U.S. Gulf/Tampa:
Tampa anhydrous ammonia for February continued at $1,135/mt CFR, with news on March business expected by the end of the February.
Market participants speculated that March may see a drop in prices after a long climb, pointing to weaker prices in the international market. However, others have noted the pushback in production of the new Ma’aden ammonia plant to the third quarter, and possible production issues elsewhere. And on Feb. 18, Incitec Pivot announced that its Waggaman plant was offline due to a hydrogen leak (see Related Story).
Eastern Cornbelt:
The ammonia market remained 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 were firmly in the $1,375-$1,385/st FOB range.
Western Cornbelt:
Ammonia pricing remained at $1,350-$1,395/st FOB terminals in the Western Cornbelt, depending on location and time of shipment, with the bulk of spring prepay offers pegged in the $1,365-$1,395/st FOB range in the region.
Northern Plains:
The ammonia market remained at $1,450/st FOB Velva, N.D., and other regional terminals in the Northern Plains, with the last spring pricing offers pegged at the $1,550/st DEL level in North Dakota. Sources reported no tons or pricing available at Leal, N.D.
Black Sea:
The area market remained quiet, with contract tons moving out. However, sources said the tensions between Russia and Ukraine are leaving buyers nervous about being able to receive and ship material.
A recent sale by Rassosh to Trammo of 15,000 mt appears to be going to Turkey, but nothing has been said yet about the price. One trader said the seller is likely not willing to talk because, if rumors are correct, it will be below the current $1,100/mt FOB.
Trammo reportedly will not talk because it is still negotiating a sale to an end user. With deals out of the area mostly done on a formula basis, sources said the trading house would be foolish to reveal a lower price that could alter its selling price.
India:
Some ammonia buying is continuing in India. Sources said cargoes from Egypt and Indonesia have been booked, and the best guess for the price showed a slight softening to $890-$910/mt CFR.
More ammonia is expected for the next fiscal year starting in April because the Indian government is emphasizing more domestic DAP production. With the market poised for a drop in prices, buyers might be getting ready to take advantage of the pending down market as soon as they can.
Middle East:
Sources said the Arab Gulf ammonia equivalent of the recent Indian purchases is $800-$850/mt FOB. One source said using the calculation is the only way right now to nail down what the spot price in the Arab Gulf might be.
Product remains tight as the market waits for the new Ma’aden plant to begin full operations sometime in the third quarter. Likewise, hiccups in other regional production are preventing the producers from building any excess tons for the spot market.
Some extra tons might come available, depending on how Southeast Asian buyers move. Right now, the sense is that some of the buyers are merely postponing shipments in the coming months, as allowed under their contracts. However, if some of the major buyers begin to cancel a cargo or two, some spot tons will pop up quickly and most likely get snapped up.
North Africa:
Demand for ammonia is steady from Morocco. Sources said its reserves are at the level they like, and no delays in deliveries are on the horizon.
Production in Algeria and Libya is going well, with any offered tons quickly getting picked up. There are reports that a cargo from Algeria made it to Northwest Europe at a level that could affect the March Baltic price negotiations. But, so far, it is just a rumor.
Northwest Europe:
There is a rumor that a deal was done at $1,000/mt C&F. However, sources stress that no one knows the source of the ammonia, who sold it, who bought it, or how many tons were involved. At this point, said one source, the talk only underscores the general feeling that prices are poised to come off in the coming months.
The price cannot get too low, however. Sources pointed out that high energy costs still determine how far down the Northwest Europe price can go. The break-even price is pegged at $900/mt, leaving some room for the sales price to drop below the current $1,180-$1,250/mt C&F, but not much.
Baltic November price talks are not expected to start until next week. If the deal for $1,000/mt C&F did happen, sources said the best price Baltic suppliers can get is $920/mt FOB. In the meantime, the material going out is at the February price of $1,115/mt FOB.
Southeast Asia:
Reports are circulating that some of the large chemical plants in the area are cutting back on production as the price begins to fall for their end products. The resulting potential reduction in production is leading to rumors of less ammonia required.
At this point, said traders, it appears that some of the buyers are asking their contracted suppliers to delay a shipment or two until the need picks up. However, there is a rumor that some orders are being canceled, leaving some excess ammonia in the market for spot deals.
South Korean imports of ammonia in January 2022 were reported at 163,000 mt by Trade Data Monitor, down 43 percent increase from imports in January 2021. The main suppliers were Saudi Arabia with 71,000 mt and Indonesia with 67,000 mt. These two countries accounted for 80 percent of the South Korean ammonia imports.