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Looks to me like this other company wants a shell to go public in..
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About US
Welcome To Our Site!
Hubei Yaozhihe Chemical Co., Ltd. was established in September, 2007, with the registered capital of 100.35 million Yuan. Our corporate representative is Xu Liekui. Now we have more than 1200 staff members.
Our production base is located in the junction of Yichang, Xiangyang, Shiyan and Shennongjia. It is the central area of the fourth largest phosphorus mine in China. The phosphorus resource we own has high quality and huge quantity. The conservative estimate reserve is 180 million tons, and the prospective reserves can be more than 1 billion tons. Depending on the resource advantage, we are ready to list our company in the security market.
Our main business is phosphorus mining and chemical industry. We have more than 10 subsidiary companies, including phosphorus ore production, phosphorus chemical production, civil blasting service, mineral prospecting, etc. Our main products are phosphorus ore, yellow phosphorus, phosphorus acid, sodium tripolyphosphate, sodium pyrophosphate, hypophosphorous acid, sodium hypophosphite, feed calcium, fire retardant and other phosphate products. Our production ability is 2 million tons/year of phosphorus ore, 13000 tons/year of yellow phosphorus and 450000 tons/year of phosphate. In 2011, our phosphorus mining and chemical annual overall production value was 1.2 billion Yuan, and the contributed profit tax was 320 million Yuan.
Since the establishment of our company, we have been honored as "Advanced Unit of Production Safety", "Great Taxpayer", "Civilized Unit" and "the Five-star Organization of the Party" by Hubei Province, Xiangyang City, Baokang County and Yaozhihe Village respectively. In 2012, we got the title of honor of "Red Flag Unit of Production Safety" from Hubei Province Government.
Here's the LOI agreement......
Exhibit 10.1
Letter of Intent (LOI) between
Hubei YaoZhihe Chemicals Co. Ltd.
and
Sterling Group Ventures, Inc.
Regarding Joint Venture Development of Phosphate Properties and Chemical Plants
of Hubei Yaozhihe Chemicals Co. Ltd.
Party A: Hubei Yaozhihe Chemicals Co. Ltd.
Party B: Sterling Group Ventures, Inc.
Based on mutual benefit, through friendly consultation and negotiation, both parties have reached following letter of intent regarding joint venture development of phosphate properties and chemical plants of Hubei Yaozhihe Chemicals Co. Ltd.
1. Parties
Hubei Yaozhihe Chemicals Co. Ltd. ("Party A") is registered in Baokang, Hubei province, China.
Address: Yaozhihe village, Maqiao town, Baokang county, Xiangyang city, Hubei province, China
Tel: 07105062157.
Legal representative: Liekui Xu. Ttle: Chairman.
Sterling Group Ventures, Inc. (“Party B”) is registered in Nevada of USA.
Legal address: 802 - 1067 Marinaside Cr., Vancouver, B.C. Canada V6Z 3A4.
Tel: 001-604-684-1001.
Legal representative: Xuxin Shao. Title: President.
2. Both parties agree to change Party A into Sino-foreign equity joint venture company ("Joint Venture") in Hubei province of China based on Sino-foreign joint venture enterprise law and related regulations by purchasing part of Party A's shares and/or increasing its capital. The joint venture company is a limited liability company. Both parties will contribute the required amounts in registered capital to be agreed upon. Both parties will share the benefits, risks and losses according to their ownerships in the Joint Venture.
3. Both parties agree that joint venture shall conduct and operate phosphate properties and chemical plants under Hubei Yaozhihe Chemicals Co. Ltd. The business scopes of the joint venture shall be exploration, mining and processing of phosphate ores, and development and production of phosphate fertilizers and phosphorus chemicals.
4. After this LOI is signed, Party B shall send its employees and consultants to visit the site and collect related information for evaluation of the project. Based on the evaluation, both parties shall discuss about the value or price of Party A's assets, share price and other business terms.
5. Party B shall pay its own cost for the evaluation of the project.
6. Party B shall keep the information that party A provides including electronic files and paper files confidential. Party B shall not disclose such information to any third party or use for other purposes without written consent from Party A except otherwise requested by laws and regulations of the countries. Such confidentiality term shall be still in effect even when this LOI is terminated or some terms in the LOI are null.
7. The laws of the People's Republic of China are applicable to the establishment, validity, interpretation and performance of this LOI. If both parties do not reach an agreement for cooperation and sign an actual investment agreement before April 1 2016, the LOI will be terminated automatically, or alternatively either party can terminate this LOI by written notice. When the notice is sent out, the LOI is automatically terminated. Either party shall not have any other liabilities to the other party.
8. There are two copies of this LOI. Each party holds one. This LOI is written in Chinese and English languages both versions having the same legal force and effect. In the event of discrepancies in interpretation, the Chinese version prevails.
9. This letter of intent is signed on November 25, 2015. The copy signed by fax shall have the same effectiveness.
Party A:
Hubei Yaozhihe Chemicals Co. Ltd.
Signed by its representative
“Liekui Xu”
Date: November 25, 2015
Party B:
Sterling Group Ventures, Inc.
Signed by its representative
“Xuxin Shao”
Date: November 25, 2015
Here we go...new assets and reorg...and God knows what else...
http://www.stockhouse.com/news/press-releases/2015/08/31/ivernia-announces-corporate-acquisition-and-re-capitalization
I would at the very least like to know what those 9 employees are doing all day in china? I don't remember seeing that many before! well mike talk to you next filing or news, whatever comes first...paydirt
Weekly Fertilizer Review
Retail fertilizer prices fall as market watches turmoil
Published on: Aug 24, 2015
Though some in the international fertilizer business are stepping back from deals in response to chaos flowing through global financial markets, U.S. growers continue to see lower prices as more dealers reset their offer sheets. And while the outlook is murky thanks to the China meltdown, there are a few hints prices for some products could begin to edge higher soon.
Ammonia prices worked lower again last week on retail markets, with our average falling $3.50 to $634.50, though that figure masks a large range still evident regionally. Quotes on the southern Plains remain mostly $560 to $615, in line with the $589 target suggested by current fundamentals of supply and demand. But further east prices are still much higher, though they're starting to reset lower too. USDA pegged Illinois at $685 for fall, though the low end of the selling range was $614, close to the $610 target fundamentally in the Midwest according to our models. Wholesale expenses remain steady, putting the Gulf index at $417 and terminals at $5420 to $555. But where the market goes from here is uncertain. A few plants will be down in the Corn Belt into harvest, while the trade is betting farmers will still be buying this fall despite the drop in prices. Supplies are getting a little tighter internationally, which may also tend to firm costs into the fall, though lower phosphate production in the U.S. could free up more ammonia.
Urea costs also edged lower again this week, with the average around $435.50, down some $2.50 from last week. Offer sheets on the southern Plains continue to run $380 to $415 mostly, with USDA's Illinois survey showing prices coming down below $455 on average, with the low end of the range down to $375. Wholesale prices continue to point to prices around $420 to $430, with fundamentals around $395, so the market is pretty fairly valued. Overall interest appears slack both in the U.S. and around the world, but there are mixed signals from that quiet market. Big sellers like China appear to be holding firm of their prices, at least for now, though international supplies could pick up toward the end of the year. That attitude is reflected in the swaps market, where the Gulf is trading $20 lower for December contracts.
UAN is still following the rest of the nitrogen complex, slipping around $1.55 on average, which puts the cost of 28% around $304.25. While some offer sheets on the Plains are down to $265 to $280, current wholesale costs suggest fair value of $285 with fundamentals at $280. The swaps market projects a $10 drop into winter, with the cost of 32% running $210 at the Gulf.
Phosphates show a big softer tone, but the complex continues to be the quietest part of the nutrient market. Average retail costs for DAP slipped almost $1.50 to around $549.50 while the cost of the Gulf was down $5 to $429. River terminals also edged lower, but business is slow. Swaps point to a $20 break in prices by November/December, but that would still leave costs most places above the $490 level forecast by fundamentals. Fair value based on wholesale costs is running around $530.
