Prices in the West are unlikely to garner much support moving into the latter stages of Q2. The May Tampa ammonia settlement was settled by Yara and Mosaic at $450/t c.fr, down $25/t on the $475/t c.fr agreed for April. With seasonal domestic demand in the US drawing to a close 2H April, many had anticipated that either a rollover or a slight decline would be agreed.
The ammonia market reverted to recent norms at the end of April, with prices more or less unchanged in the east, and several benchmarks west of Suez moving downward in line with May’s Tampa settlement. Following a trio of high-priced c.fr spot deals many wondered whether such business would be replicated in Asia, but the hype did not live up to the expectation, with the majority of tonnes continuing to move on a contract basis into the likes of South Korea and Taiwan, China. The $430/t c.fr concluded into China has been attributed to both supply uncertainty and an uptick in domestic demand, though several inland prices declined this week, rendering price direction difficult.
Ammonia pricing in the US Mid-West stood at $625/st f.o.b. in February, with applications to field continuing to ramp up. Prices in the US Gulf remain pegged in the low-to-mid$400s/t f.o.b. Recent production outages in the region have largely subsided, though an unexpectedly early uptick in seasonal demand from local buyers is likely to provide a degree of price support moving forward. The Tampa ammonia settlement for March has been settled by Yara and Mosaic at a $445/t c.fr rollover, largely in line with market expectations. The North American market remains detached from the considerably more oversupplied global ammonia scene.
Prices will remain stable-to-soft across the board, though benchmarks could remain slightly more supported in the short-term than previously thought, with more significant declines likely in Q2-Q3.
Ammonia prices are expected to remain soft moving through January with little in the way of price support from both a supply and demand perspective. Weakened global sentiment was characterised by news of January’s Tampa settlement $100/t down on December at $525/t CFR, with further declines anticipated in Q1 once the Gulf Coast Ammonia (GCA) project comes online. Traders returned to their desks in the New Year and ammonia prices extended losses amid a stable supply outlook and a distinct lack of downstream industrial and fertilizer demand.
Ammonia prices are expected to remain soft moving through January into February, with little in the way of price support from both a supply and demand perspective. January’s Tampa settlement was $100/t down on December at $525/t CFR.
Market Insight courtesy of Argus Media
Tampa ammonia contract prices increased dramatically during September, from $395/tonne c.fr to $575/ tonne c.fr. The main culprit was plant outages and reduced production at several plants in the region. The tight supply situation was exacerbated by a delay to the restart of Ma’aden’s 1.1 million t/a ammonia plant in Saudi Arabia.
Ammonia prices have now dropped by about 50% from their highs a year ago. Gas prices have fallen, particularly in Europe, and peak fertilizer application season is over in Europe and North America, leading to slackening demand., leading to slackening demand.
Market Insight courtesy of Argus Media