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FERTECON FERTECON

FERTECON AMMONIA REPORT

A Weekly Review of the International Ammonia Market 8 December 2011

HEADLINES
Yuzhnyy price falls below $500 fob. Black Sea product sold into India.

OUTLOOK
Prices under pressure globally.

KEY PRICES
Yuzhnyy fob $/t Middle East fob * no new biz Tampa/US Gulf cfr $/t 8 December 495-500 555-570* 650-655 1 December 520-550* 555-572 650-655 24 November 570-590 * 570-572 650-655

AMMONIA PRICES
700 600 500 400 300 fob Yuzhnyy 200 100 FERTECON 08/12/2011 0 J 09 J 10 J 11 US$/t

fob Caribbean fob M. East

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8 DECEMBER 2011

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FERTECON FERTECON

FERTECON PRICE SERVICE

AMMONIA PRICE INDICATIONS
All prices in US$ 8 December Fob prices Caribbean Middle East * no new business Of which: - Netbacks on contract/formula-priced sales - Spot fob Yuzhnyy/FSU fob *nominal Baltic/FSU fob *nominal Southeast Asia Delivered prices NW Europe (duty paid/duty free) *nominal NW Europe (duty unpaid) *nominal Far East India * nominal US Gulf/Tampa - Tampa - US Gulf (MS, LA, TX) 605-610 555-570* 555-570 555-560 495-500 500-520* 600-640 585-615* 570-600* 635-675 590-610* 650-655 650 655 1 December 605-610 555-572 570-572 555-560 520-550* 530-560* 600-650 640-685* 630-675* 650-685 597-617 650-655 650 655 24 November 605-610 570-572 570-572 n/a 570-590* 580-600* 590-650 690-700 676-686 630-715 609-620 650-655 650 655

FREIGHT INDICATIONS
US $/tonne (Rates basis 1-1 unless stated) Route Caribbean Tampa/USG Baltic (Ventspils) Antwerp/Belgium Baltic (Ventspils) NW Europe (France) Black SeaNW Europe (excl Scandinavia) Black Sea Antwerp/Belgium Black Sea US (1-1 Tampa) Black Sea US (2-3 USG) Black Sea US (1-1 Tampa) Black Sea US (1-2 USG) Middle East India (1 port W. Coast) Middle East India (2-3 ports W. Coast) Middle East India (1 port E. Coast) Middle East India (1 port E. Coast) Middle East- Far East (Taiwan) Middle East Far East (South Korea) Indonesia Far East (Taiwan) Cargo size (t) 20-23,000 23,500 8-15,000 12-15,000 23,500 38-40,000 38-40,000 23,500 23,500 23,500 15,000 15,000 23,500 23,500 23,500 15-20,000 Rates 40-45 26-28 47-50 80-82 60-62 65-70 74-77 86-87 94-95 27-33 43-50 55-70 45-58 75-85 84-100 40-45

FERTECON PRICE DEFINITION

Prices, rounded to the nearest US$, represent the last known spot business and current indications, for 4-40,000 t cargoes, net of credit.

FERTECON AMMONIA REPORT 8 DECEMBER 2011

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ANALYSIS
The main news this week is the fall in Black Sea prices to just under $500 fob with the sale of 3540,000 t by NF Trading to CIFC for shipment to east coast India to cover CIFCs contractual commitments to PPL and Iffco. The disparity between Black Sea and Middle East pricing, with the latter still at much higher levels, has facilitated this movement. Black Sea exporters remain long on tonnes for December with most buyers reluctant to commit to December shipments, and it seems likely that some production cutbacks will need to take place. TOAZ has tonnage on the water which still needs to find a home. Further Yuzhnyy availability for December is still not placed. Buyers are reluctant to take tonnes at this stage, preferring to wait and see how far prices fall in the coming weeks, but it does appear that demand could be there for January. There has been no new spot business out of the Middle East this week from which to judge price levels. Our spot indications represent last known business, predominantly for Iranian tonnes. There has also been no new information on any new contractual cargoes but netbacks are calculated back off our Asian pricing. The fact that Middle East suppliers have not yet responded to the downturn in the market being seen in the western hemisphere has now allowed the planned movement of up to 40,000 tonnes of Black Sea ammonia into India, taking a share of the January requirement that might have been expected to come from the Middle East. Other fertilizer prices are also sliding. Prilled urea prices out of the Black Sea have fallen to $380-390 fob bulk this week, down from $470-478 only two weeks ago. US DAP prices have fallen modestly, by around $10 over the past two weeks.

