Yuzhny ammonia prices drop back slightly

18 September 2008 20:25  [Source: ICIS news]

LONDON (ICIS news)--Yuzhny ammonia prices have dropped back by $30/tonne (€21/tonne) after producers conceded that last-done business was too high for the current market, sources said on Thursday.

Suppliers were forced to correct their price expectations to secure business for October, sources said.

Gorlovka sold around 30,000 tonnes of ammonia to trader Trammo at a reported price of $870/tonne FOB (free on board) Yuzhny for early October loading.

This price is down from the $900/tonne FOB paid few weeks ago by Keytrade for a cargo for shipment to Morocco.

Sources said that a price of $900/tonne FOB was not workable in other markets and that producers had now accepted this.

A price of $870/tonne FOB is now seen as workable on shipments to the US, if the last sale to the US Gulf at $955/tonne CFR (cost and freight) is to be considered a benchmark.

Prices are now expected to remain fairly firm as there are several production shutdowns in Ukraine and Russia at the moment.

Rossosh is not pumping any ammonia down the pipeline to Yuzhny at present as the plant is in a shutdown. Severodonetsk and Cherkassy are also down for maintenance, while DniproAzot has delayed its turnaround until October.

Additionally, sources note that demand remains strong due to the Burrup ammonia plant outage in Australia which has tightened Asian ammonia supply.

($1 = €0.70)

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By: Rebecca Clarke
+44 20 8652 3214

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