Australian ammonia plant shutdowns tighten supply squeeze East of Suez

The short-term ammonia supply outlook for East of Suez has darkened further following the unplanned shutdown of Yara's 850,000t per year plant in Western Australia for unspecified technical reasons.

The 4-6 week shutdown is especially bad news for Orica as Yara is the principal supplier to its Queensland production site and the stoppage coincides with an unscheduled outage at the explosives group’s own ammonia unit in New South Wales (NSW).

The ammonium nitrate (AN) producer received around 175,000t at its Gladstone manufacturing complex from Yara’s Pilbara plant last year, while its own facility near Newcastle provided a further 150,000t.

Orica confirmed today is in the market for offshore ammonia following the two outages. The company regularly uses the 5,700t capacity Wincanton to carry group material 1,200km north from Newcastle to Gladstone.

While that coaster left the former a few days ago, its AIS reports a low draught that indicates the vessel is empty, meaning a visit to a port in Southeast Asia could be on the cards.

Given the Australian group has an explosives joint venture at Bontang in Indonesia, it would not be a surprise if the firm managed to source some spot tonnes from a producer based at that export hub.

“Orica notes media reports regarding an outage at one of its suppliers' ammonia plants in Western Australia,” the company said in a bourse filing today.

“Orica is actively managing the potential impact of this event by working to secure alternative supply from current inventory and its diversified global manufacturing and supply network.

“Our priority is to minimise the impact on our customers and to maintain supply. At the same time, there is an unplanned outage at our Kooragang Island ammonia plant in NSW which is expected to be resolved shortly.

“A material financial impact from these interruptions is not expected. Orica will continue to actively manage and monitor the situation and will provide an update should there be a material change.”

Second confirmed Australian plant shutdown in as many days

Less than 24 hours ago, Norwegian major Yara confirmed to Profercy that its Pilbara ammonia plant is down due to “technical issues”.

“The most recent assessment is that the ammonia plant might be closed for around 4-6 weeks while TAN [technical ammonium nitrate] production is expected to be able to run more or less as normal,” the Oslo-headquartered major disclosed.

“Impact on annual volumes will be reduced by moving forwards maintenance work originally planned for later this year.”

The Yara Pilbara Nitrates TAN plant is a joint venture with Australian’s Orica, with the facility converting ammonia into material for use in mines throughout the region.

News of the unplanned outage, which local media said started last week, comes as market players look to replace the significant volumes of ammonia lost from the Middle East due to the Iranian conflict and related difficulties in transiting the Strait of Hormuz.

While export availability in Southeast and Northeast Asia is relatively healthy for now, the loss of Pilbara output will eat into that surplus as around 61,000t per month of material departed Dampier on average last year.

Despite the shutdown, the group’s Leo Sunrise left east coast India yesterday for Dampier, while its other mid-sized carrier active in Asia Pacific, the Green Pioneer, could also head to the port soon once she has dropped a term parcel in Indonesia.

Profercy data shows 738,500t of ammonia loaded at Dampier in 2025, of which exactly half remained within the country via term deliveries to CSBP at Kwinana, also in Western Australia, and to Orica.

Of the deliveries to offshore customers, around 182,000t ended up in Northeast Asia, while the Scandinavian supplier discharged around 47,000t in Thailand under contract as well as 18,000t to Indonesia.

The majority of the balance was sold on a cfr spot basis for delivery to India and Chile, though a couple of other regional suppliers also lifted tonnes via confidential fob spot deals and/or swaps.