U.S. Gulf/Tampa:
Tampa ammonia for July settled at $960/mt CFR, down $40/mt from June’s $1,000/mt. With European natural gas prices spiking, however, it may be too early to forecast the Tampa price for August.
Eastern Cornbelt:
Ammonia fill offers in the Eastern Cornbelt were confirmed at $950/st FOB terminals in Illinois, Indiana, and Ohio for 3Q delivery, with sources describing the order book as still open at all locations at midweek.
Western Cornbelt:
Ammonia fill offers in the Western Cornbelt were on the table at $825/st FOB Hoag, Neb., and Port Neal, Iowa, with the Palmyra, Mo., market pegged at the $950/st FOB level.
New fill offers in the Northern Plains were quoted at $900/st FOB Velva, N.D., but sources continued to report lower levels based on netbacks as producers compete for delivered fill business.
California:
Anhydrous ammonia postings from Calamco remained at $1,147/st DEL in California, with aqua ammonia posted at $301/st FOB Stockton.
Pacific Northwest:
Ammonia fill offers were announced late in the week at $910/st FOB Ritzville, Wash., $930/st rail-DEL, and $950/st truck-DEL in the Pacific Northwest, down dramatically from mid-June prompt pricing at $1,475/st FOB and $1,500/st DEL. Sources also confirmed some pre-fill offers at $1,250/st FOB and $1,130/st rail-DEL on a spot basis.
Aqua ammonia pricing was pegged at $240/st FOB in the region, reflecting a sharp drop from the mid-June level of $370/st FOB for prompt tons.
Western Canada:
Sources said ammonia fill programs were out in Western Canada, with uptake described as strong. Fill pricing was quoted at C$1,320-$1,340/mt DEL in the region for fall tons, down dramatically from the last prompt spring business at C$2,230-$2,250/mt DEL.
Northwest Europe:
Even with higher natural gas prices and plans for gas rationing, sources said the ammonia price in Northwest Europe appears to have softened. Estimates of where the price should be were put at $1,050-$1,100/mt C&F.
Sources noted a distinct lack of spot business in the region, but enough sales from other sources that normally feed into the area to produce the estimated price range. A reported sale of 10,000 mt from Algeria was reported at $1,000/mt FOB. The tonnage is apparently destined for Turkey.
In addition, Mitsui reportedly picked up a cargo of 15,000 mt from Indonesia that is expected to be sent to Spain and Portugal. While neither of the deals were for Northwest Europe, sources said the prices were public enough to calculate a Northwest Europe equivalent price.
Europe remains a high-priced bubble in the global ammonia market, largely because of the high price of natural gas. As a result, lower priced product from the rest of the world is finding its way there. The result is a steady price in Europe.
Some softening might even be expected, said one trader, because supplies in Southeast Asia and the Arab Gulf appear to be leaning to a slight surplus.
Black Sea:
Sources continue to report that the war in Ukraine is keeping any Russian ammonia from being exported. The pipeline that feeds Yuzhnyy has been shut since the war started. In addition, blockades of the Ukrainian ports by the Russian navy are preventing any exports.
Sources noted that unlike dry bulk goods such as urea and DAP, ammonia cannot be diverted to alternative ports for vessel loadings. The lack of sales from the area prevents any price checking.
Middle East:
Arab Gulf producers are continuing to hold to their price ideas of $900-$950/mt FOB. This is only a slight variation of previous expectations that topped out at $970/mt FOB.
The only material flowing from the Arab Gulf appears to be contract tons. With Ma’aden III up and running and a new plant in Oman gearing up, sources said a surplus of material is expected soon.
Pricing for now depends on the destination. If tons are heading to Europe, sources said the Western European market could absorb the price set by the producers. However, if the tonnage is going to Southeast Asia, the netback needs to be closer to $700/mt FOB.
While sales to Europe will be welcome, sources said buyers in Southeast Asia are currently asking suppliers to cut back on their shipments because of reduced demand.
Southeast Asia:
Sources said the main buyers in Southeast Asia – South Korea and Taiwan – are asking their suppliers to slow down and delay upcoming shipments. Traders noted that the global economic slowdown from higher interest rates and higher inflation has caused some companies to cut back on their production.
Ammonia from producers in the area is finding buyers in other parts of the world. Reportedly, Mitsui booked 15,000 mt for delivery to Spain and Portugal.
January-May ammonia imports in Thailand were reported at 130,000 mt by Trade Data Monitor. This is down from the 178,000 mt imported during the same period of 2021.
May 2022 imports were reported at 30,000 mt, up 20% from the 25,000 mt imported in May 2021. Malaysia dominated the imports for May with 28,000 mt, as well as the first five months of the year, with 107,000 mt.
India:
The only business reported by sources involved tons arriving under contract. The lack of any spot deals was not surprising to traders. The phosphate producers are facing higher input costs, making it more expensive to produce DAP than to import the product. As a result, only the tons under contract are coming in.
Sources estimated the price into India at $1,000-$1,100/mt CFR if a spot market existed. They based their estimate on prices from the Arab Gulf and Southeast Asia.
Brazil:
Ammonia imports for the first half of the year were reported at 239,000 mt by Trade Data Monitor. This is down about 26% from the 322,000 mt imported in the first semester of 2021. Ammonia from Trinidad dominated the market with 209,000 mt.
Second-quarter imports were reported at 133,000 mt, all from Trinidad, compared to second-quarter 2021 imports of 186,000 mt. June 2022 imports were down 52%, to 42,000 mt from June 2021 imports of 87,000 mt.
Shipping:
Sources said the increased demand for LNG vessels to haul gas to Europe does not seem to have affected vessel availability for ammonia shipments. One trader noted that the LNG demands are usually for ships much larger than the ammonia trade. For now, he said, the growing demand for LNG vessels is not impacting the availability of ships for ammonia.
The main factor currently affecting ammonia shipping is the break in the old shipping patterns with the lack of shipments from the Black Sea and Baltic ports. The vessels now have to spend more time at sea securing and delivering their ammonia cargoes. These longer distances do affect the final delivered price, sources said, but not in an egregious way.