Potash prices dribbled lower again last week as the slow drip downward in the nutrient continues. Our average cost is around $473, down $1.25, but dealers resetting prices are below that. USDA put the Illinois average at $458, with recent offer sheets on the Plains running $415 to $445. Midwest wholesale prices slipped to $340, which puts fair value around $100 higher on average. Fundamentals indicate a cost around $430.
Moroccan Phosphate Sales Increase by 17 percent in 2015
Saturday 22 August 2015 - 11:02
Rabat – After recording a drop in 2014, Moroccan sales of phosphate have recovered, as sales figures increased in the first seven months of 2015 by 17 percent compared to the same period last year, the latest figures from the Exchange Office have revealed.
A statement by the Exchange Office said sales increased to MAD 25.4 billion between January and July 2015, compared to MAD 21.7 in the same period last year.
The statement added that phosphate sales have significantly contributed to an increase in Moroccan global exports in the first seven months of 2015, which increased by 6.3 per cent.
Earlier figures released in March by the Exchange Office said the increase of phosphate sales reduced Morocco’s trade deficit by 37.2 percent.
The trade gap narrowed to MAD 20.5 billion by the end of February 2015, compared to MAD 32.64 billion a year earlier.
The Office Cherifien de Phosphate (OCP), the world’s leading phosphate exporter, exported MAD 5.2 billion worth of phosphates by the end of February 2015.
OCP is targeting an annual phosphate rock production of 47 million tons by 2017, against the current level of 34 million tons.
The company said that fertilizer production is expected to hit 10 million tons in 2017,making it the world’s top producer.
OCP controls 36 percent of the global raw phosphate market, and 50 percent of the sales of phosphoric acid. It also controls 70 percent of the world’s phosphate reserves.
yeah mike I agree with you...
now grant it they have faced a very hard time to be in the phosphate mining biz and all... I understand that... but I would think that they could use the cash in the coffer to start something new and exciting and I am hoping that's exactly whats happening and we will hear all about it soon. chris is in his mid 30s and its a perfect time to get something going for himself and us shareholders and his young family. most of his history has been around mining and oil company stuff and as we know its tuff timing for that but never the less, he should be able to work something out for everyone involved here. good luck to us all, paydirt
Global and China Lithium Iron Phosphate
Material and Battery Industry Report, 2015-20
NEW YORK, Aug. 13, 2015 /PRNewswire/ -- As one of the main cathode materials for lithium-ion batteries, lithium iron phosphate (molecular formula is LiFePO4, also known as LFP) features such strengths as high safety, long cycle life, and high temperature resistance. But its weakness is lower energy density. Lithium iron phosphate batteries can be used in electric vehicles, power tools, electric bicycles, energy storage devices, etc. For now, they are mainly used as power batteries for electric vehicles.
In 2014, some 12,500 tons of lithium iron phosphate were sold globally, and they were mainly sold to China, almost accounting for 75% of the total. That was mainly because Chinese electric vehicle enterprises tend to adopt lithium iron phosphate as power batteries of cathode materials. Additionally, China's great support for new energy vehicles has promoted the rapid increase of the country's demand for lithium iron phosphate. In contrast, cathode materials for power batteries in the US, Japan, and South Korea are dominated by ternary material and lithium manganate.
Globally, the traditional lithium iron phosphate material manufacturers mainly include the U.S.-based A123 and Valence and the Canada-based Phostech, which grasp mature mass-production technology. However, the demand for lithium iron phosphate battery in the US and European countries showed an ongoing decline, a situation that plunged them into financial difficulties. For example, A123 filed a petition in bankruptcy in October 2012, and was finally acquired by China's Wanxiang Group; Valence retreated from NASDAQ in July 2012 as it had long been in the red.
In recent years, however, lithium iron phosphate enterprises in Mainland China and Taiwan have been developing very fast, accompanied by dramatic capacity expansion and rising market position. By the end of 2014, over 80% of the world's lithium iron phosphate originated from Mainland China and Taiwan, of which the Taiwanese lithium iron phosphate material manufacturers were mainly Formosa and Aleees, of which total capacity approximated 7,300 tons in 2014.
In 2014, Mainland China recorded a total capacity of about 30,000 tons of lithium iron phosphate. The major enterprises included Tianjin STL Energy Technology Co., Ltd., Guanghan Mufu Lithium Power Materials Co., Ltd., and Pulead Technology Industry Co., Ltd., etc. which contributed a combined capacity of 9,500 tons. Furthermore, there are several proposed and ongoing lithium iron phosphate projects in China. For example, Tianjin STL Energy Technology planned to expand its lithium iron phosphate capacity to 10,000 tons within three years; Pulead Technology's Base in Qinghai is working to construct a "5,000 tons/a lithium iron phosphate and other cathode materials" project (Phase II).
In terms of EV industry, China's mainstream cathode materials for power batteries are still lithium iron phosphate, which represents an around 40% share of power battery market, Major manufacturers consist of BYD, Guoxuan High-Tech, and Tianjin Lishen, etc. However, low energy density of lithium iron phosphate batteries restricts the EV's driving range, a situation that makes more and more enterprises turn to ternary materials. In the future, the application percentage of lithium iron phosphate batteries in electric vehicles will fall.
However, the application of lithium iron phosphate batteries in energy storage, photovoltaic and communication batteries is on the rise, reflecting a huge space for development. In the field of electric bicycles, the batteries have obvious advantages over the traditional lead-acid batteries, hence a larger alternative space.
Global and China Lithium Iron Phosphate (LiFePO4) Material and Battery Industry Report, 2015-2018 compiled by ResearchInChina is primarily concerned with the following:
Market size, competition pattern, development prediction, etc. of the global lithium iron phosphate industry;
Market size, competition pattern, downstream demand, development prediction, etc. of China's lithium iron phosphate industry;
Operation, lithium iron phosphate business, etc. of 21 lithium iron phosphate companies at home and abroad;
Operation, lithium iron phosphate battery business, etc. of 11 lithium iron phosphate battery companies in China.
Weekly Fertilizer Review
Prices may be sliding, but events in international markets cloud the outlook.
Published on: Aug 17, 2015
While farmers are finally seeing lower fertilizer prices as summer nears its end, events on international markets could cloud the outlook for nutrient costs into the fall. Add in uncertainty over the size of U.S. crops and buying decisions aren’t getting any easier.
Ammonia prices continue to move lower for growers on the Plains, though it’s harder to find bids for fall in the heart of the Corn Belt. Average retail costs dropped $10 to $638, but updated offer sheets on the southern Plains are running in the $560 to $580 range. The Gulf Index has remained at $418 over July and August after dropping $175 during the winter and spring, suggesting average retail costs around $620. Current corn prices and other fundamentals project prices average in the $598 to $608 range, unless growers decided to cut corn acreage. In that event average costs could fall all the way to the $540 level.
Urea costs were also down $10 last week, with our average at $438. But new offer sheets on the Plains are running more like $380 to $415. Though current prices are fairly valued, swaps into fall are around $10 cheaper, so the market doesn’t appear to be worried about rising costs. Indeed, Fundaments suggest fair value around $405, less if farmers cut seedings. The big question mark now is how events in China will impact both supply and demand. China, a leading exporter, imposed a new tax on domestic sales, then roiled international markets by devaluing its currency. Currencies of many countries weakened as well, because they either sell to China or compete with it on the world export market for finished goods. Farmers in those countries, including Brazil and South Africa, have less purchasing power to buy fertilizer, which could keep markets sluggish.
UAN followed the rest of the nitrogen complex lower last week, with our average dropping $6.60 to $306 for 28%. That’s still about $20 too high, according to our fair value calculation, based on the current cost for 32% at the Gulf, which was steady at $209. Swaps show little movement through the winter, indicating little momentum for costs to turn higher. The lowest retail offers for 28% are down to $280, in line with our projections.
