Skip to main content

Tag: Prices

A cold wind from the east

Prices in sulphur markets have been climbing rapidly for several weeks now due to short supply, reaching their highest levels for early two and a half years, since July 2022. A major cause has been widening Ukrainian drone and missile strikes against Russian oil and gas facilities. In particular, drone strikes in September on the Astrakhan and Orenburg natural gas plants led to Russian sulphur exports being cut drastically, first from around 400,000 tonnes per month to only 100,000 tonnes in October, and then to zero from the 1st of November, as Russia implemented a ban on exports of sulphur used in fertilizer production which was projected to last at least until December 31st. “This decision will stabilise shipments of raw materials to the domestic market to maintain current mineral fertilizer production volumes and ensure the country’s food security,” the government’s press service reported. The restriction applies to the export of liquid, granulated, and lump sulphur. It remains to be seen whether exports of Kazakh material from Ust Luga will be affected, but some Kazakh sulphur is now being sold via Iran.

Market Outlook

l The market looks very tight through the end of the year, though some expect supply to improve in Q4. Prices are unlikely to ease in the coming weeks. l Woodside’s Beaumont New Ammonia Project is now 97% complete, and the producer expects production from the first train in late 2025. There is no information from Gulf Coast Ammonia on when to expect commercial production. l There was an absence of fresh confirmed business into northwest Europe. Still, producers with ammonia capacity in the region are expected to be maximising output given the favourable economics at current spot natural-gas prices at the Dutch TTF.

Price Trends

By the end of October the ammonia market was facing an acute shortage of spot tonnage, reflected in a $60/t jump in the Tampa price for November. The benchmark Tampa price increased for the sixth straight month to its highest since February 2023 as the global ammonia supply crunch deepened. The surge at Tampa was said to be driven by good demand in the US for direct application combined with a lack of supply. Contributing factors included Nutrien shutting down its nitrogen production in Trinidad, potentially removing around 85,000 tonnes/month from the market. So far, there is no suggestion that other producers in Trinidad will follow suit, and they may even benefit from a boost natural-gas supply given the Nutrien outage, although it is unclear whether the spare gas will be directed to ammonia as opposed to other demand sources.