U.S. Gulf/Tampa:
A New Orleans ammonia barge was reported to have traded at $1,000/st, which would reflect a $1,102/mt CFR Tampa equivalent. Tampa ammonia for July was $960/mt CFR, with August to be concluded later this month.
Sources expect more U.S. product to go to Europe in the near term as the continent’s own production is idled or threatened by high natural gas prices. As a result, what had earlier been tabbed as long inventories in NOLA will be reduced.
While most sources are bullish for Tampa in the near term, others said there has been much demand destruction since the earlier run-up to $1,625/mt CFR. As a result, they said prices may go up, but a huge jump is not anticipated.
U.S. Imports:
May ammonia imports were reported at 324,423 st, according to data released by the U.S. Census Bureau, a 28.7% increase from the year-ago 252,102 st. July-May volumes were noted at 2.51 million st, up 5.7% from the year-ago 2.38 million st.
U.S. Exports:
Ammonia exports were up 76.0% in May, to 71,203 st from the year-ago 40,462 st. July-May exports softened 26.7%, however, to 370,038 st from the year-ago 504,625 st.
Eastern Cornbelt:
Ammonia fill pricing in the Eastern Cornbelt remained at $950/st FOB terminals in Illinois, Indiana, and Ohio for 3Q delivery, with sources reporting offers still on the table during the week.
Western Cornbelt:
Ammonia fill offers in the Western Cornbelt remained in a broad range at $825-$950/st FOB, with the low reported at Hoag, Neb., and the high reflecting reference prices at Palmyra, Mo. Sources also reported some fill tons offered at the $925/st level FOB Wever, Iowa.
Northern Plains:
Ammonia fill offers were reported at $900/st FOB Velva, N.D., in early July. Delivered fill pricing covered a much broader range at $825-$950/st in the Northern Plains, depending on supplier, with the low confirmed in North Dakota from at least one producer.
Northwest Europe:
Europe remains an expensive bubble in the global ammonia market. Sources said the recent hike in natural gas prices pushed the estimated production cost of ammonia to $1,900/mt. While no one is paying this, the estimated high price just added strength to the desire to import ammonia instead of manufacture it.
Sources are reporting a deal out of Northwest Europe at $1,250/mt C&F. The price reflects gas prices from a couple of months ago. The impact of the current gas price increase is not expected to be felt until September. However, the price rise did increase the frequency of rumors that more ammonia plants will be closing in the next 6-8 weeks.
With the threat of higher production costs, sources said imports of ammonia will look more attractive. Even with higher freight rates related to the longer distances the ammonia has to travel, said one trader, the imported price should be less than local production.
Sources noted that there is plenty of ammonia available around the world – except in Europe – because of steady production and reduced demand. Reportedly, Arab Gulf and Indonesian producers are building up excess tons that could be sent to Europe at rates well below the European production cost.
Middle East:
Sources said the only product moving out of the region was tied to long-term contracts. No new spot business was reported, leaving the price at $900-$950/mt FOB.
The lack of spot deals has not prevented people from talking about pricing, however. Sources said producers are struggling to hold the line at $900/mt FOB in informal talks with potential buyers. The bidding price is in the $890s/mt FOB and lower. So far, the two sides have not bridged the gap.
This past week was slow in the region because of the EID holiday and the lack of any spot inquiries.
Producers are also facing requests from major buyers in Asia to slow down shipments as much as possible due to reduced demand, especially in Taiwan and South Korea. This desire by the buyers to slow down deliveries and to take the minimum required under contracts is said to be building up excess product in the Arab Gulf.
Southeast Asia:
Sources said Indonesia has at least one ammonia cargo looking for a home in August. So far, there has been limited interest from buyers in the region.
Demand for ammonia in Asia has slowed down as industrial output in the region wanes. Reportedly, buyers are telling their suppliers, especially in the Arab Gulf, to delay any contracted shipments as long as possible. These same buyers are also pushing back against suppliers looking to send extra material with each cargo.
Rumors are circulating that China has stopped all ammonia imports. Sources said it would not take much for China to drop to near zero imports. The last figures available through Trade Data Monitor showed January-May 2022 imports at 100,000 mt, down almost 80% from the 469,000 mt imported during the same period in 2021.
Reportedly, China is not only slowing down its imports, but sources said some of the tonnage recently received is being packaged for re-export to Southeast Asian buyers. The need for ammonia in China has waned as industrial output slows down. Much of the ammonia needed for industries is being supplied by domestic producers.
North Africa:
Phosphate giant OCP continues to take its regular tonnage from a variety of sources. Traders said OCP does not seem to be in the market for any tonnage above and beyond its current contracts. The lack of spot inquiries is helping keep the global market on the long side of supplies.
Black Sea:
The continued closure of Ukrainian ports because of Russia’s invasion means no new tons are able to flow out of the Black Sea. Traders said any prices being discussed are merely speculation.