Yara and Mosaic shocked markets with a settlement of $1,625/t c.fr for April, up $490/t on March, and the highest ever price recorded at Tampa, as the removal of Russian and Ukrainian ammonia supply impacted global prices, and Baltic rates soared to $1,500/t. However, April saw some of the global dislocations caused by the Russian conflict begin to ease, while the high prices saw buyers in the US delay purchases, leading to the Tampa price falling back $200/t for May loadings.
Market Insight courtesy of Argus Media
The ammonia market, already seeing record pricing in the wake of the winter’s gas price squeeze, is braced for even higher pricing in the wake of the Russian invasion of Ukraine. The impact upon gas prices has been most marked, with rates of over $65/MMBtu seen in European forward pricing as the threat of a cessation of Russian gas exports loomed. This will undoubtedly lead to widespread idling of ammonia capacity in Europe.
The ammonia market has entered 2022 looking very different to last year, with early January Pivdenny prices $875/t higher on a mid-point basis than they were at the start of 2021, and the likelihood of further gains ahead.
Market Insight courtesy of Argus Media
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.
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.
Market Insight courtesy of Argus Media
Market Insight courtesy of Argus Media