U.S. Gulf/Tampa:
The industry continued to await news of new business at Tampa for March. February was $1,135/mt CFR. The recent trend has been for the business to be done a week or so before the new month starts. The delay could mean negotiations were more intense.
Going into Thursday, most players were predicting a rollover in price or a relatively small move in either direction. With the Russia/Ukraine news, however, price ideas may have changed. Another factor could now be the 6-8 week repair time for the Waggaman plant in Louisiana.
Eastern Cornbelt:
The ammonia market inched up to $1,360-$1,400/st FOB regional terminals in the Eastern Cornbelt, depending on location and time of shipment. Most prepay offers in Illinois and Indiana were quoted in the $1,375-$1,385/st FOB range, with prepay business also reported at $1,375/st FOB North Bend, Ohio. The Lima, Ohio, ammonia market was referenced at $1,400/st FOB for prompt or prepay.
Western Cornbelt:
Ammonia pricing remained at $1,350-$1,395/st FOB terminals in the Western Cornbelt, depending on location and time of shipment, with the bulk of spring prepay offers pegged in the $1,365-$1,395/st FOB range in the region.
Southern Plains:
The ammonia market was steady at $1,250-$1,300/st FOB production points in the Southern Plains for prompt or prepay, with the low at Verdigris and Pryor, Okla., and the upper end reported at Coffeyville, Kan. The last offers FOB Enid, Okla., were pegged at the $1,275/st FOB level for 1Q and spring tons, while prompt truck tons at Beaumont, Texas, were quoted at $1,060/st FOB.
South Central:
Sources reported truck offers for ammonia circulating at $1,100-$1,200/st FOB in the South Central region, with the high at Cherokee, Ala. There were reports as well of very limited truck tons available at $1,150/st FOB Midway, Tenn., at mid-month.
The truck market out of Gulf Coast production facilities was quoted up to $1,060-$1,080/st FOB, depending on location.
Black Sea:
The invasion of Ukraine forced the closing of all of that country’s ports on the Black Sea. The closures ended any sales that might have come from the area. No price is available from the region.
If the closures last longer than a week, sources said the market could face a major hit in ammonia supplies. The loss of ammonia from TOAZ and Rossosh alone could lead to a loss of at least 200,000 mt/month. International traders said the uncertainty that is normal at the early stages of a major upheaval needs to be addressed with patience.
In the immediate aftermath of the invasion, it appears the sanctions threatened by the U.S. and Western European countries do not include Russian ammonia or other fertilizer exports. Likewise, for now, the sanctions seemed to avoid penalizing the natural gas suppliers.
Prior to the invasion, market players were predicting a softening of prices. The actions taken by Russia, however, have changed the outlook. Sources said when the Yuzhnyy ports re-open the asking price for spot tons will most likely be higher than the pre-invasion levels of $1,100-$1,250/mt FOB.
Even before Russian tanks rolled across the border, sources said major buyers such as Turkey and Morocco were scouting out other possible suppliers. Reportedly, the buyers approached producers in Egypt, Libya, Algeria, and Iran. Some talks were said to have started with Arab Gulf producers as well, but the lack of any extra tons in that area made any large deals look unlikely.
Sources said even with a range of alternative places, those tons combined could not replace the tonnage lost from the Black Sea.
Russian ammonia exports for 2021 were reported at 4.4 million mt by Trade Data Monitor. This is a 6 percent increase from 2020 exports of 4.2 million mt.
A bit more than 1.6 million mt were shipped through Ukraine and Estonia. These tons were usually re-exported from ports in the Black or Baltic Seas. Morocco took 558,000 mt, or about 15.7 percent of all Russian exports in 2021. Turkey was also a major buyer at 510,000 mt, for 11.5 percent of ammonia sales.
Middle East:
The tightness of the market became firmer following the Russian invasion of Ukraine. Even before the invasion, Arab Gulf producers were rebuffing requests for spot tons. The lack of any new spot deals leaves the price at $800-$850/mt FOB, but with an upward trend perceived in the talks among buyers and sellers.
Reportedly, some of the major buyers of Black Sea ammonia approached Arab Gulf producers. The lack of any extra material left the potential buyers leaving empty-handed. Sources added that even as the search for more tons intensified, the Arab producers showed no indication of being willing to investigate ways to step-up production.
Sources said some potential buyers have looked to Iran in hopes of securing extra ammonia from that country, despite the sanctions placed on it by the U.S. Reportedly, there were rumors that an exemption might be granted if the American and European action against Russia included sanctions on ammonia and urea. In the end, however, the sanctions did not include those products.
Iran shipped 541,000 mt of ammonia to foreign buyers in 2021. While down from 2020 by about 14 percent, the exports supplied a vital product to buyers looking for a bargain and who were willing to maneuver around the American sanctions. India was the major buyer, taking 68 percent of all Iranian ammonia exports last year, or 367,000 mt.
Northwest Europe:
Late last week sources were reporting that prices would slip to $1,000/mt C&F and below. Following the closure of the Black Sea ports and the rise in natural gas prices, however, any price reduction went out the window.
Sources said the production cost of a ton of ammonia went up from $900/mt in the past couple of weeks to $1,200/mt this week. The current price of $1,180-$1,250/mt C&F is expected to be left behind once March talks for Baltic material conclude and as the higher-priced European ammonia hits the market.
Talks with Baltic suppliers have not yet started, sources reported. Normally by this time, said one trader, the two sides would at least begin exploring pricing possibilities. The absence of Russian ammonia in the sanctions set out by the U.S. and its European allies removed a major concern for ammonia buyers in Europe. Some had begun to look for substitute sources from North Africa to Trinidad in the event that sanctions were imposed on ammonia.
Prior to the Russian invasion, sources said the best producers could hope for was a rollover of the $1,115/mt FOB price. However, given the closed Black Sea ports and the uncertainty in Ukraine, prices are expected to go up in March.
India:
Buyers built up reserves in the last quarter of 2021. While not fully stocked with ammonia, the end users are comfortable enough that they do not have to pay whatever price is placed before them by a supplier.
At this point, said one trader, the Indian users are in good shape. Some DAP plants will be going down for routine maintenance turnarounds, reducing the demand for ammonia.The ammonia price remains steady from the last spot deal done at $890-$910/mt CFR.