U.S. Gulf/Tampa:
European gas futures hit another record-high settlement on Aug. 18, increasing the pressure on more European ammonia plants to go offline. While this would shrink production, it could pull even more ammonia from other parts of the world such as the US.
As a result, the Tampa price for September may again go up, though if European plants are able to hold on, Tampa could roll over. Tampa ammonia prices were $1,100/mt CFR in August, up from July’s $960/mt CFR.
Nutrien has confirmed an ammonia sale from Trinidad to Northwest Europe, with the vessel to load in early September. The company said the CFR price falls in the current published pricing range. Green Markets is currently showing $1,200-$1,300/mt CFR into Europe. Nutrien says the deal reflects an FOB Trinidad value in the $1,170-$1,180/mt range.
In the meantime, sources report that a two-tiered market has developed for NOLA barges. While exporters may continue to get $1,000/st to serve the European market, that price does not match inland ammonia prices, which are trading in the $940-$1,050/st FOB range. Sources said that barges have been sold and are on offer at much lower numbers. A conservative number is $825/st FOB, with indications that trades may have gone lower.
Eastern Cornbelt:
Sources reported few changes in pricing from the previous week. The ammonia market was quoted at $1,025-$1,030/st FOB in Illinois and $1,030-$1,035/st FOB in Indiana for prompt or prepay. The market FOB Lima, Ohio, was reported at $1,025/st FOB for prompt and $1,050/st FOB for prepay, with the prompt number reflecting a $25/st increase from the previous week.
Western Cornbelt:
The ammonia market remained at $940-$950/st FOB Nebraska terminals and $955/st FOB Port Neal, Iowa, for prompt or prepay. The last confirmed ammonia offers at Palmyra, Mo., were reported at the $950/st FOB level. Truck pricing for ammonia FOB Gulf Coast terminals in Texas and Louisiana was reported at $1,000-$1,050/st FOB.
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:
Delivered ammonia prices in the Pacific Northwest were quoted at $1,050/st at midweek, up from recent fill offers in the $950-$1,000/st DEL range. The FOB market in Washington was pegged at the $970-$1,000/st level on a spot basis, up from $940/st at last report. Nutrien confirmed that it raised its ammonia price to $1,100/st DEL on Aug. 18, however.
Aqua ammonia pricing firmed to $256-$270/st FOB in the region, with the high reported late in the week.
Western Canada:
The last offers for ammonia in Western Canada were reported at the C$1,320-$1,340/mt DEL level for fall tons.
Northwest Europe:
Despite the high price for natural gas, sources said ammonia prices are not following suit.
Sources estimated that it would cost about $2,700/mt at the current gas price to produce 1 mt of ammonia, and yet prices are remaining relatively stable in Antwerp at $1,200-$1,300/mt C&F. Traders said the Northwest Europe price is affected more by the imports coming in from multiple sources rather than the estimated European production cost. One trader noted there are no markets for ammonia that would accept the estimated European production price.
Demand for ammonia in the area remains low as excessive heat pushes some plants to close and as the higher gas prices affect the ability to operate. Combined with inflation and high interest rates, most manufacturers see little benefit in running at full capacity.
Black Sea:
Even though some grain shipments are now being allowed to leave Ukraine and some dry bulk fertilizers, such as urea, have been coming out of eastern ports in the Black Sea, shipments of ammonia out of the region remain nil.
Sources said the ammonia pipeline to Yuzhnyy remains shut, affecting all exports by ship or rail. Ports away from the conflict zone are not equipped to receive or ship ammonia.
Large-scale buyers such as OCP in Morocco have depended on Black Sea product to maintain production. Sources said with adjustments to production and aggressive buying, these companies are able to keep operating. While it is not possible to completely replace the tonnage lost from the Black Sea, sources said these buyers are taking advantage of plentiful supplies from other markets to keep going.
Middle East:
With buyers looking to replace tons no longer available from Russia via the Black Sea or Baltic ports, Arab Gulf producers are reportedly working overtime to push up the price. Sources now said the opening offer from producers is at $1,200/mt FOB. Potential buyers point out that no current market can absorb that price, so talks continue and the price remains in the low-$900s/mt FOB.
Producers are facing several forces working against their efforts for higher prices. Asian buyers are pushing back hard against any price increase. Demand in Asia has softened even as cheaper Chinese material is making its way into the marketplace.
At the same time, some buyers west of the Suez, such as Turkey, are increasing their interest in buying as much ammonia as they can from Iran. And buyers in Europe seem to be getting enough ammonia from the US and North Africa to stabilize prices, leaving no room for the Arab Gulf producers to push harder on pricing.
India:
There are reports of sales into India from China at $825-$850/mt CFR. The possibility of these deals has been the basis for speculation and rumors for several weeks. Sources said the most recent deal appears to have been for 18,000 mt to a phosphate producer.
The availability of Chinese ammonia to India flies in the face of the efforts by the Arab Gulf producers to secure higher prices.
Southeast Asia:
Word is circulating that Kaltim V will be able to run its urea plant sometime in October. Sources said the most likely scenario is that the urea operation will take ammonia from other facilities while the Kaltim V ammonia reformer is repaired.
Getting the ammonia side of the complex running could take longer. Sources said if the assessment of damage is promptly completed and the company can quickly get all the necessary parts, some ammonia production could also begin in October. However, many in the industry still believe that full production may not be achieved until early 2023.
Buyers in Taiwan and Thailand are said to be looking for some spot cargoes with asking prices at $800-$850/mt CFR. These prices would move down the estimated netback to Chinese suppliers, based on the Chinese sale into India at $825-$850/mt CFR. Sources said given the soft nature of the Asia market, lower prices are expected all around.
January-July 2022 imports of ammonia into South Korea were reported at 846,000 mt by Trade Data Monitor. This quantity is only marginally below the 864,000 mt imported during the same period in 2021. The main suppliers so far this year were Saudi Arabia with 380,000 mt and Indonesia with 361,000 mt.
July 2022 imports were pegged at 148,000 mt, up about 11% from the 133,000 mt imported in July 2021. Saudi Arabia supplied about 64% of the ammonia in July, with 95,000 mt. Indonesia came in with an additional 42,000 mt for 28% of the import market.
Turkey:
Ammonia imports in Turkey for the first half of the year were reported at 339,000 mt by Trade Data Monitor. This is down 22% from the 435,000 mt imported during January-June of 2021.
Second-quarter 2022 imports were pegged at 141,000 mt, down 27% from the 192,000 mt imported during the same period of 2021.
June 2022 imports came in at 50,000 mt, marginally up from the 45,000 mt purchased during June 2021. Algeria dominated the June imports with 23,000 mt, for 45% of the import market. Russia supplied another 14,000 mt. Libya and Malaysia each sent 5,000 mt, for 10% each of the imported quantity.