Australian trio takes step closer to establishing low emissions ammonia bunkering operations
Bullish sentiment persists in the global ammonia market as illustrated by a burst of spot sales at a premium to last business, with prices surging up to $400pt in some regions as buyers scramble for scarce surplus volume.
The main driver is the loss of 300,000t per month of Russian material, with regular recipients of ex-Yuzhnyy tonnes casting their nets far and wide to secure replacement product.
Significant price hikes for the latest batch of sales were seen in all regions except southeast Asia – where many eyebrows were raised by two sales that appear out of sync with the rest of the market.
Demand destruction in northwest Europe remains a possibility unless prices become stable soon. However, with deep pocketed buyers like Morocco’s OCP hungry for surplus tonnes, rival buyers may face a fight to procure ammonia at decent prices.
Headline deals west of Suez mainly involved Yara, with the Norwegian group buying in the Baltic from Acron and Grupa Azoty at $1,550pt fob and $1,600pt fob, respectively, and agreeing a larger cfr purchase with an unnamed trader for northwest Europe at $1,460pt duty unpaid.
BASF struck a deal with a mystery supplier at $1,525pt cfr duty paid, Trammo collected a Libyan spot cargo at an undisclosed fob price, and OCP bought up to 15,000t from Argentina’s Profertil.
East of Suez, SABIC sold 25,000t to an unidentified party at $1,232pt fob, with that price representing a $132pt premium over compatriot Ma’aden’s sale last week.
Those Saudi sales had initially reinforced southeast Asian producers’ price targets for April business, but weak demand from industrial contract customers across northeast Asia meant sales were concluded at lower levels.
Malaysia’s Petronas sold 15,000t for April lifting at $1,000-1,050pt fob, with Trafigura – which has dabbled in the ammonia market a few times in the past year – linked to that deal.
Indonesia’s Kaltim sold a small parcel to long-term customer Mitsui at $980pt fob, and Parna Raya is in advanced talks with OCP over a potential cfr sale that would see up to 16,500t head to Jorf Lasfar on the Marianna Golden next month.
With supply conditions unlikely to loosen in Q2, the trend for material to head east to west should continue for several weeks. Fresh upward price pressure will emerge when regular spot buyers in India and northwest Europe return to the market in the near future.
By Richard Ewing, Head of Ammonia
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