Phosphates continue to buck the trend in the rest of the nutrient market as a surge in exports this spring lowered North American inventories according to the latest data. Still rising production left supplies at the end of the 2015 application season above year ago levels. DAP at the Gulf did drop $5.50 last week to $429, but average retail costs actually edged a buck higher, to $551. That’s fairly close to current fair value projections, though the swap market shows a lower trend into winter, with January $25 lower than the spot. Fundamentals suggest retail prices should be $500 or less for DAP, a price that might only be seen if demand from Brazil and India really dries up.
Potash was stubbornly steady in 2015, surprisingly so given the steady decline in world prices over the past year. Now retail costs are finally cracking. Our average dropped $7 last week to $474, with new offer sheets finally coming in around the $442 fair value price suggested by terminal markets. Prices could be $10 less if fundamentals remain weak. While North American companies pushed exports in the spring, domestic sales were slow. Inventory levels were still 11% below year-ago levels, but China’s demand remains uncertain due to the tax increase and currency devaluation.
gm mike, yeah that's a good size chunk on the ask right now and this is before the quarterly is out (which should be any day now)so I think we cant blame it all on L2T. so many things are working against us right now you really cant blame anyone for dumping. I think that the wild card is chris and hopefully we hear all about what hes been up to before the weeks out. good luck all, paydirt
mike look at Mosaic's results in that PR on strong phosphate sales and demand??.....that is with a 115 handle and in an old SGGV PR they said that their cost per ton would be 40 bucks. seems to me that they could mine at a profit right now too. my whiskers are growing whiskers waiting for things to happen...
Fertilizer maker Mosaic’s second-quarter profit jumps 57 per cent
Published Tuesday, Aug. 04, 2015 7:16AM EDT
U.S. fertilizer company Mosaic Co reported a much higher-than-expected quarterly profit on Tuesday, helped by strong phosphates sales and improved potash prices.
Mosaic’s shares rose 2.8 percent to $43.96 in New York.
Second-quarter net earnings climbed 57 percent to $390.6 million, or $1.08 per share.
On an adjusted basis, Mosaic, the world’s largest producer of finished phosphate products, earned $1.05 per share, above the average analyst estimate of 89 cents, according to Thomson Reuters I/B/E/S.
Net sales rose 2 percent to $2.5 billion, in line with expectations.
Joc O’Rourke, currently chief operating officer, takes over as chief executive on Wednesday, succeeding Jim Prokopanko. The move completes the changing of the guard at North America’s biggest fertilizer companies, following Potash Corp of Saskatchewan, Agrium Inc and CF Industries .
O’Rourke, 54, said in an interview that the company will keep its capital priorities of first sustaining existing businesses, followed by maintaining its dividend and growing internally; acquisition opportunities; and returning cash to shareholders.
Opportunities to buy potash companies may become more scarce if Potash Corp succeeds in buying K+S, O’Rourke said.
“The (potash) industry is reasonably concentrated and a lot of M&A-type growth is going to be difficult, and particularly if this next move by our one competitor is done,” he said.
Potash Corp said last week that if it acquires K+S, it hopes to export potash from the German miner’s Western Canada mine through Canpotex, its sales partnership with Mosaic and Agrium.
Prokopanko said Mosaic would not object.
Mosaic said its joint venture to produce phosphate in Saudi Arabia with Ma’aden will cost $500 million more to build than expected, for a total of $8 billion.
Phosphates sales rose 8 percent to 2.8 million tonnes in the second quarter, while the average realized diammonium phosphate price fell 3.2 percent to $450 per tonne.
Mosaic expects to sell 2.1 million to 2.4 million tonnes of phosphates at $435-$455 per tonne in the current quarter.
North America’s second-biggest potash producer said second-quarter potash sales fell 8 percent to 2.3 million tonnes from a year earlier, while the average realized potash price rose 5 percent to $280 per tonne.
Mosaic expects to sell 1.6 million to 2.0 million tonnes of potash at an average $260-$280 per tonne in the third quarter.
Mosaic narrowed its 2015 phosphate sales forecast to 9.5 million to 10 million tonnes from 9 million to 10 million.
The company cut its potash sales forecast for the year to 8.2 million to 8.6 million tonnes from 8.5 million to 9.0 million.
Weekly Fertilizer Review
Published on: Aug 3, 2015
Nitrogen prices continued to move lower last week on retail markets, reflecting cuts earlier in wholesale benchmarks. With commodities depressed by weak global financial markets, growers should make sure they're getting good deals before locking in costs for 2016 crops.
Ammonia prices remain steady at retailers in the central Corn Belt, but more dealers on the Plains are posting offer sheets with significant cuts from previous levels. Prices out west are now down to the $570 to $615 range, reflecting terminals that are running around $542.50, which was actually up $5 last week. Midwest terminal prices are only slightly higher at $555, following the $175 reduction in the index at the Gulf over the winter, but USDA continues to report average costs above $700 in Iowa and Illinois. The average across the country was down $12 this week to $641 in that very wide range, about $20 above projected fair value. Fundamentals continue to suggest even lower prices if the corn market can't rally, with that range down to $547 to $601. The Gulf index was flat for August at $460.
Urea was down another $5 last week, with average retail costs below $450 as whole markets internationally remain soft due to weak demand. India has been the only notable buyer of late but Iranian supplies are now joining Chinese offers on the market, helping take the Gulf index down to $280. Based on that cost, retail prices should be running around $430 or less, with fundamentals pointing to even weaker levels. Updated offer sheets on the Plains are running around that level at $425 to $445, while river markets have cut costs to $320 to $330. Swaps are mostly flat into winter as the wholesale market tries to stabilize.
UAN also appears to be stabilizing on the wholesale market, with the Gulf index for 32% down only $1 last week to $206.50. That suggests a retail cost for 28% around $285, but most retail prices are well above that level, keeping our average at $312. The swaps market at the Gulf is steady to slightly higher through winter, suggesting the market believes more farmers may turn to spoon-feeding to cut costs in 2016.
Phosphates were down only slightly last week, with the average for DAP at $550. That's actually in line with the current cost at the Gulf, which crept $3 higher to $434.50 in a market that is edging towards the top of its price range over the last year. While fundamentals and lower nitrogen costs point to lower prices, a quiet market internationally has remained very resilient. Swaps show a $20 decline into November, however, suggesting patience may be needed.
Potash was steady on wholesale and retail markets last week, with volatility on world financial markets, especially currencies, keeping buyers sidelined. Retail prices in the U.S. has been flat despite a $50 break this year on wholesale markets. While the retail average price remains above $480, terminal prices suggest fair value is really closer to $445. Fundamentals project even further cost cuts are justified but the complex resisted that market rationale this year.
China's Great Short Seller Suddenly Turns Bullish
July 29, 2015 — 1:00 PM PDT
Updated on July 30, 2015 — 7:11 AM PDT
Jon Carnes is about the last person on Earth you’d expect to turn bullish on China’s stock market.
This is a man who built his career on wagers against Chinese companies, bets so successful that one analyst ranks the 41-year-old among the best short sellers worldwide -- more effective than industry giants from Carson Block to David Einhorn. Carnes’s bearish research caused such a stir in 2011 that he fled China and had to fight off fraud allegations. The ordeal landed one of his colleagues in a Henan province prison.
So when Carnes says he’s now an advocate of investment in China Inc. -- with a 111 percent rally forecast for the Shanghai Composite Index -- it’s worth paying attention. His optimism is all the more striking given it comes at a time when many international money managers are turning bearish, put off by what they see as bubbly valuations and unjustified government intervention to prop up share prices after a $4 trillion rout.
For Carnes, the bull case is simple. The stock market’s surge to a seven-year high in June caught most Chinese investors by surprise, and they’re determined not to miss the next buying opportunity. In a country where household wealth surged to an estimated $21 trillion last year, less than 10 percent of the population is invested in equities.
“A lot of people missed out on the bull market,” Carnes said by phone from his office in Vancouver. “This violent correction is a huge buying opportunity for them.”