SUPPLIERS
FSU
FSU: Yuzhnyy/Black Sea Black Sea fob prices have now fallen just below $500 fob, although
the exact level is not clear. NF Trading has sold 35-40,000 t to CIFC for 1 half December shipment to India, covering CIFCs contractual commitments to PPL and Iffco on the east coast. CIFC has fixed the Clipper Neptun to load the cargo in Yuzhnyy with the vessel due to arrive on 9 December. There have been reports that the freight on this route is in the high $80s/90 although some put it higher. The November/December line-up out of Yuzhnyy is detailed below.
Vessel 2
nd

st

Trader

000 t

Destination

Load date

h NOVEMBER

NOV TOTAL = 301.5

Gaschem Bremen Gas Grouper Gas Columbia Nijinsky Polar Gas Cobia Pertusola
DECEMBER

Nitrochem Nitrochem Mitsui Transammonia Yara Nitrochem Yara Nitrochem Koch Yara vessel CIFC Nitrochem Nitrochem Yara

23.5 23.3 23.5 13.1 40 23.5 9.5 23.5 25 12 35-40 23.3 23.3 9.5

United States (Tampa) BASF/Belgium Morocco Turkey (Aliaga) United States n/a Toros/Turkey n/a Morocco Turkey EC India (for Iffco & PPL) n/a BASF/Belgium Israel

18-19 November 22-24 November 23-25 November 23-26 November 25-28 November 27-29 November 28 Nov-1 Dec 2-4 December 3-5 December 8-9 December 9-10 December 9-10 December 21-23 December 17-18 December

266.4-271.4

Gas Manta Kent Pertusola Clipper Neptun Gas Snapper Gas Grouper Pertusola

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FERTECON FERTECON
23-25 December 25-26 December End December End December

Clipper Mars Pacific Gas Grouper or Snapper Pertusola

Nitrochem Yara Nitrochem Yara vessel

40 40 23.3 11.5

United States United States n/a Turkey

Baltic Product for recent shipments has been sourced some time back and there has been no new
business from which to judge current fob prices. However, with news of Yuzhnyy pricing moving below $500 fob, the Baltic price is assessed around $500-520. Sillamae: The Coral Ivory loaded in Sillamae early December for Sweden. Yara has chartered the Marola to Transammonia and the vessel has loaded 25,000 t in Sillamae on 46 December and is now en route to Pascagoula/US. Transammonia has also loaded a part cargo on the Marycam Swan in Sillamae on 7 December. The vessel will first deliver to Stennungsund in Sweden, covering Transammonias contractual commitment. Ventspils: In December, only one 4,000 t cargo will be shipped by Yara on the Coral Ivory, now nd expected to be in 2 half December.

AFRICA
EGYPT: The Sylvie is due back at the OCI/EBIC facility tomorrow to load a cargo for Transammonia
for China and Japan.

MIDDLE EAST
IRAN: BIK: The Gas Master arrived in BIK on 6 December to load 16-17,000 t from Raintrade for shipment to the Philippines.
Mitsuis vessel, the Gaschem Hamburg, carrying Iranian cargo will reach India shortly to discharge around 10,000 t at Vizag, 8,000 t at Ennore and 4,000 t at Kakinada for CIL.

