U.S. Gulf/Tampa:
Tampa anhydrous ammonia business for May has been concluded at $1,425/mt CFR, down $200/mt from April’s $1,625/mt CFR. Sources had been predicting at least a rollover or a drop by as much as $300/mt. They cited Incitec Pivot Ltd.’s announcement that its Waggaman, La., ammonia plant has returned to production, along with recent news that European ammonia plants are coming back up due to lower natural gas prices.
U.S. Imports:
July-February ammonia imports were reported at 1.72 million st in the U.S. Census Bureau’s most recent report, up 7.2 percent from the year-ago 1.60 million st. February imports were off 11.5 percent, however, to 171,872 st from 194,187 st in February 2021.
Eastern Cornbelt:
The ammonia market was steady at $1,450-$1,550/st FOB in the Eastern Cornbelt, depending on supplier and location, with the low reflecting reference 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 steady 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.
Sources reported very little preplant movement taking place due to wet weather, however. “Next week looks much better for application to really go hard,” said one contact.
Northern Plains:
Ammonia pricing edged higher in the Northern Plains. The latest spring offers were quoted at $1,500-$1,525/st FOB regional terminals, up from $1,480-$1,500/st FOB at last report, with the low confirmed at Velva, N.D. Delivered ammonia was pegged at $1,575-$1,600/st DEL in the region, up from the last reported $1,550/st DEL level.
Eastern Canada:
The latest spring ammonia prices were reported at the C$1,680/mt level FOB Courtright, Ont.
Black Sea:
Sources reported that some vessels have entered the Black Sea to deliver product to Bulgaria and Turkey. This route keeps the ships far from the war zone in the north.
With the Ukrainian ports still closed because of the Russian invasion, sources said there is no way to peg a price for ammonia sales. The only business that seems able to be recorded are the sales into Bulgaria and Turkey.
Reportedly, a holder of Russian ammonia offered the product for sale to a Turkish buyer at $1,150/mt CFR, a level sources called very low. The potential buyer demurred, citing the sanctions imposed against Russia by the U.S. and E.U.Sources said some Iranian cargo was also offered to Turkey at $1,200/mt CFR. There was no word if that offer was taken up.
The Gas Cobia will be unloading its cargo of pre-sanctioned Russian ammonia in Bulgaria and Turkey. The vessel was loaded at Ventspils just as the sanctions against Russia took effect. Sources said the initial buyers were nervous about accepting the tons because of the sanctions. Eventually, the ship headed into the Mediterranean Sea as talks were progressing to find a buyer.
India:
Reportedly, some buyers have been picking up small cargoes of Iranian ammonia at $1,100-$1,150/mt CFR. These smaller sales represent the only real spot business going into India. Most of the larger imports taking place are under long-term contracts with major suppliers from the Arab Gulf.
Sources said buyers are pushing to get the price below $800/mt CFR so that the final product, such as DAP, can be priced to fit under the current Maximum Retail Price plan for subsidies. However, the current price – even for the formula-based purchases – is reported in the $900s/mt CFR. There are reports that the Indian government is revisiting its FY2022/23 budget allotments for subsidies.
Northwest Europe:
Sources reported no change in the $1,630-$1,650/mt C&F ammonia price for the area. The slow return to production of European ammonia plants is reportedly helping to hold the line on pricing.
Sources said natural gas prices are slowly coming down, and further declines are expected as demand for home heating wanes with the approach of summer. Even with more gas being made available for industrial use, the ammonia producers are still facing high costs. One trader said the decline in gas prices means the break-even price for 1 mt of ammonia is now in the mid-$900s/mt, where it was above $1,000/mt at the beginning of the month.
Even with stepped up production in Europe, sources said the production will not be able to replace tonnage lost to the sanctions against Russia. Buyers will continue to have to look to other producers from the Caribbean to Southeast Asia for product.
Middle East:
Reportedly, Ma’aden has a cargo available for sale. However, the producer is asking $1,400/mt FOB for it, with no takers so far.
