U.S. Gulf/Tampa:
October Tampa ammonia pricing settled at $665/mt CFR during the week, a $50/mt increase from September’s $615/mt CFR. The updated price outpaced recent expectations of a possible $20-$30/mt jump.
Continued firming in the European natural gas market contributed to the larger-than-expected settlement, sources noted, as did ongoing supply shortfalls in the U.S. resulting from Hurricane Ida. A 25,000 mt Caribbean sale announced by Nutrien late in the prior week suggested a possible $55/mt premium over September pricing at Tampa.
Eastern Cornbelt:
Ammonia prices moved up once again in the Eastern Cornbelt. Nutrien raised its ammonia price at Lima, Ohio, to $730/st FOB, up from $690/st the week before. Pricing levels from CF had reportedly firmed to $735/st FOB in Illinois and $745/st FOB in Indiana. On Sept. 30, Koch raised its posted price FOB Henry, Ill., to $800/st.
Western Cornbelt:
Prices soared for ammonia during the week. While the low end of the regional market was reported at $735/st FOB Palmyra, Mo., Koch on Sept. 27 reportedly raised its postings to $745-$755/st FOB Sergeant Bluff, Iowa, and Nebraska terminals at Beatrice and Greenwood, with Fort Dodge, Iowa, pricing firming to $775-$785/st FOB. Koch’s price at Creston, Iowa, was quoted at $785-$795/st FOB at the start of the week.
By Sept. 30, Koch’s postings for October-December tons had firmed again, to $785/st FOB Beatrice and Sergeant Bluff; $790/st FOB Greenwood; $800/st FOB Fort Dodge and Garner, Iowa; and $805/st FOB Washington, Iowa. On Oct. 1, Koch reported that it was pulling all ammonia offers until further notice.
Northern Plains:
Prices were ramping up quickly for ammonia in the Northern Plains.
The week began with reports of ammonia pricing at $700/st FOB Velva, N.D., and delivered offers at $730-$755/st in North Dakota, up from $715-$745/st DEL the week before. Koch on Sept. 27 issued a new round of higher postings, however, with prices firming to $785-$795/st FOB Vernon Center and Murdock, Minn. Those prices strengthened again at midweek, to $810/st FOB Vernon Center and Murdock for October-December.
North Dakota sources also reported much higher delivered ammonia prices at midweek, with reports of $825/st offers circulating for fall tons.
Black Sea:
The closure of the Ukrainian ammonia plants due to high natural gas prices leaves only limited Russian material for sale in the area. Outside of long-term contracts, sources said only about 5,000-10,000 mt might be occasionally available for the spot market.
As availability began to close off, sources reported one deal at $615/mt FOB for 15,000 mt for an October loading. Future sales could easily move the price up another $10-$20/mt. Sources said the Ukrainian production that remains is being marked for only the domestic market.
Middle East:
Ma’aden announced this week that its ammonia production was back up and ready to hit full production. Sources said the rated production capacity is about 1 million mt/y.The return of Ma’aden provided a brief glimmer of hope to ammonia buyers, especially the company’s regular customers in Southeast Asia.
In addition to the return of the ammonia unit at the existing phosphate plant, a second line for ammonia production is expected to start up in December. This second plant will eventually provide ammonia for another phosphate plant, but probably not until well into the next year. Output for that plant is also reported at 1 million mt/y.
In anticipation of having more ammonia available in the first quarter of 2022, sources said Ma’aden chartered four additional vessels to pick up and deliver ammonia for January through March 2022. These ships are in addition the three vessels already on the books for the ammonia producer.
Besides being ready to once again be a steady supplier to Asian buyers, sources said some of the tonnage might be sold to Turkey, which is expected to have difficulties finding ammonia after the closures of the Ukrainian facilities. Some sales may also end up in India, depending on vessel alignments and pricing.
For now, however, the supplies from the Arab Gulf remain tight. No spot business has been able to be concluded.
Western Europe:
The high cost of natural gas in Europe is causing more facilities to either shut down or drastically reduce their output.
This reduction in available ammonia, combined with the closures in Ukraine and a tight Arab Gulf market, has led to higher prices in Northwest Europe. Sources said the price has moved up to $710-$720/mt C&F, with a lot more room to rise.
One trader said the current price of natural gas into Europe can be translated to an ammonia production cost of $1,000/mt or more. The plants that are still operating are doing so with a mixture of gas contracted earlier at cheaper rates and the more expensive modern product, sources said. Eventually, if the gas situation does not get straightened out, one trader said the plants will have to close.
Baltic prices are still being discussed for October. Sources said producers are looking at $630-$650/mt FOB, while buyers are bidding at $615/mt FOB.
In past discussions, some producers had been willing to accept deals that were formulas based on Yuzhnyy pricing. With the Yuzhnyy spot market essentially voided out because of the plant closures, the Baltic producers are holding firm to setting a price on the market conditions in Northwest Europe.
Thailand:
January to August 2021 imports of ammonia in Thailand were up 12.8 percent, to 270,000 mt from 239,000 mt during the same period last year, according to Trade Data Monitor. The main suppliers so far this year were Malaysia at 182,000 mt, and Australia at 63,000 mt.
August imports were limited to 2,600 mt, down from 35,000 mt a year ago. Sources said the small amount was for emergency use to sustain local industry.