Yuzhny ammonia prices remain firm on tight supply, strong demand

04 March 2011 15:05  [Source: ICIS news]

LONDON (ICIS)--Yuzhny ammonia prices remain firm on the back of tight supply out of the Black Sea and Trinidad and continued strong demand from the US and Europe, market sources said on Friday.

Last business took place at $480-485/tonne (€346-349/tonne) FOB (free on board) and there are expectations that prices could rise in next business.

There was talk that end March/early April tonnes were on offer at $490-495/tonne FOB this week, but no firm offers were reported.

Suppliers see no reason for any decrease in prices in the next round of business, given a lack of prompt supply out of Yuzhny, Ukraine.

However, some sources suggest that prices are now at, or close to, their peak.

Yuzhny ammonia is now effectively sold out for March shipments and inquiries for April tonnes are emerging.

At the same time, supply in the western hemisphere is being further curtailed by gas supply restrictions in Trinidad, which has forced cutbacks in ammonia production.

The National Gas Company reduced gas deliveries to ammonia plants in Point Lisas, Trinidad, by around 20-30% in mid-February due to issues with two natural gas platforms.

Deliveries are now not expected to be restored until mid-March, sources said.

These supply restrictions have combined with continued strong demand from buyers in the US and Europe to keep prices firm.

US demand is expected to remain robust through April, and if supply remains limited this could give some further upward momentum to prices, sources said.

($1 = €0.72)

For more on ammonia visit ICIS pricing fertilizers

By: Rebecca Clarke
+44 20 8652 3214

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