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Summary

  • Russian UAN solutions imports were up 46% to February YTD.
  • If Russian imports are sanctioned, U.S. producers would benefit.
  • U.S. ammonia imports were down 39% to February YTD.

Russia exported more UAN fertilizer to the US in February (149,000 mt) versus January (135,000) and Russian UAN imports were up 46% for the two months versus last year. Trinidadian UAN imports were up 2.2%. However, total US UAN imports were down 2.5%.

UAN Solutions - U.S. Imports for Consumption Annual + Year-To-Date Data from Jan - Feb.

 
Quantity DescriptionCountry20102011201220132013 YTD2014 YTDPercent Change
YTD2013 - YTD2014
In 1,000 Units of Quantity
metric tonsRussia6796116811,19319428346.2%
.Trinidad & Tobago4469167736521581612.2%
.Egypt111106200332303412.7%
.Canada396560365302325366.3%
.Romania230442258216350-100.0%
.Netherlands40130130169579-84.0%
.Lithuania724433591086326-58.2%
.Germany2713873100130-100.0%
.Bulgaria3019994900N/A
.Poland0003800N/A
.Turkey0042000N/A
.Suriname000000N/A
.Oman0030000N/A
.India000000N/A
.Algeria090000N/A
.Ireland133000N/A
.Saudi Arabia060000N/A
.Estonia106830000N/A
.Mexico000000N/A
.Ukraine67270000N/A
Subtotal metric tons 2,2063,4953,0113,161582568-2.5%

Sources: U.S. International Trade Commission

Urea imports from Qatar were down in February to 92,000 metric tons from 155,000 tons in January, probably due to planned maintenance downtime at Qafco, but were up 124% YTD over 2013.

Chinese urea imports rose to 55,000 tons in February vs. 26,000 tons in January, but were still down 42.5% versus 2013. Typically Chinese urea goes to India and other non-North American markets.

Urea - U.S. Imports for Consumption Annual + Year-To-Date Data from Jan - Feb.

 
Quantity DescriptionCountry20102011201220132013 YTD2014 YTDPercent Change
YTD2013 - YTD2014
In 1,000 Units of Quantity
metric tonsCanada1,7321,5801,4281,072242171-29.6%
.Qatar4053934491,059110247124.7%
.China74942234577614181-42.5%
.Oman4673761,02355329133-88.5%
.Saudi Arabia5465874514971211274.8%
.Kuwait46036550038513084-35.3%
.United Arab Em7808036082886.7%
.Indonesia33632913455433-39.0%
.Russia78484902916615-76.9%
.Trinidad & Tobago59337736928855609.4%
.Bahrain266352381265085N/A
.Egypt546523493130520-100.0%
.Netherlands7891131814-22.2%
.Venezuela31935629499990-100.0%
.Libya1076607800N/A
.Singapore00032320-100.0%
.Romania142162772900N/A
.Malaysia0535327028N/A
.Argentina0002727282.9%
.Germany132428276727.2%
.Georgia000880-100.0%
.Poland624500-100.0%
.United Kingdom011110-100.0%
.Lithuania000000N/A
.Latvia000000N/A
.Dominican Rep000000-60.6%
.Italy103000-100.0%
.Japan00000036.0%
.Mexico74100004.5%
.Liechtenstein000000N/A
.Hong Kong2600000N/A
.India00000050.0%
.Niger000000N/A
.Ireland000000N/A
.Israel000000N/A
.France000000N/A
.Korea002000N/A
.Austria000000N/A
.Denmark000000N/A
.Chile000000N/A
.Bangladesh2300000N/A
.Ukraine000000N/A
.Croatia2085103000N/A
.Estonia0027000N/A
.Spain012000N/A
.Australia410000N/A
.Switzerland0100000N/A
.Slovak Republic000000N/A
.Taiwan000000N/A
.Chad400000N/A
Subtotal metric tons 6,6315,8606,9146,4691,5361,101-28.3%

The US imported 39% less ammonia in the first two months of February, probably due to severe winter weather conditions which prohibited early field application versus the warm winter last year.

