US Gulf/Tampa:
There was no word on the Tampa ammonia price for December as of press time. Sources have been expecting some weakness from November’s $1,150/mt CFR, citing increased production and lower ammonia prices in Europe.
Eastern Cornbelt:
The ammonia market continued to be quoted at $1,250-$1,350/st FOB in the Eastern Cornbelt, with the low reported out of Koch terminals in Illinois and Indiana and the high reflecting the latest terminal offers from CF. The ammonia market FOB Lima, Ohio, remained at $1,300/st FOB during the week.
Western Cornbelt:
Ammonia pricing remained at $1,250-$1,320/st FOB for prompt truck tons in the Western Cornbelt, depending on location and supplier, with the low reported out of Koch terminals in Iowa.
Southern Plains:
The last confirmed offers for ammonia remained at $1,100-$1,175/st FOB production points in Oklahoma and Kansas, depending on location. Truck pricing out of Gulf Coast terminals was steady in the $1,050-$1,080/st FOB range. “Ammonia application is not setting any records,” commented one regional source.
South Central:
Truck pricing for ammonia out of Gulf Coast terminals remained at $1,050-$1,080/st FOB, depending on location. Sources continued to report that no truck prices were being offered at El Dorado, Ark., Midway, Tenn., or Cherokee, Ala.
Black Sea:
Russian and Ukrainian grain and fertilizer are being shipped from the Black Sea under an agreement worked out with Turkey and the United Nations. Russia is still demanding the ammonia pipeline to Odessa be opened so it can export ammonia.
Many international traders call the idea of restarting the pipeline dangerous. One trader noted the power stations needed to maintain the flow of the ammonia are under regular attack by Russian military forces. At the same time, the pipeline also passes through disputed areas that could easily be attacked.
One international trader said there is plenty of ammonia available to the global market, albeit at a higher price than if the Black Sea material had not been shut off because of the war on Ukraine. He noted that even if the Russian ammonia were made available, finding buyers would be difficult. Most buyers have been able to find alternative sources. Still, despite assurances by the US and EU that there are no sanctions on Russian fertilizer-related sales, many banks and insurance firms are hesitant to back the deals.
Turkey is one of the buyers who found steady supplies once its Black Sea sources were shut down. Sources said Turkey has been taking ammonia from North Africa, Trinidad, Indonesia, and Iran. The current price into Turkey has been coming down as global supply outstrips demand.
Sources reported deals done last week showed prices at $980-$990/mt CFR. This is down about $100/mt from earlier in October. The Arab Gulf equivalent price for these Turkish deals is around $900/mt FOB.
Reportedly, Turkey is fully booked for its ammonia needs through the first half of December. It is still short a few tons for the second half of December, but, said sources, should have no problem covering their needs. No deals for January have been reported yet.
India:
Buyers continue to look for inexpensive spot deals and are taking advantage of offers from China. According to Chinese export numbers supplied by Trade Data Monitor, India has imported 62,000 mt from China since July 2022 out of 109,000 mt exported by China during the same time period.
Besides China, Indian buyers have also picked up ammonia on the spot market from Indonesia, Malaysia, and Trinidad. The prices offered by these ammonia producers have been lower than what the Arab Gulf producers have been offering.
Middle East:
Arab Gulf producers continue to claim they will not sell on the spot market for less than $1,000/mt FOB. The last spot deal from the area showed prices estimated at $1,015-$1,030/mt FOB. Buyers consider these prices too high and are asking for prices closer to $900/mt FOB.
Buyers have been watching the price into Turkey drop to use as leverage against the AG producers. The recent spot sales into Turkey are showing an Arab Gulf-equivalent price in the low-$900s/mt FOB.
The producers appear satisfied fulfilling their contracted orders with buyers around the world. Sources said, however, that producers are getting pushback from their customers in Southeast Asia. The buyers are asking the producers to reduce the amount of tonnage sent as well as the frequency of cargoes. Sources said the cutback in industrial output in the area has led to a reduced demand for inputs such as ammonia.
The Arab Gulf producers are also facing competition in the spot market from the cheaper ammonia offered by China, Indonesia, and Malaysia. International traders said it will not be long before the tanks holding the excess tons being produced in the Arab Gulf begin to reach their storage limits. When that happens, said one trader, the producers will have to re-think their pricing ideas.
Northwest Europe:
No new spot business in the area leaves the price at $1,150/mt CFR. Sources said buyers are becoming more aggressive in demanding lower prices. The latest set of bids top off at $1,000/mt CFR.
The buyers said the recent slide in natural gas prices and ready material from international sources justify the lower Northwest Europe price. Sources said, however, the gas price decline may be just a blip. With winter approaching, demand for gas to heat homes instead of industries may force prices up again.
One trader noted that if imported ammonia continues to soften, producers in Europe may have to reconsider their decisions to restart ammonia production. If gas prices go up and imports remain on a downward slope, there would be little incentive to keep their plants operating.
For now, European ammonia players are watching to see what happens in the United States. They are looking for reports on the ammonia application season, as well as the December Tampa price.
China:
Imports of ammonia into China were practically nil in October. Trade Data Monitor reported Chinese buyers imported only 123 mt of ammonia in October, compared to 89,000 mt imported during October 2021.
Sources said the near-zero tonnage imported, along with exports in October of 21,000 mt, indicates how much the Chinese industrial sector has slowed down. Major chemical companies in China have reportedly cut back on their operations. Some have slowed down output because of the zero-COVID-19 policy of Beijing that mandates shutdowns when a case of COVID-19 is confirmed in the plant or neighborhood. So even if a plant is COVID-19 free, there have been cases where workers could not get to work because their neighborhood was in complete lockdown.
Even without the COVID-19 policy, the economic slowdown in the global economy has forced many industrial plants to cut back on production as demand for their finished products declines.
In contrast to imports, Chinese exports of ammonia have been steadily increasing. China has exported 109,000 mt of ammonia since July 2022. India has imported 62,000 mt from China since July 2022 out of 109,000 mt exported by China during the same time period. The shift to becoming an ammonia exporter has benefited buyers such as India, which has taken 62,000 mt from China since July, who are looking for a cheaper alternative to the Arab Gulf and North African suppliers.
During January through October, Chinese ammonia exports were reported at 126,000 mt by Trade Data Monitor. By comparison, China exported 2,200 mt in all of 2021 and 2,300 mt in 2020. October exports were reported at 20,700 mt, with India taking 20,500 mt.
Ammonia imports for January through October were reported at 195,000 mt by Trade Data Monitor. This is dramatically down from the 750,000 mt imported during the same period in 2021. Indonesia was the main supplier with 110,000 mt.
October 2022 imports were the lowest figures seen for any month in the past three years at 123 mt. October 2021 imports were reported at 90,000 mt.