Weak US ammonia market pulls two plants offline

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

HOUSTON (ICIS news)--Weakness in US ammonia demand has forced the shutdown of two plants operated by Agrium and Mosaic, but a third plant operated by Terra Industries was defying market predictions by staying open, market sources said on Tuesday.

Agrium's 280,000 tonne/year Redwater 1 ammonia unit in Canada's Alberta province is considered a swing plant, a company source said. No details were available of the timing of the shutdown.

"It will be down until the market comes back and we can restart," the source said.

A second Agrium unit at Redwater has capacity of 680,000 tonnes/year and was still in operation.

Mosaic's Faustina plant in Louisiana has been down for two weeks, a source at that company said. No further details of the shutdown were available.

The plant has capacity of 510,000 tonnes/year of ammonia, according to global chemical market intelligence service ICIS pricing.

Terra's Donaldsonville plant has been the subject of speculation for weeks, but a company source confirmed it was still running.

A shutdown "is not a plan for us," the source said.

The Donaldsonville plant, which according to Terra data has a capacity of 500,000 short tons/year (454,000 tonnes/year) of ammonia, restarted in September after a four-year shutdown that was originally triggered by high natural gas prices.

The US ammonia market has since deteriorated rapidly, alongside sliding international prices and a drop in demand from the domestic fertilizer and industrial sectors.

The benchmark Tampa contract settled at $350/tonne for November, after peaking at $931/tonne for October.

The weakening of the US market prompted a series of maintenance shutdowns to be brought forward at five plants in Trinidad.

Two of those plants associated with US firm Koch Industries have since restarted, sources said on Tuesday. But they would likely be shut down again as soon as their storage tanks were full due to the absence of demand, the sources said.

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By: Stephen Burns
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