Alfred Little
Carnes, who started his investment career in 1992 with $3,000 of savings from a part-time job at a South Carolina fried chicken joint, has been researching Chinese shares for at least a decade. Around 2009, he started focusing on short-sale opportunities in companies he suspected were inflating their financial statements.
To shield against authorities who frowned on negative publicity for Chinese firms, Carnes created a fake online identity -- Alfred Little -- that he used to broadcast his views.
It was a winning strategy. His record of public bets ranked first among more than 28 short sellers last year tracked by Activist Shorts, a website that analyzes bearish research. At least eight Chinese companies he targeted have since de-listed or been charged with fraud.
Prison Time
Carnes also made enemies along the way. After one Alfred Little report in 2011, targeting a Toronto-listed miner of silver in China, he got threats of violence and decided to leave the country.
Mainland authorities charged his Chinese-born colleague, Kun Huang, with defamation and Huang served two years in prison. Carnes’s use of the fabricated Alfred Little identity led to fraud allegations by Canadian securities regulators, which got dismissed in May.
Carnes’s optimistic stance contrasts with a bearish shift by many of his international peers
After all that, Carnes and Huang are back together in Vancouver, managing about $10 million and overseeing a team of seven analysts in China and North America. Their firm, Eos Holdings LLC, runs money for Carnes’s family and a few friends, his charitable foundation and Eos employees. He doesn’t accept funds from outside investors.
“I really have to give him credit for fending off these problems, getting up and dusting himself off,” said Block, the founder of Muddy Waters LLC who rose to fame with a successful bearish wager against Sino-Forest Corp. in 2011. He met Carnes five years ago and the two have worked together on China research.
One Short
While Block remains a skeptic on Chinese markets, Carnes says the Shanghai Composite may surge to a record 8,000 in the next 18 months. His stock picks include U.S.-listed E-Commerce China Dangdang Inc. and Jinpan International Ltd., a maker of power distribution equipment. He’s also looking for buying opportunities in Shanghai.
The only thing Carnes is shorting these days is the Direxion Daily FTSE China Bear 3X Shares exchange-traded fund, better known by its YANG ticker on U.S. exchanges. The wager is a bullish one, paying off when Chinese shares surge. The Shanghai Composite dropped 2.2 percent on Thursday and the Deutsche X-trackers Harvest CSI 300 China A-Shares ETF lost 3.3 percent to $39.70 at 10:06 a.m. in New York.
Carnes’s optimistic stance contrasts with a bearish shift by many of his international peers. Foreign investors sold Shanghai stocks through the city’s cross-border exchange link for the past three weeks, with outflows accelerating after the government banned stake sales by major shareholders and allowed more than 1,400 companies to halt trading.
China Cynic
At 67, the median price-to-earnings ratio for stocks on mainland bourses is on par with its level at the peak of China’s equity bubble in 2007.
“I generally think there are better risk/reward opportunities than going long in China,” Block said. “He’s probably less of a cynic about the world and about China than I am.”
Carnes says Chinese shares have room to rise as more domestic speculators pile into the market. The nation’s household wealth -- estimated at $21 trillion by Credit Suisse Group AG in 2014 -- is primarily tied up in real estate, bank deposits and unlisted businesses. Just 8.8 percent of respondents in the latest China Household Finance Survey had equity holdings in the second quarter of 2015.
“There’s tons and tons of money in China, and that money has to go someplace,” Carnes said. “I don’t think giant bull markets like this end that quickly.”
big volume today...somethings up...keep an eye out...
geez mike at this point I don't give a rats azz what they do as long as they PR it :)~ im just getting a little tired of waiting for wonders and blunders. if he reads this board, I would ask him to please drop a bombshell of good news on all us mushrooms!!
Viewpoint: US phosphate, potash markets diverge
20 Jul 2015, 3.41 pm GMT
Houston, 20 July (Argus) — The US phosphate market enters the second half of 2015 on an upswing, with prices supported by resurgent crop prices and a lack of imports. But the rally's duration is uncertain.
There are supportive factors ahead of the fall application season. DAP barge prices have risen to $435/st fob Nola, up by about $30/st from April lows. The rise coincides with the rally in crop prices. New-crop corn prices have jumped by nearly $1/bushel to the mid-$4.50s/bushel over the last month because of excessive rainfall in the Corn Belt in June. That bodes well for phosphate fertilizer demand if crop prices can maintain this level or push higher.
Aside from grain prices, the main swing factor for the US DAP/MAP market will be imports. Unlike last year, the US is unlikely to see a large influx of offshore product ahead of the fall season. The US imported an unprecedented 283,000t of DAP in the third quarter of 2014—93pc of which came from China—and 386,000t MAP, most of which came from Morocco and China.
The US spent the majority of second quarter 2015 at a sizable discount to other markets, discouraging imports. Brazil cfr prices, for example, were at a $30-40/t premium for much of April through June.
Even though that premium has narrowed over recent weeks, timing issues and considerable Indian demand makes Chinese cargoes to the US unlikely. Market participants expect Moroccan shipments to the US to resume sometime in the second half of the year, with traders aiming to bring in cargoes ahead of the spring 2016 season.
Until then, domestic supply remains US buyers' only option for fall.
The US potash market has taken on a much weaker tone than phosphates as it contends with oversupply.
Barge prices are now testing new lows at the $310/st fob Nola level, even after Canadian producers introduced summer fill prices at $355/st fot Midwest aimed at stimulating demand. Even though that price came in $55/st lower than the headline level from the fourth quarter of 2014, buyers have yet to fully commit given the sense of oversupply. North American potash production reached record levels in the first quarter of 2015 while offshore suppliers from Russia, Israel, Belarus and Chile flooded with tonnage Nola to take advantage of favorable netbacks.
For the second half of 2015, it remains uncertain how much offshore product will be brought, especially with Brazil, the US' top competitor for granular MOP, behind on buying this year and Nola's premium to that market eroding.
Domestic supply will be reduced in late summer as mines undergo annual maintenance turnarounds, but US buyers should be well-supplied, especially given capacity expansions recently completed by Canadian producers.
Internationally, prices have trended flat-to-down despite substantial contract volumes booked for China and India. One potential market catalyst PotashCorp's takeover bid for German producer K+S. K+S rejected PotashCorp's initial late-June friendly takeover bid, but the Canadian producer has not dropped its interest.
If a deal is reached, the acquisition would give PotashCorp more supply-side flexibility, as it would include K+S' new Legacy mine being built in Saskatchewan.
Weekly Fertilizer Review
Nitrogen prices make seasonal move lower
Published on: Jul 17, 2015
It's taken longer than usual, but nitrogen prices are finally moving lower, with both retail and wholesale costs down this week for many products. While this is the first good buying opportunity of the summer, it's still unclear how much strength the market will have headed into the fall application season, due to uncertainty over both crop prices and international demand. Fertilizer buying out of both Brazil and Argentina was slow this year, with weak currencies hurting purchasing power.
Ammonia prices at dealers on the Plains posting new offers were down sharply this week, reflecting the break in expenses seen over the spring at the Gulf. Charges in the $590s are the rule, with some even lower. Costs in the central Corn Belt remain higher, even as there's more and more talk of less fall-applied nitrogen. Still, the lower costs in the west lowered the average price to $654, down $7.50 this week alone. The current Gulf price of $417 puts terminals at $535 to $555, suggesting fair value at the retail level is around $608 to $6
Urea prices nosed dived this week, with costs down some $37 at the Gulf alone as the international market continues to falter on slow demand and adequate supplies. While an Indian tender could boost buying a little, plenty of offers are expected. Upriver terminal charges continue to drop to match the decline at the Gulf, where the current cost of $284 translates into a fair value retail of $431. Swaps into fall are $5 to $10 cheaper, matching our models current projection based on supply and demand. Some Plains dealers are already there, posting a price of $420, though the average is $455 this week.
UAN finally appears to be ready to break at the retail level, after a steep drop on the wholesale market over the spring and early summer. While the average retail charge was down only $5 this week to $312.50 for 28%, some dealers on the Plains have slashed their price down to the $280 level where we've put fair value after the wholesale price decline. The cost of 32% at the Gulf is down to $210, with the swaps market steady into the fall.
