US Gulf/Tampa:
A Tampa ammonia price for October was still not available at press time. While sellers argued that Tampa prices should go up to follow higher European prices, buyers questioned whether global inventories were tight enough to justify an increase.
In the meantime, Nutrien confirmed an October sale into Northwest Europe from Trinidad in the low $1,300s/mt CFR. The price is up from the week-ago range of $1,250-$1,290/mt CFR.
Tampa ammonia was $1,150/mt CFR for September, up from August’s $1,100/mt CFR.
Eastern Cornbelt:
Sources continued to quote ammonia pricing in the $1,250-$1,300/st FOB range in the Eastern Cornbelt, depending on location and supplier, with the low confirmed in the Illinois market on a spot basis. The Huntington, Ind., ammonia market remained at $1,280-$1,300/st FOB for the last offers, and pricing FOB Lima, Ohio, was steady at the $1,300/st FOB level for prompt or prepay.
Sources said CF has pulled most of its ammonia pricing at terminal locations in Illinois and Indiana, however, which were last referenced at the $1,300/st FOB level. Sources described the East Dubuque, Ill., ammonia market as quiet while a recent turnaround is completed at the facility.
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.
Southern Plains:
Ammonia terminal prices in the Southern Plains were flat-to-lower as producers shift attention to UAN and urea production for export.
Although many terminals had reportedly pulled prices, the last offers out of Oklahoma production points were pegged in the $1,050-$1,150/st FOB range, down from recent published highs at the $1,200/st FOB level, with the low confirmed at Woodward early in the week.
South Central:
Truck pricing for ammonia out of Gulf Coast terminals remained at $1,000-$1,080/st FOB, with the low confirmed at Beaumont, Texas. No prices were being offered at El Dorado, Ark., Midway, Tenn., or Cherokee, Ala., sources said.
Northwest Europe:
Even though gas prices are coming down, sources said the levels are still too high to consider making ammonia. The estimate production cost of ammonia, based on the spot price for gas, was put at $2,000-$2,100/mt. This is a level seen as too high for anyone.
The high cost to produce ammonia in Europe is an invitation for buyers to look at the abundant quantities of ammonia around the world. Deals in Antwerp are much lower. Sources reported Nutrien sales of Trinidad material to Eurochem at $1,310/mt C&F.
Arab Gulf producers are also offering tons into Northwest Europe. For them, the netback of about $1,100/mt FOB is much better than the netback from the $900/mt FOB they get for contract tons to India. Spot prices into India would have to be even lower, given the competition from China.
Sources said the price shift up is not surprising. Sellers have been pushing hard for a higher price, but buyers have been just as firm in opposing the move. Reportedly, a lot of buyers in Northwest Europe are looking to bring in cargoes from Trinidad, North Africa, the Arab Gulf, and Southeast Asia. One trader noted that the best evidence for surplus ammonia available on the global market is that the tons are being booked and the landed price is barely moving.
Traders expect to see some additional slight strength in pricing, but they also expect to see the price top off soon.
Media reports that Yara was shutting its ammonia production facility in Belgium were denied by the company late in the week. The company said due to the higher gas prices, it was planning to slow down production rather than shut down completely.
Traders said the nuanced position taken by Yara sums up the general feelings about the market. Nothing is black and white, said one trader. He noted that many of the ammonia plants produce CO2 as a byproduct. This byproduct is necessary in a number of other industries, thus requiring the plants to keep operating.
Black Sea:
The continued talk of an ammonia shortage because nothing is flowing out of the Black Sea continues to puzzle many in the industry.
Earlier in September, Trammo confirmed it is cooperating with the United Nations to re-open the ammonia pipeline out of Russia to the Ukrainian port of Odessa. Reportedly, Trammo would take ownership of the ammonia as it crossed the Russian-Ukraine border.
The reported reason for the project is a shortage of ammonia in the global market. Sources point to the plentiful supplies flowing into Northwest Europe from the Americas and Southeast Asia, however. While the prices are higher than normal, no one can argue there is a shortage, said one trader.
So far, sources have not reported any movement on the plan.
India:
Sources said long-term ammonia contracts are being concluded around $1,000/mt CFR. Spot purchases from China are said to be coming in at $850-$900/mt CFR.Sources said the spot deals are for smaller quantities than the contracts, but they are setting some new pricing ideas for future talks.
January-July 2022 imports of ammonia were reported at 1.2 million mt by Trade Data Monitor, down 15% from the 1.4 million mt imported during the same period in 2021. The top four main suppliers were Saudi Arabia with 515,000 mt, Qatar with 241,000 mt, Bahrain with 117,000 mt, and Indonesia with 101,000 mt. These countries accounted for 947,000 mt of the total imports during the first seven months of the year.
July 2022 imports were reported at 142,000 mt, representing a drop of almost half from the 272,000 mt imported during July 2021. Saudi Arabia dominated the market with 66,000 mt, for about 46% of the import market. Qatar took another third of the market with 46,000 mt, and Bahrain took another 13% of the market with 19,000 mt.
Middle East:
Netbacks for possible spot tons sold into Northwest Europe are calculated at $1,100/mt FOB.
Arab Gulf producers are looking for spot sales into Europe. The netbacks from sales into Europe are significantly higher than any spot deals into India. Contract sales to India and Southeast Asia also provide a smaller return on the sales than anything going into Europe.
China:
Exports from China jumped in the third quarter. July-August shipments alone exceed the combined exports from China for the years 2016-2021.India has been a prime buyer, taking 23,000 mt during January-August, with South Korea close behind at 16,000 mt.
August 2022 ammonia exports were reported at 19,000 mt by Trade Data Monitor, with India taking 18,700 mt. Exports during August 2021 were reported at 86 mt.
China has ammonia to export, said sources, because its industrial demand has dropped. Reportedly, the ammonia being offered is produced in China, rather than re-exporting any of the ammonia China imports.
January-August imports of ammonia were reported at 175,000 mt by Trade Data Monitor, down 71% from the 595,000 mt imported during the same period in 2021. The main suppliers were Indonesia with 92,000 mt, Saudi Arabia with 39,000 mt, and Malaysia with 33,000 mt.
August 2022 imports were reported at 20,000 mt, down 74% from the 77,000 mt imported during August 2021. Malaysia dominated the imports with 15,000 mt, for 75% of the market. The remaining tonnage came from Indonesia.