US Gulf/Tampa:
Tampa ammonia for December continued at
$1,030/mt CFR, down $120/mt CFR from November’s $1,150/mt CFR. The
January price will depend on the European natural gas price and the status of
production on the continent, though some sources said product in New Orleans is
long.
Eastern Cornbelt:
With fall application rapidly winding down,
ammonia prices were softening in the region. Most Eastern Cornbelt terminal
offers were reported in the $1,250-$1,300/st FOB range, with the low confirmed
out of Koch and CF terminals in Illinois and Indiana, and the high reflecting
the last reference price FOB Lima, Ohio. No spring prepay programs were offered
during the week, sources said.
In the South, the
latest truck offers for ammonia out of Gulf Coast terminals dropped to the
$980-$1,000/st FOB range, down from $1,050-$1,080/st FOB in November.
Some ammonia, phosphates,
and potash was still being applied in parts of Illinois during the week.
Sources described fall volumes as good for all three products, although ammonia
applications were down from last year’s record fall.
Western Cornbelt:
Ammonia pricing
slipped to $1,210-$1,250/st FOB for prompt fall tons in the Western Cornbelt,
depending on location and supplier, with the low reported at Wever, Iowa, and
the high reflecting the last offers from Koch and CF terminals. No spring
prepay offers were circulating yet in the region. “Something will definitely be
out by Dec. 20,” said one contact.
Northern Plains:
The
last ammonia offers in the Northern Plains
remained at $1,200-$1,250/st FOB and $1,245-$1,300/st DEL for fall tons, but
the window for fall application was now closed in the region. No spring prepay
programs were being offered during the week.
India:
Sources put the landed price at $850-$870/mt
CFR for spot tons for the week. The updated values represent only a slight bump
up in pricing, while contract tons from the Arab Gulf were reported lower.
While the large buyers are taking in their
contract tons from the Arab Gulf, spot tons are being picked up from China and
Iran, with buyers taking advantage of Chinese ammonia at prices well below that
of the Arab Gulf. Trade Data Monitor reported that India bought 61,700
mt of ammonia from China in January-October, compared to just 155 mt purchased
from China in the past five years.
Chinese prices are expected to move up as
that country eases its COVID restrictions, which might allow more plants to
operate and leave fewer tons of excess ammonia for export. The new asking price
out of China could move the Indian price closer to $980/mt CFR, but so far no
deals have been reported at that level.
Indian buyers are also looking to Iran for
tonnage. During the January-October period, India bought 344,000 mt of Iranian
material, up 7% from the same time period in 2021.
China:
Sources expect to see higher prices coming
from China, with new asking prices reportedly moving closer to $880/mt FOB.
The increase in offer levels is expected due
to the relaxation of COVID-related restrictions by the central government.
Regular shutdowns of factories and limited shopping opportunities under the old
COVID policies reduced the demand for produced goods, reducing the need for
ammonia. With the easing of the restrictions now taking place, sources
speculated Chinese manufacturers may need the ammonia they are currently
shipping abroad.
Middle East:
Most business coming out of the Arab Gulf
consists of tons secured under long-term contracts, primarily with buyers in
India, South Korea, and Taiwan. Sources speculated netbacks from these deals to
be in the low-$800s/mt FOB.
Sources said there have been some spot deals
from the Arab Gulf, but that buyers and sellers have remained mum about tonnage
and pricing. A handful of reported deals may have included Arab Gulf material,
however, offering opportunities to estimate netbacks to the area.
An earlier purchase by Turkey reported at
$980/mt CFR could have been sourced from the Arab Gulf, sources said. If it
was, sources estimated the netback to be about $880/mt FOB. At the same time,
sources are looking at the Northwest Europe price of $1,050/mt CFR and
calculating an Arab Gulf-equivalent, estimating netbacks to the Arab Gulf
around $850/mt FOB.
The $850-$880/mt FOB range has been the focus
of much of the discussion for pricing. Sources said the last public price of
$1,015-$1,030/mt FOB is too high for any new business to be concluded, and
noted that even the producer asking price of $1,000/mt FOB was too dear for
contemplation.
Buyers in particular have argued for the past
month that the producers would have to drop their spot price closer to contract
levels for sales to be done. Most bids were noted coming in under $900/mt FOB,
and – at least officially – were rejected by the producers.
Sources noted that exports from Iran have
stabilized, and India has been the main beneficiary of exported Iranian
ammonia. The discounted price of Iranian ammonia, along with the cheaper
Chinese ammonia, provided some relief for buyers.
Northwest Europe:
No new deals moved the price off the
$1,050/mt CFR secured in late November. Sources stressed that the price is
based on imported ammonia and not product from European producers.
The rising price of natural gas is raising
the break-even level for ammonia production. Sources now peg the basic price of
ammonia at $1,400-$1,500/mt FOB ex-factory before any profit or transportation
is added. Buyers are reluctant to buy at this level, especially when there
appears to be no shortage of imported ammonia at lower prices.
Brazil:
Imports of ammonia for January-November were
reported at 387,000 mt by Trade Data Monitor, down 23% from the year-ago
504,000 mt. Trinidad and Tobago supplied the bulk of the tonnage, with 322,000
mt sent.
November 2022 imports were reported at 19,000
mt, down 28% from the 27,000 mt purchased during November 2021. Again, Trinidad
was the primary supplier with 18,800 mt.
Brazil occasionally exports ammonia, most of
which are opportunistic sales, sources said. January-November exports were
reported at 81,000 mt, up dramatically from the year-ago 17,000 mt. South
Africa bought 38,000 mt, representing 47% of Brazil’s total exports through the
period, while 15,000 mt to Spain accounted for 19% of the export market.
November 2022 exports were reported at 15,000
mt, compared to the 81 mt exported in November 2021. The market’s primary
buyers were Spain with 8,000 mt, followed by Portugal with 7,000 mt.
Indonesia:
Producers continued to look for opportunities
in Europe and India, but were also noted keeping a keen eye on customers closer
to home.
Trade Data Monitor reported
January-October exports at 1.6 million mt, up from the 1.5 million mt in the
same period of 2021. South Korea topped the market with 437,000 mt, followed by
234,000 mt to India. Japan added 171,000 mt, while Taiwan and China combined
for another 282,000 mt.
October exports were reported at 173,000 mt,
up from the year-ago 143,000 mt, while Belgium, Turkey and Morocco took a total
of 70,000 mt. India was October’s single largest buyer with 46,000 mt. Most
October buyers did not buy Indonesian product in 2021.
Turkey:
January-October ammonia imports were reported
at 577,000 mt by Trade Data Monitor, down 17% from the 698,000 mt
imported through the same period in 2021.
While Russia was Turkey’s largest single
supplier during the first 10 months of the year, its shipments have dropped off
since the invasion of Ukraine and the subsequent withering of the Black Sea
ammonia market. Russian exports to Turkey counted at 114,000 mt in the first
quarter dropped to 18,000 mt in 2Q, while a residual amount of 30,000 mt was
received by Turkey in July and August. No Russian material was recorded
reaching Turkish ports in September and October.
Turkey’s second highest supplier was Bahrain,
sending 110,000 mt compared to zero tons in January-October 2021.
October 2022 imports were reported at 62,000
mt, marginally down from 63,000 mt in October 2021. Bahrain accounted for 41%
of October supplies with 25,000 mt, followed by Saudi Arabia with 14,000 mt,
good for 23% of the market.
