US Gulf/Tampa:
Tampa ammonia for December continued at $1,030/mt CFR, down $120/mt CFR from November’s $1,150/mt CFR. The January price will depend on the European natural gas price and the status of production on the continent, though some sources said product in New Orleans is long.
Eastern Cornbelt:
With fall application rapidly winding down, ammonia prices were softening in the region. Most Eastern Cornbelt terminal offers were reported in the $1,250-$1,300/st FOB range, with the low confirmed out of Koch and CF terminals in Illinois and Indiana, and the high reflecting the last reference price FOB Lima, Ohio. No spring prepay programs were offered during the week, sources said.
In the South, the latest truck offers for ammonia out of Gulf Coast terminals dropped to the $980-$1,000/st FOB range, down from $1,050-$1,080/st FOB in November.
Some ammonia, phosphates, and potash was still being applied in parts of Illinois during the week. Sources described fall volumes as good for all three products, although ammonia applications were down from last year’s record fall.
Western Cornbelt:
Ammonia pricing slipped to $1,210-$1,250/st FOB for prompt fall tons in the Western Cornbelt, depending on location and supplier, with the low reported at Wever, Iowa, and the high reflecting the last offers from Koch and CF terminals. No spring prepay offers were circulating yet in the region. “Something will definitely be out by Dec. 20,” said one contact.
Northern Plains:
The last ammonia offers in the Northern Plains remained at $1,200-$1,250/st FOB and $1,245-$1,300/st DEL for fall tons, but the window for fall application was now closed in the region. No spring prepay programs were being offered during the week.
India:
Sources put the landed price at $850-$870/mt CFR for spot tons for the week. The updated values represent only a slight bump up in pricing, while contract tons from the Arab Gulf were reported lower.
While the large buyers are taking in their contract tons from the Arab Gulf, spot tons are being picked up from China and Iran, with buyers taking advantage of Chinese ammonia at prices well below that of the Arab Gulf. Trade Data Monitor reported that India bought 61,700 mt of ammonia from China in January-October, compared to just 155 mt purchased from China in the past five years.
Chinese prices are expected to move up as that country eases its COVID restrictions, which might allow more plants to operate and leave fewer tons of excess ammonia for export. The new asking price out of China could move the Indian price closer to $980/mt CFR, but so far no deals have been reported at that level.
Indian buyers are also looking to Iran for tonnage. During the January-October period, India bought 344,000 mt of Iranian material, up 7% from the same time period in 2021.
China:
Sources expect to see higher prices coming from China, with new asking prices reportedly moving closer to $880/mt FOB.
The increase in offer levels is expected due to the relaxation of COVID-related restrictions by the central government. Regular shutdowns of factories and limited shopping opportunities under the old COVID policies reduced the demand for produced goods, reducing the need for ammonia. With the easing of the restrictions now taking place, sources speculated Chinese manufacturers may need the ammonia they are currently shipping abroad.
Middle East:
Most business coming out of the Arab Gulf consists of tons secured under long-term contracts, primarily with buyers in India, South Korea, and Taiwan. Sources speculated netbacks from these deals to be in the low-$800s/mt FOB.
Sources said there have been some spot deals from the Arab Gulf, but that buyers and sellers have remained mum about tonnage and pricing. A handful of reported deals may have included Arab Gulf material, however, offering opportunities to estimate netbacks to the area.
An earlier purchase by Turkey reported at $980/mt CFR could have been sourced from the Arab Gulf, sources said. If it was, sources estimated the netback to be about $880/mt FOB. At the same time, sources are looking at the Northwest Europe price of $1,050/mt CFR and calculating an Arab Gulf-equivalent, estimating netbacks to the Arab Gulf around $850/mt FOB.
The $850-$880/mt FOB range has been the focus of much of the discussion for pricing. Sources said the last public price of $1,015-$1,030/mt FOB is too high for any new business to be concluded, and noted that even the producer asking price of $1,000/mt FOB was too dear for contemplation.
Buyers in particular have argued for the past month that the producers would have to drop their spot price closer to contract levels for sales to be done. Most bids were noted coming in under $900/mt FOB, and – at least officially – were rejected by the producers.
Sources noted that exports from Iran have stabilized, and India has been the main beneficiary of exported Iranian ammonia. The discounted price of Iranian ammonia, along with the cheaper Chinese ammonia, provided some relief for buyers.
Northwest Europe:
No new deals moved the price off the $1,050/mt CFR secured in late November. Sources stressed that the price is based on imported ammonia and not product from European producers.
The rising price of natural gas is raising the break-even level for ammonia production. Sources now peg the basic price of ammonia at $1,400-$1,500/mt FOB ex-factory before any profit or transportation is added. Buyers are reluctant to buy at this level, especially when there appears to be no shortage of imported ammonia at lower prices.
Brazil:
Imports of ammonia for January-November were reported at 387,000 mt by Trade Data Monitor, down 23% from the year-ago 504,000 mt. Trinidad and Tobago supplied the bulk of the tonnage, with 322,000 mt sent.
November 2022 imports were reported at 19,000 mt, down 28% from the 27,000 mt purchased during November 2021. Again, Trinidad was the primary supplier with 18,800 mt.
Brazil occasionally exports ammonia, most of which are opportunistic sales, sources said. January-November exports were reported at 81,000 mt, up dramatically from the year-ago 17,000 mt. South Africa bought 38,000 mt, representing 47% of Brazil’s total exports through the period, while 15,000 mt to Spain accounted for 19% of the export market.
November 2022 exports were reported at 15,000 mt, compared to the 81 mt exported in November 2021. The market’s primary buyers were Spain with 8,000 mt, followed by Portugal with 7,000 mt.
Indonesia:
Producers continued to look for opportunities in Europe and India, but were also noted keeping a keen eye on customers closer to home.
Trade Data Monitor reported January-October exports at 1.6 million mt, up from the 1.5 million mt in the same period of 2021. South Korea topped the market with 437,000 mt, followed by 234,000 mt to India. Japan added 171,000 mt, while Taiwan and China combined for another 282,000 mt.
October exports were reported at 173,000 mt, up from the year-ago 143,000 mt, while Belgium, Turkey and Morocco took a total of 70,000 mt. India was October’s single largest buyer with 46,000 mt. Most October buyers did not buy Indonesian product in 2021.
Turkey:
January-October ammonia imports were reported at 577,000 mt by Trade Data Monitor, down 17% from the 698,000 mt imported through the same period in 2021.
While Russia was Turkey’s largest single supplier during the first 10 months of the year, its shipments have dropped off since the invasion of Ukraine and the subsequent withering of the Black Sea ammonia market. Russian exports to Turkey counted at 114,000 mt in the first quarter dropped to 18,000 mt in 2Q, while a residual amount of 30,000 mt was received by Turkey in July and August. No Russian material was recorded reaching Turkish ports in September and October.
Turkey’s second highest supplier was Bahrain, sending 110,000 mt compared to zero tons in January-October 2021.
October 2022 imports were reported at 62,000 mt, marginally down from 63,000 mt in October 2021. Bahrain accounted for 41% of October supplies with 25,000 mt, followed by Saudi Arabia with 14,000 mt, good for 23% of the market.