Phosphates continue to show a firm tone, with wholesale costs moving higher again this week. The cost of DAP at the Gulf was up $4 this week to $431.50, which translates into a current retail fair value of around $545. That is actually $5 less than the current price, which was unchanged at just over $550. Retail costs have barely budged all this year, while wholesale costs are edging back towards winter highs after a break in the spring. Swaps into late fall are about $20 lower, suggesting patience may be needed unless the product will be applied earlier.
Potash prices showed some variability at the retail level this week. Some dealers cut costs to reflect the $50-dollar drop at terminal markets since winter, taking their prices all the way down to the $445 level. But USDA said the cost in Iowa was actually up $15, moving back to $489.25. Our model puts fair value based on wholesale prices at $450, with fundamentals of supply and demand pegging the cost down to $434.
mike the last PR'd news to the shareholders was 11 months ago. when refill was able to get something from chris he told him they have not been sitting around and they were working hard on our behalf. I would like a full report as to what that means?? I don't think that's asking too much, do you??
Our fearless leader here needs to throw us a BONE !!!!!
https://www.facebook.com/ctsakok
things just havent been the same without you L2T...
is that you buying all the shares up??
Hi Refill, I think this really says alot that they are willing to hang in there and see what happens from here. When they pick up the phone and call Chris and ask WTF is going on he tells them with no sugar coating (and they would know) and they dont sell !!! I say GL2A aboard, paydirt
gm mike, uno its interesting ive never noticed those guys before but im sure they have been there and i just missed them. i cant wait for the Q this time mike, but i say that every time i guess :)~
hey refill, these guys look to be staying the course too......
Top Mutual Fund Holders
Holder Shares % Out Value* Reported
U.S. Global Investors-China Region Fund 500,000 0.66% 6,000 Mar 31, 2015
U.S. Global Investors-Global Resources Fund 500,000 0.66% 5,500 Dec 31, 2014
Weekly Fertilizer Review
High crop prices could firm fertilizer costs
Published on: Jul 8, 2015
The turnaround in crop prices over the last month should be good news for growers with production to sell. But it could also firm fertilizer costs just as international markets face an array of uncertainty that increase volatility and risk. Profit margins are still underwater, further complicating buying decisions this summer.
Ammonia moved higher for contracts settled by the Gulf index for July, but costs elsewhere followed the trend we talked about last month. With initial fall offers reflecting the drop in wholesale costs over the spring, terminal prices also fell last week some $20 to $45, putting wholesale charges in the $535 to $555 range. While spot retail prices remain high, they’re starting to come down too, with the average at $662 this week. That’s still some $46 above our projected fair value, and fundamentals suggest prices should fall another $15 further. Much depends on prices for corn as farmers begin to draw up plans for 2016. The $75-cent rally added $30 a ton to the projected retail price of ammonia, so be on the lookout for volumes purchased earlier. There’s already a $200 spread between high and low retail costs around the country.
Urea prices were firm all spring, but that strength as predicted is over. Demand around the world is waning and sellers, like those in China, who were once standing firm are now moving to get deals done. Costs at the Gulf dropped $18.50 last week to $325 and the swaps market for July is more than $20 below that, with August contracts at $280. Average retail costs of just under $460 are around $10 above fair value, with summer values pointing to $425 – and that’s if grain prices don’t fall.
UAN appears to be searching for bottom, at least on the wholesale market, after the price of 32% at the Gulf dropped some $50 over the spring and early summer. While retail prices are quiet, with the average still around $320 for 28%, that should change quickly once dealers restock. Current wholesale prices put $280 to $285 as a fair retail price into the fall.
Phosphates are the only part of the complex with anything resembling a firm tone right now. The price at the Gulf actually rose $5 a ton last week, putting DAP there at $427.50, with upriver terminals rising a similar amount. Retail costs dropped $1 on average last week but remain above $550, around $10 over current fair value and $20 above the level where August contracts should be. DAP tends to rise and fall on a different time frame than other nutrients, and the down phase of its cycle is suggested by the swaps market, which showed contracts falling $30 into the end of the year.
Potash prices continue to leak lower at the wholesale level, with Midwest terminal costs down $7.50 last week to $355. Retail prices remain unchanged at $482 on average because little business is being done right now. Fair value is around $450, but rising corn prices have lifted the potential for prices to stay firm. Much depends on buyers around the world, who balked at higher costs when crop prices were lower.
i lifted this from a story in june on prices......
TER: Let's move on. The price of fertilizer has risen steadily for 12 months or so. Do you expect that trend to continue?
PR: Over the last year or so, the price of fertilizer is up about 10%. It has essentially been able to put small incremental increases in and hold them—both in the potash and phosphate spaces. That suggests that the issues that we had in 2013 with the break-up of state-owned Belaruskali and Uralkali (URKA:RTS) (URKA:MCX) (URKA:LSE), which really punished market pricing, are behind us. Now, the pricing negotiations with India and China are based mostly on supply and demand dynamics as opposed to market share dynamics. We're looking at a potash price now of about $306/ton and a rock phosphate price of around $115/ton.
TER: At the moment, fertilizer seems to be a largely oversupplied market. Can investors make money in this space in the near term?
PR: Yes, if they are selective and pick out those situations that have clear marketing and production advantages over existing producers. Morocco dominates the rock phosphate market on an international trade basis, but it produces rock phosphate as opposed to the more enriched sulfur phosphate. The country is now attempting to produce enriched products so that it's not selling away raw-rock enrichment price advantage in the fertilizer market. But it will take time to adjust.
In the potash market the big players are PotashCorp. (POT:CA) (POT) in Saskatchewan, and Belaruskali and Uralkali in the Russian states. Israel Chemicals Ltd. ($ICL) has spent the year positioning itself for the future by joint venturing with U.S.-based Albemarle to manufacture the latest fire retardants and then making a bid for Allana Potash Corp. (AAA:CA) (ALLRF) . Israel Chemicals needed to get potash supply that was going to be at the very best end of the price curve. Allana's Danakil potash project in the Danakil Depression in East Africa should be the lowest-cost place to produce potash over the next 20 years.
TER: Are there other potash or phosphate companies that you're following?
PR: One is Sirius Minerals Plc (SXX:LSE). For about 18 months the company has been working diligently with various U.K. planning authorities to get the final approvals needed to put its underground York potash mine into production. It is essentially moving through the last hurdles. The interesting thing is that immediately adjacent to the existing, producing Boulby potash facility, Sirius has a polyhalite deposit. Polyhalite is a potash-bearing mineral that had not previously been a significant accepted raw material component in the fertilizer market, but Sirius has demonstrated to various offtakers that polyhalite is a commercial material in its own right. Now it's just a question of the final regulatory permissions, and it will begin construction.
TER: Polyhalite is not a narrative that you typically hear in the potash space.
PR: Most potash mines are working with the mineral sylvite because it is a solution-extractable material. It also has slightly higher potassium content than polyhalite. But because polyhalite has higher proportions of magnesium and sulfur in it than sylvite, fertilizer manufacturers don't have to add as much of these to make blended fertilizers. For certain fertilizer blenders, that's a cost advantage.
TER: Are you following any other fertilizer companies?
PR: Another one is Sociedad Química y Minera de Chile S.A. (SQM) (SQM-B:SSX) (SQM-A:SSX) because it also produces some byproduct lithium and iodine.
I follow a little phosphate company called Focus Ventures Ltd. ($FCV:CA) because it offsets the big Bayovar deposits in northwestern Peru on the same productive horizons.
And I still personally follow DuSolo Fertilizers Inc. ($DSF:CA). DuSolo has chosen to go the low capital expenditure route to quickly move into production. The company is in Brazil, which is geologically and commercially short of both potash and phosphate for fertilizer. DuSolo produces coarse phosphate for the local agricultural market. DuSolo can essentially sell a bag of crushed raw rock or slightly enriched material directly to the farmers without having to blend it into higher-grade fertilizers at additional expense. That preserves its margins. By the same token, it doesn't have to build a costly plant to position itself in the higher-end enriched fertilizer component of phosphate and feedstock. I follow DuSolo quite closely.
