U.S. Gulf/Tampa:
Tampa anhydrous ammonia for February moved up $20/mt to close at $1,135/mt CFR, an increase from January’s $1,115/mt CFR. Leading up to the news, Nutrien had procured some 15,000 mt from Algeria for delivery to the U.S. Gulf at $1,175/mt CFR, thereby giving some guidance for Tampa.
While Tampa was up, some observers argued that it was a small increase and not much better than a rollover compared to the surges seen in recent months. As a result, there was speculation that the price may have topped out for now, though the European winter and gas prices may still be a major factor for March.
In the meantime, actual NOLA spot barge trades remain scarce, with the last wave reported a while ago at $1,030/st FOB. With U.S. Gulf import vessels now put at $1,175/mt CFR, the barge equivalent would be $1,066/st FOB.
Eastern Cornbelt:
The ammonia market was unchanged at $1,300-$1,400/st FOB regional terminals in the Eastern Cornbelt, depending on location and time of shipment, with the low confirmed for prompt tons in Illinois and the high reported in Ohio for both prompt and spring prepay pricing. Most prepay offers in Illinois and Indiana fell in the $1,375-$1,385/st FOB range.
Western Cornbelt:
Ammonia pricing remained in the $1,350-$1,395/st FOB range in the Western Cornbelt, with the low reported for limited January-February offers. Most of the spring prepay business was pegged in the $1,365-$1,395/st FOB range in the region, depending on location and supplier.
Northern Plains:
Sources continued to describe the Northern Plains ammonia market as quiet in late January, with most of the attention focused on urea prices instead. Prompt and/or prepay ammonia pricing was unchanged at $1,450/st FOB terminals in the Northern Plains, with the last delivered offers in North Dakota remaining at the $1,550/st level.
Black Sea:
Sources said players in the area remain nervous about the situation between Ukraine and Russia, but not enough to stop ammonia shipments from the area.The lack of any excess tons prevented any new price testing, leaving the Yuzhnyy level at $1,100-$1,120/mt FOB. Sources said a sale to OCP/Morocco confirmed this level.
If Ukraine and Russia come to blows, sources said the ammonia and natural gas pipelines will most likely be some of the first casualties. While the shutdown of ammonia to Yuzhnyy would be disruptive to those who need it, one trader said the bigger threat to the global economy would be the shutting down of natural gas transmission.
Middle East:
Arab Gulf producers are handling their contracts with little left over for spot deals. Sources said production is picking up, but it will take a while before the backlog of orders are covered so that some reserves can be built for spot deals.
For now, sources seem to think $900/mt FOB is about where the market is hitting a plateau. A trader noted that business into India is showing prices at $900-$950/mt CFR. The upper end of that range would work for the $900/mt FOB prices seen in the Arab Gulf. Anything higher, and buyers will walk away.
There are reports that not all producers are operating the way they want. Reportedly, Muntajat has delayed loading a vessel because of some unnamed production issue. At the same time, the new Ma’aden line is still not fully operational. Within the next several months, sources said these blips will be worked out and the region should be able to start building reserves to handle more customers.
India:
Sources reported some small ammonia sales into India at $920/mt CFR. With strong demand still reported in the country, sources said the price could move to $950/mt CFR. However, no one is saying that this higher level has yet been reached.
There was a report that 10,000 mt slated to ship from China has been scrapped, and the cargo is being replaced with tons from Bangladesh.
North Africa:
Sources reported a spot sale to OCP in Morocco by Trammo. The move was unusual, said one trader, because OCP rarely engages in spot deals, preferring to lean on its contract suppliers for extra material when needed.
The price of the deal was calculated off the Tampa January price. Sources said at that level, it also confirmed a steady price out of Yuzhnyy.
The producers in the area all seem to be back online. Reportedly, Abu Qir in Egypt is shopping around a small cargo, and Libya is said to have large quantities available for February loadings, as does Algeria.
The return to the markets of these producers is helping hold prices steady in Europe and providing a base and a ceiling for the Arab Gulf.
Northwest Europe:
The influx of lower-cost natural gas and the return of production in North Africa has helped keep ammonia prices steady at $1,180-$1,250/mt C&F.With the lower-priced gas, plants are slowly coming back online. There is even talk of some Polish material being offered into Western Europe.
February pricing will depend on what happens with the Baltic price. The slight uptick in Tampa indicated to sources in Europe that the market is not ready for a drop, but is approaching its peak. Where the negotiators for Baltic ammonia settle will either confirm this view or move the market in ways not easily predicted.
One trader in Europe noted that the slight move in Tampa and discussions in the area helped dispel a growing fear that the record rise in prices would soon be followed by a dramatic crash. He noted that the 2008 collapse in pricing came as part of the general global financial crisis. This year the main issue driving up the price of ammonia is the cost of production.
Sources estimated it currently takes about $900/mt just for the basic input for ammonia. If natural gas prices come off, the ammonia price will also drop. No one expects to see a collapse of gas prices, sources said, and so ammonia prices might dip, but they will not crash.
Southeast Asia:
Stepped up demand for goods from regional manufacturers have these same factories demanding more ammonia. The market in the area remains tight, with little wiggle room for prices.
Sources are looking to reported reduced output in Indonesia and Malaysia as a potential problem for the area. So far, said one trader, demand is only slightly stronger than supply. Once production steps up in the area and in the Arab Gulf, sources expect prices to stabilize – and maybe soften a bit.
Thailand:
Imports of ammonia for 2021 came in at 438,000 mt, according to Trade Data Monitor, up 25 percent up from the 350,000 mt imported in 2020.
The main suppliers to Thailand were Malaysia with 268,000 mt, representing 61 percent of the import market; Australia with 98,000 mt, for 22 percent of the market; and Indonesia at 53,000 mt, for 12 percent of the market.
December 2021 imports were up slightly at 62,000 mt, compared with December 2020 purchases of 57,000 mt.