Tampa ammonia contract nearly triples in a year with market stuck firmly in bull territory for Q2

The latest record high settlement of the Tampa contract brought down the curtain on another busy and bullish week for the global ammonia market.

Yara and Mosaic settled the US benchmark at $1,625pt cfr for April’s loadings – having failed to agree a number in March – nearly triple the $545pt cfr settlement of April 2021.

That recent deadlock meant the US phosphates major did not receive any material from the Norwegian group this month.

However, Mosaic did roll over its contract with Trammo at $1,135pt cfr for March, with that pair yet to disclose a settlement for April.

The removal of around 300,000t a month of Russian volume due to the invasion of Ukraine has triggered widespread disruption to traditional supply chains and created upward price pressure in most regions.

Sentiment and prices are now clearly divided along continental lines, with all areas except northeast and southeast Asia bullish for Q2.

Suppliers who regularly ship out of the Baltic are sending several vessels to the region, but whether they all load given the limited lines of distribution is uncertain.

One such cargo will be discharged in Turkey over the next few days, with talk the next batch of cargoes could head farther afield to countries such as South Africa, Brazil or India.

Given its huge appetite for ammonia, Morocco’s OCP was again highly active in the spot market, buying cargoes in the Americas and Indonesia for April arrival.

Yara also entered the market, securing another fob cargo in the Baltic and striking a deal with Fertiglobe for a delivery to Germany next month.

No fresh sales were announced in the Middle East and the large drop in demand from industrial users in Korea, Taiwan and China has created surplus volume that is being targeted by buyers thousands of miles away in the west.

The market should stabilise in the coming weeks and adapt to its new reality. Once it does, price volatility should start to ease, particularly with the commercial launch of Ma’aden’s huge export-oriented plant in Saudi Arabia now only three months away.

By Richard Ewing, Head of Ammonia