TER: Do you have some parting thoughts on the batteries materials market?
- See more at: http://www.equities.com/editors-desk/stocks/energy/a-power-portfolio-primed-for-profits#sthash.hzDkhD0A.dpuf
story on Agrium but tells story of market itself......
By Andrew Walker - July 6, 2015
Agrium Inc. (TSX:AGU)(NYSE:AGU) is on the rise again and new investors are wondering if this is the start of another big run.
Industry trends
Agrium is the world’s largest retailer of seed and crop protection solutions as well as a major player in the wholesale crop-nutrients market.
Experts say there are seven billion people on the planet right now. By the year 2050, that number could hit 11 billion. That’s a lot of extra mouths to feed, especially when suburban housing developments and big box shopping centres continue to gobble up valuable farmland.
In the next 15 years, Agrium says the annual consumption of oil seeds and grain could increase by 1.6 billion tonnes. To meet that demand farmers will use an additional 58 million tonnes of potash, nitrogen, and phosphate on their land and spend an additional $3 billion on seed and crop protection products.
That’s good news for Agrium and its shareholders.
Integrated business model
Agrium is a unique play in the agriculture sector because it owns both wholesale and retail operations.
The wholesale business sells nitrogen, potash, and phosphate to global buyers. This market is dominated by a handful of large players and marketing cartels. Market-share battles often erupt and that can impact prices and profit margins. For example, potash prices dropped 25% two years ago and are just starting to recover on the back of strong global demand. In fact, worldwide potash sales hit a record 61 million tonnes in 2014.
Nitrogen margins depend on the price of natural gas, which is the main input cost. North American natural gas is abundant and cheap, which puts Agrium in a great position to compete on the global market because it is a low-cost producer.
The retail operations offer investors a steady and predictable revenue stream that helps offset the volatility that can hit the wholesale side of the business.
Agrium sells seed and crop protection products to more than 500,000 farmers located in North America, South America, and Australia.
Production growth
The company is in the process of wrapping up a series of capital-intensive expansion projects. Agrium’s Vanscoy potash expansion is now complete and will add as much as 40% to the company’s output once the facility is running at full capacity. Agrium is also boosting capacity at its Borger nitrogen plant in Texas.
Dividend machine
This is a great time to be an Agrium shareholder because the transition from development to production on the major capital programs means investors should see much higher free cash flow.
Agrium recently increased the distribution by 12% and currently pays a dividend of US$3.50 per share that yields about 3.2%.
As capital costs decrease and output ramps up, cash flow available for payouts should rise significantly in the next few years.
If you are looking for a dividend-growth pick that you can simply buy and sit on for 20 years, Agrium is a solid choice.
Don't miss our #1 dividend-growth stock for 2015!
Agrium has a strong history of dividend growth, but our analysts recently discovered one TOP dividend-growth stock that is even better.
nice refill, ive got this in my retirement acct and reg. acct so im with ya bud...gl2u2
boy i dont know refill. the price has so many things that can effect it such as stock piles, weather and planting cycles, number of mines online and many more im sure, so for it to stay at 115 for so long does make one wonder about something controlling the price. i keep coming back to the fact that people gotta eat and there is alot of folks in china so im gonna stay the course.
gm Refill, yeah that really is a little crazy to stay so steady for that long. i think they can make money at this price with this mine but demand has to be there and that is the wild card i guess. we will hear something soon with the quarterly due out. take good care, paydirt
Declines in China Won't Continue for Long: Von Pfeil
http://www.bloomberg.com/news/videos/2015-06-30/declines-in-china-won-t-continue-for-long-von-pfeil
If I had just $1, I’d invest here: Stephen Roach
Friday, 26 Jun 2015
Never mind the wild swings, Stephen Roach, the former chairman of Morgan Stanley Asia, said if he had just a single buck to spend on one equity market in the world he'd pick...China.
"Markets around the world are really rich. I think if the Chinese market corrects a little bit more from here then it would be my first choice," Roach, who is now a senior fellow at Yale University's Jackson Institute of Global Affairs, told CNBC on Friday.
"Especially in consumer and services names," he added.
China's stock market has been on a roller-coaster ride in recent weeks amid concerns that valuations have risen to unsustainable levels and a flood of initial public offerings (IPOs) – which have drained liquidity from the market.
The benchmark Shanghai Composite tumbled 7.4 percent on Friday, racking up a 6.4 percent weekly loss. This follows a 13 percent plunge last week – its worst weekly decline since 2008.
The index, however, remains up 30 percent year-to-date – putting it in the ranks of the best performing markets globally.
Addressing the disconnect between China's soft macro-economic backdrop and its sizzling stock market, Roach says it all boils down to liquidity.
Over the past six months, the People's Bank of China (PBOC) has been easing its policy stance to maintain adequate interbank liquidity. In April, it lowered the reserve requirement ratio (RRR) for banks by 100 basis points to 18.5 percent - the deepest single reduction since the depth of the global crisis in 2008, according to Reuters.
"The U.S., for example, is in the midst of the worst recovery in its post-World War II history. Yet the stock market is up three times from its trough in 2009," he said. "These are liquidity driven markets and investors believe that central banks are just going to be there and keep pouring punch in the punchbowl."
Read MoreWhy Chinese stocks could slide 50 percent
Experts remain divided over how to trade the notoriously volatile mainland markets. Morgan Stanley on Friday advised investors against buying the dip in the market, noting that it has likely already seen its peak in the current cycle.
The bank set a mid-2016 target price range for the Shanghai Composite at 3,250-4,600 – representing anywhere from a 22 percent slide – in a worst case scenario - to a 10 percent rise – in a best case scenario - from current levels. The index ended at 4,193 on Friday.
"Our stance on China A-shares is that this is probably not a dip to buy. In fact, we think the balance of probabilities is that the top for the cycle on Shanghai, Shenzhen and Chinext has now taken place," Morgan Stanley wrote in a report on Friday.
Roach was less sanguine on the outlook for Japan equities, despite the Nikkei 225 index rising to its highest level in more than 18 years earlier this week. When asked about the possibility of the index climbing back to its 1989 peak of around 40,000, he said: "Forget it, that's pure fantasy."
"It's been 25 years of lost decade-like growth in Japan. The last thing Japan needs is to go back to a bubble mindset which created the monster in the first place," he said.
Roach says the jury is still out over whether Abenomics, or Prime Minister Shinzo Abe's plan to kickstart the long moribund economy, will be successful.
"There are reasons for encouragement on some ground but it's really early in the game to conclude that it is a successful campaign especially in light of political resistance to the structural changes in the third arrow," he said.
Weekly Fertilizer Review
Patience may lower nitrogen costs
Published on: Jun 26, 2015
Growers scrambling to find nitrogen for applications disrupted by flooding are facing higher prices as June ends. But there's hope costs could begin to head lower soon if rallying crop prices don't upset potential for price breaks.
Ammonia costs were steady this week with the average retail price running around $670 in a range from $630 to $730. Wholesale prices were also little changed around $560 to $600. While current retail prices fail to reflect the drop in values seen internationally this spring, initial bids for fall bookings are starting to come in with significant savings, as much as $100 below the spot market. That could begin to bring the market back in line with fundamental values, which show prices in the $570 to $620 range at the retail level.
Urea prices shot higher again this week, with the average retail charge up $6 to $460.50, as dealer charges reflect the big spring rally on the wholesale market. Recently updated offer sheets are running in the $465 to $480 range and our forecast fair retail value now is even higher at almost 390. Upriver terminals shot up $15 to more than $30, suggesting higher costs in the short run. However, the Gulf index was steady at $343.50 and swaps for July are sharply lower, just below $300. That could knock retail prices back below $440, with fundamentals pointing to lower prices still. International demand is starting to soften as India wraps up purchases and Brazil struggles with high costs inflated by its weak currency.
