US Gulf/Tampa:
After a 25% drop in Tampa ammonia prices from February’s $790/mt CFR to $590/mt CFR in March, prices remain under pressure, with sources continuing to cite low natural gas prices in Europe and the US.
Eastern Cornbelt:
The ammonia market remained at $840-$850/st FOB for spring tons in the Eastern Cornbelt, with the low reported in Illinois and the high in Indiana and at Lima, Ohio. “They haven’t adjusted since the Tampa drop and they may wait until closer to in-season to do it, but I do not see an $8 in front of it when they do adjust,” commented one regional source.
Western Cornbelt:
The ammonia market continued to be quoted in the $725-$840/st FOB range in the Western Cornbelt, with the low at Palmyra, Mo., and Wever, Iowa, and the high in eastern Iowa. Other spot terminal prices in early March included $750/st FOB Hermann, Mo., $775/st FOB Hoag, Neb., and $780/st FOB Fort Dodge, Iowa.
New ammonia offers out of Oklahoma production points slipped to $600-$625/st FOB, down from $610-$650/st, with the low reported at Woodward and Enid and the high at Verdigris. Pricing for truck tons out of Gulf Coast terminals dropped to $525-$540/st FOB in the wake of the March Tampa settlement, down from $675-$700/st FOB.
California:
The anhydrous ammonia market dropped to $980/st DEL in California, down from the previous $1,250/st DEL level. Aqua ammonia was also lower, falling to $259/st FOB Stockton and $269/st FOB Sycamore, well below the previous $326/st FOB and $336/st FOB levels, respectively.
Pacific Northwest:
New offers for ammonia were reported at $730-$775/st DEL in the Pacific Northwest, well below the previous $850-$858/st DEL range. Pricing out of Washington terminals slipped to $730/st FOB, down from the prior $915/st FOB level.
Aqua ammonia fell to $190/st FOB in the region, down from $235/st FOB.
Western Canada:
The latest offers for spring ammonia in Western Canada fell to C$1,100-$1,300/mt FOB for April-June shipments, depending on location, down sharply from the last confirmed C$1,475-$1,640/mt DEL range.
Black Sea:
If all goes according to plan, the first Russian ammonia export facility will open at Taman in December 2023. According to Tass, the facility will initially move 2 million mt/y of ammonia, with expansion to take the total to 5 million mt/y by December 2025.
No Russian ammonia has been shipped out of the Black Sea since the pipeline to Odessa was closed due to the war in Ukraine. Recent efforts by the Russians to reopen the pipeline, part of a deal brokered by Turkey and the United Nations to move out Ukrainian grain, have failed. Industry sources said the pipeline was located in an active war zone and depended on power from facilities under regular Russian attacks.
The new facility is being built by Togliattiazot, a subsidiary of Uralchem. Industry sources said that some storage tanks have already been built at the site, along with an extension of the jetty to deal with shallow waters in the area.
The ammonia will be sent to the port by rail. International sources noted that the rail line to the port is already overtaxed with shipments of LNG and dry commodities. One trader said that unless the plans also call for upgrading and expanding the rail connection to the port, it is unlikely the facility will achieve its export goals before its own self-imposed deadline of the end of the year.
Once open, the port will provide the first opportunity to move out ammonia since the war began one year ago. Sources said the vessels using the port will be able to avoid the current war zone along the Ukrainian coast, should the conflict stretch out through a second year.
At the same time as the port expansion announcement, Russian foreign minister Sergei Lavrov said that Russia may not allow for an extension of the deal that allows for the free passage of Ukrainian grains, currently set to end on March 18. Lavrov said that Russia would not extend the agreement unless the movement of Russian grains and fertilizers are better addressed.
While Russian and Ukrainian grain has moved out under the deal, Russia began calling for ammonia to be included in the agreement in fourth-quarter 2022. The dangers of opening the pipeline from the Russian border to Odessa were pointed out by most in the ammonia industry, and sources expect that ammonia will not be included in the renewed agreement.
Since the beginning of the war, the Black Sea’s primary use has been to move ammonia to western buyers such as Turkey. Sources reported a sale into Turkey at $550-$570/mt CFR, representing a confirmation of $550/mt CFR prices first reported at the end of February. The tonnage is reportedly coming from North African suppliers.
India:
Demand for ammonia remains limited because several major DAP producers are taking routine turnarounds at their plants. However, even as discussions for future tons progress, buyers are pushing for $600/mt CFR and lower, while sellers are trying to hold on to current levels in the $650s/mt CFR.
Limited imports are expected through March while the plants remain down, although April should see a step up in ammonia vessel arrivals. The bulk of the ammonia coming into India is under long-term contracts, with prices called dramatically lower than the public prices achieved under spot deals.
Ammonia imports totaled 2.2 million mt in 2022, Trade Data Monitor reported, about 8.5% below 2.4 million mt imported in 2021. Saudi Arabia, Qatar, Indonesia, and Bahrain accounted for about 80% of the imports. Saudi Arabia sent 930,000 mt to India in 2022, a 110% increase from 444,000 mt in 2021.
December imports were reported at 650,000 mt, up 7% from 608,000 mt in December 2021. Saudi Arabia accounted for one-third of the imports with 228,000 mt, followed by Qatar with 93,000 mt.
Middle East:
Sources said that Arab Gulf netbacks from deals into India put the market at $580/mt FOB, but noted that no one is offering that amount. Buyers are pushing for $600/mt FOB but getting nowhere. The last-done spot price is still at $610-$620/mt FOB.
Traders said the producers will eventually have to succumb to lower prices, as producers are facing growing inventories at their plant storage facilities. Sources said that a lack of demand and falling global ammonia market prices have buyers holding back on purchases until the tonnage is needed.
Northwest Europe:
Despite any new spot deals in Northwest Europe, sources said the price should be pegged at $600-$620/mt CFR based on the Tampa price. Even with the shift downward, traders said that price is still too high. There are already expectations that Tampa could drop another $100/mt or so in April.
The ammonia production cost is now estimated at $500-$550/mt ex-plant, with every indication of further reductions coming. Sources pointed to falling natural gas prices and ongoing limited demand for ammonia as the main reasons for the continued bearish mood on pricing.
The industry came out of the winter season in better shape than anticipated, bucking concerns that natural gas prices would spike and remain high after supplies were cut off from Russia. European countries engaged in aggressive reserve-building to ease the pain on gas users during the winter. A mild winter, however, showed that countries did not need as much of the product as believed for home heating, and the surplus gas is now being made available to the industry at ever-reducing rates.
Asia:
Chinese exports of ammonia are expected to ease off as the global price falls. Buyers as far away as North Africa and Northwest Europe are unlikely to find the Chinese material competitive as prices fall west of Suez. Even smaller regional buyers such as South Korea and Taiwan may soon find they no longer have Chinese ammonia to play against Indonesian or Middle Eastern product.
Indonesian ammonia exports for January were pegged at 140,000 mt, Trade Data Monitor reported, off 24% from the year-ago 184,000 mt. The main buyers were all regional players, indicating the January price was already too high for shipment to Morocco and Northwest Europe. South Korea dominated the purchases with 83,000 mt, for 59% of the Indonesian exports, while China, Japan, and Taiwan combined to take another 35% of the exports.