Section: CRUNS Market Intelligence

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.

Ammonia supplies have been curtailed by production shutdowns, including Kaltim and PT PAU in Indonesia, SABIC and Ma’aden in Saudi Arabia, Sorfert in Algeria and Chinese gas-based producers. There have also been gas curtailments in Iran and Trinidad.

Alistair Wallace, Head of Fertilizer Research, Argus Media, assesses price trends and the market outlook for nitrogen.

Alistair Wallace , Head of Fertilizer Research, Argus Media, assesses price trends and the market outlook for nitrogen.

Ammonia prices have been on a rising trend over the past few months as plant closures begin to make themselves felt. Yara’s Baltic ammonia price also rose sharply at the start of October, and Nutrien’s announcement of the closure of its PCS-03 plant on Trinidad helped lift prices, with Yara and Mosaic’s contract prices rising $16/t in October.

The ammonia market continues to be oversupplied, and prices have dropped to historically low levels. Yuzhnyy rates dropped to $175/t f.o.b. in July. In spite of shutdowns in Trinidad and elsewhere, demand remains sluggish and recovery from the Covid epidemic is patchy, especially in the US.

Alistair Wallace, Head of Fertilizer Research, Argus Media, assesses price trends and the market outlook for nitrogen.

Alistair Wallace, Head of Fertilizer Research, Argus Media, assesses price trends and the market outlook for nitrogen.

Prices remain at low levels, in part because of oversupply due to new plant start-ups. However, there has also been a contraction in demand, especially for technical ammonia – industrial markets for ammonia in China and East Asia have been badly affected.