US Gulf/Tampa:
Tampa prices for February continued at $790/mt CFR, down from January’s $975/mt CFR. Most sources saw continued downward pressure on the market, citing both low natural gas prices and plentiful ammonia inventories in Europe and the US Gulf.
Eastern Cornbelt:
Ammonia prepay remained at $1,095-$1,110/st FOB in the Eastern Cornbelt, with the low confirmed at Lima, Ohio. Most Illinois and Indiana terminals were unchanged at the $1,100/st FOB mark for prepay tons, but sources said they expect a downward reset from producers in the next 2-3 weeks.
Western Cornbelt:
Spring prepay offers for ammonia were unchanged at $1,050-$1,100/st FOB in the Western Cornbelt, with the low in Nebraska and the high at Palmyra, Mo. Iowa terminals were reported in the $1,060-$1,070/st FOB range in late January. Sources said they expect lower prepay prices to be announced in the coming weeks, however.
Southern Plains:
Although spring prepay ammonia offers were steady at $875/st FOB Woodward, Okla., $900/st FOB Pryor, Okla., and $950/st FOB Verdigris, Okla., sources said prompt ammonia was being priced at $820/st FOB Borger, Texas, and $865-$870/st FOB in Oklahoma.
South Central:
In the wake of the Tampa February ammonia price drop, truck pricing for ammonia out of Gulf Coast terminals fell to $700-$710/st FOB, well below the previous $875-$880/st FOB range. Sources continued to report no new offers out of El Dorado, Ark., Midway, Tenn., or Cherokee, Ala.
India:
Sources reported a few small shipments being picked up from Asian suppliers at $780-$790/mt CFR. Major buyers have also continued to receive larger cargoes under contracts with Arab Gulf producers at about the same price level.
International traders said the lack of transparency in deals cut with the Asia suppliers makes for nervous buyers in the area. The best that most have been able to do is to triangulate prices based on their discussions, while also trying to make a deal.
Middle East:
Sources said that a sale to Turkey at $750/mt CFR indicated a netback to the Arab Gulf of $680/mt FOB. This level matches values estimated from closing prices in East Asia.
Sources said that any deal West of the Suez Canal would have to be in the $680-$690/mt FOB range. At the same time, sales to East Asia would have to be closer to $700/mt FOB to work. The drop in pricing and expectations of lower prices from buyers reflects the general attitude in the market.
Arab Gulf producers claim they are fully booked and have no incentive to lower prices. However, one trader noted that some producers are pushing out cargoes that must wait several days to unload at the receiving port. There are reports that in some locations, more than one ammonia vessel is waiting to discharge its cargo.
One source said that by shipping out product, even with delays on the receiving end, the producers can honestly claim they have no excess tons. However, said one trader, eventually the delays in unloading product could make it difficult to secure vessels to continue the practice. If that happens, he said, the producers will end up building up reserves. Buyers would then be expected to become more aggressive in demanding lower prices.
Iranian exports for 2022 were reported at 556,000 mt by Trade Data Monitor, up marginally from 541,000 mt exported in 2021. India bought 460,000 mt, accounting for 83% of the exported material.
December exports were counted at 66,000 mt, up from the year-ago 24,000 mt. India took 74% of the exports with 49,000 mt, followed by Oman with 13,000 mt.
Northwest Europe:
Panic related to high prices and limited material has been replaced with a steady confidence in lower prices and more product. Sources reported that Yara closed a deal out of Algeria showing a Northwest Europe price of $780-$790/mt CFR. This transaction comes on the heels of earlier reports of late-January deals in the $820s/mt CFR.
Sources said the lower natural gas prices now indicate an ammonia production cost of about $700/mt ex-plant. One trader said that at this level, there is still more room for prices to drop.
The lower prices were attributed to larger-than-expected natural gas reserves. The gas supplies are in good shape, said one trader, because the winter in Europe has so far been milder than expected, and buyers were aggressive in finding plentiful gas resources to replace Russian product that is no longer being sent to Europe.
Ammonia imports by Turkey softened to 796,000 mt in 2022, Trade Data Monitor reported, falling from 839,000 mt in 2021. Buyers reached out to a wide variety of suppliers after both marine exports from the Black Sea were halted due to the war in Ukraine and the subsequent shutdown of the ammonia pipeline to Odessa. Russia, Bahrain, Indonesia, and Algeria combined for about 60% of imports for the year. Russia led the way with 178,000 mt, for 22% of the market.
December ammonia imports stood at 92,000 mt, up 17% from 78,000 mt in the prior December. China was the top seller with 22,000 mt, representing about 24% of the monthly market, and just under 3% of Turkey’s 2022 ammonia imports.
Southeast Asia:
Taiwan reportedly bought a cargo from China at $780/mt CFR. Sources said limited demand from the area is helping push down prices.
Many of the Asian buyers, including India, looked to Asian suppliers from Indonesia, Malaysia, and China for their ammonia. Sources said buyers may soon find that tonnage from China is limited, as softer worldwide ammonia prices are making it less fruitful for Chinese sellers to offer product.
Indonesia might see a large increase in available ammonia. Sources speculated that because of an upcoming national election, urea producers will kick up production at all of their facilities to ensure plentiful supplies for the domestic market. The action could produce more ammonia than needed for urea production. The excess material will be offered on the open market, further driving down prices from the region.
Ammonia exports from Indonesia have already stepped up, Trade Data Monitor reported, rising to 1.9 million mt in 2022, up 7.75% from 1.8 million mt in 2021. South Korea took 26% of the exported product at 511,000 mt, followed by India with 302,000 mt. Japan received 197,000 mt.
December exports were reported at 143,000 mt, up from the year-ago 136,000 mt. Fourth-quarter exports rose to 483,000 mt from 377,000 mt in 4Q 2021.
Imports of ammonia into Thailand for 2022 were reported at 317,000 mt, off 28% year-over-year from 438,000 mt. The top suppliers were Malaysia with 215,000 mt, for 68% of the imports, and Indonesia with 85,000 mt. December imports totaled 11,000 mt, down from the prior-year 62,000 mt.
Poland:
AGrupa Azoty spokesperson confirmed to Green Markets that the Polish fertilizer and chemicals group is producing ammonia at “stable levels,” and intends to continue production at similar levels going forward. The spokesperson declined to comment on actual production volumes, however, either for ammonia or downstream fertilizer products.
Grupa Azoty has the capacity to produce a total of 3.14 million mt/y of ammonia group-wide, according tothe Green Markets database.
Given the stabilization of natural gas prices seen from the European market in January, Azoty said it would lower its fertilizer product prices as of Feb 1, despite strong year-over-year increases in the prices of other fertilizer production inputs, including electricity, coal, phosphate rock, and potassium chloride. The company described the price revision as another significant response to changing market conditions, following a similar one in October (GM Oct. 21, 2022).
The updated pricing will be applied by authorized Azoty distributors countrywide.