QATAR: Qafcos vessel, the Al Marona, is arriving in India on 10 December to discharge 5,000 t for
Zuari at Goa and 5,000 t for MCFL at Mangalore. The Qafco 5 urea line will start up in 2 half December before the associated new ammonia lines. It will use ammonia and CO2 from existing facilities and from from storage. The first of the new ammonia lines will then start in January, to be followed immediately by the second ammonia line (now known as part of the Qafoc 6 complex). The Qafco 6 urea line is scheduled for towards the end of 2012. Qafco has no spare ammonia and has been taking swap tonnes from Sabic and PIC to meet contractual commitments. The 2
nd nd

half November/December line-up in the Middle East is as follows:

Supplier/Origin 000 t Destination Price $/t cfr unless stated Load date

Vessel 2
nd

h NOVEMBER

NOV TOTAL = 303.15-304.15

Maersk Genesis Antwerpen Gaschem Hamburg Camberley Maersk Genesis Jag Viraj Al Marona

Iran (B.Assaluyeh) TA/Qatar BIK/Iran Sabic/S.A. (RAK) Iran BIK/Iran Qafco/ex-S.A. (RAK)

15 23.5 23 10 14.99 15 15.35

Iffco/Kandla (WC India) 609-610 China & S. Korea (to n/a MSK for Namhae) CIL/EC India 608 w 30 d

16-18 Nov 20-21 Nov 25-27 Nov 25-26 Nov 26-28 Nov 27-29 Nov 30 Nov

WC India GSFC (5) n/a & Hindalco (5) 608 Iffco/WC India Ard 615-616 Iffco/EC India WC India Zuari (5) & n/a MCFL (5)

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FERTECON FERTECON

DECEMBER Maersk Genesis Al Barrah Gas Master Camberley Nisyros Al Jabirah Rose Gas Camberley RAK = Ras Al-Khair

163-164

Iran Sabic/S.A. (Al Jubail) Raintrade/BIK, Iran Sabic/S.A. (RAK) Qafco/ex-S.A. (RAK) Sabic/S.A. (Al Jubail) Sabic/S.A. (RAK) Sabic/S.A.
TA = Transammonia

15 23 16-17 23 23 23 23 17

Iffco/Kandla (WC India) 608 South Korea n/a n/a Philippines EC India (on behalf of n/a Petronas) n/a EC India South East Asia n/a n/a n/a WC India GSFC (12) l-t contract & Hindalco (5)

Early Dec 5-6 Dec 6 Dec 6 Dec 17 Dec 18 Dec Mid Dec 20-22 Dec

ASIA
INDONESIA: Kaltim took its K2 plant down in early December for a three-week turnaround and, therefore, does not have any excess ammonia to sell as it is building inventory in order to supply the Popka granular urea plant which does not have its own associated ammonia plant.
Mitsuis vessel, the Nashwan, arrived in Bontang today to load. The Gas Oriental is due into Bontang to load on 14 December.

MALAYSIA: After discharging its current cargo in Haldia/EC India, the Bunga Kemboja will return
to Kerteh to load a cargo on behalf of Sabic for delivery to Kaohsiung in Taiwan. Subsequently, Petronas will load around 9-10,000 t on the vessel for Thailand, mostly for delivery to Rayong on behalf of Sabic, with the balance to NFC on its own account. Three cargoes are expected to be shipped in January, firstly to India, then Thailand and then again to India.

OCEANIA
AUSTRALIA: The Nordic River is currently in Kwinana to discharge ammonia lifted from Burrup
and is expected to complete on 12 December. The Eeklo arrived in Dampier yesterday and as of today, 8 December, is on berth to load ammonia from Burrup.

MARKETS
ASIA
INDIA: The main interest this week is the news that Black Sea tonnes are scheduled to move to
east coast India for January arrival. West Coast: Qafcos vessel, the Al Marona, is arriving in India on 10 December to discharge 5,000 t for Zuari at Goa and 5,000 t for MCFL at Mangalore. East Coast: Mitsuis vessel, the Gaschem Hamburg, carrying Iranian cargo will reach India shortly to discharge around 10,000 t at Vizag, 8,000 t at Ennore and 4,000 t at Kakinada for CIL. CIFC is to cover contractual deliveries to Iffco and PPL at Paradeep with tonnes from the Black Sea. CIFC has sourced tonnes from NF Trading at a price just under $500 fob Yuzhnyy and has fixed the Clipper Neptun to load 35-40,000 t in Yuzhnyy, where the vessel is due to arrive on 9 December. It is understood that the vessel will have to wait some time to discharge in India. The Bunga Kemboja which loaded in Kerteh/Malaysia on 29-30 November and partially discharged 9,000 t for PPL at Paradeep early this week, has now reached Haldia to discharge 5,000 t ammonia for TCL. December/January ammonia import cargoes into India are as follows.

