Market Watch

Ammonia, California, Eastern Cornbelt, Market Watch, Middle East, Pacific N.W., U.S. Gulf, Urea, Western Canada, Western Cornbelt

AMMONIA

Eastern Cornbelt: The anhydrous ammonia market remained at $675-$690/st FOB in the region, with the low quoted in the Illinois market for spot prepay offers and the upper end FOB Huntington, Ind., for prompt ammonia. Illinois contacts also talked of prepay offers at the $680/st FOB level last week.

Western Cornbelt: The Western Cornbelt anhydrous ammonia market was steady at $630-$670/st FOB regional terminals, depending on location and time of delivery.

California: Calamco raised its anhydrous ammonia postings to the $660/st truck-DEL mark in California, while aqua ammonia postings firmed from $165/st to $177/st FOB. Calamco’s AN-20 reference price moved to the $266/st truck-DEL level.

Pacific Northwest: Anhydrous ammonia was pegged at $690-$710/st DEL in the Pacific Northwest region, depending on location. The range was up on the low end, and had also narrowed considerably from last report.

Western Canada: Anhydrous ammonia pricing was steady at $817-$825/mt DEL in Manitoba, $825-$834/mt DEL in Saskatchewan, and $834-$861/mt DEL in Alberta. Dealer postings remained in the $827-$871/mt DEL range in the region, depending on location.

Middle East: Market sources say demand from Europe, Asia, and the United States is pushing the price ever upward. Last week at least three deals were concluded that moved Arab Gulf ammonia into the $450s/mt FOB. Nitrochem took 8,000 mt from Sabic and 15,000 mt from Fertil at $450/mt FOB early in the week. By Thursday, the price moved to $457.50/mt FOB in a deal between Sabic and Transammonia.

Industry sources say the move was expected after the Tampa price jumped to $515/mt CFR.

Sources in Asia say production problems in Algeria, Trinidad, and Yuzhnyy are helping move up the Middle East price.

The one dampening feature is India’s increased take of Iranian ammonia.

The contract price into India remains constant. One source said the reason for the stable price is the steady rate of ammonia purchases from Iran at a price lower than what the Arab producers are now able to secure in the spot market.

With the latest deals, sources now say the ammonia market for the Arab Gulf is at $450-$458/mt FOB, with $500/mt FOB expected soon.

strong>Black Sea: Sources report Mitsui took a cargo from Yuzhnyy for delivery to Yara in Tampa. The unusual sales chain was the result of good timing, said an Asian trader. Mitsui reportedly had a vessel without a cargo just at the time that some tons for the United States could be had in Yuzhnyy. Sources report the sale reflected the new higher Tampa price. One observer noted the deal was a “win-win” for everyone.

Prices remain strong in the upper $460s and low $470s/mt FOB. However, sources say higher prices are on the horizon. Continued diversion of natural gas to the consumer market and away from ammonia producers will keep ammonia stockpiles limited. One trader said that the limited production, coupled with strong demand, almost ensures higher prices in the second quarter.

UREA

U.S. Gulf: Granular barge prices began the week strong, with trades reported early in the week for prompt at $380-$385/st FOB. However, despite a positive grain report earlier in the week, sources said buying interest quickly dried up. As a result, players said trades dropped as low as $375-$379/st FOB. However, one player said he was still holding out for the higher numbers last week.

Despite the heady grain news, sources said that for the most part, the urea supply pipeline is now well stocked and will not be replenished until actual movement to the field occurs. With much of the nation in the deep freeze, that i