Yuzhny ammonia activity slows on tight availability

28 August 2009 15:29  [Source: ICIS news]

LONDON (ICIS news)--Ammonia demand remains strong at present but activity has slowed due to tight availability from most major supply sources, including Yuzhny, market sources said on Friday.

Vessel loadings have been delayed due to a lack of product at the port and September availability was either already committed or remained unclear, they added.

Russian producer Togliatti restarted its fifth ammonia line on 22-23 August, but at the same time another line went down and has yet to restart. Only four lines were running at present, a company source said.

Availability from Togliatti for September was currently uncertain as a result, but was expected to be less than the 150,000 tonnes initially anticipated for the month, the source added.

Lower gas prices in the Ukraine from September onwards may lead to increased output from producers there, but most sources expected that Yuzhny prices would have to rise another $30-40/tonne (€21-28/tonne) from current levels to make exports profitable.

Last done business was a sale of 15-16,000 tonnes of ammonia from the warehouse of Ukrainian producer Gorlovka. The seller reports the sale at $265/tonne FOB (free on board), while trader Transammonia said it bought the tonnes at $260/tonne FOB Yuzhny.

There are indications that Gorlovka may start up its second ammonia/urea line 29-30 August, while Odessa Port Plant is still awaiting confirmation of its new gas price and does not expect to make a decision on whether to restart its second ammonia line until September.

Sources estimated that prices would need to be close to $300/tonne FOB Yuzhny to make Ukrainian exports viable.

($1 = €0.70)

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By: Rebecca Clarke
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