US Gulf/Tampa:
Tampa ammonia remained at $1,150/mt CFR for September, up from August’s $1,100/mt CFR. As for the October price, on the one hand, players will continue to watch the European gas situation and the ammonia outages it has caused. On the other, however, sources note that there has been no keen run-up in prices to European buyers, and product does appear to be available.
US Imports:
Ammonia imports were down 0.7% to kick off the 2022-2023 fertilizer year, according to data released by the US Census Bureau. July’s ammonia import total tracked at 193,611 st compared to the prior-year 194,887 st.
US Exports:
Ammonia exports for July firmed 110.9% year-over-year, to 144,034 st from 68,280 st.
Eastern Cornbelt:
Ammonia prices remained at $1,250-$1,300/st FOB in the Eastern Cornbelt, depending on location and supplier. While CF was referenced at $1,300/st FOB terminals in Illinois and Indiana, Koch postings reportedly ranged from $1,250-$1,280/st FOB in the region. Nutrien raised its Lima, Ohio, price to $1,300/st FOB for prompt or prepay, up from the previous $1,250/st FOB level.
Western Cornbelt:
The ammonia market was steady at $1,200-$1,225/st FOB in the Western Cornbelt in mid-September, with the low confirmed in Nebraska and Iowa and the high at Palmyra, Mo.
Northern Plains:
Delivered ammonia prices in the Northern Plains were reported in a broad range at $1,150-$1,275/mt, depending on location, up from $1,050-$1,150/st in late August. Terminal pricing was pegged at $1,100-$1,200/st FOB for prompt or prepay, with the upper end confirmed at Velva, N.D.
California:
New ammonia postings in California were confirmed at $1,250/st DEL for September tons, up from the previous $1,147/st DEL price. New aqua ammonia postings in the state were quoted at $271-$336/st FOB, depending on location.
Black Sea:
International ammonia trader Trammo Inc. confirmed that it is cooperating in a UN-backed project to reopen the ammonia pipeline from Russia through Ukraine to the port of Odessa. The ammonia reportedly is slated to be supplied by Russian producer Uralchem and sold to Trammo at the Russian-Ukrainian border.
Traders in Europe questioned the deal. One noted that the area the pipeline passes through is under regular bombardment by Russian military forces. And even if the bombing stops, he said the Russians are targeting many of the power facilities needed to keep the pipeline and the port terminal operating.
The idea of working out a deal to move Russian ammonia out of Black Sea facilities was part of a larger plan to allow shipments of Ukrainian wheat and dry-bulk Russian fertilizers. One trader noted that moving dry goods such as grains and urea is much easier than volatile products such as ammonia.
Industry sources also noted that there is no real rush to get more Russian ammonia into the market. Sources said supplies are plentiful from the Arab Gulf and Southeast Asia. Likewise, there also seems to be enough ammonia from the Western Hemisphere, notably Trinidad.
The only place that shows a potential shortage right now, according to sources, is Western Europe. The high cost of natural gas makes producing ammonia in Europe expensive. Product is being imported from Asia, North Africa, and the Americas to fill the ammonia needs of the area, however.
One source pointed to Morocco, a regular buyer of Russian ammonia before the war in Ukraine began. Since the war started in February, OCP in Morocco has shifted its production to use less ammonia and has reached out to suppliers across the globe. Even with the higher transportation costs of bringing ammonia in from Indonesia, sources said Morocco is getting what it needs at an affordable price.
The question several raised is why there are no discussions to persuade the Baltic states to allow Russian ammonia to flow out of their Baltic ports once again. Given the bad relations between Russia and the three Baltic states, however, one trader said he could imagine that such a discussion was a non-starter.
Reportedly, there is about 30,000 mt of ammonia in storage at Yuzhnyy. One trader said the talks might be able to provide safe loading and shipping of those tons.
Industry watchers are also concerned about transparency in the discussed deal. If the ammonia does make it to ports for export, the industry would like to know how much Trammo paid for the product before any deals are made to buy the Russian ammonia.
For now, the lack of any ammonia movement out of the Black Sea means there is nothing to calculate a possible price from the area.
