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Nitrogen+Syngas 395 May-Jun 2025

3 May 2025

Market Outlook

Market Outlook

AMMONIA

• Continuing oversupply means that ammonia prices should continue to come under pressure moving into 2H April, though it remains to be seen just how much further values in Asia can decline before producers begin to shutter output.

• Conversely, questions remain as to how much of an upside impact US 10% tariffs will have on imports of Trinidadian ammonia for the next Tampa settlement.

• The seven week Ma’aden turnaround announced for May-June should also help to put a floor under ammonia prices out of the Arab Gulf.

• The netback to the Caribbean will be adjusted down $43.50/t this week to $351.50/t FOB, taking into account the 10% US tariff on imports from Trinidad. Mosaic and Yara are understood not to have agreed a way forward yet for the Tampa contract in May and the Caribbean export price is calculated on Tampa at $435/t CFR less the 10% tariff and assuming a $40/t freight.

UREA

• The meltdown in global financial markets unleashed by the US last week showed few signs of abating. Even as President Trump paused his “reciprocal tariffs” for 90 days, and cut them all back to 10%, he ramped up the pressure on China. All fertilizer producers that export urea to the US will now face a baseline 10% rate, excluding Canada, Mexico and Russia.

• Amid the turmoil, India held its first urea tender for nearly two months and had secured less than a third of its stated aim of 1.5 million t/a at the time of writing. The very short term could therefore see urea prices stabilise, as India may well have to tender again. Not all benchmarks may increase, however, as fading interest in Europe could take its toll on Algeria and Egypt.

METHANOL

• Methanex, the world’s largest producer and supplier of methanol, maintained its Asian contract price (ACP) for April 2025 unchanged at $420/t, with China $20/t lower at $400/t.

• There are concerns that US tariffs on China, the major importer of methanol, may lead to slower demand growth in industrial sectors. Chinese MTO demand also appears to be falling, with lower operating rates and delays to new capacity. The tariffs may also lead to lower methanol demand in the US as spending slows.

• Falling oil prices due to concerns about recession will also likely play on methanol markets, bringing prices lower. This, taken together with some new capacity in Iran and the US, means that the outlook for the short to medium term is for lower prices for both Atlantic and Pacific methanol.

Latest in Agricultural

Dangote to fund new urea plant

Aliko Dangote, self styled “Africa’s richest man”, has signed a $2.5 billion partnership with the Ethiopian Government to build one of the world’s largest single-site fertiliser plants in Gode, Somali Regional State. The was signed on August 28th by Dangote Group and Ethiopian Investment Holdings, the government’s strategic investment arm. Under the agreement, Dangote Group will hold a controlling 60% equity share, with EIH taking the remaining 40%. EIH says that the facility will be “among the top five largest urea production complexes globally… with production facilities boasting a combined capacity of up to three million metric tons per annum.” The project will take gas feedstock via pipeline from the Calub and Hilala gas fields, with provisions for future expansions into ammonia-based fertilisers.

Green ammonia plan for Scotland

Norwegian state-owned power group Statkraft says that it is moving ahead with plans for a 400 MW green hydrogen and ammonia production facility in the Shetland Islands, after securing a land lease near the disused Scatsta Airport. Known as the Shetland Hydrogen Project 2, the facility will use electrolytic hydrogen to produce green ammonia for a range of industrial applications, including use as a sustainable marine fuel and to help decarbonise fertiliser production.

Joint venture for green ammonia project

L&T Energy GreenTech Ltd (LTEG), a wholly-owned subsidiary of Larsen & Toubro (L&T), has entered into a joint development agreement with Japan’s Itochu Corporation of Japan to develop and commercialise a 300,000 t/a green ammonia project at Kandla in Gujarat state. Under the agreement, LTEG and Itochu will collaborate on the development of the green ammonia facility, with Itochu planning to offtake the product for bunkering applications in Singapore.

Green ammonia project proposal

The Namibian mining town of Arandis is reportedly in discussions with Cleanergy Solutions Namibia concerning a $2.85 billion investment to develop a large-scale green ammonia production site at Aran-dis, targeting production of 200,000 t/a of ammonia in the first phase based on abundant local solar energy. The Aran-dis Town Council approved the project in 2024 and is in the process of acquiring 2,400 hectares of land for the project, which is subject to the award of an Environmental Clearance Certificate, expected in the second quarter of 2026. The construction phase of the project will begin in 4Q 2026, with operations due to begin in 2030. Local infrastructure development will include pipelines and storage tanks for water, hydrogen and ammonia, as well as port, railway, road and power infrastructure, and may include handling and storage facilities. Cleanergy Solutions is a joint venture between Olthaver & List and Belgian company, CMB.TECH. It has operated a green hydrogen pilot project near Walvis Bay since 2024.

Coal based fertilizer and methanol plant proposal

Suiso, a South African company specialising in blue ammonia production, is set to invest $1.7 billion in a coal-to-fertiliser facility in Kriel, Mpumalanga in the east of South Africa. The proposal is for a 1.5 million t/a ‘blue’ ammonia-urea plant which will replace South Africa’s annual imports of 1.2 million t/a of urea, as well as producing 235,000 t/a of blue methanol for fuels, using advanced decarbonisation and carbon capture technologies. Suiso is partnering with Sinopec Ningbo Engineering, Stamicarbon, and ETG – the latter will distribute Suiso’s fertilisers across Africa, supporting local agriculture and long-term food security.