US Gulf/Tampa:
Tampa ammonia prices for January moved down $55/mt, to $975/mt CFR from December’s $1,030/mt CFR. With natural gas prices weakening in Europe, sources said that more European ammonia production may start up, which would continue to pressure Tampa and international pricing.
US natural gas prices are also down, a boon to ammonia producers. Buyers argued that NOLA production is plentiful and that prices should move lower.
Eastern Cornbelt:
Ammonia prepay prices remained at $1,095-$1,110/st FOB in the Eastern Cornbelt, with the low at Lima, Ohio, and the high at Wood River, Ill. Most Illinois and Indiana terminals were reported at the $1,100/st FOB level for prepay offers in early January.
Western Cornbelt:
Spring prepay offers for ammonia pricing were unchanged at $1,050-$1,100/st FOB in the Western Cornbelt, with the low in Nebraska and the high at Palmyra, Mo. Iowa terminals were reported in the $1,060-$1,070/st FOB range. Prepay ammonia in the Southern Plains was steady at $950/st FOB Verdigris, Okla., $900/st FOB Pryor, Okla., and $850/st FOB Woodward, Okla.
Northern Plains:
Spring prepay offers for ammonia were quoted at $1,160/st FOB Glenwood, Minn., Velva, N.D., and Grand Forks, N.D., and $1,110/st FOB Murdock, Minn. No current delivered ammonia pricing was confirmed in the region in early January.
Black Sea:
No exports from the Black Sea were reported because the pipeline from Russia to Odessa remains closed. Critics continued to pan efforts to reopen the pipeline, noting that the stepped-up attacks by Russian forces on Ukrainian targets are damaging the infrastructure needed to make the pipeline work properly.
Imports by Turkey for January-November were reported at 704,000 mt by Trade Data Monitor, down 17% from 761,000 mt recorded through same period in 2021.
November imports were reported at 127,000 mt, more than double the 63,000 mt imported in November 2021. The main suppliers were Indonesia with 61,000 mt, good for 48% of imports, and Bahrain with 30,000 mt. Neither country sent ammonia to Turkey in 2021.
Northwest Europe:
Lower gas prices into Europe have cut into the production cost of ammonia. Sources now put the production cost of ammonia at just under $800/mt, compared to well over $1,000/mt in December.
Sources attributed the lower price to reduced demand stemming from unseasonably warm weather and larger-than-expected reserves built up by European companies. Some expect to see ammonia producers and industrial buyers of ammonia consider either restarting their plants or stepping up production.
Trading was slow this week, with sources noting no new deals moving the price away from the $1,050/mt CFR level set in December. However, discussions taking place across Europe, the drop in the January Tampa price, and lower gas prices combined to give industry watchers the idea that prices should be coming off soon. Talks with Turkish buyers are now reportedly centered around $800/mt CFR instead of the $900-$1,000/mt CFR discussed in December
One trader noted the drop in ammonia pricing could impact the movement to green and blue ammonia. He noted that the break-even price for these new forms of ammonia is $600-$800/mt ex-plant. If the price continues to slide in Europe, sources noted, maintaining production of green and blue ammonia might not be feasible.
Middle East:
The Arab Gulf market is slowly coming back as the new year begins. So far, no new deals have been confirmed to move the price off the December levels of $850-$880/mt FOB.
Producers are still reportedly talking about $900/mt FOB for any spot tons. Contract sales into Taiwan, the rest of Southeast Asia, and India have reportedly shown a netback well below the current estimated price.
India:
The spot price into India remained in the $850s/mt CFR on tons sourced mainly from China, Malaysia, and Indonesia. Product from the Arab Gulf also comes in at a similar price, but under long-term contracts that have offered quiet, but favorable, prices to buyers.
China:
Sources said export totals continue to run higher than normal, but could soon sputter out. The estimated production cost for Chinese ammonia was put about $600/mt ex-plant. With freight of $100-$150/mt to India and Southeast Asian buyers, it will not take much of a price drop to make export sales uneconomical.
Southeast Asia:
Demand for more ammonia remains slow as buyers reassess the market situation. With reports of lower ammonia prices in the offing, some manufacturers seem to be contemplating stepping up both production and demand for ammonia.
Exporters such as Indonesia and Malaysia are also keeping an eye on shifts in the market. Sales into Europe benefited the producers while demand in the region has slowed down. Sellers are watching closely how prices are shifting in the Caribbean and possibly in Europe to determine if they will be able to maintain their current rate of production and sales.
Indonesia exported 1.8 million mt of ammonia in January-November, according to Trade Data Monitor,up about 8% from the year-ago 1.7 million mt. The market’s largest buyers were South Korea with 487,000 mt, and India with 255,000 mt.
November exports from Indonesia were reported at 167,000 mt, up 71% from 98,000 mt in November 2021. South Korea bought 50,000 mt, representing 31% of the market. Morocco, Turkey, and India each took 21,000-24,000 mt, combining to total 41% of November exports. These buyers did not buy any material from Indonesia in November 2021. The US, a new entry to the Indonesian market, bought 6,000 mt during the period.
Thailand:
Trade Data Monitor reported January-November ammonia imports at 306,000 mt, off19% from 376,000 mt in the prior-year period. Malaysia was the single largest supplier with 215,000 mt, followed by Indonesia with 84,000 mt.
November imports were counted at 18,000 mt, down from 22,000 mt purchased in November 2021. Malaysia accounted for 83% of imports with 15,000 mt, leaving 17% for Indonesia, with 3,000 mt.
North Africa:
Reports that India and Morocco will be discussing possible joint venture operations to produce DAP and NPK could require more ammonia for the Moroccan market.
Sources said Morocco is better positioned than India to receive ammonia from sources as diverse as the Caribbean and Southeast Asia. At the same time, there are reports that production costs in Morocco could be dramatically lower than in India, and Morocco is reportedly looking to expand the use of solar and wind power for its industries. While the move to renewable power sources could take up to 10 years, the effort to increase DAP and NPK production could dramatically alter the dynamics of the ammonia market once completed.