US Gulf/Tampa:
Tampa ammonia moved up for October, but ever so slightly. Prices firmed just $25/mt, to $1,175/mt CFR, up from September’s $1,150/mt CFR. While European ammonia outages have required ammonia imports, some sources argued that international supplies were plentiful enough to supply Europe without the need for much of a price increase.
Eastern Cornbelt:
The ammonia market remained at $1,250-$1,300/st FOB for the last confirmed offers in the Eastern Cornbelt, with the low in Illinois and the high FOB Lima, Ohio, for both prompt or prepay tons.
Western Cornbelt:
The ammonia market was steady at $1,200-$1,225/st FOB in the Western Cornbelt for the last confirmed offers, with the high at Palmyra, Mo., and the low reported in Nebraska and Iowa on a spot basis.
California:
Ammonia postings in California were confirmed at $1,250/st DEL for September tons, up from the previous $1,147/st DEL price. New aqua ammonia postings in the state were quoted at $271-$336/st FOB, with the low at Stockton while inventory is available, and the high at Sycamore.
Pacific Northwest:
Ammonia pricing in the Pacific Northwest was pegged at $1,275-$1,325/st FOB and $1,325-$1,350/st DEL, up significantly from early September pricing in the $1,070-$1,200/st FOB and $1,050-$1,100/st DEL ranges.
The aqua ammonia market firmed to $345/st FOB in the region, up $50/st from last report.
Western Canada:
The last offers for ammonia were quoted in a broad C$1,600-$1,800/mt DEL range for fall tons in Western Canada, up C$100/mt from last report at the low end of the range.
Black Sea:
The damage to the Nord Stream natural gas pipeline raised more concerns about talks to reopen the ammonia pipeline from Russia to Odessa, Ukraine.
Talk of reactivating the pipeline started in mid-September when the United Nations and Trammo discussed shipping Russian ammonia under the deal that allows for the export of grain and fertilizers. The ammonia pipeline passes through areas of Ukraine where Ukrainian and Russian forces are still in active combat. One trader said the possibility of damage to the pipeline would be too great and could cause more damage than what has been seen from the recent Nord Stream breaks.
Some in the ammonia industry were also perplexed by the UN move. Sources said except for the US, no country uses ammonia as a fertilizer. One trader added that there is enough ammonia available to cover the needs of urea and DAP producers. While sources admit the price for ammonia is higher than in the past, having adequate supplies is not the issue. While the loss of Russian ammonia from the Black Sea and the Baltic ports did disrupt the market initially, buyers have been aggressive in securing their needs from other sources.
Despite the talk, industry sources said port authorities have not yet received any orders to prepare for the storage and loading of ammonia. Likewise, vessel inquiries to pick up the product are not being reported.
India:
Buyers in India are still taking what spot tons they can, and the main source for these purchases appears to be China. The deals at $850-$900/mt CFR are usually for 10,000-15,000 mt.
Contract tons from the Arab Gulf in larger volumes are also still coming in. Nailing down a spot deal from the Arab Gulf, however, is much harder. Producers are holding to FOB prices that exceed the landed Indian price, leaving Indian buyers to look elsewhere for a bargain.
The recent deals between Saudi and Omani suppliers with OCP will make finding any discounts on spot deals more difficult, said one trader.
Middle East:
Sources said Saudi and Omani firms have signed contracts with OCP in Morocco for large quantities of ammonia. The deals reportedly cover the loss of 500,000-900,000 mt from Russia that OCP faced when exports from the Black Sea stopped due to the Russian invasion of Ukraine.
The contracts are reportedly only for one year. Sources said the deals will take up any excess tons the Arab Gulf producers might have had, leaving few, if any, opportunities for spot sales. The contracts are a boon to the producers, said one trader. Excess tons had been building up as buyers, such as India, were demanding prices lower than producers were willing to accept. The sales to OCP should take care of the built-up reserves and prevent any tons from sitting around looking for a buyer.
Sources did not know the settled price of the deals, but speculated it would be formula-based, with each cargo’s price determined by published numbers. The current contract price out of the Arab Gulf is reported at $1,000-$1,100/mt FOB, with no spot deals reported.
OCP had been pursuing ammonia from suppliers as far afield as Indonesia and Trinidad in the fallout of the Russian invasion of Ukraine. At the same time, said sources, the phosphate giant reduced the output of DAP for MAP and TSP, which required less ammonia. This allowed OCP to maintain its DAP contracts while also nursing its ammonia reserves. With the new contract in hand, sources expect to see DAP production step up to normal levels.
Sources were careful to point out that while the deal with the Arab Gulf producers will cover most of OCP’s needs, it may not be enough. To fill in the gap, OCP is expected to continue to seek out occasional spot purchases from Southeast Asia and Trinidad.
Northwest Europe:
The ammonia market has stabilized, with no new deals to move the price from the $1,310/mt C&F recently achieved.
Even before the damage to the Nord Stream gas line was discovered, the price of natural gas put the production cost of 1 mt of ammonia at more than $2,000. The shutdown of the gas line will push that price higher.
Despite the higher European production costs, sources do not expect the Northwest Europe price of ammonia to skyrocket. Buyers can secure tons from Trinidad and Southeast Asia at levels that allow for the current price to hold, sources said. Availability from North Africa is also considered likely. Some tons from the Arab Gulf might also be tossed into the mix, even though the last deal with OCP is leaving producers with fewer tons available for spot sales.
European producers are expected to keep churning out ammonia despite the high cost. Sources said the plants need to fulfil contracts, not only for ammonia, but also for byproduct material such as CO2 for non-fertilizer industries.
Southeast Asia:
Sources said the ammonia buying market remains soft. Industrial buyers continue to ask suppliers to slow down deliveries of contracted tons. At the same time, the buyers are also invoking the provisions in their contracts that allow for reduced amounts in each shipment.
The lack of buying demand is leaving some producers in the area with extra tons for sale. Buyers in Northwest Europe continue to monitor the price and availability of product, along with shipping costs, to determine if a deal can be made. So far, deals have been done that allow for a reasonable netback to the producer and no price increase in Europe.
Imports of ammonia into Thailand for January-August were reported at 237,000 mt by Trade Data Monitor, down 12% from the 269,000 mt imported during the same period in 2021. The main suppliers in 2022 so far have been Malaysia with 154,000 mt, and Indonesia with 75,000 mt.
August 2022 imports were reported at 32,000 mt, up dramatically from the 2,600 mt imported during August 2021. Indonesia sent 16,000 mt, for 52% of the import market in August. Malaysia rounded out the sales with 15,000 mt, for 48% of the market.