US Gulf/Tampa:
Tampa prices for February continued at $790/mt CFR, down from January’s $975/mt CFR. Lower gas prices in Europe and the US are expected to continue to put pressure on ammonia prices.
US Imports:
Ammonia imports for December firmed 14.7% year-over-year, according to data released by the US Census Bureau, to 179,484 st from 156,534 st. Imports totaled 1.13 million st for July-December, however, off 10.9% from 1.27 million st in the year-ago period.
US Exports:
December ammonia exports moved 1,665.3% higher, to 134,264 st from 7,606 st in December 2021. July-December totals were up 285.4%, to 724,228 st from 187,937 st noted one year earlier.
Eastern Cornbelt:
The arrival of springlike weather in the Eastern Cornbelt was accompanied by a reset of spring ammonia prices. Postings from CF and Koch for March-June shipment reportedly dropped to $840-$850/st FOB terminals in Illinois and Indiana on Feb. 8, down sharply from the initial $1,100-$1,110/st FOB prepay offers in the Eastern Cornbelt.
The drop in ammonia had been expected amid falling urea and UAN prices and reports of lackluster spring ammonia prepay business.
“I have never seen a year that I can recall with this much softness in the markets heading into spring. Growers are just sitting on the sidelines, not making decisions or having many discussions,” remarked one source. “I really don’t think the markets are done with the softness yet, so I have been delaying some final purchases for spring also.”
Western Cornbelt:
A new round of spring ammonia prices at midweek dropped prepay levels to $840-$850/st FOB in the Western Cornbelt, well below the previous $1,050-$1,100/st FOB offers. Spot prepay prices for March-June shipment included $840/st FOB Fort Dodge and Garner, Iowa, and $850/st FOB Washington, Iowa, and Palmyra, Mo.
An ammonia reset occurred in the Northern Plains as well, with CF terminals in North Dakota and Minnesota falling to $840/st FOB and delivered prepay offers dropping to $850-$875/st in the region. Sources talked of new prepay ammonia prices in the Southern Plains dropping to the $650/st level FOB Oklahoma production points.
California:
Anhydrous ammonia postings in California remained at $1,250/st DEL. The aqua ammonia market was steady as well at $326-$336/st FOB, with the low at Stockton and the high at Sycamore.
Pacific Northwest:
New offers for ammonia were reported down to $850-$858/st DEL in the Pacific Northwest, well below the previous $970-$1,000/st DEL range. Offers out of Washington terminals slipped to $915/st FOB, down from $950-$980/st FOB. “It looks like ammonia prices have finally unwound in response to continued weakness in urea,” said one contact.
Aqua ammonia pricing slipped to $235/st FOB in the region, down from the previous $275/st FOB level.
Western Canada:
The last offers for spring ammonia continued to be reported at C$1,475-$1,640/mt DEL in Western Canada, depending on location and supplier, though there was no new business to test the market in early February.
Black Sea:
Even as no material is flowing out of the Black Sea, buyers in Turkey, Bulgaria, and Romania are keeping an eye on the market for bargain-priced product to be shipped to their Black Sea ports. These ports are well clear of the war zone on the Black Sea’s northern shore.
Turkish buyers are reportedly looking at $700-$710/mt CFR for their purchases, with some reportedly eyeing sub-$700/mt CFR tonnage. For material to arrive in Turkey at that level, sources said that Arab Gulf ammonia would have to be sold around $620/mt FOB, a level far below what producers are willing to take.
Pressure from Russian producers and the United Nations to reopen the ammonia pipeline from the Russian border to Odessa has gone quiet, sources said. While most in the industry said that opening the pipeline made no sense while hostilities are still ongoing, UN representatives were active in December and January in attempting to restart ammonia exports from the region.
One trader suggested the lack of recent efforts to reopen the pipeline could be due to public reports that Russia is gearing up for a major spring offensive that could damage the pipeline.
India:
Sources reported that recent arrivals into India all seem to be tied to contract tons. The softening ammonia market is leading buyers to push for ever-lower prices for spot deals, and for reducing contract prices into the $770s/mt CFR. So far there has been no confirmation of any spot deals – which would have to be in the low-$780s/mt CFR – nor of any public shift in the contracted price.
Indian buyers continued their talks with potential suppliers from China and Iran. Both companies have offered spot tons at prices close to contract values in the $780s/mt CFR. Arab Gulf suppliers seem unwilling to discuss spot cargoes at the levels Indian buyers want, but continue to service the contract deals.
Middle East:
Producers are reportedly ready to talk about spot deals in the $680s/mt FOB, but are not finding any takers. Buyers are said to be looking at $620/mt FOB, which would fit with pricing ideas out of Turkey, although sources said no new spot deals have concluded that would allow for a price shift.
The pressure will continue to build. Even as Turkey and India push for prices in the $620s/mt FOB, sources said Taiwan buyers have cut deals with non-Arab Gulf suppliers at $750/mt CFR. At that price, the Arab Gulf-equivalent would be $650/mt FOB.
Sources said that industrial-use gas supplies in Iran are opening up as winter fades, and more ammonia tons are expected to be available going into the second quarter. Even with the anticipated production increase, sources said Iranian ammonia will not be a major factor in the market. One trader noted the procedures to pay for the ammonia and arrange shipping are complicated because of sanctions against Iran.
India and Turkey are most likely to remain the main buyers of Iranian product. Both countries have worked out arrangements with third countries to process payment and resolve shipping issues related to Iranian ammonia.
January exports from Iran totaled 21,000 mt, Trade Data Monitor reported, up 5% from 20,000 mt shipped in January 2022. India took 89% of the exports with 18,500 mt, followed by Turkey with 2,000 mt.
Northwest Europe:
The pressure is on to lower prices. Sources said the lower price of natural gas now puts the cost of producing ammonia at $650/mt ex-plant. At this level, the last-done bit of business in the $780s/mt CFR indicates there is room for a decline in pricing.
No new deals were done this week. Sources said there was a lot of talk, but with limited demand in Europe combining with plentiful supplies, buyers are in no rush to accept current pricing levels.
Brazil:
Sources said that Brazil is likely to remain a spot market supplier. Ammonia exports from Brazil totaled about 126,000 mt in 2022, representing an average shipment of 10,500 mt per month. Brazil exported 18,000 mt in January 2023, according to Trade Data Monitor, with all of the tonnage going to South Africa.
Brazil will most likely remain a supplier of convenience when vessel and tonnage availabilities line up with demand, sources said. Due to the erratic nature of monthly availability from Brazil, however, one trader said it is unlikely that anyone will sign a long-term contract for Brazilian ammonia.
January ammonia imports totaled 15,000 mt, 38% down from the year-ago 24,000 mt. All of the product came from Trinidad and Tobago.