Section: CRUNS Market Intelligence

Market Insight courtesy of Argus Media

Soaring natural gas prices in Europe, up to five times higher than normal, have led to numerous economic shutdowns of ammonia capacity across the continent. This has coincided with shutdowns in the US due to hurricane season, reducing availability considerably and driving up prices in the western hemisphere.

Market Insight courtesy of Argus Media

The first half of 2021 has been characterised by tight supply in the ammonia market, exacerbated by plant outages in Europe, Trinidad, Saudi Arabia and Indonesia. At the same time, higher spot demand has fuelled significant price increases in both the eastern and western hemispheres. Low inventories and reduced export availability in the Far East forced Indian phosphate producers and industrial consumers of ammonia to source product from other locations.

Ammonia markets continue to be dominated by unplanned outages in Saudi Arabia (where the SAFCO 4 and one of the Ma’aden ammonia plants are both down, removing 2.3 million t/a of merchant ammonia from the market). This comes on top of other shutdowns earlier in the year on Trinidad, in the US and Australia.

Market Insight courtesy of Argus Media

February saw ammonia prices jump due to a series of plant outages, including EBIC in Egypt, and several plants in North America, including two on Trinidad; the 760,000 t/a Nutrien 4 plant and 500,000 t/a Tringen 2 plant, both due to gas shortages, as well as Yara and BASF’s 750,000 t/a unit at Freeport, Texas.

Market Insight courtesy of Argus Media

The ammonia industry faced a difficult February, due to extremely cold weather conditions in the northern hemisphere. In the US, production outages resulting from winter storm Uri affected up to 7 million t/a of capacity.

Market Insight courtesy of Argus Media