US Gulf/Tampa:
Tampa ammonia for June fell to $340/mt CFR, off $40/mt from May’s $380/mt CFR. Most sources had expected another drop, citing falling natural gas prices in Europe and plentiful ammonia supplies.
European gas prices continued to move down again this past week, though it was not assured this would prompt more plants on the continent to return to production, especially when European producers can still import product at prices below their own cost of production.
Sources said that NOLA prices continue to track below the Tampa equivalent.
Eastern Cornbelt:
Ammonia prices remained under pressure in the Eastern Cornbelt. Sources quoted new prompt offers at $435-$450/st FOB regional terminals, depending on location, down from last week’s $490-$500/st FOB range.
While one Illinois contact said that sidedress movement in his area was “well over half done,” others said the big push is still weeks away. “It’s been a crazy busy week finishing planting,” commented an Ohio source. “It’s going to be a few weeks in my opinion before the sidedress wave kicks open.”
Western Cornbelt:
Ammonia prices dropped again, falling to $425-$450/st FOB in the Western Cornbelt, down from last week’s $450-$490/st range. In the Southern US, new offers were confirmed at $405/st FOB Verdigris and Pryor, Okla., with truck pricing down to $300-$305/st FOB out of terminals in Louisiana and Alabama.
While no summer fill programs were out in late May, sources said there is a fair amount of discussion about where Cornbelt ammonia prices will fall. As one contact said, most expected “a $3” in front of any new fill offers that are announced in the coming weeks.
California:
Anhydrous ammonia continued to be referenced at $890/st DEL in California. Aqua ammonia postings were unchanged as well at $237/st FOB Stockton and $247/st FOB Sycamore.
Pacific Northwest:
Delivered ammonia pricing in the Pacific Northwest was quoted in the $695-$730/st range, down from $710-$740/st earlier in May. While the upper end of the range was in play earlier in the week, sources said the low was more common as the week progressed. No current FOB terminal prices were confirmed in late May.
Aqua ammonia dropped to $150/st FOB in the region, down from the prior $190/st FOB level.
Western Canada:
The last reported spring ammonia offers in Western Canada were quoted at C$700/mt FOB and C$960-$1,040/mt DEL, down from the previous C$1,040-1,070/mt DEL range.
Black Sea:
Russia has threatened to end its participation in the Black Sea Grain Initiative, the agreement allowing for Ukrainian grain to be shipped out of the Black Sea without being threatened by Russian warships, unless the UN forces Ukraine to reopen the ammonia pipeline from Russia to Pivdennyi. The move would allow for Russian ammonia to once again be shipped to the global market.
Opposition to reopening the pipeline has come from not only the Ukrainian government, but also many international ammonia traders. Sources said the pipeline passes through an active war zone, making damage to the line likely.
Moscow is also demanding that its agricultural bank be given access to the SWIFT international financial payment system. While Russian fertilizers, including ammonia, are not on the sanctioned list, denial of access to SWIFT was one of the actions taken against Russia following its invasion of Ukraine.
Frustrated with the inability to reopen the pipeline, Russia has stepped up development of an ammonia terminal at Taman, near Crimea. The Russian government said it will begin ammonia exports by the end of year.
In the meantime, ammonia is being sent to a port near St. Petersburg. The intention is to use one ship as a floating terminal to receive the railed ammonia, and then transfer it to vessels for international sales. Sources said that three vessels have already been chartered for this purpose. Exports are expected to start in June.
India:
Sources said the contract price for ammonia has been going down, and that the spot price will follow. While the industry met in Prague for the IFA Annual Conference, buyers were noted talking about pricing material at sub-$300/mt CFR levels.
The contract price was reportedly pegged at $270-$280/mt CFR, while talks for spot material are focused on $290-$300/mt CFR. One trader said an aggressive spot buyer might even be able to push the price into the $280s/mt CFR.
Sources reported that FACT may soon return to the international market after not purchasing imported ammonia for more than one year. The company was previously able to operate with domestic ammonia alone, but is reportedly getting ready to open a second line of production. The need for more ammonia will also prompt FACT to expand their port facility to accommodate larger quantities of material.
January-March imports totaled 621,000 mt, Trade Data Monitor reported, up about 20% from the year-ago 516,000 mt. March imports stood at 139,000 mt, down 43% from 244,000 mt imported in March 2022. The main suppliers were Bahrain with 46,000 mt, Oman with 37,000 mt, and Saudi Arabia with 31,000 mt.
Middle East:
Sources said that no new spot deals were concluded while the industry attended the IFA conference in Prague. The estimated price for any new business was pegged at $220-$225/mt FOB, while the contract price was reported at $210-$220/mt FOB, based on recent formula-derived sales into India.
Northwest Europe:
Sources said that realistic prices have moved to $350-$360/mt FOB, following reports of ex-plant pricing at $368/mt. The lower price has not been done, however, but was reportedly where talks are settling. There were reports that some buyers are pushing hard for $320/mt CFR, but without success.
Prices are expected to continue to fall. Sources said that softer natural gas prices and a general malaise in the market could lead to buyers becoming more aggressive in their pricing demands. There was talk in the market of prices moving closer to $300/mt CFR and below. Sources said, however, that the $300/mt CFR mark could be the market’s floor.
The industry has started preparing for the EU’s new plan to restrict carbon emissions (GM May 12, p. 33). So far, none of the measures are affecting prices. Sources said the impact to the cost of ammonia may not be felt until 2025-2026.
Southeast Asia:
The latest business from the area came on a sale from Petronas at $260/mt FOB. The price generated much discussion in the industry, as conventional wisdom puts the current break-even price for ammonia produced in Malaysia and Indonesia at $280-$300/mt FOB.
Plants in Malaysia and Indonesia are expected to go down in June for routine turnarounds. The plants have reportedly built enough reserves to service their contracts during the shutdown period.
China:
Trade Data Monitor reported January-April ammonia imports at 214,000 mt, a 137% increase from 90,000 mt imported during the same period of 2022. April imports were noted at 109,000 mt, up from 11,000 mt in the prior-year period. Indonesia sent 49,000 mt, followed by Oman with 25,000 mt. Saudi Arabia and Malaysia each supplied 15,000 mt.
January-April exports were reported at 131,000 mt, against 437 mt shipped out during the same period of 2022. April exports came in at 4,300 mt, significantly above the year-ago 44 mt.
China exported a great deal of ammonia in second-half 2022 and into 2023, as prices were high enough to handle the deals, and China’s domestic industrial customers did not need as much ammonia as in previous years. Sources have predicted that once China’s industries begin building up once again, and as the global price of ammonia drops, China will begin exporting fewer tons.