Australian trio takes step closer to establishing low emissions ammonia bunkering operations
Statements today from US President Barack Obama and Iranian President Hassan Rouhani confirm that a deal has been reached between Iran and the P5 + 1 nations that paves the way for the removal of major trade sanctions restricting Iranian exports.
With regard to nitrogen fertilizers, Iranian ammonia and urea exports have been increasingly restricted in recent years as sanctions have progressively tightened. The latest news suggests that Iran could make a full return to the international fold.
Iranian exports of urea have been running at up to 3m. tonnes/year, representing around 6-7% of World export supply. With sanctions in place up to 83% of annual urea exports have been to India in recent years, although limited movement of product to South East Asia, Central and South America, and Europe has also been possible.
However, Iranian suppliers have had to accept discounted prices compared to non-sanctions affected product. Clearly, if Iranian product is no longer restricted, this could be a negative for the Indian exchequer with Iran having real export options from which it can achieve improved prices for its granular urea.
While eventual freedom from sanctions will impact the urea market, it would also have an impact on ammonia. Iranian exports are less than 0.5m. tonnes/year (less than 3% of world trade). India has been the main receiver of product at discounted prices as other buyers in South East Asia, South Korea, Taiwan and the West have not been able to purchase. The potential impact for India is acute as in 2013, 98% of the 460,000t of ammonia exported from Iran was supplied to India.
With regard to the new deal, there are political obstacles still to be overcome, but the latest progress suggests that Iran is moving ever closer to a return to the World market as a participant free of restrictions.
The brief analysis above was first published through the Profercy Nitrogen Service. More information on the service is available below.
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