AMMONIA
AMMONIA
U.S. Gulf/Tampa: While prices for September went up to $425-$435/mt DEL, sources last week were predicting that by the time October rolls around, they could slip again. Others noted the recent drop in natural gas prices, which they say will give ammonia producers some leeway should nitrogen prices begin to fall.
Eastern Cornbelt: Anhydrous ammonia remained at $550-$560/st FOB in the region for prompt or prepay tons.
Western Cornbelt: The Western Cornbelt ammonia market remained at $550-$560/st FOB regional terminals for prompt tons, with fall prepay offers in the $560-$570/st FOB range.
Southern Plains: Steady fertilizer movement was reported on preplant wheat. Sources said efforts were underway to pressurize the western leg of the Magellan ammonia pipeline after months of hydrotesting. One industry source said expectations are that product will be available the second week of September at Conway, Kan., and possibly in Clay Center, Kan., the week after.
The upswing in spot prices continued to spark caution on the part of some buyers. “We are playing a fairly conservative position right now,” said one. “Our coverage is adequate, but not long. We will fill in some holes with spot tons if the need arises and as we liquidate our positions.” He noted as well that forward pricing ideas are mixed. “For every bullish attitude, there is an offsetting bear,” he said.
The anhydrous ammonia market was quoted at $490-$500/st FOB regional production points, with reference levels at the $540-$545/st FOB level at pipeline terminals in Kansas. Effective Aug. 23, Agrium’s ammonia postings moved to $545/st FOB Clay Center, Kan., $540/st FOB Conway, Kan., $535/st FOB Mocane, Okla., and $495/st FOB Borger, Texas.
South Central: The ammonia market had firmed to $495-$540/st FOB regional terminals, with the low at Memphis, Tenn., and the upper end FOB Henderson, Ky.
India: FACT closed its 7,500 mt tender Sept. 1, with Transammonia apparently taking the prize.
The Trammo price of $372/mt CFR has an estimated netback of $345-$347/mt FOB.
The offers from the Arab Gulf producers showed they were swinging from the fences. The estimated netbacks on their offers were just under $390/mt FOB.
Tender results follow.
FACT Ammonia Tender 7,500 mt
|
Company
|
US$/mt CFR
|
|
Transammonia
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372.00
|
|
PIC
|
412.90
|
|
Qafco
|
414.00
|
|
Sabic
|
415.00
|
Sources speculate the Trammo tons could come from Iran or Oman. Transammonia ?Çô working through its European office ?Çô has done deals with Iranian suppliers in the past. And Indian buyers have not been averse to taking Iranian tons.
In general, the Iranians offer their ammonia and urea for a few dollars off the Arab producers’ desired prices. The difference, sources say, is because of the embargo against using U.S. dollars to purchase Iranian products. The buyer usually has to work through a financial middle man ?Çô usually in the UAE ?Çô to handle the currency transfers.
The return of FACT to the buying market came as a relief to many producers who have been looking for more public spot buyers to help show how much the market has moved.
The last time FACT was seriously in the market was in January, when it sought to secure up to 100,000 mt in 7,500 mt lots.
Middle East: The FACT/India tender confirmed all the talk of recent weeks that the price was moving up.
Then a purcha