U.S. Gulf/Tampa: In light of firming international prices, some sources had expected a bump at Tampa for April. However, that was not to be the case. Major players concluded a rollover late in the week at $310/mt DEL.
While inland U.S. supplies of ammonia have tightened, that is apparently not the case for the Caribbean, where sources say there are a few stray cargoes competing for the Tampa market. Reportedly, there was an available cargo from Trinidad and one from Venezuela’s FertiNitro, where there has been a urea plant down. In addition, Mosaic is continuing to take minimum supplies of ammonia due to phosphate cutbacks.
The last-done NOLA barge business continued to be reported in the $285-$292/st FOB range.
April NYMEX natural gas closed March 17 at $1.936/mmBtu, up from March 10’s $1.788/mmBtu.
Eastern Cornbelt: Wet conditions slowed preplant ammonia movement in the Eastern Cornbelt, but tight inventories continued to drive up spot prices. Sources quoted the regional ammonia market at $515-$525/st FOB for new business at mid-month, up $35/st from the previous week, although there was “no real activity” to test those new pricing levels.
Ammonia pricing levels FOB Courtright, Ont., had also reportedly firmed to the $525/st level for sales to U.S. customers, up from $490/st FOB the week before.
Western Cornbelt: Preplant demand for ammonia remained strong in areas of the Western Cornbelt where fieldwork was uninterrupted by rainfall last week. Ongoing demand, coupled with tight supply, served to drive ammonia prices higher again during the week.
“We’re trying to move ammonia, but can’t get our hands on it,” said one Nebraska contact late in the week.
Sources early in the week quoted spot ammonia pricing at the $480-$490/st FOB level in Nebraska, up $20/st or more from the previous week. By the end of the week, however, terminal levels were quoted as high as $515/st FOB in Nebraska and $525/st FOB in Iowa for March and April tons.
Southern Plains: Fueled by tight supply, the anhydrous ammonia market continued to strengthen in the Southern Plains region. Sources quoted the market at $440-$465/st FOB regional production points, up some $20-$40/st from the week before, with the low quoted for April delivery and the upper end reportedly being offered for “very limited” spot tons.
Ammonia availability was the key issue, however, with most production points and pipeline terminals out of product and not offering prompt tons at mid-month. “In 10 days, there will be some tonnage cheaper than $465/st FOB,” said one contact.
South Central: Sources reported much higher spot prices for ammonia in the South Central region. “Pricing has not been tested for a couple of weeks, so when fields dry it will be interesting to see if we can keep supply,” said one regional source.
The ammonia market had reportedly firmed to $490/st FOB Memphis, Tenn., up a full $90/st from three weeks earlier. The Henderson, Ky., ammonia market was quoted at the $525/st FOB level for new business last week, up from $470/st FOB just one week earlier. “The question is will the farmer buy at this number, and will there be time to get it on ahead of planting,” said one regional contact.
Black Sea: Sources said the downward trend in prices appears to have abated. This week a series of cargoes at 6,000 mt each were sold to Turkey from Yuzhnyy origin for an estimated netback of $270/mt FOB. Additional deals for larger tons came in at $250-$260/mt FOB for April loadings.
The stabilized prices appeared to come from production cutbacks instead of new demand. Ukrainian producers continue to have problems getting enough low-cost natural gas from Russia to turn out product. Sources reported spot Yuzhnyy supplies for export are close to being sold out for April.
Sellers are already saying the $270/mt FOB price should be the floor for any April discussions. Traders and other buyers, however, are pushing back, and are apparently willing to discuss prices in the $260s/mt FOB.
India: Buyers continue to take product from Arab and Persian sources, but prices are beginning to move up. The latest FACT tender for two lots of 7,500 mt showed a $388/mt CFR price.
Unfortunately for FACT, it ended up with only one lot being awarded. Sources said the cargo will come from Iran with an estimated netback of $330/mt FOB.
The FACT price flies in the face of statements by other buyers that they would only accept $360/mt CFR for the east coast and $340/mt CFR for the west coast. Sources said these pricing ideas might have worked early last week, but not now.
India bought a lot of ammonia during the past month, but sources said demand for the rest of March and April is expected to be much lower. Sources said the large stockpiles of DAP and urea in India indicated to some observers that India has less need for more ammonia in the coming weeks. Talks among buyers and sellers in the past week appeared to confirm that Indian demand for ammonia is expected to slow down in the near future.
Middle East: Arab and Persian producers in the Arab Gulf are able to move up their prices.
Sources said the netback of an Iranian sale to FACT in India is about $330/mt FOB. Arab producers covered sales late this week that came in at $340/mt FOB. These sales are on the heels of a deal late last week from PIC that reportedly came in at $320/mt FOB.
Arab producers claim they are sold out for March, and industry observers are willing to accept that. April loadings are now being discussed in the $340s/mt FOB.
Industry observers are concerned that producers will push the strengthening market too hard and take prices much higher too fast. One trader said India might be able to work with a gradual increase in prices, but will push back against any rapid increase.
Sources said some inquiries to producers came as a result of unexpected shortages in Asia. Reportedly, a production issue in Indonesia forced a trading house to look elsewhere for product to cover the lost ammonia. Arab producers apparently used the situation to move up prices for spot business.
Moroccan buyers have apparently stepped up their demand. Sources said last month that demand was pegged at 2,500 mt/day, but the March numbers now indicate demand is closer to 3,500 mt/day.
The demand is not seen as a major step up. Rather, said one trader, it puts Morocco back on track to meet with its regular demand.
Baltic: Koch reportedly picked up 40,000 mt for an early April loading. Sources said the purchase pretty much closes out any potential spot business from the area until May. Even then, said one trader, because the Baltic exporters depend mostly on contract sales, the amount of tonnage available for spot sales fluctuates.