U.S. Gulf/Tampa:
Tampa ammonia prices were $1,100/mt CFR in August, up from July’s $960/mt CFR. As for September prices, most anticipate an increase based on the natural gas-based outages in Europe. In addition, the third quarter is also the time for ammonia and downstream nitrogen plant turnarounds, which could be a factor in firming up available supplies.
In the meantime, the new Ma’aden’s plant is now in commercial production after its initial trial, which could serve to at least partially offset some of the outages. In addition, sources report a lull in industrial demand.
U.S. Imports:
Ammonia imports for June were down 25.0%, according to the US Census Bureau, to 214,592 st from the prior-year 285,983 st. Imports totaled 2.73 million st for the concluded July-June fertilizer year, rising 2.4% year-over-year from 2.66 million st.
U.S. Exports:
June ammonia exports were up 840.0% year-over-year, to 94,295 st from 10,031 st. July-June totals were down 9.8%, however, to 464,333 st from 514,656 st one year earlier.
Eastern Cornbelt:
The ammonia market remained at $1,000-$1,050/st FOB in the Eastern Cornbelt, with the low confirmed at Lima, Ohio, for prompt tons and the high for fall prepay offers at that location.
Illinois terminals were pegged at $1,025-$1,030/st FOB for prompt or prepay, depending on location and supplier, with the Indiana market quoted at $1,030-$1,035/st FOB.
Western Cornbelt:
Prompt or prepay ammonia prices edged up to $940-$950/st FOB Nebraska terminals and $955/st FOB Port Neal, Iowa. “Most have moved to a single price now for prompt or prepay,” said one contact.
Southern Plains:
Ammonia pricing for prompt or 4Q delivery were quoted at $850/st FOB Woodward, Okla., $900/st FOB Verdigris, Okla., and $950/st FOB Coffeyville, Kan. Truck pricing out of Gulf Coast terminals ranged broadly at $850-$1,050/st FOB, with the low based on netbacks to Beaumont, Texas.
South Central:
The truck market for ammonia was reported in a wide range at $850-$1,050/st FOB Gulf Coast terminals, depending on location, with the low based on netbacks for delivered tons and the high reflecting new postings since the conclusion of August Tampa business. No prices were reportedly being offered at El Dorado, Ark., Cherokee, Ala., or Midway, Tenn.
Northwest Europe:
Despite the high cost of natural gas for ammonia production, the price for ammonia remains at $1,200-$1,250/mt C&F. Sources said the price is determined now more by imports than European production.
Demand for ammonia is Europe is low as the continent takes off for the traditional August holidays. The product that is needed for August and September has already been booked at prices that do not reflect the impact of the current high cost of natural gas. Sources estimate the production cost of 1 mt based on the current natural gas price is about $2,000/mt. This is a level much higher than what buyers are paying.
Once the holidays end and the tonnage bought earlier is depleted, sources said prices in Northwest Europe will move up to $1,400/mt C&F if the energy situation remains tight and uncertain. Tempering some of the pricing expectations are concerns the European economy – and likely the global economy – could slip into a recession. The resulting reduction in demand for industry could cause a collapse in the market.
One of the biggest influences on holding down the Northwest Europe price is the plentiful supply of ammonia from other parts of the world. Sources said Arab Gulf producers are more willing to ship product to Europe to take advantage of the high prices. At the same time, ammonia from Trinidad and North Africa is also regularly being snapped up.
Occasional cargoes from Indonesia are seen as unlikely if the Kaltim V facility remains down.
Southeast Asia:
The Indonesian government and Kaltim management are not saying much to the public about the future of Kaltim V. The plant has shuttered its ammonia and urea production since an explosion occurred in the facility last month.
Sources said the company is still assessing the damage and costs of repairs. Expectations are now that the plant will remain shut into February 2023.
Reportedly, the ammonia tanks were not affected by the explosion, allowing Kaltim to honor many of its commitments for July and August shipments. Once that tonnage is gone, however, exports from Indonesia are expected to stop.
Buyers in the region said some small cargoes of Chinese ammonia are being shopped around at $700/mt FOB. The price is very attractive to many buyers, but the quantities are said to be just under a few thousand tons with each offer. In many cases, this is not enough ammonia for the buyers’ needs.
Pricing in the region continues to be under pressure, not only from the presence of the Chinese ammonia, but also because of the economic slowdown taking place in the area and in the world. Less demand for end-products from Taiwan and South Korea means less demand for ammonia from the industries. While contracts to take ammonia are being honored, no one is asking for extra material or going into the spot market for additional tons.
India:
Sources said some small lots of ammonia from China and Iran have been finding their way to Indian buyers. The final prices for the shipments are being closely held. Sources speculated that some substantial bargains might be found in the deals.
Without any confirmation of these smaller deals, sources said the market price into India remains at $825-$850/mt CFR, based on larger, more public deals recently done.Sources noted, however, the presence of offers from Iran is beginning to put some pressure on Arab Gulf producers to lower their prices to compete.
Middle East:
Producers are focusing their attention on markets west of the Suez Canal, especially Europe. The high price in Antwerp is a magnet for sellers looking to maximize their profits and remove excess tons from the marketplace. At the same time, there is also sufficient demand from Morocco for material to replace the ammonia that normally comes from the Black Sea.
The demand from North Africa and Northwest Europe comes as a relief to the producers, who are facing strong push backs from their usual buyers in Southeast Asia, where the market has gone soft.
Producers argue that prices in Europe at $1,150-$1,200/mt CFR justify a netback of $1,100/mt FOB. However, buyers in the Western and Eastern Hemispheres are rejecting this argument, noting the plentiful supply of ammonia in the Arab Gulf.
North Africa:
Sources reported that a vessel is booked to take ammonia from Donaldsonville, La., to Morocco for OCP. The tonnage was not revealed, but sources estimated the price at $1,050/mt FOB.
The Moroccan phosphate giant has been taking what ammonia it can from whatever source it can to make up for the loss of ammonia from Russia. Sources said even though the tonnage lost is significant, OCP does not seem to be desperate for product. They have taken tons from Indonesia, Trinidad, the US, and the Arab Gulf, as well as from nearby North African suppliers.
Reportedly, OCP has shifted some of its production away from ammonia-hungry DAP to MAP and TSP to stretch its ammonia supplies as much as possible.
The Libyan Fertilizer Company announced it was restarting its #2 ammonia and urea plant. The facility was shut down for two months following issues with oil production and embargoes. The #1 plant is expected to be back online later this month.The ammonia production at the Libyan plant is expected to stabilize at 80% of its 800 mt/d rated production.
Brazil:
Ammonia imports for January-July 2022 were reported at 271,000 mt by Trade Data Monitor. This amount represents a 30% drop from the 385,000 mt imported during the same period of 2021.
July 2022 imports were reported at 32,000 mt, almost half of the 63,000 mt imported during July 2021. The two suppliers for June were Trinidad with 25,000 mt and the US with 6,000 mt.