03 May 2011 15:42 [Source: ICIS news]
LONDON (ICIS)--Ammonia prices in the Middle East have jumped to $505/tonne (€338/tonne), up $35/tonne, following a spot sale by SABIC amid strong demand and tight supply, market sources said on Tuesday.
SABIC said it had sold 23,000 tonnes of ammonia to trader Mitsui at $505/tonne FOB (free on board) for loading at the end of May, from either Al-Jubail or Ras az Zawr.
SABIC said it is too early to determine which port the cargo would load from, but added that the product would be shipped to either the east coast of India or southeast Asia.
The last spot business from the Middle East was in March and quoted at $470/tonne FOB following a sale by Iran’s Petrochemical Commercial Co (PCC).
Since then, supply in the region has been tight and sales have been made under contract or formula pricing.
Netbacks from latest contract business are quoted by Middle East-based suppliers in the range of $480–485/tonne, and fresh spot business had been expected to take place at higher levels.
Offers in an ammonia tender last week from India reflected FOB prices above $500/tonne FOB.
Sources said demand from traders and buyers for shipments to India and southeast Asia remains strong, while at the same time surplus supply from the Middle East is limited.
SABIC said it may have another spot cargo available for sale in the second half of May.
($1 = €0.67)
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