IFA '08: Qafco predicts ammonia price correction

19 May 2008 09:00  [Source: ICIS news]

VIENNA (ICIS news)--A downward correction in Middle East ammonia prices is on the cards, an official from Qatar Fertilizer Co (Qafco) said.

 

Given lower prices for Yuzhny ammonia and lacklustre demand from India, prices in the Middle East would have to be adjusted downwards, said the unnamed official late on Sunday on the sidelines of the 76th International Fertilizer Industry Association (IFA) conference.

 

However, the extent of the correction would depend on developments in US pricing, the official added.

 

Negotiations for the June Tampa contract price were due to start this week.

 

Although a decrease from May's prices of $550/tonne CFR (cost and freight) is widely anticipated, it is unclear whether the number will drop to around $525/tonne CFR as producers hoped or as low as $500/tonne CFR that buyers are looking for.

 

Middle East ammonia prices are currently assessed at $450-500/tonne FOB (free on board), but producers have been facing bids from traders at $400/tonne FOB and below.

 

Yuzhny ammonia prices are currently at $427-430/tonne FOB and some expect Middle East numbers to drop to around that level.

 

The IFA conference runs from 19-21 May.

 

For more discussion on the chemicals industry visit ICIS connect

 

By: Rebecca Clarke
+44 20 8652 3214

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