Iran ammonia prices rise $80/t on spot sale

18 September 2008 12:20  [Source: ICIS news]

LONDON (ICIS news)--Iranian ammonia prices have risen around $80/tonne following a spot sale on the back of strong demand and tight supply, market sources said on Thursday.

 

An official at Iran Petrochemical Commercial Co (IPCC) confirmed that it had sold a 23,500 tonne cargo for end-October shipment in the low-$920s/tonne FOB (free on board).

 

The buyer and likely destination of the cargo were not revealed.

 

IPCC issued a tender, which closed on 15 September, requesting bids to remain valid for three days.

 

Traders Yara, Trammo and Mitsubishi were understood to have submitted bids, with Trammo’s the highest, according to market sources.

 

This sale is around $80/tonne higher than IPCC’s last spot sale in August -$840s/tonne FOB to Mitsubishi for 8,000 tonnes for shipment to the Far East.

 

Producer Saudi Basic Industries Corp (SABIC) also sold tonnes to Mitsubishi last month at a price which netted back to $840-845/tonne FOB.

 

The rise in prices comes on the back of strong demand for Middle East ammonia as a result of reduced availability in the Asia-Pacific region due to the shutdown of the Burrup ammonia plant in Australia.

 

This has caused traders to snap up any spare availability in the Middle East and meant there is strong competition for any tonnes that do become available to the spot market.

 

Market sources also noted that with Yuzhny ammonia prices having risen to $900/tonne FOB, expectations that any new sale out of the Middle East would be above that level.

 

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By: Carl Roache
+44 20 8652 3214

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