Fertiglobe reports mixed Q2 sales, delays low-carbon ammonia project
Source: Profercy Ammonia
While Monaco is world famous for its culture of risk taking and high stakes, ammonia market participants at this week’s industry conference in the wealthy principality opted to stick, not twist when it came to stepping up to the table and striking deals.
The reluctance to conclude business, or even show their hands in many cases, comes amid conflicting views over the state of the market.
Suppliers point to an uptick in Indian import demand, capacity curtailments in Saudi Arabia and a recent sale out of the kingdom at a decent premium – albeit for a trader heard to have secured a favourable freight rate on a newbuild for a delivery to North Africa – for their bullish view.
However, that positive outlook is countered by buyers who argue the market remains very well supplied and demand soft, particularly given the muted industrial demand in key import hubs throughout Northeast Asia.
This bearish stance also highlights the likelihood of the usual seasonal hike in US Gulf exports soon, while the number of carriers being redelivered or sitting idle awaiting instructions also points to slowing order books.
Contrasting views push market into lower gear
Given the strong difference of opinion, a stalemate has emerged, with neither buyers nor sellers willing to make the first move.
Lengthy plant shutdowns in Saudi Arabia and Indonesia have also spooked some buyers East of Suez, but soft industrial demand in Asia Pacific continues to act as a brake on spot deliveries to countries including South Korea, China and Taiwan.
Back in the West, supply is strong and demand stable to soft. The only confirmed June cfr spot price to date was announced several weeks ago and involved Trammo’s $400pt cfr sale of 23-25,000t to Morocco’s OCP Group.
Several cargoes for May shipment into Europe have also emerged in recent days, but as is often the case of late, no prices have been shared. There are also suggestions a heavily discounted Iranian cargo could arrive in Turkey next month, but the alleged sale at $340pt cfr remains unconfirmed for now.
Once leading names return to their desks after the conference in the south of France, deals are expected to be agreed as supplies seek to shift inventory rather than cut capacity, though whether it is vendors or buyers who have an ace up their sleeve remains to be seen.
By Richard Ewing, Head of Ammonia at Profercy
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