U.S. Gulf/Tampa:
With recent news that European ammonia plants are returning to production, the Tampa ammonia price for May becomes more of a question mark. April saw a significant jump to $1,625/mt CFR, up from $1,135/mt CFR recorded in March and February.
On April 14, European natural gas prices slumped to the lowest since the start of the war in Ukraine, with the Easter holidays approaching and Russian President Vladimir Putin remaining largely silent on a potential halt to European gas supplies.
Benchmark Dutch front-month gas futures dropped as much as 17 percent, to 87.19 euros per megawatt-hour, the lowest intraday level since Feb. 23, the day before Russia invaded Ukraine, according to Bloomberg. Trading and demand also typically slide ahead of the holidays.
“Energy demand is down, with no seeming rush to bridge the Easter weekend quell of trading,” said Tim Partridge, Head of Energy Trading at DB Group Europe.
U.S. Exports:
Ammonia exports for July-February were down 40.1 percent, to 250,616 st from 418,225 st. Exports were reported at 38,411 st for February, however, up 154.6 percent from 15,088 st in the prior year.
Eastern Cornbelt:
The ammonia market was quoted in a broad $1,450-$1,550/st FOB range in the Eastern Cornbelt, with the low reflecting referencing pricing from Koch and the high reported for CF pricing in Illinois and Indiana. The market FOB Lima, Ohio, remained at the $1,475/st level at mid-month.
Western Cornbelt:
The ammonia market was quoted at $1,425-$1,450/st FOB in the Western Cornbelt, depending on location, with the low reported at Beatrice, Neb., and the high at Palmyra, Mo., and out of most Iowa terminals.
California:
Anhydrous ammonia reference pricing in California jumped to $1,610/st DEL for April tons, up a full $390/st from the last posting. Aqua ammonia prices also firmed in the state, to $412-$422/st FOB, depending on location, up from $315-$325/st FOB in March.
Pacific Northwest:
Spring pricing for anhydrous ammonia in the Pacific Northwest was quoted at the $1,500/st DEL level in mid-April, down from the last reported high of $1,650/st DEL. The aqua ammonia market remained at $405/st FOB in the region for spring tons.
Western Canada:
Spring ammonia offers in Western Canada were quoted at C$2,230-$2,300/mt DEL in mid-April, up C$50/mt at the high end of the range.
Black Sea:
The war in Ukraine is keeping the major ammonia loading ports closed, making price discovery difficult. Sources said any discussion of pricing at this point is mere speculation.
India:
Sources said large buyers are easing back on their contracted tons, leaving them in good shape without a need to scramble for extra material. At the same time, smaller buyers seem to be able to cover their limited needs with small purchases, mostly from Iran.
Ammonia prices remain high, leaving buyers and the government concerned. The price is causing some difficulty securing the necessary credit from banks and is playing havoc with the government budget, which only began on April 1. Reportedly, the government has formed a committee to look at how to deal with the rising costs of fertilizers without breaking the bank.
Middle East:
Arab Gulf producers are now asking $1,450/mt FOB for what limited ammonia is available. So far, no one has taken them up on their offers.
Sources said calculating an appropriate price for the area is difficult. One trader noted that working back from the current price in Southeast Asia, the netback should be around $900/mt FOB. Buyers are pushing for a price closer to $1,000/mt FOB, but the last done spot deal came in at $1,230/mt FOB.
With steady and strong production, sources said producers are under no pressure to sell their product. Demand is steady enough that supplies are matching the buyers’ needs. There is also limited pressure to lower prices, given the absence of Black Sea material in the global market.
Buyers such as OCP in Morocco have been scouring the globe to secure the tons they need. Reportedly, OCP has made more purchases from the Arab Gulf than in previous years.
Southeast Asia:
Ammonia demand is slacking off as industrial production eases in the face of slower economic growth. Sources said the main industrial buyers in South Korea and Taiwan have backed off on their purchasing demands, and are seeking only the basic amounts required under their contracts.
Northwest Europe:
The ammonia price remained steady at $1,630-$1,650/mt C&F. Softer gas prices and the stronger ammonia price is making it possible for plants to restart. Sources said the break-even price is holding around $1,000/mt, giving enough room in the market to compete against imported tons.
Recent sales into Turkey at $1,200/mt CFR and Greece at $1,700/mt CFR helped industry sources to accept the higher prices of ammonia in Europe.
The main issue facing buyers is not the availability of ammonia, said sources, but rather the ability to get financing to buy the material. Banks are hesitant to provide the credit necessary to buy a cargo or two when the value of those cargoes is at record highs.
North Africa:
Production and purchases of ammonia in the area are running at normal rates. Sources said OCP/Morocco is telling all who will listen that they have enough ammonia to keep up phosphate production through June. At the same time, said sources, OCP is scouring the globe for the tons they will continue to need.
With Black Sea and Baltic sources closed off because of the war in Ukraine and sanctions against Russia, the global market is missing about 250,000 mt each month. Additionally, OCP needs to bring in at least three cargoes each month to maintain its operations. Already OCP has stepped up its inquiries to Trinidad, the Arab Gulf, and Southeast Asia to secure the tons it needs.
Phosphate production in Morocco is expected to pick up, and with it increased demand for ammonia. The lack of phosphate exports from Russia and China has offered OCP opportunities to seize greater market share in countries such as Brazil.
At the same time, OCP has reportedly said it would not be shipping phos acid until a price for the second quarter is settled. Sources said the new asking price is $2,000-$2,200/mt CFR to India. Until a deal is closed, sources said OCP will use the acid to step up its production rates.
Brazil:
Ammonia imports for the first quarter of the year were reported at 106,000 mt by Trade Data Monitor, down roughly 22 percent from the 136,000 mt imported during the same period in 2021.
Trinidad, as usual, dominated the imports. Brazil imported ammonia from Qatar for the first time, however, and also pulled a cargo from Argentina for the first time since 2020.
March 2022 imports were reported at 65,000 mt, more than double the 32,000 mt imported in March 2021. Tons from Trinidad accounted for 53 percent of the March imports, with material from Qatar and Argentina accounting for another 24 percent each.