U.S. Gulf/Tampa: No new sales were reported in the markets last week, despite speculation that extra tons in the area should result in new spot sales. Instead, they may have resulted in trades or contract business. Mosaic has extra tonnage now that it has taken down phosphate capacity at Faustina, and the OCI North America plant officially began production at the Beaumont, Texas, facility in late November.
In the meantime, ammonia producers continued to enjoy ever-decreasing natural gas prices. The Henry Hub NYMEX natural gas price continued to plummet last week. It closed Thursday at $2.697/mmBtu, which was the lowest price for a prompt month in 28 months.
Eastern Cornbelt: CF reposted anhydrous ammonia in the $650-$660/st FOB range in the Illinois and Indiana markets in early January. Sources quoted dealer pricing out of some regional terminals at the $670/st FOB mark for prompt tons last week.
Western Cornbelt: A long-overdue storm system blanketed much of the Western Cornbelt region with snow last week, and also sent temperatures plummeting from record highs to single-digit lows in the space of 12 hours. The wintry weather slowed fertilizer movement to the field, including some early applications of ammonia on rowcrop ground.
Ammonia pricing was down from last report, with sources quoting the market at $610-$650/st FOB regional terminals to the dealer. The lower numbers were reported out of Nebraska terminals, with the upper end quoted in the Missouri market. Ammonia pricing out of Iowa terminals was generally tagged in the $620-$640/st FOB range, depending on location and supplier.
Southern Plains: Several sources in the Southern Plains market reported a flurry of prepay activity since early January, as well as some steady preplant ammonia applications on corn ground in Kansas. One contact said the brisk business was kicked off when growers finally received their insurance checks from last year’s drought-damaged crops. “We didn’t get anything done in November and December, but this has been by far the busiest January we’ve ever had,” said one source.
The ammonia market was tagged at $580-$610/st FOB in the region, with the lower numbers out of some regional production points. Sources reported long lines at some terminals in early January, with reports that truck availability is getting tight.
South Central: Ammonia pricing out of South Central regional terminals was pegged in the $645-$655/st FOB range, with the upper end quoted for spring prepay tons out of the Memphis market.
Middle East: Once again, Sabic closed a deal that lowered the price of ammonia in the region.
As last year ended, Sabic sold product to Transammonia for India that dropped the public price more than $100/mt. Now, sources report another Sabic deal that takes the price even lower. Sabic sent 15,000 mt to a U.S. West Coast buyer for a reported price of $555/mt CFR. Once freight and handling are backed off, Asian sources peg the netback at $395/mt FOB.
Sources said Sabic was desperate to move material because of lower demand in Asia and India. Adding to the Sabic woes was the opening of Qafco 5 and the multitude of contracts signed to take advantage of the new ammonia output. Asian players noted that a lot of the production – but not all – of the Qafco facility will be dedicated to contracts rather than the spot market.
The Sabic deal drops the regional market to $395/mt FOB. Some sources said they think the market will continue to fall for a few more weeks. Others, however, see this latest deal as the bottom for the region. This latter group says the price could stabilize in the $390s/mt FOB and slowly climb back up by mid- to late-February.