Yuzhny ammonia prices up $15/tonne on last business

07 August 2009 16:42  [Source: ICIS news]

LONDON (ICIS news)--Yuzhny ammonia prices have continued to firm on demand recovery and tight supply, with Russian product sold this week at prices up to $15/tonne (€11/tonne) higher than previous business, market sources said on Friday.

Trader Nitrochem said it had sold a total of 50,000 tonnes of Togliatti ammonia in three lots for 25 August-5 September loading at prices reflecting the high-$248-250/tonne FOB (free on board) Yuzhny.

Last done business was reported at $235/tonne FOB when trader Trammo purchased 15,000 tonnes of Ukrainian ammonia which loaded on the Nijinski for Turkey in late July.

Expectations were that these prices could be topped soon, with US buyers reported to be bidding at prices equivalent to $270/tonne FOB to secure September tonnage.

However, despite the potential increase, these levels are still unlikely to prompt Ukrainian producers to increase ammonia exports as they are still below production costs, sources said.

Russian producer Togliatti restarted its fourth ammonia line this week, but promptly had to stop it again due to technical problems. The producer hoped to resume production on the fourth line by the end of the week and also start up the fifth line at the same time, it said.

Sources noted this could add an extra 20-30,000 tonnes of availability per month, but added it would likely be used as stock at the port in order to speed up vessel loading which is currently very slow.

Yuzhny availability would only be marginally higher once Togliatti restarted the fourth and fifth lines, while availability from other nearby sources, namely Ventspils and North Africa, was reduced due to plant turnarounds, sources said.

At the same time, demand from the US, Europe and Turkey was strong, they added.

($1 = €0.70)

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By: Rebecca Clarke
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