13 May 2011 11:43 [Source: ICIS news]
LONDON (ICIS)--Yuzhny ammonia prices have risen above $500/tonne (€350/tonne) in new deals for June loading on the back of continued good demand and persistent supply issues in Trinidad which is tightening global availability, market sources said on Friday.
A trader said it had purchased an unspecified quantity of Ukrainian ammonia at $505-507/tonne FOB (free on board) for June shipment from Yuzhny.
Deals for May shipment were concluded in the $495-500/tonne FOB range.
Suppliers had been offering at $510/tonne FOB for June ammonia cargoes.
The higher prices come in contrast to concerns over recent weeks that demand levels may drop seasonally in June and force a correction in prices.
However, demand looks strong through June at present and supply problems in Trinidad are tightening availability.
There is continued import demand from the US for June deliveries, with both agricultural and industrial demand reported to be robust, sources said.
Traders are shipping 87,000 tonnes of Yuzhny ammonia to the US this month, while a 38,000 tonne Baltic cargo will be shipped in early June.
Improved weather in the Midwest over the past week has seen corn planting accelerate and raised hopes that it will be a strong spring ammonia application season, which will prompt more import demand.
An outage at Mosaic’s Faustina, Louisiana, ammonia plant in the US is currently having no impact on requirements as phosphate operations have been temporarily suspended due to flooding. However, if the ammonia plant remains down once phosphates production restarts, this could trigger some extra demand, sources said.
Sources also expect North African ammonia demand to remain robust, with Morocco looking for around 60,000-70,000 tonnes/month and Tunisian consumption improving following recent issues with phosphate production.
Gas supply issues which started in mid-February have yet to be resolved with deliveries reported as sporadic. An improvement in the situation does not appear likely until the end of May at the earliest, following notification from the National Gas Company of further gas supply curtailments starting next week.
Sources said they had been notified that a curtailment period would start on 16 May for about 12 days. Expectations were that deliveries would be reduced by 10-20% during this period.
($1 = €0.70)
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