West, FSU prills are also too expensiveat $320-325pt fob and a move down to $310pt fob or lower seems possible before a floor price is set.

In Asia, Chinese prilled urea is heavily committed and, with the low tax window about to close, and more Indiansubcontinent demand expected, higher prices should be witnessed. However, it is doubtful the full 15% plus Rmbtax can be passed on to the market. This would imply a price around $330pt fob China - $345-350pt cfr India, atwhich level Middle East and FSU product could be competitive.

The same applies to Chinese granular. $310pt fob now would imply $357pt fob with high tax. Producers can makeproduct available for much less given the fact that prices dipped to $260-270pt fob in May/June this year. $270ptfob now would reflect around $310pt fob with tax. Returning to prills, low returns of $260pt fob seen earlier this yearwould point to $300pt fob China and $315-320pt cfr India.

Matching the lowest price possible in India would be the worst case scenario for Middle East granular urea. $315-320pt cfr would reflect $300-305pt fob. This is unlikely to happen as other markets will pay more.

Potential price upsideDespite the weaker agricultural commodities price outlook (compared with last year) the period through February2015 should afford room for modest price increases in urea generally. With regard to the USA, normal weatherpatterns (no repeat of the cold late spring of 2014), should support a price increase to $350ps ton fob Nola in Q1and a $350pt fob netback for Middle East product.

After dipping back to $350pt fob, Egyptian/Algerian prices could also move back to $370pt fob for business inEurope.

With regard to the Indian subcontinent, logically the next tenders should see prices move on to $315-320pt cfr Indiaand above, some $10-15pt above the prices of the last MMTC tender.

Demand for urea for March shipment is expected to ease with Europe and the USA having covered most of theirrequirements. Further, at this stage it will be too early for Indian subcontinent demand to generate while Brazil willalso be in a slower phase.

Thus, prices will likely again come under downward pressure into Q2/Q3 when an eventual floor should be found.As in 2014, the floor price for 2015 will depend largely on the level at which Chinese supply will be reduced. Thisyear, with a very loose tax policy, prilled urea bottomed out at $240-250pt fob China and granular at $255-265ptfob. For 2015 there is talk of the export tax being set at a flat 13% for the year with Rmb 40 to Rmb 100pt additions

200

225

250

275

300

325

350

375

400

425

450

475

500

J A S O N D J 14 F M A M J J A S O N D J 15 F M A M J

Modest price upside possible into Q1

China Granular Urea fob US Gulf metric cfr Middle East spot fob

$pt


for the low and high tax periods respectively. If Chinese production economics are no better than in 2014, thiswould imply a low tax floor of $270-275pt fob for prilled urea and $290-295pt fob for granular.

This would be higher than in 2014 and would be good news for producers elsewhere. A flat tax could also lead to aless volatile market with no real stock build up at Chinese ports necessary in mid-year.

PublisherProfercy Ltd.

Email: [email protected]

All rights reserved. No part of this publication may be reproduced, stored in aretrieval system or transmitted in any form or by any means, without the priorwritten permission of the Copyright owner.


19 November 2014


Sample Market Update

Urea/NitratesIranian granular urea on offer in Brazil at lowlevels; other M East cargoes targeted at Brazil;FSU prills weak

SupplyMiddle East: Further to earlier, the Eurochem purchaseof granular urea from UAE was at $322-325pt fob.Keytrade is in the freight market for 40,000t SoharOman-Brazil and a trader for 35,000t Kuwait-Brazil.Swiss Singapore is reported to be shipping

Baltic: Salavat closes a sales tender 20 November for20-25,000t each of prilled and granular urea for Januaryshipment from Kotka. 3,000t of prills are also availablefrom the Black Sea. A trader is in the freight market for27,000t urea St Petersburg-Corinto and Quetzalprompt.

Yuzhnyy: AFT will ship 11,000t and 15,000t cargoes ofOPZ prilled urea to Turkey under recent salesreportedly reflecting around $308pt fob.

Egypt: MOPCO sold 3-5,000t of granular urea toAgrium at $356pt fob while HFC sold 4,000t to Koch at$357pt and 3,000t to Unifert at $359pt.

The first EK Agrium granular urea plant will becompleted in Q1 2015 and the second in Q2. It isunderstood that gas supplies have been secured for thefacilities.

A lack of suitable vessels and high freight rates maylimit participation in the 20 November Abu Qir UANsales tender. This could result in the 25,000t availablebeing split up into smaller lots for Spain and France.

Romania: Trammo has fixed a vessel to load 32-35,000t of UAN for the US east coast around $36-40ptdepending on quantity. Koch has a vessel to load forthe US and Nitron a cargo for Argentina.