Traditionally the largest suppliers, Trinidad exported 212,000 mt of ammonia in February versus 236,000 in January, and Canada exported 54,000 tons in February, versus 85,000 tons in January.

Russia and Ukraine supplied 200,000 tons of ammonia to the US last year to February, but so far no ammonia imports have appeared this year.

Anhydrous Ammonia - U.S. Imports for Consumption Annual + Year-To-Date Data from Jan - Feb.

 
Quantity DescriptionCountry20102011201220132013 YTD2014 YTDPercent Change
YTD2013 - YTD2014
In 1,000 Units of Quantity
metric tonsTrinidad & Tobago4,4533,7733,7703,460543448-17.6%
.Canada1,0121,1611,1291,213217139-35.6%
.Ukraine478588303461920-100.0%
.Russia2815465384301080-100.0%
.Venezuela88234206156476539.8%
.Saudi Arabia0571177900N/A
.Indonesia36425745230-100.0%
.Mexico5531864000N/A
.Latvia7638035230-100.0%
.Estonia46109030130-100.0%
.Brazil341372500N/A
.Colombia275623569.4%
.Argentina0001500N/A
.Switzerland0001000N/A
.Cayman Is000660-100.0%
.Korea154300-1.5%
.Germany000000N/A
.Taiwan010000N/A
.Japan090000N/A
.Belgium010000N/A
.Turkey03523000N/A
.United Kingdom000000N/A
.China000000N/A
.Egypt9016249000N/A
.Libya2000000N/A
.Oman4700000N/A
Subtotal metric tons 6,7426,8116,2956,0321,078658-38.9%

According to Farm Futures magazine, ammonia prices are firming up in the Midwest corn belt after a spike in Tampa benchmark prices of $120 USD/mt to $580 late last month.

Retail ammonia was being offered at $732.50/st up $97.50 according to the USDA's survey of Iowa crop production costs as of April 8. The State of Iowa is the leading corn grower in the Union and corn needs the most nitrogen of all the row crops grown.

Seasonal UAN solutions prices are supported by the bump in ammonia prices. Gulf wholesale UAN-32% was $282.50 and in the Midwest, retail UAN solutions were steady at $393.50/short ton on average.

These sharply higher ammonia and steady seasonal UAN prices have not been completely reflected in the equity prices of some of the most leveraged nitrogen producer stocks and MLPs.

Included in this group are Terra Nitrogen LP (NYSE:TNH), CVR Partners (NYSE:UAN), Rentech Nitrogen Partners LP (NYSE:RNF) and OCI Partners (NYSE:OCIP).

CF Industries (NYSE:CF) should also benefit although the stock has had a good run. Agrium Inc. (NYSE:AGU) recently curtailed a plant in Alberta, losing an estimated 20,000 tons of ammonia production, but should benefit due to its largest Canadian ammonia production and extensive North American retail ammonia application services.

If Ukrainian fertilizer exports are curtailed due to a lack of natural gas supply from Russia, about six million tons of capacity could be affected. Recently, the largest private nitrogen producer Group DF, indicated three of its four plants were operating at capacity. However, these plants were producing mainly ammonium nitrate for the domestic growing season. Ammonium nitrate is not exported to from the Ukraine to the US due to a countervailing duty action.

Russian imports of ammonia and UAN could be prohibited if the US chooses to impose trade sanctions, benefiting domestic producers.

The first USDA Crop Progress report was delayed a day and released yesterday afternoon. It showed parts of the US winter wheat crop in bad condition similarly to last year, caused by excessive drought and cold.

The April USDA WASDE and Crop Production reports are going to be released today at Noon EST. Corn futures are mixed, soybeans are rallying and wheat futures are down modestly this morning. Higher soybean prices could draw acres from corn, reducing nitrogen fertilizer demand and mitigating some of the beneficial impact of tighter nitrogen imports.

Source: Lower February Imports Bullish For U.S. Fertilizer Producers