Yuzhny ammonia prices drop on improved supply
03 October 2008 13:37 [Source: ICIS news]
LONDON (ICIS news)--Yuzhny ammonia prices have dropped $20-30/tonne (€14-22/tonne) on the back of improved supply and weak demand, market sources said on Friday.
There was no shortage of ammonia, with falling prices of urea and ammonium nitrate (AN) prompting producers in the former Soviet Union (FSU) to sell more ammonia for export, sources said.
They added that at the same time, demand for ammonia was slow, particularly in the
Market sources said Rovno had sold a small cargo to Trammo at $830/tonne FOB (free on board) and a major buyer reported having last purchased tonnes for October shipment at $840/tonne FOB, down from previously reported business at $850-870/tonne FOB.
Prices looked to be heading towards $800/tonne FOB, with unconfirmed reports of one Ukrainian producer offering at those levels, although other producers were still holding out for prices above that level.
The $931/tonne CFR (cost and freight) Tampa settlement for October could justify a price of around $850/tonne FOB Yuzhny based on freight for 35,000 tonne vessels at $75/tonne, sources said.
They added that freight for smaller sized vessels was much higher, which would push Yuzhny netbacks down.
Moving into the last quarter of the year, sources said that the supply restrictions which caused prices to peak at $900/tonne FOB would disappear.
FSU ammonia output was expected to return to 300,000 tonnes/month after a series of maintenance turnarounds. Australian production at the Burrup plant was likely to resume in December and a new Egyptian plant was due on stream soon.
($1 = €0.72)
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By: Rebecca Clarke
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