UAN were firm on retail markets this week as growers debated whether they could risk sidedressing with more rain in the forecast in many areas. While retail charges for 28% averaged just under $320, costs for 32% at the Gulf slipped, and swaps suggested a further decline was coming into summer and fall. That could take retail prices back down to the $285 level suggested by current contracts.
Phosphates were choppy again last week, with little change seen this late in the season on the retail market. The average cost for DAP stayed at just under $552, with wholesale costs mixed. The Gulf index for DAP firmed to $422.50 through July, with no much change in the swaps market into the fall. Fair value based on wholesale costs continues to run around $15 to $25 under current price levels, but international prices remain fairly strong as foreign growers continue to buy.
Potash prices fell again on wholesale markets, with the Midwest terminal cost down $5 to $362.50. That's $42.50 below its 2015 high achieved during the winter, but retail costs remain little changed, with the average around $483. Wholesale costs suggest retail prices should be around $30 cheaper, with fundamentals pointing to lower values still. The biggest news in a quiet market this week came from reports Canada's Potash Corp is trying to buy rival K&S, a German producer.
hey nightroads thanks man... our time is coming and i am locked and loaded and ready so it can start anytime now!! GLA,paydirt
i thought so too.... these stories are starting to show up everywhere and its just a matter of time before we are impacted. all those folks in china gotta eat :)~
Phosphate Producers Set to Become New ‘Blue Chips,’ VTB Says
by Yuliya Fedorinova
June 24, 2015 — 1:40 AM PDT Updated on June 24, 2015 — 7:06 AM PDT
Phosphate fertilizer makers are set to gain as a supply surplus in the $35 billion market narrows, reducing the premium investors pay for potash producers, according to VTB Capital.
“The phosphate fertilizer producers are set to become the blue chips of the agrochemicals market, the role which potash miners once held,” said Elena Sakhnova, an analyst at VTB Capital in Moscow.
While the two groups of fertilizers don’t directly compete as farmers require both, Sakhnova said the pendulum is swinging in favor of phosphates, with demand set to increase 3 percent this year. The $20 billion potash market hasn’t recovered from the 2013 demise of the trading venture between PAO Uralkali, the biggest producer, and its Belarusian partner, which depressed crop nutrient prices and shares.
The gap in the enterprise value to earnings before interest, taxes, depreciation and amortization ratio between potash producers and phosphate-focused fertilizer makers, which indicates the size of the premium investors are ready to pay for the shares, has narrowed to the lowest since at least 2013, according to data compiled by Bloomberg.
“The supply-demand situation on the horizon is much better in phosphates than in other fertilizers,” said investor Jim Rogers, who sits on the board of OAO Phosagro, the world’s third-largest phosphate nutrients producer. Rogers has invested in Phosagro shares, but not those of Uralkali.
Demand for diammonium and monoammonium phosphate, the benchmark for the nutrient, is set to increase to 62 million metric tons this year, according to VTB Capital estimates.
Phosphate Capacity
“The demand growth of the phosphates market will be higher than the speed new projects will be developed,” Sakhnova said. That will see the industry running at 87 percent of total capacity in a decade compared with 78 percent in 2014, she said.
Phosphate demand in India, which slumped by half in 2013, has rebounded with purchases projected to grow by as much as 60 percent this year, according to Phosagro and Mosaic Co.
By contrast, Uralkali sees potash demand declining by 6 percent to 8 percent this year from the record 63 million tons in 2014. With new projects, including Eurochem Group AG’s fields in Russia and BHP Billiton Ltd.’s Jansen, looming, that may cut capacity utilization at potash producers to an average 78 percent in a decade from 85 percent last year, said Sakhnova, the most accurate share price forecaster for Uralkali, according to data tracked by Bloomberg.
“Most investors, in my opinion, have valued potash producers for their historical management of supply when prices fell,” said Jason Miner, an analyst at Bloomberg Intelligence. “The rapid rise of potential capacity, and growth in number of suppliers negotiating, has weakened that view.”
Phosagro shares have advanced 24 percent this year, while Uralkali rose 10 percent in Moscow trading. Potash Corp. of Saskatchewan Inc., the largest potash producer in North America, declined 13 percent.
UNO Mike, they are sitting on the real deal, no "IF'S OR MAYBE'S" and all they need is price, and I think that will happen soon, and keep in mind that they have everything in place to flip the switch and they are mining. We even have a end product distribution partner!! The next PR i hope will read that they have started mining and also have contracted to be the brokers for a few large end users or sellers of fertilizers in china and they are ready to ROCK AND ROLL!!!
Phosphorus Industry China
Lewes, DE -- (ReleaseWire) -- 06/18/2015 -- On 6 May-8 May, 2015, the 22nd Chinese Annual Conference of Phosphate Compound Fertilizer Industry was held in Chengdu City, Sichuan Province. CCM learned from the conference that China has become a major phosphate compound fertilizer production, consumption and export country after many years of development, especially because of the rapid growth over the recent decade. However, several problems are exposed at the same time, including a large but weak phosphate compound fertilizer industry, overcapacity and weak profitability. The phosphate compound fertilizer industry will experience a crucial industrial transformation period in the next three to five years. This transformation will focus on overall industrial scale control, industrial structure optimization, innovation stimulation, resource utilization, environment protection and safe production.
As for policies, from April 20, 2015, both national on-grid tariff of coal-fired power and electricity utilization price for commerce and industry were reduced. However, electricity utilization privilege for chemical fertilizer enterprises will be canceled. CCM believes that the cancel of the privilege policy is a price strategy with which China guides a reduction on chemical fertilizer utilization and leads the chemical fertilizer industry to market-oriented operation. Also, on 19 May, 2015, the Ministry of Agriculture of the People's Republic of China held a meeting on promoting and implementing the action plan for zero growth of chemical fertilizer consumption by 2020.
As for enterprises, in early May 2015, Guizhou Province released an action plan to control environmental pollution. Accordingly, the phosphorus chemical industry will focus on increasing the utilization rate of industrial waste water and phosphogypsum. On 11 May, 2015, Anhui Sierte said that its pyrite project in Xuancheng City, Anhui Province will be put into production in July.
As for technologies, the sulfuric acid project (sulfur decompose phosphogypsum to produce sulfuric acid), which is led by Sichuan Hongda, technically supported by Sichuan University and jointly conducted by Zhengzhou University, Kunming University of Science and Technology and Southwest University of Science and Technology, has taken shape. It is expected to pass the review by the Ministry of Science and Technology at the end of 2015. Besides, On 22 May, 2015, Jinhua Fulukete officially launched phosphating technology and products on metal surface with no phosphorus, fluoride and heavy metal.
The USD/RMB exchange rate in this report is USD1.00=RMB6.1165 on 4 May, 2015, sourced from the People's Bank of China. All the prices mentioned in this report will include the VAT, unless otherwise specified.
At the end of April 2015, Chinese listed phosphorus chemical companies released their 2014 full-year financial reports in succession. In order to clearly show the status quo and future development of the domestic phosphorus chemical industry, CCM conducted systematic analysis on 4 leading companies to determine the general direction of the industry.
China produces a large amount of gypsum as by-product during industrial production. However, the utilization rate is low. Solutions to increase the utilization rate include developing new utilization modes because at present, by-product gypsum is mainly used to produce construction materials. Also, the concession policy should be expanded to cover companies that do not possess the capability to further process industrial by-product gypsum.
China has become a major phosphate compound fertilizer production, consumption and export country. However there are several problems, including the large but weak phosphate compound fertilizer industry, overcapacity and weak profitability. The phosphate compound fertilizer industry will experience a crucial industrial transformation period in the next three to five years. This transformation will focus on overall industrial scale control, industrial structure optimization, innovation stimulation, resource utilization, environment protection and safe production.
From April 20, 2015, both national on-grid tariff of coal-fired power and electricity utilization price for commerce and industry were reduced. However, electricity utilization privilege for chemical fertilizer enterprises will be canceled. CCM believes that the cancel of the privilege policy is a price strategy with which China guides a reduction on chemical fertilizer utilization and leads the chemical fertilizer industry to market-oriented operation.