DemandBrazil: A trader is understood to be moving an Iraniangranular urea cargo to Brazil, reported to be on offer viaa local company at $335-340pt cfr equivalent.

Peru: Uralchem has sold a cargo of prilled urea andSAN with the urea in the mid-$350s pt cfr. The buyer isunderstood to be Abocol. Uralchem has also sold27,000t of AN to Famesa Explosivos for deliveryDecember/January ex-Baltic. The AN is for theAntamina mine.

US Gulf: Prompt granular urea is put around $315pston fob with December and January having traded atsimilar levels.

Ammonium nitrate: It is understood that a decision onthe removal of anti-dumping duties on Russianammonium nitrate is imminent with Russian producersexpecting the decision in their favour. The duties are253.98% and have been in effect for over 10 years.

SE Asia: Latest sales of amsul in SE Asia have beenmade at levels equating to just below $120pt fob China.Traders are understood to have sold short in theexpectation that prices will weaken in December.

25 November2014Published byProfercy LtdEditor Clive Yearsley

E [email protected] T +44 1372 386205 www.profercy.com

© Copyright 2014 Profercy Ltd All rights reserved. No part of this publication may be reproduced, stored in aretrieval system or transmitted in any form or by any means, without the prior written permission of the Copyright owner.


Urea/UANBlack Sea: Eurochem is in the freight market for 25,000t of urea Tuapse toImmingham, UK. Shipment is for first half December with the cargo made up of20,000t of granular and 5,000t of prills.

Middle East: Spot prices remain at $325pt fob for granular urea. However,traders with formula-based cargoes to load for Brazil/Latin America are facingreturns in the $310-315pt fob range.

Mexico: The Buying Group is reported to have purchased 25-30,000t of Russianprilled urea direct from a producer at $330-335pt cfr east coast Mexico. Estimatesput the fob price at between $300 and $303pt fob Baltic.

US Gulf: There is little interest in prompt granular urea product ahead of theThanksgiving holiday. Prices for January continue to reflect higher levels up to$317-318ps ton fob. This equates to around $310pt fob Middle East for 30,000tcargoes. On the paper market March is at $320ps ton fob.

India: IPL tender: It is estimated that up to one million tonnes of urea will besought in the 3 December tender, in part replacing the 300-400,000t not shippedunder the last IPL tender in July. Meanwhile, the Indian press continues to covershortages of urea in various areas/states for the current rabi season. Pressure isbeing put on the government to supply product over the coming months.

France: UAN 30 prices are now put at €215pt FCA Rouen for March/April , thelow to mid-$270s pt cfr.

Italy: NF is now offering its Chinese granular urea in Ravenna at around €335ptFCA big bags. A 25,000t cargo of Iranian granular is due to discharge inManfredonia and Ravenna with Veganitro reportedly marketing the product.

Turkey: Further to earlier, Samsung and Keytrade are due to load prilled urea inRomania for Gubretas and Kastamonu respectively.

3 December2014Published byProfercy LtdEditor Clive Yearsley

E [email protected] T +44 1372 386205 www.profercy.com

© Copyright 2014 Profercy Ltd All rights reserved. No part of this publication may be reproduced, stored in aretrieval system or transmitted in any form or by any means, without the prior written permission of the Copyright owner.

UreaEgypt: AFC’s ammonia/urea plant has no gas with supply having been cut 1December for at least one week. As a result AFC has withdrawn spot offers andwill only supply 15,000t to Koch this month/early January under formula.

Black Sea: Prilled urea is tight for nearby shipment. NF is reported to have beenbid at $305pt fob Nikatera for prompt tonnage and also for a cargo for C America.

India: IPL tender: Following today’s tender, it is understood that IPL is movingfast to book urea and major awards at the lowest Kpat price (or equivalent forother ports) will be confirmed in the next 24 hours. While China needs to sell,India is also short of urea following a slimmer recent import programme than wasthe case last year.

China: Reports from Chinese sources suggest the announcement of the new taxregime for 2015 is imminent. Last minute discussions reportedly revolved arounddropping the proposed Rmb 80pt tax in favour of a different, but presumably nottighter, approach.

Thailand: Indonesian granular urea is being offered at $330pt cfr with littleinterest evident from importers. Buyers remain concerned over the weakness ofthe international market and the outlook for Q1 rice application given thegovernment’s efforts to dissuade farmers from planting. Thai urea imports were145,000t in October, down 6% on October 2013. January-October was 1.91m.tonnes, down 9% on 2013.


profercy nitrogen reports. free trials...prilled urea: $320-322pt fob yuzhnyy $287-295pt fob china...

Documents