Section: CRUNS Market Intelligence

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

Supply in southeast Asia looks tight for the coming weeks, but further declines in Chinese domestic prices could alter the supply/demand balance in the region in August.

Market Insight courtesy of Argus Media

Market Insight courtesy of Argus Media

Further downward corrections are possible but the rate of demand is stabilising, suggesting the market floor is in sight, though some have suggested that May could bring another sharp reduction in the Tampa contract price towards the mid$300s c.fr. Demand remains sluggish in both eastern and western hemispheres.

The EU benchmark TTF natural gas price had fallen to $16.89/MMBtu on average for February, down 19% on January’s average and 36% lower than the figure for February 2022. By the end of the month it had fallen to $14.83/MMBtu, its lowest level since the outbreak of war in Ukraine. EU gas storage was assessed as 61% full on 28 February, compared to a five-year seasonal average of 40%, due to strong LNG imports and mild weather over the winter. Over one third of European ammonia capacity has returned to production as gas prices fall.

Market Insight courtesy of Argus Media