After years of rapid development, China has become a major phosphate compound fertilizer production, consumption and export country. However, the phosphate compound fertilizer industry has encountered many problems such as overcapacity, decreasing gross profit margin, increasing pressure from environmental protection and intensifying international market competition.
Under the environment of rising boom for phosphate compound fertilizer, the production capacity of many of Anhui Sierte's projects are being released. it will promote the company's performance to climb to a higher level.
In early May 2015, Guizhou Province released an action plan to control environmental pollution. Accordingly, the phosphorus chemical industry will focus on increasing the utilization rate of industrial waste water and phosphogypsum.
In early May 2015, Sichuan Hongda's sulfuric acid project has taken shape and it is expected to pass the review by the Ministry of Science and Technology at the end of 2015.
Pushing by favorable export tariff policies, China's export volume of DAP & MAP soared in Q1 2015.
In mid-May 2015, ex-works prices of yellow phosphorus in some areas in China have hit a bottom in the recent three years. Meanwhile, export volume of yellow phosphorus also decreased significantly year on year.
Spanning over 44 pages, "Phosphorus Industry China Monthly Report 1505 (12 issues per year)" report covers Performance analysis of four Chinese listed phosphorus chemical companies in 2014, China in urgent need of increasing gypsum utilization rate, Key points of phosphate compound fertilizer industry development: structure optimization and scale control, Electricity price reduced and electricity utilization privilege for chemical fertilizer enterprises canceled, Four major handicaps block development of Chinese phosphate compound fertilizer industry, Many projects being launched to promote growth of Anhui Sierte's performance, Phosphorus chemical enterprises in Guizhou focus on utilization of waste water and phosphogypsum, PKG phosphate project of Wuhuan Engineering ready for trail production, EuroChem builds fertilizer plant in Ongtustik Kazakstan, Phosphate manufacturer in Tunisia forced to shut down, Luxi Chemical: 100,000 t/a urea ammonium nitrate solution project put into production, Zhejiang Wansheng's 44,000 t/a phospholipids fire retardants project close to be finished, Yunnan Yuntianhua establishes new subsidiaries, MIIT releases third batch list of enterprises conforming to access conditions to yellow phosphorus industry, Yunnan Academy of Agriculture Sciences signs strategic cooperation agreement with Yunnan Yuntianhua, MOA endeavors to promote action on zero growth of chemical fertilizer consumption, Sichuan Hongda's sulfuric acid project takes shape, Jinhua Fulukete's bonderite substitute technology and relevant products gain major breakthrough, Market Data Analysis, China's export volume of DAP & MAP soars in Q1 2015, Chinese yellow phosphorus market keeps depressed in May 2015, Price Update, Price monitoring of phosphate chemicals in April 2015, Import & Export, International trade of phosphate chemicals in March 2015. The report covered companies are - Yunnan Yuntianhua Co., Ltd.; Jiangsu ChengXing Phosph-Chemicals Co., Ltd.; Anhui Liuguo Chemical Co., Ltd.; Yunnan Yuntianhua International Chemical Co., Ltd.; Hubei Xingfa Chemicals Group Co., Ltd.;
Read more: http://www.digitaljournal.com/pr/2588921#ixzz3dioSDmEY
New Investment Safeguards World’s Food Supply
June 18th, 2015 by Shelley Goldberg
By Shelley Goldberg, Commodity Strategist
Nutrient-rich soil is essential for farming. Without it, we wouldn’t be able to produce the food we need.
But as our society continues to modernize – and our food cycle changes to accommodate over seven billion people – the world’s soil is becoming depleted of crucial nutrients.
It’s why fertilizer is so important to our food security. But the cost of fertilizer is rising at an alarming rate.
The good news is, for the first time ever, retail investors are now able to trade this critical commodity…
It All Starts With Dirt
Fertilizer might not be the sexiest of commodities to talk about, but it certainly serves a very important role in the world’s economy.
Plants need nutrients – such as nitrogen, phosphorus, and potassium – to grow.
Historically, those nutrients have been found in soil – the foundation for everything on earth. Soil also regulates carbon and water cycles, in addition to growing food.
Before industrial and municipal recycling came about, most human waste went right back into the soil. So the nutrients used to grow food went right back into the ground.
Today that natural cycle has been replaced with what we hope is a more sanitary process, particularly when factoring in all of the prescription drugs and pathogens in our systems. As a result, human waste is now transported to bodies of water like oceans and rivers, particularly as the number and size of cities around the world grow.
Now, this doesn’t mean the cycle has been changed permanently. This waste can still make it back to the soil through the great process known as the circle of life. (Starting with fish that can eat human waste, and ending with a predator up the food chain placing the waste back into the earth.)
But that all takes way too much time.
In addition to routing of human waste to water sources, other factors are reducing the global supply of phosphorus and potassium, such as climate changes and food production.
Industrial farming methodologies, for instance, along with biomass burnings have had a significant impact on the supply of phosphorus and potassium.
There is a large body of research on how carbon sequestration – which captures fossil fuel emissions – can build up soil to a point of higher organic matter. But there’s a long way to go in that pursuit, both from an ecological and agronomic perspective.
Thus, as the world’s population grows and more resources are needed to keep society chugging along, the soil used for farming is quickly running out of nutrients.
Finding the Necessary Nutrients
Humans and plants can pull nitrogen from the air, but phosphorus and potassium must be mined or recycled.
Thus, mining for phosphorus (phosphate) and potassium (potash) has become a huge business. As farmers become more and more industrialized, their need for fertilizer increases along with the population they feed.
Unfortunately, phosphate and potash are becoming a depleted resource, like gold.
And, like most other mined commodities, they have seen extreme price volatility over the last decade.
Phosphate rock prices spiked in 2008 (along with the larger commodity complex) as China became a major consumer. After a recovery, prices are now in an upswing. Potash prices have performed quite similarly.
In terms of supply, the biggest U.S. phosphorus mine, the Aurora in North Carolina, will be depleted in 20 years. Meanwhile, nations are competing to take ownership of the world’s balance of phosphorus in places like Morocco and Bou Craa in the Western Sahara.
Finally Harvesting Future Fruit
Until we figure out how to put nutrients back into the soil, there’s the financial marketplace to take advantage of.
Up until recently, if one had a view on the fertilizer market, the only vehicles to trade or invest in were the physical commodity – or the equity of a fertilizer producer.
The former requires major infrastructure. For the latter, your choices are fairly limited as the fertilizer market is largely an oligopoly.
The Chicago Mercantile Exchange (CME) does offer a number of fertilizer swaps, but these are typically utilized by physical fertilizer traders rather than CTAs, hedge funds, or the retail market.
But this past Monday, this gap was finally filled.
The CME launched its first fertilizer futures contracts on the CME Europe exchange. And the timing couldn’t be more perfect.
CME Europe is the CME’s new London-based derivatives exchange and the CME Group’s first wholly-owned exchange outside of the United States.
The exchange offers not one but six different futures contracts. You can trade futures based on fertilizer in three different ports in the United States (Tampa, New Orleans, and the Gulf Coast) and internationally (Egypt, China, and Ukraine).
All contracts are financially settled, which means you don’t have to worry about having tons of fertilizer to deliver, or having piles of it dumped on your front door.
Additionally, they all trade in U.S. dollars. Each U.S.-based contract represent 25 short tons. Non-U.S. contracts are in 25 metric tonnes. Contracts trade at either six or 12 consecutive months forward.
Trades can be executed through ClearPort and CME Globex. Traders already registered with CME ClearPort for U.S. Clearing can have their registrations extended to include CME Europe upon approval.
And, if you really do your homework by following supply and demand fundamentals on a global basis, you may become savvy enough to arbitrage between contracts!
Good investing,
Shelley Goldberg
hey flat, i would sure love to know who it is soakin up shares right now and why. maybe L2T is buying back his shares. in any case i hope we get some news soon. gla, paydirt