One trader said with demand remaining strong, Ma’aden is in no rush to sell. According to sources, eventually a deal will be made and the price could be pushed higher from the last spot deal at $1,230-$1,245/mt FOB. Alternatively, said one observer, if the market can hold off for a few months, additional production from Oman could cause Ma’aden to accept a lower price.
Reportedly, the Ma’aden plant will not start up until 3Q. The tonnage from that facility is said to already be spoken for. Sources said OCP, the Moroccan phosphate producer, has signed a long-term agreement to take a large portion of the new output. The material will be needed, because OCP no longer has access to the ammonia that once flowed out of the Black Sea. Indeed, as one trader noted, no one has access to any Black Sea ammonia at this time.
The Oman operation is expected to bring another 300,000 mt/y to market in June, leaving many in the industry satisfied that the tightness exhibited in the market earlier this year will soon ease.
Iran has been shopping around as much of its product as it can. Buyers who are willing to cross the U.S. over its sanctions against Iran can usually find what they need at a lower rate than what the Arab producers are offering. Small lots have been sold into India, easing the pressure for product there.
January-March exports from Iran were reported at 116,000 mt, down about 7 percent from the 125,000 mt exported during the same period last year. Trade Data Monitor reported that the main buyers in the first quarter were India at 88,000 mt and Turkey at 23,000 mt.
March 2022 exports of Iranian ammonia were up dramatically at 45,000 mt, compared with 20,000 mt in March 2021 numbers, Trade Data Monitor reported. India took 96 percent of the March tonnage at 44,000 mt.
Southeast Asia:
There is a big gap between what ammonia buyers are willing to pay and what regional sellers are willing to accept. Reportedly, buyers are digging in their heels at $1,000/mt CFR, while producers are equally adamant that the price should be $1,000/mt FOB.
Demand for ammonia in the area is weakening as Western demand for the final products from some of the factories in the area eases off due to higher inflation and interest rates. For now, said sources, buyers are taking what they need and no more. Some excess tonnage is reportedly building up, but not enough yet to cause a dramatic price drop.
Occasional inquiries from non-traditional buyers such as OCP in Morocco are helping stem any drastic drop in prices. However, as OCP and other buyers from outside the region find and secure tons from other areas, that price support could fade quickly.
South Korean ammonia imports for January-March 2022 were reported at 409,000 mt, up from 380,000 mt during the same period last year. Trade Data Monitor reported the main suppliers to South Korea during the first quarter of this year were Indonesia at 171,000 mt and Saudi Arabia at 163,000 mt.
March 2022 imports were reported at 132,000 mt, down about 8 percent from March 2021 imports of 144,000 mt. Indonesia imports of 56,000 mt accounted for 42 percent of the ammonia imports in March. Another 50,000 mt from Saudi Arabia accounted for 38 percent of imports, leaving very little left for other suppliers.
China:
Sources said there was limited demand for imported ammonia given plant shutdowns and cutbacks related to COVID restrictions.
Traders quoted the domestic ammonia market at $300-$400/mt FOB ex-factory against potential export prices in the $900s/mt FOB. The price gap, said one trader, is a result of the Chinese government pushing to build reserves to insulate the domestic market from the higher-priced global market.
January-March imports this year were reported at 80,000 mt, according to Trade Data Monitor, down 77 percent from the 354,000 mt imported during the first quarter of last year. March 2022 imports totaled 17,000 mt – all from Indonesia – compared with 151,000 mt in March 2021.
North Africa:
Sources reported a softening in the ammonia market. AOA in Algeria reportedly settled a deal at $1,200/mt FOB, just a week or so after closing a sale at $1,500/mt FOB.
Major Moroccan buyer OCP reportedly has signed a deal with Ma’aden for a steady supply of ammonia beginning in the second half of the year. Sources said the deal is based on expectations that the new Ma’aden plant will be operating early in the third quarter.
While it waits for the Ma’aden plant to be fully operations, OCP continues to scour the globe looking for product. Occasional forays to Southeast Asia have caused a slight dislocation in that market. One trader noted that OCP does not go that far afield very often, however, so the impact is limited. There are also reports that a vessel for OCP is loading in Argentina.