Market Outlook

Historical price trends $/tonne

AMMONIA

In China, domestic prices are expected to come under significant downward pressure, with seaborne indications already following suit, with buyers said to have rejected offers around the $375/t c.fr mark.
Ukraine’s Odessa Port Plant is in the market for natural gas to restart ammonia and urea production, local reports suggest. One of the tenders to secure gas is for the supply of 251,800 cubic meters which would be sufficient to restart one ammonia unit and operate it to full capacity until the end of the year.
Ammonia prices are likely to remain relatively flat as curtailments tighten product availability. Postponement of new US capacity and Russian exports should delay any oversupply in the market, with downstream fertilizer capacity expansions not outpacing ammonia supply additions until 2026.

UREA

There is still no sign China will ease urea export restrictions in the short term. Most market players are bearish on the volume of urea that will be exported in the balance of 2024. Only a marginal improvement is expected in September. With prices weakening, there has been some interest from NPK producers to cover for the autumn application which has encouraged a small increase in price.
Indian buying continues to set the tone for the market. Production increases outpaced demand increase in 1H 2024, with a shortfall of 546,000 tonnes, and while imports have been down 30% for the year to end July, at just under 2 million tonnes they suggest comfortable inventories in India.
Egypt has faced significant production disruption due to natural gas supply interruptions, with production running at around 80% of capacity, offering a potential bullish factor.

METHANOL

Methanol markets have been tight in 3Q 2024, with increased demand outpacing supply, leading to a significant global inventory drawdown and increasing methanol prices. The tightness looks set to remain to the end of 3Q 2024, in spite of some improvements in methanol supply and inventories globally. Increased supply from the Geismar 3 plant in Louisiana will be offset to some extent when Methanex shuts down its Atlas plant on Trinidad and restarts Titan, removing 1 million t/a of capacity.
Methanex reported healthy demand growth across all traditional and energy-related downstream sectors, with (methanol-to-olefins) MTO operating rates influenced by the availability of supply.
Longer term, the startup of the new 1.8 million t/a Petronas methanol plant on Sarawak, Malaysia will help to ease market tightness towards the end of 2024 and start of 2025.