U.S. Gulf/Tampa:
The Tampa market continued at $615/mt CFR for September. Prospects that October prices might move up took a turn on Sept. 15 when CF Industries announced it would be idling nitrogen plants in the U.K. due to high natural gas prices. It heightened further when Yara announced on Sept. 17 that it was also cutting production in Europe (see related front page story). The move prompted questions about whether other European plants would also go down.
In the meantime, Incitec Pivot Ltd. confirmed on Sept. 13 that its Waggaman, La., ammonia plant will be down for four weeks from its idling on Aug. 28 before Hurricane Ida. As previously reported, CF on Sept 9 said its giant Donaldsonville, La., complex was on its way back up.
Nutrien reported on Sept. 15 that its Geismar, La., ammonia plant was in the process of restarting and it hoped to re-establish production over the next several days. Some of the NOLA area outages may be offset by The Mosaic Co.’s expectation that it will lose 300,000 mt of phosphate production in the near term due to Ida and a phosphoric acid tank problem at New Wales.
Eastern Cornbelt:
Ammonia prices were pegged at $670-$680/st FOB in the Eastern Cornbelt, up another $5-$10/st from last report, depending on location.
Western Cornbelt:
The ammonia market firmed to $675-$695/st FOB in the Western Cornbelt, up $20-$30/st, with the low reported at Garner, Iowa, and Palmyra, Mo., and the upper end at Marshalltown, Iowa. The market FOB Nebraska terminals fell in the $675-$685/st FOB range during the week, depending on location.
Southern Plains:
Ammonia prices moved up significantly in the Southern Plains. Sources quoted new offers at $665-$675/st FOB regional production points, up from $625-$635/st FOB at last report, with the upper end confirmed at Enid, Okla., and Dodge City, Kan.
South Central:
The ammonia market in the South Central region reportedly strengthened to $620/st FOB Gulf Coast terminals for any new truck offers in mid-September, up $50/st from last report. Sources continued to report no current offers on the table from El Dorado, Ark., Cherokee, Ala., or Midway, Tenn.
Northwest Europe:
The cost of ammonia is expected to be affected by the rising prices of natural gas and the subsequent closings of ammonia production. Already the market is reverberating from the closures of the CF Industries plants in the U.K. The two plants, Ince and Billingham, have a combined annual rated output of 875,000 mt of ammonia.
The company closed the plants with no re-opening dates announced after natural gas costs jumped more than 6 percent in mid-September. Until that point, CF was raising the price of its various nitrogen products in line with more modest input price increases. In the end, however, the cost to produce the various products, including ammonia, proved too expensive to continue.
Within 48 hours of the CF announcement, Yara followed suit, announcing it was not only closing down unnamed ammonia plants in Europe, but was also curtailing projects that would have helped increase output. The company said by next week it will have shut down about 40 percent of its European ammonia production capacity.
Yara said it will continue to monitor the situation to determine when it would restart its facilities.
Other possible closures now include OCI’s Geleen plant and the Fertiberia Palos plant.
The moves by the European companies almost ensure that more ammonia will have to be brought in from the Americas, with the exception of Fertiberia, which would most likely import from Algeria. Even before the shutdowns, cargoes from the U.S. Gulf and Trinidad have been coming into Europe in reaction to higher prices. Sources said the potential additional movement could provide a basis for a higher ammonia price in Tampa. One trader said the European demand could more than counter the argument for lower prices based on the Mosaic plant shutdown.
Black Sea:
Ukraine producers are said to be ready to sell off the product they have already produced and then shut down. The high price of natural gas has pushed the production cost past what the ammonia producers can charge for their product.
With winter around the corner, sources said there will be no relief for the producers. Sources estimated the plants should be fully shuttered by the end of October.
Russian exports of ammonia for January through July were up 2.4 percent, according to Trade Data Monitor, to 2.62 million mt from the 2.56 million mt exported during the same period in 2020.July exports were pegged at 387,000 mt, up 33 percent from July 2020 exports of 290,000 mt. The main buyers were Turkey at 85,000 mt and Estonia at 76,000 mt.