Yuzhny ammonia prices firm on limited availability, good demand

27 August 2010 16:27  [Source: ICIS news]

LONDON (ICIS)--Yuzhny ammonia prices are firm at $365/tonne (€288/tonne) on the back of limited availability and good demand from Europe, North Africa and the US, and prices were expected to grow further, market sources said on Friday.

Yuzhny prices hit $365/tonne FOB (free on board) last week when Yara bought tonnes from several suppliers for September shipment. Prior to this, ammonia had traded at $350-355/tonne FOB for late-August/early-September loading.

Buyers were now reported to be willing to pay $380/tonne FOB for October cargoes; however these were not on offer yet.

Given the market fundamentals, there have been also expectations that prices could reach $400/tonne FOB soon, although some sources said such ideas were premature.

Sources said that most producers have now fully committed their September availability, meaning there was little product for prompt shipment.

At the same time, demand has strengthened, they added.

US demand was strong at present with suppliers looking to refill their systems ahead of the autumn application season which was expected to begin in October. The season was expected to be good as crop prices were rising, sources said.

Meanwhile, phosphates producers in North Africa have ramped up production due to higher phosphates prices, and as such were looking for more ammonia.

Suppliers noted that US and North African buyers were asking for maximum volumes to be delivered under their contracts and at the same time were looking for extra tonnes.

European demand was also strengthening ahead of the autumn season, while additional reports of production problems in Europe have added to requirements.


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By: Rebecca Clarke
+44 20 8652 3214

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