US Gulf/Tampa:
Tampa ammonia for December was concluded at $1,030/mt CFR, down $120/mt CFR from November’s $1,150/mt CFR. Market observers had expected a lower price based on increased production in Europe, as well as lower international prices.
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 limited terminal offers from CF. The ammonia market FOB Lima, Ohio, remained at $1,300/st FOB during the week.
Ammonia continued to move to the field in some parts of the Eastern Cornbelt during the final days of November, and some sources said they expect another two weeks of application based on weather forecasts. No spring pricing programs have been announced in the region.
“Tons are still moving to the field, and we’ve been seeing some parties who normally apply in the spring taking advantage of this fall weather and moving to apply now,” said one regional contact.
Western Cornbelt:
Ammonia pricing slipped to $1,250-$1,300/st FOB for prompt fall tons in the Western Cornbelt, depending on location and supplier. In the Southern Plains, new offers FOB Enid, Okla., were reported at the $1,000/st level.
California:
Anhydrous ammonia postings in California remained at $1,250/st DEL. The aqua ammonia market was unchanged at $271-$336/st FOB, with the low reported for the last offers at Stockton and the high at Sycamore.
Pacific Northwest:
Ammonia pricing in the Pacific Northwest remained at $1,335-$1,350/st FOB and $1,350/st DEL. The aqua ammonia market was also unchanged at $345/st FOB in the region. “Ammonia will come down once fill/prepay numbers start to come out,” said one regional contact.
Western Canada:
New winter fill pricing for anhydrous ammonia in Western Canada was quoted in a broad range at C$1,350-$1,595/mt DEL, down sharply from the last reported prompt fall pricing in the C$1,600-$1,800/mt DEL range. No spring pricing programs were announced in the region as of Dec. 2.
Black Sea:
News reports indicate the United Nations and Russia are closer to a deal that would re-open the ammonia pipeline from Russia to Odessa, but international traders continue to criticize the move.
One European trader noted that the Russians are targeting electrical supply centers in their war against Ukraine. Efforts to open the pipeline will require the diversion of the limited electricity produced in the war zone away from the civilian population to the pipeline.
If the deal does go through, sources said the price of ammonia could come down. However, Russia may find it difficult to regain many of its old markets. Several major buyers that once depended on Russian ammonia have moved on to other suppliers.
India:
Buyers in India are almost exclusively taking spot tons from China and Southeast Asian sources such as Indonesia and Malaysia. Long-term contract material is still coming from Arab Gulf suppliers.
The Asian suppliers are offering their tons at levels that equate – and sometimes beat – the contracted price from the Arab Gulf. Sources said the landed price for spot ammonia into India remains around $850/mt CFR.
Middle East:
Sources said there is no spot material coming out of the Arab Gulf, and the product moving out is said to all be contracted tons. Reportedly, the producers claim they are sold out for December and into early January.
Any discussion about a spot cargo usually begins around $1,000/mt FOB from the producers and just under $900/mt FOB from buyers. With cheaper product from Southeast Asia for East of Suez buyers, sources said there is little incentive for buyers to come up in their bids. Likewise, sufficient supplies from North Africa and Trinidad and lower landed prices are keeping buyers West of Suez from agreeing to the spot prices proposed by Arab Gulf producers.
The lack of any new spot deals leaves the last public spot price at $1,015-$1,030/mt FOB. Sources said this is not a level that is easily attained at this time, however.
The producers are keeping an eye on demand out of Australia following the closure of the Yara Pilbara plant. Reportedly, the Australians could be looking at more purchases from Indonesia and Malaysia, reducing the availability of ammonia from Southeast Asia. They are also watching rising gas prices in Europe to see if more imports will be needed that cannot be supplied from North Africa or Trinidad.
January-October ammonia exports from Iran were reported at 419,000 mt by Trade Data Monitor, down 11% from the 473,000 mt exported during the same period in 2021. The main buyers were India at 344,000 mt and Oman at 27,000 mt.
October 2022 exports were reported at 35,000 mt, up 42% from the 25,000 exported in October 2021. India took 18,500 for 53% of the exports, followed by Oman with 14,000 mt for 39% of exports.
Northwest Europe:
A sale by Nutrien at $1,050/mt CFR dropped the ammonia price in Europe. Sources said the move presaged the drop in Tampa to $1,030/mt CFR. One trader noted that the netback to Trinidad from Europe and Tampa is about the same.
Imports of ammonia are expected to pick up in December. Sources said gas prices into Europe have been rising at almost 10% per day, leaving ammonia producers little choice but to cut back on production.
European producers began to ramp up production in November following a dip in gas prices, resulting in fewer imports. Sources estimated that European buyers imported about 200,000 mt less in November than they did in October. With natural gas prices moving up again, however, the producers may begin reversing their gradual increase in production by slowly stepping back on their output.
Potential buyers will start looking again at Trinidad and Southeast Asia for supplies. Sources said tonnage from Malaysia and Indonesia may be less available. The European buyers could face competition from buyers looking to replace the tons lost due to the closing of the Pilbara plant. Even though the plant is expected to be closed for about a month, it will be during the height of winter in Europe when gas prices are expected to be even higher.
Southeast Asia:
Ammonia supplies are expected to tighten as buyers look to cover lost material from the closing of the Pilbara plant in Australia. The plant was closed because of uncertain natural gas supplies. Damage to the pipeline run by the supplier is expected to take four to six weeks before deliveries can recommence.
Even with the expected increased demand for ammonia from the area, sources said the excess material from China will work to keep prices stable.
Thailand ammonia imports for January-October were reported at 288,000 mt by Trade Data Monitor, down about 19% from the 354,000 mt imported during the same period in 2021. The main suppliers were Malaysia at 200,000 mt and Indonesia at 81,000 mt.
October 2022 ammonia imports were reported at 18,000 mt, with Malaysia supplying 15,000 mt. This is a drop of 64% from the 49,000 mt imported during October 2021.