U.S. Gulf/Tampa: The markets remained quiet. Jitters over war with Iran caused some to fear its impact on ammonia. Higher Mideast prices have sellers arguing for a bump to Tampa numbers for April.
In the meantime, April NYMEX natural gas settled at $2.272/mmBtu on March 8. How much longer until it gets below $2.00/mmBtu?
In their recent earnings reports, nitrogen producers had been crowing about recent deals struck below $4.00/mmBtu. Now nitrogen producers don’t have to worry about raising ammonia prices; they just have to sit back and wait for gas prices to fall, and see their margins grow.
Eastern Cornbelt: The anhydrous ammonia market was unchanged at the $630-$640/st range FOB regional terminals, with the low reported in the Illinois market and the upper end out of Indiana terminals to the dealer.
Parts of southern Indiana and Illinois were cleaning up last week after the destructive tornadoes that churned through the area on March 2. Some of the worst damage was reported in the Henryville, Ind., area.
High wind warnings were issued again for northern Illinois and parts of northern Indiana and Ohio last week, and temperatures dropped from the 60s to the upper 30s on March 7 in some locations. The powerful winds also brought precipitation to the northern counties on March 7-8.
Western Cornbelt: The ammonia market had reportedly slipped to $585-$625/st FOB regional terminals, depending on location, with the low quoted in the Iowa and Nebraska markets on a spot basis. Retail ammonia prices were reported in the $750-$800/st range.
A western Iowa source talked of a small amount of ammonia moving to the field last week. One Iowa contact also reported movement of dries to the field in his location, but he noted that there is “not much left to do this spring” after the dry winter that allowed steady field activity in January and February.
Northern Plains: The anhydrous ammonia market remained at $620-$630/st FOB Minnesota terminals and $750/st DEL in the North Dakota market.
Colder temperatures were reported in central North Dakota at midweek, but elsewhere conditions continued to be described as dry and mild. So far this winter, Minneapolis has only seen 22 inches of snow, compared with a total of 86 inches last winter.
India: The price in the area remains hovering about $400/mt CFR. Sources say it will be a while before a major move on prices is seen.
One reason for the stagnation at this time is the maintenance shutdowns currently in place. Another reason is that the Indian budget for the next fiscal year will not be known for another week or so. Buyers tied to government operations are not able to make commitments for April deliveries until that budget is released.
Middle East: The talk of military strikes against Iran is heightening the fear ship owners have about picking up ammonia from Iranian producers.
Ship owners were already nervous about their status under the new sanctions being imposed on Iran by the U.S. and Europe. Then the rhetoric of possible military action against Iran last week added to the shippers’ jitters.
Prices from the Arab producers remain stable. For now, the product that is being turned out is finding a home. Additional tons may soon become available once Qafco 5 gets up to full operations later this month.