US fertilizer to boom through H1 2008 - Terra
25 October 2007 22:47 [Source: ICIS news]
HOUSTON (ICIS news)--Strong conditions in the US fertilizer market should continue through the remainder of 2007 and at least the first six months of next year, fertilizer producer Terra Industries said on Thursday.
"As we look ahead, we are encouraged by forecasts for strong corn and wheat plantings driven by high prices for these nitrogen-intensive crops," chief executive Michael Bennett said.
"Clearly, with our fundamental drivers aligning favourably, we remain quite positive about our outlook for the rest of this year and the 2008 first half," he said.
The
The price of corn, a crop that is a heavy consumer of ammonia in particular, began to soar in August 2006 amid swelling demand for feedstock for
US ammonia prices typically peak in the winter months, and hit a bottom in the mid-year summer months.
Some ammonia buyers expect the Tampa CFR (cost & freight) contract price to peak above $340/tonne in the winter months ahead.
The contract settled among main market participants at $322/tonne for November, according to data from global chemical market intelligence service ICIS pricing.
Commenting on Terra's third-quarter results, issued on Thursday, Bennett said the expected seasonal declines in nitrogen fertilizer prices in the quarter had been reversed by continued strong demand.
Terra reported operating income for the third quarter of $95.5m (€66.9m), up from $29.4m in the year-earlier quarter.
Revenues totalled $594m, up from $465m for the third quarter of 2006. The increase was mostly due to higher selling prices, with ammonia up by 8%, urea ammonium nitrate (UAN) up by 61%, and ammonium nitrate (AN) up by 11%.
By: Stephen Burns
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