FERTECON AMMONIA REPORT 8 DECEMBER 2011

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DECEMBER West Coast Iffco/Kandla Iffco/Kandla GSFC/Sikka GSFC/Sikka MCFL/Mangalore Hindalco/Dahej Hindalco/Dahej Zuari/Goa East Coast CIL/Ennore CIL/Kakinada CIL/Vizag PPL/Paradeep PPL/Paradeep Iffco/Paradeep TCL/Haldia TCL/Haldia JANUARY East Coast PPL & Iffco/ Paradeep CIFC/Black Sea Iran Iran Iran PCG/Malaysia PCG ex-Sabic/S. Arabia Iran PCG/Malaysia PCG ex-Sabic/S. Arabia Iran Iran Sabic/S. Arabia Sabic/S. Arabia Qafco/ex-S. Arabia Sabic/S. Arabia Sabic/S. Arabia Qafco/ex-S. Arabia

FERTECON FERTECON
Discharge Vessel

Supplier

000 t

$/t cfr unless stated

131.99-132.99 66.99 14.99 608 15 608 5 l-t contract 12 l-t contract 5 l-t contract 5 l-t contract 5 l-t contract 5 l-t contract 65-66 8 608 w 30 d 4 608 w 30 d 10 608 w 30 d 9 600 w 30 d 9 l-t contract 15 615-616 5 601 w 30 d 5-6 l-t contract 35-40 35-40 35-40 l-t contract January Clipper Neptun 10-11 Dec 12-13 Dec 9-10 Dec 4-5 Dec Mid Dec mid Dec 5-6 Dec Mid Dec Gaschem Hamburg Gaschem Hamburg Gaschem Hamburg Bunga Kemboja Camberley Jag Viraj Bunga Kemboja Camberley 1 Dec Dec 1 Dec Late Dec 10 Dec 1 Dec Late Dec 10 Dec Maersk Genesis Maersk Genesis Camberley Camberley Al Marona Camberley Camberley Al Marona

At the FAI meeting in Delhi this week, both the government and industry have been emphasising the demand destruction for both phosphate and potash due to higher prices. It is too early in the season to quantify the reduction and the impact varies from region to region and from crop to crop. With the prices of some cash crops higher, some farmers appear able and willing to pay the higher P and K prices, but many farmers are cutting back on P and K. Nitrogen demand remains strong and there are rumours that the government will increase urea prices by 10% at the end of calendar 2011 with a further increase at the start of the next fertilizer year. The Indian Finance Minister, Pranab Mukherjee, is reported to have said that the fertilizer subsidy will be Rs 900 billion ($17.38 billion) in 2011-12, Rs 500 billion higher than initially projected.

JAPAN: Imports of ammonia in October were just over 10,000 t, all sourced from Indonesia. Year to date, the overall import volume of about 175,000 t is 20% down on the January-October 2010 level. SOUTH KOREA: The Viking River is due into Ulsan tomorrow, 9 December, for Yaras delivery to
SFC. The Antwerpen is due into Yosu on 10 December with tonnes from Mitsubishi to Namhae. Mitsubishi sourced the tonnes from Transammonia out of Qatar.

VIETNAM: The Gaz Millennium is due into Haiphong on 10 December for Mitsuis delivery to the Dinh Vu DAP plant.

OCEANIA
AUSTRALIA: Yaras vessel, the Nordic River, is currently in Kwinana to discharge ammonia for CSBP from Burrup.

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Orica reported another spill incident yesterday, 7 December, at its Kooragang Island plant to the NSW Environment Protection Authority. There was an overflow of weak ammonium nitrate fertilizer solution from a storage tank into a containment area with some spillage onto the ground. Orica has now announced that it has completed its investigation of the incident and is confident that the causes have been fully indentified, so is satisfied that it can go ahead with the restart of the nitric acid and AN plants.

