Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr
Issue link: https://emj.epubxp.com/i/689616
FERTILIZER MINERALS JUNE 2016 • E&MJ; 37 www.e-mj.com gas demand as well as the quality of the feedstock being treated. Sulphur is also recovered from smelt- ing metal sulphide concentrates, while additional production comes from a few Frasch operations, and from natural sul- phur ore. With mining involved directly in both pyrite and sulphur ore production and in smelter recovery, these sources are signifcant to the industry, although their contribution to world sulphur output is overshadowed by that from the hydrocar- bons sector. Figure 3 shows production trends for total and recovered sulphur pro- duction since 2000, where "recovered" includes byproduct sulphur from both hy- drocarbons and metallurgical sources. In terms of pricing, potash (measured as muriate of potash—KCl) has overall been on a downward trend over much of the past four years, as shown in Figure 4 on p. 42. From more than $480/metric ton (mt) at the beginning of 2012, the price headed downhill to a little more than $300/ mt by early 2014, then managed to hold its own until the end of last year. By April, producers were looking at less than $270/mt for their output, leading to pro- duction cutbacks and predictions of a tough year ahead. The lower line on Figure 4 illustrates Morocco export phosphate rock prices on a quarterly basis over the same period. That the trend is comparable to that for potash should not come as much of a sur- prise, given the common end usage. In summary, Offce Chérifen de Phosphates (OCP)—Morocco's state-owned producer and world's leading exporter—is today re- ceiving 40% less for its output than it did four years ago. However, that is nothing when com- pared to the slump in sulphur prices that has occurred over the past two years. According to data compiled by U.K.- based Integer Research, and presented earlier this year at The Sulphur Institute (TSI) Sulphur World Symposium by the company's research manager for sulphur and sulphuric acid, Meena Chauhan, where FOB prices in early 2014 were in the range of $175–190/mt (depend- ing on the geographical source), today $80/mt is typical. As Peter Harrisson, senior consultant for sulphur and sulphuric acid at commodi- ties analysts CRU, noted in March, "Pric- es have weakened much faster than was previously expected. The rapid drop in phosphate price levels was the key driv- er for the weakening sulphur market." Which, if nothing else, just goes to illus- trate how closely these commodities are interconnected. Fertilizer specialist Fertecon added some background. "The sulphur market has its own dynamics, different from the rest of the fertilizer market," the com- pany said. "With this market structure, price dynamics are often confusing. Supply is overwhelmingly an involuntary byproduct of oil and gas processing, and demand is driven primarily by the phos- phate market." Potash: Projects and Pauses On the corporate level, the main non- event of 2015 was PotashCorp's abortive attempt to buy German potash and salt producer, Kali und Salz (K+S). Remem- ber, of course, that PotashCorp itself was the target of a $40 billion takeover pro- posal by BHP Billiton in 2010, with Ca- nadian government objections leading to BHP Billiton subsequently withdrawing. As far as PotashCorp's pursuit of K+S was concerned, its outlay would have been somewhat less eye-watering—just €7.9 billion (then about $8.8 billion). How- With the capacity to convert 6 million mt/y of phosphate rock into phosphoric acid and fertilizers, Aurora in North Carolina is PotashCorp's largest individual phosphate plant. Figure 1—World potash production (K 2 O content), 1999-2014. (Source: BGS)