US Gulf/Tampa:

The $435/mt CFR Tampa ammonia price for April reflected a significant – and expected – drop from March’s $590/mt CFR. Lower natural gas prices in Europe and the US, plentiful ammonia supplies, and a delayed start to spring applications were all cited as reasons for the drop, though sources said it was too early to speculate on May pricing.

Eastern Cornbelt:

Another drop in ammonia prices pushed terminals down to $575-$600/st FOB in the Eastern Cornbelt, depending on location, with the low reported in Illinois early in the week. New offers at Lima, Ohio, were confirmed at $600/st FOB, down from the previous $750/st FOB level.

Western Cornbelt:

Ammonia prices were down considerably in the Western Cornbelt at $500-$525/st FOB, well below the $670-$710/st FOB offers confirmed in late March, with the low reported in Nebraska and the higher numbers in Iowa.

Sources reported brisk fieldwork and preplant ammonia application taking place in eastern Nebraska, southwestern Iowa, and parts of Missouri during the week, along with heavy pasture fertilization. The pace was still slow in northern Iowa, though sources said a favorable forecast should allow activity to pick up during the second week of April.

Southern Plains:

Ammonia prices remained under pressure in the Southern Plains. The latest prices were quoted in the $500-$515/st FOB range out of Oklahoma production points, well below the previous $570-$590/st FOB offers. Truck pricing out of Gulf Coast terminals slipped to $400-$435/st FOB.

South Central:

Ammonia prices were down in the South Central region following last week’s sharp drop in the April Tampa price. Sources said new offers for truck ammonia fell to $400-$435/st FOB Gulf Coast terminals, down from $525-$540/st FOB, while the latest pricing at Cherokee, Ala., was reported at the $525/st FOB level. No ammonia offers were reportedly available out of Midway, Tenn., or El Dorado, Ark., in early April.

Black Sea:     

Business in the area was tied to purchases by Turkey. Sources reported new deals at $340-$350/mt CFR, representing a drop of about $60/mt from business done just one month earlier. Unconfirmed reports described the tonnage as most likely originating from Iran.

Iranian product represents a small portion of Turkey’s ammonia imports. Out of a total 796,000 mt imported in 2022, Iranian tons accounted for 32,000 mt, according to Trade Data Monitor. Ammonia from Iran was counted at 3,200 mt in January-February, representing about 2% of Turkey’s total ammonia imports for the period.

Based on this new price, traders made a few calculations to see where Northwest Europe and the Arab Gulf would be priced if the tons came from those locations. The estimated netback to the Arab Gulf was put at $300-$310/mt FOB, which also fit with calculations from deals in Southeast Asia. The estimated price for Northwest Europe was put at $350/mt CFR, which matched up with some estimates based on the Tampa price for April.

Turkish buyers have reportedly fulfilled their April needs and will take a break in buying. Purchases for May delivery will begin again at the end of the month.

January-February ammonia imports to Turkey were reported at 142,000 mt, an 8% increase from the year-ago 131,000 mt.

February imports were tagged at 28,000 mt, off 41% from 48,000 mt in February 2022. The market’s main suppliers were Oman with 17,000 mt, followed by Egypt with 11,000 mt.

India:     

Buyers continue to push for lower prices. Sources reported that bids are now focusing on sub-$400/mt CFR, but with no new deals confirmed. The lack of new business left the price at an estimated $450-$460/mt CFR.

Demand for ammonia is expected to pick up in April, as DAP producers restart their plants following routine maintenance turnarounds. Buyers are taking a hard look at sales in Southeast Asia and Turkey. Sources said the estimated Arab Gulf-equivalent netback from those deals would mean a landed price of $350-$390/mt CFR at India.

Southeast Asia:     

Sources reported a few small deals at $360-$380/mt CFR. The netback from these deals to Indonesia, the reported source of the product, was put at $320/mt FOB. These deals could lead to an Arab Gulf-equivalent price of $300-$310/mt FOB, sources said.

Following the latest round of sales from the area, some traders believe the ammonia market’s floor has been reached. At this price level, said sources, it would not make economic sense for China to export ammonia. China exported 238,000 mt of ammonia in 2022, according to Trade Data Monitor, while exports for the first two months of 2023 were 103,000 mt. Fewer exports are expected in March, followed by a steady decline thereafter.

Exports from Indonesia were counted at 257,000 mt for January-February,down 18% year-over-year from 315,000 mt. February exports were 117,000 mt, falling 11% from 131,000 mt in the previous February.

Morocco, with 25,000 mt, was Indonesia’s only buyer located outside of Asia. Following the Russian invasion of Ukraine, Morocco reached out to a number of nontraditional ammonia suppliers to replace the tons lost when the Ukrainian export ports were closed. In the end, Morocco took 84,000 mt from Indonesia in 2022. Prior to that, there were no Indonesian sales to the North African country on record, according to Trade Date Monitor.

South Korea remains a strong buyer of Indonesian ammonia, taking 98,000 mt in January-February, representing about 38% of Indonesia’s total ammonia exports for the period. In 2022, South Korea was the top Indonesian buyer, taking 511,000 mt out of a total 1.9 million mt exported.

January-February ammonia imports at Thailand stood at 65,000 mt, above the year-ago 26,000 mt. February imports were 18,000 mt, up slightly from 17,500 mt reported for February 2022. Thailand’s primary supplier was Malaysia, with 16,700 mt.

Middle East: 

The lack of any new business from the Arab Gulf led traders to look at the price of deals in Turkey and Southeast Asia to calculate an equivalent price from the Gulf. Sources said the $360-$380/mt CFR deals into Southeast Asia, along with the Turkish deal reported at $340-$350/mt CFR, both lead to an estimated Arab Gulf-equivalent price of $300-$310/mt FOB.

Sources were firm in stressing that no public deals were done at that level. They were just as firm that $300-$310/mt FOB is the starting point of talks for any deals. Arab Gulf producers are reportedly long on product, and will eventually have to lower their pricing expectations to relieve the pressure on their growing reserves.

Northwest Europe:      

Just as traders had to take out their calculators to come up with an Arab Gulf-equivalent price, they also had to do some math to see where prices might be – or should be – in Northwest Europe.

Besides watching sales into Turkey, sources looked at the April Tampa ammonia price for ideas on where the Northwest Europe price should be. Based on those calculations, sources estimated the price should be about $350/mt CFR, representing a $100/mt drop from the previous estimated level. One trader noted that this makes sense, given both the $155/mt drop in the Tampa price and the $60/mt decrease at Turkey.

At this level, imported ammonia will be much cheaper than European production costs. Sources said producers appear to be turning out the minimum amount of ammonia necessary to cover their needs, while turning to imports for anything beyond those requirements.

One trader noted that even with the dramatic $155/mt drop in the Tampa price for April, there is still room for more price declines in the market. Demand, he said, remains weak, while production in the Arab Gulf and Southeast Asia continues at a steady pace.