NORTH AMERICA
UNITED STATES: In domestic market, ammonia application has been high this Fall season. Wholesalers in western Iowa and eastern Nebraska have said that this years Fall ammonia run for corn plowdown has been very heavy but has now ended by the onset of winter weather.
Spring prepay ammonia is on offer at $820/s. ton ex-terminal in central and southern Indiana. The price for cash ammonia has dropped to $700-710/s. ton in central Illinois as Fall corn preplant demand has wound down. A light volume ammonia is going to corn and milo (sorghum) preplant in eastern Kansas and western Missouri.

SOUTH AMERICA
MEXICO: Fertinal is reported to have upped production to about 100,000 t/m MAP/DAP in
November and December thanks to increased phosphate rock output over the past couple of months. This increases ammonia demand.

NATURAL GAS
WEST EUROPE: UK day-ahead gas is lower this week at 57.46p/therm ($9.02/mmBtu) compared to 57.98p/therm last week. Continental spot hub prices are also lower, at the equivalent of $8.98/mmBtu compared to $9.20 last week. Spot gas is over $6 below the cost of formula contract gas. UKRAINE: Ukraine has paid just under half of its November gas bill to Gazprom and has received
an extension to 28 December on paying for the balance. Negotiations on a revised gas contract continue. This week Gazprom said it hoped to finalise negotiations by the end of the year. Ukraine is looking to revise the current oil-linked contract to one that reflects European spot hub prices.

UNITED STATES: US gas prices at the Henry Hub are lower this week at $3.4462/mmBtu
yesterday compared to $3.5288 last week. Prices at the MidCont hub were slightly higher, at $3.4341 compared to $3.4276 last week. Forward prices on the Nymex were $3.421, compared to $3.608 last week. NYMEX prices were: Jan $3.421, Feb $3.458, Mar $3.470, Apr $3.518, May $3.560, Jun $3.602, Jul $3.655, Aug 3.683, Sep $3.688, Oct $3.726, Nov $3.871, Dec $4.161.

AGRICULTURE
CROP FUTURES: The economic situation in Europe and a strengthening dollar has put pressure
on commodity crop prices this week. Corn December futures on the Chicago Board of Trade are down 19 cents on a week earlier. Wheat futures are also down, sliding on poor exports. Ample global supplies are providing more competitive choices for buyers, seeking cheaper purchases. Soybean futures have showed little change on a week ago as prices have been supported by dry weather in South America, although the situation is not serious, forecasts are being watched as the crop size has the potential to impact demand for US soybeans. Tomorrows release of the latest USDA WASDE reported is awaited by the market.

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FERTECON FERTECON

CME CROP PRICES cents/bushel Price Price Weekly Price Price Product Dec 2011/ December Change Mar 2012 July 2012 Jan 2012 2010 559.4 Corn 582.2 -19 592.6 606.6 742 Wheat 583 -12.6 600.4 637.2 1,296 Soybean 1,131 -0.2 1,141 1,161 1,395.5 Rough Rice 1,438.5 -45 1,466.5 1,523 Prices are Wednesdays closing rates for the forward months indicated. The 2010 price in the final column is the forward price reported one year ago
FORWARD CROP PRICES
Mar-12 Jul-12 Dec-10

Cents/bushel 1500 Dec 2011/ Jan 2012 1200 900 600 300 0
CME/CBOT

Corn

Wheat

Soybean

Rice

Regards Vivien Bright and Marta Jamrozy

FERTILIZER DERIVATIVES
Bids and offers for FIS ammonia cash settled derivatives are as follows:
Ammonia cfr Tampa ($/tonne) Month Dec 11 Jan 12 Feb 12 Bid 630 620 610 Offer 655 645 625 Mid 643 633 618

FIS Ltd Fertilizer Swaps Ron Foxon : + 44 207 090 1122 / + 44 7738 726557 Alexey Paliy : +1 212 634 6424 / +1 203 979 7023 Rob Duncan : +1 502 357 0094 / +1 502 410 8899 ferts@freightinvestor.com www.freightinvestorservices.com

FERTECON AMMONIA REPORT 8 DECEMBER 2011

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