Northwest Europe:
Ammonia prices showed minor fluctuation as imports from the Americas, North Africa, and Asia continue to come in. Sources pegged the ammonia price in Northwest Europe at $1,250-$1,290/mt C&F.
The price does not reflect what ammonia would cost if the market had to depend on solely European-made ammonia. Sources estimate the price to produce one ton of ammonia in Europe is more than $2,000 because of the high cost of natural gas. The lower market price in Northwest Europe is tied more to the cheaper ammonia coming in from the rest of the world.
Sources expect the prices to remain relatively stable through October, with only slight fluctuations. November prices, however, could be different. So far, said traders, no one is talking about November prices or quantities. The tension in Europe over pricing has most buyers and sellers constantly looking at short-term deals.
The operators of the ammonia plants that are still running in Europe are said to be carefully looking at their production costs and market needs. For the bulk of the plants, the more pressing issue is CO2. Many European companies need the CO2 byproduct from ammonia production for their facilities. Reportedly, the ammonia producers are calculating how much they can limit ammonia production while still being able to supply their contracted CO2.
Reportedly, there are discussions within EU offices about some form of subsidy to ensure a regular supply of CO2.
Middle East:
Producers continue to claim they are sold out through October. While some are taking them at their word, others said some spot material could be found if the price was right.
For now, sources put the ammonia price out of the Arab Gulf at a steady $1,075-$1,100/mt FOB, with most of the discussion taking place at the upper end of the range. The price fits in well with the reported price in Northwest Europe.
Producers are facing major pushback from their Southeast Asian customers. The buyers are not only asking the producers to ship the bare minimum required under their contracts, but some are also indicating they may soon be asking for a cargo or two to be deferred. Demand is down in Southeast Asia, as inflation and high interest rates hammer the global economy.
Sources said while no one is officially talking about November deals, a few traders are saying the market for that month is beginning to look better for both demand and production. Prices might shift a bit, according to one source, but nothing major is expected.
Iranian exports for January-August 2022 were reported at 326,000 mt by Trade Data Monitor, down 23% from the 424,000 mt exported during the same period in 2021. India dominated purchases from Iran during the period, taking 284,000 mt, while Taiwan took 23,000 mt and Turkey took 19,000 mt.
August exports were reported at 45,000 mt, down from the 65,000 mt shipped out during August 2021. India took 42,000 mt in August 2022, leaving significantly smaller cargoes for other buyers.
India:
Whenever buyers go looking for spot tons, sources said the first place they call is China. The Southeast Asian and Middle East producers have much higher pricing expectations than their Chinese counterparts.
Sources said the Chinese ammonia is mostly coming from excess tons related to cutbacks in industrial production in China due to a slowing economy and COVID-related cutbacks.
The price remains at $850-$870/mt CFR because of the deals buyers have been able to make with their Chinese partners. Sources said talks currently taking place could move the price closer to $900/mt CFR, but no one has concluded a deal at that level.
Major Indian buyers continue to receive their contracted tons from the Arab Gulf. Sources said the price paid is based on formulas that are far afield from the spot market.
Southeast Asia:
Sources said the Indonesian suppliers are now asking $900-$950/mt FOB for ammonia, which would translate to about $1,000/mt CFR into India. So far, the Indian buyers are passing on this price. The lower end of the range, however, fits nicely with the Northwest Europe ammonia price, providing sellers a ready buyer.
Demand in the area remains soft as area factories reduce their output because of higher inflation and interest rates.Chinese exports in the second half of the year are expected to show a marked increase, especially to India.
South Korean imports for January-August 2022 were reported at 947,000 mt by Trade Data Monitor, a minor drop from the 999,000 mt imported during the same period in 2021. The main suppliers to South Korea so far this year were Indonesia, sending 450,000 mt, and Saudi Arabia, which shipped 387,000 mt to South Korea.
August 2022 imports fell to 101,000 mt, down 25% from the 135,000 mt imported during August 2021. Indonesia dominated the August 2022 supplies with 89,000 mt.