AMMONIA
AMMONIA
U.S. Gulf/Tampa: Yara has concluded business with its major Tampa customers, Mosaic and CF, for June at $370/mt DEL, down $35/mt from May. Sources attributed this to weaker international prices.
Eastern Cornbelt: Movement of ammonia and UAN for corn sidedressing has yet to kick into gear in the region due to uncooperative weather. The anhydrous ammonia market was pegged in the $440-$470/st range FOB regional terminals to the dealer, with the lower end reported out of spot Illinois terminals at mid-month.
Western Cornbelt: Several dealers said sidedress movement of ammonia and UAN on corn will pick up as soon as field and weather conditions improve. Ammonia pricing continued to slide at mid-month, with sources quoting the regional range at $390-$460/st FOB terminals, depending on location. The lower numbers were reported out of both Iowa and Nebraska shipping points on a spot basis, while the upper end reflected dealer levels out of Missouri locations.
Southern Plains: The anhydrous ammonia market was quoted at $350-$390/st FOB in the region, with the upper end out of pipeline terminals in Kansas. Sources quoted dealer pricing out of regional production points in the $350-$365/st FOB range, with some suppliers posted as high as $380/st FOB production locations and $395/st FOB regional pipeline points.
South Central: Ammonia out of regional terminals had dropped to $425-$450/st FOB, with the low at Memphis and the upper end FOB Henderson, Ky. Dealer postings remained as high as $470/st FOB Henderson at mid-month, but sources said no sales were taking place at list prices.
Black Sea: Prices are sliding to a point where producers are said to be concerned they will soon reach the break-even point again. Sources estimate the current break-even point at $290/mt FOB. Current bids are coming in at $300/mt FOB.
So far, no one is reporting a producer accepting offers at $300/mt FOB, and sales at $310-$315/mt FOB are openly discussed. Some of the lower priced deals are said to be “Yuzhnyy equivalent” prices, which means someone is estimating what the cost would be if cargo came from the Black Sea.
One Asian trader said that by the end of next month, those $300/mt FOB bids might look pretty good to the producers.
There is a general consensus ?Çô for now ?Çô that the price out of Yuzhnyy is in the $310-$315/mt FOB range, with downward pressure continuing.
Ukrainian producers face a particular problem with lowering ammonia prices. Their basic feedstock of natural gas comes from Russia. Reports are circulating there will soon be an increase in the gas price.
Just a month ago, all users of Russian natural gas in Ukraine breathed a sigh of relief as the new Ukrainian government settled a series of deals with Russia that included extended access to Ukrainian ports by the Russian navy. Lower gas prices from Russia were reported to be part of the final agreement.
But sources now report an increase in prices might move the ammonia break-even price to $325/mt FOB.
Middle East: Lower prices into India are forcing down Middle East prices, say sources. The source of the new prices seems to be in Iran.
One trader reported that with each spot shipment out of Iran, the price drops.
The latest round-up buying includes four cargoes to Mitsui for a total of 23,000 mt. One source said if Mitsui hadn’t taken the tons, the Asian or European offices of another trader house would have.
Ammonia demand in Asia remains strong enough to encourage suppliers to reach out to every available source.
The best guess for the recent purchase by Mitsui is that these tons will go to India,